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Kazakhstan and Russia to Harness Transit Potential

Kazakhstan’s Prime Minister Olzhas Bektenov travelled to Moscow to attend a meeting on March 4th with the Prime Minister of the Russian Federation, Mikhail Mishustin. High on the agenda, was the North-South international transport corridor and in particular, the section of railway interlinking Russia, Kazakhstan, Turkmenistan, and Iran. Russia and Kazakhstan are connected by the longest land border in the world spanning over 7,500 km. Noting that “the most important transit routes in Eurasia run through our countries", the Russian prime minister highlighted the huge potential for cooperation in transport and logistics. Late in February, Kazakhstan’s Deputy Minister of Transport, Maksat Kaliakparov reported on plans by the railway administrations of Kazakhstan, Russia, and Turkmenistan to launch a joint venture to improve services and reduce cargo delivery time along the North–South Transport Corridor. In 2023 the volume of cargo transported via this route amounted to 2.1 million tons; an increase of 4% compared to 2022. By 2027, the transport potential of the entire corridor rise to between 6 - 10 million tons per year. Mr Bektenov furthermore stated that Kazakh and Russian business entities are currently implementing 135 projects worth $26.5 billion. To maintain progress and facilitate transit between the two countries, the Kazakh prime minister stressed the need to speed up work on checkpoints on the Kazakh-Russian border. According to plans, 29 of the 30 checkpoints are due to be modernized by 2027.

China Poised to Increase Imports of Agricultural Produce from Kazakhstan

In recent years, Kazakhstan has seen a steady growth in China’s demand for its organic and environmentally friendly agricultural produce. As reported at a meeting on March 4th between Kazakhstan’s Minister of Agriculture, Aidarbek Saparov and Chinese Ambassador to Kazakhstan Zhang Xiao, in 2023, exports almost doubled to $1.01 billion. The Kazakh Ministry of Agriculture relayed the ambassador’s assurance that the importation of meat, grain, and other agricultural products from Kazakhstan is set to continue. The minister stated that Kazakhstan has the potential to increase its export of grain to China to two million tons per annum and asked the ambassador for assistance in accelerating the signing of bilateral agreements on the export of a wider range of agricultural products including chilled meat, poultry, offal, beet pulp, and potatoes. Saparov also requested assistance in accrediting new Kazakh enterprises to export livestock produce to China. In early February China lifted restrictions, imposed since 2005, on the import of poultry Kazakhstan. A ban on the import of meat, resulting from concerns over foot-and-mouth disease and in place since 2022, was similarly overturned. The lifting of the restrictions allows exports of frozen beef and pork from the south-eastern regions of Kazakhstan to resume.

Foreign Investors Abandon Industrial Projects in Kazakhstan

Over the past four years Kazakhstan has suspended six planned projects involving foreign investors. A lack of funding, changes in market conditions, logistical difficulties and the overall geopolitical situation have been cited as reasons for their abandonment. The first project to be suspended was the production of fiber optic products in Almaty. The Turkish company BC Fiber Group built a warehouse in the city to sell finished products, and expected to localize production in the area, but refused to open a fabrication plant. The second project involved a ridesharing company from China, DiDi Global, which planned to begin operations in Kazakhstan -- but eventually scrapped those plans when it was unable to withstand changes in market conditions and increased competition. The third cancellation was by the American company Conduent, which planned to implement a national system of toll collection on the roads of Kazakhstan. It rethought its plans after a profitability review. Agro Global GmbH from Germany wanted to localize production of agricultural machinery in the Akmola region. This also never came to fruition, with the reason this time being a lack of funding by the investor. The list also includes a project for construction of a cattle-breeding complex in the Almaty region by Italian investor Inalca. This was also due to a lack of financing. The sixth project on the list was planned development of the Alaigyr lead-silver deposit in the Karaganda region. Turkish investor Eczacibasi Holding was interested in pursuing the mining project, but after due diligence, the company declined to continue due to what it deemed as insufficient reserves at the deposit.

Qaz Steppe Innovation Hub Opens in Dubai

The launch of the Qaz Steppe Innovation Hub took place on March 1st at the Trade House of Kazakhstan in Dubai, UAE. Attending the opening ceremony, Arman Shakkaliev Kazakh Minister of Trade and Integration reported, “The Qaz Steppe Innovation Hub will help promote the Kazakh IT services sector to international markets, unite the interests of business sectors in Kazakhstan and the UAE, enable the development of mutually beneficial cooperation, and increase the competitiveness of our IT companies.” To date, the new platform has already helped present 15 Kazakh start-up projects to the Middle East market and in 2023, the export of Kazakhstani IT services reached $500 million compared to $30 million in 2020. A goal to raise the export of IT services to $1 billion by 2026 has now been set by president of Kazakhstan According to Timur Mauleshov, co-founder of Qaz Steppe Innovation Hub, entry to UAE and Middle East markets will further spur the development of export of high-tech solutions from Kazakhstan. “The Qaz Steppe Innovation Hub will be a unique platform for the implementation of the ambitious task set by President Kassym-Jomart Tokayev to transform Kazakhstan into an IT country. Since 2021, locally based Kazakh start-ups have attracted investments worth over $1 billion. The technological boom that is happening in the UAE today opens up new prospects for our talented specialists and interesting start-ups.”

Kazakhstan Comments on Russian Missile Tests on its Territory

Kazakhstan's Ministry of Defense has confirmed that Russia tests its missiles inside of Kazakhstan's borders. The country's deputy minister of defense Shaykh-Khasan Zhazykbayev has gone on record to say that in Kazakhstan there is a military test range called Saryshagan, where the 110th training center of the Russian Federation does indeed conduct missile tests. Zhazykbayev noted that Russia has a treaty dating back to 1993, according to which it has the right to use this land as a testing ground. "Missiles of up to 200 kilometers' range are tested there. There is no infrastructure and population [on] this range, so no one suffers," said Zhazykbayev. The deputy minister also noted that Russia conducts only 50 hours of missile testing at Saryshagan each year. The Saryshagan military training range in Kazakhstan is located in the Karaganda and Zhambyl regions, to the northwest and west of Lake Balkhash in the Betpak-Dala steppe. Its construction began in 1956, and its area now holds an active military airfield and several abandoned dirt airfields. The Yekaterinburg to Almaty highway runs through it. Presently it's considered to be the first and the only military range in Eurasia where missile weapons are developed and tested.

Kazakhstan Seeks U.S. Cooperation to Develop Critical Minerals

During a visit to the United States on March 1st, Kazakhstan’s Minister of Industry and Construction, Kanat Sharlapaev met David Applegate, director of the U.S. Geological Survey, to discuss expanding bilateral cooperation regarding mineral deposits in Kazakhstan. Of Kazakhstan’s 50 types of minerals, 17 were identified by the U.S. Geological Survey as critical. As reported by Sharlapaev, the key aims of future collaborations are attracting investment in geological exploration, mining, and the processing of rare and rare-earth metals, as well as facilitating Kazakhstan's integration to the global market through cutting-edge technologies and expertise. Speaking at a roundtable discussion at the U.S. Chamber of Commerce with members of the Kazakh-American Business Council (USKZBC) and representatives of American companies, the minister outlined the benefits afforded by consolidating the partnership between Kazakhstan and the USA. Emphasis was placed on the strategic potential of mining rare and rare earth metals and the development of related industries. In particular, he cited the importance of creating a cluster of industries in Kazakhstan to produce raw materials for batteries, including nickel, cobalt, manganese, and lithium and with reference to reforms on the use of subsoil to attract investment, encouraged US mining companies to participate in forthcoming auctions in Kazakhstan.