Renowned economist Nouriel Roubini speaks about Samruk Kazyna's transformation program

A world-renowned economist Nouriel Roubini has spoken about the transformation program of Kazakhstan’s Samruk Kazyna National Wealth Fund during the VIII Astana Economic Forum that took place in Astana on May 21-22, Tengrinews reports.

Samruk Kazyna owns, either in whole or in part, many important companies in the country, including the national railway company Kazakhstan Temir Zholy, national postal service KazPost, the state oil and gas company KazMunayGas, the state uranium company Kazatomprom, the country's largest air carrier Air Astana, and numerous financial groups. The state is the sole shareholder of the fund.

Samruk-Kazyna controls around $100 billion in assets, which is over half of Kazakhstan's GDP. 

The program, which was announed at the end of last year's February, aims to improve its investment attractiveness, optimize business processes and improve its portfolio structure to rid it of excessive bureaucratization in a large-scale reorganization.

The program was approved on September 5, 2014 at a meeting chaired by Kazakhstan's Prime Minister Karim Massimov. International consultants assited Kazakhstan in developing the document. 

“What’s going on now in Samruk Kazyna is closely connected to what is happening in Kazakhstan in general. If the transformation program is successfully implemented, then the country can achieve its goal of joining the top 30 developed nations of the world,” Roubini declared.

He named five factors that could play an important role in making this program economically successful. The first key to success was investments and their diversity. According to him, Kazakhstan had rich mineral deposits, yet the economic success largely depended on the country’s investments in human, physical and institutional capital, knowledge, infrastructure and innovation.

The second factor Roubini named was achieving a balance between public and private sectors, while the third one was ensuring diversification of the economy.

“A competitive advantage of Kazakhstan is its natural resources. However, the processing industry and services sector must be innovative to counter external shocks. Samruk Kazyna Fund has come up with the program of diversification to become less dependent on raw materials export,” he said.

The next aspect that could help ensure the success of the program, was maintaining Kazakhstan's openness to trade and direct foreign investments. In Roubini's opinion, foreign investors had to play a larger role in the country’s privatization program and its People's IPO project.

The last, but not least was knowledge. “Investments in the human capital and raising domestic leaders play a key role. In its transformation program, Samruk Kazyna Fund places a big emphasis on meritocracy to promote truly talented people,” Nouriel Roubini concluded.

The Astana Economic Forum is an annual international platform for dialogue, which has been held with an active participation of Kazakhstan's President Nursultan Nazarbayev since 2008. It is annually attended by more than 10 thousand delegates from over 100 countries, including prominent politicians, journalists, Nobel Prize winners and experts in finance and economics.

Writing by Assel Satubaldina, editing by Tatyana Kuzmina