Investment Environment of the Agro-Industry Sector in Kazakhstan

In 2003, Kazakhstan newly enacted the Act for New Foreign Investment after abolition of the Act for Foreign Investment and the Law on State Support for Direct Investment. Under the new law, there is no discrimination between domestic and foreign investors. Investment favors are provided in priority sectors, which include following sectors: industrial infrastructure, processing industry, agriculture, agro-industry, housing, the social sector and tourism infrastructure. The incentives for direct investments in the priority sectors are: property tax and income tax exemptions for up to five years respectively, and exemptions or reductions in customs duty on materials necessary for completion of the investment project.

In 2002, the new law on taxation was enacted. Taxation system of Kazakhstan generally seems to be coincident with international standards. However, there are so many taxes imposed on enterprises, which may distort profit structure of enterprises. The maximum tax rates are different across according to sources of taxes: 30 percent for corporate tax, 15 percent for value added tax, 21 percent for social security tax. It is estimated that 32-35 percent of total revenue accounts for taxes paid by enterprises, implying that the tax burden is high.

Table 1. Selected Tax Rates in Kazakhstan

Types	Tax Rate
Corporate Tax Value Added Tax Land Tax Property Tax Social Security Tax Commodity Tax Transportation Tax Auction Tax	Up to 30% Up to 15% varies by use 1% Up to 21% varies by commodities varies by transportation types 3%

Source: Korea EXIM Bank, 2005

Kazakhstan has tried to improve the investment climate to attract FDI to more sectors including oil industry since its independence from the Soviet Union in 1991. For this purpose, Kazakhstan enacted four major legislations relating to foreign investment, such as the Act for Foreign Investment in 1999, the Act for State Support for Direct Investment in 1997, the Act for Government Procurement in 1997 and the Tax Code in 2001.

As a result, Kazakhstan has been fairly successful in attracting FDI, which supported economic recovery. During the period from 1993 to 2003, gross FDI inflows to Kazakhstan totaled USD 23.4billion. As of 2003, crude oil and natural gas extraction accounted for 51.8 percent of gross FDI, while agriculture, forestry and fishery accounted for 0.04 percent. Food industry, which is based on agriculture, is predominantly domestic market oriented and not lucrative due to low market demand for the local food products, implying that it is less attractive to foreign investors.

Table 2. Foreign Direct Investment (FDI) in Kazakhstan by Sector
Unit: million USD, ( %)

	1993-2000	2001	2002	Jan.–Jun.2003
Agriculture etc. Mining Manufacturing Transport, etc Finance Real estate Electric power Others	7.4(0.1) 7,841.2(62.4) 1,766.4(14.1) 160.0(1.3) 206.4(1.6) 1,432.8(11.4) 433.0(3.4) 715.0(5.7)	5.0(0.1) 3078.1(67.7) 641.4(0.7) 161.1(161.1) 44.4(1.0) 456.5(10.0) 33.8(0.7) 124.3(2.7)	2.5(0.1) 2107.7(51.7) 829.5(20.4) 95.2(2.3.) 11.8(0.3) 841.4(20.7) 17.5(0.4) 167.9(4.1)	1.1(0.04) 1148.4(51.8) 433.3(19.5) 45.0(2.0) 7.8(0.4) 433.6(19.6) 58.4(2.6) 91.2(4.1)
Total	12,562.2(100.0)	4,544.6(100.0)	4073.5(100.0)	2218.8(100.0)

Source: National Bank of the Republic of Kazakhstan

Tajikistan’s Agriculture and Agro-industry Sector

Agriculture is Tajikistan’s major sector endowed with unique geographic and climatic environment. Due to its environment, Tajikistan can cultivate virtually almost all agricultural crops. The agricultural sector contributes nearly 30 percent to the country’s GDP and employs more than half of the total employment. In addition, it is responsible for more than 30 percent of exports. Especially, cotton alone provides 30 to 40 percent of budget revenues in taxes.

During the past years, about 400 agricultural producers have been restructured into over 14,000 farms with 3.8 million hectares of cropland. The agrarian reform significantly affected Tajikistan’s agricultural sector and related institutions. 85.3 percent of meat, 86.5 percent of milk, 81.5 percent of eggs, 56.7 percent of vegetables, and 66.3 percent of fruit and berries were produced by the private sector in 2001. However, the major part of the most valuable irrigated land is still controlled by state and collective farms.

The major food and agricultural commodities produced in Tajikistan are wheat, potatoes, cow milk, cotton seed, and cotton lint. Cotton lint is the major exporting agricultural commodity followed by onion and fruit products. Sugar, wheat, flour, and beef are major importing agricultural items of Tajikistan.

Cotton is the major crop whose production covers more than 50 percent of the country’s irrigated land. Before the independence, Tajikistan’s cotton yield per hectare was the highest in the central Asian region with an earning capacity of 60 to 70 percent of production costs. However, cotton production dramatically declined after the independence and halt of centralized supplies of material and technical resources. Furthermore, world lint cotton prices have dropped by more than 50 percent in the past years while prices of fuel, machinery, and fertilizers keep growing.

In Tajikistan, cotton marketing and production are subject to the state administrative system, there is no competition among participants. Also local government imposes extra charges on cotton sales to boost its tax collection.

