Kazakhstan – Turkey: “Silk Road” for Business

Oct 13. Kazpravda. Istanbul

By Vladimir Kuryatov

Kazakhstan - Turkey: "Silk Road" for BusinessDuring his official visit to Turkey President Nursultan Nazarbayev took part in the Kazakh-Turkish business forum. Agreements worth more than $ 1 billion were signed in the end.

The business forum was an opportunity to make contacts, see the exhibition on the work of “Samruk-Kazyna”, and an industrial exhibition of Kazakh-Turkish joint projects.

The Kazakh President and the Turkish Prime Minister addressed the forum held in the hotel “Cevahir”. Describing Turkey as a main trade and economic partner, N.Nazarbayev marked a fast growing trade between our countries and a significant contribution to this process of about 400 Turkish companies active in our country. -This forum today is attended by about a hundred Kazakh and a thousand Turkish representatives of business structures and companies. In its frames, the agreements and documents were signed totaling the sum of more than $ 1 billion, – said Nursultan Nazarbayev.

The President also drew attention of the Turkish business to priorities in the national economy – the use of high technologies and economic industrialization program, under which in the two and a half years 443 projects were launched worth $ 11 billion, and nearly 100 thousand new jobs opened.

Kazakhstan highly appreciates the experience of industrial development in Turkey, it was stressed. Given the two countries’ potential, there are good opportunities for joint projects in metallurgy, energy, logistics, textile, food and chemical industries and agriculture.

– Kazakhstan is interested in boosting the share of foreign business in its economic development. Therefore, we are taking the necessary measures for the protection of investments. In the “Protecting Investors” indicator in the Doing Business 2011 ranking of the World Bank, Kazakhstan was raised 34 positions up compared to 2007. Our country ranks 10th among 183 countries. In the indicator “Ease of Doing Business”, in the past five years Kazakhstan went from the 80th to 47th place. The number of permits has declined, which saves time and money, – he said. At present Kazakhstan accounts for 80% of the entire foreign investment in Central Asia.

– During the years of independence, we have formed a stable investment climate in the country. 166 billion dollars of direct foreign investment were attracted. This was conductive to the dynamic growth of our economy, – he went on.

The President also noted promising emerging markets for Turkish businessmen in the framework of the Customs Union of Kazakhstan, Russia and Belarus. – I would like to draw the attention of the Turkish investors to this issue. Customs barriers between the two countries have been eliminated for a free movement of goods. Thanks to this, we have a single market, involving approximately 170 million people and with an overall GDP of about one and a half trillion dollars.

In 2011, the import of Turkish goods in Kazakhstan compared to 2009 increased by 30%. This figure, according to President Nursultan Nazarbayev, has been achieved thanks to the CU. Thus, Kazakhstan has formed a most auspicious climate for investment.

– The countries should cooperate in joint research, particularly in such important areas as energy efficiency, green economy, reduction of harmful emissions, nanotechnology and others.

The President expressed confidence that the meeting will result in strengthening of mutual economic relations. Business ideas and direct cooperation of our business should be beneficial for the “New Synergy” joint programme.

Prime Minister of Turkey Recep Tayyip Erdogan called Kazakhstan a fraternal country and the ancestral home of the Turks.

– I want to make you feel at home in Turkey. The relations between the two countries have deep roots, and we are committed to their continued expansion and consolidation. The negotiations with Kazakhstan opened a new era in our relations.

According to the Turkish Prime Minister, the 4- billion-dollars trade volume between Kazakhstan and Turkey is not a fully unlocked potential of our relationship. He hopes by 2015 it will increase to 10 billion dollars.

Addressing the business community in this connection, Recep Tayyip Erdogan said, the duty of politicians is to clear the path for co-operation and eliminate hurdles to it if there are any. The authorities of Kazakhstan and Turkey have created a good platform for interaction. And the business forum in this respect is conductive for partnership.

One of the impediments to business might be the geographical distance between the two countries, therefore, our President, and the Turkish PM believe the revival of the Silk Road would facilitate interaction.

