Kazakhstan, EU Mark 25 Years of Strong and Growing Relations

A WEEKLY ONLINE PUBLICATION / WWW.MFA.GOV.KZ ISSUE NO. 543 / FRIDAY, FEBRUARY 2, 2018

Kazakhstan, EU Mark 25 Years of Strong and Growing Relations

New Reforms to Promote Competition, Modernise Agriculture

In Focus: Foreign Policy Priorities

Also In The News

EU-Kazakhstan relationship remains strong, anticipates continued growth

Kazakhstan, EU Mark 25 Years of Strong and Growing Relations Despite the difficulties of representing 28 countries and more than 500 million people, the European Union has been remarkably successful in delivering peace and prosperity. The EU’s foundations were laid when Europe was still recovering from the second devastating war between its countries in a generation. It’s a mark of its success that it’s now impossible to believe its member nations could again descend into armed conflict. On the economic front, the removal of barriers has also spurred co-operation, growth and rising living standards. This success is why the EU was hailed by Kazakh President Nursultan Nazarbayev two decades ago as a model for economic co-operation in our region, report The Astana Times. The Eurasian Economic Union (EAEU), which grew out of his vision, is still in its infancy. But there are signs that the EAEU can deliver rewards for its members and provide a wider economic boost. As the EU has shown, a successful economic union should not be inward-looking. Economic co-operation is not a zero-sum game but benefits all participants. February marks the 25th anniversary of the establishment of diplomatic relations between Kazakhstan and the EU, which has become the foundation of a strong and growing economic and political partnership. The European Union is Kazakhstan’s biggest trade and investment partner. It is the major market for the country’s oil and gas, a supply which helps ease its energy security concerns. In all, the EU accounts for 40 percent of Kazakhstan’s external trade. It is trade, too, where there remains room for growth. In the first 10 months of last year, Kazakh trade with EU countries grew 23 percent compared to the same period in 2016 and amounted to over $24 billion. It is the same story on investment. While Kazakhstan has been successful attracting funding from diverse partners in recent years, direct investment from EU member countries in 2016, at nearly $11 billion, was just about half of the annual total. The European Investment Bank and other international financial institutions have helped fund improvements in Kazakhstan’s economy, including $247.3 million last year to develop its agriculture sector. Behind these impressive statistics are hundreds of individual partnerships between European companies and their Kazakh counterparts. More than 6,000 joint ventures, including major firms

Astana Calling

as well as, increasingly, small and medium-sized businesses operate in Kazakhstan. Accord to The Astana Times, Kazakhstan’s oil and gas sector is where co-operation is strong and long-standing. But the recent opening of a Kazakh-French plant to produce radar equipment – the first in Central Asia – is one example of new high-tech ventures beyond the commodities sphere. There is strong interest from EU companies in the next stage of the modernisation and diversification of the Kazakh economy. Sustainable energy production and use is an area rich for co-operation as EXPO 2017 underlined. More joint ventures in engineering and manufacturing have recently been set up. The relationship between the EU and Kazakhstan goes beyond commercial. Over the last 25 years, the EU and its institutions, as well as individual member countries, have given Kazakhstan strong and welcome support as we transitioned from being part of the Soviet Union to a modern, stable independent nation. In turn, Kazakhstan earned recognition as the EU’s key partner in the region, working together on shared foreign policy goals. It is why, before the 25th anniversary was reached, a new Agreement on Enhanced Partnership and Co-operation was drawn up and has been operating provisionally since May 2016. (For its full entry into force, the ratification by nine remaining EU member states is required while 19 states have already ratified). The agreement – the first of its kind for a Commonwealth of Independent States country – has also in the last few weeks been endorsed in the European Parliament. As The Astana Times reported, during the debate over the agreement, European Commissioner for Justice Vera Yurova said the relationship between the EU and Kazakhstan had never been stronger. The history of the last 25 years suggests that there is plenty of potential to deepen this partnership in the years ahead.

As the EU has shown, a successful economic union should not be inward-looking. Economic co-operation is not a zero-sum game but benefits all participants.

