December 12, 2017

Review: Atsana Expo 2017

From June to September 2017, Atsana, the capital of Kazakhstan hosted the Atsana Expo show case, where over 120 countries and 22 international organizations demonstrated the latest innovations in the clean energy sector. Titled the Future of Energy, this expo focused on four themes, including the ‘Reduction of Carbon Emissions’, ‘Energy for Life’, ‘Energy for All’, and the ‘World of Energy,’ which focused on the role of each individual’s contribution to the efficient use of energy.

The Dutch pavilion was launched by the Minister of Economic Affairs of the Netherlands, at that time Mr. Henk Kamp and the Kazakhstan Vice Minister of Energy Mr, A. Magauov.

Mr. Kamp accompany by H.E. Magzhan Ilyassov, Ambassador of Kazakhstan to the Netherlands,  led a delegation of more than 100 Dutch companies, 75 of which were already established in Kazakhstan. As a leading investor in Kazakhstan, the Dutch pavilion emphasized the economic partnership between the two nations, organizing various activities during the duration of the Expo.

When looking back at the origins of this economic partnership, a notable moment was in 2007, when a delegation from the Dutch Ministry of Foreign and Economic Affairs visited Kazakhstan. 2 years later, Kazakhstan’s foreign minister visited the Netherlands, were he met with his counterpart and the Dutch Prime Minister Mark Rutte. Since then, prime minister Rutte has visited the country several times, including for the Organization for Security and Cooperation in Europe (OSCE) summit in 2010.

Due to this positive relationship, Dutch multinationals as well as small and medium-sized businesses, primarily in the energy, agriculture, logistics, and port development sectors – are increasingly showing interest in Kazakhstan. In contrast, Kazakhstan is showing increasing interest in working with the Netherlands in the agricultural, horticultural and poultry sectors. Additionally, currently the Netherlands and Kazakhstan are profiting trade partners. The Netherlands exports chemicals and machinery, while Kazakhstan exports primarily oil.

While the countries are successful trade partners, there are significant differences between the two countries. Kazakhstan’s population of 17.7 million people enjoys an area of 2,724,900 km2, approximately 65.6 times bigger than the Netherlands. Additionally, Kazakhstan’s economy is primarily focused on natural resources. As geographically the largest of the former Soviet republics, excluding Russia, Kazakhstan’s vast hydrocarbon and mineral reserves form the backbone of the economy. Kazakhstan is landlocked and depends largely on Russia to export its oil to Europe. Further, oil is exported directly to China, showcasing Kazakhstan’s unique position as a bridge between Eurasia and Asia.

Astana, Kazakhstan.

Vice Minister Magauov said: “We are sure that Astana will become an effective platform for demonstrating the best world developments and trends in the use of energy from the sun, wind, biogas, sea and thermal waters.

Development of mutually beneficial bilateral ties with the Kingdom of the Netherlands has always been based on cooperation, trust and friendship, and continues to be one of the priorities of our foreign policy. Kazakhstan considers the Netherlands as our key political, trade and investment partner in the European Union.”

When considering Kazakhstan’s economy, it is important to understand the ramifications of natural resource dependence. The economic downturn of its Eurasian Economic Union partner, Russia, and the decline of global commodity prices from 2014 to 2015, contributed to an economic slowdown in Kazakhstan. In order to combat this issue, in 2014 Kazakhstan devalued its currency, the tenge, and announced a stimulus package to cope with its economic challenges. Since 2015, Kazakhstan has replaced its currency band with a floating exchange rate, leading to an even sharper fall in the value of the tenge. Since January of 2016, the tenge has modestly appreciated, primarily due to a slight increase in oil prices.

In addition to lack of diversification in the economy, Kazakhstan also struggle with various issues surrounding corruption, bureaucracy, and arbitrary law enforcement. This has been a large concern for investors, who seek security in their ventures. Further, the country’s banking sector is subpar, suffering from low liquidity, poor asset quality, and a lack of transparency.

Despite these drawbacks, the Astana Expo revealed promising changes for the country of Kazakhstan. Green technologies based on new fundamental discoveries, physics, and building on the developments of Nikola Tesla are helping facilitate diversification within the Kazakhstani economy. Moreover, this demonstration showcased the best of the best in the solar, wind, biogas, and marine sectors, raising Kazakhstan as an emerging player in the global push for clean energy development. The facilities built for the Expo will continue to serve as vital constructions as Kazakhstan continues to develop. For example, spaces used for pavilions can be converted into standard office spaces, to ensure investment is not wasted.

Overall, while Kazakhstan’s economy and political situation remain shaky, major strides are being made in the country’s development as exemplified via the Astana Expo. Not only was this Expo a major achievement for Kazakhstan as a nation, it will serve as an example for other countries in Eurasia and Asia who are seeking to diversify their economy, broaden international contacts, and push for modern development.

 

 

 

 

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