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How Kazakhstan-Uzbekistan Economic Relations Are Developing

The new course of cooperation

Darkhan Satybaldy, Ambassador Extraordinary and Plenipotentiary of the Republic of Kazakhstan in Uzbekistan

Kazakhstan is in the top three of Uzbekistan’s trade partners. According to the Ministry of Investments and Foreign Trade of the Republic of Uzbekistan, in 2019, the volume of goods turnover with Kazakhstan amounted to $3.32 billion, or 8% of the country’s total external trade.

A key aspect of Kazakhstan and Uzbekistan’s economic interaction is their bilateral trade: from 2016 to 2019, mutual turnover increased from $1.8 bln to $4.1 bln. Kazakhstan is among the three leading trade partners of Uzbekistan, only trailing China and Russia. An open and constructive relationship between the leaders of our countries plays an integral role in strengthening and activation of the sector. This allows the two states to advance the good neighborly relations to a new, progressive level.

The turnover is on the rise

Our cooperation efforts in the financial sector received a significant boost. In Tashkent, representative offices of two large Kazakhstani financial institutes were opened: Tenge Bank and the export and insurance company KazakhExport.

Another synergy in active development is the transport industry. According to the State Committee of the Republic of Uzbekistan on Statistics, in 2019, the highest number of visitors in Uzbekistan was from Kazakhstan – 2.4 mln people, or 29.7% of all arrivals. Kazakhstan, in turn, was visited by 5.4 mln Uzbekistanis, or 42.4% of all departures from the country.

Due to the growing travel frequency, Kazakhstani Air Astana and SCAT airlines plan to add flights between the republics. Destination points under consideration include such Uzbek cities as Samarkand, Bukhara, Urgench, Qarshi, Namangan, Termez and Nukus.

In 2019, the number of flights between the countries increased to 32 per week. Organization of high-speed passenger traffic is on the table.

The folk diplomacy

On the interregional level, there is active communication. With the 2019 opening of the Beineu-Akzhigit-Border of Uzbekistan international highway, ties between the western regions of our republics have grown stronger, while Uzbekistan also acquired a shortcut for its goods into the markets of Russia and countries of the Caucasus.

There are plans to create an international center for trade and economic cooperation on the border of our states, which would enhance the interaction of border territories. Logistic potential of neighboring countries is being expanded. Reconstruction of the largest B.Konysbayev-Yallama checkpoint is nearly finished, where conditions for crossing the state border have been made more comfortable.

Partnership of Kazakhstani and Uzbekistani regions formed the basis for a new interaction platform – the Interregional Cooperation Forum of the Republic of Kazakhstan and the Republic of Uzbekistan. At its two sessions in Shymkent and Urgench, more than 50 investment agreements worth over $700 mln were signed.

The key is in collaboration

During the official visit of Kazakh President Kassym-Jomart Tokayev to Tashkent in April 2019, leaders of our countries marked the development of cooperation ties and joint business projects as one of the top priorities.

The flagship of Kazakhstani-Uzbekistani cooperation is the UzAuto Motors and SaryarkaAutoProm joint venture in Kostanay that makes Ravon cars. In 2019, there were over 5,000 vehicles assembled there. This year, production of a new Ravon R4 model was launched, and in March 2020, heads of governments of Kazakhstan and Uzbekistan kicked off a joint project on assembly of five new models.

In 2019, the Kazakh-Uzbek commercial and industrial company Alliance launched a joint textile manufacture in Shymkent. The Uzbekistani Dentafill Plyus is implementing a project to build a medical facility in the city as well.

In Turkestan, an agricultural investment project is near completion: it will produce farming machinery of the Tashkent Tractor Plant, make textile goods and create a desert-zone horticultural cluster, based on Uzbek irrigation technology. 

According to the Uzbekistani Embassy in Kazakhstan, in Uzbekistan there are 809 enterprises with participation of Kazakhstani capital.

Raw material base and the market

One of the major infrastructural co-projects is the Central Asian Trade House in Nur-Sultan, established in 2016 by national companies of the two countries. Its main objective is to increase the turnover of horticultural products, their storage and transportation. It’s a large hub from where fruits and vegetables are delivered to the markets of northern regions of Kazakhstan and Russia.

I’m certain that the first steps in industrial collaboration will become an additional basis for our economic cooperation. Uzbekistan has a significant consumer market whereas Kazakhstan possesses an extensive raw material base.

Mutual interest

Kazakh business is also growing its presence in Uzbekistan, due to exports as well as creating joint enterprises. Investors from Kazakhstan are active in the Uzbek market and before 2022, they plan to implement 13 projects worth $37.9 mln.

Kazakhstani BI Group operates in Uzbekistan and builds residential houses in Tashkent. Ecoton Co LTD is building a plant for the production of aerated concrete and slabs in the Angren free economic zone.

While the coronavirus pandemic caused a 14% slump in production and trade in the first quarter, the market is reviving and independently determining the needs for various goods and the feasibility of joint production. The most important thing is that today, there are favorable political, cultural and humanitarian conditions for the development of full-fledged Kazakh-Uzbek cooperation.
 


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