Kipchaks and investments: What connects Kazakhstan and Hungary?
The Head of State is scheduled to make a state visit to Hungary. During high-level meetings, a wide range of issues aimed at expanding mutual cooperation is planned for discussion. Last year, we reported that the Hungarian company MOL was planning to launch one of Kazakhstan’s largest gas condensate fields, Rozhkovskoye. Currently, the field is operating successfully, and it is forecasted to contribute over 500 billion tenge to Kazakhstan’s National Fund. What are the future prospects for developing relations, and what connects Kazakhstan and Hungary? Find out more in the analytical report by a Kazinform News Agency correspondent.
Strategic partnership
This year marks 32 years since the establishment of diplomatic relations between Kazakhstan and Hungary. Notably, Hungary was the first European country in Central Europe to sign a declaration of strategic partnership with Kazakhstan. Currently, there is a stable political dialogue between Astana and Budapest, with mutual understanding on pressing issues of the current geopolitical situation and joint responses to regional security challenges.
High-level meetings
On September 18, 2023, during the 78th UN General Assembly session, President Kassym-Jomart Tokayev met with Hungarian President Katalin Novák. The discussions focused on trade, economic, investment, and cultural-humanitarian cooperation between the two countries.
A year earlier, Hungarian Prime Minister Viktor Orbán visited Kazakhstan on an official visit, meeting with Kassym-Jomart Tokayev. During the talks, both sides discussed the state and future prospects of Kazakh-Hungarian relations, emphasizing strengthening political dialogue, deepening trade and economic cooperation, and expanding cultural-humanitarian ties. President Tokayev expressed gratitude to Viktor Orbán for his significant contribution to bringing Kazakhstan and Hungary closer. Orbán, in turn, thanked the Kazakh President for the invitation and hospitality extended to him and the Hungarian delegation. He praised the level of political dialogue and mutually beneficial partnership between the two countries:
“It is always pleasant to return home. Hungarians gladly visit Kazakhstan because we share millennia-old common roots. Over the last decade, we have made great efforts to develop our cooperation, achieving good results. It is a great honor to work with you. Hungary has always been and will remain a reliable strategic partner of Kazakhstan. The relations between Hungary and Kazakhstan are better than ever, but the potential, especially in the economy, remains immense. We have excellent prospects,” Orbán said during the meeting in Akorda.
It is worth noting that Hungary consistently supported Kazakhstan’s bid for the OSCE chairmanship in 2010 and backed hosting EXPO-2017. Hungary also supports Kazakhstan’s accession to Council of Europe conventions on criminal justice and easing visa regimes with EU countries.
Key agreements
Over the past decades, cooperation between Kazakhstan and Hungary has actively developed in various areas. Since 1996, the Kazakh-Hungarian Intergovernmental Commission on Cooperation in Combating Organized Crime, Terrorism, and Drug Trafficking has been in operation. Since 2008, there has been an Intergovernmental Commission on Economic Cooperation between the two nations.
Over the years, several agreements have been signed, including a treaty on combating organized crime and terrorism, an economic cooperation agreement, and a treaty on mutual legal assistance in criminal matters.
Additionally, in 2012, the Kazakh-Hungarian Business Council was established. By 2014, the countries signed a Joint Declaration on Strategic Cooperation. In 2015, the Kazakh-Hungarian Agricultural Direct Investment Fund was created with a charter capital of $40 million. That same year, a Memorandum of Understanding was signed for creating the Kazakh-Hungarian Strategic Council. In June 2017, direct flights between Budapest and Astana were launched.
Kazakh exports worth $700 million
In over 30 years of partnership between Kazakhstan and Hungary, trade relations have flourished, and economic projects have been implemented. Here are some figures: the trade turnover between the two countries from January to August 2024 amounted to $131.1 million, a 6.3% increase compared to the same period last year ($123.3 million). For the entire year 2023, trade turnover reached $187.5 million, up 8.9% from 2022 ($172.2 million).
This year, Kazakhstan’s exports to Hungary decreased by 29.8% over the first eight months, amounting to $2.7 million. According to the Ministry of Trade and Integration of Kazakhstan, the decline in exports to Hungary is attributed to reduced shipments of certain goods, including fish fillets (down by 76.2%), ferroalloys (down by 100%), telecommunication devices (down by 77.2%), iron and steel products (down by 100%), and chain parts made of iron or steel (down by 100%).
Notably, in November 2023, the government of Kazakhstan announced its readiness to increase exports to Hungary. Plans were discussed to boost the export of 95 goods, amounting to approximately $700 million.
Imports to Kazakhstan from Hungary, on the other hand, increased by 7.5% from January to August 2024, reaching $128.3 million.
