ABSTRACT
The investment crisis in Kazakhstan was further intensified by the steady contraction of investment and downturn in the real sectors of the economy. This was due, in particular, to the high interest rates and the high risk of investing in production. In 1993, foreign capital began flowing into Kazakhstan in substantial amounts, but not merely in the form of "investments." In 1993—94, Kazakhstan attracted foreign capital chiefly in the form of foreign loans and credits. Kazakhstan had an opportunity to learn from the negative experience of many developing countries in attracting foreign investments. From the very beginning of its independence, Kazakhstan could have followed a policy of attracting direct foreign investment by relying upon its rich complex of energy and natural resources. The long-term and strategic import of the losses from selling off basic industries and natural resources is evident that Kazakhstan is no longer able to conduct an effective structural policy with respect to its industrial sector.
