With the economic development community slowly beginning to exit nationwide lockdowns, fDi is reaching out to professionals on the FDI frontline as they grapple with the biggest global challenge in recent history.
Covid-19 has not spared Kazakhstan, with the central Asian country enforcing many of the social distancing measures seen elsewhere. On top of this, the resource-rich nation has also had to contend with the collapse in the oil price. Baurzhan Sartbayev, chairman of national investment promotion agency KazakhInvest, talks about how his team is trying to adjust.
Q: How has your team coped during the crisis?
A: A number of projects have been delayed and that is a challenge, but we are keeping busy so that once borders reopen investment projects can get going.
Overall, we haven't had substantive issues with the change to home working. However, remote working is new for us and has required new skills from management and employees, such planning, self-motivation and communication.
Based on our experience over the last few weeks, it’s quite possible that we will decide to introduce a greater level of automation and more flexible working conditions in the future.
Q: What business processes have you automated?
A: We have automated general business processes for investment promotion and the support of existing projects.
We have, for example, developed our in-house relationship management system so any request we receive gets processed and directed to the right person within the organisation.
Q: Will digital onboarding practices survive beyond the crisis?
A: This is the new normal. Everything will be done remotely this year, I think. The crisis has shown us that even face-to-face meetings are not always necessary.
Instead of attending conferences, we can share information online, as well conduct negotiations digitally.
Overall, business has been affected negatively, but not to the extent we expected at the very beginning of the crisis.
Q: How has the crisis affected your strategy?
A: FDI will drop by at least 30% this year, according to Unctad. That decline will impact developing economies the most. Our hope is that the investment climate we have developed in Kazakhstan over the last decade should help mitigate the impact of the crisis.
The country needs to take care of the economy, particularly small and medium enterprises (SMEs).
At KazakhInvest, we introduced a 24/7 hotline for any type of enquiry, and we are liaising with the government to develop a more flexible approach to investment contracts.
Q: What do you predict in the mid-to-long-term?
A: One of our main challenges is to draft a plan of action once the pandemic is over. The global economy will change and we expect significant competition for FDI.
We are planning to implement measures to increase the attractiveness of Kazakhstan to foreign investment, such as strengthening cooperation with international financial institutions and coming up with new approaches to develop SMEs.
The crisis also brings opportunities to further diversify the economy into agriculture and food production, medical devices, industrial machinery, and high value-added products.
Q: The market expects start-ups to lead the post-Covid-19 recovery. What’s your start-up strategy?
A: We’re including startups in our strategy. Before our focus was mostly on large companies, but we now acknowledge that start-ups have great potential and can be more adaptable.
In the Information and communications technology (ICT) space we have a state-led programme ‘Digital Kazakhstan’ which seeks to accelerate the use of digital technologies to boost economic development. As a result, several companies are interested in investing in the country in areas like data mining and data centres.
However, it’s important to gauge the success of FDI primarily in terms of job creation, and ICT companies don’t create many jobs, although they generate other positive economic impacts.
Q: Global value chains are expected to become shorter. How is this going to affect Kazakhstan’s vision of becoming a trade link between the east and the west?
A: Many governments may take a step back with regards to international trade and move towards import substitution policies – abolishing the import of foreign products and encouraging production in the domestic market.
As a country, we may need to substitute some imports to ensure our market receives everything it needs, particularly with regard to our Economy of Simple Things programme – which seeks to boost manufacturing and agricultural processing – and engage more with SMEs.
Baurzhan Sartbayev is the chairman of Kazakhstan’s national investment promotion agency KazakhInvest.
You can find the full archive of the fDi’s Virus Diaries series at the following link. If you work in economic development or investment promotion and want to share your experience in dealing with the coronavirus, get in touch at fDi@ft.com.