Strengthening Kazakhstan-Norway Relationships

Currently, Kazakhstan is experiencing a period of important domestic change. In January 2014 President of Kazakhstan Nursultan Nazarbayev  announced a new political course for the country; the main goal is for Kazakhstan to join the top 30 most developed countries in the world by 2050.

Called ‘Kazakhstan’s way – 2050: common aim, common interests, common future’ President Nazarbayev describes the project as “a mature vision of a new era in the history of the country.” ‘Kazakhstan 2050’ calls for better governance, improvements in the welfare and tax system, support for small- and medium sized businesses and increased infrastructure development.

            Advancing these ambitious goals in November 2014 President Nazarbayev announced the new policy of Kazakhstan “Nurly Zhol” (Bright Way), designed to give new impetus to industrial modernization and socio-economic development in modern geopolitical conditions.

According to the Kazakh President, several years to come will be the years of reconstruction in the global economics and politics. The IMF revised down its global economic development forecast for the next two years.
          In his Address, the President made public a new economic policy of Kazakhstan, Nurly Zhol, to continue structural economic reforms.
Kazakhstan came to understanding it is high time to use the National Fund reserves. Kazakhstan was one of the first in the former USSR to establish the fund back to 2000 to accumulate savings and reduce dependence of the national and local budgets on world prices. USD 10 bln will be earmarked in the next three years to support SME and large-scale entrepreneurship, to rehabilitate the country’s banking sector and raise new investments, to continue construction of the EXPO 2017 complex, and to develop the Astana city infrastructure. The five-year infrastructure development plan will be the new economic policy linchpin. Above 100 foreign companies are expected to take part in it.

          In his address the Head of State responded to the main present-day challenges. In my opinion, this document is of strategic and international importance and should be considered as the plan of complex reforms amid global instability.

In the past two decades, Kazakhstan made a giant leap forward in development terms, and the economy is booming. 20 years ago, the economy was in ruins. Inflation was 2,100%.Today, GDP per capita is US $12,000; 16 times more than in 1991. According to experts, Kazakhstan was the third-fastest growing country in the first decade of the 21st Century. Only China and Qatar performed better. We have saved more than US $66.6 billion in The National Fund – the so called “Fund for Future Generations”. We plan to increase this in the medium term to US $93.3 billion.

Currently, Kazakhstan is ninth globally in terms of proven oil reserves. The country ranks eighth for coal reserves and second for uranium reserves. Kazakhstan is first in the production of aluminium; and among the world’s top

ten exporters of grain and flour. Kazakhstan is implementing a large-scale project called the “New Silk Road”, which aims to revive the country’s historical role as the main nexus of the continent, and to turn it into the largest regional business and transit hub; a bridge between Europe and Asia. An important step in this direction is the creation of an attractive climate for investors based on sound policies in the use and distribution of natural and other resources. The government plans to develop business clusters aimed at promoting innovative development.

Competent, technically educated people are the key to moving from an energy resource based to a diversified economy. The government of Kazakhstan is investing heavily in staff, in new infrastructure, and in the creation and formation of a well educated and remunerated national work force. Kazakhstan was one of the first former Soviet Union states to join the European Higher Education Area. In 2010, we joined the European Cultural Convention and the Bologna Process. We established a special study abroad programme – the Bolashak programme. Since 1993, the state has funded more than 8,000 young Kazakhstanis to study in the best universities of the world. The majority of Bolashak students already work for their country in leading branches of the economy.

The healthcare system has been radically reformed. Since 1991, the financing of the healthcare system has increased more than 100 times. At present, we can say with confidence that Kazakhstan’s model of development, with an emphasis on industrialization, is bearing fruit. We are one of the 50 most developed countries in the World Economic Forum’s competitiveness ranking, and rank amongst the five richest countries in Asia according to per capita income. In the World Bank’s ‘Ease of Doing Business’ ranking we share tenth-place for the protection of investors along with Great Britain and South Africa. On taxation, we are ranked between the UK and Switzerland in 17th position in the world.

Since independence, Kazakhstan has made an enormous contribution to support international peace and security. Our government has introduced many measures to this end including: the renunciation of nuclear weapons, the creation of confidence-building measures in Asia, the strengthening of the integration process in Eurasia, the encouragement of inter-religious dialogue, and active participation in the strengthening of global security including the fight against international terrorism and extremism.

Twenty years ago, our young country took a large step in the international arena with our accession to the Nuclear Non-Proliferation Treaty. As a non-nuclear state, it was a formal sign of Kazakhstan’s determination to work for a world free of nuclear weapons – an ambition which has helped define our country since we first gained independence in 1991. There were, of course, very good reasons for this commitment. The threat from nuclear weapons, as our President Nursultan Nazabayev has said, strikes a deep chord within our country. 
          For forty years, Kazakhstan was a test site for nuclear weapons. The fall-out from these tests at Semipalatinsk – of which over 100 were above ground – has left a terrible legacy. A generation later, the deaths and deformities continue. The threat for us from nuclear weapons is not abstract but all too real. 

This is why, in August of 1991, months before we attained full independence – and to the joy of our people – President Nazabayev ordered the closure of the Semipalatinsk site. At Kazakhstan’s urging, the date of August 29 has now been commemorated officially by the United Nations as the International Day against Nuclear Tests. 