ASTANA CALLING / ISSUE 543/ 2

Back to Contents

The government seeks to increase competitiveness with a focus on agro-technologies

New Reforms to Promote Competition, Modernise Agriculture Kazakhstan is continuing to scale back government and quasipublic involvement in its economy in efforts to protect and promote competition. Last year, 108 laws and 972 bylaws were audited to identify rules that hinder competition; 144 such hindrances were found, Minister of National Economy Timur Suleimenov told a Jan. 30 government meeting. Amendments were made to the relevant legislative acts through the draft law “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Improving Business Regulation,” which is being considered by the Mazhilis (lower house of Parliament). In addition, Kazakhstan approved the Comprehensive Plan for Privatisation for 2016-2020. The plan originally included 734 facilities to be privatised; 367 facilities worth 164 billion tenge (US$508.4 million) were transferred to competitive environment in 2016-2017 as envisioned by the plan.

renewal are the two key tasks, according to Agriculture Vice Minister Arman Yevniyev. Increasing productivity and efficiency as well as involving IT businesses in agriculture are the goals of digitising the country’s agricultural complex. To this end, a digitisation office has been set up. Sixty-two of the Agricultural Ministry of Kazakhstan’s 101 services are only partially automated, but 89 services are planned to be switched over in the next two years. The introduction of new technologies and precision tools is also key, as it allows for greater productivity with fewer resources using, for example, satellite and computer systems, sensors and autopilot steering systems and other methods for assessing fields and field variability. Measures supporting the use of these new tools are expected to decrease losses in the field by 25 percent, Yevniyev said.

Steps to reduce the state’s participation in entrepreneurial activities will continue as envisioned by the State of the Nation address, “New opportunities under the Fourth Industrial Revolution,” published Jan. 10.

The ministry is also planning to introduce a smart farms system to help monitor and control livestock, manage greenhouses and keep online records. The ministry plans to launch pilot projects for a number of upgrades in the Akmola and Karaganda regions.

“At present, the ministry has established a working group to determine the list of state institutions and subjects of the quasi-public sector for transfer to the competitive environment or liquidation, as well as their consolidation. Information on the work results of the group will be submitted to the government in three stages: in April, May and June,” said Suleimenov.

This year, the agriculture sector will also receive block chain technology and the opportunity to order grain carriers online, said Yevniyev. Work has begun to launch online trading to allow foreign buyers to purchase grain by 2020.

The government completed 212 investigations into competition protection in 2017, and 187 found violations. Fines of 2.01 billion tenge (US$6.23 million) were imposed, and 594 million tenge (US$1.84 million) has been recovered so far. Eighty-one investigations of competition protection law violations are underway now, with a focus on the retail, primary and secondary wholesale coal markets and retail fuel sales markets. In 2016, Kazakhstan’s antimonopoly authority was admitted as a participant in the Organisation for Economic Co-operation and Development (OECD) competition committee. A visit by OECD experts is expected this year to review the implementation of changes in antimonopoly legislation introduced in 2015-2016. A large-scale OECD review on competition law and policy is scheduled for next year.

This year, the ministry will develop a detailed logistics map of the agricultural complex, including existing and planned terminals and storage and distribution centres. Overall, digitisation efforts are expected to have an impact of around 40 billion tenge (US$124.4 million) by 2025, Yevniyev noted.

In addition, Kazakhstan approved the Comprehensive Plan for Privatisation for 20162020. The plan originally included 734 facilities to be privatised; 367 facilities worth 164 billion tenge (US$508.4 million) were transferred to competitive environment in 2016-2017 as envisioned by the plan.

Kazakhstan is also continuing its large-scale modernisation of its important agricultural sector, seeking to incorporate advanced agricultural technologies. Digitising state regulation and technological

Astana Calling


Back to Contents

In Focus: Foreign Policy Priorities Strengthening UN & Int’l Security

CNEEC Vice-President Zheng Chengjun said the company is considering investing in the projects using its business experience in China and abroad as it fits into the strategic partnership between the two countries and would be beneficial for the people on both sides. Following the negotiations, the parties discussed the possibility of organising a field trip to Kyzylorda for CNEEC engineers.

Kazakhstan holds a UN Security Council Open Debate on the Middle East As UN Security Council President, Kazakhstan convened a regular open debate on the situation in the Middle East, including the Palestinian question. Special Coordinator for the Middle East Peace Process Nickolay Mladenov briefed council members on the situation in the region with special attention to the Palestinian-Israeli confrontation and the status of Jerusalem. The council members urged the leaders of the two sides to observe the principles of international agreements, with regard to observing the right of the Palestinian people to statehood and Israel’s right to security. More than 50 representatives of member states and regional organisations expressed their concern over the announced reduction in U.S. financial assistance to Palestine in a worry that the decision will worsen the refugee situation and lead to their radicalisation. In his remarks, Permanent Representative of Kazakhstan Kairat Umarov underlined the commitment of his country to the twostate solution, with the necessity to implement the provisions of UN Security Council Resolution 2334 concerning Israel’s establishment of settlements in Palestinian territory. The Kazakh delegation reiterated President Nursultan Nazarbayev’s remarks at the UN Security Council regarding the nonproliferation of weapons of mass destructions that called on world leaders to resolve international issues through confidence-building measures, which would lead to lasting peace and security across the world, including the Middle East. (www.mfa.kz)

