THE COOPERATION BETWEEN KAZAKHSTAN AND ARMENIA DEVELOPS IN A FRIENDLY AND MUTUALLY BENEFICIAL SPIRIT
Alexandr Avanesov
ArmInfo, 14 June 2007
2007-08-01 16:04:00
The cooperation between Kazakhstan and Armenia develops in a friendly
and mutually beneficial spirit Exclusive interview of the Extraordinary
and Plenipotentiary Ambassador of Kazakhstan to Armenia Ayimdos
Bozjigitov with ArmInfo
-Mr. Ambassador, how do you estimate the situation of
Armenia-Kazakhstan cooperation? Don’t you think that, presently,
the level of political interrelation between the two countries
significantly outstrips the trade-economic cooperation? If yes,
what is it connected with?
-The political interrelation, of course, significantly outstrips the
level of trade-economic cooperation, but, in course of time, with
the development of the two states’ economies the economic constituent
will also develop.
In general, speaking about the political interrelation between
our countries, it is necessary to emphasize that no politics can be
without economics. Since diplomatic relations were established between
Armenia and Kazakhstan, the cooperation between the two states has been
developing in a friendly and mutually beneficial spirit. The mutual
aspiration to expanse the trade-economic cooperation was mentioned
during the first official visit of Kazakhstan’s president Nursultan
Nazarbayev to Armenia on 23-24 May, 2001. Likewise, on 6-7 November,
2006, President of Armenia, Robert Kocharian paid an official visit
to Astana, over which summits and a roundtable on the topic "Economy
of Kazakhstan and Armenia" were held.
Armenia’s economic opportunities were presented in order to attract
investments from Kazkhstan into Armenian economy. R. Kocharian made
a speech before the representatives of business circles of Kazakhstan
during which he presented Armenia’s economic situation, macroeconomic
indicators of your Republic. This proves that trade-economic relations
between the two states are stable and developing according to the
plan. Armenian president’s visit to Kazakhstan became a new starting
point in trade-economic relations between the two states, since it
made possible to outline the basic directions of mutual interest. One
of the main issues of the mentioned visit’s agenda became the further
enhancement of contractual-legal basis of the bilateral cooperation. A
range of basic intergovernmental agreements were signed, such as
the Convention on Avoiding Double Taxation and Prevention of Tax
Avoidance Regarding Income Tax and Property Tax, that on Promotion
and Mutual Support to Investments and on Cooperation in the Sphere of
Culture. In this respect, we still have to strive to strengthening of
the contractual-legal basis of the bilateral cooperation, and in the
future to proceed to reviewing the project of Agreement on "Cooperation
between the Republics of Kazakhstan and Armenia in the sphere of
science and education". Besides, the issues of possible development of
future cooperation in the sphere of seismology, weather forecasting
and reducing earthquake risks, including the issue of concluding a
bilateral agreement in this sphere, were discussed. The agreement
on mutual visits of citizens signed in Astana is no less important,
especially, taking into account that Armenian Community in Kazakhstan
includes 25 000 people, most of whom often visit Yerevan. When we were
opening the Embassy of Kazakhstan in Armenia, we didn’t think that so
many consular issues would emerge. An agreement on transport has also
been signed, which was ratified by the Government of Kazakhstan. A
draft agreement in the sphere of tourism is being worked out.
At the same time, I’d like to emphasize that not all the existing
resources of the trade-economic sphere have been mobilized, yet. These
issues are included in the agenda of our dialogue, as well as in
the intergovernmental commission. Of course, commodity circulation
between the two states is presently insignificant, the development
of which is in no small measure hindered by objective reasons, the
main of which is the transport problem.
Even the ratification of the present agreements and formulation of
new documents will not give their result immediately, the results
appear in a mid-term prospect. In this respect, it is necessary to
establish contacts among corporations and companies of the two states.
-You said about intergovernmental commission. When will its next
meeting take place?
-The next meeting of the Armenian-Kazakh Commission will take place
approximately in autumn 2007. It depends on how quickly we will
manage to prepare all the documents. There are no firm frames, the
Commission’s work will be oriented to its content.
-During the last few years Kazakh capital has actively been invested
in the economy of Georgia and Azerbaijan, while, in Armenia, with the
exception of the bank sector, no serious progress is observed. What
is this connected with, and what measures are you going to take for
activating the bilateral trade-economic cooperation? Which spheres
do you personally consider more prospective?
Today, investments of Kazakhstan in the economy of Armenia total
40 million dollars. The investments were made mainly in the banking
sector of Armenia.
In general, Kazakhstan considers Armenia as a country with high-level
economic freedom. Moreover, there is rather favorable climate for
investors and exporters in Armenia. All this alongside with impressive
macroeconomic indicators create favorable conditions for bilateral
economic cooperation.
At the same time, the investment cooperation between Armenia and
Kazakhstan is insignificant. Our countries have solid mutually
advantageous potential that, unfortunately, is not used completely.
