Several surveys and corruption indices have labeled the country with corrupt flags. The Transparency International’s Corruption Perception Index (CPI), which ranks countries according to perceived levels of public sector corruption, scored Kazakhstan at 2.757 points in 2011 (CPI 2011), although it fares better than its neighboring countries (Russia at 2.4, and Uzbekistan and Turkmenistan at 1.6). Bureaucracy remains one of the issues that Kazakhstan inherited from the Soviet era. The centralized leadership structure of the public sector and the rotational program of key public sector personnel have resulted in a general lack of transparency and accountability of institutions and government officials (Arkhipov and others 2010). According to the 2011 Doing Business survey of the World Bank, dealing with construction permits and cross-border trading are two of the most problematic issues in doing business in Kazakhstan. For instance, the costs of import or export of a single container was more than triple the OECD average, and the estimated time to complete cross-border transactions is at 76 days for export and 62 days for import is far above the OECD average (of 10 and 11 days, respectively) and requiring more than double the documentations. Table 4.4 provides a snapshot of the latest “doing business” indicators for Kazakhstan. Table 4.4 Indicators for Doing Business in Kazakhstan in Comparison to OECD Average, 2012 Kazakhstan
OECD
1. Starting a Business
Kazakhstan
OECD
6. Protecting Investors
Procedures (#)
6
5
Extent of disclosure index (0-10)
9
6
Time (days)
19
12
Extent of director liability index (0-10)
6
5
Cost (% of income per capita)
0.8
4.7
Ease of shareholder suits index (0-10)
9
7
Paid-in min capital (% income per cap)
0.0
14.1
Investor protection strength (0-10)
8.0
6
Rank (Change in rank from 2011)
10 (+34)
Rank (Change in rank from 2011)
57 (-8)
2. Dealing with Construction Permits
7. Paying Taxes
Procedures (number) Time (days) Cost (% of income per capita) Rank (Change in rank from 2011)
32
14
7
13
189
152
Time (hours per year)
188
186
93.2
45.7
Profit tax (%)
15.9
15.4
Labor tax and contributions (%)
11.2
24
1.6
3.2
28.6
42.7
147 (+1)
Payments (number per year)
Other taxes (%)
3. Getting Electricity
Total tax rate (% profit)
Procedures (number)
6
Time (days) Cost (% of income per capita) Rank (Change in rank from 2011)
5
88
103
88.4
92.8
86 (+1)
4. Registering Property
Rank (Change in rank from 2011)
13 (+13)
8. Trading Across Borders Documents to export (#)
9
4
Time to export (days)
76
10
3130
1032
Cost to export (US$ per container)
Procedures (number)
4
5
Documents to import (#)
12
5
Time (days)
40
31
Time to import (days)
62
11
0.1
4.4
Cost to import (US$ per container)
3290
1085
Rank (Change in rank from 2011)
176 (0)
Cost (% of property value) Rank (Change in rank from 2011)
29 (-2)
5. Getting Credit
9. Enforcing Contracts
Strength of legal rights index (0-10)
4
7
Time (days)
390
518
Depth of credit information index (0-6)
5
5
Cost (% of claim)
22.0
19.7
36
31
Public registry coverage (% of adults)
0.0
9.5
Private bureau coverage (% of adults)
37.6
63.9
Rank (Change in rank from 2011)
Procedures (number) Rank (Change in rank from 2011)
27 (-1)
78 (-3)
10. Resolving Insolvency Time (years)
1.5
Cost (% of estate)
15
9
42.7
68.2
Recovery rate (cents on the dollar0 Rank (Change in rank from 2011)
1.7
54 (-5)
Source: The World Bank Group 2012.
Kazakhstan is considered to have a strong infrastructure in terms of automobile and railway routes, and is one of four international transport corridors between Asia and Europe, but its transportation infrastructure is deteriorating at a fast pace (UN 2006). Since the country’s independence, most of the investments were directed 57
This is measured on a scale of zero to 10, zero being highly corrupt.
107