Behind Kazakhstan’s Success In Business
Ernst & Young executive John Ferraro has become an huge supporter of doing business in Kazakhstan. He cites the government’s enthusiasm, the “can-do” attitude of Kazakhstan citizens and the geography as major reasons to invest in this economy. The country lies on both sides of the Ural River and is one of only two landlocked countries in the world positioned on two continents. Kazakhstan shares borders with both Russia and China. The economy of this country also makes it an attractive target for investment.
In addition to crude oil, the country exports textiles, wheat, livestock, and uranium. Kazakhstan made history by being the first former Soviet country to to pay off all of its debt to the International Monetary Fund seven years before the debt was due. This was one of many reasons the U.S. decided to grant the country the status of a market economy in 2002. Currently energy is the leading economic industry in Kazakhstan. That industry combined with a strong banking industry helped to earn the country the ranking of the 50th most competitive market in the world from the Global Competitiveness Report.
Based on the successes in the Kazakhstan model, the economy plays a large role in attracting investors. Other factors also help U.S. investors decide to get involved in a foreign country’s economy. Once a country like Kazakhstan starts to operate based on U.S. accounting principles, it is easy for investors to give them a second look. Sound accounting principles are a language that any smart investor speaks.
One of the biggest accounting principles that almost all investors value is transparency. Every investor deserves a meaningful accounting of how a particular investment is performing. Countries who choose to cloak financial practices and hide information about true economic performance lose their financial charisma with investors fast.
One of the reasons Kazakhstan has been so successful with its investors is because of its connections with Ernst & Young. The company has been assisting the country make itself more attractive to investors. Executives like Ferraro help government leaders remain aligned with good accounting practices and financial standards. This partnership has worked primarily because Kazakhstan leaders are open to change and willing to be mentored by others with more experience. They take critical feedback as positive instruction to help them improve their current infrastructure.
Mr. Ferraro has a lot of experience fostering these kind of relationships with businesses. His work has allowed him to live in London, New York, Rome and Chicago. He does most of his consulting as a senior adviser to major clients all over the world. So far, his business acumen and financial expertise has played a key role in the creation of Ernst and Young’s Europe, Middle East, India and Africa Area as well as the company’s Asia-Pacific Area. His dealings in Kazakhstan has earned him a position on the Kazakh Foreign Investors’ Council.
International financial consultants have to be able to adapt to change quickly in order to be successful in foreign economies. They must be able to use the winds of change and incorporate them into a larger vision. Often, this means conducting business in ways the companies involved have never considered before changed occurred. It means not losing sight of a vision and being able to emerge on the other side of change as something effective and new.