FOREIGN CAPITAL AND PROBLEM OF ENSURING OF NATIONAL ECONOMIC INTERESTS Axana PANZABEKOVA, PhD Head, Department of the Theory of National Economy and Institutional Policy Institute of Economics Ministry of Education and Science Republic of Kazakhstan

Interests of the foreign capital

Factors of attraction of the foreign capital Labours good quality of man power low cost of man power Infrastructural developed production infrastructure developed telecommunicational infrastructure developed social infrastructure Financial developed banking area developed insurance area Macro economical economic growth high effective demand large market capacity Investment policy tax privileges and preferences with the purpose of investments attraction insurance of private investments creation of special economic areas Socio-political stability of socio-political situation in the country Geopolitical geographical situation of the country in relation to other countries passing through the territory of the major transport ways, presence of seaports

Threats of the foreign capital to national interests

Name of activity status Sectoral structure of direct foreign investments in Kazakhstan in 2001-2007, in % Name of activity status Years 2002 2003 2004 2005 2006 2007 1 2 3 4 5 6 7 Agriculture, hunting, forestry and fishery 0,1 0,0 0,2 Mineral resource industry, including: 51,7 47,5 64,5 27,5 1,5 11,3 - coal and linitis plastica production, peat exploitation - 0,1 1,1 0,4 - crude oil and natural gas extraction 50,4 45,9 63,5 25,8 10,1 - uranic ore extraction 0,5 0,3 - metallic ore extraction 0,8 - other mineral resource industries - Manufacturing industry 20,3 21,7 6,1 4,4 13,0 5,9 Production and distribution of electrical energy, gas and water 1,9 Construction 1,8 2,0 3,9 Trade, car and home use manufacture maintenance 2,6 3,6 3,2 11,8 10,0 Hotels and restaurants Transport and communication 2,3 1,6 1,0 1,7 2,7 3,8 Financing activities 1,3 10,4 58,0 Immovable property operations, rent and services for enterprises 20,6 21,6 21,3 54,1 53,9 7,9 Education, health protection and social services 0,9 0,02 Other kinds of activities 2,4 T O T A L 100

Criterion Foundations Mechanisms Concept of national interests ensuring in sphere of attraction and use of the foreign capital Criterion country competitiveness ensuring population employment ensuring advocacy of domestic commodity producer Foundations economic expediency of investment projects priority selection of donor countries minimum commercial risk for country correlation with purposes of economic policy environmental safety non-admission of illegal export of capital outside of country limitation or non-admission of foreign capital in sectors having strategical importance for national economy Mechanisms economic mechanisms of attraction and use of the foreign investments administrative control of attraction and use of foreign investments organizational mechanism of attraction and use of foreign investments government regulation of attraction and use of foreign borrowings

Thank you for attention! Dr. Axana Panzabekova Tel: +7 727-385-10-03; E-mail: office@ieconom.kz