Investment climate and economic conditions
Investment climate and Kazakhstan and Germany’s economic conditions were among the issues discussed during the session, with the delegations’ heads setting forth their strong interest in enhancing the trade and economic and investment cooperation. The session reached agreement in principle to formulate, as soon as possible, and conclude a high-level road map setting out economic spheres of interaction between the countries and focused on targeted projects in the real economic sectors, the Kazakh Foreign Ministry informed.
This will be a springboard for a new stage in the bilateral cooperation aimed at promoting and modernizing the Kazakh economy, bringing state-of-the-art technologies from German and creating output of high finish goods in Kazakhstan.
Bilateral trade and economic cooperation between Kazakhstan and Germany
The session took up the issues on the bilateral trade and economic cooperation between Kazakhstan and Germany in energy and energy efficiency development, renewable energy sources, environment, agriculture, industries, technology transfer, transport and logistics, housing and public utilities, health, education, tourism and intellectual property protection. 4 investment projects involving German capital in excess of US$183 in commerce, industries and renewable energy sources were implemented in Kazakhstan in 2018, creating around 400 new workplaces.
The co-chairmen of the intergovernmental working group spoke of the ongoing economic situation in their countries in light of the recent political events, as well as of the current world economy development and challenges to it arising from the trade wars. Against the backdrop of turbulence in global financial markets and the long-standing sanctions policies of the leading actors, both parties noted the considerable growth in the trade turnover between Kazakhstan and Germany in 2018. Reportedly over 90% of German investments in the Kazakh economy are concentrated in processing, chemical industries, production of building materials and agribusiness.
As the Kazakh co-chairman of the working group said Germany is among key political and leading trade and economic partners of Kazakhstan in the EU, as well as one of the priority countries of long-run export interest to Kazakhstan.
Kosherbayev briefed German partners on the government policy’s priorities to encourage investments geared towards a favorable investment climate, an improved investment infrastructure and collaboration with foreign investors. He proposed to do his utmost to widespread implementation of joint investment projects and to greater production activities of German companies in Kazakhstan.
“A comprehensive ecosystem to attract investment is well under modernization. The investment climate is being aligned with the OECD standards. Significant efforts are made to set up direct engagement – starting with foreign embassies ending with local executive bodies. We will be working to make our joint investment projects, as well as potential proposals to locate productions within Kazakhstan, come to fruition”, the Kazakh Deputy Foreign Minister said.
Kazakh Invest National Company acting as a negotiator on behalf of the Kazakh Government told the investors the state support measures and investment projects support measures and presented German investors with its projects.
“Our pipeline includes 174 projects for over US$40.1bn involving foreign investors, largely represented in agribusiness and mining and metallurgical industries, petrochemical production, mechanical engineering, infrastructure and commence. The company, widely represented abroad and having branches in within the country, renders a full range of support services for investment projects from ideas to their implementation and in the post-investment period”, Deputy Chairman of the Board of National Company “Kazakh Invest”, Ruslan Issatayev, said.
The German delegation’s head outlined the role of Kazakhstan citing it as an important partner of Germany in the region, highly evaluated the dynamic trade and economic and investment cooperation development between the two States, pointing to permanent interest of German business to the Kazakh market. According to his speech, new opportunities to step up a wide-ranging interaction between the two countries in the field of economics and investments open up as some barriers fall off the agenda.
“Our relations have a large, not yet been fully used potential, as well as the niches to which specific content could be ramped up. Kazakhstan remains our key and most important partner in Central Asia. The German economy has a stake in wide participation in modernizing the Kazakh economy and is willing to make its modest contribution in this area”, Ekhart Franz said.
In 2019 the parties set plans to carry out a joint project with the German factory for meat processing and food production Tönnies (annual turnover equals 6.3 billion euros). The company intends to invest to set up a full processing cycle meat plant with a feed yard, meat combine and distribution centers.
Construction projects of facilities in renewable energy sources jointly with Sun Farming and Prisma Solar are under development.
The bilateral meetings featured the possibility to establish a joint waste-management enterprise in the Zhambyl region by Germany’s FB Waste Recycling, with local Ecozher LLP could be its potential partner.
The 50 million-euro project’s implementation will make it possible to recycle 150 thousand tons of solid waste a year and generate up to 5 MWt/h of electricity, creating 150 new workplaces in the region.
The Kazakh delegation met the leadership of one of the leading manufactures of agriculture machinery CLASS. The German side agreed to set up agriculture machinery production in Kazakhstan following the meeting. The meeting highlighted the agreement saying CLASS will choose Kazakh enterprises to locate by 30% in the fifth year once the production is established.
The Kazakh delegation also held talks with the deputies of the German Bundestag, the leaders of the German Committee on Eastern European Economic Relations and the Community to promote Germany’s economic cooperation, as well as partook in a visit to the scientific and technological park Berlin-Adlershof bringing together over 500 companies and research institutes in photonics, optics, renewable energy sources and biotechnology.
At the end of the day, the session of the intergovernmental working group set out the beginning of a brand-new stage in the economic cooperation between the two States and readiness of both parties to a gradual and wide implementation of the economic projects that will be included in the road map of cooperation for years to come being developed jointly.
For reference, the intergovernmental working group is the main body that coordinates trade and economic cooperation between Kazakhstan and Germany and holds regular partnership dialogue at the intergovernmental level.