Economic Developments - April 2017

On April 10, 2017, Areva and Kazatomprom signed a major agreement to strengthen their long-standing cooperation in the uranium mining sector in Kazakhstan. The agreement will open up new opportunities for further development and enhancement of the joint-venture Katco (Areva (51%) and Kazatomprom(49%)).

Moscow-based Expert Center for Eurasian Development has studied Central Asian and Caucasian countries in terms of their attractiveness for investment, overall business environment, political stability, and guarantees of investors’ rights. Kazakhstan took first place because of several strengths: serious economic potential, a capacious market (17 million people domestically, plus access to markets of other Eurasian Economic Union members), a legal framework etc. It however suffers from possible instability when there is power transition in the near or medium term. Other countries in descending order are: Azerbaijan, Uzbekistan, Georgia, Kyrgyzstan, Armenia, Tajikistan, and Turkmenistan in last place. Turkmenistan lags in spite of being endowed with large hydrocarbon reserves, transit potential etc because of potential interference in economic activity in the country. It has weak protection of property rights, high corruption and bureaucracy, economic dependence on hydrocarbon exports, and risk of destabilization due to crisis in Afghanistan.
 
Turkmenistan inaugurated a US$1 billion Belarussian-built potash plant on Friday, aiming to export 1.2 million tonnes of fertilisers a year to China and India as part of its drive to diversify away from natural gas exports. Speaking at the opening, Turkmen President Berdimuhamedow said the joint production facility was one of the largest in Asia and represented "the birth of a new industry" in a country reliant on natural gas exports. 

Astana Expo 2017 will open in Kazakhstan on 10 June, 2017 for a three-month run. It will be smaller in scale and shorter in duration than other Expos in the past. Its theme is “Future Energy.” The organizers project an attendance of 5 million, 85% from Kazakhstan, and 15% from abroad. The latter are mostly expected from 10 countries that make up Commonwealth of Independent States: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan and in addition, China. A significant number are also expected from Europe, Turkey and United States. The mega-event will celebrate the 25th anniversary of independence of Kazakhstan.

According to Asian Development Bank, Turkmenistan was growing at a breakneck speed of 14.7% in 2011, which slowed down to 6.5% in 2015 and to 6.2% in 2016.

Foreign Ministers of Shanghai Cooperation Organisation (SCO) member states met on 21 April in Astana to prepare for the 8-9 June meeting of heads of member states. Foreign Ministers agreed on a draft agenda for the Summit meeting next month. They agreed on a SCO Astana Declaration draft and a list of documents to be submitted for signature at the Summit. Russia expressed confidence that India and Pakistan will join SCO next month.

In 2016, the inflow of foreign direct investments (FDI) in Kazakhstan grew 40%  (US$20.6 billion)compared to 2015 (US$14.8 billion) and surpassed the previous record from 2008. Inflow of FDI has been growing steadily since 2007, but declined by 17% in 2013. 

Kazakhstan will significantly reduce its oil production in May-June in order to meet its commitment to the OPEC to cut its production by 20,000 bpd. Average oil output fell by 30,000 bpd in January. In February, the production volume slightly increased, and in March, oil output exceeded 1.7 million tons, the earlier level.

President Nazarbayev spelt out a timeline to switch the country's writing system from Cyrillic to Latin alphabet. The change should be fully effective by 2025. The move is part of Nazarbayev's push for modernization and for expanded international recognition of the country. He dismissed fears that this would render large sections of the population illiterate.

A regular meeting of Supreme Eurasian Economic Council and an informal meeting of heads of states of Collective Security Treaty Organization (CSTO) members took place in Bishkek on 14 April. Meeting of the Eurasian Economic Union focused on integration and removal of trade barriers. The meeting was attended by presidents of all member countries of the union - Kyrgyzstan, Russia, Kazakhstan, Belarus and Armenia. Decision to grant Observer status to Moldova was taken.

 

April 30, 2017
  

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About the Author

Ambassador Ashok Sajjanhar

Former Ambassador of India to Kazakhstan, Sweden and Latvia; President, Institute of Global Studies and Distinguished Fellow, Ananta Centre

Ambassador Ashok Sajjanhar belongs to the Indian Foreign Service and has acquitted his responsibilities in the diplomatic service for 34 years. He was Ambassador of India to Kazakhstan, Sweden and Latvia and has worked in senior diplomatic positions in Indian Embassies/Missions in Washington DC, Brussels, Moscow, Geneva, Tehran, Dhaka and Bangkok and also at Headquarters in India. He negotiated for India in the Uruguay Round of Multilateral Trade Negotiations and in negotiations for India-EU, India-ASEAN and India-Thailand Free Trade Agreements.

He contributed significantly to strengthening strategic ties and promoting cultural cooperation between India and USA, EU, Russia and other countries.Ambassador Sajjanhar worked as head of National Foundation for Communal Harmony to promote amity and understanding between different religions, faiths and beliefs. Ambassador Sajjanhar has been decorated by Governments of Kazakhstan and Latvia with their National Awards and by Universal Peace Federation with Title of ''Ambassador of Peace.'' Currently Ambassador Sajjanhar is President of Institute of Global Studies, New Delhi. He writes, travels and speaks extensively on issues relating to international relations, foreign policy and themes of contemporary relevance and significance. He appears widely on TV panel discussions. Ambassador Sajjanhar is interested in reading, music and travelling. His wife Madhu is an economist and an educationist. They have a son and a daughter both of who are accomplished singers. Their son passed out of Yale University and their daughter is pursuing her PhD at University of Minnesota.