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Government: Kazakhstan to boost non-primary commodities and services’ exports by 31.8%

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Exports of non-primary goods and services stood at US$23bn., 4.1% up, in 2018 with non-primary exports equaling US$15.7 billion, 0.9% up. Meanwhile exports of services rendered stood at US$7.3 billion in 2018, 12.3% up. Read the article below for more figures in exports of Kazakh non-primary goods and services.

Kazakh Minister of National Economy, Ruslan Dalenov, called on government agencies wipe out barriers to exports in time and full while reporting on the 2018 figures on exports of non-primary commodities and services.

According to him, exports of services rendered set out the positive trend and rose by 12.3% in 2018.

The national export strategy was adopted in 2017 to increase the non-primary sector and diversify non-primary goods and services markets. The government agencies need to timely and fully work on eliminating barriers to exports. Exports of Kazakh commodities and services stood at US$68.3 billion in 2018, 24.2% up compared with 2017. This was due primarily to the increase in oil prices. Exports of non-primary goods and services totaled US$23 billion, increasing by 4.1% over the year, with non-primary exports equaling US$15.7 billion, an 0.9% growth than in the previous year. In 2018, exports of services provided showed the positive trend rising by 12.3%, standing at US$7.3 billion, he said.

China, Russia, the Netherlands, Uzbekistan, the UK, Turkey, Japan, Kyrgyzstan, the UAE and Afghanistan are main consumers of Kazakh goods, with 75% of Kazakh processed goods are exported to these countries. Pipes, metal constructions, alloys, steel, metals form the major share of Kazakhstan’s non-primary exports. These are followed by goods of the chemical industry, with uranium making up the main share of exports. Next up is oil products. The share of food products makes up US$1 billion.

Services exports amounted to US$7.3 billion in 2018, 12.3% up than in 2017.

Transport services traditionally prevail, with pipeline transport transit services for US$2.3 billion rendered in 2018, constituting 57.5% of the overall transport services. These include Uzbek-Russian gas transit to Russia and China through Kazakhstan, as well as Russian oil transit to Russia and China.

Railway transportation services equaled 19.3% or US$770 million and air services made up 16% or US$639 million.

The next is tourist services exports with its share accounting for 30.9% or US$2.3 billion. The speaker said there should be the emphasis made on the growth in business and telecom services. Among major foreign consumers of Kazakh services are the PRC and Russia.

While concluding his report, the Minister underlined some figures to boost non-primary commodities and services’ exports by 31.8% by 2022.

To increase exports of non-primary goods and services by 31.8% by 2022, exports of industrial products should rise by US$5.7 billion to US$20.2 billion, exports of agricultural products should grow by US$0.7 billion to US$1.9 billion, and exports of services rendered should increase by US$2.4 billion to US$9.7 billion, Ruslan Dalenov concluded.

Roman Sklyar, who is responsible for the Ministry of Industry and Infrastructure Development, recalled of the positive trend in Kazakhstan’s non-primary exports, making up US$15.7 billion in 2018, increasing as little as 1%.

Exports of products in the chemical industry rose by 2.6%, mineral products’ exports – by 14.6%, exports of food products – by 7.6% and exports of products in machinery climbed by 11%, Roman Sklyar said.

Kazakhstan exports 800 product items to 120 countries, with ferro-alloys, unprocessed zinc, refined copper, uranium, petroleum gas, transformers and accumulators being main exporting products in the manufacturing sector.

The increase by 16% was seen in exports of finished goods, with the share of finished goods in processed goods’ exports demonstrating the growth by 2.5 percentage points compared with 2017 and equaling 23%.

According to the minister, the export-orientated plants launched in 2018 as part of the industrial development national program hold an export potential equaling US$458 million, with 50% of their total products orientated towards export.

In addition, the support of 500 billion tenge to export-orientated projects will also promote exports. Taking into consideration the consumption and demand upturn in world markets, this year expects growth in exports of products in the following areas:

– machinery (by strong exports of transformers, accumulators and bearings);

– metallurgy (by increased production of ferro-alloys and steel pipes);

– chemical and light industries.