That this task is feasible could be seen in the exhibition of business projects. The president of the National Center for the development of transport logistics of JSC “KTZ” Rustan Jenalinov said that together with the colleagues, they are studying the issue of goods transportation from Japan, South Korea and China to Turkey and Europe via Kazakhstan. Land route, as studies show, is more convenient. Cf.: the delivery time of goods to Turkey in 20-pound containers from the eastern ports of China by sea takes 20 to 30 days, whereas by land- 15 to16 days.

New railway lines are constructed: Zhezkazgan – Saksaul – Beineu (to be ready in 2013), Kars (Turkey) – Akhalkalaki (Georgia) – in 2013. Perspective volume of traffic on the new lines will be 5-7 million tons with further increase in 2020 to 10 million.

There is an alternative freight route through Turkmenistan and Iran too: the Uzen (Kazakhstan) – Bereket (Turkmenistan) – Gorgan (Iran) line is opening next year.

Recep Tayyip Erdogan spoke about the prospects of cooperation in other sectors of the economy.

– We attach much importance to the work of Turkish companies in Kazakhstan in various areas: construction, pharmaceuticals, consumer goods, and others, – he said. – Our construction contracting companies have invested substantial financial resources in Kazakhstan. The Turkish investments are to be actively diversified into other sectors of economy: agriculture, mining, and others. Also today, Kazakhstan’s business is investing in the tourism sector, and we intend to step up cooperation in this area. This is a great benefit to both countries.

Turkey is sixth in the world in tourism. The Prime Minister cited figures in this respect: 10 years ago Turkey received about 13 million people a year, in 2011 – more than 30 million tourists. Of them, 300 thousand are Kazakhstanis.

– It is important that the number of Turkish tourists increased in Kazakhstan. In this regard, we discussed the problem of lowering the air fare.

Recep Tayyip Erdogan also offered to diversify the flight routes. The relevant ministries were assigned with this task at the meeting of the Strategic Council.

The need for a more free system of transition of vehicles across the border was brought up, as well as for increasing the visa-free stay from 30 to 90 days. All of this will help solve the current issues in trade, – concluded the Prime Minister.

Vice Prime Minister, Minister of Industry and New Technologies of Kazakhstan Asset Isekeshev, his Turkish colleagues, representatives of chambers of commerce addressed the meeting too.

A.Isekeshev mentioned new implementation tools for the “New Synergy” program. It should be legal-framed first. As for the program itself and the action plan, to be implemented in eight sectors, which are traditionally strong in Turkey, there is sufficient potential in Kazakhstan and in the market of the Customs Union. This is light industry, chemicals, energy, metals, machinery and other areas. There are plans to establish joint industrial zones. The first one will open in SKO-based FEZ “Ontustik.”

A solid “portfolio” of projects has been formed. As part of financial support an agreement is to be signed on opening a credit line for the implementation of joint projects, the sum of 250 million dollars so far. Work is current with the Turkish banks on mutual recognition of guarantees. As a result, said A.Isekeshev, investment cooperation with Turkey could reach 3 billion U.S. dollars. This will be facilitated by the agreements. In particular, the LLP “Alma Pharm” and “Abdi Ibrahim” signed a contract on the establishment of a pharmaceutical plant in Almaty region. JSC “Agromashholding” and LLP “CPC AUTO” plan to produce ambulance cars and other vehicles. JSC “NC” Kazakhstan Engineering “and the company Otocar intend to cooperate in production of military vehicles and off-roads and their maintenance in Kazakhstan. Building a new shopping mall, a production line of soft drinks and other initiatives are pipelined too.

The same day, Nursultan Nazarbayev met with Turkish businessmen and outlined to them Kazakhstan’s main initiatives in the economy, its modernization and diversification.

After it he shared in the ceremony of raising the flag of the Turkic Council, in which he stressed that the Turkic world has more than 40 nationalities and ethnicities. The Turks, who number about 200 million, made a special contribution to world culture. In 2010, during the visit of the Turkish President Abdullah Gul to Astana, Turkic Academy was opened.

The Turkic Council was established October 3, 2009 as an international organization, in accordance with the Nakhichevan agreement.

The flag of the Turkic Council was adopted in August 2012 at the second Summit of the Turkic Council in Bishkek.