Azerbaijani companies invested about $310 million in Kazakhstan’s economy - KAZAKH INVEST Deputy Chairman of Board

By Trend

Azerbaijani companies have invested about $310 million in Kazakhstan’s economy since 2005, Deputy Chairman of the Board of Kazakhstan’s KAZAKH INVEST national company Zhandos Temirgali said in an interview with Trend.

Temirgali added that despite the COVID-19 pandemic, foreign investors are still showing great interest in Kazakhstan as the biggest economy in Central Asia.

“It was possible to observe a good upward trend in foreign direct investments [in Kazakhstan] as of 2021,” the deputy chairman of the board said. “In general, we managed to reverse the negative trend of 2020 and increase the volume of investments.”

The deputy chairman said that the foreign direct investments in Kazakhstan reached about $18.7 billion during the first nine months of 2021, which is 50 percent more than in the same period of 2020.

“In general, there are plans in 2022-2023 to overcome the negative trend of the COVID-19 pandemic and reach good indicators which were in 2017-2019, when the volume of foreign direct investments reached over $20 billion annually,” Temirgali said.

The deputy chairman added that 57 projects were implemented in Kazakhstan in 2021 through the support of KAZAKH INVEST company, a company that is a national operator supporting investment activity.

“These are the new industrial enterprises which were put into operation, the investments made in these enterprises reached about $3.8 billion, which is by 2.4 times more than in 2020,” Temirgali added. “Moreover, about 5,000 jobs were created, which is also an important indicator for us.”

The deputy chairman said that the US, Switzerland and the Netherlands are still the main investors in Kazakhstan’s economy.

Temirgali also stressed that a great decline in GDP was not observed in Kazakhstan, as well as in Azerbaijan as of 2020 as opposed to many other countries.

While commenting on the spheres in which the foreign direct investments were made compared to the pre-COVID-19 pandemic period, the deputy chairman added that as before, the biggest share of investments accounted for Kazakhstan’s extractive sector.

“In general, the structure of Kazakhstan's economy is similar to the structure of the Azerbaijani economy and of course, the biggest share of investments accounted for the mining sector,” Temirgali said.

The deputy chairman said that the structure of investments or the structure of investment inflows into the economy did not change greatly and radically following the results of the COVID-19 pandemic period.

“But there is a general trend to increase the share of the processing facilities,” Temirgali said. “Globally, we have seen a growing interest of foreign investors in the processing sector, in particular, in the food industry, the petrochemical industry, the chemical industry, the engineering industry and so on over the past few years.”

The deputy chairman said that in general, the country clearly understands the need to diversify the economy and this trend, which was outlined even before the COVID-19 pandemic, continues.

While speaking about the spheres of potential development of bilateral cooperation between Azerbaijan and Kazakhstan, Temirgali stressed the transport sector.

“Azerbaijan and Kazakhstan have a favorable location and they are the Caspian littoral countries, moreover, these are the fraternal countries,” the deputy chairman said. “The trade turnover is growing dynamically. It reached about a third of $1 billion as of 2021, which is three times more than as of 2020. It is clear that there was a great decline in 2020, but nevertheless, this figure is much bigger than those in 2018 and 2019. Therefore, the positive trend is obvious.”

Temirgali stressed that foreign investors consider the market of Central Asia and the South Caucasus as a single region and when making investment decisions, it is very important for the region to be attractive in terms of investments as a whole.

“The connecting link in the transport sector is the New Silk Road project of the Trans-Caspian International Transport Route, which unites such countries as Kazakhstan, Azerbaijan, Georgia and European countries, globally linking China and the EU,” the deputy chairman said.

Temirgali added that this is a very promising route, and if one considers the statistics, it is possible to see a very positive trend amid turbulence in global politics and instability associated with other alternative routes.

The deputy chairman said that 4.4 million tons of cargo, which is about 96,300 containers, have been transported through it since the launch of the Trans-Caspian International Transport Route until today.

“In general, the dynamics of transportation via the road along the China-EU route and the volume of transit transportation through Kazakhstan in 2021 exceeded one million TEU containers, which is by 22 percent more than in 2021,” Temirgali said.

The deputy chairman also stressed that multimodal routes are becoming cheaper thanks to the development of modern technologies, including digital ones.

“They are becoming cheaper and more cargo is shipped via road through our region, rather than by sea from Asia to Europe and then to other countries,” Temirgali said. “Our Turkic route through the Caspian Sea is becoming more valuable within this global transportation of goods.”

The deputy chairman said that firstly, the cost of transportation is decreasing, secondly, taking into account various political situations, trade wars and sanctions on a global scale, this route seems to be stable.

“Kazakhstan and Azerbaijan are the countries that are the core of this route,” Temirgali said. “Our cooperation is very important and we see a very great prospect in this regard.”

The deputy chairman said that proceeding from Kazakhstan’s statistics, the Azerbaijani companies have invested about $310 million in Kazakhstan’s economy since 2005.

“Of course, we saw a decline in investment activity during the COVID-19 pandemic but presently, there is a positive trend,” Temirgali said. “The investment partnership between Kazakhstan and Azerbaijan is reaching a new level. About 500 companies with Azerbaijani capital operate in our country. These companies work in the field of construction, processing, trade, logistics and many other sectors.”

The deputy chairman also disclosed the main joint projects of Kazakhstan and Azerbaijan.

“Among them are a grain terminal in the port of Aktau, a joint venture between Kazakhstan and Azerbaijan for receiving and transshipping the Kazakh grain, a logistics center in the Aktau Sea Port and a plant for the production of fittings,” Temirgali said.

The deputy chairman also stressed that the Kazakh government is developing a new concept of investment policy that will meet the current challenges and the international investment community as a whole has some expectations regarding the reforms that are being carried out in Kazakhstan.

In general, Temirgali stressed that the concept of the investment policy which is being developed covers all sides of this issue.

“This includes the process of attracting new investments, the work with current investors, legislation and so on,” the deputy chairman added. “I would like to stress that this document will take into account the environmental, social and governance (ESG) principles.”

The deputy chairman said that this means that the country considers these processes through a solution to the environmental problems, through the creation of eco-friendly facilities in Kazakhstan, as well as the social responsibility.

“It is very important,” Temirgali added. “First of all, this is the creation of high-quality jobs, which, firstly, envisage fair salaries, secondly, these are safe jobs in all facilities and of course, the need for constant improvement of skills of local personnel.”