TRANSNATIONAL CORPORATIONS IN KAZAKHSTAN
Sergey Smirnov, Independent researcher (Almaty, Kazakhstan)
Obviously, transnational corporations (TNCs) with over 50 percent of world industrial production, over 60 percent of international trade, and nearly 90 percent of foreign direct investments under their control exert considerable influence on the world economy. They have essentially all trade in raw materials under their thumb; Kazakhstan, a country rich in mineral wealth, is also within their range of influence. As an independent state, the republic was not only one of the first in the post-Soviet expanse to attract foreign capital by transferring large enterprises of basic industrial branches to trust management, which allowed subsequent privatization and the setting up of new facilities with 100 percent foreign money, but also relied on intensive mining and extraction as its economic cornerstone.
In 1994-1997, the TNCs began their active invasion of Kazakhstan’s economy: after supporting “director” or “bureaucratic” privatization, the government placed its stakes on large foreign investments for obvious reasons. Involvement of large TNCs not only placed the country on the economic map of the world and guaranteed a flow of investments, but also ensured domestic stability (due to interest in protecting property rights). This explains the unprecedentedly wide-scale (as compared to other countries with “transition” economies) involvement of large TNCs in the republic’s economy.
The government expected that foreign corporations’ involvement in the local economy through shares and long-term contracts on oil and gas production would contribute to the country’s economic upsurge. It was expected that “the new private owners would not only invest in production, but also introduce new marketing and management skills and,…………………..