Gulmira Kabiyeva. Anti-Corruption Support to Doing Business Transparently


Head of the Project Office

Protecting Business and Investments

Anti-Corruption Support to Doing Business Transparently

After signing of a Memorandum on Cooperation and the Creation of the “Protecting Business and Investments" project office between the Agency of the Republic of Kazakhstan for Civil Service and Anti-Corruption, as well as the Ministry of Foreign Affairs and the Ministry of Investment and Development. Astana, 11 of April 2018

The prosperity of any state, the embodiment of new ideas and innovations, depends on business development. Thanks to the full support of the government of Kazakhstan, a solid institutional framework of a market economy has been formed over the years of independence. Private initiatives and free enterprise became the key factors of economic development and growth of the country's welfare.

Today, the international community highly appreciates the business environment in Kazakhstan. According to the 2018 World Bank Doing Business research, Kazakhstan ranks 28th out of 190 countries and we are first (last year in the third place) in terms of Protecting Minority Investors. Our country ranks third under the Protection of Investors indicator of the Global Competitiveness Index of the World Economic Forum.

Kazakhstan became an associate member of the Investment Committee of the Organisation for Economic Cooperation and Development (OECD) and also joined the Declaration on International Investment.

Within the implementation of the Plan of the Nation, the Astana International Financial Centre was established on the experience of such well-known international financial centres as Abu Dhabi, Dubai, London, New York, Singapore, Shanghai and Tokyo. At the same time, the country does not intend to rest on its laurels and continues to take different measures to support and protect the rights and legitimate interests of business.

This year, the President signed the law “On Introducing Amendments and Additions on the Improvement of Business Regulation." The main purpose of the changes is the liberalisation of legislation in the field of business regulation. Amendments to the law envisage the reduction of state control functions by 30 percent. Approximately 1,000 amendments were made to 14 codes and 109 laws to create the most favourable conditions for boosting business.

The head of state noted that “now it is extremely important to open all possible 'gateways' to strengthen business activity and involve a wide range of people in entrepreneurship." At the 31st plenary meeting of the Foreign Investors Council, the head of state once again paid attention to the need to create better conditions for business.

Effectiveness of investment decisions made is based to a certain extent on the efficiency of the anti-corruption policy that has received a new vector thanks to the political will of the President of Kazakhstan.

Systemic and comprehensive measures to prevent corruption have allowed Kazakhstan to improve its position in the international rating agencies, whose evaluation depends on equity prices, credit availability, investment attractiveness and trust to states, firms and banks. Thus, Kazakhstan entered the list of lower level of corruption, gaining 31 points for the first time in the Transparency International Corruption Perceptions Index for 2017. These estimates are the highest ones over Kazakhstan's history in this rating (for comparison, in 1999 - 23 points). Similar progress was observed in the estimates of seven out of nine international rating agencies.

In the framework of the anti-corruption strategy approved by the head of state, the 100 concrete steps Plan of the Nation lays the groundwork for a fundamentally new model of a state free from corruption.

This model is based on early prevention and effective diagnosis. The activities are aimed at the prevention of corruption incidents rather than addressing the consequences. The prevailing desire was to disseminate the “do not give and do not take bribes" principle to make corruption impossible and disadvantageous for both officials and citizens. For the first time, prevention institutions have been introduced, including anti-corruption monitoring, as well as the identification, analysis and elimination of corruption risks. A set of measures is being implemented for anti-corruption training and education of the population, creating an atmosphere of absolute rejection of bribery. We are gradually beginning to realise that the best way to rid society of corruption is early prevention and unification of efforts of the state, civil society, business community and citizens of Kazakhstan.

In addition, Kazakhstan still faces certain risks to business and investors connected with their activities in our country. In this regard, the Agency intends to promptly and rigidly respond to any unlawful interference with business. In the past three years alone, the Agency has identified 976 cases of unlawful interference with business activities. Illegal actions brought 389 officials to criminal responsibility.

The above statistics are confirmed by studies conducted among business entities of the Atameken National Chamber of Entrepreneurs (NCE), which assessed the level of corruption in the regions and in state bodies. According to the results of the special review on corruption sociological research, the frequency of corruption schemes has increased in the period of 2016-2017. Entrepreneurs have noted an increase in corruption in the Almaty, Atyrau, Mangystau, South Kazakhstan and Zhambyl regions. It has been found that every second corrupt transaction is initiated by an official (54.5 percent) or an entrepreneur (40.6 percent) and both parties act as initiators in 5 percent of cases. According to entrepreneurs, the main reasons for corruption are unreasonably high requirements and their impracticability, the complexity of the procedures, the lengthy period of execution and the desire to evade responsibility.

As for the protection of rights and legitimate interests of entrepreneurs, many unresolved issues remain; first of all, it concerns the quality of handling complaints by state bodies.

For ensuring a favourable investment climate and increasing the confidence of business and investors in government institutions, the agency, together with the Ministry of Foreign Affairs and the Ministry for Investment and Development of Kazakhstan, created a “Protecting Business and Investments" project office, which officially began its work on June 8. Its activity is focused on anti-corruption support for business projects in Kazakhstan. Specialised front offices were established throughout the country, in all oblasts and cities of republican significance.

The only requirement for an investor is adherence to an anti-corruption agreement, which means commitment to doing business transparently and adhering to a zero tolerance policy against any manifestation of corruption.

We believe that the Agency's assistance from the beginning to the completion of a business project will be a significant constraining factor for dishonest officials who wish to receive corruption revenue from an entrepreneur.

Anti-corruption support is provided under the accession of businesspersons and investors to the above-mentioned Agreement. The key novelty of this project is the constant presence of the Agency and ministries in the activities of investors, which will allow them to conduct business freely and legally. Today, anti-corruption support is available for 229 projects of domestic and foreign investors for a total amount of over 6.4 trillion tenge (UD$17.4 billion).

Activity of the project office is based on a constructive approach to all the details while protecting the legitimate interests of entrepreneurs and investors. Entrepreneurs go directly to the project office, to the regional front offices and also operate through the Agency's call centre (1424).

The portfolio of front offices already has a plenitude of resolved issues. Direct communication with investors made it possible to identify pain points that hinder the development of business and entrepreneurship in the country. During the current period, 190 (about 85 percent) out of 223 received appeals on problematic issues were resolved positively, while providing assistance to entrepreneurs and investors.

The Agency has applied a fundamentally new anti-corruption approach, which envisages 24/7 free of charge anti-corruption support for investment projects. The investor may contact the project office or regional front offices for verbal advice or send a written request. Our task is to prevent corruption and to preemptively protect the rights and interests of investors and, in general, the entire business.

Created at : 21.12.2018, 12:05, Updated at : 21.12.2018, 12:05