Macron’s visit to Kazakhstan: strengthening bilateral ties, securing raw materials
As President Emmanuel Macron embarks on his visit to Kazakhstan on November 1 this week, the diplomatic and economic ties between the two nations are set to receive a significant boost. The visit comes at a crucial juncture, as Kazakhstan seeks to deepen its relations with the European Union (EU) while strengthening its partnership with France across various strategic areas. More about what to expect from the visit and the current state of relations between Kazakhstan and France is in the latest article of Kazinform.
“The leaders of two countries will hold talks on strengthening the trade-economic, investment and energy cooperation and discuss the issues of international and regional agendas,” reads the statement of the Kazakh President’s press office.
The last time the two leaders met was in November 2022, during President Kassym-Jomart Tokayev’s visit to Paris.
Historical context
Kazakhstan and France have shared a diplomatic relationship since the early years of Kazakhstan’s independence in 1991. Diplomatic relations were established on January 25, 1992. In March 1992, the French embassy was opened in Kazakhstan, and in July 1993, the Embassy of Kazakhstan was opened in France.
Over the years, these ties have matured, encompassing diverse sectors such as trade, culture, education, and technology.
Current bilateral relations
Kazakhstan and France have maintained a strong economic partnership with French companies, particularly in the energy and infrastructure sectors, significantly contributing to Kazakhstan's development.
The cooperation stems from the Strategic Partnership Agreement signed in June 2008 and which entered into force in July 2010. France was the first EU member state to sign a strategic partnership agreement with Kazakhstan
In November last year, Macron described Kazakhstan as a “strategic partner” of France.
Cultural and educational exchanges between the two nations have also flourished. French language and culture have gained popularity in Kazakhstan, and educational programs such as the Bolashak Scholarship have provided Kazakh students the opportunity to study in France, strengthening people-to-people ties.
There is also Alliance Française Kazakhstan working to promote the French culture and language in Kazakhstan. At the moment, there are more than 830 French Alliances in the world in 132 countries on 5 continents. There are four of them in Kazakhstan - in Almaty, Astana, Shymkent and Karaganda, working with the support of the French Embassy.
President Macron's visit to Kazakhstan should also be viewed within the broader context of the EU’s interests in the region. Strengthening Kazakhstan's ties with the EU aligns with the EU's strategy to diversify its energy sources and strengthen regional security and economic development in Central Asia.
The Enhanced Partnership and Cooperation Agreement (EPCA), which came into effect in March 2020, has laid the foundation for deeper collaboration between Kazakhstan and the EU. This agreement promotes political dialogue, trade, economic cooperation, and cultural exchanges.
Kazakhstan is the first Central Asian nation to establish a comprehensive partnership with the EU, and this relationship is seen as a cornerstone for EU engagement in the Central Asian region
Trade is growing
France is one of Kazakhstan's key trading partners. According to the Bureau pf National Statistics, in 2022, the volume of trade between Kazakhstan and France recovered to the pre-pandemic level, reaching $4 billion, with an increase of 35.3 percent compared to the previous year. Exports from Kazakhstan made up $3.1 billion, and imports - $0.9 billion.
Overall, Kazakhstan’s trade with EU countries reached a staggering $41.9 billion.
Trade turnover between Kazakhstan and France between January and August 2023 reached $2.7 billion, which is 21.1 percent higher than in the same period of the previous year ($2.3 billion).
Exports from Kazakhstan to France in eight months surged by 2.9 percent, hitting $1.8 billion. Imports to Kazakhstan from France increased by 91.2 percent and amounted to $889.7 million.
The main goods exported from Kazakhstan to France are crude oil, uranium, titanium and titanium products, sulfur, hydrogen, inert gases and other nonmetals, motors and electric generators.
The main goods imported into Kazakhstan from France are vaccines, blood serums, turbojet and turboprop engines, gas turbines, medicines packaged for retail sale, coal electrodes, radar and radio navigation equipment and electric transformers, among others.
Investments
France is one of the five largest investor countries, investing in the economy of Kazakhstan. The total volume of French capital investments since 2005 is $18.4 billion.
At the same time, investments worth $770.2 million were attracted in 2022 alone, an increase of 27.7 percent compared to 2021. The gross outflow of Kazakh investments to France is $32.8 million.
There are over 170 companies with French capital in Kazakhstan, including such large transnational corporations as Total, Orano, Alstom, Danone, Vicat and Saint Gobain.
In May 2022, Air Liquide, a French multinational company which supplies industrial gases and services to various industries, received observer status in the Council of Foreign Investors under the President of Kazakhstan. Currently, Alstom, another French giant, is being considered to join the council too.
