Natural Resources Giant Kazakhstan: What kind of international economic regulation framework is applicable to its SOEs?

Author Name Alisher UMIRDINOV (Nagoya University)
Creation Date/NO. April 2017 17-J-029
Research Project Comprehensive Research on the Current International Trade/Investment System (pt.III)
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This paper investigates the applicable international economic regulation framework for the state owned enterprises (SOEs) of Kazakhstan, one of the powerhouse in the Central Asian region in respect to natural resources, territory, and scale of economy. After the collapse of the Soviet Union, notwithstanding to the fact that Kazakhstan chose the path of radical transition to a market economy and organized several rounds of a large scale privatization program, the presence of SOEs in the economy is still high, and more than half of its gross domestic product (GDP) reportedly is produced by SOEs. Moreover, the sovereign wealth fund keeps important assets under its management, and competition law does not function well on state subsidy issues.

In 2015, on the other hand, the Russia-led Eurasian Economic Union entered into force, and Kazakhstan joined the World Trade Organization (WTO) and concluded a new Enhanced Partnership and Cooperation Agreement with the European Union (EU). The importance of such international economic treaties lies in that Kazakhstan made several significant accession commitments, including price regulation during the WTO accession and agreed to inclusion of a far-fetching SOE chapter in the Enhanced Partnership and Cooperation Agreement with EU. Although, with respect to Kazakhstani SOEs, these treaties have not yet generated enough practice, but it can be concluded that the above treaties highly disciplined the Kazakhstani SOEs, and that their enforcement and dispute settlement situation needs to be followed carefully.