Exports in transport and construction rose by 15% and 200% respectively.

Domestic construction companies started to access world construction services markets. For instance, road construction in Georgia, railway construction in Slovakia (IntegraConstruction), a concentration plant in Kyrgyzstan (AAEngineering LLP).

Given a huge potential of the construction market abroad, domestic companies need to actively access this services market using the existing exporter support instruments offered by Baiterek National Managing Holding, Roman Sklyar said.

Support to domestic exporters

No fewer than 270 domestic exporting companies secured support from the state.

Roman Sklyar reported on the planned support actions for exporters.

15 trade and economic missions, 7 national stands, 5 presentations of trade marks, as well as foreign relevant exhibitions abroad are planned for this year, he explained.

Exporters will be supported to shake down and set out meetings with foreign potential customers, to promote their products, as well as to cancel out costs for rental, accommodation and food, flight and interpretation services.

Such support will embrace 70% of the exporters, that is 270 domestic companies.

Single window for exporters kicked off in Kazakhstan

The umbrella brand Made in Kazakhstan aimed at increasing recognition of and demand for Kazakh products abroad will be created this May. Credible exporters under the umbrella brand Made in Kazakhstan will enjoy broader state export support measures.

Given the remoteness from large markets, transportation cost accounts for up to 30% of the cost of goods, largely affecting cost competitiveness in export markets. This year envisages transportation cost reimbursement for exporters when exporting finished goods with the highest added value, minister Sklyar said.

In so doing, to encompass all subjects of entrepreneurship, the criteria based on their categories are set: 30% – large, 50% – medium and 60% – small businesses.

Cost reimbursement is true when transporting by railway and by road.

Export diversification was observed in 2018, as well as the geography of exporting processed products. In 2017 Kazakhstan exported processed products to 42 countries, last year this figure rose to 48. There was the increase in exports of processed products of the agro-industrial complex to traditional markets, as well as new markets are opened. Given the forecasted increase in exports of processed products to these markets, there will be a 106.2% rise in food output.

The national program to develop the agro-industrial complex features the plans to increase exports of agricultural products to US$2.4 billion by 2021, this year’s exports of agricultural products will rise to US$1.27 billion as exports of processed products grew by 6.4% in physical terms and 3.5% in money terms in 2018. So, 3.5 million tons of processed agricultural products for US$1.125 billion in the past year. Out of 533 exporting product groups of the agro-industrial complex’s total products, 275 product groups of processed agricultural products are exported, with 17 new processed products exported for the first time in last year. In addition to flour and grain, the top processed products also include fat and oil, confectionery, fish products, natural juice, pasta and flour products, as well as meat and milk products, Kazakh Agriculture Minister Saparkhan Omarov said.

In his speech, Kazakh PM Askar Mamin outlined three issues that should be considered while stepping up the export potential.

Boosting the country’s export potential is a strategically important factor for quality economic growth. In this regard, it is necessary to consider the following issues: first off, the trade deficit with the main partners such as Russia, Belarus and China. State support measures are developed, a Kazakh center of industry and export was created, state measures’ financial instruments will be consolidated in one place from production to export. It is also essential to strengthen the work to increase the quality and accessibility of trans-border infrastructure as our closest trade partners have stable economic growth forecasts: in China � 6.3%, in Kyrgyzstan � 3.8%, in Azerbaijan � 3.4%, in Russia � 1.6%, leaving us better conditions to access favorable markets. Our products should be recognizable abroad and their promotion needs to be through export brands. Our producers should increase the quality of their products to this end, with the full conformity to the regulations and other requirements of the states of our export interest, the Kazakh PM said.

Concluding his speech, the Prime Minister gave the Ministry of Industry and Infrastructure Development and interested government agencies tasks to develop and implement Kazakh standards, technical regulations, to establish a modern laboratory base enabling businesses to receive certificates for products and services, as well as to advance export-orientated products through world e-trade platforms. Thirdly, the Ministry of National Economy together with the Ministries of Industry and Infrastructure Development, Agriculture, Foreign Affairs should elaborate road maps to promote exports in sectors and priority service areas.

Source: Kazakhtan 2050

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