Kazakhs says has work cut out to
attract investment
06:32 a.m. May 24, 1999 Eastern
By Mike Collett-White
ALMATY, May 24 (Reuters) - Kazakhstan
will have to work hard to hit its direct
foreign investment target of $1.0 billion this
year now that many of its prize oil and gas
assets have been sold off, a senior
privatisation official said on Monday.
''The situation is fairly difficult, and to reach
the figure of $1.0 billion by the end of the
year will require a colossal effort from our
agency and also from the government,'' said
Anvar Saidenov, chairman of the state
Kazakh Investment Agency.
Even if the target is reached, it will represent
the second successive decline in investments
in the vast Central Asian state. Direct foreign
investment was $1.2 billion in 1998, well
below targets of $1.7-1.9 billion, and $1.3
billion in 1997.
The flood of multinational companies
looking to tap Kazakhstan's huge reserves of
oil, gas and metals has slowed to a trickle
after the slump in world commodity prices,
the Russian crisis and a declining stock of
resources on offer.
''You know that there no longer remains the
so-called cream of oil and gas reserves, but a
list of second- or third-tier deposits,''
Saidenov, whose agency works with foreign
investors, told reporters via videolink from
the capital Astana.
''There are problems on the internal market
and among oil companies with regard to the
price of oil.''
The biggest investors to date include oil and
gas majors from the United States, France,
Britain and Italy and the Chinese state oil
company, as well as Indian and Korean
conglomerates involved mainly in steel and
base metals.
The Kazakh economy is based heavily on
raw material exports. The slump in prices
last year saw the trade deficit widen and
gross domestic product shrink 2.5 percent.
Kazakhstan's long term hope for prosperity
is to ride an oil production and export boom,
financed largely by foreign companies.
That appeared to be coming true until
recently.
But in the post-boom period several foreign
firms, including those involved in
multi-billion dollar projects, have run into
complications with local or national
authorities or have been unable to fulfil
contract conditions due to domestic
problems.
Dulat Kuanyshev, deputy chairman of the
agency, said that in its rush to attract major
investors, Kazakhstan had not always acted
consistently with its interests.
''Some contracts were signed from a point
of view of 'revolutionary expediency', and
not from a point of view of the law, in order
to attract a major, quality investor quickly,''
Kuanyshev said.
''But this did not always coincide with the
protection of national interests. That is why
we have these conflicts - they have happened
often because the investor did not always
reliably inform us of its financial and
technical potential.''
He said that a special commission had been
set up under Foreign Minister
Kasymzhomart Tokayev to help settle
disputes with foreign investors. |
