Q: How would you characterise the economic health and future prospects for Astana?
The assessment of the state of the economy of Astana is valid only in conjunction with [the assessment of] the economy of Kazakhstan. This year, independent Kazakhstan will celebrate its 20th anniversary. During that time, our country has turned from a backward fragment of the Soviet empire to the recognised leader in its economic development. This was made possible thanks to effective market reforms and a promptly adopted strategy of long-term development [Kazakhstan-2030], on the basis of which are changes in all economic and social policies.
But, undoubtedly, the largest realised strategic achievement of independent Kazakhstan is the new capital of Astana. This is a global project, from the economic and socio-political to the demographic point of view. Astana has become a project that has had a significant effect on all sectors of the economy and on the lives of nearly everyone in the country.
The development of Astana has been and remains a top priority of economic development throughout the country. In just 10 years, the city’s GDP has increased by more than by 50 times, the share of new capital into the country's GDP has increased from 1.5% to 10%, while industrial output has risen more than seven times. It is significant that the volume of the growth of investment in fixed capital since the movement of the capital [from Almaty] has increased by 22 times.
Q: Which types of FDI are you seeking for the city? Where are the biggest needs?
Attractive areas for investment in Astana remain traditional – urban development, infrastructure, transport and communication. And housing is very important: in his speech at the recent congress of the Nur Otan Party, which became part of the election programme, President Nursultan Nazarbayev put before the executive authorities the task of ensuring the country’s population through affordable and quality housing.
And yet, the main priority we give to investors who share our plans [is] outlined in the strategy of accelerated industrial and innovation development. Astana as the capital, by definition, cannot and should not be an industrial metropolis. We see its future as the international innovation centre. We need new technologies, companies producing products with high added value. We need new knowledge. We strive to provide a high quality of life for Astana residents, and therefore welcome the investment, whose purpose is to create centres of research in technology, modern education and medical care. We also consider our capital as a promising centre of international sports and tourism business.
Q: Are there any incentives in place to entice foreign investors?
Certainly, we have incentives and they are quite attractive. In particular, the Astana New City special economic zone, created on behalf of President Nazarbayev, deals with the problem of attracting profitable investments. It operates according to the worldwide proven formula of tax credits, minus customs duties and plus free land.
Investors do not have to pay VAT on the sale of goods, work and service turnovers undertaken for construction purposes in the territory of the zone. Zero tax is applied on the sale of goods and equipment used during the construction. They do not have to pay land tax in areas where the facilities are under construction. They do not have to pay property tax on the residual value of buildings and structures.
In addition, a regime of free customs works in the zone. When placing foreign goods under the customs regime, customs duties and taxes are not imposed, except for the levying of excise duty on imported goods, and non-tariff measures are not applied, except for requirements for product safety.
We hope that such conditions will attract not only international construction companies, but also today's architects and town planners.