Since 1992, the Intergovernmental Commission on Economic Cooperation has been operating. Its latest meeting took place in May 2023 in Astana as part of the visit of Olivier Becht, Minister Delegate for Foreign Trade, Economic Attractiveness and French Nationals Abroad, to Kazakhstan. His delegation included heads of 20 companies, as well as representatives of the Ministry for Europe and Foreign Affairs, the French Treasury, the Bureau of Geological and Mining Research and the French Development Agency.
Strategic areas for cooperation
Tokayev’s latest visit to France in November 2022 made a significant push for bilateral ties. During the visit, 25 documents worth $3 billion covering various economic sectors were signed.
Given the global push for renewable energy, France and Kazakhstan are exploring opportunities for cooperation in the development of clean energy projects, including wind and solar energy.
Independent oil and gas expert Dinmukhammed Kudaibergenov said the trade structure could change slightly in the next 7-10 years.
“With the emerging international agenda of the energy transition, Kazakhstan’s exports will inevitably decrease in terms of hydrocarbons, which currently account for 40.2 percent, as of 2021, in the share of total foreign trade,” he said.
One of the major projects under implementation is a wind power station of 1 GW capacity to be commissioned in 2026-2027 in the Zhambyl region by Total Energies. The agreement was signed with Samruk Kazyna National Wealth Fund and KazMunayGas national oil and gas company in June 2022.
Electricity from the wind farm will be sold to the Financial Settlement Center of Renewable Energy for the national grid under the 25-year power and purchase agreement (PPA), a legally binding defining the terms and conditions under which the power producer will sell and deliver electricity over a specified period. The PPA agreement was signed in June.
Total has been operating in Kazakhstan since 1992, mainly in oil and gas exploration and production. The preliminary cost of the project is $1.9 billion.
French Alstom has also been instrumental in modernizing Kazakhstan’s railway industry. Alstom, a multinational company headquartered in France that specializes in the manufacturing and servicing of rail transport equipment and systems, is present in Kazakhstan with more than 1,000 people and seven sites, which include two plants. The first is in Astana for locomotive manufacturing and maintenance, and the second is a KazElectroPrivod joint venture in Almaty for the production of point machines.
Low carbon development as a common objective
French companies can assist Kazakhstan in exploring and developing alternative energy sources. Nuclear energy is one of them. French Electricite de France SA (EDF) was on the short list of companies to participate in the construction of a nuclear power station in Kazakhstan if the upcoming referendum votes in favor of the construction.
If Kazakh exporters are interested in French markets, they will need to adapt to the emerging green agenda, including the EU’s Carbon Border Adjustment Mechanism (CBAM). Starting October 1, 2023, designated imported goods from outside the EU will fall under CBAM.
“Therefore, the prospect of cooperation with France, in case of interest of Kazakh exporters in preserving and increasing raw materials, should be focused on the implementation and strengthening primarily in the green economy and green metallurgy,” said the expert.
He also sees the potential to increase titanium exports to France, which is in demand by the French aircraft manufacturing industry.
“Titanium exports could potentially grow, which is in demand by the French aircraft industry and could become the best alternative to Russian titanium. France is among the top five consumers of titanium of Kazakh origin, with a share of up to 20 percent of all exports in 2021,” said Kudaibergenov.
Uranium
Uranium exports are also a strategically important aspect of bilateral cooperation. In 2022, Kazakhstan became the absolute leader in uranium mining, accounting for 42% of global production, followed by Canada (15%) and Namibia (11%).
French newspaper Le Monde reported in August, citing Euroatom, that over the last ten years, France received approximately 88,200 tons of natural uranium from three main sources - Kazakhstan, accounting for 27 percent of the total, Niger contributing 20 percent, and Uzbekistan, making up 19 percent.
French Orano has been operating in Kazakhstan since 1996 through KATCO, a joint venture between Orano (51 percent) and the Kazatomprom national mining company (49 percent). KATCO is exploiting the Muyunkum and Tortkuduk uranium deposits in southern Kazakhstan.
In November 2022, Orano and Kazatomprom signed a memorandum of cooperation, which envisions the implementation of a joint technical research & development roadmap, investigations on the ways to address carbon emissions from operations and sets the ground for discussions on long-term development of the partnership between the two companies.
President Macron's visit to Kazakhstan presents an opportunity to reinforce the strong and diverse ties between the two nations. Bilateral relations with France continue to be a crucial element of Kazakhstan's foreign policy, and this visit will likely mark a significant step in further enhancing these connections.
