REPUBLIC OF KAZAKHSTAN IN FIGURES

Содержание

2

Additional information

Fiscal management

Economic growth and development

Executive summary 2

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Executive Summary

After a decade of exceptionally strong economic growth and development, Kazakhstan’s ability to withstand shocks has been tested since the onset of the global liquidity crisis in 2007. Against expectations by many, appropriate policy responses and strong financial ratios have enabled Kazakhstan, which was identified as being among the worst affected, to avoid a severe banking crisis with a run on deposits, a currency crisis, depletion of FX reserves and prolonged recession.

Prudent macroeconomic policies in recent years have strengthened the authorities' position from which to navigate the financial storm. Despite of the deteriorating global economic outlook and a sharp fall in oil prices, by the Government there was maintained a positive growth of economy in 2009, by estimated 1.2%.

The government’s key priorities for the next two years include the stabilisation of the financial sector, supporting the small and medium sized enterprise (SME) sector, develop the agro-industrial sector and the real estate market, advancing the diversification of the economy, boosting employment and supporting socially vulnerable groups of the population.

Fiscal policies, despite the government’s planned support for the economy, remain conservative. The original oil price assumption in the 2010 budget is established at $ 65 pbl. and contingency plans have been made in case oil prices fall to $ 35 pbl. The consolidated fiscal balance in 2010-12 is forecast to continue to show moderate deficits due to low oil prices. State budget balances planned at around 4,1% of GDP in 2010 should be comfortably financed given the amounts of government’s assets and low debt levels.

In January-July 2010 to December 2009 inflation amounted at 4.6 % (at appropriate period of 2009 – 4.1%).

External liquidity position strengthened in the beginning of 2010 as a result of improved balance of payments dynamics. Due to comfortable export prices and continuous FDI inflows in 2010, the current account of balance of payments is expected positive.

Long-term prospects remain good given Kazakhstan’s vast endowment of natural resources and the government policies to support the economy’s diversification through infrastructure development and improvements to the business environment.

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Resilient fundamentals supported by a strong sovereign balance sheet…

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At the end of 2010 GDP growth amounted 7 %. For 2010 GDP growth is forecast at 7,0%. Positive growth first of all maintained due to oil prices increase and smart policy of the Government to overcome the crisis.

Inflation potential in Kazakh economy in 2010 was – 7,8 %. In 2010 it is not expected any further inflation slowdown, due to having a number of risks. At the end of 2011 inflation is expected at 6-8%.

In 2009 GDP per capita grown up to $ 9000.

Gross international reserves of Kazakhstan as of 01.05.2011 amounted $ 37 bln.

Gross assets of National Fund as of 01.05.2011 amounted $ 36 bln.

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Key macroeconomic indicatorsKey macroeconomic indicators

Resilient fundamentals supported by a strong sovereign balance sheet…

ForecastsForecasts

National Bank and Statistics Agency

 

2007 2008 2009 2010 2011

report report report report forecast

GDP, $ bln 104,9 133,4 115,3 146.9 132,8

GDP, trillion tenge 12,8 16,1 17,0 21,6 19,9

GDP growth, % 8,9 3,3 1,2 7,0 7,0

GDP per capita, $ 6772 8514 7257,1 9000 8299,4

Inflation (CPI), % 18,8 9,5 6,2 7,8 6,0-8,0

Average price for oil, $/per bar. 72,7 97,6 61,9 79,6 107,2

Oil & Gas production, mln. tones 67,1 70,7 76,4 79,7 81

  2003 2004 2005 2006 2007 2008 2009 2010

GDP growth (%, change) 9,3 9,6 9,7 10,7 8,9 3,3 1,2 7,0

GDP per capita ($) 2068,0 2874,0 3771,0 5292,0 6772,0 8514,0 7257,1 9000

Current account (% to GDP) (0,9) (0,8) (1,8) (2,5) (7,9) (4,7) (2,6) 9,5

Trade balance (% to GDP) 11,9 15,7 18,1 18,1 14,4 25,1 15,2 16,5

Exports of goods (%, change) 32,0 55,7 37,4 37,0 24,8 49,1 (39,3) 72,2

International reserves ($ bln.) 5,0 9,3 7,1 19,1 17,6 19,9 23,2 37

FDI (% to GDP) 7,2 12,6 3,7 8,2 7,6 11,1 8,3 12,2**

State debt (% to GDP) 15,0 11,4 8,1 6,7 5,9 6,4 13,0 -

National Fund (% to GDP) 11,5 11,4 14,2 18,1 20,0 20,5 21,2 24,5

*Jan-Jul 2010, **Report data as of Q1 2010

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…and a government’s broad ranging Anti-Crisis Plan to limit the extent of the economic slowdown

