Kazakhstan To Take Steps Toward A New Democratic Model

Kazakhstan established a diplomatic relationship with Canada over 30 years ago. Since 2011, Canada has invested $5.8 billion in the Kazakh economy. The future of Canada and Kazakhstan’s economic relationship was uncertain regarding the recent political leadership transition and the tragic events in Kazakhstan in January 2022.  

On March 6, during the Kazakhstan-Canada Business Forum, Kazakhstan and Canadian businesses sat together. They discussed the investment climate of Kazakhstan and potential projects in Toronto. The Kazakhstan-Canada Business Forum was focused on exploring promising investment opportunities in mining and metallurgy. Although there were geopolitical and economic factors, the trade turnover between Kazakhstan and Canada reached $838.6 million during the post-pandemic period. This number is 69.2 per cent higher in comparison with the previous year. 

Kazakhstan and Canada discussed the future development and partnership opportunities, and, according to the Deputy Chairman of the Board of JSC “NC” KAZAKH INVEST Zhandos Temirgali, “The pool of joint projects with the Canadian side consists of 11 projects worth $1.4 billion in mining, metallurgy, energy, agriculture, and engineering industries. There is a huge potential for expanding cooperation in developing strategic mineral deposits necessary for creating high-tech industries”. Canadian investors have an interest in Kazakh projects. They are looking forward to more democratic reforms, which would simplify Kazakhstan’s business creation and management processes for foreign investors. Their expectations are also related to the upcoming Parliamentary elections.

Today, Kazakhstan is planning to become a “land of change.” Despite the challenges the country faced in January last year, Kazakhstan made an effort to implement transformative reforms and amend the Constitution for the benefit of Kazakhstan and its people. The Head of State is committed to his formula of “a strong President — an influential parliament — a responsible government.” President Kassym-Jomart Tokayev is firm in ensuring such incremental progress and change, as evidenced in the reforms he initiated and pushed through over the past year.

“Tokayev’s reforms have ushered in new democratic principles in our country, The Deputy Minister of Foreign Affairs Roman Vassilenko said, – including a more influential parliament, limited presidential powers, and direct elections of rural mayors. Several initiatives were also launched at the start of this year. One of them is the establishment of the Constitutional Court, to which every citizen can apply”.

During the press conference in Astana, Vassilenko emphasized that Kazakhstan’s political development is significant. The country is committed to holding the elections in full accordance with national legislation and best international practices. These will be the most competitive parliamentary elections in Kazakhstan’s modern history after significant reforms to registration rules for political parties and to the electoral legislation were put in place. Participation of seven parties in elections further contributes to creating a multi-party system by increasing plurality and political diversity. This was particularly evident during the televised debates between the parties’ representatives over the past few weeks. They focused on various social, economic, and political issues and presented competing and widely different visions for the country. A total of 359 candidates are self-nominated, unprecedented for Kazakhstan and running in the single-mandate districts. The people of Kazakhstan have enjoyed a lively campaign so far. They now expect many new faces in parliament as the threshold for political parties to enter the Mazhilis has also been reduced to 5 per cent.

The people of Kazakhstan hope that the parliamentary and local elections represent the completion of a reset in this cycle of Kazakhstan’s political life.

“A key moment that I must note is the inclusion of our citizens in this new political process. From giving people a vote on the constitutional amendments through the referendum to conducting presidential, parliamentary, and local elections, citizens of Kazakhstan have had a clear say on the direction of our country. The people of our country are at the heart of this process and will remain so going forward,” Vassilenko mentioned in his speech.

Law system reformation is another key area Kazakhstan is willing to focus on. Kazakhstan plans to develop “the clear rules of the game” to create a positive and attractive investment environment. According to Aset Irgaliyev, the Chairman of the Agency for Strategic Planning and Reforms of Kazakhstan, “We are working on this direction, and our reforms are not “cosmetic” but fundamental. The legal system reformation and implementation of the new tax code is not an instrument to increase our revenue but also mainly the tool which will help to diversify our economy. Our goal is to mitigate the number of contacts between businesses and bureaucrats and make the process of investment in Kazakhstan’s economy and operating business in our country smoother. Another goal is to de-monopolize the economy.

For investment climate improvement, in 2022, the Government of Kazakhstan adopted Investment Policy Concept until 2026 to attract more investments to Kazakhstan. The concept ensures the country’s attractiveness considering the global ESG requirements, increasing private investment inflows, and developing competitive high-value manufacturing. Macroeconomic stability, low inflation, predictable fiscal policy, and balanced public finance should become the main conditions for the further development of Kazakhstan. The Minister of National Economy Kuantyrov stated, “We are currently developing a new Budget Code and Tax Code, which will be introduced next year. The new Budget Code will simplify the budgetary process, ensure a transition towards performance budgeting, expand budget independence and responsibility, and strengthen fiscal decentralization. This will significantly improve budget effectiveness. In turn, the new Tax Code will mainly focus on ensuring the stability of tax legislation, simplifying and digitalizing of tax administration.” There is high demand for relocating foreign companies to Kazakhstan under the current geopolitical situation. In 2022, more than 20 companies relocated to Kazakhstan, such as Honeywell, InDriver, Weir Minerals, Ural Motorcycles, Fortescue, TikTok, Koppert, and Emerson.  Currently, the government is negotiating substantive relocation negotiations to Kazakhstan with more than 50 other companies. It expects that the migration of international and Russian companies to Kazakhstan will continue.

Kazakhstan society has high expectations from the parliamentary elections and expects new dynamic initiatives from the newly formed parliament. They hope this will make a positive democratic impact on Kazakhstan’s political and economic development and international relations and attract new companies and investments into the country. These elections will become one of the steps on the way to democratic changes.

– Taya Rtichsheva, U Multicultural