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 KAZAKHSTAN International Business Magazine №3, 2010
 Germany and Kazakhstan: On reciprocal tracks
Germany and Kazakhstan: On reciprocal tracks

2010 is marked as the Year of Germany in Kazakhstan. In the framework of this, the Federal Chancellor Angela Merkel paid her official visit to our country for the first time in the mid of July. The investment memorandums, signed during her visit, brought the economic cooperation between Kazakhstan and Germany to a qualitatively new level. In this concern, the Kazakhstan magazine addressed the ambassadors of the two states with the questions on problems and prospects of development of bilateral relations.

Rainer Eugen Schlageter, Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to the Republic of Kazakhstan

It is common knowledge that the recession impacted the indicators of trade turnover between Germany and Kazakhstan. In this concern, what is the current situation in this area?

Indeed we had to notice a significant reduction of bilateral trade turnover, caused by the global recession and other factors. This especially affected German export in the non-raw material sector. However, in the first months of 2010, we again recorded growth, and we are currently waiting to see how sustainable this trend will remain. The recession consequences for large Kazakhstani banks also affect the mechanism of insurance of export credits and, today, it hampers rapid expansion of trade between our countries. At the same time, we hope that the current barriers will be eliminated in the near future.

Chancellor of Germany Angela Merkel visited Kazakhstan recently. What are the major results of this visit?

The official visit of the Chancellor of Germany on July 18 of this year again underlined the good relations between FRG and RK. At a meeting with the President of Kazakhstan, the Prime-Minister and other key figures, they discussed topics of high importance for bilateral relations as well as the issues related to regional and global content. Let me just name a few key points in order to schematically present the range of discussed issues. These are Afghanistan, the OSCE, the global economic horizons, cooperation in the field of education, protection of the environment and the atmosphere. Together with President Nursultan Nazarbayev, the Chancellor of Germany attended the Kazakhstani-German business forum, at which over 30 contracts between the enterprises and organizations from both sides were signed.

How is the Year of Germany in Kazakhstan going? What events in the economic sector have taken place? What events are planned before the end of 2010?

We are glad and proud to see the course of the Year of Germany in Kazakhstan. While conducting the program events, such as the exhibition “United Buddy Bears” in Astana or the scientific conferences in Almaty, we encountered great interest and found live feed-back; therefore, we can already be upbeat about the results. In the field of economy not only such events as the German Investment Forum (Astana, March 12, 2010), but also other important events prove the interest of Germany for Kazakhstan. We can add here a three week-long Roadshow from BMW that took place throughout Kazakhstan in May and June, or the international forum “Innovative Medical Equipment in Central Asia” (Astana, April 22, 2010). No less interest is shown to new technologies, as was demonstrated by the mobile exhibition of DENA-technologies, called Renewables – Made in Germany, that took place in Almaty on July 5, 2010.

The next big event was the German-Kazakhstani innovative dialogue, organized in Almaty on July 5, 2010 by German Society for Technical Cooperation (GTZ) in cooperation with the Ministry of Economic Development and Trade, Ministry of Industry and New Technology.

Furthermore, the program of future events includes the Day of German Economy, scheduled for October 1, 2010 as well as participation in the KIOGE’2010 international oil and gas exhibition and conference, just to name a few upcoming events. With this wide range of events we hope to achieve positive effects and new impulses for the bilateral economic development.

One of the major conditions for successful implementation of the AIID program in Kazakhstan is the development of human potential. In this concern, what is the progress of cooperation between our countries in the field of education?

Germany is highly interested in expansion of cooperation with Kazakhstan in the field of education. Of course, we are committed to the intensification of teaching in the German language not only to the ethnic Germans, but for all school and university students in Kazakhstan. Such institutions as the German Academic Exchange Service (DAAD) provide the talented Kazakhstani students with scholarships for studying in Germany. The most noticeable landmark, a sort of "beacon", is the Kazakh-German University (KGU) in Almaty. On July 15, 2010 President Nazarbayev ratified the agreement on further cooperation in the development of this academic institution. We want to expand the KGU operation as soon as possible, and put clear focus on engineering academic programs that are important for your country. Needless to say, that for expansion and modernization of the KGU we need additional buildings, for which we count on the support of the government of Kazakhstan.

