EDITORIAL

Kazakhstan, an important player in the new global reality

I was aware of the realities in Kazakhstan and I had read a lot over the last two years, given joint projects carried out with this country’s embassy in Bucharest. That is why the invitation extended by the Foreign Ministry of the Republic of Kazakhstan to visit this country indescribably gladdened me, since I was about to get to know, firsthand, what I knew solely from press reports or pictures about this country, about her impressive evolution in the 25 years since the proclamation of independence, to ensure a deserved and rightful place in the global community.

During the brief period that elapsed since the proclamation of independence, Kazakhstan succeeded in building a new state, a new capital, a new competitive economy—which has increased 16 times and has become one of the strongest economies in the region. In addition, the country has attracted more than $200 billion in direct investments, becoming the leader in the region in terms of attracting foreign capital, with some three quarters of all FDI that flowed into Central Asia.

The main impression with which I returned from my one-week visit to “The Land of the Great Steppe” – as the country of 17 million is dubbed in promotional materials but also in the recently launched app that Roman Vassilenko, Deputy Minister of Foreign Affairs, presented to us, is that the country has entered its third decade of independence as an established and stable state with a dynamically developed economy and clearly set foreign policy principles that lead to a rising role and strengthening of its international reputation and prestige.

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At the same time, Kazakh authorities are committed to win a very ambitious bet aimed at transforming this country into a financial hub of the Central Asian region.

Moreover, Kazakhstan, the country that has 130 nationalities, is a model of inter-ethnic tolerance, one from which many countries of the world could take important lessons in what concerns maintaining cultural identity and peace between the different ethnic groups.

I reached Astana, the country’s new capital, with a group of international journalists and observers, late at night, the day before the snap elections for the Lower Chamber of the Mazhilis.

The fascinating metropolis, which is not yet 20 years old, revealed itself to me a bit, in all of its splendour, on the road from the airport to the hotel, and I confess that seeing some of the city’s architecture made me even more curious, and I could hardly wait for the next day to come in order to explore and discover it.

The three days spent in the city, the meetings we had with Foreign Ministry officials, with local administration officials, officials from the EXPO 2017’s organising committee or from the management of the Astana International Financial Centre (AIFC), offered us not only the chance to explore and visit the sights of a vibrant city, but also to find out precious information about the ambitious future plans concerning the promotion and development of the Astana brand, as well as the positioning of Kazakhstan and her capital as an attractive financial hub and centre for foreign investments.

In addition, by hosting EXPO-2017, Kazakhstan has an excellent opportunity to show the world not only its unique history and culture, but also to demonstrate its achievements and innovative strength.

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As a national project, First Deputy of the EXPO-2017 Chairman told us, it is expected to give a powerful boost to further diversification and modernisation of Kazakhstan’s economy. In the short-term, thousands of new jobs will be created, and the country’s officials are keen to achieve new horizons for the tourism, hotel and service sectors, as well as the development of small and medium-sized businesses. Furthermore, this global exhibition will give fresh impetus to developing science, technology and culture. I will return to the visit at EXPO-2017 and I will write about it separately, in a future article, since the topic and the preparations Kazakhstan is making in order to make this an emblematic event undoubtedly deserve more coverage.20160319_091639

The city view from the 45th storey of the city’s tallest building, the one in which AIFC offices are located, is impressive.

After the city received the status of capital and special economic area, numerous interesting and modern construction projects were carried out, offering the city a unique architectural imprint of modern constructions, in scale and design, in contrast to the vast, open steppes that surround the city.

According to Mr. Kairat Kelimbetov (photo R), the CEO of Astana Financial Centre, the goal of the AIFC, that will be housed within the 25 hectares of the EXPO 2017 town starting with January 2018, is to create a major international financial services centre in Kazakhstan, based on the successful experience of leading global financial centres such as London, Shanghai, Hong Kong, Singapore and Dubai.20160319_133826

In this respect, he told us that AIFC is working on establishing AIFC Courts and AIFC Regulatory Authority within the next 12 months.

From hosting EXPO 2017 to diversifying its economy in non-oil sectors, Astana has more ambitious plans for its people. “Education is part of our agenda for the next decade. It plays a key role in producing the right human capital, especially in IT. We are in the right time to become one of the best consumers of artificial intelligence,” AIFC officials say.