Real EstateReal Estate Employment and Social ProtectionEmployment and Social Protection

Other Industrial SectorsOther Industrial SectorsSME’sSME’s

Moratorium on the immigration of non-skilled workforce and increasing control regarding illegal immigration

Contracts to prevent mass layoffs and preserve employment signed with 8,000 large and medium enterprises which employ 900,000 people

(Re-)schooling and training programs

Additional unemployment benefits and various kinds of social aid

Free school catering, improved pre-school education

Funds allocated for food security and (vital goods such as meat, dry milk, sugar)

Broad-ranging Road Map project to sustain/create jobs in the regions, in 2009 more than 380 thousand jobs created

The Road Map to continue in 2010 with 143.1 bln tenge budgeted

Funding of KazAgro via emission of bonds (120 bln tenge) to the Oil Fund

Channeling of investments into areas with high export potential

Mainly financial and institutional support for projects in the agriculture and food industry through the central state and regional budgets, the National Welfare Fund, and the state holding “KazAgro”

Mainly infrastructure and electricity sector projects (120 bln tenge from the Oil Fund)

From NFRK assets 120 bln tenge were directed for refinancing of mortgages and 240 bln tenge for solving of problems in real estate through Samruk-Kazyna’ Real Estate Fund, which purchases incomplete projects, completes construction and rents them to the public

48,8 bln tenge and 46,3 bln tenge were allocated to complete the construction of objects in Astana and Almaty. More than 20 thousand apartments were completed as a result. An additional 40,8 bln tenge was directed to purchase apartments by the Akimat of Astana. To date more than 5.5 thousand apartments have been purchased.

At the same time, a public housing program for 2008-2010 was developed to resolve housing problems. The program, totaling 300 bln tenge, plans the construction of 28 million square meters of residential space

From NFRK assets 120 bln tenge allocated for SME support: 117 bln tenge via DAMU fund and commercial banks directed

for financing of SMEs (70% for refinancing of existing projects and 30% for new projects at a rate of 12.5%);

3 bln tenge will be directed to the direct lending for SME

In the framework of SME support (by three tranches & the “Damu – Regions” program) more than 8 thousands of SME projects were financed and 11.4 thousands of jobs were supported

Micro-project programs, operated through “Kazpost” offices

Measures to reduce “red tape” and to improve business environment for SME, including changes to Private entrepreneurship law to limit the number and duration of state inspections/audits and changes to licensing system

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Total anti-crisis funds allocated amount 3 029 bln tenge (20.2 bln. USD), including:

Anti-crisis measures on 5 directions – 1 691 bln tenge (11.3 bln USD)

Reduction of minimal reserve requirements – 490 bln tenge (3.3 bln. USD)

Reduction of tax pressure - 500 bln tenge (3.3 bln. USD)

Implementation of new plan of further modernization of economy and realization of employment strategy (Road Map) - 348 bln tenge (2.3 bln. USD)

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Disbursement of assets for the realization of Anti-crisis measures of the Government for the period of 2007-2009

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 Item

2007 2008 2009 February 2010

Balanceallocated disbursed allocated disbursed allocated disbursed allocated disbursed

1 Financial sector stabilization     557 540

  476 090

557 540

476 090

81 450

2 Houses construction 74 325 99 398

109 780

394 579

214 640

564 302

324 420

239 882

3 SME 48 800

85 417

180 009

120 000

188 655

254 217

368 664 -114 447

4 Agroindustrial complex 24 400

50 422

13 360 120000

199 536

194 822

212 896 -18 074

5 Implementation of investment projects of Samruk-Kazyna

        120 000

27 200

120 000

27 200

92 800

 Total

143 525

792 776

303 149

754 579 1 106 121

1 690 880

1 409 270

281 611

1 Anti-crisis measures 143 525

792 776

303 149

754 579 1 106 121

1 690 880

1 409 270

281 611

2 Reduction of minimal reserve requirements     490 000

490 000  

3 Reduction of tax pressure         500 000

500 000

 

