EU Cooperation - The Times Of Central Asia

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Italian Bank to Enter Kazakhstan Market

An Italian state bank, Cassa Depositi e Prestiti, plans to establish a new credit line in Kazakhstan, as announced by Edmondo Cirielli, Italy’s Deputy Minister of Foreign Affairs and International Cooperation. Cirielli made the announcement during his meeting with Arman Shakkaliyev, Kazakhstan’s Minister of Trade and Integration, on October 29 in Astana. Cirielli stated: "We are confident that our relations will only strengthen in the trade and economic sphere. Kazakhstan occupies a key position in Central Asia and connects Europe with the region. We plan to open a credit line of our state bank, Cassa Depositi e Prestiti, in Kazakhstan.” Minister Shakkaliyev noted that Italy is Kazakhstan's third-largest trading partner among European Union countries. In 2023, trade turnover between the two countries amounted to $16.1 billion, 7.8% more than the previous year. Exports from Kazakhstan to Italy reached $14.8 billion, and imports stood at $1.2 billion. In January-August 2024, bilateral trade increased by 33%, reaching $13.8 billion, with Kazakh exports rising by 36% to $12.9 billion. Astana hosted the 9th Kazakh-Italian working group meeting on economic and industrial cooperation on October 29. Deputy Minister of Foreign Affairs Edmondo Cirielli headed the Italian delegation. The meeting focused on increasing the transportation volume along the Trans-Caspian International Transport Route, which will create additional opportunities for bilateral trade. The parties also confirmed their interest in developing the transport and logistics sector. Kazakhstan proposed expanding cooperation in the agricultural sector, including fruit and vegetable growing and grain processing and expressed its readiness for long-term partnerships with Italian grain processors and the supply of high-protein wheat to the Italian market. Italian companies were encouraged to invest in Kazakhstan's renewable energy sector and the Khorgos Special Economic Zone, strategically located on the Kazakh-Chinese border.

EU Cooperation

Amid Russia-Ukraine War, Top EU Diplomat Promises Closer Cooperation with Central Asian States

Josep Borrell, Vice-President of the European Commission and High Representative of the European Union for Foreign Affairs and Security Policy, visited Central Asia to meet with the presidents of Kazakhstan and Kyrgyzstan. This trip by Borrell, whose term ends in October 2024, underscores the region's growing global importance in terms of trade and energy security, especially given the ongoing war between Russia and Ukraine. Borrell arrived in Kazakhstan for an official visit on August 1, marking his second diplomatic trip since his appointment as the EU’s foreign affairs chief. Explaining the purpose of the visit, he said “as my mandate as a representative of the European Union ends in three months, it was very important for me to come here to Astana to reaffirm the strong interest and commitment of the European Union to strengthen cooperation with Central Asia in general and with Kazakhstan in particular as the strongest country in the region.” Europe’s realization of Central Asia’s strategic value has recently become more apparent. In a presentation to investors on January 29, 2024, Borrell detailed the EU's growing interest in Central Asia, citing Russia's conflict with Ukraine as a driving force behind this policy reorientation. Borell asserted that the EU regarded Russia as a security concern and is committed to lessening its dependence on Russia. He impressed the same point on Central Asian audiences and called for strengthening trade relationships as well as diminishing reliance on Russia through the Global Gateway, a strategy by the European Union to invest in infrastructure projects worldwide. Notably, the primary land routes from Central Asia to the EU currently traverse Russian territory. The EU’s preferred corridor, known as the Trans-Caspian International Transport Route, is in high demand with volume of cargo transportation in 2023 of more than 2.7 million tons, 86% higher than in 2022. This capacity is projected to rapidly expand as infrastructure investments become operational. “I used to say that four years ago, when I came to Brussels, Central Asia was a little bit in the middle of nowhere – and now, you are in the middle of everything… Everything that matters between Europe and Asia goes through you”, said Borrell. Borrell's first trip to Kazakhstan as the EU’s top diplomat was in November 2022. Since that time, the country has become increasingly significant for Europe as a transport corridor, an alternative energy partner (oil, green hydrogen, and nuclear), and a supplier of scarce critical materials used for the development of technology products. In this regard, Kazakhstan is not only crucial for Europe and its Western allies but also for Russia and especially China, both of which are competing for trade and investments in the country and in the broader region. For Uzbekistan, Russia is boosting its gas exports and is planning to construct nuclear power plants. China has invested billions of dollars in transport infrastructure investments in Central Asia under its Belt and Road Initiative, which has significantly enhanced regional connectivity. Rather than aligning exclusively with one power bloc, Kazakhstan’s...

