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Kairat Sarybay on economic diplomacy of Kazakhstan in the center of Europe

18 June 2019 16:00

NUR-SULTAN. KAZINFORM Kazinform News Agency offers its readers an article by Kazakh Ambassador to Austria and Slovenia, Permanent Representative to international organizations in Vienna Kairat Sarybay themed Economic diplomacy of Kazakhstan in the heart of Europe.

Economic diplomacy has always played a special role in the Kazakh Foreign Affairs Ministry's activities. The country's foreign policy places emphasis on promoting trade and economic cooperation with foreign partners and attracting foreign investments.

Key tasks of economic cooperation with Austria and Slovenia are transfer of competences, technologies and localization of European production in Kazakhstan.

Austria is one of the leading and reliable trading partners of Kazakhstan in Europe. The sales in 2018 grew by 45% to reach almost EUR 1.6 billion accounting mainly for oil and petrochemicals. Each third liter of gasoline or diesel in Austria is made of Kazakhstan's crude oil. For the past 10 years Austria channeled more than EUR 5 billion in Kazakhstan. Kazakhstan's investments into Austria made USD 25.3 million since 1992.

One of the largest Austrian investors in Kazakhstan is OMV Oil Company. Currently, Kazakhstan and Borealis AG Company, with its head office in Vienna, Austria, negotiate an issue on construction of a petrochemical complex in Atyrau region. Borealis Company is one of the world's largest producers of polyethylene. The project supposes investments up to USD 6.5 billion to produce 1.25 million tons of polypropylene a year.

As is known, Austria boasts great experience in the sphere of development of new technologies and innovation solutions. Last year Austria infused about EUR 12.3 billion into research, development and engineering that is 3.19% of the country's GDP. The Austrian economy can propose technological solutions which could be integrated into large productions. For example, Frauscher Sensortechnik GmbH jointly with Kazakhstan Temir Zholy National Company JSC realize in Kazakhstan a project on providing railways with inductive sensing technologies and the state-of-the-art system of axles count.

Austria is the world's leader in the development of green technologies. Last year, the share of renewable energy accounted for 70% of the overall power production. Austria's hydropower engineering takes the lead in the country's power sector. The main biofuel products are wood substance (fuel wood and pellets), biowaste (landfill gas) and liquid biofuel. For example, fuel pellets used for home heating for over than 30 years have virtually replaced residual fuel oil as a fuel material from the local market.

In 2018, the Kazakh Embassy jointly with high-technology Carinthia companies initiated a project on building the national solar energy center in Turkestan. The Solar Consortium and Green Technologies International Center of Kazakhstan signed the pre-contract on cooperation. The source of financing of the projects is currently being sought for.

Slovenia also has high-quality technological know-how, in particular, in the sphere of digitalization and pharmaceuticals.

There are 19 enterprises with participation of Slovenian capital in Kazakhstan, including 8 joint ventures and 11 enterprises with 100% participation of Slovenian capital in pharmaceuticals, renewables, engineering, telecommunications (KRKA, Gorenje, Lek, Bisol Group, DUOL, Iskratel, etc.).

It is noteworthy that Slovenian products occupy the substantial part of Kazakhstan's pharmaceutical market. The talks on location of drug preparation production in Kazakhstan are underway. Besides, Slovenia is ready to share practice in using Block Chain, Big Data IT technologies, water resources management, energy efficiency, green technologies, etc.

On September 28-29 last year the Almaty administration's project took the first place in the Smart City 2018, the European forum of smart cities, for implementing the complex transport system reform. This achievement stirred great interest in further broadening of cooperation between the nations.

Austria and Slovenia have great experience in the sphere of tourism. Austria's tourist market ranks 6th in Europe and 11th in the world. The country boasts successful approaches and unique universities for training staff for tourist industry. For example, the Salzburg Institute of Tourism and Hotel Management offers both high-level theory and practice. The sides work upon the signing of the memorandum of cooperation with the Salzburg Institute.

Austrian Master Concept developed the master plan for the development of a mountain cluster in Almaty. According to estimates of the Austrian experts, investments up to USD 1.5 billion will pay off in 7-10 years up to USD 2 billion annually. The key is the creation of more than 20,000 new workplaces.

The Doppelmayr Group, the world's leading manufacturer of ropeways, cable cars and ski lifts, has been working in Kazakhstan for more than 10 years. The company implemented two unique projects at the Shymbulak and Akbulak ski resorts which have the longest cableways in Central Asia. Presently, the company winds up the processes of construction of the chair lifts at the Lesnaya Skazka ski resort situated 30 km away from Almaty.