In conclusion, what are your impressions of Kazakhstan? How do you see its future?

I gladly live in Astana, including in winter time. The city is rapidly growing and it became a real capital city. I travelled through many places in Kazakhstan and have seen many things, although still not enough. Kazakhstan is a very beautiful and diverse country; wherever I go I meet hospitable people. Kazakhstan has mineral resources, a young population, ambitious programs of further development in the economic and social sectors as well as smart political leadership. The development of Kazakhstan will become a real Success Story!

Nurlan Onzhanov, Ambassador Extraordinary and Plenipotentiary of the Republic of Kazakhstan to the Federal Republic of Germany.

Nurlan Baymoldanovich, when we are talking about the investment aspect of Kazakhstani-German cooperation, first of all, we imply the implementation of projects in Kazakhstan. Do Kazakhstani investors have interest in developing of business in the market of Germany?

We well understand that the trade and economic partnership between Kazakhstan and Germany must not be "unilateral movement" and it can be totally successful only when the cooperation is supported in both directions. The potential of our cooperation is not exhausted only by the presence of German products in the market of Kazakhstan. Therefore, we face a certain goal – in accordance with the Path to Europe state program to attract advanced German knowledge and technologies, organize competitive production in Kazakhstan of products with high added value, and then create conditions for the Kazakhstani investors entering the market of Germany and Europe in general. We are happy to note that a number of successful projects with the attraction of German investments in the Kazakhstan’s economy, including the production sector, is inevitably growing, and this is an important step in the direction of modernization in our country.

Along with that, we should not forget about Kazakhstani investments in Germany’s economy, the amount of which reaches some $4 billion, as of today.

This means that although there are not many projects, implemented by Kazakhstani investors in Germany yet, their number can go up in due course. Among the current projects we can highlight the successful operation of Kazakhmys Corporation that owns a subsidiary company in Hettshtedt city of Saxony-Anhalt federal land – Mansfelder Kupfer GmbH, the large copper smelter. Another example is Petraluxe GmbH JV that launched the production of construction material in the city of Aschersleben.

How would you access the level of German companies’ awareness about the investment opportunities in our country? What role did the Year of Kazakhstan in Germany (2009) play here?

The Year of Kazakhstan in Germany is the first large-scale event of our republic in Europe that, no doubt, had great importance for improving our image international wide. In the framework of the Year, we conducted more than 100 events throughout Germany, and 27 of them were of economic nature. We signed 23 investment and economic documents.

Speaking of the routine operation of the embassy, we, in close cooperation with Germany’s chambers of commerce and economic institutions, hold Days of Kazakhstan’s economy in large industrial and financial centers of FRG on a regular basis that helps develop and strengthen business ties. We pay a great deal of attention to practical work with political and business circles in Germany and provide the most topical information about the investment climate in Kazakhstan. Therefore, the concerned German companies are quite well aware of these issues.

The specially established joint structures also play a big role here. They are the German-Kazakh Intergovernmental Working Group on Economic Cooperation, the Working Group on Cooperation with Kazakhstan within the Union of Central and Eastern Europe (OMV), the German Economic Club in Kazakhstan and the recently established Kazakh-German Business Council and others.

Overall, I would like to underline that in the last two years alone we held three official visits at presidential level, each of which had a substantial business component. Thus, in the course of the recent visit of Chancellor of Germany Angela Merkel to Kazakhstan, the following bilateral documents were executed: 9 intergovernmental and interagency documents and about 40 economic agreements and contracts to the amount of more than 2.2 billion Euros. I believe these results are evidence of the high level of our collaboration with the German partners.

