Investors advise Kazakhstan not to hide "rabbits in hat"

/REUTERS, Almaty, Oljas Auezov, December 8, 03/ - Foreign investors, who have invested more than $20 bn. into Kazakhstan economy within 12 years of independence, advise to the country's authorities to hold more predictable policy and consult with companies before making important decisions, and also pass the law about international arbitration. Kazakhstan President Nursultan Nazarbayev, in his turn, said that government would not go back on its plans concerning increasing of taxes for raw stuff sector, and also might tie admission to development of Caspian shelf with foundation of new non-raw productions. INVESTORS DO NOT LIKE SURPRISES "International investment union and companies do not like surprises, - said vice- president of ChevronTexaco Peter Robertson at the conference of Foreign investors council under the president of Kazakhstan on Saturday. "The biggest harm is made by the offered legislative changes, which appear like a rabbit from a magician's hat, - he added. - It staggers investors and causes fears about what else can appear from the hat". "Introduction of new rules of the game is to be more predictable", - head of European bank for reconstruction and development Jean Lemier agreed with him. Nazarbayev reacted with an extemporaneous joke for Robertson's speech: "We will try so that not only rabbit come (out of the hat), but a hen as well, which brings gold eggs". A bit before Nazarbayev and government's representatives had next meeting with foreign investors, Kazakhstan parliament quickly accepted corrections in the tax legislation, according to which all new fields at the shelf, with development of which the country hopes to enter the league of the largest world oil producers, will be developed on conditions, which are significantly less than the existing projects. Oil industry's representatives complained that the government had not acquainted them with its plans and did not want to listen to their opinion. "Much time is needed in order to establish trust, so it's necessary to be careful not to loose what was obtained with difficulties", - said Robertson. ChevronTexaco also had disagreements with authorities concerning methods of calculation of taxes and other payments of Tengizshevroil JV - largest oil extracting company of Kazakhstan, in which ChevronTexaco owns 50%. However afterwards the sides achieved compromise, and Robertson did not focus attention on that theme. COMPANIES ARE WAITING FOR THE LAW ABOUT ARBITRATION Despite the fact that government and investors were constantly saying about successful exchange of opinions and information during previous conferences of the council, which are held every six months during last five years, it was found out that authorities do not always imagine position of foreign companies. Thus, according to the words of the company's partner Baker & McKenzie Max Gutbord, foreign investors have been waiting for three years for passing of the law about international arbitration,. "Since Kazakhstan obtain independence only two foreign arbitration decisions have been executed, - he said. - Sure, it's possible to explain it by the fact that Kazakh side never disputes, but it seems to me that it's not a real explanation. It's more real that (international arbitration's decisions) just re not accepted for execution". "This problem can be easily and quickly solved by passing the model law UNCITRAL", - he added. At the same time, minister of industry and trade Adilbek Jaksybekov, whi was speaking before him, said government considered it as unnecessary, and investors agreed with it. Afterwards Nazarbayev, summarizing results of the conference, said "it's necessary to solve this question". KAZAKHSTAN DOES NOT HURRY Commenting on investors' speeches, Nazarbayev made it clear that increasing of tax load on raw industry was inevitable. "If they don't want (to invest) - we do not hurry", - he said having advised to look for privileged taxation mode in refining industry. "The government will tie presenting of fields (at Caspian shelf) to investors with the fact that they will found industrial productions in Kazakhstan at the same time ", - said Nazarbayev. Only in several years after failure of USSR and obtaining of independence Kazakhstan made a dash in economic development. Reforms of financial markets, many of which still have no analogues in CIS, have laid on good ground of growing oil extraction on the because of grown prices for oil - major export goods of Kazakhstan. Since 2000 GDP started growing by 10% a year in the average. Since the very beginning the country's authorities staked on foreign investments, first of all, in oil and gas branch and non-ferrous metals production. Scaled investments on "parole" of Nursultan Nazarbayev resuled in abrupt growth of welfare of a narrow group of people in the country that let authorities speak aloud about rise of "domestic bourgeoisie" and hint on its ability to take place in more attractive branches, where foreigners were dominating at that moment. [2003-12-08]