Kazakh President Kassym-Jomart Tokayev has instructed the government to create favorable conditions for the relocation of international businesses that have left Russia due to sanctions imposed over its invasion of Ukraine.
Addressing a government meeting on Thursday, Tokayev stressed that the measure should boost the production of goods.
“We are witnessing a global struggle for investment capital,” Tokayev said. “Еvery second large foreign company of almost 1,400 curtailed its operations or completely withdrew from the Russian market. The government should create favorable conditions for their relocation to Kazakhstan.”
He went on further to say that the government was earlier given instructions to prepare a pool of investment projects in the manufacturing industry and search for potential investors.
With a population of almost 19 million, Kazakhstan is one of the world’s largest countries and the most developed in Central Asia. Kazakhstan has long been striving to attract more international businesses and investments by reviewing policies for doing business in the country. In 2019, the Kazakh government announced the country’s intent to join the world’s top 30 economies by 2050.
To become a promising market for business, the government in Nur-Sultan changed existing legislation to improve the country’s licensing system, as well as simplified business creation procedures, optimized state control and oversight activities, and improved the business climate.
Doing business in Kazakhstan has become easier, according to the World Bank’s “Doing Business 2022” ratings. The country ranked 25th, ahead of countries like Russia (#28) and China (#31), and some of the world’s developed economies, such as Italy (#58) and Brazil (#124).
Both Russia and Kazakhstan have been long-time allies. However, relations between the two countries weakened after President Tokayev made it clear that Kazakhstan has no intentions to recognize the independence of the so-called Donetsk and Lugansk People’s Republics. Tokayev’s statement made at the plenary session of the 25th St. Petersburg International Economic Forum (SPIEF) went viral in the global media.
Some western media sources interpreted Tokayev’s statement as a turning point for the two countries’ relations, speculating that Kazakhstan is breaking away from Russia, while Russian media framed Tokayev’s response from a different angle.
Meanwhile, Kremlin spokesman Dmitry Peskov told reporters on Friday that Kazakhstan’s efforts to attract sanctions-hit businesses that have left the Russian market were “absolutely normal”.
“It’s absolutely normal when any country in the world tries to create comfortable conditions for foreign investors,” Peskov said. “Another thing that is clear is that under unprecedented pressure from the outside, many companies are forced to take such decisions. Unfortunately, this is the reality in which we live and work.”
Since Russia invaded Ukraine, Western nations have tightened the screws on Moscow through severe sanctions that have crippled the country’s economy and penalized its government officials and their family members. So far, Western powers have targeted several large financial institutions, Russian sovereign debt and wealthy individuals from Russia. Sanctions on Russia’s foreign debt envisage that the country can no longer raise money for its state financing from Western financial institutions.
Dozens of international companies have exited the Russian market in recent months, writing off significant losses on their investments as they rushed to suspend business in the country.