January 31, 2011 / 11:36 AM / 7 years ago

Kazakhstan to unveil sell-off blueprint soon

DAVOS, Switzerland (Reuters) - Kazakhstan, seeking $100 billion in foreign investment in the next decade, plans to unveil a key privatization program by the end of the first quarter, its prime minister said.

The country is aiming to diversify its resources-dependent economy and become a leading emerging market by 2020.

The head of Kazakhstan’s sovereign wealth fund said on Friday that the sell-off - a so-called “people’s IPO” - would begin in 2012.

“In 10 years time, Kazakhstan will be among the top emerging markets,” Prime Minister Karim Masimov told Reuters Insider.

“We strongly believe that, in the next decade, we will get about $100 billion of foreign direct investment into the Kazakh economy.”

Kazakhstan’s economy is estimated to have expanded by 7 percent in 2010, Masimov said, while industrial production grew 10 percent as the country emerged from the financial crisis.

Kazakhstan was among the first and hardest hit by the crisis, but banks that defaulted emerged from billion-dollar restructuring programs last year promising a return to growth.

“During the crisis, the Kazakhstani government and state played a more significant role,” Masimov said on the sidelines of the World Economic Forum in Davos.

“But I think now it’s time to take a step back: to let private initiative, foreign direct investment and our local businesses play a bigger role,” he said in the interview on Friday.

“The government should play a role of regulator, as an investor in infrastructure and ... a co-investor, if needed.”


Kazakhstan, whose economy has grown faster than neighboring Russia’s, is benefiting from high oil prices and, with vast untapped reserves, is likely to attract investors. It is also the world’s largest uranium miner and a major copper exporter.

    Masimov said a blueprint for the sell-off of state assets - a move Kazakhstan hopes will kick-start a lackluster domestic stock market - would be presented to the government in the first quarter of 2011.

    President Nursultan Nazarbayev, who has ruled for two decades and enjoys sweeping power in the nation of 16.4 million people, has set Kazakhstan a target of generating 40 percent of GDP from small and medium-sized businesses by 2020.

    “Our aim is to attract foreign direct investors into the non-resource area,” Masimov said, citing as example an investment by General Electric (GE.N) to produce locomotives.

    Negotiations continue, meanwhile, between the state and the foreign-owned consortium that owns the massive Karachaganak gas field in northwest Kazakhstan.

    State oil and gas company KazMunaiGas KMG.UL has stated its intention to acquire a stake in the consortium, which includes Italy’s ENI (ENI.MI), Britain’s BG Group BG.L, U.S. major Chevron Corp (CVX.N) and Russia’s LUKOIL (LKOH.MM).

    Asked when negotiations would be concluded, Masimov said: “Soon.” But he declined to give more details, or to confirm or deny the state’s interest in the project.

    “We are committed to the sanctity of the contract,” he said.

    Writing by Robin Paxton in Almaty; Editing by David Cowell

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