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2007 Assessment

Kazakhstan: Integrity Indicators Scorecard

Kazakhstan: Integrity Scorecard Report > Sub-Category: Privatization
Indicators		Score
50	Is the privatization process effective?	75
51	Can citizens access the terms and conditions of privatization bids?	75

Indicator and sub-Indicator Details

Is the privatization process effective?

50a: In law, all businesses are eligible to compete for privatized state assets.

Score:

YES

Comments:

References: Law on privatization Chapter 1 General provisions Article 2 Subjects of the privatization [ LINK ]

50b: In law, there are regulations addressing conflicts of interest for government officials involved in privatization.

Score:

YES

Comments: As reported by many experts, many officials became rich in the privatization process. [ LINK ]

References: Regulation The statement of the rules of organizing and conducting the auctions Department of State Property and Privatization of the Ministry of Finance Part 1 General provisions Point 7 The participants of the auctions can not include... [ LINK ]

50c: In practice, conflicts of interest regulations for government officials involved in privatization are enforced.

Score:

100

Comments:

References: Report. Staff of Agency of Financial Police. 2007 Concepts and Signs of The Corruption Crimes (in Russian) [ LINK ];

Interview with Alikhan Baimenov, chair of Akzhol party Sept. 20, 2006 published by polit.ru website;

[ LINK ]

Can citizens access the terms and conditions of privatization bids?

51a: In law, citizens can access privatization regulations.

Score:

YES

Comments: By law, privatization auctions are open to the public and all regulations are described in the article 14.

References: Law on privatization Chapter 1 General provisions Article 4 Main principles [ LINK ]

51b: In practice, privitizations are effectively advertised.

Score:

100

Comments: The major part of privatization of Soviet property has already been done. Today, state companies go more for IPOs.

References: Interview with Utepov E.K., chair of the Committee of State Property and Privatization The State As A No-Owner Kazakhstanskay pravda Aug. 1, 2006

[ LINK ])=rus;

Statement Oraz Jandosov On The Privatization Tender of The Energy Facilities June 15, 2005 [ LINK ]

Peer Review Comments: Privatization is not just about the companies but about the property itself, which is poorly managed.

51c: In law, the government is required to publicly announce the results of privatization decisions.

Score:

YES

Comments: Since then, many reforms have been undertaken within the ministry and its committees.

References: Resolution of the Government of Kazakhstan from Feb. 14, 1997 On specialized coupon auctions Point 3. Order of conduction of coupon auctions [ LINK ]

51d: In practice, citizens can access privatization regulations within a reasonable time period.

Score:

100

Comments: Quite often privatization went on in closed auctions, to which people had limited access.

References: Report. Staff of Agency of Financial Police. 2007 Concepts And Signs of The Corruption Crimes (in Russian) [ LINK ]

Report Nurbulat Masanov Corruption in Kazakhstan. Myths and reality Aug. 14, 2001 [ LINK ]

51e: In practice, citizens can access privatization regulations at a reasonable cost.

Score:

100

Comments: The main rules are defined in the law on privatization and some regulations of the government. All of them are easy to find. However, usually the results of the privatization tender are known beforehand. It means that if someone is interested, the formal regulations are easy to obtain. If the piece of property is not lucrative then the competition can be a real one; if it is a very interesting piece usually there are some parties involved, which make the preliminary work and sometimes the unofficial negotiations with the state. That is why maybe international experts called the policy of the government in privatization "unclear".

References: Report Oleg He On EBRD Estimations Central Asian Countries Have Not Moved forward in The Reforms (in Russian) Nov. 29, 2002 [ LINK ]

Report Sarabekova T.S., deputy head of The Chair of Territorial Committee of State Property And Privatization of Almaty City Legal Foundation of Privatization, 2006 (in Russian) [ LINK ])=rus

Peer Review Comments: The regulations are difficult to access on some bids, as they are insider deals.