Chinese investment in Kazakhstan

Chinese Investment in Deep Processing Grain Plant in Kazakhstan

On 25 June, Deputy Prime Minister of Kazakhstan Serik Zhumangarin and Chairman of the Board of National Company Kazakh Invest Yerzhan Yelekeyev met the leadership of CITIC Construction in China, to discuss the construction of a plant for deep processing of grain.

As reported by Kazakh Invest, CITIC Construction is one of China’s leading construction and engineering companies, with a turnover of $2.5 billion. In 2023, the company implemented a similar project in Belarus.

In Kazakhstan, the Chinese company plans to implement the project, primarily located in the Almaty region and with the creation of 2,000 jobs, in several phases.

With a total capacity to process up to 1 million tons of wheat per year, the plant will produce fructose syrup, crystalline fructose, allulose, crystalline dextrose, sodium gluconate, gluten, and feed.

It is anticipated that the cost of the build will exceed $1 billion.

“We are ready to provide comprehensive support for the implementation of the project,” stated Yelekeyev. “Deep processing of grain is one of the priorities and promising areas in the strategic development of the economy of Kazakhstan. Our country is one of the largest wheat producers in the world and is ready to contribute to ensuring food security in the region, as the area of land for crops cultivation and livestock grazing exceeds 200 million hectares.”

 

photo: primeminister.kz

A Million New Jobs on the Horizon in Kazakhstan

At a meeting on sustainable employment on June 25, Kazakhstan’s Prime Minister Olzhas Bektenov tasked his government to create employment for around a million citizens this year.

Referencing the initiative, Minister of Labor and Social Protection of the Population Svetlana Zhakupova reported that in 2024, the government plans to ensure employment for 948 thousand Kazakhstan citizens. To date, about 353 thousand people, including 148 thousand youths, have found work, representing 37% of the target.

Since the beginning of the year, 137 thousand people have secured state-subsidized jobs. Over 97 thousand have found employment under the Head of State’s initiative “100 new jobs for every 10 thousand people”; over 103 thousand have filled employers’ vacancies, and some 16 thousand have been employed by national project programs.

Prime Minister Bektenov announced that the concept behind “Development of the Labour Market of the Republic of Kazakhstan for 2024-2029” is to create a maximum number of permanent jobs, including those for young professionals.

Today, up to 25 percent of graduates of technical and vocational educational institutions, work outside their professions. To address the issue, Bektenov stressed the importance of establishing interaction with employers through means such as digital monitoring of employment which tracks projects requiring new labour.

In theory, the implementation of measures to ensure employment will create 3.8 million quality jobs by 2029.

The meeting also addressed issues concerning the employment of Kazakhstan citizens abroad and the protection of their rights.

Regarding the above, the Prime Minister warned, “We are aware of situations where their salaries were not paid, medical services were not provided, contracts were grossly violated. Work is therefore underway to conclude relevant intergovernmental agreements -and-  to systematize the work of private agencies that employ our citizens abroad. Kazakh citizens should receive reliable guarantees under the contract.”

 

 

photo:president.kg

Kyrgyzstan and EU Sign Enhanced Partnership and Cooperation Agreement

On June 25, President of the Kyrgyz Republic Sadyr Japarov met the President of the European Council Charles Michel in Brussels to discuss issues on Kyrgyzstan-EU interaction.

Views were exchanged on prospects for trade and economic cooperation and the implementation of joint projects in energy, transport, rare metals, agriculture, and environmentally- friendly technologies

Following the meeting, an Enhanced Partnership and Cooperation Agreement (EPCA) between the European Union and the Kyrgyz Republic was signed by the Minister of Foreign Affairs of the Kyrgyz Republic Jeenbek Kulubaev, High Representative of the European Union for Foreign Affairs and Security Policy/Vice-President of the European Commission Josep Borrell, and Executive Vice-President of the European Commission and Commissioner for Trade Valdis Dombrovskis.

The new document replaces the Partnership and Cooperation Agreement (PCA) signed back in 1999.

As reported by the Delegation of the European Union to the Kyrgyz Republic, the Agreement provides new legal grounds for reinforced political dialogue and deepening cooperation in areas such as trade and investment, sustainable development and connectivity, research and innovation, education, environment, and climate change, as well as rule of law, human rights, and civil society. It will also strengthen cooperation in foreign and security policy, including issues of conflict prevention and crisis management, risk reduction, cybersecurity, regional stability, disarmament, non-proliferation, arms and export control.

