By Ramesh Jaura
This is the sixth in a series of articles from Kazakhstan which being geographically located both in Asia and Europe, considers itself a Eurasian country. The articles are based on information gathered during a visit from June 7 to June 15 on the occasion of the opening of EXPO 2017 in Astana. Video clips accompany the articles in this series. – The Editor
BERLIN | ASTANA (IDN) – Renewable energy and green economy as well as sustainable economic growth, world trade and infrastructure were the principal themes of the recent Astana Economic Forum (AEF) that is widely acknowledged as a platform for dialogue on issues related to economic development in Central Asia and the world at large.
Though an annual event held in the capital of Kazakhstan since 2008, the Forum held on June 15-16 distinguished itself in more than one way. Over 4,000 participants from 100 countries participated in the tenth Astana Economic Forum that focused on ‘New Energy – New Economy’.
The partakers included heads of government and state, business leaders, representatives of international institutions such as the World Bank and other organizations active in the field of international cooperation, eminent economists and energy experts, opinion leaders, writers and journalists.
The 10th AEF also acquired an enhanced significance because it was held within days of the opening of EXPO 2017 with ‘Future Energy’ as its central theme, showcasing ways and means of addressing emerging social, economic and environmental challenges – and this against the backdrop of the Paris Climate Change Agreement advancing the paradigm shift to the green economy.
Renewable energy and green economy are part of the third stage of modernization of the country to ensure economic growth above the world average and bring the nation closer to its goal of joining the top 30 most-developed countries, as President Nursultan Nazarbayev said in his 2017 address to the nation.
The first stage of modernisation was forming an entirely new state based on the principles of a market economy in the 1990s. The second was implementing Strategy 2030 and creating a new capital, Astana.
President Nazarbayev, who spoke at the plenary session on June 16, the third stage of modernization “is not a plan to combat current global challenges, but a reliable bridge to the future, to meet the objectives of Kazakhstan 2050 Strategy.” It will be carried out on the basis of the 100 Concrete Steps Plan of the Nation.
An important segment of the AEF was the session titled Kazakhstan – Systematic Country Diagnostic. Prime Minister Bakytzhan Sagintayev said in his remarks to the session: “Step-by-step we should reach a growth rate of 5.5 percent by 2021. It is a difficult situation, but we . . . have adapted to the price of raw materials. Other sectors of the economy are already beginning to work and rise. The economy is changing, new fields, professions are emerging, as well as new challenges and opportunities.”
“And, therefore,” he added, “today Kazakhstan faces an ambitious task to consolidate the achieved successes and develop in a new global reality. To be in the wake of new growth points is the task of the third modernisation of the country.”
To achieve the goal, Prime Minister Sagintayev added, the Kazakh government is working in five areas: accelerated technological modernisation of the economy, improving the business environment, macroeconomic stability, ensuring productive employment and improving the quality of human capital.
Along with this, eight directions of the country’s development have been identified: the fuel and energy complex, the basic sectors of the economy, the agro-industrial complex, transport and logistics, tourism, trade, education and health. “Target indicators have been defined for each direction and each minister knows their goals and in what year we should achieve them,” Sagintayev told the participants.
2017 marks the 25th anniversary of cooperation between Kazakhstan and the World Bank. The Bank presented a systematic country diagnostic (SCD) with preliminary findings relating to the main pathways to reduce poverty and boost shared prosperity in Kazakhstan.
Over the past 25 years, the World Bank supported the implementation of 45 projects worth $8 billion. These included building and modernisation of nearly 1,300 kilometres of the roads and successful recovery efforts to bring back the Aral sea and new hope for devastated Aral Sea communities in Kazakhstan.
The Aral Sea was once the world’s fourth-largest lake, covering 26,000 square miles on the border of Kazakhstan and Uzbekistan. But in the 1960s, the the Soviet government redirected the Amu Darya and Syr Darya rivers for agricultural projects, robbing the Aral of water. It started shrinking, and the lake split in two by 1990. By 2003 the water level had fallen 72 feet, prompting the World Bank to finance construction of the $85-million Kok-Aral Dam.
The World Bank systematic country diagnostic helps the government get an objective assessment, identify opportunities and risks, problem nodes and get recommendations for their resolution, Prime Minister Sagintayev said.
At the same session, the European Bank for Reconstruction and Development (EBRD) called on Kazakhstan to deepen its reform efforts. “According to our latest forecast, Kazakhstan’s economy will grow by 3.5 percent in 2018 and 2.4 percent in 2017. But to make sure that growth happens and exceeds forecasts, continuing reform efforts are crucial,” said EBRD Director for Kazakhstan Agris Preimanis.
President Nazarbayev, however told the AEF plenary session that Kazakhstan’s economy had grown by 4 percent in the first five months of 2017. As the external economic environment is improving, the country needs to make another push for structural reform, creating a competitive, green and inclusive economy, he said.
