Speech by Ashok Lavasa, ADB Vice-President for Private Sector Operations and Public–Private Partnerships, at the Foreign Investors’ Council Session: Measures of Post-COVID Economic Recovery and Investment Activity in Kazakhstan, 20 November 2020
Your excellency President Tokayev,
And Distinguished delegates,
Good evening
I am pleased to participate in the discussions today on key policy issues as we look ahead to recovery from the current Covid crisis. The pandemic has affected global economy in an unprecedented manner, and Kazakhstan too has been impacted by the pandemic and plummeting oil prices.
At the government’s request, ADB was among the first development partners to commit its support to Kazakhstan in March 2020. By June ADB approved countercyclical support loan of 1 billion dollars and then provided a grant of over 5 million dollars to support health and social sectors. Together with the Ministry of Health and UNDP we are updating the online COVID-19 monitoring and tracing platform, revising medical waste management standards and training health professionals on environmentally sustainable utilization of medical waste.
The ongoing challenges may understandably keep the government preoccupied with urgent immediate issues. However, in our view, it is important for Kazakhstan to maintain its impressive record as a champion of foreign investment in the region.
We welcome the establishment of the Coordination Council in 2019 for attracting investments. The Council has prioritized investments with high-level technology content. As per a recently published ADB study, a general pattern of innovation in Asian economies is that at the initial phase countries adopt foreign technologies through FDIs, and then move to a phase of growth driven by their own innovation. In this second stage, countries need to nurture technology absorption capacities through investment in research and development (R&D). Advanced economies invest about 2.5% of GDP in R&D and developing Asia does about 2.1%. In 2019 Kazakhstan invested a mere 0.17%. In our view, as an upper-middle-income economy, Kazakhstan can invest more to expand innovative activity within the country.
We believe that the Coordination Council while it receives suggestions of investors, should be empowered to address those issues. Going by our own experience of working on the Karaganda University Hospital since 2016 we believe government would benefit from long-term strategic investment planning in order to have a consistent approach to PPP and infrastructure development.
There is also a need to develop reliable and diversified long-term local currency funding for investors and deepen the local capital markets.
In the end, I would like to assure that ADB stands ready to support government’s economic and social recovery as needed and looks forward to a continuing collaboration.
I wish you - Your Excellency, the people of Kazakhstan, and all present here, good health and a happy future.
Thank you.