The United Nations Conference on Trade and Development UNCTAD has released its World Investment Report 2022. According to the report, net foreign direct investment inflows into Kazakhstan amounted to a record $6.1 billion over the past five years, a 83% more than the previous year. This indicator became the highest among all the countries of the post-Soviet space.
61% of all investments in Central Asian countries
Following Kazakhstan on the list of record holders for foreign direct investment among post-Soviet states are Uzbekistan ($2.5 billion), Lithuania ($2.2 billion), Georgia ($2 billion), and Belarus ($2.5 billion). 1.6 billion).
It is worth noting that the inflow of net foreign direct investment to the Central Asian countries as a whole increased by 39% and amounted to $10 billion, of which Kazakhstan accounts for more than half, 61%.
As already mentioned, these data are taken from the report of the United Nations Conference on Trade and Development UNCTAD, which is a kind of think tank and headquarters for the development of recommendations of the UN General Assembly in the field of trade. and investment. Within the United Nations system, UNCTAD plays the role of focal point for finance, technology, investment and sustainable development. The main objectives of the organization are to promote the development of the world economy through the development of organizational and legal conditions and mechanisms for international economic relations. The organization conducts economic policy analysis, convenes intergovernmental meetings, interacts with civil society and the business sector around the world.
In an introductory article to the report, UNCTAD Secretary-General Rebeca Greenspan says that over the past year, prospects for international investment have looked downright bleak against the backdrop of a growing crisis in health systems, climate change and the economic crises that caused uncertainty in investors around the world. Rising inflation, fears of a recession and turmoil in financial markets halted many investment plans at the beginning of the year. In the end, international investment flows were still in crisis, but the system was more resilient than expected.
“While foreign direct investment worldwide fell 12% last year, falling to $1.3 trillion, its decline was limited and investment in developing countries grew, albeit minimally, so investors They announced new projects in industry and infrastructure by the end of the year.” writes Rebecca Greenspan. – As for the business as such, the situation in this area does not inspire optimism. Significant imbalances persist in global investment patterns. Investment growth in developing countries affects only a small number of young economies. Foreign direct investment in many developing countries is very modest, while investment in the least developed countries has fallen 16% from an already low level.
The author highlights the growth of some sectors of the economy, such as the production of semiconductors, whose recovery is due to the shortage of chips. However, this growth occurs in the context of weak performance in other industries that are important to the productive capacity of developing countries.
“While some investment sectors important for sustainable development (such as renewable energy) are attracting significant foreign investment, others, particularly water, sanitation and agricultural food production, are developing slowly. Foreign direct investment in agriculture, which is so important to maintain food security, is lower today than it was in 2015, when the Sustainable Development Goals were adopted,” the author writes.
“Together, with intelligence and determination, we must find the right path to overcome these challenges and build a more stable and just world for future generations”, concludes the Secretary General of the United Nations Conference on Trade and Development.
promising investments
Some economists call the investment climate – ie. economic, financial and political conditions of the country or region – the basic factor in the development of the economy and the well-being of the population.
In turn, the state of the investment climate is influenced by various factors. These are the standard of living of citizens, the level of crime and corruption, the state of national security, the degree of stability of the political regime, the fiscal policy of the state, the responsibility of the government before political institutions and citizens, the transparency of government decisions, the state of property rights, etc.
The factors that affect the entry of foreign investment are divided into soft and hard. The former include the regulatory and legislative framework, financial and tax incentives, the relationship between government and business, and administrative processes. Hard factors include the geographic location of a country or region, natural resources, infrastructure, the level of human capital development, and the size of the domestic market. An unfavorable investment climate becomes an obstacle to foreign investment in the country’s economy, which inevitably affects the standard of living of citizens.
A report from the United Nations Conference on Trade and Development UNCTAD points to a 6% increase in foreign direct investment in 32 landlocked developing countries. Kazakhstan once again leads this ranking, followed by Ethiopia, Uzbekistan and Mongolia.
The Republic of Kazakhstan also ranked fifth among the world’s emerging economies in attracting net foreign investment in renewable energy projects for the period 2015-2022 with an indicator of $56.3 billion.
