International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

 

IMPACT OF FOREIGN DIRECT INVESTMENT ON KAZAKHSTAN’S ECONOMY: A Boon or a Curse
AvinashWaikar, LeylaJepbarova, Sang Lee, Lara Gardner, Jay Johnson

Abstract
The Republic of Kazakhstan has received large amounts of Foreign Direct Investment (FDI) relative to other countries within the Commonwealth of Independent States since its independence in 1991 from the Soviet Union. Kazakhstan expects to continue to attract FDI primarily because of its significant oil reserves. Simple regression analyses were employed to determine the impact of FDI on GDP, per-capita income and on individual sectors of the economy. Our analyses showed that FDI generally had a positive, although moderate, effect on Kazakhstan’s economicgrowthand per-capita income. The study also indicated that FDI had an adverse impact in some sectors, especially agriculture and manufacturing, crowding-out domestic investment. The largest share of FDI is directed towards the energy sector. We concluded that FDI alone may not be relied upon to promote sustainable growth of the Kazakhstan economy, but their commitment to more economic freedom should promote an improving economy.

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