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Tokayev Increasing Kazakhstan’s investment Appeal

Written by: William Hampton

On September 21, Kazakhstan’s President Kassym-Jomart Tokayev announced that his country would hold early elections on November 20.  The announcement came during his visit to New York City for the opening of the 77th Session of the United Nations General Assembly, traditionally an international summit where challenges are defined, and heads of state meet formally (and informally) to discuss them.

It was almost like a homecoming for Tokayev, who, beyond his service to Kazakhstan, has significant experience at the UN. He had been the UN’s Under-Secretary-General responsible for the operations of its office in Geneva for three years in the early 2010s. This time around, he arrived with a clear two-pronged agenda that included presenting to the world the security challenges faced by his country and promoting foreign investment. Tokayev managed to give Kazakhstan one of the highest profiles at the New York summit.

Maintaining Regional Peace and Security

As a former diplomat and long-time state bureaucrat, Kassym-Jomart Tokayev understands how international risks endanger the current and future prosperity of the Kazakhstani people and seeks to craft his foreign and domestic policies to allow his country to flourish in increasingly choppy global waters. Ensuring regional peace is paramount to achieving his second agenda of economic development.

In this conjecture, the war in Ukraine is a particularly hard nut to crack. Could the international security system deter such a Russian invasion of yet another sovereign state?  Tokayev said in his speech to the UN General Assembly that the system was in chaos because it neglected three core principles which he said must be re-emphasized, consisting “sovereign equality”, “territorial integrity”, and  “peaceful coexistence” between states (last one presumably referring to the non-use of force).

Tokayev also opposed the “polarization and fragmentation” of the global international system, seeing them as drivers of international conflict.

Kassym Jomart Tokayev at the UNGA Sept 2022

Promoting Foreign Direct Investments

At least as important as Tokayev’s speech were his myriad meetings with dozens of U.S. and international leaders in business and finance, including his attendance at the Kazakh-American Business Council. These discussions covered multilateral cooperation in every major sector of the Central Asian largest economy from energy to transportation and logistics, from agriculture to information technology and the production of medical equipment.

The U.S. is one of the three largest foreign investors in Kazakhstan. Geo-economically, it represents an important potential counterbalance to the Russian and Chinese influence on Kazakhstan’s economy and society.

Such trade council meetings have occurred regularly for years.  But this meeting was different.  Kazakhstan has taken material steps to create a level playing field for businesses.  Tokayev’s promises of “greater market access and transparency,” and “new opportunities for the private sector and international partners” complement the encouraging reforms that he has already undertaken.

Tokayev has focused on bringing higher value-added jobs to avoid the risk of falling into the so-called “middle-income,” characterized by rising costs and declining competitiveness. Such a trap would bring economic stagnation to the country’s young population, on whom so much of Tokayev’s reforms depend to succeed.

Rule-of-law stable democracy

More importantly and promisingly, Tokayev envisions a rule-of-law democracy that is politically stable.  His package of constitutional reforms, passed by a referendum in June of this year, is already bringing sweeping changes.  He shed the “super-presidential” system and definitively changed the nepotistic and corrupt elite political culture that he had inherited from the old regime. Expected to win re-election in November, he is promising a “Just and Fair Kazakhstan” that aims to decentralize decision-making, strengthen the rule of law, increase international competitiveness, and ensure equal opportunities for every citizen.

For the international investment community, a democratic-minded leader like President Tokayev is a welcome change from the autocratic styles of former Soviet republics.  The stable business environment that he is inculcating looks set to guarantee a more level playing field where institutions and regulations are better positioned to sustain long-term investments.

In the current global context, Kassym-Jomart Tokayev is positioning Kazakhstan internationally to make good on its potential and, in turn, deliver in a big way for its citizens.