kazakhstan market

Doing Business in Kazakhstan: Economic Implications of Worldview

by Kevin White

Kazakhstan is one of the top ten fastest growing economies in the world. This multicultural developing nation is home to 140 various ethnicities and 17 religious groups. The capital city Astana is slated to host the Expo 2017. Kazakhstan’s ambitious 2050 plan is to become one of the top thirty most developed economies in the world. In this vein, Kazakhstan is engaging in unprecedented efforts to attract foreign investment. Recent legislation is offering investors 30% government subsidies on their investment and up to ten years tax free. This offer has been marketed to Western audiences through canny ad campaigns in popular media venues such as Euronews.

Yet in spite of these sincere efforts, corruption behind the scenes is still all too prevalent. A spokesman for the Dutch embassy, who wished to remain anonymous, stated that recently a Dutch company took Kazakhstan up on its attractive offer. However, shortly after completion of their new facility, Kazakhstan “inspectors” found a piece of machinery in violation to some obscure code. As a result the Dutch company had their investment subsidy rescinded and were fined 40% of their investment for a penalty. Similarly, a German businessman stated that German companies are still hesitant to invest substantially because of the routine problems of corruption and bureaucracy.   

For Kazakhstan citizens, the atmosphere is no better. One businessman lamented that he typically is required to pay about five bribes per month to do business. In one shocking example, an ambitious Kazakh young man who studied in Europe opened a business investing $40,000. Through hard work, his business grew to ten times in value and provided good paying jobs to several employees. Finally two individuals who worked in the government came to him with pictures of his children and told him that if he did not sell to them his business for $40,000, he would “have problems.”

In the interest of protecting his family, he sold his business. Within one year, the business failed. Those who stole his business lacked the competence and talent of this talented young entrepreneur. In consequence, Kazakhstan lost a portion of its potential to create future new products and services. A talented working force is displaced, along with their earning power to purchase goods, thereby lessening the demand for new products and services. The potential tax revenues to improve civic infrastructure is lost. In despair, the frustrated young entrepreneur left Kazakhstan for the West, where he felt he could successfully use his talents in an atmosphere where rights and property are safe from exploitation. 

It is a detrimental lesson to future entrepreneurs, who find their dreams dashed by the realities of injustice from an early age. Hard working students find all of their efforts rendered meaningless as they are asked to pay a bribe to their professors to achieve the grade they rightfully earned, while lazy and unproductive students who pay bribes earn high marks while doing nothing. Graduates entering the workforce are often expected to pay bribes to even obtain the job for which they have worked hard.

Yet There is Hope

In spite of these examples, Kazakhstan is definitely improving. In 2014, Transparency International ranked Kazakhstan 126 out of 175 in corruption (175 being the most corrupt). In his 2012 state address introducing the 2050 strategy, President Nursultan Nazarbayev stated his commitment to combating corruption: “Corruption is not just an infringement, it undermines the belief in effectiveness of the State and represents a direct threat to the national security. We should strengthen our fight against the corruption, including improving the anti-corruption legislation in order to achieve our ultimate goal – to eradicate corruption within Kazakhstan.”

In April, the Kazakhstan Agency for Fighting against Economic and Corruption Crimes in cooperation with the Financial Police Academy, Turan University, the Kazakhstan Association of Higher Education, the Republican State Enterprise “Kazakhstan Temir Zholy”, Soros Foundation and Transparency International opened the first Anti-Corruption School. This represents a dramatic improvement from recent years. In spite of the continuing instances of corruption, there are significant efforts by many in government to tackle the problem of corruption. Many young government leaders understand the correlation between rule of law and human rights with economic development.

President Nazarbayev has routinely iterated that one of the greatest needs in Kazakhstan is the development of moral character in the lives of people, especially the young people. He is absolutely right. Many of the hindrances to economic development within Kazakhstan as well as other former Soviet states can be traced back to moral problems such as selfishness, greed and dishonesty. This lack of ethics has resulted in a “survival of the fittest” mentality which pervades society and shackles the nation from its true economic potential. Kazakhstan, like many former Soviet states, is plagued by a culture of corruption. In a 2012 address, Nazarbayev stated: “We are entering a period in the development of our state, when spiritual issues will be of no less important than the economic, material order.”

Ideas Have Consequences

Nazarbayev makes a great point. Here it is important to understand the context in which Kazakhstan, as well as the entire former Soviet Union, has developed. The Soviet Union was built upon the ideological foundation of Marxist atheism which was diametrically opposed to and viciously incompatible with Christianity. Lenin wrote: “There is nothing more abominable than religion.” Marx prescribed this vision, writing that in communism: “God does not exist, cannot exist, and must not exist.” Because of this predisposition against the Christian faith, the Soviet Union was deprived of the benefit of moral guidance and instruction provided by the Bible through the institution of the church.

Indeed ideas have consequences. Fyodor Dostoyevsky prophetically wrote: “if there is no God, then everything is permissible. Crime will be inevitable.” Atheism removed the basis of personal responsibility and accountability for behavior before God as well as society. Atheism removed any higher moral authority than one’s own. The natural consequence is the mentality of “every man for himself” and “survival of the fittest”, rather than by principle and rule of law. This can account for the lawlessness throughout the former Soviet Republics, where mafia and corruption is so rampant. Georgian gangster and godfather of the Russian mafia Otari Kvantrishvili stated: “It was Vladimir Lenin who was the real organizer of the mafia and set up the criminal state.”

