(MENAFN- Trend News Agency) BAKU, Azerbaijan, November 30. The
International Finance Corporation (IFC) will boost private
sector-led growth in Kazakhstan through financial support,
Ekaterina Benjamin, International Finance Corporation's (IFC)
Country Officer for Kazakhstan, told Trend in an exclusive interview.
IFC's strategy and main areas of activity in
Kazakhstan
"IFC recognizes Kazakhstan's substantial potential, and we are
pleased to witness the country's robust economic growth, fueled by
market reforms and foreign investments, since gaining independence.
Despite recent slowing growth, income inequality, and weak
institutions, IFC believes that Kazakhstan can overcome these
challenges through measures such as investing in human capital,
enhancing public sector efficiency, and reforming state-owned
enterprises. Overall, IFC is committed to supporting Kazakhstan's
transition towards a resilient private sector-driven economy and is
consistently working towards this goal," she said.
IFC, she says, highlights the significance of preparing for
climate adaptation.
She said as the largest global development institution dedicated
exclusively to supporting the private sector in developing nations,
IFC's mission is to collaborate with the country's private sector
to create new markets and opportunities for all. Benjamin pointed
out that in Kazakhstan, IFC's strategy is to boost private
sector-led growth through support to the financial sector and
investments in manufacturing, infrastructure, and the service
sector.
Ekaterina Benjamin pointed out that one of the areas IFC is
strongly advocating for is financial inclusion.
"We are committed to promoting inclusive economic growth by
enhancing financial access for smaller businesses, including
businesses led by women and in rural places. Over the past several
years, IFC has supported KMF, a leading microfinance organization
in the country, with a range of financial products totaling $237
million, as well as it also provides expertise in risk management
and corporate governance. We also recently announced investments in
other microfinance institutions such as Arnur Credit and Shinhan
Finance," she said.
According to her, IFC also strives to unlock the immense
potential of Kazakhstan's agribusiness sector.
"For instance, Kazakhstan remains Central Asia's largest grain
producer, capable of exporting approximately half of all the grain
it produces each year. Notably, the majority of the wheat
cultivated in Kazakhstan is of high quality, with durum and spring
varieties standing out as particularly renowned. One of our recent
investments to support the sector is KazFoodProducts, a notable
agribusiness company in the region," Benjamin said.
As she noted, another area where IFC sees potential for the
country is logistics.
"IFC has provided advisory services for the BAKAD project, one
of the most significant infrastructure public-private partnership
projects in Central Asia. Our experts aided in shaping the project,
aligning stakeholders, and facilitating legislative changes to make
this ambitious undertaking a reality. IFC has also spearheaded a
$450-million financing package to support the construction of a new
international terminal at the Almaty airport, the busiest air
transportation hub in Central Asia. It is expected that the
upgraded airport will be more energy efficient, produce less waste,
and emit fewer greenhouse gases," Ekaterina Benjamin said.
IFC's contribution to achieving environmentally
sustainable economic growth
IFC is engaging with the Kazakh government to promote
environmentally sustainable, resilient, and inclusive economic
growth.
"The country's commitment to achieve carbon neutrality by 2060,
announced in December 2020, is a commendable but complex
objective," she said.
Benjamin noted that a carbon neutrality strategy is now being
created, and the transition entails a gradual shift toward a more
sustainable economy, reducing dependency on energy and hydrocarbons
and dramatically lowering greenhouse gas emissions.
"This shift will enable Kazakhstan to achieve its long-term
environmental and climate objectives while preserving its economic
and developmental interests," the country officer said.
According to her, a recent World Bank Group study indicates that
significant adjustments must be made across key economic sectors in
order for the country to address climate change.
"Specifically, the country will need to incentivize
climate-smart agriculture practices, invest in efficient water
infrastructure to conserve its water supply, and strengthen other
infrastructure to build resilience. These changes could unlock a
wave of investment in projects like solar plants and wind farms
that help Kazakhstan both reduce its carbon footprint and lessen
its reliance on often expensive imported fossil fuels," Ekaterina
Benjamin noted.
Kazakhstan's potential in agriculture
"Kazakhstan's food sector holds significant promise, given its
dominant role in wheat and flour manufacturing, extensive land
reserves, and substantial capacity for producing and exporting
organic goods," she said.
