SAUAT MYNBAYEV Chairman of the Management Board, Samruk

"We will be compliant with international practices"

Can Samruk become a showcase for Kazakhstani business?

It’s too early to judge the results. The companies still have to be transferred in three stages. Our ultimate goal is to increase the value of the companies under our umbrella by introducing corporate governance principles and making the companies more open and transparent.

How does Samruk operate on a daily basis?

We act as a shareholder for the companies in our roster and we are involved in the constitution of their boards of directors. We do not interfere with their daily operations, but we are accountable to the government for the activities performed. At present, our main job is to participate in meetings of boards of directors.

What progress has been made in the field of corporate governance?

We now have independent directors on the boards, as well as on various committees under the boards, such as those on risk management. It all confirms that the country and its corporate sector are making progress. Objectively, we are changing the regulatory framework so Kazakhstan will be in compliance with international standards and practices. It’s not an easy job.

Will Kazakhstan be accepted in the WTO in 2007?

The accession to the WTO is very topical for us. First and foremost, our country is an exporter of raw materials. Just like anybody else, we have to struggle to compete in the marketplace. But it is much easier when you can fall back on these resources. During the negotiation process there’ve been improvements to the regulatory framework, making it more consistent with Western standards. We’ve also managed to change the mentality of our people to a certain extent.

Privatisation versus a state holding—which do you prefer?

Different companies pursue different goals. For privatised companies, the main goal is to have a long-term financial outcome. Being large-scale companies, they should adopt social or political objectives. For state holdings, those two types of goals are primary. There is a goal, for example, to provide rural areas with telecom services. If the company is private, it can set the terms for the implementation of such a project by saying that it is willing to do it on condition that it is subsidised. That is a major difference.