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Kazakhstan to focus on economic diversification and a greener economy

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Kazakh President Kassym-Jomart Tokayev spoke about the need for greater economic diversification and greener solutions in the economy at the 33rd session of the Foreign Investors’ Council hosted on 10 June in the Kazakh capital Nur-Sultan.

The council consists of heads of 37 large transnational companies and international organizations as well as heads of key ministries has served as an important platform for connecting major foreign investors in Kazakhstan and the government and helping the nation to improve the investment climate. 

Over the past year, global trade suffered from dramatic losses. Kazakhstan’s foreign trade turnover was down 13 percent last year amounting to $85 billion.

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Despite this downward trend, Kazakhstan’s non commodity exports showed a lesser decrease of 2.8 percent to $15 billion and foreign direct investments made $18 billion.

Last year saw the implementation of 41 investment projects worth $1.6 billion and involving foreign investors.

“As the global economy recovers, Kazakhstan is also on its path to economic recovery. Our government forecasts the growth to be at least 3.5 percent and we expect the possibility of higher growth,” said Tokayev.

During the session, Tokayev also spoke about the need to boost Kazakhstan’s railway system. In 2020, the volume of transit rail transportation grew by 17 percent. 

Five international railway corridors pass through the territory of Kazakhstan, which gives an opportunity to the country to capitalize on its strategic geographic location.

91 percent of containers transported in 2020 through the territory of Kazakhstan accounted for the China-Europe-China route.

“We can surely say that Kazakhstan has really become a key link in overland transportation between Asia and Europe. Kazakhstan is an important and reliable partner in implementing China’s Belt and Road project,” said Tokayev.

Tokayev also reaffirmed the country’s commitment to introducing cleaner technologies and accelerating the efforts as the country transitions to a green economy.

Also emphasising focussed on Transition to Low Carbon and Green Technologies,  Prime Minister Askar Mamin chaired the EU-Kazakhstan High-Level Platform of dialogue on economic and business matters (Business Platform) on 11 June.

The event brought together representatives of business and EU Heads of Mission led by the Ambassador of the EU to the Republic of Kazakhstan, Sven-Olov Carlsson. Visiting EU Special Representative for Central Asia Ambassador Peter Burian joined the event.

The High-level Business Platform complements the technical dialogue between the EU and Kazakhstan within the Enhanced Partnership and Cooperation Agreement, in particular the Cooperation Committee in Trade Configuration, which took place in October 2020. 

The EU has committed to climate neutrality by 2050 and is fully translating the implementation of the Paris Agreement into legislation. Ambitious targets and decisive actions demonstrate that EU is and will remain to be a global leader in the transition to green economy. The climate challenge is inherently global, the EU is only responsibly for approximately 10% of all global Greenhouse Gas emissions. The EU expects from its partners to share a comparable level of ambition to fight climate change and is ready to deepen cooperation with Kazakhstan in this area, including exploring new opportunities for trade and investment.

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Kazakhstan

Nur-Sultan and Brussels step up dialogue in the human-rights sphere

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At the initiative of the Embassy of Kazakhstan in Belgium, Kazakhstan Human Rights Commissioner H.E. Elvira Azimova, held video talks with H.E. Mr. Eamon Gilmore, the EU Special Representative for Human Rights. During the conversation, the two parties discussed a broad range of issues of mutual interest for Kazakhstan and the European Commission.

Azimova informed Gilmore and his colleagues in detail about the work carried out by her office to protect civil rights and freedoms in Kazakhstan, as well as about interaction with official agencies and NGOs. In this regard, the two sides discussed various forms of co-operation between the offices of the Commissioner for Human Rights in Kazakhstan and the EU Special Representative for Human Rights, including within the framework of the existing EU-Kazakhstan and EU-Central Asia dialogue mechanisms in the human dimension.

The colleagues also exchanged views on the results of Azimova’s first working trip to Brussels in mid-July 2021, including her bilateral agreements with the leadership and members of the relevant structures of the European Parliament.

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Source – Embassy of the Republic of Kazakhstan to the Kingdom of Belgium

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Voters go to rural polls for first time in Kazakhstan

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Voters in Kazakhstan's rural districts went to the polls at the weekend in keenly-awaited local elections that are seen as a further step in the country’s road to a fully functioning democracy, writes Colin Stevens.

For the first time ever, people in villages, settlements and small towns got the chance to elect  local leaders, or akims (mayors).

A total of 2,297 candidates competed for 730 mayoral seats. The final list was reduced from an initial 2,582 candidates. The formal results are expected to be announced later this week.

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Under a new system introduced by President Kassym-Jomart Tokayev, any citizen aged 25 years and over could run for the post of local mayor.A total of 878 of candidates, or 38.2 per cent, represented one of the country’s mainstream political parties but, crucially, more than 60% of the candidates, a total of 1,419, ran as independents rather than with the backing of a political party.

According to experts, the most active residents were from the East Kazakhstan and Zhambyl regions, where the voter turnout exceeded 90 percent. Whereas, the lowest number of voters was in Almaty region. The voting was monitored by more than 2,000 observers. However, they did not report any serious violations.

