Kazakhstan - The Times Of Central Asia

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Digital Almaty Forum To Be Held In February

From February 1st to 3rd Kazakhstan’s business capital, Almaty, will host the Digital Almaty 2024 forum, entitled "Industry X: The Digital Development of the Future". Now in its sixth year, the forum will bring together government officials from Shanghai Cooperation Organization (SCO) and Eurasian Economic Union (EEU) countries, leading experts, and entrepreneurs from around the world, said the Kazakh Ministry of Digital Development, Innovation, and Aerospace Industry, one of the forum’s organizers. Ersultan Ermanov, director of the ministry’s Department for Development of the Information Technology Industry, said that international technology parks from Belarus, China, India, Iran, Kyrgyzstan, Russia, and Uzbekistan will participate in the Digital Almaty forum. “The participation of their delegations will help lay the foundation for future fruitful cooperation, discuss current trends in the field of digital technologies, as well as the possibilities of their application to solve social, economic and environmental problems. Such events have a very positive impact on the country’s image,” Mr Ermanov said. The forum will also include an exhibition of Kazakhstan’s largest subsoil users, technology parks, and technology companies, which will share experience and information about projects in the IT ecosystem. More than 30,000 people are expected to attend the three-day digital event. As part of the forum, an Industry 4.0 Startup Battle is planned for February 3rd — a large-scale battle for the title of the best industrial startup, with a total prize fund of $150,000. This year, startups will compete for the title of "Best Startups in Industry 4.0" in the areas of Digital Oil Field, ESG, and Smart Mining. The organizers of Digital Almaty 2024 are the Ministry of Digital Development, Innovation, and Aerospace of Kazakhstan, the Ministry of Foreign Affairs of Kazakhstan, Akimat (municipality) of Almaty, and Tech Garden.

Kazakhstan Needs Better Agricultural Technology

Over the past five years Kazakhstan has introduced water-saving technologies on a greater part of its agricultural land. Since 2019 this area has been expanded by 33%, from 210,000 hectares to 312,000 hectares in 2023, deputy minister of agriculture Amangaliy Berdalin said at a government meeting on January 22nd. He added that this year 1.58 million hectares of irrigated land are being cultivated in Kazakhstan. Of these, 1.1 million hectares, or 74% of the land, are surface irrigated (using canals and ditches), 97,900 hectares are flooded rice fields, 227,300 hectares (14.3%) use modern irrigation equipment, and 97,900 hectares (6.2%) use drip irrigation. However, at the same meeting the deputy minister of water resources and irrigation, Nurlan Aldamzharov, commented that the share of water consumption by agriculture today only accounts for 65% of the total water intake in Kazakhstan, and irrigation is impeded by large water losses, especially in the country’s dry southern regions. “In 2023, out of 1.8 million hectares of irrigated land, water-saving technologies were used on as little as 17% (312,000 hectares), which is extremely unacceptable in the current realities,” the deputy minister emphasized.

EU Drives Increased Demand For Kazakh Coal

Kazakhstan will increase its production of coal in the period 2023-2029, the Kazakh Ministry of Industry and Construction has said, adding that the country exports around 28% of the total volume of coal it mines. In order to meet the demands of energy-producing and industrial enterprises, the ministry says it is working to increase coal production, as well as the country’s coal export potential. According to the National Bureau of Statistics of Kazakhstan, exports of hard coal and lignite have increased 6.5-fold, mainly due to the growing demand for Kazakh coal from the countries of the European Union. The embargo on Russian coal exports to European countries, introduced in the EU from August 2022, has created a good opportunity for Kazakhstan to significantly increase its coal exports to Europe.

Kazakhstan at a Crossroads: Navigating Geopolitical Dynamics in Eurasia

Sharing borders with China, Kyrgyzstan, Russia, Turkmenistan and Uzbekistan, Kazakhstan is the largest landlocked country in the world and the ninth largest overall by land area. Its geography makes this country a pivotal transit hub and it is now in the process of reshaping its strategic role in Eurasia. A recent significant development is the announcement of a new railway to China, which will further enhance Kazakhstan’s position in global trade, including in China’s famous Belt and Road Initiative (BRI). Deepening its relationship with China is one way that Kazakhstan seeks to diversify its economic and political ties away from Russia. At the same time, Kazakhstan is also looking to reduce its relative dependency on China and trying to balance its relationships with other major powers. Although some Western states have lately recognised this, and various international financial institutions are also assisting in enhancing Kazakhstan’s connectivity, these actors still need to pay more focused attention to Kazakhstan and work with the country in a more constructive manner. Expanding infrastructure and regional connectivity In the past, Kazakhstan has strengthened its position as a transit corridor through investments of more than $3.5 billion in the Khorgos gateway on the Chinese border (for facilitating Chinese goods being shipped to Central Asia and Europe), and other significant investments in various railways (most recently, the Shalkar–Beyneu and Zhezkazgan–Saksaul lines), as well as in the Kuryk seaport on the Caspian Sea and in the Trans-Caspian International Transport Route (TITR). The TITR is a 6,500-km corridor that links Asia with Europe and passes through various countries including Kazakhstan, Azerbaijan, Georgia, and Turkey. The Kuryk seaport has direct access to railway tracks and is fast becoming an important multi-modal route for cargo transshipment. In May 2023, Kazakhstan and China signed 47 co-operation agreements worth $22 billion. At the time, Kazakhstan’s President Kassym-Jomart Tokayev underlined that “the full exploitation of our transport and logistics capacity is of strategic importance”. He named China, Europe, Russia, and Central Asia as targets for logistical expansion. Reviewing bilateral relations with China in October last year, Tokayev proclaimed that his initiatives “confirm Kazakhstan’s readiness to strengthen our ‘all-weather’ relations and multifaceted co-operation”. Kazakhstan’s new railways amid incipient geopolitical shifts Given the above context, the recent announcement of the third railway connection between Kazakhstan and China is an important development that will enhance freight capacity and reduce border congestion. The new 272-kilometre (km) line will run in a south-east direction from Ayagoz in eastern Kazakhstan to Bakhty on the Chinese border before continuing to Chuguchak in Tacheng prefecture. The double-track railway is expected to boost freight capacity between Kazakhstan and China by more than two thirds, raising annual carriage from 28 million to about 48 million tonnes per year after its completion in 2027. The connection is a part of the major investment in a total of 1,300 km of new railway lines that are expected to facilitate exports and contribute to the TITR’s development. In the meantime, Kazakhstan has recently flashed on the geopolitical...

