Corruption in Kazakhstan is a major obstacle to FDI: MP05 june 2014, 12:13
Bribe. This is the only way to obtain a public service in Kazakhstan, MP Tursunbek Omurzakov is quoted by Tengrinews as saying.
The MP declared that despite the Government's attempts to improve the business climate in Kazakhstan, their efforts did not have the desired effect. All because of bribes.
Numbers show that the investment climate in Kazakhstan has become less attractive, Omurzakov said quoting the National Bank's report that showed that in 2013 the gross inflow of direct investment in Kazakhstan decreased by 17 percent.
Citing the recent report of Transparency International, an international watchdog, Omurzakov declared that the scale of corruption in Kazakhstan was steadily growing. “In the recent report of Transparency International Kazakhstan was ranked 140th out of 180 countries, sliding down 7 lines. The NGO believes that despite the measures adopted by the Kazakhstan leaders in order to develop the economy and attract investment, corruption is becoming a major obstacle to doing business in the country. According to the study, a bribe is the only way to obtain a public service. 33 percent have paid bribes to speed up the process of being provided public services, while 39 percent have given bribes in the form of gifts,” said Omurzakov during the review of the draft amendments to the legislation on improving the investment climate.
Omirzakov also referred to the research made by Ernst and Young consulting firm that concluded that in the upcoming three years about three quarters of all foreign direct investments would be made in the traditional industries of Kazakhstan - energy and mining. Kazakhstan’s economy is based on export of raw materials, while light industries - clothes, shoes, furniture, consumer electronics and home appliances - remain highly underdeveloped. The worsening of the investment climate is hardly helping the development in the light industries.
Omirzakov also talked about potential investors being not fully aware of Kazakhstan’s investment potential. "75 percent of investors who are not represented in Kazakhstan, could not even name a single city in Kazakhstan that they considered attractive for investments," he said.
However, the MP is sure that the government will take notice of the points he outlined.
Earlier this year Kazakhstani government put forth a new package of incentives to attract foreign investors, so the Government is clearly concerned about improving the situation.
Reporting by Renat Tashkinbayev, writing by Dinara Urazova editing by Tatyana Kuzmina