ASTANA EBRD Head Jean Lemierre praised the investment climate in Kazakhstan on Friday but warned that political reforms were also needed amid growing concern that the country is taking an increasingly authoritarian road.

"The Kazakh economy has been very successful and we should go on building on the very good mix in Kazakhstan of economic reform, political reform and transparency," the European Bank for Reconstruction and Development head said.

Kazakhstan has won praise in the West for forging ahead with structural economic reforms and was awarded "market economy" status by the United States in March.

However uncertainty has grown over democratic development in Kazakhstan in recent months following the closure of almost all critical media in the country and the arrest of two opposition leaders, AFP reported. Addressing a joint press conference with Kazakhstan's President Nursultan Nazarbayev, Lemierre described current trends in the country as "a unique mix which must be nurtured in a very efficient way and can bring a lot to Kazakhstan."

He was speaking after a foreign investors council meeting, aimed at encouraging dialogue between international companies and the leadership of Kazakhstan.

The Central Asian state relies heavily on foreign investment and has attracted billions of dollars to its economy, mainly to its oil and gas sector, since it split from the Soviet Union in 1991.

"Most of the investors, if not all the investors, say that when you compare the situation in Kazakhstan with many other countries (in the region) the situation is better in Kazakhstan. Nevertheless there is room for progress," Lemierre said.

Investors have raised questions about the implementation of the rule of law in Kazakhstan as well as about issues of taxation, customs and bureacracy, he added.

Nazarbayev said Kazakhstan has been successful in attracting investment compared to its ex-Soviet neighbors and was quick to counter any charges that his country had become less tolerant of political dissent.

"Naturally I am sad that there has been talk recently that the pace of democratic reform in Kazakhstan is slowing down. I don't thing that is the case," the Kazakh leader said, intervening to answer a question directed at Lemierre.

"There is no way that Kazakhstan is going to turn away from democratic reforms, because this is the way that Kazakhstan has selected as the way of its economic and political development," he added.

The fear that Kazakhstan is moving down an increasingly repressive path comes after the closure of 22 private newspapers and television stations in Kazakhstan in recent months, according to the opposition.

The United States expressed alarm about the apparent intimidation of the free press and the political opposition in May when the offices of the popular business weekly ****Respublika**** were firebombed.

The independent newspaper has reported widely on allegations of official corruption in Kazakhstan and is thought to have angered the authorities by giving coverage to the opposition democratic choice movement.