Welcoming Investments

CNEEC is expected to support Kazakhstan in matters of design, construction, operation of facilities as well as the training of engineering personnel. (www.kazinform.kz)

Culture & Identity Modernisation

New names starring in Kyz Zhibek Opera Twenty-six-year-old opera singer from Kazakhstan Malika Minisini has a rare type of classical female singing voice, a mezzo-soprano. Fluent in five languages, she has worked in construction, marketing as well as the hotel and oil industries before stepping into the world of music and artistry. On Jan. 28, Malika made her debut for the Astana Opera as Batsaiy in Yevgeniy Brusilovsky’s “Kyz Zhibek.” The artist finds her part in “Kyz Zhibek” to be very emotional and wants to deliver in her performance the strong energy of her character. Kazakh opera is not easy to perform; in order to keep and convey the meaning of every word, the soloist needs to sing each word clearly and accurately, which makes operas in Kazakh harder, the artist said. The first Kazakh opera, “Kyz Zhibek” was recognised as the gem of national musical art. Playwright and novelist Gabit Musrepov wrote the libretto based on a folk lyric-epic poem about the tragic love of Zhibek and Tulegen. Brusilovsky widely used Kazakh folk songs and kuis as well as works by folk composers Ybyrai, Mukhit, Zhayau Musa and Tattimbet and applied the European instrumentation to Kazakh music in making the score. (www.astanatimes.com)

Chinese companies to join in the energy projects in South of Kazakhstan The Governor of Kyzylorda region Krymbek Kusherbayev visited China for negotiations with China National Electric Engineering Co (CNEEC) on the possibility of constructing solar and hydroelectricity power plants, a waste processing plant and developing smart cities in Kyzylorda region. “Kyzylorda has the biggest natural capacity for production of solar energy in Kazakhstan with 362 sunny days out of 365,” said the governor. Another group of projects is about the construction of small-scale hydroelectricity power plants using the resources of the Syrdaria River. The third project is the construction of solid waste plants with a processing capacity of 150,000-160,000 tons per year. Kusherbayev explained that this project too will generate power from the processing. He also expressed interest in learning the experience of Chinese companies in developing smart cities. The projects are to be funded through public-private partnerships over 10 to 15 years.

Astana Calling


Back to Contents

Also In The News... •

•

•

•

Kazakh delegation participates in 48th World Economic Forum A Kazakh delegation led by Deputy Prime Minister Yerbolat Dossayev participated in the World Economic Forum (WEF) in Davos, Switzerland, where world leaders and scholars discussed “Creating a common future in a collapsing world.” The subject centred around answering questions about the fourth industrial revolution, global geopolitics, developing capital markets and global trade and digital economy. The delegation joined the interactive panel session on Strategic Briefing: Eurasia and met with the leadership of several international institutions, including the Organisation for Economic Cooperation and Development (OECD), Asian Infrastructure Investment Bank (AIIB), WEF executive committee and different foreign state agencies. Every year, WEF gathers more than 3,000 leaders from various sectors that traditionally shape the agenda of global economy and development. Record amount of goods transported through Kazakhstan last year The volume of cargo transported through Kazakhstan has continuously increased in the last five years, hitting a record in 2017, said Minister for Investment and Development Zhenis Kassymbek during a Jan. 30 government meeting on enhancing transport and logistics infrastructure efficiency. Compared to 2016, the amount of goods in transit grew by 50 percent to 2.1 million tonnes. The major • trigger of the transit rise is competitive tariff rates, said Kassymbek. The government is planning to continue coordinated action with partner states to increase transit 10-fold by 2020. Kazakhstan is seeking to revive the historic Silk Road to become a major transit country for goods to and from China and Western Europe. Since 2015, the nation’s GDP transport share has reached 8 percent, he added; in the last ten years, its investments in infrastructure, transport and logistics reached $30 billion. During the period, more than 2,000 kilometres of railways were built, 6,300 kilometres of highways reconstructed, more than 15 airports renovated and Caspian Sea maritime terminal capacities increased up to 26 million tonnes. From 2014-2016, Kazakhstan improved its country ranking in the World Bank Logistics Performance Index from 88th to 77th place. If the Nurly Zhol state programme is implemented successfully, the country seeks to hit 40th place by 2020. Kazakh Ministry of Foreign Affairs and Japanese Agency of International Cooperation (JICA) discuss official development assistance in Kyrgyzstan A Kazakh delegation visited Kyrgyzstan as part of the JapaneseKazakh project to assist Kazakhstan in cooperation with Afghanistan on official development assistance (ODA) and developing a national ODA system. The delegation consulted with the Japanese • Agency of International Cooperation (JICA) and United Nations Development Programme (UNDP) representatives in Bishkek. One of the objectives was to advance expertise capacities and the potential of Kazakh state ODA agencies. The delegation presented its current policies and the Foreign Ministry’s ongoing work towards establishing ODA mechanisms, as well as creating a national agency. The discussions centred on areas of potential cooperation with Kyrgyzstan, including implementing joint projects. JICA experts spoke about its current activities in Kyrgyzstan, including One Village One Product (OVOP), a strategy to stimulate the local economy. OVOP encourages the production of food, honey, and handmade merchandise from felt and medicinal herbs for export. JICA also reviewed its work in agriculture, business development, information technology and education. To provide first-hand experience, the host organised visits to the local Japanese centre, Centre for Information Technologies, OVOP centre and a venue within the agricultural products logistics project funded by the programme. An agreement to assist Kazakhstan in establishing an ODA system was reached during the meeting between Kazakh President Nursultan Nazarbayev and Japanese Prime Minister Shinzo Abe in October 2015.

