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Kazakhstan: A Rising Global Player in Trade and Diplomacy

Over the past decade, Kazakhstan has become an increasingly important land-bridge between East and West, both in terms of trade and diplomacy. A vast nation the size of Western Europe with powerful neighbors in the form of China and Russia, yet on the doorstep of Europe with access to the Caspian Sea, Kazakhstan’s location has elevated it to the cusp of becoming a global power. Given its geography, it is reasonable to assert that many decisions in Kazakhstan are, out of necessity, the result of a geopolitical tightrope act necessitating a balanced and far-reaching policy outlook. This strategic position has been described by Ariel Cohen, a Nonresident Senior Fellow at the Eurasia Center of the Atlantic Council, as a “visionary multi-vector policy pioneered” by President Tokayev. Indeed, “mutually beneficially cooperation” and “mutually beneficial strategic partnership” have become watchwords of Tokayev’s presidency. Due to projects such as the Belt and Road Initiative and the Middle Corridor, Kazakhstan’s location has made it an indispensable ally to China. Playing a pivotal role in the expansion of transcontinental trade has led the whole of Central Asia to, in the words of Tokayev, “become a global stakeholder.” Trade turnover between Kazakhstan and China continues to expand, reaching $31.5 billion in 2023 (a 30% increase on 2022), and new transit routes are continuously under construction, with the Bakhty-Ayagoz railway line set to lead the opening of a third border crossing with China and increase the throughput capacity between the two nations from 28 million to around 48 million tons. Both cultural and political ties continue to grow, with a 30-day visa-free travel regime coming into force in November 2023. As for the total amount of Chinese investment in Kazakhstan over the past eighteen years, estimates vary from $23.2 to over $36 billion. Even these huge sums, however, are dwarfed in comparison to the Netherlands, which, in the last five years alone, has invested a colossal $33.8 billion in Kazakhstan. Meanwhile, according to Kazakhstan’s Bureau of National Statistics data for January to December 2022, Italy was Kazakhstan’s largest exporter, accounting for 16.4% of exports worth $13.9 billion during this period. The strength of this partnership was evinced by President Tokayev paying an official visit to Italy in January 2024, during which he held talks with Prime Minister Giorgia Meloni and spoke about the two nations’ “dynamically” developing relationship and its “enormous potential”. As a block, the EU is Kazakhstan’s biggest overall trading partner, the destination for 39% of total exports and accounting for 29.4% of its total trade in 2021. Through initiatives such as the C5+1 and the B5+1, meanwhile, the United States has increasingly sought to engage with Central Asia, and with Kazakhstan in particular. With investment totaling $19.4 billion, the U.S. ranks second in terms of foreign investment over the past five years. A driving force behind this engagement has been the huge untapped reserves of Rare Earth Elements (REEs) located in Kazakhstan. According to the Brookings Institute, whilst China is the dominant player in...

Uzbekistan Plans to Increase Exports of Agricultural Products to $3.5 Billion Annually

President Shavkat Mirziyoyev visited the Uzbek Plant Quarantine and Protection Agency on March 18, the president’s official website says, where officials discussed the agency's mandate for managing the cultivation of exportable goods and identifying new markets for them. It's anticipated that projects like those managed by the agency will help increase agricultural product exports to $3.5 billion this year. The amount of agricultural exports in 2023 was close to $2 billion. Measures related to the production of fruits and vegetables date back to an agreement from January 18, 2019, when guidelines were adopted during online meetings on export and industrial matters. The Plant Quarantine and Protection Agency, in particular, was entrusted with executing the agreement. One of the projects is a mobile application called Agroko‘makchi, which provides services related to plant protection, helpful information, export advice, and deeper familiarity with agricultural subjects. Exporters in Uzbekistan can connect with buyers overseas through the Asiaexport.se platform. Information is posted on the platform about a wide range of products, including fruits, vegetables, dried fruits, juices, household goods, confectionery, textiles, leather goods, and pharmaceuticals. Additionally, officials shared details regarding the agency’s collaboration within the ePhyto global solution innovation system. With this system, phytosanitary certificates can be electronically exchanged with 119 nations. This year, eight more countries will receive phytosanitary permits for 25 types of products. Ten mobile labs will be set up around the regions this year. Over 3,000 vineyards, 6,000 gardens, 344 packaging businesses, and more will all be brought into compliance with foreign phytosanitary regulations. Digitalization of pesticide trade and inventories is aimed at ending the illicit import of low-quality pesticides into Uzbekistan.

