Foreign Direct Investment: Kazakhstan

There are a great deal of conditions that can show importance of this specific chosen issue for study. Among the primary reasons is the fact that, oil is very important resource, that has value across the world and at the same time it's very essential to Kazakhstan. The role of Kazakhstan has increased worldwide largely owing to its huge essential oil reserve potential; therefore country's engine oil industry now became the main element of its monetary sector. Nowadays Kazakhstan is among top countries on the globe in oil reserves and furthermore is aspires to become even more important player in international olive oil market in the foreseeable future. Because of this further successful development Kazakhstan is actively seeking to entice more FDI that would positively affect on capital inflow, technology, management skills, market know-how. That's the reason it is essential to examine the main element factors and determinants of FDI, the impact of the FDI in petrol sector of Kazakhstan, the way FDI influenced on overall economy and on development of Kazakhstan generally. These research would be beneficial not limited to forecasters, researchers and owners of international organizations, also for federal and governmental organizations of Kazakhstan in order to

- increase the quality of investment insurance plan of the united states relating to changes induced by development of FDI;

- define the position of the country on the entire world and local market in order to discover what specific competitive advantages Kazakhstan can provide;

- analyze how to raise the appeal of the Kazakhstan companies for international investors.

FDI has a whole lot of significant results on the economy of coordinator country, as it influences the economic progress, general welfare, creation, exports; moreover, it is one of the major factors leading to international overall economy.

What is more this matter is important and interesting for me personally, when i am at first from Kazakhstan and I intend to develop my future career in making an investment field in Kazakhstan.

III. What is the study question?

As a study questions of the job I consider analyzing future attraction of FDI in Kazakhstan, as well as considering future advancements of the complete investment system in specifically emerging engine oil market of Kazakhstan.

For answering this question additionally it is important to answer following questions

- How FDI afflicted Kazakhstan market and investment weather?

- What kind of advantages Kazakhstan provides for foreign investors nowadays?

- What obstacles overseas buyers can meet and overcome while entering olive oil market of Kazakhstan?

- What future and what perspectives is planning on Kazakhstan related to to FDI in its petrol market?

- What federal of Kazakhstan should to do for appealing to more opportunities in Kazakhstan?

IV. What's the project about?

The main aim of the analysis is to analyze future appeal of Kazakhstan growing petrol market for FDI. This aim may be accomplished by inspecting various economic determinants, impact FDI got on Kazakh economy. The main goal during the review is better understanding of the essential oil market producing process in Kazakhstan that further may help to identify the main motivations and reasons of FDI decision making and future perspectives.

In order to provide full picture of impact of FDI and its own determinants in Kazakhstan it'll be presented background information about the monetary growth and short summary of the oil sector of Kazakhstan, followed by explanation of few international companies and their motivations and determinants of FDI were guided by. Also it is essential to analyze spending process in Kazakhstan itself as well as how FDI may impact host country. In addition, through the studies we will determine current advantages Kazakhstan economy provides to international investment, its investment opportunities and competitive advantages in comparison to other countries. Needless to say, it will be important to specify obstructions FDI can meet, including such aspects as defects in financial field, politics and legal systems, problem.

V. What's the academic books basis of the task?

The theme of Foreign Direct Investment in Kazakhstan is broadly discussed theme nowadays both in Kazakhstan and in another country. This is why just why there are great variety of information, which is symbolized in books, researches, studies, handbooks and publications.

First of all for the start works it's important to consider the international business. As an excellent source for this function can be used the book by J. Daniels, L. Radebaugh, D. Sullivan "International Business: Environments and Procedures". This reserve perfectly represents business working in international marketplaces, modern studies of global surroundings, international business functions. You can find information about the current world financial environment; also environmental frameworks, various theories and institutions are explained.

For writing this project I'd use the e book by E. K. Dosmukhamedov "Foreign Direct Investment in Kazakhstan: Politico-Legal Aspects of Post-Communist Change" among the resources of information, where E. K. Dosmukhamedov uses a distinctive method of the study of post-communist changeover by inspecting FDI from a legal, politics and economic tips of view. What is very important for me is that in this publication Kazakhstan is used as a particular research study to describe the role of FDI in restructuring the current economic climate of the former Soviet Union countries in the Post-Communist period. The second e book I intend to use broadly is "Investing in Russia, the Ukraine, Latvia, Lithuania and Kazakhstan" compiled by Gil Feiler and Alexandre Garese. I will use this book because information that is provided there is very accurate or more to date and gives critical functional advice to international investors and people on such issues as legal highly relevant to trade and business activities; home elevators investment regulations, taxation, IPR regulations, currency and bank and etc. For interpretation of the theoretical issues of the task the e book by Imad A. Moosa "Foreign Direct Investment: Theory, Information and Practice" will be applied.

Among sources of information there may be wide range of the official sites. Normally the one is web site of the Foreign Traders' Council chaired by the Leader of the Republic of Kazakhstan: www. fic. kz. As I need to evaluate FDI specifically in oil market of Kazakhstan, of course, the official sites of oil companies will be used for representing analyses on specific instances, also CIA World factbook: Kazakhstan engine oil production is very important source of information here.