EU Cooperation International Cooperation Reforms

Roundtable on Uzbekistan’s Reform Agenda

The 2nd Roundtable of Uzbekistan’s Country Platform was held last week in Tashkent. Backed by the European Union, the event provided a platform for discussions amongst over 80 government partners and international institutions on Uzbekistan’s reform agenda and coordinate support activities. As reported by the Delegation of the European Union to Uzbekistan, the participants agreed to continue collaboration through more than 13 sectoral working groups supporting issues prioritized by the Uzbekistan–2030 Strategy including agriculture, energy security, green growth, and the rule of law. Led by the Agency for Strategic Reforms (ASR) under the President of Uzbekistan and the Ministry of Economy and Finance of Uzbekistan, and with secretarial assistance from the European Union, the Country Platform aims to foster effective coordination. Bakhodir Rakhmatov, Director of the Agency for Strategic Reforms, commented: “Constructive collaboration between development partners and government ensures achievement of the priority reform objectives identified by President Mirziyoyev aimed at creating a more prosperous and sustainable future for all. The ASR plays a pivotal role in coordinating the engagement of ministries and agencies with development partners.” Taking over the support previously provided by the World Bank in May, the European Union committed to assisting the Country Platform until the end of 2025. “The European Union is honored to co-chair and promote the Country Platform as a forum for open dialogue, cooperation and collaboration between Uzbekistan and development partners,” said Charlotte Adriaen, Ambassador of the European Union to Uzbekistan. “The common goal is to support Uzbekistan in its reform path. The Platform is an opportunity to join forces, to effectively move together bringing prosperity, sustainable development, leaving no one behind.”

International trade EU Cooperation Trans-Caspian Corridor

EU-Funded Projects Strengthen Central Asia’s Trade and Economic Ties

On 26 June, Almaty hosted the closing meeting of two regional projects in Central Asia funded by the European Union: the ITC Ready4Trade Central Asia and the OECD Policy Component of the EU Central Asia Invest Programme. As reported by the Delegation of the European Union to Kazakhstan, both initiatives have done much to support Central Asian countries' efforts to advance trade reforms, enhance competitiveness, foster connectivity and strengthen regional cooperation. The event brought together policymakers and key stakeholders from private and public sectors in Central Asia, as well as representatives of the European Union, the International Trade Centre (ITC), and the Organisation for Economic Co-operation and Development (OECD). "The European Union has long been supporting the governments of Central Asian countries in their business environment and trade and transport connectivity reform efforts together with international partners, including ITC and the OECD,” said Kestutis Jankauskas, Ambassador of the European Union to Kazakhstan. “Going forward, we will endeavour to develop the potential of the Trans-Caspian Transport Corridor together with our Central Asian partners to make it a competitive, multimodal and sustainable corridor that can bring Central Asia and Europe closer together. We look forward to the new EU-funded Prosperity Programme to be implemented by ITC and the OECD to support the implementation of this goal.” The ITC Ready4Trade Central Asia project has made significant progress in enhancing intra-regional and international trade across five Central Asian countries. In close collaboration with the governments, the project tackled obstacles to cross-border trade by simplifying and digitalising trade procedures, ensuring greater transparency and efficiency terms of cost and time. The project also established national SME Trade Academies, providing tailored on-the-job coaching and enhancing the capacity of SMEs to participate in the global market. The OECD has supported reforms in areas including private sector development, internationalization, digitalisation, trade and transport connectivity, and resilience to shocks. Zhanel Kushukova, Vice-Minister of Trade and Integration of Kazakhstan, commented: “In recent years, significant work has been done in Central Asian countries to simplify and optimize trade procedures, reduce the time for trade operations and automate customs processes. This has allowed us to almost double the volume of trade turnover over the past five years, to $10 billion. In the medium term, Kazakhstan plans to increase trade turnover with Central Asian countries to $15 billion.” Kazakhstan’s QazTrade agency estimates that the implementation of the recommendations proposed by the above projects and the transition to paperless trade will lead to a 30 percent increase in trade turnover in the medium term.

EU Cooperation Economy Export/Import Investments European Union

Kyrgyzstan and EU Strengthen Economic Cooperation

During his working visit to Brussels, Kyrgyz President Sadyr Japarov held talks with Valdis Dombrovskis, the Executive Vice President of the European Commission. The main topics of discussion were deepening trade and economic cooperation, attracting investment, realizing joint projects in mining and the green economy, introducing digital technologies, and developing human resources. Dombrovskis emphasized the importance of strengthening partnerships between Kyrgyzstan and the European Union. He noted that signing the Enhanced Partnership and Cooperation Agreement opens new opportunities for realizing mutually beneficial trade and economic projects. He also expressed the EU's readiness to deepen economic cooperation and interest in participating in significant energy and infrastructure projects, such as the Kambarata HPP-1 and the China-Kyrgyzstan-Uzbekistan railroad, emphasizing their financial potential. Sadyr Japarov thanked the EU for its support and for signing the new Agreement on Enhanced Partnership and Cooperation, expressing his confidence that it would strengthen the agreements reached and create a modern legal basis for future bilateral interaction. The President noted that Kyrgyzstan provides significant opportunities for trade and investment due to its geographical location and transit potential. Japarov also emphasized the country's commitment to the green agenda, stating its intention to reduce greenhouse gas emissions by 44% by 2030 and achieve carbon neutrality by 2050. As part of the initiative to develop a green economy, Japarov proposed exchanging foreign debt for green projects, thus improving the global environmental situation. Projects on water management and the introduction of environmentally friendly technologies in Kyrgyzstan's mining industry were also discussed.

International trade International Cooperation EU Cooperation Regional Security Human rights

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.