Ex-Soviet country lures firms leaving Russia amid sanctions

Companies are being offered the chance to relocate to Kazakhstan

Kazakhstan’s president, Kassym-Jomart Tokayev, has instructed the government to create the necessary conditions to welcome in foreign companies that were forced to leave Russia amid the Ukraine-related sanctions, TASS reported on Thursday, citing the president’s press service.

The government should create favorable conditions for [the companies’] relocation to Kazakhstan. This will give us good opportunities to increase the production of non-resource-based goods,” Tokayev was cited as saying.

The Kazakh leader noted that nearly half of Russia’s 1,400 foreign companies have suspended operations or left the country since the start of Moscow’s military operation in Ukraine in February.

According to Tokayev, the government was also instructed to prepare a number of investment projects in the manufacturing industry, but “there is little to brag about,” as no new projects have been established so far.

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Previously, the president also urged the Eurasian Economic Union (EAEU) nations to set up favorable conditions for companies leaving Russia due to sanctions to relocate. In a speech at the EAEU council in May, he said that “even world giants” are well aware of the advantages of the geo-economic location of the union and cannot ignore the potential of the 180 million-large consumer market.

Commenting on Tokayev’s announcement, Russian Presidential spokesperson Dmitry Peskov said that it is normal when a country tries to create comfortable conditions for foreign investors, but said that it is unfortunate that companies have to quit the Russian market due to political pressure.

All countries are trying to do this, including our country. Another thing is that it is now clear that under pressure from the outside, many companies are forced to make such decisions [to quit or relocate]. This, unfortunately, is the reality in which we live and work,” Peskov said.

Western sanctions have forced hundreds of international companies to either suspend operations in Russia or pull out entirely. Clothing manufacturers Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Adidas, Victoria’s Secret, and others have closed shop in the country. Several restaurant chains, including McDonald’s, have also departed, as well as furniture-maker Ikea, tech giants Apple and Microsoft, plane-maker Boeing, oil giant Exxon Mobile, banks and hotel chains, and many other global companies.

For more stories on economy & finance visit RT’s business section

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