Moreover, for reflecting the latest media and changes in making an investment world in my final project I will use periodical sources on Internet and newspaper publishers, also some dissertations that derive from this or near this research subject can be very beneficial.

VI. How will you answer the research question?

During this research will be used basically inductive methodology. Firstly FDI in Kazakhstan will be reviewed at the level of the country, on the next step at the amount of the industry sector in support of from then on at the level of particular organizations.

The research question would be solved by focusing mostly on qualitative research method, which will include interviewing and personal experience, that will assist to underline specify nuanced reasons and meanings. But such components of quantitative research method as econometric model will be used, for better understanding and representation of analyzed materials.

In this research secondary data will be trusted. The major secondary data sources are catalogs, variety of magazines and international essential oil company's investing in Kazakhstan oil market official web sites, researches and studies. For gathering primary data will be used effective qualitative method - interviewing, which allows to look deeply into subjective realities. Interviewing is chosen due to its highly adaptability and unique ability to grant the researcher understanding of the interpersonal actor's own perspective. As we know interview can take form of telephone interviewing, face-to-face group interviewing and mailed questionnaires. Because of this particular task it was made a decision to choose around 10 foreign international petrol companies among the most big and famous companies buying Kazakhstan olive oil market. Firstly, it'll be sent a notice of agreement by e-mail to take the interview, after that only two or three 3 companies (regarding with their response) will be chosen and interviewed. Ideally interview will need face-to face form, but in case it might be impossible interview will be studied in form of mailed questionnaire. Members of the interview supposed to be managers with more than 5 years work experience in these specific companies.

Projects' case study essentially seeks affects, effects and perspectives of FDI on oil market of Kazakhstan. This study will be focused on interviews, procedures and data research.

VII. Task Plan

The plan of the final project will approximately contain seven chapters. The first chapter includes introductory aspects. You will see described objectives, strategy and main issues of the job.

The second chapter will be focused on FDI theoretical aspects and can look over the definition of FDI, theory of FDI and FDI related determinant factors. There I plan to examine need for FDI for appearing markets, benefits and drawbacks of FDI. I intend to complete first and second chapters by the beginning of January 2009.

The third chapter will be dedicated to Kazakhstan itself and its olive oil market. This chapter will include interpersonal and inexpensive characteristics of Kazakhstan, legal review, business environment, investment opportunities, the information on the nature of the Kazakhstan current economic climate, general summary of its energy sector.

The forth chapter could be more particularly centered on engine oil market and petroleum sector of Kazakhstan, notably engine oil production, export and investment. Also in this part will be displayed information about large international companies working in Kazakhstan. Additionally, using the qualitative method I am going to make an effort to identify why, where and exactly how these companies committed to emerging marketplaces and specifically in Kazakhstan olive oil market. The 3rd and fourth chapters I intend to end by mid-March 2010.

The fifth chapter will show current advantages Kazakhstan can offer to foreign buyers, such as possession advantages, location advantages and other. Furthermore I will describe current obstacles foreign entrepreneur can meet, such as legal and administrative obstacles, economic obstacles related to reforms and transition, corruption. This section I intend to complete by mid-April 2010.

In the 6th chapter I'll examine what impact FDI in essential oil sector possessed on Kazakhstan overall economy, after that I am going to try to symbolize properly future perspectives of foreign ventures in Kazakhstan, and the last one however, not minimal, part will express what government of Kazakhstan must do to increase FDI in its market and especially in engine oil market. This chapter I plan to complete by mid-May 2010.

The last seventh chapter will be bottom line, which will include all the research results and studies. This section and the whole draft backup of the ultimate project I intend to complete by the beginning of July 2010. Because of this, the final task is organized to be done ahead of schedule for future advancements and upgrading in compliance with suggestions of consultant.

The Gant chart shown below is demonstrating the approximate deadlines of particular elements of the task.

VIII. Bibliography

  • 1. ANNE E. PECK. , Economic Development in Kazakhstan the role of large corporations and foreign investment funds, Routledge Curzon, 2004. 2. BARRY M. P. , "Foreign Direct Investments in Central Asian Energy: A CGE Model", Eurasian Journal of Business and Economics 2009, 2 (3), 35-54. 3. CLINTON R. SHIELLS, "FDI and the Investment Weather in the CIS Countries", IMF Plan Discussion Paper, Western european II Division, November 2003 4. DANIELS J. , RADEBAUGH L. , SULLIVAN D. , International Business: Conditions and Businesses, Prentice Hall, 2008. 5. DOSMUKHAMEDOV E. K. , Foreign Direct Investment in Kazakhstan: Politico-Legal Areas of Post-Communist Move, Palgrave Macmillan, 2002 6. FEILER G. AND GARESE A. , Investing in Russia, the Ukraine, Latvia, Lithuania and Kazakhstan, Sussex Academics press, 2007. 7. LINDLOF T. R. AND TAYLOR B. C. , Qualitative Communication Research Methods, 2nd release, Thousand Oaks, 2002. 8. KPMG in Kazakhstan: Investment guide 2008.
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