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Criticism Levied towards the EIZ

Infrastructure development in the SEZ is set to receive 372 billion tenge in funding.

Infrastructure development within the Special Economic Zone received a funding of 372 billion...
Infrastructure development within the Special Economic Zone received a funding of 372 billion tenge.

Criticism Levied towards the EIZ

Half of Kazakhstan's Special Economic Zones Sit Vacant Despite Billions in Funding

Let's dish the dirt on Kazakhstan's SEZs! Over 370 billion tenge was splurged on constructin' in special economic zones, but buildin' ain't complete in more than half of 'em. That's what our girl, Nataliya Godunova, the head of the Senate's Budget Committee, spilled at a plenary session, as per Total.kz.

Here's the lowdown: special economic zones are supposed to spur modern, high-productivity, competitive productions. But questions about these zones have been buzzin' for ages, says Godunova. And, back when there were only five zones, Kazakhstan's big shot demanded an investigation into their effectiveness. Well, today we got 13 zones, and the outcome ain't exactly what we hoped for.

From 2001 to 2019, Kazakhstan sucked up 372 billion tenge from the republican budget for SEZ infrastructure, with 62% comin' from National Fund resources. But here's the kicker: buildin' is completion-worthy in only three outta 13 zones. To complete all the construction, an additional 280 billion tenge is needed, leavin' nearly 60% of the total SEZ territory vacant.

Makin' things worse, the total volume of investments attracted to SEZs amounts to approximately 4.3 trillion tenge. However, only 29% of that, or 1.2 trillion tenge, went into industrial development. Godunova hints that much of this dough went to quasi-state sector entities - yep, the connections are deep in Kazakhstan's economy!

Many experts believe the slow development of SEZs can be attributed to bureaucratic hurdles, infrastructure constraints, and the need for more focused investment strategies. But hey, Kaizakhstan's showing economic growth with a 4.8% rise in GDP and increased industrial production. Maybe it's just a bump in the road!

Now, you ain't heard the last of Kazakhstan's SEZ story. Plans are in the works to launch a new zone, Korkyt Ata, in the Kyzylorda region, which aims to boost economic growth, transit transport, logistics, and tourism infrastructure. And, the Mangystau region is pumpin' cash into infrastructure projects, like the expansion of the Aktau Seaport special economic zone, expected to bring in more foreign investment.

But remember, these SEZs are a mixed bag, with strengths and weaknesses in their development. While questions about their effectiveness linger, lovers of stake and politics can't help but keep a close eye on Kazakhstan's SEZ progress!

Investments in the finance sector within special economic zones remain scant, with only 29% of the total investments attracted going towards industrial development. This raises concerns about how the funds allocated are being utilized, considering the deep connections in Kazakhstan's economy.

As the finance industry plays a significant role in driving economic growth, the underinvestment in industrial development within these zones could hamper Kazakhstan's SEZs' potential to spur modern, high-productivity, and competitive production as intended.

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