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Brief Overview:

Economics of Multinational Enterprise: FDI inward flows are the amount or value of direct investment made by residents other than the reporting economy. Kazakhstan is the largest Central Asian economy. The country’s economy relies primarily on energy (Uranium reserves), oil & gas and mining. It has other flourishing sectors working, the car industry, and technology and retail services. China, Russia and many western countries bring inward FDIs in Kazakhstan. It is a perception that only China and Russia are major foreign investors but United States, and many other countries are the sources of inward FDIs in Kazakhstan.

More than half of the FDIs in Kazakhstan are in energy and mining sectors. Another emerging trade and investment partner is the European Union. EU’s investments account altogether almost half of the $177.7 billion FDIs in Kazakhstan. Government of Kazakhstan provides incentives to foreign investors in the form of a 5-year waiver of taxes, subsidies, special economic zones, and exemptions from some duties (Weitz, 2013).

Sources of Inward FDI:

Disregarding the perception that only Russia and China are major foreign direct investors in Kazakhstan, National Bank of Kazakhstan shows that Western countries were among the top investors by September 2012. Netherlands was at top with $49 billion of inward FDI in Kazakhstan, the United Kingdom $24.7 billion, and the United States $17.9 billion.

Meanwhile, China and Russia were two main non-western countries with $18.2 billion and $5.3 billion of investments respectively by January 2013. The United States began to invest in Kazakhstan in 1990 especially in the energy sector. Existing US companies operating in Kazakhstan are Chevron, Exxon Mobil and ConocoPhillips. France is also among the top FDI sources in Kazakhstan as its companies are active in aeronautics, transportation and even in the energy sector.

Kazakhstan’s government provides multiple benefits to foreign investors but to an extent, domestic investors have an edge. It doesn’t affect the inward FDIs in country as it continued to flow in. In 2015, the mining and construction sector witnessed a 30-40% decline in foreign investment. However, China had announced USD 2 billion of investment to develop a ‘Silk Road’ and other projects of Eurasia oil exploration. Kazakhstan is expecting USD 500 million of investment in oil exploration project by US, France, UK, Netherlands and China…………………….