Prospective Investment: Kazakhstan's efforts to successfully conquer the world financial market
This coming summer, Kazakhstan will officially launch its Astana International Financial Center (AIFC). In fact, the center has been operating since January 1, and already has some achievements to boast. The project that seemed, at first, utopian, became real, and now there is no doubt that Astana can really become the new Hong Kong or London.
First of all, what is AIFC? By analogy with other centers, there are concentrated representations of world famous companies, banks and specialized financial institutions, through which, a huge flow of international transactions with securities and gold, takes place. AIFC is a platform where it is convenient for any company to place its shares, and investors have the opportunity to choose the instruments for investing. Kazakhstan, as the organizer of such a structure, receives in return investments, technologies, bonuses from financial operations and, most importantly, a completely new positive image.
Here are some examples to understand AIFC’s full scale. The strategic partners and shareholders of the center are such big names in the financial world as the Nasdaq exchange, specializing in transactions of high-tech companies, and one of the world's largest investment banks Goldman and Sachs. In addition, one of the first on the site was y the Development Bank of China - the largest in the world of its kind. We must understand that to participate in any projects, these structures have a strict list of requirements. And Kazakhstan's financial center suits them by these standards and requirements.
The three organizations listed above are only a small part of the list of financial services and recipients of the AIFC. By the end of 2018, about 100 companies will be registered at the AIFC site, in 2019, according to plans, there will be at least 250, and by the end of 2020 - about 500. They will come from various parts of the planet. AIFC should become a financial hub for the countries of Central Asia, the Transcaucasian republics, the EAEU, the Middle East, the territory of Western China, Mongolia and Europe.
In order to understand how serious Kazakhstan is, about implementing the AIFC projects, it is necessary to take into account that the financial center is part of a big strategy for diversifying the economy of the nation. The idea of its creation came in the days of the first wave of the crisis, the slowdown in world economic growth and the fall in oil prices. Kazakhstan understood that it needed to somehow secure its economy from new shocks. One of the correct ways was to attract foreign capital. The AIFC in this situation was a win-win.
That is, for Kazakhstan this is not just an image project, it is the direction of the national policy, the strategic plan for strengthening the stability of the economy and improving the welfare of citizens. Therefore, the authorities approached the preparation of the financial site very thoroughly. And the partners obviously understand this. AIFC has interested Russian companies that are ready to become residents and place their investment, although a similar financial center was launched in Moscow. But Russians trust Astana more. And this is the main indicator of quality.
It’s easy to understand what attracts Russian and other partners to Astana. All procedures in the country, one way or another, are related to the activities of investors, and are simplified as much as possible. Preparation of papers, registration - all this is done by the representatives from Kazakhstan on the spot. At the same time, they communicate with potential partners in their own language: all tax, customs procedures are translated into English. Investors in Kazakhstan are provided with a preferential tax regime and an independent financial court that operates on the basis of English law. These practices, each separately, are found in other financial centers. AIFC, in fact, has accumulated the best of them and is ready to show what will come of it.
Here are some conjectures: Kazakhstan, which has been spoiled by investors’ attention thanks to its political stability, even during an economic crisis; adequate manner of dealing with partners and hospitality in general; will be able to significantly increase its investment potential and develop for itself a completely new direction of activity. As calculated in Astana, the cumulative effect from the creation of the AIFC only up to 2028 could exceed $40 billion.
It is clear that the project still needs to be fully implemented and these indicators have yet to be achieved. Experts believe Kazakhstan will undoubtedly succeed. At least, because in the asset of the nation and its authorities, there is already one successfully implemented project, which also initially provoked a storm of criticism, skepticism and misunderstanding - the new capital of the country - Astana. The idea of moving everything from the well-known, comfortable, warm Almaty to a climatically severe and little-known Astana, was first perceived as a joke. Then some speculated, if the city gets recognition it would take up to 50 years. This year Astana celebrates its 20th anniversary, and today Astana is a platform for Syrian negotiations, objectively more successful than Geneva, Astana is the venue for the international exhibition EXPO, Astana is the city where the first OIC summit on science and technology was held, Astana is the platform where the first OSCE summit was held since 1999. International experts and political analysts believe, Astana has been recognized worldwide, therefore its ambitions to become a financial hub of Eurasia, are valid.