Samarkand Replaces Paris as Host of UNESCO Conference

The Silk Road Samarkand tourism and convention complex will host the 43rd session of the UNESCO General Conference in 2025 -- the first time the globally significant event will be held outside of Paris since 1985. The conference will focus on discussions and decisions on UNESCO's activities. Besides Samarkand, conference events will also be held in the cities of Tashkent, Bukhara, Khiva and Shahrisabz. Samarkand was not chosen as the host venue by chance. Not only is it a great historical open-air museum city, but it has also managed to host a number of important international events over the past six months. At next year's UNESCO conference, officials plan to develop projects for establishing the State Museum of the Great Silk Road in Samarkand, restoring Amir Timur's gardens, restoring the Bibi-Khanum complex -- as well as a master plan for protecting the historical center of Bukhara, which is on the UNESCO World Heritage List. Samarkand, by the way, has recently become the subject of heated debate over the construction of the ethnographic tourist center Bokiy Bukhoro (Eternal Bukhara) on the borders with the historical center and buffer zone of Bukhara. The complex, which will occupy an area of 32.6 hectares, involves the demolition of 29 state facilities, including the buildings of the hokimiyats (municipal offices) of Bukhara region and Bukhara city, the regional prosecutor's office, school No. 2, Bukhara State Medical College, College of Culture, Bukhara Arena stadium and others. Since 2017, 14 unique examples of Uzbek national cultural heritage have been included in the UNESCO lists. Bukhara was included in the UNESCO Creative Cities Network, and last September, the 1,050th anniversary of the birth of the great polymath and scholar Abu Rayhon Beruni was widely celebrated at UNESCO headquarters.

What Bank Loan Data Can Tell Us About Kazakh Business in 2023

After being severely tested by the pandemic in 2020-21, several thousand companies in Kazakhstan closed due to decreased demand and supply chain disruptions. Though the problems of local businesses began long before the pandemic, the two years of lockdown wiped out many good players and made those that survived more dependent on government orders and projects. Overall, Kazakhstan has a primarily commodity-driven economy (crude oil, metals and petrochemicals account for the majority of export earnings), and the country's economic fortunes have tracked the prices of a short list of major commodity exports. Thus, the government finds it hard to diversify the economy. Oil price volatility affects the national currency, and the ups and downs in the tenge exchange rate versus hard currencies make it difficult to be in a business with an investment cycle longer than one and a half to two years, as you have lower revenues amid dollar investments. This is one of the reasons why launching long-term projects in the country is difficult when there are no guarantees of sales, while currency risks can hit any project. The government has been active in attracting foreign investment, offering state support and protection, but only relatively recently did it begin to pay the same attention to the demands of domestic investors. However, this is only the beginning of a very long journey towards reducing dependence on imports and expanding the range of exports to stabilize the economy. A debt-driven economy The share of the private sector in Kazakhstan is difficult to measure. If we take SMEs (small to medium-sized enterprises) as the core of private business, in different years it fluctuates between a range of 20-30% of GDP. However, since state capitalism is entrenched in the country, even among SMEs there are contractors working for state and quasi-state structures, receiving funds from state companies and agencies. One-hundred-percent private companies that do not depend on government contracts finance their operations from their own or borrowed capital. This is why, in a transparent economy like Kazakhstan’s, looking at loan data can reveal the main trends in business and which niches have not yet been occupied and could be interesting for investment by both foreign and local players. It is best to look at the country's economy through the loan portfolio of banks that are subject to international banking regulation, whose indicators meet an easily understandable standard. There is a caveat: in Kazakhstan there is also the Development Bank of Kazakhstan, which is not included in the table below. It is technically not a bank, but rather a development institution financed from the quasi-public sector by Baiterek National Management Holding, which receives budgetary funds. In addition, most extractive-industry companies in Kazakhstan – due to their high capital expenditures and the shallowness of the country’s financial market – raise funds in the U.K., Switzerland, the U.S. and Russia. Chinese banks rarely lend to 100%-Kazakh companies, limiting themselves to trade credits (in the form of equipment) or loans to joint ventures with Chinese...