This is the reason why new construction and the setting up of various research and higher educational institutions in Astana city have taken place. Teacher training, agriculture, medicine, engineering and construction institutes were built here in the new capital.

Despite its dependency on oil, which is witnessing an all-time record low price, Kazakhstan’s economy still registers growth. Strategically located on the Silk Road trade route, the country sees huge growth potential in various non-oil sectors, including fintech. “There is a huge potential for digitisation in Kazakhstan, especially within the finance and payments industry,” AIFC officials add.

Shooting up the city from the 45th floor offers the image of amazing and strangely futuristic structures. One of the newest is Khan Shatyr, a shopping mall that is the world’s largest tent, designed by the famous Norman Foster. Foster was also the architect behind the Palace of Peace and Reconciliation, a 60-meter-tall glass pyramid.

Almost 20 years after it was declared the new capital city on December 10th 1997, Astana, the second largest city of Kazakhstan, has now become a new cosmopolitan metropolis with skyscrapers and the offices of intercontinental companies and oil corporations.

The locals recall that, not long ago, this was a small town with less than 100,000 people, in the middle of the steppe, surrounded by marshes. Even the hotel we stayed in was built on a plot of land that was part of the steppe not long ago, according to the locals.

In 1999, upon UNESCO’s decision, Astana received the name “the City of Peace”, and every step that has been taken ever since in shaping its destiny, fully confirms this label.

“With its unique location at the heart of Eurasia and a population close to one million people, Astana has established excellent connections to major cities around the world. It has repeatedly held successful global events, including the Asian Winter Games (from January to February 2011) and the OSCE Summit (December 2010) with participation of representatives from 56 nations. Thus, Astana, known for its vibrant and colourful city life, is fast becoming a modern metropolis in the region, that will function as a magnet to attract significant investment. By hosting EXPO 2017 and by focusing on using alternative sources of energy, Kazakhstan is pioneering the way forward and setting the benchmark for sustainable living,” Mr. Roman Vassilenko (photo below) told us, among other things, during the extremely warm welcome he gave at the headquarters of the Foreign Ministry to the group of international journalists and observers who went to Astana in order to cover the Mazhilis elections.

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Starting his presentation about Kazakhstan’s regional and global status and role, about the country’s objectives and foreign policy strategy by presenting the “Kazakhstan – The Land of the Great Steppe” app on a screen, Mr. Vassilenko told us that the country’s geographic position, between Europe and Asia, has helped to define its foreign policy priorities and diplomatic activity and plays a determinant role in its new vision of becoming a regional and global player.

Kazakhstan’s foreign policy concept, Roman Vassilenko told us, was developed in line with President Nursultan Nazarbayev’s “Kazakhstan-2050 Strategy” whose major goal is to ensure the country’s entry into the elite club of the world’s 30 most developed countries by the turn of this century.

“Our country’s foreign policy underscores its commitment to create long lasting alliances and partnerships. The good relations of Kazakhstan with Russia, China, the United States and other Western nations, as well as with the EU –with whom we recently signed an Enhanced Partnership Cooperation Agreement (EPCA)– altogether underscore the vibrancy and dynamism of a multi-vector foreign policy approach, aimed at ensuring a politically stable, economically sustainable and safe development of Central Asia,” the Kazakh Deputy Minister of Foreign Affairs told us.

Regarding Kazakhstan’s new agreement with the EU, it is the first agreement of this kind signed by the European Union and a Central Asian country .The EPCA  covers 29 areas of cooperation, ranging from political cooperation to investment, trade, infrastructure and areas such as innovation, culture, sports, tourism and law enforcement cooperation and is expected to give a significant boost to economic and political ties between the EU and Kazakhstan, Mr. Vassilenko pointed out.

“One of Kazakhstan’s most important decisions since independence was gaining the status of a non-nuclear state and to pursue a policy of non-proliferation,” he added.

The steady development of the country is also based on it being an active, yet impartial player in regional events. As a matter of fact, Kazakhstan has gained entry to several regional organizations of great importance such as the Commonwealth of Independent States (CIS), the Eurasian Economic Union (EEU), the Central Asian Economic Association and the Shanghai Cooperation Organization.

Additionally, joining the UN Security Council as a non-permanent member is one of the Kazakhstan’s highest international priorities.

