The European Bank for Reconstruction and Development (EBRD) has published its new strategy for Kazakhstan. While commending the visible progress the country has made on the path towards transition to market economics, the strategy notes that transition towards multi-party democracy and pluralistic society has not matched the achievements on the economic front.
The paper is available at the EBRD website: www.ebrd.com. The strategy paper outlines the EBRD’s plan to focus on infrastructure projects in the transport, energy and municipal sectors while continuing to concentrate on small-and-medium-sized enterprises and pursue projects that strengthen the agriculture and financial sectors.
The EBRD has invested more than €800mn in cumulative commitments and remains one of the largest investors in Kazakhstan. Over the next two-year period, the EBRD will dedicate special efforts to promoting commercial principles and competitive access in infrastructure, including lending without sovereign guarantees. An overarching goal of the bank in these activities is to promote economic diversification through support for domestic and foreign investors.
To build upon the successes to date, improvements in the investment climate and governance are still required. Particular attention needs to be paid to creating confidence in the domestic legal system including the implementation of new legislation, increased financial transparency in public enterprises, utility pricing reforms and privatisation of the remaining state shareholdings. The strategy paper argues that economic diversification is necessary to allow the economy to withstand future commodity price shocks and provide economic opportunities to the population outside the resources sector.
The EBRD remains actively involved in both the private and the public sectors, through a broad spectrum of investments. Private sector projects represent two thirds of the current portfolio. Based on the current project pipeline, it is anticipated that commitments for 2002 alone could reach €300mn and that this level should be maintained for 2003/04. s