Economic diplomacy: prospects for development

June 22. Kazpravda

By Rapil Zhoshybayev, First Deputy Minister of Foreign Affairs of the Republic of Kazakhstan

Economic diplomacy: prospects for developmentIn the Strategy of Kazakhstan’s development – 2050 President Nursultan Nazarbayev identified modernization of industries as the main task of further industrialization.

Ambitious targets for economic diversification and modernization put forward economic diplomacy as a most important priority of foreign policy. In the light of objectives set by the head of state, attracting direct foreign investment, import of advanced foreign technologies, development of export potential, and promotion of national economic interests abroad are important areas of foreign trade activities.

President Nursultan Nazarbayev attaches great importance to economization of foreign policy, its focusing on concrete economic results. Under his leadership, Kazakhstan has attracted more than $ 170 billion of foreign direct investments and we are leading in CIS in terms of their volume per capita.

At present priorities for the country are creating favorable investment climate and diversification of economy and exports, the rise of business activity and competitiveness in the context of forthcoming accession to the WTO and the formation of a single market in Eurasia.

An important aspect of economic diplomacy is also to increase efficiency of joint intergovernmental commission (IGC) on Trade and Economic Co-operation and business councils (BC). In this direction, a number of proposals aimed at strengthening their activities in the field of investment and development of non-oil sector were made. Besides, active work is being carried out on the introduction of the evaluation and regulation system for IPC and BC. Particular attention is given to consideration by the IPC of common problems arising in the Kazakhstan’s business community in their relations with foreign countries and in the issues of investment and export cooperation.

Another important area of economic diplomacy is to attract foreign investments. At present, in accordance with the national plan, 20 priority countries to attract investment were identified and specific indicators for public agencies and diplomatic missions were established.

In the past year, the Ministry of Industry and New Technologies developed joint action plans to implement the state policy to accelerate industrial – innovative development, and in addition the “road maps” defining priority sectors for cooperation were created for each country.

The Ministry of Foreign Affairs and its overseas missions are carrying out various activities to attract foreign investors. This will strengthen the “Group of Friends of Kazakhstan” with participation of heads of foreign trade and economic chambers and missions, banks, accounting firms and large businesses. The institute of honorary consuls of Kazakhstan abroad becomes more and more important within the economic diplomacy. Being representatives of the business elite of the host country, the honorary consuls often make a significant contribution to the development of trade and economic relations between the two countries, attracting investments and technologies in the economy of Kazakhstan.

Another important international initiative of the President, recognized by the international community, was the establishment of communication platform G-Global, which in a short time has proved itself as a unique platform to discuss the challenges of the global economic crisis and to search for solutions. During the VI Astana Economic Forum the World Anti-Crisis conference under the auspices of the UN was initiated to develop concrete proposals to overcome the global crisis and to help development of international financial institutions. This initiative was supported by the leadership of UN General Assembly, UNCTAD, representatives of the “Group of 77” and China, in total by 132 countries.

Kazakhstan this year for the first time participating in the “Big Twenty” in St. Petersburg will be able to make suggestions and recommendations on the agenda of the summit.

One of the national key projects in our country is holding the exhibition “EXPO-2017 in Astana”. In keeping with the Presidential Decree, the State Commission was established, as well as the national company and the commissioner was appointed. The National Plan for the organization and holding of EXPO 2017 was timely approved and working staffs were formed in all state bodies. Hosting in Astana the international exhibition is a tremendous achievement of economic and political significance of our country.

The forthcoming accession to the World Trade Organization (WTO) is seen no less important event for Kazakhstan’s economic policy. After Kazakhstan’s accession to the organization our trade policy will undergo inevitable changes. Kazakh business will have to show its economic viability and the ability to adapt to new market conditions.

We should also note the successful interaction with the Organization for Economic Cooperation and Development (OECD). Kazakhstan has the right together with the European Union to lead the Steering Committee of the OECD Initiative for Central Asia and to become a co-chair in Eurasia Competitiveness Program for three years. The OECD Council took a decision to invite Kazakhstan to participate in the work of the Committee on Investments and adherence to the Declaration on International Investment and Multinational Enterprises.

The Committee on Industry, Innovation and Entrepreneurship supported the request of the Ministry of foreign affairs for the status of permanent observer. The application was submitted to the OECD Secretariat, which will prepare a decision for final approval by the Board of the organization.

An important area of the foreign policy in the long term is Kazakhstan’s participation in regional integration. The Ministry of foreign affairs considers all available forms of cooperation in order to address socio-economic and water and energy issues, the creation of transit transport infrastructure, the issues of common customs and trade tariffs, and the formation of an international network of cross-border tourism.

Special attention is paid to the Action Plan for implementation of the Strategy of the Central Asia Regional Economic Cooperation (CAREC) on transport and trade’s facilitation, which identifies active investment measures aimed at the improvement of all six transport corridors to international standards by 2017. Additional investments in the coming decade will help to complete the infrastructure network and to start the development of transport corridors in the logistics and ultimately economic corridors.

We continue work with the international financial institutions. In the context of regional integration the Central Asian Program of Energy and Water Resources of the World Bank is of special interest.

One of the key partners involved in the financing of infrastructure projects – the Asian Development Bank defined the city of Astana as the venue for annual meeting of its Board in 2014.

At present, the investment capacity of Kazakhstan has potential for growth. According to international experts, the inflow of foreign direct investments can be increased to 10 billion dollars. In the ranking of Doing Business Kazakhstan is 49th and 10th – in the indicator “Protecting Investors”.

Our republic also has considerable potential to implement the idea of the head of state on the creation in key transport corridors of Kazakhstan of a common set of hubs of international level – on trade and logistics, finance and business, innovation and technology and tourism.

In conclusion I would like to add that we live in time of endless possibilities. Almost nothing is impossible for those who have necessary knowledge and access to the global information infrastructure. With all these elements, the organization of small business or own production in a developing country can be successful in the global market, especially if you have support of a reliable professional and effective economic diplomacy.

In the process of globalization, the issues of industrialization and modernization of the economy, the development of resource base and infrastructure set large-scale tasks for the Foreign Ministry which require its active steps in all areas of international economic cooperation. Of particular importance in this work is close collaboration in the framework of international organizations of universal and regional character. Achieving the goals of economic diplomacy will ultimately improve the competitiveness of the national economy, and help in creation of new industries and jobs, and economic growth of the country as a whole.