Kazakhstan is open to new ideas and technologies, ready to collaborate with global companies, assisting them in integrating their innovative solutions into the country's economy. This was stated in an interview with the correspondent of the business information center Kapital.kz by the Deputy Minister of Foreign Affairs of Kazakhstan, Alibek Kuantyrov.
— Alibek Sakenovich, a round table on global investments recently took place in Kazakhstan. What are the main outcomes of this meeting?
— Yes, this is indeed an important event. This year we held the Kazakhstan Round Table on Global Investments-2024 (KGIR-2024), which brought together representatives of the global business community, investors, and leaders of major international corporations. One of the most significant highlights was the signing of an agreement with the Chinese company CHN Energy, which is prepared to invest $4 billion in the production of coal chemical products. This project is not only substantial in terms of investment volume but is also crucial for the development of Kazakhstan's manufacturing industry. We always emphasize that our country is not just a resource-driven economy but an important center for the processing and production of high-tech goods. We see enormous potential in converting coal into higher-value products such as carbonates and propylene. This sector could become a vital growth driver for cities like Aksu, Shakhtinsk, Temirtau, and Ekibastuz, where coal production plays a key role in the economy. In the current context of moving away from coal-fired energy generation, the coal industry needs further momentum through a new strategy for coal companies that gradually transitions to coal chemistry. Moreover, our country ranks among the top ten in the world in coal reserves.
— It is known that an agreement has been signed with AstraZeneca. Could you elaborate on the impact of such companies entering Kazakhstan?
— This project plays a crucial role in implementing the strategic initiatives of the President of the Republic of Kazakhstan, Kassym-Jomart Tokayev, aimed at increasing the share of domestic medicines and medical products to 50%. The localization of the production of critically important drugs by Big Pharma companies is a key step toward these goals and helps reduce dependence on imports and lower healthcare costs. The transfer of modern technologies and facilities to local partners enables companies like AstraZeneca to reduce costs for the Kazakh healthcare system and expand patient access to necessary medications.
It is also worth noting that a long-term contract has already been signed with Pfizer for the localization of production in Kazakhstan, and in October of this year, production of Roche's products commenced. The international pharmaceutical group Polpharma is also successfully operating in the market. All of this is the result of many years of efforts to attract major pharmaceutical companies to Kazakhstan.
Simply put, we still procure these medications from abroad, which is why we aim to reduce costs through the localization of pharmaceutical production.
— It can also be noted that the number of Russian companies in Kazakhstan is decreasing. Is this really the case?
— The decrease in the number of Russian companies in Kazakhstan is primarily linked to market processes and is not unusual. However, there was a significant increase in such companies in 2022, so it would be more appropriate to compare current data with figures from before 2022. This growth was a response to changes in the global economy when many companies and entrepreneurs relocated their businesses to Kazakhstan to continue operating under sanctions. This led to a temporary wave of registrations. The market has now stabilized.
It is important to note that in 2023, Russia ranked second among countries investing in Kazakhstan. The exit of some companies is a natural process related to the market's adaptation to sanctions and external economic changes.
— In recent years, there has also been a decline in foreign investments in the oil and gas sector. What do you have to say about this?
— Investments in Kazakhstan's oil and gas sector remain significant; however, the share of foreign investments in the extractive industry has decreased from 75% to 36% over the past 10 years. This is due to the diversification of interests and positive changes in the investment climate. The slowdown in investment rates can be attributed to the completion of major projects, such as the Future Expansion Project of Tengiz. This project, valued at approximately $50 billion, is one of the largest in the country's and the world's history, and its implementation has been ongoing for over 10 years. The main works on the project have already been completed, and now such large investments are no longer needed at this stage.
It is important to note that these changes do not imply a decline in interest in Kazakhstan as an oil and gas player. Rather, it is a transitional phase where the country is actively diversifying its economy and attracting investments in other sectors. We are witnessing growth in investments in manufacturing, agriculture, IT, infrastructure, transport, logistics, and renewable energy sources (RES).
— What do you think will be the contribution of investments in Kazakhstan's economy in 2024?
— In the first quarter of 2024, Kazakhstan attracted nearly $10 billion in direct foreign investments, which is a good result. New factories have already been opened, such as Carlsberg in the Almaty region and Coca-Cola in Shymkent, and the construction of major facilities, such as the Kia plant in the Kostanay region, is ongoing. It is worth noting that Kia is investing in a joint venture and the construction of a factory outside of the Republic of Korea for the first time in history.
Additionally, new production capacities will soon be opened – a tungsten ore processing plant and a ceramic tile manufacturing plant. All these projects create thousands of jobs and provide new opportunities for local companies and citizens.
There is also significant potential in the extraction and processing of rare and rare earth metals. According to the World Bank, Kazakhstan has over 5,000 unexplored deposits valued at more than $46 trillion. Investors from Asia, Europe, and America are already showing interest in this area.
Kazakhstan is actively moving towards achieving carbon neutrality by 2060. By 2030, we plan to increase the share of RES in the country from 6% to 15%. To achieve this, large investments are being attracted for projects such as “Hyrasia One” by the German company Svevind, which envisions the production of environmentally friendly hydrogen in the Mangistau region and is valued at $50 billion.
Finally, our country continues to be one of the largest wheat producers in the world, harvesting more than 10 million tons annually. Modern grain processing technologies allow for the efficient production of fertilizers, food additives, essential amino acids, animal feed, bioplastics, and vitamins. Thus, within the framework of KGIR-2024, the Akmolinsk region's akimat, the national company “Kazakh Invest,” and Dalian Hesheng Holding Group signed an agreement worth $650 million for the implementation of a wheat deep processing project.
— How do you assess the work on attracting investments overall?
— We actively collaborate with international investors and strive to create the most comfortable conditions for them to operate in Kazakhstan. The national company “Kazakh Invest” plays a key role in attracting foreign investments and facilitating the launch of new productions in Kazakhstan. In 2023, with the support of “Kazakh Invest,” 47 new productions with foreign participation worth approximately $1.1 billion were put into operation, demonstrating a high level of trust from foreign investors in Kazakhstan's economy. In the first ten months of this year, with the support of the national company, 20 projects worth around one billion dollars have already been launched.
An important tool for attracting investments is the Investment Headquarters at the level of the First Deputy Prime Minister. It helps promptly address investor issues and coordinate actions among various government agencies. Additionally, a Fast Track support system for investment projects has been implemented — a “green corridor.” This system provides expedited and simplified processing of all necessary procedures, as well as the possibility of using ready-made “turnkey” solutions.