4 Implementation of new plan of further modernization of economy and realization of employment strategy (Road Map)

        347 900

140 000

347 900

140 000

207 900

  TOTAL 143 525 792 776 303 149 2 092 479 1 246 121 3 028 780 1 549 270 489 511

mln. tenge

Disbursement of assets for the realization of Anti-crisis measures of the Government for the period of 2007-2010

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Source: MEDT, Statistics Agency Source: Statistics Agency (2010 – Jan-Jun)

27,726,4 26,2

20,6

27,0

28,8

23,1

31,9

16,6

23,0

34,1

11,1

13,514,8

-4,8

2,9

2003 2004 2005 2006 2007 2008 2009 2010

in % to GDP %, change

9,39,6 9,7

10,7

8,9

3,3

1,2

4

3

2 068

3 771

6 772

8 5147257,1

7552,6

8299,4

2003 2004 2005 2006 2007 2008 2009 2010F 2011F

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Strong economic growth in recent years fueled by private investment

GDP (% change) and GDP per capita in $GDP (% change) and GDP per capita in $ Investment in % of GDP and % yoy change Investment in % of GDP and % yoy change

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The country holds about 3.2% of the world’s total proven oil reserves. Overall prospective resources are estimated at between two and three times the size of proven reserves

Over the next decade, Kazakhstan is expected to double oil production on the back of higher production at the Tengiz field and launch of the Kashagan field, which is the fifth largest in the world by reserves

The republic holds 1.4% and 3.4% of the total world reserves of natural gas and coal, respectively.

Kazakhstan possesses all known useful minerals including major deposits of ferrous and non-ferrous metals, uranium and gold

Kazakhstan is also a significant exporter of grain, ranking among the world’s leading ten exporting countries

Outstanding and diverse natural resource wealth supports long-term growth prospects

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Outstanding and diverse natural resource endowment supports long-term growth prospects

Oil reserves (% total world reserves), 2009Oil reserves (% total world reserves), 2009

# World Rank

Kazakhstan Mineral Resources (% World Total & Rank)Kazakhstan Mineral Resources (% World Total & Rank)

Source: USGS

Source: Geological Committee of Ministry of Oil and Gas, RK

Source: BP Statistics, Broker’s research

Russia7%

Other13%

OPEC75%

Kazakhstan3%

US2%

1% 2% 2% 3% 6% 6% 8% 8% 8%13%

60%

Bauxit

e

Moly

bden

um

Bismut

h

Coppe

r

Iron O

reLe

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Rheniu

m

Cadmium Zinc

Uraniu

m

Chrom

ium

% o

f W

orls

Res

ourc

e B

ase

11 9 5 11 6 4 4 5 5 3 1

0

100

200

300

400

500

600

700

800

Saudi

Ara

bia

Kazak

hsta

n

Austra

lia

Russia

South

Afri

ca

Canad

aChil

e US

Ukrain

e

Brasil

Indo

nesia

China

thou

sand

s U

SD

12

Source: MOG, MEDT. 2009 – Statistics Agency operative data

Rising energy production will partially compensate for the decline in prices

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95,0

81,080,076,4

70,767,1

50

60

70

80

90

100

2007 2008 2009 2010 2011 2015

Oil Production

Oil production (mln ton)Oil production (mln ton)

Source: MOG, MEDT

Natural gas production (bln m3)Natural gas production (bln m3)

61,655,8

53,544,843,6

373633,529,6

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011 2012 2013 2014 2015

Gas Production

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New measures of the Government for the industry development

The Program of accelerated industrial-innovative development of Kazakhstan for 2010-2014 (PAIID)The Program of accelerated industrial-innovative development of Kazakhstan for 2010-2014 (PAIID)

Source: MEDP

Main goal of PAIID – accelerated industrialization and economic diversification to support long-term sustainable economic growth

PAIID Objectives:

Consolidation of public and private efforts and concentration of state resources for development of priority sectors of economy;

Ensuring a favorable macroeconomic and investment climate and building effective institutions and mechanisms of government and business interaction

Within the framework of PAIID the Industrialization Map is being implemented

At present the Gross Industrialization Map includes 237 projects with amount of 7,26 trillion tenge.

Republican Map includes 101 project with the sum of 6,76 trillion tenge, Regional Map includes 136 projects with the sum of 493 bln. tenge.

At the end of first half of 2010 there were launched 72 projects with the sum of 381 bln. tenge, at the second half it is planned to accomplish 72 projects with the sum of 459 bln. tenge.