Dostoyevsky understood that if there is no God, then ultimately there can be no basis for morality and law, or for human rights. If there is no God, then there is no higher governing principle, upon which to base justice. This can only result in lawlessness, corruption, and injustice; which will ultimately lead to discontent, unrest, apathy, and economic stagnation. Indeed corruption is the natural consequence of the ideological foundations of Marxist atheism.

The Role of the Church in Culture

President Nazarbayev correctly understands that the success of a nation is completely dependent upon the moral character of its people. While Kazakhstan enjoys a wealth of natural resources, it is important to acknowledge the need of a moral and spiritual foundation upon which its success and prosperity can be achieved. Here is the God-given role of the church in society, to serve the nation by providing the moral and spiritual support for all people, serving as a light and a guide in national morals and principles. Tragically the Christian church in Kazakhstan remains to some extent under continued scrutiny and persecution.

Recent studies have substantiated the fact that religious freedom is an important component for political stability and corresponding economic prosperity. In their book The Price of Freedom Denied, researchers Brian Grim and Roger Finke stated “religious freedom is not only strongly correlated with other freedoms and civil liberties, but it is also an important factor in other universally desirable goods such as lower levels of armed conflict and poverty, along with higher levels of income and better lives for women.” Governments that are not committed to religious liberty become increasingly intolerant and coercive, insisting that they have a monopoly on truth that must be forced on others. Without religious freedom, democracy suffers, economic stagnation becomes inevitable.

The Socioeconomic Implications of Faith in Culture

Freedom and human rights, as expressed through the freedom of religion, speech, press, assembly, and vote are what produce the vital sense of ownership of the nation by the people. This sense of ownership is what fosters the sense of social and civic responsibility, which motivates private citizens to make a great nation. It is this atmosphere of democracy in which business and free markets thrive.

In his research “The Missionary Roots of Liberal Democracy”, Robert D. Woodberry reveals the significant socioeconomic impact of nations which were influenced by conversionary Protestants compared to other beliefs. Woodward’s research indicates that evangelical missions significantly contributed to innovations such as religious liberty, mass education, mass printing, and reforms in human rights which resulted in conditions ideal for the development of stable democracies.

Similarly at a forum sponsored by the Turkish Institute, held in Kazakhstan in 2003, a South Korean spokesman attributed the rise of Christianity as being directly responsible for the economic development of his nation. He described that as people turned to Christianity, they became more law-abiding, hardworking and personally responsible citizens, which created an atmosphere where economic development thrived.

Business and Mission

Rather than remaining within the confines of the church, as ambassadors representing the kingdom of God, Christians are called to participate and engage in every profession and aspect of culture. We are not called to impose the kingdom of God by force, but rather we are called to serve people and nations, compassionately demonstrating His love and character to the world to the glory of God.

To retreat from the spheres of business, government, the arts, science and education is to essentially concede these realms to the world and to render the Biblical faith as culturally irrelevant. This would be a great mistake. As ambassadors representing Christ on Earth, we must engage these spheres. In his inaugural speech, founding Amsterdam Free University, Abraham Kuyper concisely proclaimed: “There is not one square inch in the whole domain of human existence over which Christ who is sovereign does not cry out ‘Mine!’”

Just as individuals can become corrupted and no longer reflect the image of the Creator; so too cultures and nations can become distorted and corrupted from the image intended by the loving Designer. It is the role of the church – the people of God – to be His instrument and light of the world. As people are restored to God individually, they too become His ambassadors in host cultures. As nations corporately turn back to God, cultures too are transformed into the design intended by the Creator. Such nations are healed, blessed and in turn a light and blessing to all nations to the glory of God.

Kazakhstan is at a Critical Point of Decision

Kazakhstan is a nation with great promise and potential. While Kazakhstan enjoys a wealth of natural resources, it is important to acknowledge the moral and spiritual foundation upon which success and prosperity can be achieved. Herein is the cultural mandate of the church of Kazakhstan to lead the way and serve the nation, by being a light and a guide in national morals and righteousness.

The answer for Kazakhstan, as well as any society, is not in revolution of war, but rather in the moral revolution of the human heart. It is found in spiritual and moral revival found in Jesus Christ. As individuals and nations are reconciled to God, people’s lives are changed and they become God’s moral agents to bring light and hope to a world of spiritual darkness and death. There are tangible economic benefits for those who heed the counsel of the manual given by the Designer.

It is time to forever shed the lies of Marxist atheism and to embrace the Christ, the savior of all peoples. Atheism and the persecution of Christianity will ultimately forfeit economic prosperity. Such prosperity can only occur in a climate of freedom, human rights, and rule of law. These virtues are fostered by the principles of Biblical Christianity permeating society. Indeed the ancient scripture, validated throughout the history of human experience, calls and invites Kazakhstan to return to God and His path: “Blessed is the nation, whose God is the Lord.” 

Kevin White is a Research Fellow and Country Director for the Religious Freedom and Business Foundation. He has resided in Almaty, Kazakhstan since 1999.