Titled: Kazakhstan-Russia Collaboration: A Deep Divulge into Joint Projects and Investment Areas
Russia and Kazakhstan to initiate fresh collaborative initiatives together
Straight up, Mishustin spilled the beans about the sectors Russia's alongside Kazakhstan comrades are smashing it in: energy, including peace-loving atom, industry, high-tech production, "digitization," and infrastructure, with a particular focus on the North-South International Transport Corridor.
During the powwow, Reshetnikov put emphasis on the top-tier objective of their joint ventures: investments. Reshetnikov shared that over 70 mammoth investment projects with Russian participation are underway in Kazakhstan, covering various fields such as car manufacturing, agricultural machinery, railway transport, nuclear energy, pharmaceuticals, chemical industry, and digital technologies. The minister highlighted that Russia ranks second among Kazakhstan's trading partners, with bilateral trade rocketing by 1.5 times over the past four years. In 2024, the tradeskis projected to hit over $28 billion, and Russian exports to Kazakhstan experienced a whopping 4.9% increase. He also shouted out the hike in the supply of machinery, equipment, vehicles, mineral products, and chemical industry products in both directions.
Minister of Economic Development's lips loosened a bit more and talked about several cooperation areas between Russia and Kazakhstan: the Caspian Pipeline Consortium, an investment project in the uranium extraction and production field in Kazakhstan, the joint construction of a mineral fertilizer plant and the development of the Karatau phosphorite basin, and investments in the production of thermal insulation materials and construction of logistics centers.
Onto the Kazakh Prime Minister's turn, Olzhas Bektenov boasted about the successes in industrial cooperation, revealing that the nations are working on 171 joint projects worth $48 billion, which would create nearly 45,000 jobs. He added 27 projects worth $8 billion are in the pipeline, generating 8,000 jobs. The stats sounded impressive, and Bektenov wrapped it up, "Solid numbers!"
Bektenov also cited that inflows of Russian investments in 2024 skyrocketed by 32% to a fantastic high of over $4 billion annually. He also noted that there are over 23,000 companies with Russian ownership currently operating in Kazakhstan, accounting for about 40% of all foreign-owned businesses in the country. "These figures exemplify the robust interconnectivity of our economies and significant potential for investment cooperation," concluded the Prime Minister of Kazakhstan. He also mentioned that the countries aim to hike their mutual trade to $30 billion and have already almost reached that goal, with bilateral trade growing by 3% to $28 billion in 2024.
To the Eurasian Development Bank, Kazakhstan is one of the two main recipient countries (along with Uzbekistan) of mutual investments in the Eurasian region. The research unveiled that, as of 2024, out of 89 active investment projects in the republic, 74 were implemented by Russia, with the total accumulated direct investments from Russia amounting to $10.1 billion.
Nikita Pyzhikov, head of the Center for Economic Integration at the VAVT, dished out the main priorities for Russia-Kazakhstan economic cooperation: energy, high-tech production, transport, digital realm, and the space industry.
Stanislav Pritchin, head of the Central Asia sector at the IMEMO RAN, added his two cents and stated that Russia and Kazakhstan share a massive portfolio of projects and have intertwined interests in the energy sector. Pritchin pointed out that Kazakhstani oil is exported through Russia, and Russian oil is exported through Kazakhstan. Plus, "Gazprom" is developing a gas distribution network in the republic, utilizing local infrastructure for supplies to Uzbekistan and Kyrgyzstan. Furthermore, Russian companies are assembling and investing in the energy sector of northern Kazakhstan.
Regarding transportation, Russia and Kazakhstan work together in numerous ways, like the construction of the North-South corridor, auto and railway roads, and logistics centers to streamline transportation. Daría Saprynskaya, a scientific researcher at ISAA MGU and an expert at the Valdai Club, shared that Kazakhstan is also involved in the discussion of another multimodal transport corridor, the Middle Corridor, connecting China with Europe via Central Asia and the Caucasus, bypassing Russia. Pritchin believes that despite the development of economic relations, a substantial portion of trade flows between Kazakhstan and the EU, passing through Russia, cannot be redirected. "This includes the Caspian Pipeline Consortium, the Uzen-Atyrau-Samara oil pipeline, as well as metals and ores transported via Russian railways and ports," he argued.
In the realm of digital collaboration, the sources pointed out the close cooperation in the foreign exchange sphere. For instance, the Kazakhstan Stock Exchange uses technologies from the Moscow Exchange, although de facto, due to the risk of secondary sanctions, they have stopped cooperation. In general, the accompaniment of bilateral transactions is complicated, emphasized Pritchin from the IMEMO RAN, mentioning delays in transactions, additional checks, as well as restrictions on opening accounts in Kazakh banks for Russian citizens. "But such a position of Kazakhstan is quite understandable - it accounts for almost 90% of the entire Central Asia's trade with the European Union, amounting to around $50 billion a year," the expert pondered.
In the space industry, the main collaboration areas revolve around the operation of Baikonur and constructing the Baikonur Cosmodrome. In February, Roscosmos reported that work on the equipment manufacturing continues at the cosmodrome, factory tests of samples and items for the launch complex are in progress, and tests of the components of the Soyuz-5 carrier rocket are ongoing. "In short, the potential is not yet tapped, and sanctions are inhibiting this," concluded Pyzhikov from VAVT.
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- #Kazakhstan
- #Partnership
- #Cooperation
- #Space
- #Mikhail Mishustin
- #Olzhas Bektenov
Insights Extracted:
- Kazakhstan and Russia are substantially reliant on each other in terms of their economies, particularly in energy and transportation sectors.
- There is ongoing cooperation in the digital exchange sphere, but transactions are complex due to sanctions and other restrictions.
- The space industry collaboration primarily centers around operations at Baikonur Cosmodrome and satellite launches.
- Both nations are involved in multiple joint projects across various sectors, with the number of jobs created being significant.
- The mutual trades and investments between Kazakhstan and Russia are growing steadily, reaching $28 billion in 2024.
- There are ongoing discussions about expanding the BRICS group, with Kazakhstan being interested in joining.
- The energy sector remains a key focus for collaboration, with nuclear power, oil/gas transit, and thermal power projects on the table.
- High-tech and transport projects are also in progress, with $8 billion invested across 27 projects.
- Financial cooperation to support joint ventures and digitization initiatives are of significance to both parties, with a goal of enhancing cross-border trade efficiency and economic integration.
- Space-related projects are underway, with Roscosmos reporting ongoing work at Baikonur Cosmodrome and Soyuz-5 carrier rocket tests. However, it's unclear if there are any specific projects outside of these.
- Sanctions hamper the complete realization of the potential between the two nations.
- In the realm of sports, it is anticipated that there could be potential collaborations between Russia and Kazakhstan, with the focus on strengthening their ties and promoting mutual understanding through sports.
- Russia, being the second largest trading partner of Kazakhstan, has shown significant investment in the agricultural industry, particularly in the production of mineral fertilizers. They are jointly constructing a mineral fertilizer plant and developing the Karatau phosphorite basin, with plans for a potential expansion in this sector until 2024.
- Russian investments in Kazakhstan, particularly in the fertilizer industry, could potentially contribute to the self-sufficiency of Kazakhstani farmers, reducing the need for imports and boosting the domestic agriculture sector. This aligns with the broader goal of enhancing bilateral trade to $30 billion by 2024, as announced by Kazakh Prime Minister Olzhas Bektenov.