Kazakhstan followed this move with an even more historic initiative when we voluntarily renounced the world’s fourth largest nuclear arsenal, which we inherited on the break-up of the Soviet Union. No country has done more to bring the goals of the NPT closer. Ever since those early days, we have continued to work tirelessly to achieve the goals of the treaty. We have encouraged countries across Central Asia to come together to declare the region a nuclear-free zone – a model for wider progress.

Kazakhstan is making a significant contribution to strengthening regional stability. We are the region’s largest aid donor. We channel our humanitarian aid both bilaterally and through multilateral mechanisms. Currently, a national agency for official development and technical assistance is being created in Kazakhstan. A priority is the implementation of aid projects in Afghanistan, whose development and security is critical to the peace and security of the Central Asia.

Kazakhstan initiated the Conference on Interaction and Confidence Building Measures in Asia, which now includes 24 countries with a combined population of over three billion people.

Kazakhstan has integrated successfully into international society. We have developed successful partnerships with our neighbors – Russia, China, the countries of Central Asia as well as the US and the EU. We are also an active member of the OSCE. Partly in recognition of our democratic progress, Kazakhstan was appointed chair of the OSCE in 2010. Our chairing of the OIC came at a difficult time in Islamic world history. Under the motto ‘Peace, Cooperation and Development’, Kazakhstan focused efforts on overcoming humanitarian crises, resolving conflicts, developing new cooperation mechanisms, and promoting dialogue between the Islamic world and the West.

Since 2012, a Single Economic Space has begun to function between Kazakhstan, Russia and Belarus. Our immediate goal is to create a Eurasian Economic Union.

          The EXPO 2017 Exhibition will be held in Astana under the tagline of ‘Future Energy’. Astana’s candidature to host EXPO-2017 was supported by two thirds of the votes of member states from the International Exhibitions Bureau – 104 out of 154 countries.

          Kazakhstan has become a modern, forward-looking, confident state, as well as a responsible international partner. We are an attractive and favorable destination for foreign investments. Big multinationals including Asian Development Bank, Arcelor Mittal, Baker & McKenzie, BG, Cameco, Chevron, ConocoPhillips, Deloitte, Deutsche Bank, EBRD, ENI, ENRC, Ernst&Young, Eurasian Development Bank, ExxonMobil, General Electric, JP Morgan Chase, Mitsubishi Corporation, PhilipMorris, RBS, Sberbank, Shell, TeliaSonera, Total and many more are actively engaged in Kazakhstan. For many of them Kazakhstan is a market of strategic importance. It may not always be an easy market, but it is important to be part of it. Kazakhstan, as one of the world’s fastest growing economies, offers huge possibilities.

We want investors to be part of our continuing economic success. The main element in Kazakhstan bilateral relations is trade/investment.

          According to the National Bank of Kazakhstan, the total volume of

Norwegian FDI into Kazakhstan from 1993 to 2013 was over US $94,4 million.

32 joint ventures, branches and representative offices of Norwegian companies registered in Kazakhstan.

Norway is the leading exporter of fish to Kazakhstan. Kazakhstan grain is more than 10% of the total imports of cereals in Norway.

The building structures and equipment (lifts, jacks, machinery and others) are exported to Norway. Besides fish, Kazakhstan imports the food products, machinery, equipment and ferrous metals products.

          There is great scope for broadening cooperation beyond the traditional sectors of oil and gas, in areas such as transport and construction, the space industry and in the development of Kazakhstan’s green economy.

Kazakhstan begun to take steps to transition to a green economy. Kazakhstan has set the goal that its transition into the green economy will increase GDP by 3%, and create more than 500 thousand new jobs. In June 2014, the Kazakh government set tariffs for energy produced by renewables in a bid to get three percent of electricity from cleaner sources by 2020. Kazakhstan plans to spend an average $3.2 billion a year along with investors to achieve its green goals by 2050 and cut carbon emissions by 40 percent in 2050 from 2012 levels.

          Kazakhstan’s trade and economic cooperation is developing fast and as the economy develops and diversifies, has the potential to expand into new areas, including innovations and high technology agribusiness, green technology, new materials, energy efficient construction and specialized technical training. Other areas of cooperation with great potential include culture, education and tourism. 

I believe there are now more reasons than ever for Norwegian businesses to invest in Kazakhstan. Our location at the heart of Eurasia has, in the past, been seen as a challenge. But it now also offers a great opportunity. We are well

positioned to take advantage of the rising economies of Asia, including the giants of India and China. As a member of the Eurasian Customs Union – soon

to be the Eurasian Economic Community – we offer free trade access to a population of 175 million, with a combined GDP of US$2 trillion. Additionally,

we have just signed Joint document on completion of negotiation process on  Enhanced Partnership and Cooperation Agreement with the European Union. We truly offer an economic bridge between the East and West. At the beginning of the next year we expect to join the World Trade Organization which underlines our determination to continue the path of reform and to strengthen our economy.

We very much hope that Norwegian investors and businesses will take advantage of the opportunities available in Kazakhstan. I can assure them that they will receive a very warm welcome.

          I believe our relationship is going from strength-to-strength. There is a clear desire on both sides to translate this new partnership into real results. In closing, I am pleased to say we are seeing a real positive change in Kazakhstan-Norway relations. We can, of course, go further and we hope to create many more opportunities to strengthen our partnership.

 

           I am looking forward to deepening old relationships and making new connections over the coming years.

 

H.E. Kairat Abusseitov

 

Ambassador to the Kingdom of Norway

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