According to her, Kazakhstan remains Central Asia's largest
grain producer, capable of exporting approximately half of all the
grain it produces each year.
"Indeed, wheat currently accounts for 80 percent of grain
production in the country. However, Kazakhstan also cultivates
crops like barley, cotton, sunflower seeds, and rice, offering
substantial opportunities for production. We believe that the
agricultural sector's potential has yet to be fully realized.
Although around 75 percent of the country's land is suitable for
farming, only about 30 percent is currently utilized for
agriculture. Expanding agricultural output could bolster regional
food security and generate employment, as agriculture provides a
livelihood for approximately one in three Kazakhs," Benjamin
said.
She noted that investments of IFC in KazFoodProduct is a
significant stride in supporting agribusiness in Kazakhstan.
"Our funding will assist the group in its sustainable expansion,
thereby enhancing food security and job prospects. Additionally,
we're aiding the company in becoming the first in the country to
attain an EDGE Gender Equality Certification, which establishes
benchmarks and standards for workplace gender parity," she
noted.
Ekaterina Benjamin pointed out that in March, IFC also hosted a
workshop on food safety, bringing together industry leaders and IFC
regional specialists to exchange insights and expertise on
contemporary, globally acknowledged food safety management
standards.
"This initiative aims to empower local businesses to fortify
their presence in the domestic market, expand into new markets, and
mitigate costs and risks. We believe that prioritizing knowledge
dissemination, active public awareness, and fostering unity within
the food industry will propel the country forward, ensuring that
products labeled "Made in Kazakhstan" will be highly sought after
both domestically and internationally," she said.
IFC & women entrepreneurship in Kazakhstan
"At IFC we are convinced that women's entrepreneurship and
economic empowerment are critical to inclusive economic growth.
Where women are empowered, they can contribute their full potential
- leading to a more diverse and dynamic workforce," she said.
According to Ekaterina Benjamin, nations that demonstrate
greater gender parity enjoy increased per capita national income
and experience accelerated economic expansion.
"According to statistics from the Fund for Sustainable
Development and Support of Women's Entrepreneurship in Kazakhstan,
women constitute 51.8 percent of the population and play a
significant role in generating about 40 percent of the country's
total Gross Domestic Product. Additionally, they manage
approximately 42 percent of small and medium enterprises, and
female entrepreneurs contribute to 30 percent of employment within
this sector," she said.
As Benjamin noted, this was one of the reasons IFC's funding to
microfinance organizations such as KMF, Arnur Credit, and Shinhan
Finance included a gender component.
"For instance, at least half of the funds provided to KMF are
earmarked for women-owned small enterprises, while at least 25
percent of the investment in Shinhan Finance will be earmarked for
women-owned small businesses," Ekaterina Benjamin noted.
Expanding access to finance for Kazakhstani
SMEs
Benjamin pointed out that despite playing a crucial role and
contributing about 27 percent to Kazakhstan's GDP, smaller
enterprises face significant hurdles in accessing finance.
"Challenges such as inadequate documentation, unestablished
credit histories, and complications with property titles as
collateral hinder their financial support. Moreover, these
businesses have suffered substantial income disruptions due to the
economic slowdown post-pandemic, compounded by the geopolitical
uncertainty sparked by Russia's invasion of Ukraine. This creates a
pressing need for tailored support to help them bounce back and
thrive," Ekaterina Benjamin explained.
According to the country officer, as the economy works to
recover from these setbacks, small firms urgently need access to
finance for inventory investments, resuming operations, and
adapting to the new post-crisis economic landscape.
"To increase their access to finance, we work through local
financial institutions to provide much-needed access to finance to
millions of individuals and smaller enterprises that IFC would
never be able to reach directly on its own. Through our
collaboration with microfinance institutions, IFC is poised to
ignite growth, foster job creation, and alleviate poverty in
Kazakhstan, with a particular focus on underserved segments. Our
outreach extends not only to women-led businesses but also
encompasses rural-based businesses spread across various regions,"
she noted.
IFC's future plans in Kazakhstan
"Looking ahead, IFC remains committed to supporting private
sector development in Kazakhstan and broader Central Asia, with a
continued focus on key sectors such as agribusiness, financial
services, infrastructure, and manufacturing, while promoting
sustainability and climate change mitigation and adaptation,"
Ekaterina Benjamin said.
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