Kazakhstan seeks transportation, agro sector growth, says vice minister

November 09. Central Asia Newswire. NEW YORK

By Jax Jacobsen

Kazakhstan seeks transportation, agro sector growth, says vice ministerThe Kazakh economy would benefit most from significant growth in the agriculture and transportation sectors, the Kazakh Deputy Minister of Industry and New Technologies (MINT) Nurmuhambet Abdibekov told Central Asia Newswire (CAN) on Monday during the two-day Kazakhstan-U.S. Investment Forum 2010 in New York.

“The development of agriculture is the top priority,” Abdibekov told CAN.

“Due to the climatic conditions of Kazakhstan” agriculture represents a major potential area for economic growth.

Abdibekovalso said that growth in this sector would have a direct positive effect on the majority of Kazakhs “considering that 50 percent of the population of Kazakhstan lives in rural agrarian areas.

“The development of agriculture will directly impact their living conditions,” he said.

During the economic forum being held at New York’s prestigious Harvard Club, some expressed concern over expanding agriculture in the face of what they consider Kazakhstan’s limited water supply.

Abdibekovaddressed those concerns, however, by emphasizing that a major part of Kazakhstan’s development plan to 2020 involves adopting new technologies in all sectors – including agribusiness – that would make farm water use more efficient.  Farmers will be using capillary irrigation systems which require less water input to feed their crops, he said.

Prime Minister Karim Massimov also addressed agricultural growth in his opening address to the forum on Monday saying Kazakhstan plans to increase production in meat and grain and play a larger role globally in those sectors.

Kazakhstan recently stepped in to provide wheat stocks to markets to which Russia normally exports after droughts and fire decimated Russia’s wheat crop.

Regional countries, including Pakistan and Afghanistan, will also need increasing amounts of food in the future and Kazakhstan would like to be the major provider for these states, Massimov said.

The other critical sector which Abdibekov believes will benefit the Kazakh economy the most is the development of the country’s transportation infrastructure.

Above all else, the Western Europe-Western China highway will have a significant impact on the development of Kazakh infrastructure, he said.

The Western Europe-Western China highway plans to revive the ancient Silk Road to connect the East to the West to facilitate trade. The highway will enable travelers to traverse the route within ten days by passing a minimal number of border check points.

Building the highway will allow more Kazakh regions to be connected to each other and will stimulate domestic trade. In this vein, the Kazakh government is also undertaking the development of its railway, known as Temir Zholy (Kazakhstan Railways).

In addition to working with U.S. giant General Electric (GE) to improve the railway system, Kazakhstan is “now working on developing our own production of trains.”

The main obstacle facing railway development, Abdibekov said, is that some rails are supplied by electricity and some are not, but the deputy minister is confident that the railway development plans will overcome this hurdle.

Abdibekovalso expects that Kazakhstan’s focus on adopting information technology (IT) practices and expanding the country’s information infrastructure will also strengthen the Kazakh economy.

“We’ve introduced new modern standards in the telecom/communications sector,” Abdibekov told CAN. “We are developing Internet provider services.  We’re developing this kind of infrastructure, which will stimulate businesses to be part of the system and use it practically.”

In addition to this, Kazakhstan has created IT parks throughout the country, with one such park in the country’s commercial capital Almaty.

These IT parks are also developing new technologies to make Kazakhstan globally competitive and improve the telecom sector.

Abdibekovalso recognized the reality of the global financial situation and how it could affect development plans and the ability to attract billions of dollars worth of foreign direct investment (FDI).

“The biggest challenge is the problem of bringing new investment to the country within the post-crisis timing,” he told CAN. “Also, we face some problems of external financial markets in terms of borrowing.”

But in his address to the forum, which ended Tuesday, Abdibekov assured the U.S. and international business interests gathered for the conference that Kazakhstan is moving forward.

Kazakhstan has “a new economic mindset where productivity and innovation take first priority,” Abdibekov told the forum.