It is important that the constructive political dialogue is
strengthened by effective partnership in the trade and economy
sphere. We are to elaborate effective cooperation models, open
new cooperation possibilities, especially, in energy and transport
spheres. Kazakhstan is considered the possible shareholder in the
stably developing banking sector of Armenia.
Kazakh banks rapidly increase their assets and enter markets of the
neighbouring countries, using surplus resources and low interest rates
in the local market, which makes crediting in abroad profitable. The
second largest bank in Kazakhstan "Turan Alem" has strong positions in
the financial markets of a number of CIS member-states. It established
a branch in Armenia in 2005. Moreover, given Armenia’s interest in the
supply of hydrocarbon material from deposits in Western Kazakhstan,
the planned construction of Kazakh oil terminals in the territory of
Georgia will help organizing oil supply to Armenia. In the nearest
future, the bank intends to extend its presence in you country,
increasing the credit volumes by $10mln.
In particular, these funds will be directed to mortgage loan
activity. In general Kazakhstan has serious resources to invest in
abroad. As of today, the volume of Kazakhstan’s investments totals
$18bln.
Only in Georgia about $1bln was invested and this is not by
chance. Being a landlocked country, Kazakhstan like Armenia
doesn’t have access to sea in order to export its goods in the
world markets. Thereby, it was decided to construct oil and grain
terminals in Georgia, from the services of which Armenia can also
benefit. Taking into consideration Armenia’s interest in hydrocarbon
raw material delivery from the deposits of West Kazakhstan the
planned construction of Kazakh oil terminals in the territory of
Georgia will promote Kazakh oil supply to Armenia. Delivery of Kazakh
grain to Armenia is also considered from this point of view. Joint
ventures have always been considered an effective and strong form of
bilateral cooperation. Armenia is shareholder of 45 small enterprises
in Kazakhstan, including 21 JVs. These enterprises are mainly engaged
on wholesale trade, services and production of building materials. We
are ready to discuss possible establishment of JVs in the sphere of
machine building, tourism and jewelry.
-At the last meeting with Azerbaijan’s President Ilham Alieyv in Astana
Kasakhstan’s President Nursultan Nazarbayev expressed Kazakhstan’s
interest in Baku-Tbilisi-Ceyhan projects and in TransCaspian gas
pipe- line.
A month later, when meeting Russia’s President Vladimir Putin they
touched on Kazakhstan’s participation in the joint project of Caspian
gas pipeline with Russia and Turkmenistan. Moreover, Kazakhstan intends
to export its hydrocarbon material to China. Will the country resources
be enough? And what’s your opinion on RA Foreign Minister Vardan
Oskanyan’s statement about the possibility of Armenia’s participation
in the project of TransCaspian gas pipeline taking into consideration
that it was a project of transporting Kazakh and Central Asian gas
– Kazakhstan’s government is holding an active work on learning
possible options of the export oil and gas pipelines taking into
consideration their economic and political expediency, technical
ability and economic security.
The decision about construction of the TransCaspian gas pipeline may
be adopted only after preparing of the technical and economic basis
of the project, as well as after having progress in settling the
international and legal status of the Caspian Sea. Without thorough
study of the technical and economic assessment of the TransCaspian
gas pipeline project, I think it is untimely to comment on the
participation of any country in it.
In general, today Kazakhstan is in the group of states which have
strategic hydrocarbon reserves, which directly influence the formation
and condition of the international energy market. Kazakhstan accounts
for two-third of the whole volume of oil recovered in the Caspian
region. Evaluation of the proved oil stores of Kazakhstan amounts to
9-17,6 bln barrels. It is predicted that by 2010 gas recovery will
grow and amount to 45 bln sq/m.
Exploratory reserves and assay value of natural gas taking into
consideration the new deposits on the Caspian shelf in Kazakhstan
totals about 3,3 trillion sq/m while potential resources reach 6-8
trillion sq/m.
Because of the inner-continental geographical situation of Kazakhstan
and the absence of access to the world oceans, it has a serious
task – to ensure the ways for compatible export of the local raw
materials to foreign markets by means of creation and development
of an effective and rational pipeline infrastructure. The growing
gas and oil recovery in explored and producing fields overland and
on the shelf of the Caspian Sea will inevitably demand increasing of
the general capacity of the existing export systems.
Conducting of the multi-vector export policy of the local resources
is the most acceptable option for Kazakhstan. Legal and commercial
conditions of the oil and gas transportation through transit countries
will play a key role when choosing the export directions of Kazakh
hydrocarbon. Presently Kazakhstan’s government pays a maximal attention
to this aspect. For example, Kazakhstan doesn’t participate in the
construction project of "Kars-Akhalkalaki-Baku" railway.