Observers say that the elections have created additional opportunities for active citizens to realize their potential and that the presidential political reforms have sparked keen interest in Kazak society.

The elections are seen as a key step in efforts to gradually liberalise Kazakhstan's political system, which has for almost three decades been dominated by the presidency.

Tokayev came to power in 2019 after the surprise resignation of Nursultan Nazarbayev who had run the nation of 19 million since independence and the elections honour a key pledge he made at the time.

A well placed source at the Kazakhstan embassy to the EU told this website the elections of rural akims was “a very important moment which opens a new stage of political modernization in our country.”

The election campaign had partly focused on both the health and economic implications that arise from the Covid-19 pandemic.

Much of the campaigning took place online on social media, as the current situation is subject to pandemic restrictions. But it is also hoped that this can give a real new impetus of digital political democratisation for the young generations as half of the Kazakh population is under the age of 30.

The president announced the initiative to hold local elections in his address to the nation last year and less than a year has passed to this becoming a reality.

The Kazak source went on: “The elections of rural akims opens up new opportunities for citizens to directly influence the development of their settlements. They form new long-term principles in the functioning of the public administration system and qualitatively change the nature of relations between state and society.”

The election campaign had reportedly aroused wide interest among citizens and cultivated increased political competition. The high number of independent candidates was particularly notable.

“In general, these local elections will contribute to the further democratization of the country,” added the source.

The source stressed the “strategic importance” of the elections, saying they marked “serious institutional changes” in the system of local government in the country.

“Along with the adoption of a new law on peaceful assemblies and the liberalization of legislation on elections, the introduction of direct election of akims contributes to an increase in the political culture and political participation of Kazakhstanis.”

It is also hoped, he said, that the elections will also pave the way for a new generation of civil servants and improvements to the state apparatus.

“All this together will provide positive impetus to the further development of the local government system and is a progressive change in the country.They clearly show that the president’s initiatives and decisions are gradually being implemented and enjoy broad support in society.”

He points out 10 new laws on political reforms have already been adopted since the president came to power and several more are in the pipeline.

Further comment comes from Axel Goethals, CEO at the Brussels based European Institute for Asian Studies, who believes the elections  “will continue the steady progress towards a more coherent democratic structure in the nation”.

Goethals told this site the elections should be seen as a process of ‘controlled democratisation’ and it was encouraging to see “signs of improvement” which include a “fledgling multi party system and the move towards more complete representation and political competition”.

Goethals added: “Kazakhstan under President Tokayev has also made very positive inroads into increasing general representation and civil society participation in its democratic process.This election and voting process must be considered in a broader context of a country still evolving. As a former Soviet state, Kazakhstan is slowly moving towards a more open democratic system. This is a process which cannot happen overnight and requires a more gradual approach to avoid abrupt or forced changes which could result in instability, as it is also part of a learning curve of democratisation for the voters, the candidates, the political parties as well as for the institutions in Kazakhstan.

“President Tokayev has shown real commitment and determination in order to improve the socio-economic fabric of Kazakhstan through political modernisation. This has been built upon by the legacy and reforms initiated by his predecessor Nursultan Nazarbayev, the first President of the Republic of Kazakhstan.”

Elsewhere, MEP Andris Ameriks, Vice-Chair of the Central Asian delegation in the European Parliament, told EU Reporter:  “The results of the elections are highly important for Kazakhstan.

“At a time when the whole world is still struggling with a pandemic that has caused great social turmoil and provoked national governments, it is vital that these elections provide a real example of mutual trust between the people and the authorities.”

Fraser Cameron, a former  European Commission official and now director of the Brussels-based EU/Asia Centre, agrees, saying that the elections “should mark another step forward in Kazakhstan’s  steady progress towards a more open and democratic society”.

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Middle Corridor intends to strengthen and contribute EU–Asia trade and co-operation

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As many readers may have knowledge of the increase of the role of trans-eurasian railway corridors, especially through the lens of the actual EU policy towards to the goals of the increase of railways share within transport sector and making the economies more sustainable and cleaner, we find it quite in time and co-ordinated in harmony with the intentions of the Trans-Caspian International Transport Route (TITR or Middle Corridor) to contribute to these ambitious goals and to become a partner of the EU towards this direction, writes International Association Trans-Caspian International Transport Route Secretary General Rakhmetolla Kudaibergenov.

History and facts

In February 2014 the Coordination Committee for the Development of the TITR was established with the initial membership of the infrastructure companies of Azerbaijan, Georgia and Kazakhstan (3 railways, 3 ports and shipping). Among the activities of the Coordination Committee was first of all the experience of the international coordinated work, forming effective tariff rates for container transportation, for transportation of general cargo (fuels, gasoil, grain, metals etc.) and the organization of the first pilot container trains "Nomad Express" in 2015-2016.

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Further the Coordinating Committee participants decided to establish the International Association “TITR” with headquarters in Astana, which has started its activities since February 2017.

