W MUSAVIR:
ASTANA: Roman Vassilenko, Deputy Minister of foreign affairs of Kazakhstan, interacted on Wednesday with a group of international journalists answer questions about his country’s development and the China-promoted Belt and Road initiative.
As aware Astana is hosting a number of international events. He said that Kazakhstan on the map gives a sense of why Kazakhstan is among the strongest supporters and key participants of China’s mega project, ‘the Belt and Road initiative’.
Unveiled by Chinese President Xi Jinping in 2013, in Astana. The Central Asian nation is the first country on the way to Europe from China if land transport is used instead of the sea. Many maps about the Belt and Road can be found in internet, but most of them are extremely vague or even misleading.
“After China and Kazakhstan, Russia comes next, and then Belarus and Ukraine”, said Vassilenko, explaining that there were two major routes being used by the railroad shipping companies that transport goods from China to Europe.
He added, “Kazakhstan has built 2,500 km of railroad since it became independent, more than any other post-Soviet country. That investment was meant to take advantage of the country’s central position in Eurasia and restore east-west connections, the Kazakh diplomat explained [in Soviet times the connections were north-south”.
Kazakhstan has also laid 4,000 km of tarmac, including a 2,700 km that makes up the Kazakh leg of the 7,000 km-long Western Europe-Western China Highway. It is already been used by shipping companies but the main activity is by rail.
Deputy Foreign minister illustrate the exponential growth of container transport. In 2010, there were zero Chinese containers shipped via Kazakhstan to Europe. In 2011, 1,200 containers were shipped. In 2017, that number grew to 200,000 containers and this year, almost 400,000 containers are expected to cross Kazakhstan. Overall, Kazakhstan expects to transit 2 million containers, including the north-south direction, by 2020. This would bring $5 billion in transit fees.
The advantage for goods companies is that they are able to send their wares from China to Europe in 15 days. In comparison, transport by ship takes between 30 and 45 days, Vassilenko said. He also explained that shipping by rail is less expensive than by air, but still more expensive than by sea ($2,000 by ship, compared to $6,000 by rail).
But experience shows that if the goods are of high value, like Hewlett Packard’s who manufacture their computers in China, or Apple’s iPhones, it is more advantageous to use the rail route. The volumes are also telling, as only 1.5 million containers are transported by rail per year compared with 15 million containers via sea link.
Addressing the media persons in Astana he said, “China is among the biggest investors in Kazakhstan, where 51 economic projects worth $28 billon are being implemented jointly with the Middle Kingdom, and not all are related to the Belt and Road initiative. Many of them, relate to industries such as petrochemicals, energy, housing construction, road construction, agriculture and processing of agricultural products, etc.”
With its 28 members, the EU remains the largest investor in Kazakhstan though, accounting for roughly 50% of the total and half of the $300 billion dollars invested in Kazakhstan over the 26 years of independence, Vassilenko said. He added that taken individually, Russia is the largest trading partner, accounting for almost 21% of Kazakhstan’s trade, while China is quickly catching up and accounts for 18% of the country’s foreign trade.
He further stressed that relations with the EU and US were also seen as a big priority. “Our goal is to ensure the balance of those relations, politically and economically”, he said, giving as example the biggest sector of the country – oil and gas – where investments have been distributed evenly, China accounting for a quarter of all investments, but the largest investor being the US, and Italy, the UK and France having also a very important share.
He also reminded that his country was among the countries who established in 1996 the Shanghai Cooperation Organization [with Russia, China, Kyrgyzstan, Tajikistan, as a structure serving as a mechanism for jointly addressing common issues, developing not just security cooperation, as it was the case originally, but also economic cooperation.
When asked about the relation with India and UAE, the diplomat said we already have great relation with both the countries. With India we have already started 72 hour visa free regime for passengers having transit through Kazakhstan. Joining of India in SCO is also a great achievement towards our good ties with them. We are supplying our Uranium to India. In our digital Kazakhstan program we will be inviting software engineers from Indian IT hub, which will also add in bonding of the ties.
We have friendly ties with UAE also. For Financial Centre we are almost following the steps Dubai has followed for its growth. We started Visa free regime from March. Mubadala investment fund is one of the largest investor. Abu Dhabi Plaza is coming in the heart of city. Recent visit of our president to UAE resulted in commercial agreements worth $7 billion including construction of biggest petrochemical plant by Borealis near western part of the country, which is a joint venture with Abu Dhabi’s Mubadala. This Austria based company will be constructing the plant with major share from Mubadala approximately tune to 60%.
We have very good relations with Egypt, our relation with Egypt go back to the history even in past 26 years of independence. When Egypt finalizes economic talks on Eurasia our economy will definitely grow. Egypt is very Populated Muslim Arab country and since our first Summit in OIC Summit last year it has been Presidents vision to modernize the Muslim Community like that of Egypt. We supply grain to Egypt before also and now also our ties and business will boost.