>>> Interview with Mr. Nurmukhamed Zhangarayev, Economic Counsellor at the Kazakhstan Embassy in Romania
By Constantin Radut
-What has been the evolution of bilateral trade and your estimates for the years 2018/2019?
-The evolution of bilateral trade between Kazakhstan in Romania has been positive in the last years. In 2016, trade turnover amounted to 803 million USD, in 2017 it reached 992 million, and this year the figures promise to be well in excess of that level. Available data for January – April 2018 shows that the volume of bilateral trade already amounted to 668 million USD. In absolute terms, Romania is Kazakhstan’s most important trade partner in Southeast Europe.
In view of the figures, we have all reasons to be optimistic about the future development of bilateral trade. Still, there are several issues to be resolved in order to raise our economic cooperation to a new level. In particular, commodity flows remain lopsided as much more is exported from Kazakhstan to Romania than vice versa. Last year, Kazakh export to Romania amounted to 925 million USD, while Romanian export was 67 million only.
On the other hand, Romanian export to Kazakhstan is more diversified than our own export to Romania which relies on deliveries of crude oil. This is another key issue that needs to be addressed. We hope that in the future our export will become more balanced, with a larger share of value-added goods produced in Kazakhstan.
-Is there currently a formal framework for entrepreneurial cooperation between companies in the two countries (association, agreements, contracts, etc.)? What are the most significant cooperation projects?
-Yes, there is a number of frameworks for bilateral business cooperation, the most important being the Intergovernmental commission for trade, economic, scientific and cultural cooperation. The Commission meets annually and is usually accompanied by a Romanian-Kazakh business forum, which brings together entrepreneurs for B2B meetings. The next meeting of the Commission and the business-forum will take place in Astana on September 24-25.
Furthermore, there are several cooperation agreements in place between regional and sectoral business circles that allow us to pinpoint potential projects taking into consideration local particularities. In July 2017, the Foreign Trade Chamber of Kazakhstan and the Chamber of Commerce and Industry of Romania signed a Memorandum of Cooperation in order to work on identifying and diversifying mutually beneficial sectors of the economy. More recently, the Chambers of Commerce of Atyrau (in West Kazakhstan) and Prahova signed a cooperation agreement in April 2018. Similar agreements are expected to be signed between the Chambers of Commerce of Bucharest, Astana and Almaty on September 25 and 26. There are talks underway between Aktau and Constanta on establishing a formal cooperation framework for the two port cities.
Speaking of important cooperation initiatives, we expect that in the coming years our economic partnership will be spearheaded by projects in the sphere of energy, transport and logistics, digital economy, food and agriculture, and consumer goods industry. Important companies, such as KazMunayGas International, Vard, Siveco, Rominserv, Umeb, StiloEvora, and others are currently active in the markets of Kazakhstan and Romania. We expect that more companies will join them in the near future.
-Do you appreciate that there are areas where a better partnership between governments and / or companies should be started at bilateral level?
-I believe there is a need to bridge the gap between the official and business dimensions in terms of fully exploiting the potential of priority government programs. In Kazakhstan, there is a number of high-profile projects such as Digital Kazakhstan, Kazakhstan – 2050, Nurly Zhol, Agro-industrial Complex Development Program and other, that offer advantageous conditions for foreign business.
In this regard, I would like to draw attention to the launch of Astana International Financial Centre, the International Centre for development of green technologies and investment projects and the IT start-up technology park on the basis of “EXPO 2017 Astana”. These platforms represent a very good opportunity for implementation of joint initiatives with Romanian partners.
All of these initiatives, coupled with a very favorable investment climate (Kazakhstan occupies 36th position in 2018 Doing Business rating), offer a unique chance for Romanian companies to explore the market of Kazakhstan, and use it as a springboard for expansion into other growing markets, such as Russia, China and Central-Asian region.
Let me also mention that the Government of Kazakhstan has set up specialized national companies “Kazakh Invest” (invest.gov.kz) and “Kazakh Export” (keg.kz). Operating as “one-stop shop” agencies for inbound/outbound trade and investment, they provide integrated approach and service packages, and can be very useful both for Kazakh and Romanian companies alike.
-In the field of foreign investments, what are the sectors in which companies in your country have invested in Romania and what projects are in the attention of companies in your country? What Romanian investments are now on the business market in your country?
-Kazakh national corporation “KazMunaiGas” purchased in 2007 the Rompetrol Group investing more than 3 billion USD in the largest Kazakh investment project abroad. A significant part of invested resources was used for modernization of refineries and expansion of refueling stations network. Nowadays, Rompetrol is one of the largest taxpayers to the state budget and a major player in the energy market of Romania.
Given the strategic location of the two countries along trans-continental routes, Kazakh companies are interested in exporting carbohydrates, nuclear fuel, and food products to Romania as well as use it as transshipment area for Europe-bound export. We are confident that smooth operations of KazMunaiGas International (Rompetrol) in Romania will contribute to further growth of trade turnover between our countries.
In the period from 2005 until now, direct investments from Romania to Kazakhstan amounted to 1,2 billion USD. Currently, there are more than 20 companies with participation of Romanian capital in Kazakhstan in a number of sectors ranging from IT to food industry to waste treatment.
At this stage, the economies of Kazakhstan and Romania are highly complementary. Romania is interested in securing and diversifying its energy supply. At the same time, Kazakhstan welcomes high-quality and moderately priced production of Romanian companies, with emphasis on software, digital solutions, IT and specialized equipment, shipbuilding and agriculture. We believe that it creates excellent conditions for further expansion of economic cooperation.
Finally, the Romanian diaspora in Kazakhstan (ca. 22 thousand) that functions as a bridge between the two countries in the cultural domain, can be a potentially important aspect of our trade and economic partnership.