Now after 4 years after its establishment the TITR association became known and well recognized. Today it is represented by 8 countries (Ukraine, Poland, China, Turkey and Romania joined) and 20 state and private companies-members. It is non-profit association with the exceptionally commercial goals:

  • Attracting transit and foreign trade cargo to the TITR,
  • Development of integrated logistics products along the corridor,
  • Development of an integrated solution (technology) for the transportation process across TITR,
  • Promotion of the competitiveness of TITR in comparison with alternative routes,
  • Operating an effective tariff policy, optimization of costs,
  • Reduction of administrative barriers related to the border and customs procedures and related to the shipment processing.

The definition of the TITR, as it follows accordingly from its name, is the all railfreight in between Azerbaijan and Kazakhstan ports at the Caspian Sea of all the types of cargo and direction (transit, import and export). So TITR is providing its service for transportation of cargo from China and Central Asian countries towards Europe and Africa as well as in the opposite directions. As for today the significant part of cargo is a wide range of Kazakhstani exports, including petrochemicals, LPG, ferrous and non-ferrous metals, coal, coal coke, ferroalloys, cereals, oilseeds, legumes and many others.

The main difference of the Middle Corridor is that we provide not only container service, but also wagon shipments and project cargo. It is widely known that the main driver of growth in traffic in the direction of China – Europe has become "subsidies" from the Government of China, but as the development of our route takes place with their insignificant participation, this demonstrates our big margin of safety and readiness for any market changes that may become even more favorable to us. Moreover because the potential of the cargo base is very high in absolutely all the directions.

During the last 2020, COVID-19 pandemic year, there have been no stops or interruptions in the work of the TITR. Of course, only common well-coordinated work of all the participants of TITR, a clear technology for organizing container trains, reduced transportation times and the competitive tariffs are the key to the success achieved. In 2016 only 122 containers in TEU passed through our route   and in 2020 there are already around 21 000 TEU containers.

As by the results of 5 months of 2021 the volume of cargo transportation along the TITR amounted to 218 thousand tons, out of it 120 thousand tons or 55% is a transit through Kazakhstan, which is 14% more than in the same period in 2020. Transportation of goods in this direction is carried out mainly in containers. The increase of West-East traffic by 2 times is due to the supply of meat and by-products from the United States to Kyrgyzstan and Uzbekistan, sugar to Tajikistan and Kyrgyzstan, sodium tetraborate from Turkey to China. The westbound traffic volumes for 5 months of 2021 amounted to 83 thousand tons, which is almost the same as in the same period in previous year. While its structure has been changed, including an increase to 3,4 times of traffic of tomato paste from China to Italy and doubled volumes of walnuts from China to Turkey.

From January 1, 2021 to the present, 47 container trains have passed along the route in the westbound direction and 4 trains on the Turkey – China leg of the corridor. Total volume of container traffic therefore in 5 months of 2021 amounted to 9674 TEU or 27% higher than in 5 months of 2020.

New hub of Aktau and the perspectives and opportunities for the European business

As a new growing-point on the logistics map of Eurasia – Aktau (in the western part of Kazakhstan) is expected in the future to be recognized and effective as the Khorgos Dry Port at the Khorgos – Altynkol border point between China and Kazakhstan.


Rakhmetolla Kudaibergenov, Secretary General, International Association “Trans-Caspian International Transport Route”

On behalf of the Association, we welcome and try to support a stronger and faster development of the logistics power of the Aktau Hub, as its success will obviously mean that a cargo from the EU has just passed through the TITR and has already brought value to its members along the route before the cargo will be further distributed in the directions to the south of Russia, China or Central Asian countries.

Here I would like to note that the Kazakhstan side would be glad to meet foreign investments in the region and especially warmly welcome the European ones. The whole range of favorable treatment for the investors may be discovered here starting from the priority sector of transport and logistics, for example cost-friendly warehousing of cargo produced and aimed for the CIS and Asian countries and to a new production facilities in full to open from where the goods produced may be subsequently sent to the world markets.

We wish for a fast further integration of the Middle Corridor into the global transport logistics system and international relations. Transit and transport potential of the countries of TITR will lead to the common synergy and the development of logistics systems in the formation of a new architecture of transcontinental corridors.

The whole trade between Kazakhstan and the EU for 2020 is 23,7 billion USD (including exports – 17.7 billion USD and imports – 6 billion USD). In total Kazakhstan exports about 160 million tons of various cargoes both to its nearby neighbors and to world markets, including about 85 million tons by rail and about 75 million tons by pipelines. So there is still a lot of potential for mutually beneficial partnership, we see with the use of the Black Sea maritime lines, Marmaray cargo tunnel and connection with the transport corridor system of Europe.

Applying to the European business society we wish to give a new impetus for an increase of business networking, disclosing the wide range of opportunities of Middle Corridor as the Trade and Transport Bridge of Europe and Asia, we are open for new offers and projects on our route, ready for the boost of trade relations between countries located to the east and west of the Caspian Sea.

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