Expected results:

Sustained pace of economic development with the annual EVA growth approx. to 50%

Structural shifts in the economy and industry towards greater production of value-added products; increase in the proportion of manufacturing up to 12.5%

Greater economic productivity

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Selected projects of the Industrialization Map

Agriculture: Construction of grain elevator complex in Mangystau oblast, 6.9 bln. tengeAgriculture: Construction of grain elevator complex in Mangystau oblast, 6.9 bln. tenge1

Construction industry and production of construction materials: Construction of cement plant 19.5 bln. tenge

Construction industry and production of construction materials: Construction of cement plant 19.5 bln. tenge

Oil processing, infrastructure of oil & gas sector: Modernization and reconstruction of Atyrau Oil processing plant, 362.3 bln. tenge

Oil processing, infrastructure of oil & gas sector: Modernization and reconstruction of Atyrau Oil processing plant, 362.3 bln. tenge

Metallurgy and production of finished metal products: Reconstruction of Taraz metallurgy plant, 11.6 bln. tenge

Metallurgy and production of finished metal products: Reconstruction of Taraz metallurgy plant, 11.6 bln. tenge

Chemical and pharmaceutical industry: Construction of Gas-Chemical complex in Atyrau oblast, 945 bln. tenge

Chemical and pharmaceutical industry: Construction of Gas-Chemical complex in Atyrau oblast, 945 bln. tenge

Energy: Construction of Balkhash thermal power-station, 360.7 bln. tengeEnergy: Construction of Balkhash thermal power-station, 360.7 bln. tenge

Transport and telecommunication infrastructure: Reconstruction of “West Europe – West China” road, 825.1 bln. tenge

Transport and telecommunication infrastructure: Reconstruction of “West Europe – West China” road, 825.1 bln. tenge

2

6

3

4

7

5

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Source: MEDP

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Kazakhstan has become a regional leader in attracting FDI, with the EU and the US amongst the largest investors in the country.

FDI inflows have become increasingly diversified, flowing into various non-oil sectors of economy such as metallurgy manufacture and financial sector.

Despite the crisis FDI inflows will continue to come into projects of oil & gas sector development.

Multi- annual foreign investment projects ensures sustainability of FDI inflows despite the global crisis

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Exploration and mining sector dominate in FDI activity(Q1 2010)

Exploration and mining sector dominate in FDI activity(Q1 2010)

FDI inflow by several main countries(Q1 2010), % shares

FDI inflow by several main countries(Q1 2010), % shares

FDI growth, $ mln.FDI growth, $ mln.

Source: National Bank

4 624

8 3176 619

18 45319 755

18 429

5208

10 624

2003 2004 2005 2006 2007 2008 2009 1Q2010

Traspor t and

comm.; 3%

Construction; 3%

Manufacture; 13%

Finances; 5%

Trade; 5%

Others;

12%

Exploration; 42%

Mining;

24%

Switzerland

5%

France

6%

USA

3%Holland

35%

Korea

3%China

5%

Others

29%

Italy

3%

Virgin isl.

6%

UK

5%

Multi- annual foreign investment projects ensures sustainability of FDI inflows despite the global crisis

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Source: National Bank Source: National Bank

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At the end of 2009, the state budget deficit amounted to 3.1 %, which is modest given the Government’s significant Anti-Crisis support

For 2010 the deficit is forecast to reach 4.4 %, it is projected to slowdown it up to 3.4 % by 2012

Oil price projections in the budget during 2010-2012 are set at $65 per barrel

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State budget deficits remain moderate in 2009-2011 as prudent fiscal policies are the focus

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Source: Ministry of Finance

Itembln.