It is necessary to observe the agreement between Kazakhstan and
Azerbaijan signed in June 2006 on assistance when transporting gas
from Kazakhstan via the Caspian Sea to Azerbaijan and further to the
world markets via the Baku-Tbilisi-Ceyhan oil pipeline, just from the
point of view of strengthening of the energy security of Kazakhstan
and of the region in general. Moreover, to transport oil via the
TransCaspian route the Kazakh party together with recovery companies
is drawing out the KCTS (Kazakh Caspian Transporting System) which
includes an oil pipeline at the territory of Kazakhstan, sea terminals
in Kazakhstan and Azerbaijan, sea transporting by tanker fleet and the
connecting pipeline Baku-Tbilisi-Ceyhan. The trilateral declaration
(Russia, Kazakhstan, Turkmenistan) about construction of the Caspian
gas pipeline and the quadruple joint declaration including Uzbekistan
as well about development of the gas transporting capacities in the
Central Asia region, which foresee reconstruction of the existing gas
pipeline from Turkmenistan via Kazakhstan to Russia, construction of
the new Caspian gas pipeline as well as extension of capacities of the
Central Asia – Center gas pipeline are of the same significance. It’s
but natural that the China export direction is also worked over.
-Analysts think that the Russian President’s proposal concerning
the Caspian gas pipeline is directed to the neutralization of
Azerbaijan. What do they think in Kazakhstan?
-I understood your question. I don’t know what the analysts you
mentioned think about it but Kazakhstan keeps to the bottom-line
approach, based on the commercial viability and on the competitive
ability of the transit tariffs. Alternative and economically feasible
directions for transporting the energy resources are important for
Kazakhstan.
-You mentioned of mid-term prospect of developing trade-economic
relations between Armenia and Kazakhstan. Are there any calculations
on the timeframes of activating the relations?
-The most unappreciative job is to name concrete dates, like predicting
the results of a sport competition. But basically, our relations
develop according to plan. The meeting of the Intergovernmental
Commission will take place in autumn, when, as planned, several
documents will be signed as well as a business forum will be held. I
think that just after it the market entities of our states will be
activated. Without their participation our activities will be of a
declarative nature.
-Would you, please, tell what projects Armenia invites Kazakhstan to
participate in?
-We already got a proposal on concession of Armenian railroads. We
also suggested that Armenia should participate in an open competition
in Mangyshlak-Bautino railroad construction. We also invite Armenia
not only to be an investor but also a contractor.
-Did Armenia invite Kazakhstan to take part in the construction project
of Iran-Armenia railroad, which would give Armenia an opportunity of
direct entry into the markets of Central Asia and Kazakhstan?
-No, we didn’t get any official invitation for Kazakhstan’s
participation in that project.
-What else can interest Kazakhstan in Armenia?
-We are interested in the opportunity of investing both in the
construction of new power plants and modernization of currently
functioning blocks in Armenia. Moreover, Kazakhstan is interested
in Armenia’s mineral resource industry and in cement production. The
point is that large-scale construction has started in Kazakhstan and
we need cement. It is planned to establish three more cement plants
in Kazakhstan. We are also interested in cooperation in the tourism
sphere. Presently, models of cooperation in tourism business are
under elaboration.
-And what would be Kazakhstan’s position on joint construction of
"GasPromOil" of Iran-Armenia gas pipeline and of an oil-processing
plant on the border of Armenia and Iran?
-Presently, these projects are only studied by the participant-sides,
for this reason it is untimely to speak about Kazakhstan’s joining
them. As I already mentioned, Kazakhstan may decide to participate
in a project only after assessing its viability, as well as the
political and economic dividends. At the same time, we can’t exclude
such possibility taking into consideration that Kazakhstan have good
relations with Armenia, Russia and Iran including at the summit
level, and is concerned about increasing cooperation with them;
the projects are supported by the leadership of Russia and Armenia,
we have the opportunity of their fulfillment especially, in case
of cooperation with Russian business, which is widely represented in
Armenian market. Basically, I am confident that the cooperation between
Armenia and Kazakhstan will prosper. Establishment of partnership
and business relations between our presidents will promote this.
-How would you estimate the cooperation between Armenia and Kazakhstan
within the frame of international structures?
-We actively cooperate within the frames of CIS, CSTO and OSCE. As
international organizations, OSCE in particular stated that
well-organized and transparent parliamentary election was held in
Armenia, which is also very interesting for us. As to the CIS, as you
know, Kazakhstan’s president has suggested that the structure should
be reformed and that they should concentrate on 5 main directions-
agreed migration policy, cooperation on creating of a single transport
communication, cooperation in the sphere of science and education,
fighting trans-frontier criminality and cultural-humanitarian
cooperation. It is also necessary to follow the principle of base-line
approach while making the agenda for the Commonwealth and to work by
the formula "one year-one subject-matter". This implies determining
and working every year till making final decision on a key issue,
touching upon the interests of all the participants in the CIS.