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. Last Updated: 07/27/2016

A Better Business Bet: Head for Kazakhstan

Confrontation has been good for business in Russia. Since the October events, Moscow's hotels have been fuller than usual with foreigners keen to look again at the possibility of doing business in Russia, which, after the suppression of its parliament, the publication of a draft constitution and the provision of parliamentary elections, promises greater political stability.

Potential investors often question whether Russia really wants to attract foreign investment, since the environment seems so hostile, the rules so Byzantine and the practice so unpredictable. In this respect, the decree issued by President Boris Yeltsin at the end of September providing for increased security for foreign investment in joint ventures helped promote the better atmosphere that is now palpable in business circles.

But while Russia has been on a confidence roller coaster for the past few years, the former Soviet republic of Kazakhstan has attracted consistent and rising interest because it offers not only what Russia does - huge reserves of natural resources - but also what Russia does not, stability of government. It possesses nearly 50 percent of the former Soviet Union's reserves of lead, wolfram, copper and zinc; 90 percent of its chrome reserves; and one of the world's largest reserves of oil and gas. Barring a vast accident, Kazakhstan is the 21st century's Kuwait.

Contracts already signed or about to be include one with Chevron for the development of the Tengiz oil field, and another with British Gas and AGIP for the development of the Karachaganak gas and oil field; a six-member consortium is now exploring the offshore reserves in the Kazakh owned Caspian Sea.

These are big projects: they will bring in their wake commensurately large contracts for infrastructure and attract expanding circles of service industries, commercial development, hotels and shops. Like Kuwait, Kazakhstan will get rich - and undergo a revolution in its culture.

The Kazakhs wish to keep as much control of this dizzying prospect as they can: Businesses that are serious about investment have to register a representative office or a Kazakh "daughter" company. Any application or project must go through each layer of authority on its climb to obtain authorization at the top. Central control of exports is being again concentrated in 12 foreign trade organizations.

The stability of the country appears to be real, but it is purchased at the cost of a strong central control. Yet although there is no guarantee of continued stability, Kazakhstan may have the good fortune to break through to new wealth before the dangers of stresses in the society become too great.

Marcia Levy, an attorney at Norton Rose, has been practicing law in Moscow for two years.