Public-Private Partnerships in Kazakhstan: Evolution of the Government Policy and Reality of PPP Deployment. Part II

Abstract

This article examines PPP development in Kazakhstan from 1991 to the time of writing. Article reviews evolution of the PPP legislation and approaches used to develop a PPP-enabling environment in order to draw lessons for the country’s future policy. This article describes evolution of the PPP concept in the country and provides analysis of gaps and deficiencies in the current PPP policy and legislation. The PPP definition and the scope of PPP activity has evolved significantly in the nation’s legislation and legal literature since 1991. Author distinguish the following five stages of the PPP development in Kazakhstan: Stage One—PPP legal framework for foreign investors only (1991-1993); Stage Two—Lack of PPP-specific legal framework and “pilot” projects (1994-2005); Stage Three—The formation of legal and institutional frameworks (2006-2015); Stage Four—Active PPP deployment: the focus being on quantity (2016-2018); Stage Five—Adjustments to the PPP framework: stricter requirements (2019- present). In this article, the author examines the last three stages from 2006 to present, paying attention to the actions of the government, Policy Goals at the Stage Three. Stage Four and Stage Five, assessing the implications for further policy development of public-private partnerships in the state. the author examines that despite forming advanced legal and institutional PPP frameworks and promulgating a policy document (the PPP Programme), there was an apparent lack of success in PPP implementation during Stage Three. It seems that the country lacked the critical element that is required for successful PPP implementation: high-level political support that would overcome all kinds of resistance to private sector involvement in public service delivery. During Stage Four, there was also a rapid increase in the execution of different agreements that were called PPP agreements but. author considers that strictly speaking, should not be treated as such, as they are just imitations of a PPP. By the end of Stage Four, therefore, all relevant stakeholders expected the government to roll out changes in the PPP policy and legal and institutional frameworks to curb the growing government debt risk and prevent the misuse of fiscal funds by the regional and local authorities. On Stage Five Kazakhstan’s government announced a new PPP policy with project quality as a priority. But nowadays as the coronavirus outbreak spreads across the globe, it is likely that many existing PPP projects in Kazakhstan will experience considerable revenue generation challenges.