Investing in Kazakhstan

From an economic development perspective Kazakhstan is at crucial juncture. Just 17 years after gaining independence from the former Soviet Union the country has transformed itself into a recipient of direct foreign investment of gold rush proportions; achieved GDP growth levels in excess of 10% per annum; and witnessed the emergence of a retail consumer middle class.

Underpinning much of the economic evolution experienced by the world's 9th largest country, have been the widespread fiscal, monetary and regulatory reforms initiated and put into place by the country's influential and decisive president, Nursultan Nazarbayev. Amongst these changes was the symbolic move of the capital city to Astana that to many Kazakhs embodies the country's post soviet economic ambitions. Capitalising on the country's enormous wealth of oil, mineral and metals resources - coupled with unprecedented increases in global commodity prices - Nazarbayev's economic reforms have seen the country receive more direct foreign investment than all the other central Asian countries added together. This influx of foreign investment has fuelled much-needed infrastructure projects in the country's oil, mineral and metals sectors that have led to increased production levels and export revenues.

Further to this, the country also witnessed transformational building projects in its newly established capital city of Astana and a sustained retail consumer boom that seemed to have put the days of underinvestment and widespread poverty associated with the Soviet era long behind them. However, the recent dramatic decline in GDP growth rates, fuelled by a squeeze between rising inflation levels and dramatic decline in funds from the international credit markets have curtailed the long enjoyed retail consumer boom and left the country's banks with growing foreign debt obligations and corroding asset classes.

Balanced on a knife-edge between the prospect of a further downgrading of its long-term foreign currency rating to below that of investment grade and the huge economic potential for its export industries; Kazakhstan represents an investment proposition with truly enormous potential returns enshrined within a truly unique set of risks, uncertainties and challenges.

Effective knowledge of and interaction with Kazakhstan's legal, regulatory, governmental and financial agencies is essential to do business successfully in the country, so having a local partner is very important if you want to succeed in the region. The culture and mentality are also very different from the West and it's crucial to have someone on your team that understands the mentality, the regulatory structure, the way of working. With its skills and experience in facilitating authentic communication between various parties, MMG can help to put together deals that would otherwise be impossible.

Founder of MMG, Ms Gaukhar Ashkenazi, is an established and successful business woman of Kazakh origin who specialises in advising multi-national companies within the natural resource, construction and banking sectors on how to get the most out of Kazakh investing.