In addition, the EPCA will create new opportunities for cooperation in critical raw materials, essential for green and digital transitions.

High Representative of the European Union for Foreign Affairs and Security Policy/Vice-President of the European Commission Josep Borrell commented: “We are happy to count the Kyrgyz Republic amongst our close partners. The Enhanced Partnership and Cooperation Agreement demonstrates our steadfast commitment to strengthening and deepening our bilateral relations based on shared values and common interests in all areas of mutual benefit, reflecting new geopolitical and economic realities. We will continue working with Kyrgyzstan on further strengthening the protection of human rights and fundamental freedoms and promote cooperation with civil society which are essential pillars of an open democratic society.”

Welcoming the initiative, Executive Vice-President and Commissioner for Trade Valdis Dombrovskis, announced: “This Enhanced Partnership and Cooperation Agreement marks a new chapter in the EU’s economic and trade relations with Kyrgyzstan. We have included an ambitious Trade and Sustainable Development Chapter that aims to promote fair and open competition, while also benefiting Kyrgyz consumers and SMEs. Through this Agreement, we are helping to create more opportunities for EU and Kyrgyz businesses and investors by facilitating trade flows and enhancing cooperation. We believe this partnership will contribute to the prosperity of our regions by generating new and better jobs and boosting economic development and resilience.”

Since 2016, the Kyrgyz Republic has benefitted from unilateral and preferential access to the EU market through the Special Incentive Arrangement for Sustainable Development (GSP+) of the EU Generalised Scheme of Preferences. Kyrgyzstan is the EU’s third largest trading partner in Central Asia. GSP+ has contributed to an increase in EU-Kyrgyzstan trade in goods in 2023 by 116% (over 2022) reaching EUR 2.845 billion.

 

 

@president.uz

Mirziyoyev Discusses Cooperation with Russian Minister of Internal Affairs

On June 25, Shavkat Mirziyoyev received the Russian Minister of Internal Affairs, Vladimir Kolokolsev, who was in Uzbekistan on a business visit, the president’s press service has reported. At the outset of the meeting, Mirziyoyev expressed his condolences and words of encouragement to the family members of the law enforcement officers who died in the recent terrorist attack in Dagestan.

During the meeting, the practical implementation of agreements between the two countries was high on the agenda. Current aspects of cooperation in the fight against terrorism, extremism, drug trafficking, organized crime, cyber security and digital expertise were discussed.
Particular attention was paid to the issue of increasing the effectiveness of cooperation mechanisms in the field of migration.

On the same day, Ziroat Mirziyoyeva, the First Lady of Uzbekistan and chairman of the board of trustees of the Zamin Foundation, met with Hans Kluge, the director of the European regional office of the World Health Organization. At the meeting, issues of cooperation between the World Health Organization and the Zamin Foundation on improving children’s medical services, including those suffering from oncological diseases, their rehabilitation, and the development of palliative care in Uzbekistan were discussed. Special attention was paid to developing and improving environmental protections, including the involvement of international experts in developing international air quality and drinking water quality standards.

@gazeta.uz

Uzbekistan Launches Mechanism for Recognizing Foreign Citizens as “Undesirable” Elements

In its second and third readings, the Legislative Chamber of the Oliy Majlis (parliament) approved amendments to the law regulating the legal status of foreign citizens and stateless persons within the country. The key innovation was a move to recognize foreign citizens as undesirable elements who will not be permitted to stay in Uzbekistan.

The grounds for declaring the stay of foreign citizens and stateless persons unacceptable may be public calls or actions that contradict state sovereignty, territorial integrity and security of the country, provoke interstate, social, national, racial, and religious enmity, or discredit the honor, dignity, and history of the people of Uzbekistan.

The law provides for a five-year ban on such persons entering Uzbekistan, opening bank accounts, acquiring real estate, participating in the privatization of state property, and entering into financial and contractual relations. The document also defines the procedure for deporting persons not permitted to stay in the country.

Before this new law can enter into force, it must be approved by the Senate and signed by the president.

Image: gov.kz

Kazakhstan Facing Challenge of Developing Roads in Ninth Largest Country in World

Kazakhstan is one of the most active post-Soviet states in building roads. Over the past decade, KZT4 trillion ($8.55 billion) has been spent on highway construction in the country, yet in a world ranking of road quality, Kazakhstan stands 93rd out of 141 countries.