reforms, adopting several legislative acts on combating corruption, rendering public services, establishing public councils, the access to information and the ethical code of conduct for civil servants, noting they have the potential to increase the efficiency of the national anti-corruption policies. At a meeting with the Civil Service Affairs and Anti-Corruption Agency, Kotlyar and government officials addressed the principle of impartial accountability for corruption offences, discussing the issues concerning the application of non-criminal fines, criminal prosecution and enhancing judiciary independence in handling corruption cases. Doctors observe patients online Minister of Health Yelzhan Birtanov announced plans at the Mazhilis (lower house of Parliament) meeting to create a personal account for doctors so that they can follow up with and get feedback from patients. The ministry is seeking to build an integrated healthcare platform with an electronic health passport incorporating the patient’s and doctor’s personal accounts. The patient’s account will provide citizens with online access to information about their health conditions and health services and the opportunity to receive health services through mobile technology, said Birtanov. He added the programme will allow patients to evaluate healthcare organisations. Through doctors’ personal accounts, medical workers will be able to interact online to jointly provide health services. By giving a complete picture of patients’ health conditions, the online accounts will facilitate doctors in making a diagnosis and prescribing treatment, receiving quick patient feedback, continuously monitor development and access the platform from any device and location. Electronic health passports will allow for collecting and using health data for policy decisions and prevention measures. The ministry will be the receiver and user of such statistics for health analysis and management. Introducing digitised tools into healthcare is in line with President Nursultan Nazarbayev’s latest address regarding applying the opportunities of the new industrial revolution. Gennady Golovkin-Canelo Alvarez rematch set for May 5 After scoring a split draw in their first fight in September 2017, middleweight boxers Gennady Golovkin and Canelo Alvarez have announced they will seek a rematch. The possible venues for the May 5 event include New York’s Madison Square Garden, Las Vegas’ T-Mobile Arena and the Dallas Cowboys’ AT&T Stadium. The scores of the September fight, viewed as controversial due to questionable judging, ended 118-110 in favour of Alvarez, 115-113 in favour of Golovkin and a 114-114 split. The event was Golovkin’s first non-win in his 38-fight professional record.

OECD expert: Kazakhstan makes progress in rendering public services Dmytro Kotlyar, head of the Organisation for Economic Cooperation and Development (OECD) Istanbul anti-corruption action plan monitoring group, was in Astana to discuss implementing the OECD Istanbul plan (a sub-regional peer-review programme) recommendations and assess the latest progress in the country’s anti-corruption policy. In presenting the interim report, Kotlyar noted Kazakhstan’s efforts to adopt anti-corruption tools and its achievements in rendering public services. He added the importance of systematic work to further explore the potential of efficient public services and encouraged following OECD’s best practices and recommendations. Kotlyar elaborated on the reforms which Kazakhstan has implemented, saying the decision to issue the annual National Anti-Corruption Report and conduct sectorial studies represent a positive sign. Kotlyar praised the civil service

Astana Calling


ASTANA CALLING A WEEKLY ONLINE PUBLICATION / WWW.MFA.GOV.KZ Please send comments and questions to [email protected]

Back to Contents