It was not surprising therefore that a roundtable on ‘Energy of the Future and Role of Kazakhstan in the World Energy System’ discussed the key developments in the global energy sector and possible changes to the structure of energy supply and demand in the upcoming decades.
The roundtable was organized by the Center for Strategic Initiatives (CSI), an independent consulting and analytical company in Kazakhstan, which partners, among others, with the prestigious World Economic Forum for conducting research on competitiveness and the preparation of analytical materials.
Reviewing major achievements in the energy sector in the past several years, Kanat Bozumbayev, the Minister of Energy noted that Kazakhstan was the first country in Central Asia to adopt the Concept of transition to green economy by 2050. One of the key elements of this Concept is a 25 percent reduction in GDP energy intensity by 2020 and involvement of renewable energy sources that are expected to account for 3 percent of the total energy mix by 2020.
Green investments in Kazakhstan are expected to be financed, among others, by the Green Climate Fund, established within the framework of the UN Framework Convention on Climate Change (UNFCCC) to assist developing countries in adaptation and mitigation practices to counter climate change.
The Minister of Energy announced the creation of a new International Center of Green Technologies on the grounds of EXPO 2017. The Center will assist in achieving the transformation goals of the energy sector, the transition to “green” businesses, the transfer and adaptation of green technologies and best practices, and the development of green finance.
Green finance is in fact one of the major activities of the Astana International Financial Centre (AIFC), a financial hub for Central Asia, the Caucasus, the Eurasian Economic Union (EAEU), the Middle East, West China, Mongolia and Europe. The Centre, situated within EXPO 2017, is supported by modern infrastructure and the latest technology.
As AIFC Governor Kairat Kelimbetov pointed out, green financial products and services consider environmental factors, provide support for environmentally responsible investments, and stimulate the development of low carbon technologies, projects, industries, and business.
At a media briefing, Kelimbetov said: “It is very important to realise the commitments that the Kazakh government made at the Paris conference. And it seems to me that everyone in Kazakhstan at the level of both the government and local administration understands that the theme of Expo, Future Energy, is indeed, a very important topic, and that we need a long-term strategy, a vision and an action plan. And I believe that as part of this activity, as the AIFC together with the EBRD, we have created a very outstanding team of experts who are now helping us to develop a master plan and concept papers on the creation of a ‘Green’ financial system in Kazakhstan.”
A significant segment of the 10th Astana Economic Forum was the International Transport and Logistic Business Forum titled the ‘New Silk Way’, which provided an opportunity to discuss global trends and their impact on transcontinental routes, multimodal transport, new segments of the market and Eurasian transit corridors.
The challenges ahead were mirrored in the session called ‘Globalisation: a Future Full of Uncertainties‘, which heard stimulating remarks by: the author of two bestsellers ‘Black Swan’ and ‘Confessions of an Economic Hit Man‘, Nassim Taleb; Economic Adviser to the Russian President Sergei Glazyev; and the Chairperson of JP Morgan Chase International Jacob Frenkel.
Participants in the AEF also heard an updated Multi-dimensional Review of Kazakhstan by the Organisation for Economic Cooperation and Development’s (OECD). Commenting the OECD recommendations, the Kazakh Vice Minister for Investments and Development Yerlan Khairov said: “There will always be a competition for investments, and our task is always to be the first in this fight. Therefore, we highly appreciate these recommendations, and their high-quality implementation is very important in the process of strengthening the economy of Kazakhstan.”
Among the outcomes of the Forum was an announcement by the Central Asia Transport Logistics Partnership to improve the quality of transport and logistics services throughout the region by focusing on policy and legislative changes and workforce development that contribute to the improvement of regional transport corridors and transit connections to encourage better trade and investment.
The Partnership, established in 2015, unites more than 40 public and private transport and logistics companies of the region. It ia supported by the United States Agency for International Development (USAID) and GIZ, the German Organization for International Cooperation.
Another important segment of the event was dedicated to the Samruk Kazyna Sovereign Wealth Fund’s privatisation programme, including the upcoming IPO of Kazatomprom, Kazakhstan Temir Zholy and Air Astana. Also within the Forum, the AIFC and MasterCard agreed to jointly implement innovative payment technologies and develop Kazakhstan’s non-cash economy. AIFC Governor Kelimbetov said, the parties would develop the infrastructure of the financial centre, including modern payment technologies. [IDN-InDepthNews – 19 July 2016]
Note: Several quotes in this article are taken from The Astana Times.
WATCH VIDEO > https://www.youtube.com/watch?v=5YbU5MN1pKw
Development Talk with Mr Augusto Lopez Claros, Director, World Bank Group on Development Economics, on June 15 who chaired a session at the Astana Economic Forum
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Photo: A session of the Astana Economic Forum with the Kazakh Prime Minister. Credit: The Astana Times | primeminister.kz