Financial analyst Arman Beisembayev recently unveiled that Kazakhstan maintains trade relationships with all of its neighboring countries, including Russia, which, until last year, accounted for 20% of its trade turnover, media reports.
Last year, China became the second-largest trading partner, with European Union countries also holding significant trade partnerships. However, recent statistics indicate a substantial decline in trade with Russia since 2022, a trend that has become particularly pronounced this year. Conversely, trade with China has seen an increase.
Due to economic issues in the Russian Federation, China has taken the top spot in the rankings this year. Arman Beisembayev noted that the sanctions have impacted trade turnover, as previously bought and sold goods are no longer accessible.
Kazakhstan primarily exports hydrocarbons, metals, and raw materials to neighboring countries, with little processing. This results in the country buying necessary goods in exchange. Russia and China remain Kazakhstan's top trading partners.
Kazakhstan is the world leader in proven reserves of zinc, tungsten, and barite and ranks second in silver, lead, and chromite, third in copper and fluorite, fourth in molybdenum, and sixth in gold. Despite this, the country's national economy is closely linked to the global economy, making it vulnerable to potential economic and financial shocks.
The country's President Kassym-Jomart Tokayev, has recognized this need for protection in the Development Strategy. Meanwhile, financial analysts have identified a lack of economic self-sufficiency, with limited domestic production to meet the country's needs.
Arman Beisembayev noted that while there is some manufacturing and small-scale industrial production, Kazakhstan does not have the means to produce what it requires.
Kazakhstan exports agricultural products to over 70 countries, which benefits the market economy.
According to Arman Beisembayev, the country sends millions of tons of grain to Afghanistan, with Uzbekistan also being a buyer of Kazakh grain.
In exchange, Kazakhstan purchases flour from them while imposing volumes.
The expert notes that Kazakhstan's trade turnover with foreign countries includes various goods such as animal hides, small footwear, and textile industries.
The European Union, specifically the Netherlands, Italy, and France, is the primary buyer of Kazakhstan's oil, while Germany has recently begun purchasing significant volumes.
Earlier this year, Germany and Poland halted their import of Russian oil and instead turned to purchasing oil from Kazakhstan. As a result, KazTransOil, a subsidiary of KazMunayGas, agreed with Transneft to pump 1.2mn tons of oil to Germany in 2023 at a rate of 100,000 tons per month. The agreement also allows for a potential increase in supply to 3mn tons in the future.
Arman Beisembayev stated that Kazakhstan provides Europe with the necessary energy resources while exporting mainly light industry products, textiles, and manufacturing goods. Additionally, the country imports high-tech products that are not available in their country, with some coming from Europe and others from Russia, such as household appliances and gadgets. It also purchases premium machines, equipment, and high-tech products from Europe, ensuring European quality.
According to the speaker, Kazakhstan is part of the Eurasian Economic Union (EEU) like Russia, which means that events in these countries impact Kazakhstan to some degree.
'Our dependence on both Russia and China is critical. Take, for instance, the inflation rate from last year. It was affected by various factors, including the military action in Ukraine and the subsequent sanctions imposed on Russia. As a result, the Russian Federation's economy has had a ripple effect on other countries, including Kazakhstan. Additionally, the exchange rate from last year was impacted by several factors such as the collapse of the ruble, sanctions, war, and disrupted supply chains, all of which have affected the economy of Kazakhstan. Furthermore, our country has a significant trade volume with China. Therefore, any unforeseen event in China will undoubtedly have an impact on us',
Arman Beisembayev said.
According to an expert, a positive relationship exists between Kazakhstan and the countries of China, Russia, and the EU. Economic growth in these countries will increase trade turnover, and Kazakhstan will be able to purchase more goods. As a result, Kazakhstan can increase its production, extract minerals, and sell them abroad. This interdependence will lead to more earnings and buying more goods from other countries.
Kazakhstan's bilateral trade is highest, with China, Russia, and the EU, accounting for 60% of all trade. The Central Asian country trades successfully with other countries in the region, along with Türkiye, the Republic of Korea, India, and the US.
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