Where you are running a factory, investing in a pension fund, exporting or importing, it can be perilous to ignore overseas markets. Firstly, you can fell far behind of competition without monitoring international best practices, secondly, upheaval in one country can send powerful shock waves far beyond its borders, thirdly we learn from inconveniences of doing business abroad.
When getting involved in international business development, we automatically think of nationalization, expropriation of assets and land reforms. And yes, given a frequency of crises and vulnerability, country risk is definitely difficult to forecast and manage. It is challenging to forecast future risks because of country defaults, interrelatedness of countries, lack of homogeneity, unreliability of history to name a few. So much depends on the particular perspective of each business and industry and on the type of the investment instruments that are involved (bonds, commercial loans, long-term project finance, resource-based lending, foreign direct investment and trade finance).
Like other former Soviet Republics, Kazakhstan is still developing a transparent and effective business culture that is attractive to foreign investment. The government of Kazakhstan realizes the need to implement economic reforms, though laws and regulations adopted to improve the business environment are often poorly implemented at the local level. Foreign investors and local firms complain of burdensome regulations that often reflect a way of doing business that is reminiscent of the Soviet Union. Challenges remain in addressing problems related to the country’s competitiveness and economic diversification, its over-reliance on the extractive sector, continued corruption, need for increased transparency and rule of law.
However current practices of country risk management used by global entrepreneurs, all kind of business development specialists, expatpreneurs switched the focus from monitoring the laws to the management of uncertainty. When approaching country risks as a manageable process, international business development becomes much less complicated.
Kazakhstan has developed into the leading market in Central Asia and is positioning itself as a transit route between China and Europe. With somewhat limited success, it is seeking ways to use its oil and mineral wealth to diversify its economy. These efforts, combined with a growing middle class, provide trade and investment prospects for foreign firms seeking new opportunities in one of the most dynamic of the emerging markets.
Some economic highlights include:
- Kazakhstan has a healthy appetite for imported goods and in some, not all, cases is willing to pay more for higher quality and innovative technology/service.
- Kazakhstan acceded to the World Trade Organization in November, 2015
- The most recent report from the Heritage Foundation’s Index of Economic Freedom rated the country as “moderately free” and ranked it 42 out of 180 countries, well above neighboring China (#111) and Russia (#114).
President Nazarbayev’s declared aim is to have Kazakhstan join the World Economic Forum’s “Global Competitiveness” Top 30 economies by 2050. In 2016-2017, Kazakhstan significantly improved its ranking by turning around a five year decline, and has now climbed to the rank of 53 out of 138 countries.
Moreover our international community “Made in Kazakhstan” is dedicating its activities to opening and strengthening a collaboration of international entrepreneurs and businesses with Kazakh ones.