Additionally, Doppelmayr Group boasts considerable experience in mineral resources transportation via cable systems, one of the best ways of mineral resources transportation in mountainous and uneven country. The Austrian company made a presentation of its potential to Sokolov-Sarybai Mining and Processing Enterprise JSC which specializes in extraction and processing of iron ore.

In 2018, Doppelmayr Group came up with an idea to use cable systems in public transport and integrate them into the existing infrastructure of Kazakhstani cities. It was noted that cable systems are highly environmentally friendly and do not rely on city traffic.

Such global players in transport and logistics sector as Kapsch TrafficCom AG and Gebrüder Weiss GmbH in Austria and the Port of Koper, one of the largest ports in Slovenia, are of particular interest for Kazakhstani specialists. The annual cargo turnover of the port totaled 24 million tons in 2018.
Kazakhstan and Slovenia can potentially cooperate in terms of training of Kazakhstani specialists from Aktau at the University of Primorska in Koper.

Over the past five years the Kazakhstan-Slovenia Business Club (KSBC) has proved to become an important and active institute of cooperation between the economies of the two countries. Moreover, KSBC President Dejan Stancer is the official representative of National Company Kazakh Invest JSC in Slovenia and that, in its turn, adds momentum to the bilateral economic relations.

The Kazakhstan-Slovenia Business Forum which was organized last year within the framework of the Intergovernmental Commission with the support of NC Kazakh Invest JSC and KSBC sought to showcase investment opportunities of the two countries. On the sidelines of the forum Kazakhstani and Slovenian companies held a number of meetings. The inauguration ceremony of then KSBC office in Nur-Sultan wrapped up the forum. KSBC business delegations of companies which are keen to cooperate and work in the domestic market visit Kazakhstan on a regular basis.

Direct economic ties between the regions of Kazakhstan and federal states of Austria and municipalities of Slovenia have the vast potential. To date East Kazakhstan region and federal state of Styria, South Kazakhstan region and Carinthia, Pavlodar region and Upper Austria as well as the cities of Almaty and Graz have signed the memorandums of cooperation. Analogous memorandums are expected to be signed by the capital cities of Nur-Sultan and Ljubljana, Wels and Uralsk, Aktau and Koper. These documents will serve as the foundation for regional cooperation and specific joint projects.

Honorary consuls of Kazakhstan play an important role in the stimulation of economic, scientific and cultural ties and the promotion of tourism potential between Kazakhstan, Austria and Slovenia. The Honorary Consulates of Kazakhstan function in seven federal states of Austria (Styria, Burgenland, Salzburg, Vorarlberg, Upper Austria, Tyrol, and Lower Austria) and two cities of Slovenia (Maribor and Nova Gorica). There are plans to unveil the Honorary Consulate of Kazakhstan in Carinthia in 2019.

The honorary consuls greatly contribute to the promotion of foreign economic priorities of Kazakhstan, especially in terms of attraction of foreign investments. For instance, the visit of a Track Tec Group delegation to Kazakhstan was organized in April 2019 with the support of Honorary Consul of Kazakhstan in Salzburg Karl Prammer. During the visit the representatives of the company discussed with NC Kazakhstan Temir Zholy JSC potential investments into Kazakhstan's railway infrastructure.

In March 2019, Honorary Consul of Kazakhstan in Lower Austria Alexander Kiss arranged a presentation of HELIOVIS AG which participated in the International exhibition EXPO-2017 and unveiled its project HELIOtube at the Energy Best Practice pavilion.

Honorary Consul of Kazakhstan in Styria Günter Nebel helped organize bilateral meetings with the local government and the Federal Chamber of Economy to discuss the issues of bilateral cooperation in the sphere of culture, education, healthcare and tourism.

As part of the visits of Central Asian ambassadors to the federal state, Honorary Consul of Kazakhstan in Vorarlberg Hanno Ulmer helped arrange meetings with well-known Austrian companies, such as Doppelmayr Group, Zumtobel Group, Liebherr Group and Bertsch Group. The visits were aimed at familiarizing with the production facilities of the companies and technologies they are using to later apply them in Central Asian countries.