Kaspi.kz attracts nearly $1bn of investment in US market

Kaspi.kz has successfully conducted an initial public offering (IPO) in the U.S. and raised almost $1bn. January 16, Kaspi.kz launched IPO on the U.S. exchange NASDAQ. Initially representatives of Kazakhstan fintech planned to sell 9 million shares. But according to the results of placement the company managed to sell 11300000 ADSs, the cost of each amounted to $92. Thus the market value of Kaspi.kz amounted to $18,800,000. The placement of shares in the U.S. is led by Morgan Stanley, JPMorgan Chase & Co. and Citigroup Inc. Now shares of the company are preparing to start trading on Nasdaq Global Select Market under ticker KSPI. Certainly, this shows the company's strong start in the U.S. market. In 2020, Kaspi.kz has already enjoyed similar success and raised the same amount of money in an IPO in London, becoming the most expensive company in the history of Kazakhstan. In 2020, one depositary receipt sold at $33.75, the fintech sold 29.6 million securities. As of today, Kaspi.kz shares are owned by Baring Vostok, Mikhail Lomtadze and Vyacheslav Kim. They hold stakes of 27.53%, 24.67% and 23.47% respectively. Vladislav Kim and Mikhail Lomtadze are among the 50 richest businessmen in Kazakhstan.

“At a Crossroads” – Atlantic Council Addresses Rare Earth Elements in Central Asia

On January 23rd, the Atlantic Council’s Eurasia Center and the International Tax and Investment Center gathered together the authors of the report, “Leveraging Central Asia’s Rare Earth Elements for Economic Growth.” The report highlights the potential of Central Asia, which has remained underappreciated in terms of its rare earth elements (REE) resources, despite its increasing geopolitical significance. China currently dominates the global mining and refining of REEs, giving it a near-monopoly status. The report argues that this scenario calls for an urgent need to diversify global supply chains and suggests that Western investment could play a pivotal role in exploring and mining Central Asia's REEs, thereby contributing to the diversification of supply chains. Furthermore, such investment could have far-reaching implications for the region itself, bolstering regional integration and sovereignty, spurring economic growth, and enhancing economic freedom throughout Central Asia. Opening the discussion, Ariel Cohen, a Nonresident Senior Fellow at the Eurasia Center of the Atlantic Council, highlighted the critical geopolitical location of Central Asia, stating that REEs “may be the next big thing in Central Asia at the engine of economic growth.” Cohen praised the “visionary multi-vector policy pioneered” in Kazakhstan by President Tokayev, and characterized Kazakhstan’s relationship with Russia as “very fraught,” and defined by “multi-generational trauma. Nuclear energy is zero emission energy,” he said, but for the U.S. to capitalize on opportunities for mining REEs in Kazakhstan, “we need to do more and better.” The President of Second Floor Strategies, a public policy consulting company, Wilder Alejandro Sánchez emphasized that Kazakhstan and Uzbekistan are the most “forward-looking” nations in Central Asia in regard to REEs, whilst mining in Kyrgyzstan remains stuck in a “legal limbo,” and Tajikistan currently lacks the necessary critical infrastructure. Nether the less, he stated, REEs could become a driving factor behind regional “cooperation and integration.” Wesley Hill, an International Program Manager at the Energy, Growth, and Security Program of the International Tax and Investment Center, spoke about the international relations components of REEs. “In the same way we competed and continued to compete for other energy resources, most especially crude oil, we will be competing for REEs,” he stated. “It's happening already, this geopolitical clash [which is] primarily driven by competition between the United States and China. After the publication of this report, Beijing cut off all exports of rare earth element refining technologies to the United States. Central Asia is very much at a crossroads,” he stated. Addressing this geopolitical conflict with China over REEs, Ambassador John Herbst, a Senior Director at the Eurasia Center of the Atlantic Council, stated that Central Asia is a “critical region… rich in rare earth minerals [whilst] China is our principal adversary. They are not a friend of the United States.” Finally, Suriya Evans-Pritchard Jayanti, a Nonresident Senior Fellow at the Eurasia Center of the Atlantic Council, characterized REEs as an “extremely important development opportunity” for Central Asia, particularly given “geostrategic energy realignment after the Russian invasion of Ukraine. I think it's a geostrategic realignment opportunity for...