Private Sector Can Help Kazakhstan Become High-Income Country: World Bank Group Study

A new World Bank Group study on Kazakhstan says the country’s wheat, livestock, and transport sectors are among those with the strongest potential for private investment. Those investments could help create new markets and boost job creation, the study found. 

The Country Private Sector Diagnostic for Kazakhstan, jointly produced by IFC and the World Bank, says the country needs to diversify its economy, gradually reduce the state’s presence in the economy, and further develop the private sector. Kazakhstan’s strategic position between Asia and Europe, complemented by targeted reforms to encourage investment and increase competitiveness of its key non-oil sectors, can help the country transform itself into a high-income country and pursue its development ambitions.

“Private sector diagnostics are designed to help our member countries achieve their development goals through increased private sector participation in the economy,” said Lilia Burunciuc, World Bank Regional Director for Central Asia. “The Kazakhstan’s Private Sector Diagnostic provides a road map to support the government in undertaking reforms that will help increase private sector investment and help diversify the economy away from oil, gas, and mining.”

The study identified several barriers that need to be addressed to increase private investment. They include a challenging business climate, constraints in access to finance, poor logistics, quality standards that are not aligned with potential export markets, especially in agribusiness, and the dominance of state-owned enterprises, which stifle the private sector.

“By fostering the development of agribusiness, transport, and logistics, Kazakhstan can speed up the diversification of its economy,” said Tomasz Telma, IFC Regional Director for Europe and Central Asia. “An infusion of private investment in these industries will help create a more dynamic, export-oriented, and productive private sector, creating new markets and driving economic development in the country.”