$300 million in Hungarian investments
Over the past 20 years, more than $300 million in investments have been attracted to Kazakhstan from Hungary. Last year, negotiations were reported on implementing investment projects worth $490 million in the fields of engineering, agriculture, and logistics. Major investors in Kazakhstan’s economy include the Hungarian oil and gas company MOL, as well as Gedeon Richter, Egis, and others.
Kazakhstan is home to 32 Hungarian enterprises and 39 joint Kazakh-Hungarian companies operating in agriculture, trade, construction, and mining industries.
In December 2023, MOL launched one of the largest gas condensate fields, Rozhkovskoye, in partnership with KazMunayGas Exploration and Production JSC (KMG) and First International Oil Corporation (FIOC). The mining rights belong to the joint venture Ural Oil and Gas (UOG), which includes KazMunayGas (50%), MOL Group (27.5%), and China’s Sinopec (22.5%).
According to KMG, the Rozhkovskoye field was discovered in 2008, with a gas and condensate production contract signed in 2015. The field contains recoverable condensate reserves of 12.5 million tons and reservoir gas reserves of 26.8 billion cubic meters. By 2040, the field is expected to produce 14.2 billion cubic meters of raw gas and 7.1 million tons of condensate. To date, approximately $534 million has been invested in the project. The field is projected to contribute 501 billion tenge to Kazakhstan’s National Fund and 110 billion tenge to the local budget. Additionally, shareholders plan to allocate at least 3.1 billion tenge for the region’s socio-economic development and invest 1% of the total investments annually into training Kazakh personnel.
Another promising project is the construction of solar power plants and hydrogen generators in Kazakhstan by the Hungarian company Globalia. The company aims to supply electricity to four settlements and one industrial facility in the Arzgir zone of Atyrau region through five solar parks with a total capacity of 10.3 megawatts. In July 2023, Globalia announced plans to develop a 27-hectare agricultural industrial park in Kazakhstan, selecting Arshaly district in Akmola region, one of the country’s main agricultural areas, for the project. The park will primarily focus on grain production. According to Kazakhstan’s Ministry of Agriculture, projects in model fish farming, land and soil adaptation to climate change, feed mill construction, and establishing demonstration and research stations for crop cultivation are planned in the coming years.
It is worth noting that Hungarian companies are interested in implementing joint investment projects with Kazakhstan, especially in the context of deepening cooperation through the framework of the Organization of Turkic States (OTS), of which both Kazakhstan and Hungary are members. In November 2023, representatives of Kazakhstan’s Ministry of Foreign Affairs and Kazakh Invest met with the Hungarian National Association of Machinery and Energy Equipment Manufacturers (MAGEOSZ). The discussions focused on localizing energy equipment production in Kazakhstan, a promising area given the country’s energy strategy to introduce 17.5 GW of capacity by 2035.
Descendants of the Kipchaks
Kazakhstan and Hungary share deep historical ties, as descendants of Kipchak tribes, who migrated to modern-day Hungary from the Turgai steppes in the first half of the 13th century, still reside there. This historical connection forms the foundation for the shared cultural heritage of the Kazakh and Hungarian peoples. Researchers from both countries conduct joint archaeological studies on the settlement history of the Kipchaks in Hungary and the Magyars in Kazakhstan.
Kazakhstan’s universities also collaborate with leading Hungarian institutions under an agreement between Kazakhstan’s Ministry of Education and Science and Hungary’s Ministry of Human Resources. Each year, 250 Kazakh students receive scholarships to study in Hungarian universities under the “Hungaricum” program.
Artists, scientists, and athletes from both countries actively participate in cultural and sports events held in Kazakhstan and Hungary. For example, on April 15, 2022, the Hungarian Museum of Natural Sciences hosted an exhibition on the Botai culture of Kazakhstan, dedicated to the domestication of ancient horses. In 2023, Hungary hosted performances by Kazakh ethno-folklore ensembles “Arnau” and “Turan”, the Academic Orchestra of Kazakh Folk Instruments named after D. Nurpeisova, and exhibitions by Kazakh artists at the 27th Beregfürdő International Art Exhibition.
Additionally, the Kazakh Film Days were held in Budapest, featuring screenings of the films “The Kazakh Khanate: The Golden Throne” and “Oliara”.
Cultural and humanitarian relations between the two countries are actively developing, supported by the historical closeness of the two peoples and their shared commitment to reviving national culture and traditions.
Previously, Kazinform News Agency reported that during the 8th meeting of the Kazakh-Hungarian Intergovernmental Commission on Economic Cooperation in Budapest, a Memorandum of Understanding was signed between Kazakhstan’s Ministry of Energy and Hungary’s Ministry of Culture and Innovation on the training and education of personnel in the peaceful use of nuclear energy.