tenge% to GDP

bln. tenge

% to GDP

bln. tenge

% to GDP

bln. tenge

% to GDP

Receipts 3510,3 22,1 3546,4 20,4 4110,3 21,3 4413,4 21,0

Tax 2228,7 14,0 2350,0 13,5 2817,5 14,6 3022,4 14,4

Non-tax 136,2 0,9 66,8 0,4 69,2 0,4 73,0 0,3

Transfer from National Fund 1104,6 7,0 1200,0 6,9 1200,0 6,2 1200,0 5,7

Expenditures 4003,0 25,2 4267,4 24,5 4844,3 25,1 5149,2 24,5

Current programs 2966,5 18,7 3255,8 18,7 3711,5 19,2 4381,3 20,8

Development programs 1036,5 6,5 1011,6 5,8 1132,8 5,9 767,9 3,7

Deficit (Surplus) -492,7 -3,1 -721,0 -4,1 -734,0 -3,8 -735,8 -3,5

Government debt volume 1618,0 10,2 2339,0 13,4 3073,0 15,9 3808,8 18,1

GDP 15887,8 17411,9 19316,0 21022,9

Average exchange rate, tenge to $ 147,5 150,0 150,0 150,0

World oil price (Brent), $/bar. 61,9 60,0 60,0 60,0

National Fund assets ($ mln.) 24280,6 22,3 27586,6 23,8 33256,7 25,8 39634,8 28,3

201220112009 2010

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State budget deficits remain moderate in 2009-2012 as prudent fiscal policies are maintained

State budget indicators and forecasts 2009-2012 (KZT bln)State budget indicators and forecasts 2009-2012 (KZT bln)

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Consolidated budget indicators and forecasts 2009-2012 (KZT bln)*Consolidated budget indicators and forecasts 2009-2012 (KZT bln)*

The consolidated budget feels the impact of lower oil prices, continues to show a moderate deficit

Consolidated budget, % of GDPConsolidated budget, % of GDP

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bln. tenge

% to GDPbln.

tenge% to GDP

bln. tenge

% to GDPbln.

tenge% to GDP

Receipts 3783,8 23,8 3841,7 22,1 4992,2 25,8 5307,0 25,2Oil 2406,3 15,1 2473,0 14,2 3126,5 16,2 3372,9 16,0Non-oil 1377,4 8,7 1368,7 7,9 1865,7 9,7 1934,1 9,2

Expenditures 4005,9 25,2 4269,3 24,5 4846,7 25,1 5152,0 24,5

Current programs 2969,4 18,7 3257,8 18,7 3713,9 19,2 4384,1 20,9Development programs 1036,5 6,5 1011,6 5,8 1132,8 5,9 767,9 3,7Balance -222,1 -1,4 -427,6 -2,5 145,5 0,8 154,9 0,7

2012Item

2009 2010 2011

25,2 24,5 25,1 24,5

25,225,822,123,8

-1,40,70,8

-2,5-3

7

17

27

2009 2010 2011 2012

Receipts Expenditures Balance

Source: MEDT

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State budget expenditures 2007-2012 show stable increase in expenses with reduction of development expenses.

In state budget revenues the transfers increase proportionally to increase of tax receipts. In 2009 to 2012 it is projected to increase of tax receipts by 1.4 times.

The state budget deficit increased by 1.7 times from 2007 to 2009. As a result the Government’s anti-crisis measures and conservative fiscal policy it is the deficit is expected to remain at around 3,5 % of GDP through 2012.

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Authorities continue to demonstrate commitment to conservative fiscal policy despite the economic crisis

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Source: Ministry of Finance

State budget expenditures (KZT bln and % GDP)State budget expenditures (KZT bln and % GDP)

Authorities continue to demonstrate commitment to conservative fiscal policy despite the economic crisis

Government revenues (bln KZT)Government revenues (bln KZT)

Government expenditures (bln KZT)Government expenditures (bln KZT) State budget deficit for 2007-2012State budget deficit for 2007-2012

F I 

S C

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   M

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 E M

 E N

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1 000

2 000

3 000

4 000

5 000

6 000

2004 2005 2006 2007 2008 2009 2010 2011 2012

0,00

5,00

10,00

15,00

20,00

25,00

30,00

State budget revenue (excl. receipts to National Fund)State budget expendituresState budget expenditures in % to GDP

2 629,8

4 034,4

3 505,3 3 541,5

4 134,44 342,5

2 356,0

2 819,5

2 228,7 2 350,0

2 817,53 022,4

258,0

1 072,0 1 104,6 1 075,7 1 171,0 1 266,0

0

5001 000

1 5002 000

2 500

3 0003 500

4 0004 500

5 000

2007 2008 2009 2010 2011 2012

Revenue, total Tax receipts Transfers

1 943,502482,4

2966,5 3255,8 3711,54381,3

1 170,00

1891,41011,6

1132,8767,9

1036,5

2007 2008 2009 2010 2011 2012

Current expenditures Development expenditures

-215,3

-333,2

-492,7

-721 -734 -735,8

-3,5-3,8

-4,1

-3,1

-2,1-1,8

(750)

(650)

(550)

(450)

(350)

(250)

(150)

(50)2007 2008 2009 2010 2011 2012

-4,5

-4

-3,5

-3

-2,5

-2

-1,5

-1

-0,5

0Balance in % to GDP

22

Republican budget for 2010-2012 provides for retention of current 20% CIT rate for 2010-2012.

