Japan to invest up to $1bn in Kazakhstan’s economy – Kazakh Diplomat

ASTANA. KAZINFORM Japan is planning to invest up to $1bn in Kazakhstan's economy in the nearest three years. In an exclusive interview with Kazinform correspondent, Ambassador Extraordinary and Plenipotentiary of Kazakhstan to Japan Yerlan Baudarbek-Kozhatayev tells about this and other aspects of the two countries' trade-economic cooperation.

Mr. Ambassador, what is the significance of this year for the Kazakhstan-Japan relations?

On May 1, a new era will start in Japan after Crown Prince Naruhito ascends to the throne. Astana and Tokyo are approaching this moment as strategic partners that is stipulated in an appropriate declaration.

From the first days of Kazakhstan’s independence, President Nursultan Nazarbayev has been giving a special attention to the development of the bilateral cooperation with Japan. The official visit of the Head of State to Tokyo in November 2016 aimed at attraction of Japanese technologies and investments required for successful modernization of economy. At the meeting with Kazakh President, the leaders of Japanese companies could personally assure themselves of Kazakhstan’s firm interest in creation of favorable investment conditions.

How can you describe the current trade-economic cooperation between Kazakhstan and Japan?

In 2018, the total commodity turnover between Kazakhstan and Japan was $2bn that is 54% higher against the same period in previous year ($1.3bn).

Kazakhstan’s exports to Japan in 2018 comprised $1.5bn having risen by 70% compared to the same period in 2017 ($886mn). In the past 6 years, export to Japan showed a positive dynamics having increased twofold – from $628mn in 2013 to $1.5bn in 2018.

Kazakhstan exports primarily crude oil and metals to Japan which can be explained by historical conditions and economic role of the two countries in international trade. In this regard, the Embassy’s activity targets on diversification of Kazakhstani export and increasing the share of non-primary goods. Noteworthy to say, that Japan’s consumer market is saturated with home-made products. Of course, tough competition, specific requirements and national demand peculiarities create some obstacles for foreign exporters’ entrance to the Japanese market. Despite that, in 2018 Kazakhstani companies exported for the first time safflower oil and honey to Japan. Presently, the sides are negotiating supply of livestock products, namely horse meat, from Kazakhstan to Japan.

What investment projects are under implementation now?

Japan is the 7th major foreign investor of Kazakhstan. According to the National Bank’s data, the total volume of direct investments from Japan to Kazakhstan made $357.3mn and in 9 months of 2018 it amounted to $304.1mn. Oil&Gas and mining sectors attract a significant inflow of foreign investments.

One should note also Japan’s active investment in production sector of Kazakhstan. For instance, in 2018 the two countries implemented several investment projects. I mean Tokyo Rope Almaty, Hino Motors maintenance and assembly centre in Almaty, Nissin Foods and NYK Line transport and logistics terminal. In general, we expect that in 2019-2021 Japan will invest from $800mn to $1bn in Kazakhstan.

What can you say about the plans of further development of trade and economic ties in 2019?

The Kazakh-Japanese Joint Commission for Economic Cooperation of Governmental and Private Sectors is a major mechanism of our trade-economic interaction. This year, we plan to hold the 8th session of this Commission and a meeting of the Business Council in Tokyo.

More than 70 Kazakh-Japanese enterprises are functioning today in Kazakhstan in oil and gas, metallurgy, finance, ore-mining sectors, vehicle wholesale and logistics. Presently, we are negotiating the organization of a visit of Japan’s Keidanren Business Federation to Kazakhstan. Besides, we are planning to hold a business forum in Tokyo to boost trade-economic interaction and make a presentation of Kazakhstan’s investment climate. The trade-economic ties with the regions of Japan are maintained through the honorary consulates of Kazakhstan in Kansai, Chubu and Kyushu provinces.

What about fulfillment of President Nursultan Nazarbayev’s instruction to launch a direct flight between Kazakhstan and Japan?

The talks regarding launch of direct flight between Astana and Tokyo are underway. An appropriate regulatory legal framework has been created for the operation of flights. The Kazakh Embassy is now negotiating the issue of provision of a slot at the Narita Airport of Tokyo. According to the Ministry of Industry and Infrastructure Development, the direct flight will be launched in the second half of 2019.

Thank you for the interview!

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