Agriculture and Agro-industry Sector of Kyrgyz Republic

The Kyrgyz Republic’s economy is predominately driven by agriculture and has relatively small manufacturing industry. The agricultural sector contributes nearly 40 percent to the country’s GDP and employs about half of total registered employment. Following the break-up of state owned enterprises, the agricultural sector has increasingly moved away from large scale collective farming to smaller subsistence level of family farming. Specifically, 40 percent of agricultural output is produced by private farmers and 54 percent from family farms.

The major food and agricultural commodities, produced in Kyrgyz Republic are potatoes, wheat, cow milk, sugar beets, and maize. Cotton lint and tobacco leaf are the major exporting agricultural commodities and wheat and sugar are major importing agricultural items.

As part of its effort to stimulate the development of the cotton sector, the government has set aside about 3 percent of total arable land for cotton production. This resulted in growth of cotton production from 75,000 ton in 1995 to about 122,000 ton in 2004. Nearly 80 percent of the cotton is grown by private farmers, which generates almost 5 percent of the total value of the country’s exports. However, high production costs from lack of fertilizers, pesticides, and herbicides weaken the industry and negatively affect country’s cotton export potential. Tobacco is also an important cash crop for the Kyrgyz agricultural sector. However, most of tobacco is grown by state owned enterprises and local value-added production activities are very limited.

Mongolian Agro-industries and Agro Processing

Due to the lack of processing equipments and lagged technology development, the rates of value-addition are low in agro-industries. Mongolia produces about a quarter of the world output of cashmere. Small-scale cashmere processing factories are scattered in Mongolia. In 2003, there were five domestic and 80 foreign invested cashmere processing factories, of which there were 42 primary-level, 37 knitting, and 6 complex-level processing factories. Substantial amounts of raw or primary-level processed cashmeres are exported to China, hindering additional value creation within the borders of Mongolia.

Besides livestock production, food self-sufficiency is low. Crop farming is relatively new activity and was developed primarily through large state farms, although now those state farms are completely privatized. Wheat production in 2003 was 164,400 ton, which is not sufficient for feeding the people; Mongolia imports heavy amount of wheat flour from abroad including Kazakhstan. Vegetables and fruits had been produced sufficiently until the early 1990s, but they are now imported from China.

Tips for Choosing a Good Yoghurt

Yoghurt (or sometimes written yogurt), also known as sour milk is a result of fermentation process of milk. It is known that yoghurt contains two types of probiotics, Lactobacillus and Bifidobachterium. Yoghurt can be made ​​from any milk, including soy milk. But modern production is currently dominated by dairy milk. Fermentation of lactose contained in milk produces lactic acid, which plays a role in milk protein to produce a gel-like texture and a unique odor in the yoghurt. Yoghurt is often sold as with no flavor, however, yoghurt with taste of fruit, vanilla or chocolate are also popular.

If you are a yoghurt lover and do not have time to make it yourself then plan to buy it at the yoghurt outlet, so there are some tips for you to choose a good yoghurt:

1. Choose a thick yoghurt.
2. Choose yoghurt stored at cold temperatures, otherwise do not choose which placed in the outdoor, because it has usually been re-sterilized so the mikroorganism has gone.
3. Pay close attention to the label, which the plain yoghurt and drinks yoghurt and adjusted to your needs.
4. Pay close attention to the date of expiration.

instant gratification...practically

i have a confession to make. i shop online. kind of a lot. mostly shoes & accessories because they are the most likely to fit and look as good on me as they do in the pictures.

so because i shop, i tend to have a few favorite go-to sites. endless.com wasn't one of them, until the other day when a friend of mine sent me a link to these seychelle eye to eye wedges that i fell in love with.

i checked my go-to sites but then came back to endless because they had a 25% of sandals promo and free overnight shipping. i placed my order at 3pm tuesday and by wednesday at 10:30am i had a endless.com box with my name on it waiting for me in the lobby.

i couldn't believe how fast my shoes arrived! i was shocked, in a little bit of disbelief, suppppppppper impressed, and pretty sure that endless.com has magical elves working for them.

you can bet your bottom dollar that i'll be back...in a flash.

Review of Agricultural Commodities of Uzbekistan

The major food and agricultural commodities produced in Uzbekistan are wheat, cow milk, cotton seeds and lint, and tomatoes. Cotton lint, grapes, tomatoes and onions are the major exporting agricultural commodities and flour of wheat, sugar, and vegetable oils are major importing agricultural items.

A survey administered by the International Finance Corporation (IFC) proportionally sampled SMEs throughout the country, and 56 percent of the respondents are working at agricultural sector. It can be estimated from the survey, therefore, that the number of agro-industry enterprises amounts to 130 thousand because the number of active SMEs in 2004 is 237.5 thousand (IFC, 2003, 2004).

Uzbekistan is the seventh largest cotton producing country and the second biggest exporter of cotton after the U.S. in the world. About 60 percent of population is working in the cotton industry, meaning the importance of the sector in national economy is substantial. Cotton took up about 20 percent of total export amount in 2003, and therefore the state revenue from the cotton products in the world market is the largest in agricultural sector. The heavy dependence on raw mineral and agricultural products exposes the country to the risk of financial crisis stemming from unstable international demands and prices.

The world price of cotton is moving upward over the long term, but competition in world market is getting severer; China, the United States, India, and especially West African countries are competing with Uzbekistan with their cheap labor cost and production cost.

Wheat production amounts to about 4.8 million ton, which is quite enough for the self-sufficiency, but some amount of flour of good quality is imported from Kazakhstan.