Efficient tax system that supports diversification of the economy and expansion of tax base through legalization of shadow business.

Kazakhstan is ranked 52nd in Paying taxes metric by the World Bank’s “Doing business” report in 2010.

New tax code aims to support economic diversification and general economic activity

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Accommodation of all changes/amendments/interpretations to the Tax Code made during the last 5 years

Adjustment of the Tax Code for the application of IAS, IFRS

Revocation of advance payments of corporate income tax for small business enterprises

Extension of loss deferral period to 10 years

Stage-by-stage introduction of traditional VAT payment scheme (introduce reimbursement of VAT receivables from the budget)

Introduction of common social tax rate (11%) instead of regressive scale

Reduction of VAT to 12% from 13%

New tax code aims to support economic diversification and general economic activity

Measures in the New Tax CodeMeasures in the New Tax Code

Optimization of investment tax preferences

Revocation of advance payments of corporate income tax for small business enterprises

Extension of loss deferral period from 3 to 10 years

Reduction of CIT from 30% to 20% in 2009

Allow processing industries to file for tax deductions for construction expenditures and cost of fixed assets within a three year period

Replace the old royalty-based tax system with the new Mineral Extractive Tax that directs flow of the new tax by oil and tax companies to the National Fund and by other energy sector to the budget

Change the calculation of rent taxes, including change of base price levels from selling price to the world price levels and inclusion of coal in the tax base

Starting from January 2009 the government stopped issuing production sharing agreements (existing agreements will stay in force)

Increase tax burden of the energy sector from 49% to 62% (at base price 72.7 $/b)

Introduction of a more flexible EPT calculation

Corporate Income Tax ReformCorporate Income Tax Reform Taxation of Mineral Extractive Sector Taxation of Mineral Extractive Sector

F I 

S C

 A L

   M

 A N

 A G

 E M

 E N

 T

24

Source: Ministry of Finance

Public sector debt breakdown as of January 1, 2010, bln. tengePublic sector debt breakdown as of January 1, 2010, bln. tenge

19,717,4

15,0

11,4

8,16,7 5,9 6,4

13,0

16,6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F

3,54,9

8,1

22,3

27,5

23,4

34,9

14,7

11,5 11,4

20,622,3

30,3

18,1

14,2

21,3

0

5

10

15

20

25

30

35

40

2003 2004 2005 2006 2007 2008 2009 2010f

$ bln.

% to GDP

329,1

1289,0

0,0

473,3

2,570,672,1 7,40 39,3

0

300

600

900

1 200

1 500

External Domestic

GovernmentNational BankLocal auth.GuaranteedDebt by guarantee

Public sector gross debt (%GDP)Public sector gross debt (%GDP) Assets of National Fund (% GDP and US$)Assets of National Fund (% GDP and US$)

Source: Ministry of Finance, MEDT

F I 

S C

 A L

   M

 A N

 A G

 E M

 E N

 T

Very low sovereign debt and substantial assets allow the government to finance comfortably the projected deficits

25

Creation of a Customs Union

Perspectives of Customs Union (CU) in framework of EurAzECPerspectives of Customs Union (CU) in framework of EurAzEC

1. Increase of trade turnover between countries (Belarus, Kazakhstan and Russia). For local enterprises the market will expand to around 170 mln people.

2. As a result of unification of customs tariffs on goods from third countries, the weighted average tariff almost doubled. This will promote the decrease of reliance on imports.

This will give the chance to Kazakh goods to penetrate the markets which were firmly occupied by goods from third countries (particularly, from China) due to the difficulty of price competition.

3. Improving the investment and business climate in Kazakhstan (lower VAT, employment taxes) should help to secure foreign investment inflows to non-oil sectors aimed at common market.

4. The customs union will be a stimulus for cooperation of complementary enterprises and creation of vertically-integrated corporations in Russia, Belarus and Kazakhstan.

5. Unification of tax tariffs will lead to its growth for Kazakhstan, and with additional investment attracted would lead to increase state budget revenues

A D

D I

T I

O N

A L

I

N F

O R

M A

T I

O N