Turkmenistan’s Food Prices Continue to Rise

The prices of subsidized products in Turkmenistan's state stores continue to rise, according to a report by correspondents from the Chronicles of Turkmenistan. Beginning March 12, the price of a kilogram of poultry increased to 35 manat ($10) from 21 manat ($6). The price for domestically produced chicken is the same as for poultry imported from Turkey. In some stores chicken legs are still being sold at the old price -- 16 manat ($4.57) per kilogram -- but according to sellers, new batches could be more expensive. These days in various parts of Turkmenistan's capital Ashghabat, private traders are selling rice -- the price of which has increased by three manat per kilo -- directly from trucks. As of March 6, eggs have become more expensive in Ashgabat's state stores. The price has increased to 1.50 manat ($0.43) and 45 manat ($12.86) for a 30-egg tray, respectively, from one manat ($0.29) per egg or 30 manat ($8,57) per tray. The cost of flour went to 3-5 manat ($0.86 – $1.43) per kilogram from one manat ($0.29) in February -- while the cost of bread increased to four manat ($1.14) from one manat ($0.29) per loaf. Turkmenistan's president Serdar Berdimuhamedov signed an order to raise the purchase prices of wheat and cotton by two to three times beginning with the harvest of 2024 -- just before the sharp increase in the prices of goods in state stores.

Nauryz

Starting Over: Central Asian Countries Celebrate the Arrival of Spring

It’s time for renewal in Central Asia. Spring is arriving and it’s time to tidy up the home. Time for traditional music, cuisine, and brightly colored costumes. An occasion to reflect and renew, give thanks for the past, and build toward the future. Or set aside bad things that happened and start over. One of the world’s oldest holidays happens on the spring equinox, which is March 20 (Central Asia time) this year. Known as Nowruz, Navruz, Nauryz, and other variations, it means “New Day” in Farsi and traces its roots to the ancient Persian religion of Zoroastrianism. This year, it coincides with the Muslim holy fasting month of Ramadan. The holiday is also celebrated in the Caucasus, the Middle East, and other regions. [caption id="attachment_15786" align="aligncenter" width="1200"] A view of the shanyrak, the central part of the upper dome of the yurt is shown to guests as an art object during Nauryz festivities. A shanyrak design, containing blue that represents the sky, is the national emblem of Kazakhstan. Photo: TCA[/caption] Celebrations are already in full swing. This year, Kazakhstan introduced a new format for Nauryz, with events running from March 14-23. In 2009, UNESCO included the day on its list of “intangible cultural heritage of humanity.” In many parts of Central Asia, people decorate houses with branches of fruit trees to ensure a prosperous year. On the night before the spring equinox, people fill vessels with water from springs, milk, and grain. It is believed that such a ritual will bring abundant rains and a successful harvest in the coming year. Holiday concerts feature traditional instruments. There are the karnai and surnai (wind instruments) and dutar (strung) in Tajikistan and Uzbekistan, or the dombra and kobyz (both strung) in Kazakhstan and Kyrgyzstan. [caption id="attachment_15785" align="aligncenter" width="1200"] Baursak, a fried bread, and Nauryz kozhe, a cool, hearty drink that symbolizes good luck, are shown during Nauryz celebrations in Almaty, Kazakhstan in 2023. Ingredients of Nauryz kozhe can include water, meat, salt, milk or yogurt, and grain. Photo: TCA[/caption] A beautifully set table is another Nauryz tradition. The central place on the table in Tajikistan, Uzbekistan, Kyrgyzstan, and Turkmenistan is occupied by sumanak, a dessert. It is made of germinated wheat and cooked in a metal pot for about 12 hours. According to legend, you should make a wish while stirring the sumanak. It is said that if you make a wish from a pure heart, it will definitely come true. In Kazakhstan, a special place on the table is occupied by Nauryz kozhe, a hearty soup of milk, meat, butter, two kinds of millet, rice, and corn, symbolizing the seven principles of life: growth, luck, happiness, wealth, health, wisdom, and heavenly protection. At home, it is poured into seven bowls and placed before seven wise elders, known as aksakals. The number has a special meaning in many aspects of the celebration. Traditionally, everyone should invite seven guests to their home and visit seven houses themselves. Nauryz is also a time...