Russia, Kazakhstan slow to build
growth By Sergei Blagov
Russian and Kazakhstani leaders have
reiterated plans to further develop bilateral
commerce, relying on the free-trade arrangements
of their Customs Union. Two-way trade, however,
has appeared to advance slower than previously
expected.
Attended by Presidents Nursultan
Nazarbayev and Vladimir Putin, the Inter-Regional
Cooperation Forum, held in Pavlodar, Kazakhstan,
on September 18-20, drew representatives of some
600 Russian and Kazakhstani businesses. During the
bilateral forum, both governments signed only
relatively minor agreements on energy and
environmental cooperation and on the prevention of
industrial accidents.
President Nazarbayev
told the forum that Russian investors held
stakes in 26 projects in
Kazakhstan totaling US$5.5 billion. A number of
joint venture agreements were additionally
concluded in Pavlodar, totaling $2 billion,
according to Nazarbayev. He noted a car-making
joint venture in Eastern Kazakhstan region that
would produce 120,000 vehicles per year.
Russia and Kazakhstan also pledged to
develop bilateral technology and infrastructure
projects. Nazarbayev said both sides were drafting
a long-term agreement on the use of the Baikonur
space center. In response, President Putin said
that 76 out of 83 Russian regions have economic
ties with Kazakhstan - most notably, the Moscow,
Novosibirsk, Altai and Orenburg regions. Putin
also noted the western China - western Europe
transit corridor that will connect St Petersburg
with China's border via Kazan, Orenburg and
Almaty.
The Russian and Kazakhstani
officials repeatedly pledged to increase bilateral
trade. During a meeting with Putin on September
19, Nazarbayev said the Customs Union was
instrumental in increasing bilateral commerce.
Putin also agreed that trade volumes were
increasing. Trade statistics for this year,
however, suggest that bilateral trade has remained
at the same levels.
After the meeting with
the Russian president on September 19, Nazarbayev
told journalists that the bilateral trade volume
increased 30% year-on-year to $23 billion in 2011.
He noted that in the first half of 2012 bilateral
commerce reached $11 billion. In other words,
bilateral trade volumes for 2012 appeared to
remain largely unchanged since last year.
There were some discrepancies between
Russian and Kazakhstani data. According to the
Russian customs statistics, the bilateral trade
volume was up 35% year on year, at $20.5 billion
in 2011, while Russian exports to Kazakhstan had
increased by 25% and Kazakhstan's exports to
Russia were up 60%.
Furthermore, bilateral
trade volumes apparently fell short of earlier
expectations. At a meeting with Putin on June 7,
Nazarbayev pledged to increase the annual
bilateral trade volume to as much as $40 billion
in 2012. With the six-month figure amounting to
only $11 billion, the $40 billion target number
now looks unattainable by year's end.
Inter-regional cooperation also appeared
slow to develop. The Russian newswire Regnum
commented that trade between Russia's Orenburg
region and Kazakhstan did not increase in the past
year despite the existing free-trade arrangements.
Orenburg region accounts for some 10% of Russia's
total trade volume with Kazakhstan. The agency
also noted that Russian businesses tended to use
the free trade regulations only to import goods
from third countries through Kazakhstan so as to
dodge some Russian taxes and duties.
Both
nations remained slow to conclude a new agreement
on oil product trade that envisaged the supply of
some 1 million - 2 million tonnes of Kazakhstani
crude oil to Russia free of Kazakhstan's export
duties. The agreement was previously expected to
take effect from January 1, 2012, and then from
July 1.
Ties between Russia and Kazakhstan
were still officially viewed as a "strategic
partnership". During a visit to Astana on June
7-8, Putin and Nazarbayev signed a protocol to the
bilateral friendship treaty, dated May 25, 1992,
and extended it for 10 more years.
Yet,
during Putin's visit to Kazakhstan, some
disagreements surfaced. In particular, on
September 18, Kazakh parliamentarian Yerlan Karin,
head of the governing Nur Otan party, described
the idea to create a Eurasian parliament as
unrealistic and a threat to Kazakhstan's
sovereignty. The next day, Leonid Slutsky, head of
the Commonwealth of Independent States (CIS)
committee of the Russian Duma, the lower house of
parliament, publicly rebuked the Kazakhstani
lawmaker's sentiments.
Although this
year's numbers seemed to fall well behind earlier
expectations, Russia and Kazakhstan have continued
to prioritize increased bilateral commerce. In the
meantime, however, Russia's ongoing efforts to
expedite post-Soviet regional integration have yet
to win over all the critics in Kazakhstan.
Prior to working as Moscow-based
independent researcher and journalist, Dr
Sergei Blagov was a newswire reporter. He
spent nearly seven years reporting from Hanoi,
Vietnam, between 1983 and 1997.
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