Kazakhstan, an oil-producing Caspian nation hit hard by the global recession, urged foreign companies on Friday to invest more of their profits locally to help diversify the economy, Reuters reported.
The former Soviet nation has attracted more than $50 billion in foreign direct investment since it gained independence in 1991, mainly in its oil and metals sectors.
Addressing a meeting of foreign investors chaired by President Nursultan Nazarbayev and EBRD President Thomas Mirow, Economy Minister Bakhyt Sultanov said it was time for foreign companies to look at opportunities in other sectors.
"There is a separate set of issues which we would like to raise with investors, the reinvestment of profits made in Kazakhstan in order to develop the service and manufacturing sectors, small and medium sized businesses ...," he said.
"That would work in favour of both investors and the state in light of increases in local content of procurement."
Foreign investors have been worried about the state of Kazakhstan's banking sector, which is plagued by deteriorating asset quality and painful debt restructuring talks, as well as a string of high-profile arrests in the key uranium sector.
Memories are also still fresh of a bitter dispute between the government and a group of Western oil companies in 2007-2008 over the future of the Kashagan oilfield, one of the world's biggest oil discoveries in past decades.
Addressing investors on Friday, Sultanov vowed to do more to improve transparency and corporate standards at Kazakh companies to make it easier for foreigners to enter local markets.
U.S. oil companies such as Chevron Corp (CVX.N) are some of the biggest foreign investors in Kazakhstan, which now seeks to diversify sources of financing by inviting more companies from Europe and Russia, its biggest trading partner, analysts say.
Central Asia's biggest economy, Kazakhstan grew rapidly on the back of booming oil and metals prices between 2000 and 2007 but the financial crisis has ended years of double-digit growth.
Concerns about emerging market risks have made foreign investors more cautious about investing in markets such Kazakhstan -- a headache for the Kazakh government seeking new ways to reinvigorate the stalling economy.
With industrial production falling and economists expecting the economy to slip into recession this year, Kazakhstan is also worried about a possible rise in anti-government sentiment in a country where the state tolerates little dissent.
Industrial production contracted by 4.6 percent year-on-year in January-May compared with growth of 3.8 percent in the same period, according to figures released on Friday.