Kazakhstan Government Approves New Privatization Plan

The government of Kazakhstan has approved a comprehensive privatization plan for 2016-2020, under which the share of state participation in the economy will be cut to 15 percent, National Economy Minister Erbolat Dosayev said on December 28, Kazakh media and regional media report.

“On Friday (25 December), we adopted a new comprehensive privatization plan for 2016-2020 with a new list of companies. And we hope that the work of the interested central state and local executive bodies will be primarily focused on development of competition and support of private capital during the next 3 years,” the Economy Minister said.

According to the Economy Minister, the new plan will oversee the privatization of 65 of the country’s largest state-owned firms, in addition to the sovereign wealth fund, other national holdings, and shares of 173 subsidiaries and affiliates.

Dosayev noted that the privatization program is designed up to 2020 taking into account that the assets will be placed at the IPO and SPO, due to “a long process of preparation and the allocation itself.”

Dosayev highlighted that the large-scale privatization plan is a priority of the Kazakh government in 2016, however he noted with regret that the book value today, which contains the assets and the fair market value differ.

“This proposal has been supported previously by the Head of State and deputies so that we could find investors who are willing to implement large investment programs, and we have set the task that the packages must be sold at a rate of not less than 25 percent, and for those companies where there are private investors – more than 50 percent,” the Economy Minister said.

Stratfor Global Intelligence says it believes that the privatization drive will not ensure economic stability in Kazakhstan, as similar efforts have not worked in the past.