The First Kazakh-Austrian Forum ‘Austrian Technologies Serving Sustainable Development of Kazakhstan' held in June 2018 in the Kazakh capital became a remarkable event in the Kazakh-Austrian interregional cooperation. Those attending the forum were the representatives of political and business communities of the two countries' capitals and regions and Honorary Consul of Kazakhstan in Austria. The representatives of eight regional administrations of Kazakhstan made presentations about their regions and the current projects and discussed specific steps of application of Austrian technologies in priority sectors of Kazakhstan. 26 Austrian companies represented their advanced technologies and discussed their use in Kazakhstan. The II Forum of Regions is planned to be held in Austria in 2020.

As is known, Vienna has been one of the global centers of international diplomacy where a number of international organizations including UNIDO, OPEC, OFID and OSCE are headquartered. These organizations are of huge interest for Kazakhstan.

The experience of the UNIDO and a high level of its consulting services are proved by a constant rise in the number of projects launched by the Organization in various countries of the world. The technical support of industrial development provided by the UNIDO has an independent and transparent character and is not aimed at gaining profit. Unlike similar services offered by other international consulting companies, the UNIDO does not pursue commercial purposes and works for the name of industrial welfare of the member countries. The cooperation with the UNIDO has a long-term character which means that the UNIDO will help the government of Kazakhstan in implementation of the project in a long-term perspective, in updating and complementing it based on the principle of sustainable development.

The OFID is an intergovernmental financial institute of development founded the by OPEC member countries for assisting countries in basic infrastructure development, improvement of provision of public services as well as promotion of production, competitiveness and trade.
Unlike other international financial organizations, the OFID does not interfere with politics and legislation of recipient countries since its goal is to fight poverty.

The OFID may also be of interest to Kazakhstan as a source of additional financing for development projects implemented by other international financial organizations. The Fund is ADB's second largest financial partner after the World Bank, and also cooperates closely with the Islamic Development Bank.

On the platform of the UN Office at Vienna, the Permanent Mission of Kazakhstan actively interacts with the International Atomic Energy Agency (IAEA), which, in addition to nuclear non-proliferation and nuclear safety, also aims at promoting peaceful uses of nuclear energy and sustainable development.
In particular, the IAEA laboratories in Seibersdorf are studying the practical utilization of nuclear technologies in medicine - in the fight against cancer, in agriculture - in horticulture, animal husbandry, food security, and other economic sectors.

Following the February 2018 visit to Seibersdorf paid by representatives of subordinate organizations and scientific institutions of Kazakhstan's Ministry of Agriculture, Ministry of Health, and Ministry of Education and Science, we are exploring the issues of the further use of atomic technologies in various industries. For instance, jointly with the Research Institute for Biological Safety Problems of the Science Committee of the Ministry of Education and Science of the Republic of Kazakhstan, we are studying the matter of conducting internships for employees of the Institute for the Development of Vaccines against Viral Pathogens.

Within 2019 and 2020, together with the relevant ministries and departments, we plan to explore the matter of water security, as well as a possible visit to the IAEA to be paid by Kazakhstan's delegation so that to exchange experiences in this field.

In light of the new targets on the economization of Kazakhstan's foreign policy, the OSCE's second dimension can be seen as an effective platform for promoting the national economic interests.

Kazakhstan's priorities in the second dimension are the promotion of national interests in the field of good governance, water issues, green economy, and economy digitalization. Besides, the OSCE's Economic and Environmental Dimension can contribute to greater compatibility of regional economic and transport integration processes and, ultimately, lead to the establishment of a common economic space from Vancouver to Vladivostok in the spirit of the Astana Declaration adopted at the OSCE Summit in 2010. Promoting enhanced interaction between integration associations, in particular, the idea of Greater Eurasia, which will unite the Eurasian Economic Union, the Silk Road Economic Belt, and the European Union into a single integration project of the 21st century, is the central focus of our work within the framework of the OSCE.

Kazakhstan has proposed the creation of an OSCE Thematic Center on Sustainable Interconnectivity. The center's activity is to be targeted at analytical and research efforts on interconnectedness in its broad interpretation, in particular, the implementation of projects in the field of sustainable interconnectedness, including issues of good governance, green economy, development of new technologies, disaster prevention, energy security, and promotion of trade and transport across the OSCE space.

The Thematic Center is meant to be located at the premises of the Astana International Financial Centre (AIFC), and this, in turn, will create synergy with the International Center for Green Technology and the International Hub of IT Startups."

Keywords: Foreign policy ,