Modern-day Kazakhstan is a paradox. It hosts relatively sophisticated systems of internal communication, transportation, industry, agriculture, education, housing and health care, although most of the infrastructure suffers from funding restrictions. Kazakhstan is continuing to develop systems of business law, taxation, banking, and external links to the international business community and, most importantly, a market economy.
This paradox presents a unique challenge to business people entering Kazakhstan when attempting to assess real business risks and to make reality-based decisions rather than relying on perceptions. Abundant natural resource wealth and agricultural production make Kazakhstan's population one of the potentially richest countries per capita in the former Soviet Union. However, converting this potential into reality requires many critical factors to function in concert. Attracting and protecting investors is among the most critical of these factors.
As with many developing economies seeking external investment capital, Kazakhstan finds itself in a highly competitive situation. The wealth of its petroleum, mining, and agriculture sectors may be too great a temptation for many foreign investors to pass up. The question will be whether Kazakhstan's legal and business infrastructure will be able to keep pace with the demands inherent to investment development. Kazakhstan has successfully introduced concepts of property ownership, human rights, environmental protection and investment protection. In so doing, Kazakhstan has taken a giant step in meeting these development needs. New laws that appear to be consistent with the intent of the constitution are written and adopted with regularity. However, a number of operational regulations and legal practices are based on or derived from Soviet law.
In spite of some world-wide market fluctuations in the last few years, of late there seems to be a resurgence of interest in Kazakhstan among foreign investors. Coupled with recent political events in the region, many around the world seem to be focusing more closely on Central Asia as a whole.
Investors, whether multinational oil companies or small trading companies, continue to weigh the risks associated with Kazakhstan investments and are mindful of the impact that a fluctuating commodity price, like oil, can have on this emerging economy thatdepends heavily on its natural resources.