Today, major attention is paid to the events within the Year of Germany in Kazakhstan. What large joint economic events of this year would you highlight in Germany?

In 2010 we had a number of important events, important for the Kazakh-German economic cooperation.

In January Kazakhstan’s delegation attended the International Green Week 2010 agricultural exhibition in Germany. The result of the trip was the implementation by JSC KazAgro and Claas Company under support of the Machine Building Alliance of Kazakhstan of a project of launching a manufacturing line for assembling of agricultural tractors of the famous Xerion brand in Akkol, the district center of the Akmola Oblast.

In March Kazakhstan was represented at ITB’2010, the biggest international tourism industry exhibition. Kazakhstan’s stand took the first place in the contest, organized among the countries of the Asia-Pacific region, leaving behind South Korea and Malaysia.

Kazakhstan’s delegation participated in the work of "For Foreign Economy of Saxony" where it successfully presented Kazakhstan’s State Program of Accelerated Industrial and Innovative Development of the Republic of Kazakhstan.

Cologne hosted an international workshop conference, devoted to the industrial energy efficiency in the Central Asian countries, where our delegation also made an active contribution.

In April, Kazakhstan’s delegation, headed by the First Deputy Minister of Industry and New Technologies Albert Rau, visited Berlin, meeting the leadership of the Federal Ministry of Economy and Technologies, Foreign Affairs Ministry, Committee on Eastern European Economic Relations (OA), Association of Entrepreneurs of Germany, cooperating with the countries of East and Central Europe (OMV), German Machinery and Plant Manufacturers Association (VDMA), German Chambers of Commerce and Industry (DIHK), as well as leading German enterprises, including RWE, BASF, Siemens, Claas, Lemken, EADS, Rheinmetall, Fraunhofer, Hochtief, Krone, Elpro, Capital Energy World, ENCON Technologies, OHB Technology, Europack, and Laca Wind Energy.

On May 6, we held another session of the Kazakh-German Intergovernmental Working Group on Trade Cooperation in Berlin. These and other events allowed us to prepare a few particular projects, the commercial agreements on which were signed during the visit of the Chancellor of Germany to Astana.

What is your opinion about the success factors of the Germany’s economy, its strengths and what German know-how could be applied in Kazakhstan?

It is common knowledge that Germany is the leading country with regards to export". Having plants in various countries, FRG meticulously continues retaining the manufacturing of major equipment at home for the strategic machine building sector, therefore, retaining the production technology. This means that big machine building equipment is produced in Germany while completing parts and accompanying equipment are produced abroad, where the raw materials and labor force are cheaper. This mechanism allows maintaining the famous German quality and at the same time keeping leading positions in the export of the country.

The strength of the Germany’s economy is the substantial share of small and medium enterprises. 99% of all enterprises in FRG are part of the SME sector, paying the turnover tax. It involves 6 of 10 employed. Many German enterprises are family businesses that define their faithful attitude to work, discipline and long term planning.

The next success elements, of course, are the constant development of science and education, without which no know-how and progress are possible. At the same time, the sound approach to any project and problem allows solving the set tasks creatively, with low costs, and focusing on the future, with care for the next generation. For instance, let us consider the existing system of processing the industrial and household waste that ensures a non-waste system, energy saving and environmental protection.

Another important point is that Germany does not possess significant reserves of mineral resources; moreover, it depends on the import of energy resources and metallic ore. The country imports about 100% of metallic extractable resources, consumed in the country, 97% of crude oil, 84% of natural gas, and 72% of coal. In 2008, total imports to FRG reached about 127 billion Euros, while 80% percent of the imported raw material is then processed and re-exported in the form of finished products.

Today, the number of know-how developments that can and must be applied in Kazakhstan is large. Therefore, we must continue our partnership and we hope to reach fruitful results in the future for the welfare of our nation.


Table of contents
We will build a new world  Editorial review 
Germany and Kazakhstan: On reciprocal tracks  Rainer Eugen Schlageter, Nurlan Onzhanov 
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