4.5.2. Convene Market Stakeholders in Policy Conversations Regarding Financing


A sound and stable macroeconomic environment and the fiscal discipline that underpins it is an important driver of economic growth. For example, the potential for high inflation or currency devaluation is a strong deterrent to business investment. Poor or unstable fiscal policies discourage investment by increasing the risk of loss and making the potential for positive returns more uncertain.

A relatively stable economic environment with consistent government policy provides the predictability and lower-risk environment needed for a financial sector to operate efficiently.This can result in lower exogenous risk and lower-risk premiums charged by finance providers.The net effect is a broad increase in access to affordable finance for a wider range of finance-seekers.

While USAID is no longer heavily engaged in macroeconomic policy, it continues to be deeply involved in fiscal policy and practice. Domestic resource mobilization and public financial management are considered key parts of the journey to self-reliance for USAID partner countries. Poor fiscal policy and systems can impact the cost of funds, pushing up interest rates due to governments borrowing to cover deficits. Areas of intervention include advisory support for tax policies, collection, and working with municipalities to establish better financial management systems (Source: Mobilizing Private Finance for Development: A Comprehensive Introduction).


  1. Ability to find borrowers in target sector/region
  2. Availability of suitable training for the needs of target sector/region
  3. Sufficient understanding of target sector/region and the needs of borrowers in target sector/region to make lending decisions
  4. Transaction costs associated with originating and managing loans to target sector/region


Coming soon.


Coming soon.


Coming soon.



After the collapse of the Soviet Union, Kazakhstan became an independent republic transitioning from a command to a market-based economy. However it was saddled with a Soviet era fiscal policy which deterred investment.The absence of such investment – particularly foreign investment which could help Kazakhstan unlock its rich oil and gas resources – was a strong impediment to badly needed economic growth.


Through its implementing partner Barents Group (now Deloitte Consulting) USAID supported Kazakhstan in becoming the first country of the Newly Independent States (NIS) in 1995 to adopt a comprehensive Tax Code.This new code served as a model for other NIS countries. One of its most important features provided a positive tax environment for foreign direct and more domestic investment without providing any special incentives. Kazakhstan also implemented a Treasury system that allowed the Ministry of Finance to consolidate, control and account for all government revenues and expenditures in a single account.


A fair and predictable tax regime is a necessary condition for foreign and domestic investment. If the rules of the game are not clear, investors will simply not invest.With a modern fiscal regime in place, Kazakhstan was successful in attracting foreign investment, boosting domestic investment, leading to solid and sustained growth (even reaching double digits) over the last 17 years.


Related Resources

Have something that you want to submit to the wiki? Submit it here.