“Kazakhstan is a member of the UN General Assembly for over 25 years and has played its role internationally. Our region has many challenges including those linked with the nuclear safety, security and economy and I believe we can play a better role in the UNSC (United Nations Security Council) as it will make it more equitable. In 2010 Kazakhstan expressed its interest to bid for non-permanent member seat at the UNSC which was one step forward to its six-year foreign policy agenda 2014-2020. The purpose of our UN bid is to go in the third circle of influence and widening its more active presence on the international stage, playing an important role on the issues of peace keeping, energy, environment, economy, food, poverty, terrorism and nuclear non-proliferation,” Mr. Erlan Idrissov, Kazakhstan’s Minister of Foreign Affairs stated in  a recent  interview with London Post.

“Kazakhstan had more nuclear weapons as member state of Union of USSR than total numbers of UK, France and China. We were number four in the world. We are great believers of the nuclear disarmament and are closely working with UN, USA and others. We have developed a nuclear fuel bank and countries who require nuclear fuel for the energy generation can apply to us via International Atomic Energy Agency (IAEA). Over 130 countries have supported our resolution in the UN on this subject. We are working internationally via UN and our own means on water, energy and food security issues,” the Kazakh Foreign Minister also told London Post.

Another milestone for Kazakhstan’s foreign policy is the New Silk Road, of which it expects to benefit in major ways, the Deputy Minister of Foreign Affairs, Mr. Roman Vassilenko told us.

Being in the middle of the transit route between China and Europe could help Kazakhstan’s aim to be a key actor in global trade.

Kazakhstan expects 30 million tons annually of freight to be funnelled to its section of the Western Europe-Western China corridor. The initiative aims to improve this by accelerating the flow of goods, services and people throughout the region to promote cross border collaboration and trade.

As part of the new strategy of the New Silk Road, the Kazakhstan Temir Zholy national railway company has already established a partnership with Dubai Port World to design a general line of vehicle interaction with the seaport of Aktau and its linkage with the Khorgos –East Gate project in the organization of global supply and the integration of Kazakhstan’s infrastructure services into the world trade and transport chain.

The New Silk Road is seen by Kazakhstan as an opportunity to deal with major challenges and the country is committed to take advantage of this momentum:  attracting more FDI; upgrading its highway and railway infrastructure; and boosting trade and economic cooperation in a difficult period following a sharp decline in energy and other commodity prices on the international market.

Noteworthy, the  investment trend is accelerating  and half of $200 billion FDI amount has come to Kazakhstan since 2008. The majority of this investment has come from the Netherlands, US, China, UK, France, Italy, Russia and Canada and the leadership of the country promises that new initiatives will be launched to target new investments and to encourage business activity.

However, with forecasts for global economic development being revised downwards, Kazakhstan has had to revise its strategic own plans accordingly.

In November 2014, President Nazarbayev proclaimed Kazakhstan’s New Economic Policy titled Nurly Zhol (“The Bright Road”) which aims to continue structural reforms to the country’s economy.

Significant sums of money are to be allocated judiciously to overcome the uneasy times ahead and continue to stimulate economic growth through the development of transport, energy, industrial and social infrastructure, as well as small and medium –sized businesses.

An Infrastructure Development Plan is at the core of the country’s New Economic Policy. Improved highways connecting all Kazakhstan’s widespread regions will lead to greater domestic wellbeing as well as increased value for the country’s positioning as an important trade hub and transit corridor between Asia and Europe. “Nurly Zhol will become the driver of the economic growth during the coming years. 200,000 new jobs will be created by the construction of roads alone,” President Nazarbayev pointed out in his speech “Nurly Zhol-The Path to the Future” in November 2014.

As a matter of fact, more than 10,000 km of roads and 2,500 km of railways have been built and rehabilitated in Kazakhstan.

Listening to the statements about future plans made by the officials we met during the three days we spent in Astana, one thing is certain:

Leveraging its vast natural resources in combination with a strategic vision for the future to modernize and develop rapidly , Kazakhstan targets to keep its rising prominence in Eurasia but also to become a more and more  important actor  on the world socioeconomic and geopolitical stage.

In other words, there is “Bright Road” ahead for the country in shaping its regional and global role.

 

 

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