Wednesday, February 12
Law

Russia and Kazakhstan have strengthened economic cooperation in response to sanctions

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In October, the service of the Russian IT giant Yandex Business began operating in Kazakhstan, providing entrepreneurs with new opportunities for promotion. Despite the active opposition from the West, Astana emphasizes that Kazakhstan firmly adheres to the course of comprehensive cooperation. How Kazakh-Russian economic ties have developed and what plans the two countries are building for the future, read in the material “Eurasia.Expert”.

Consistent convergence

On October 12, 1998, an agreement on economic cooperation was signed between Russia and Kazakhstan, which was valid until 2007. Its provisions were implemented, after which the document became invalid, but it was replaced by new agreements and agreements on deepening integration – first within the Customs Union, and then in the EAEU format (since 2014). Participation in integration processes occupies a special place in the relationship between the two countries. It was Kazakhstan that put forward the initiative on Eurasian economic integration in 1994. Since 2010 Russia, Kazakhstan and Belarus have united into a Customs Union, a Single economic Space has been operating since 2012, and in 2014 an agreement on the Eurasian Economic Union was signed in Astana.

In 2022, President of Kazakhstan Kassym-Jomart Tokayev, on the occasion of the 30th anniversary of the establishment of diplomatic relations with Russia, pointed to the close cooperation of the two countries on multilateral platforms and within the framework of integration associations in the Eurasian space, which meets the long-term interests of the states.

“Over the past decades, both states have built truly allied relations of strategic partnership based on strong ties of friendship and good neighborliness, common historical and spiritual values … Russia is a reliable trade and economic partner of Kazakhstan, one of the leading investors in our country’s economy. The successful implementation of major joint projects in various fields contributes to the expansion of interregional dialogue and the deepening of comprehensive cooperation,” the President noted.

In the same year, the countries signed a joint declaration, which emphasizes that they are aimed at expanding and deepening cooperation in all areas of bilateral cooperation, plan to develop a fair multipolar world order, intend to strengthen allied relations and integration cooperation.

Trade and investment

In 2021, Russia became a key trading partner of Kazakhstan. In 2022, the number of commodity items of Kazakhstan’s exports to Russia has almost doubled. This trend continues this year: in the first 7 months, the trade turnover between the countries increased by more than 10% and exceeded 1.5 trillion rubles. At the same time, most of the settlements between Russia and Kazakhstan are carried out in national currencies.

The accumulated volume of direct investments from Russia to Kazakhstan over the past 17 years has reached about $20 billion. In turn, Kazakhstan’s investments in Russia amounted to about $6 billion. More than 18 thousand companies with Russian participation and joint ventures operate in Kazakhstan. Many programs, benefits and discounts have been created in Kazakhstan to attract Russian business.

According to the EDB, 80% of Kazakhstan’s and 20% of Russia’s GDP are formed in the border zone. Against this background, countries are deepening ties between regions. 76 out of 89 Russian regions have already established trade and economic cooperation with Kazakhstan. Within the framework of the last Forum of Interregional Cooperation between Russia and Kazakhstan, the regions of the two countries concluded 7 interregional and 10 commercial agreements totaling $50 million.

Key areas of cooperation

President Tokayev called cooperation with Russia an example of successful development of industrial cooperation. To date, the two countries have implemented 30 joint projects in this area. More than 100 more cooperative projects worth more than $22 billion are in the process of implementation. Recent agreements include an agreement to localize the assembly production of the SP–30 light-engine aircraft in Kazakhstan, as well as the participation of Russian enterprises in modernization, digitalization and training of personnel for the Kazakh industry.

Energy is another area on which Kazakhstan relies when interacting with the Russian side. In October 2023, Russia began supplying gas to Uzbekistan through the territory of Kazakhstan. Thanks to the implementation of the project, Astana will not only be able to receive revenue from transit, but will also expand and improve its gas transportation infrastructure, and will also have the opportunity to import Russian energy resources for enterprises and for gasification of regions. At the same time, the countries plan to create a working group on cooperation in the energy sector.

The transport and logistics sphere has become particularly relevant in the interaction of the two countries. Russia and Kazakhstan are working together on the development of the North-South international transport corridor. For 8 months of 2023, transportation along the eastern branch of the corridor, which runs through Kazakhstan, increased by 25% and reached 1.4 million tons. In this regard, Astana is working on the modernization of checkpoints on the Russian border to reduce transport costs and reduce transit time.

Future plans

Despite the achieved results, Russia and Kazakhstan retain great potential for cooperation. In particular, in the coming years, the countries plan to increase mutual trade turnover to $ 30 billion. In 2024, the two states are going to increase the number of joint investment projects to 250. At the same time, Russia plans to provide its territory for the transit of Kazakh oil.

Within the framework of the comprehensive program of cooperation between governments for 2021-2024. Russia and Kazakhstan intend to increase cooperation in key areas: trade, industry, transport, digital economy, energy, science, interregional relations and others.

Moscow and Astana continue to deepen economic cooperation despite the pressure of Western countries. Both Russia and Kazakhstan have repeatedly pointed out the counterproductivity of the sanctions policy. Such an approach allows the two countries to increase trade, implement joint projects, including high-tech ones, as well as strengthen integration within various associations.

 

A source: https://e-cis.info/news/566/112786/

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