Record year for road construction

The focus of the current road construction season is completing the reconstruction of sections of the main road transport corridors: Karaganda–Balkhash–Almaty, Taldykorgan–Ust-Kamenogorsk, Aktobe–Kandyagash, and Atyrau–Astrakhan.
Overall, the current season is due to be set new records. There are plans to repair, reconstruct and build twelve thousand kilometers of road. Another feature of the work this year is the implementation of a major new program for the “medium repair” of local roads to strengthen them structurally, which is designed to improve transport links between populated areas. This program is set to repair about 2,500 kilometers of road throughout the country.

Betting on tolls

In February, the government announced plans to increase tariffs on federal toll roads. However, the initiative is still under consideration. The current tariffs – KZT 1 per kilometer for passenger vehicles (0.002 US cents) and KZT 5-25 per kilometer for freight vehicles depending on the load capacity and transport class – were approved back in March 2013 for the first toll highway built in the country (Astana-Shchuchinsk). Since then, the tariffs have not changed.

In 2024, there are plans to roll out a toll system on another 2,400 kilometers of federal roads, namely on the sections Kostanay–Troitsk, Aktobe–Russian border (toward the city of Orenburg), Aktau–Beineu, Kyzylorda–Aktobe Region border, Usharal–Dostyk, Kostanay–Denisovka, Makat–Kandyagash, Taraz bypass, Karaganda bypass, Balkhash–Burylbaital, and Shu– Burylbaital.

According to the national company in charge of federal and international roads in Kazakhstan, KazAvtoZhol, the toll system will be introduced only after repair work is completed and the roads fully comply with regulatory requirements. In addition, attention is being paid to transit routes when introducing tolls. This is especially relevant in the context of the government’s plans to develop freight transit through Kazakhstan and make the country a regional transport and logistics hub. Thanks to international transport, including transit, tolls are expected to become a significant contributor to the country’s budget.

Today in Kazakhstan, there are 17 toll road sections with a total length of more than 3,200 kilometers, which, along with the state budget, help finance the maintenance of federal roads. According to the Ministry of Transport, KZT60 billion ($130 million) is required annually to maintain the country’s roads. Internationally, road maintenance is financed by taxes allocated for transport, but this is not enough in Kazakhstan – it is one of the largest countries in the world, but has a low population density, meaning its road infrastructure remains underutilized.

Because of this, historically, road maintenance in the country was financed from the state budget. Overall, the toll system will be gradually introduced on 11,000 kilometers of road by 2029 as reconstruction work is completed. The further rollout of the system, which aims to support year-round maintenance, should reduce the burden on the budget and eventually lead to self-sufficiency within the highway industry.

Meanwhile, car owners resent the introduction of tolls on federal highways. To mitigate this dissatisfaction, incentive measures could be put in place, including a transparent approach to collecting tolls with flexible terms that are agreed by market participants. In particular, the international practice of discounts on travel on highways at different times of the day or on weekdays and weekends for different types of vehicles could be applied. These measures would be welcomed by both motorists and freight carriers. This could also significantly relieve congestion at payment collection points.

Image: gov.kz

 

Speed and safety are the priority

Building modern highways means not only significantly cutting down travel time, but also improving safety. According to statistics, almost ten times fewer accidents occur on toll roads versus free ones, and there are 20 times fewer injuries or fatalities. Meanwhile, Kazakhstan’s statistics agency reports that the number of traffic accidents on the country’s roads decreased from an average of 23,359 to 15,886 from 2013-23 (excluding 2020 and 2021, when road restrictions were in place due to the pandemic quarantine).

Developing the country’s network of roads will help people travel between populated areas faster, improve their standard of living, boost security, and contribute to the development of regions and whole sectors of the economy. Indeed, the government is betting on roads as the most widespread and popular means for transporting passengers and freight (in particular, transit freight). A high-quality road infrastructure would go a long way towards attracting new freight flows, providing the shortest east-west and north-south land routes, and becoming a significant source of income for the country.

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Dauren Moldakhmetov

Dauren Moldakhmetov is the Editor-in-Chief of Kazakhstan’s industry transportation publications: the railway magazine “Trans-Express Kazakhstan” and the business magazine “Trans Logistics Kazakhstan.”