At the very outset, I would like to thank ORF and SAPRA Foundation for inviting me to this august gathering and express my profound gratitude to everyone present here for having an interest in my country.

Let me offer you quick facts on Kazakhstan :

Full name : Republic of Kazakhstan

Population : 15 million

Location : Central Asia, South of Russia, Northwest of China.

Total area: 2,717,300 sq.km, 9th largest country in the world, 86% of that of India

Form of Government: Unitary state with a presidential-parliamentary form of government

Capital: Moved from Almaty to Astana on December 10, 1997

Literacy: 99%

Currency : Tenge, equal to 100 Tyins. Introduced on 15 Nov 1993

Statehood : Regained independence on December 16, 1991

Language : Kazakh is the state language. Russian is also widely spoken, English enjoys Government’s support as a language of international affairs and business

After 16 years of independence, Kazakhstan has become a success story of a nation-building from the scratch.

During the Soviet period, Kazakhstan was an agrarian economy supplying raw materials to the former Soviet Union. The most striking feature of Kazakhstan’s economic development during its sixteen years of independence has been the transition from central command planning to a market system by implementing complex political, economic and social reforms designed to make it into a democratic State with a market economy.

The first few years of Kazakhstan’s independence were characterized by economic decline (mainly due to the destabilizing influence of the disintegration of the Soviet Union): by 1995, real GDP had dropped to 61.4 per cent of its 1990 level. This economic deterioration was worse than that experienced during the Great Depression of the 1930s.

Since 1992, Kazakhstan has actively pursued a programme of economic reform to establish a free market economy through deregulation and the privatization of State enterprises. After 16 years of independence Kazakhstan is now generally considered to be among the most advanced countries on the post Soviet space in this respect.

Today Kazakhstan’s economic growth has been as high as 10% a year since 2000, which is among the highest in the world. Market economy reforms resulted in 90% of economy belonging to the private sector.

These achievements have been possible because of the timely adoption of the National Development Strategy “Kazakhstan 2030” in 1997, which provides a vision of where Kazakhstan should stand in 2030 in terms of national development.

This year we celebrate the 10^th anniversary of this long term strategy, which formed a basis for sustainable progress. Under the strategy, we have conducted large scale privatization programs, reformed our pension system and modernized the financial and banking systems, created an investment-friendly environment.

Over the last 10 years, Kazakh economy increased as much as 5 times. Our external trade has grown 6 times and amounted to $ 80 billion. Kazakhstan’s main trade partners are the EU (Italy, Germany, UK, Netherlands), Russia, Switzerland, China, US.

The main features of our economy have been from the very start a free flow of capital and 100% currency convertibility, which contributed a lot to the business transactions.

According to the World Bank data, Kazakhstan is among the top 20 investment friendly countries in the world. The World Bank report “Business in 2005: Removing obstacles for growth” placed Kazakhstan in Group 5 (also including Germany, Denmark, New Zealand, Switzerland and Singapore) for protection of investors’ rights.

As a result, having stood at $1.3 billion in 1993, FDI had reached $10.4 billion by 2006. Today we are already exporter of capital and our investments made overseas exceed USD 17 billion.

If in the early 90s, the GDP per capita was only $400, today it stands at $7000. Kazakhstan today is fast moving to a post-industrial, high-tech, English-speaking economy with capabilities in aerospace, biotechnology, IT and peaceful atomic energy under the government-adopted Industrial and Innovation Development Strategy.

One of its examples is that last year Kazakhstan launched its first ever telecommunication satellite, KazSat, and has become a space power, with other two satellites in the pipeline.

Kazakhstan is eager to get the best practices from around the world. To train its bright talents in the best universities and institutes in the world we have given a shape for the Bolashak (‘Future’) program, which has become a successful initiative. Under the Program, 3000 Kazakh students are sent annually to pursue their higher education at the leading educational institutions abroad on full Government sponsorship

For those who cannot afford to leave the country, best professors from abroad, including India, are invited to deliver lectures at Kazakh universities in IT, space, biotechnology, engineering, etc. The purpose is to impart world standard education on Kazakh students and train highly qualified managers and specialists to efficiently run the growing economy.

In order to realize these ambitious goals, Kazakhstan has officially announced its aspiration to become a trilingual nation, with Kazakh as the State language, Russian as the language of interethnic communication, and English as the language of successful integration into the global economy and community.

As you know, Kazakhstan is rich in oil and gas. Its hydrocarbon reserves constitute about 1.5% of the world resources. However, the main economic priority for Kazakhstan is to avoid over-dependence on its oil, gas and minerals sector while using these natural assets to build a modern, diversified, highly-technological, flexible and competitive economy with a high value-added component. So, to avoid the so called “Dutch disease” we put the emphasis on the high tech, value added industries such as textile, metallurgy, tourism, petrochemistry, construction materials, etc. This is the central goal of the National Strategy for the period to 2030 and of the recently adopted State Industrialization and Innovation Programme, which covers the period through to 2015.

Kazakhstan is the second uranium rich country after Australia, possessing 21% of world uranium resources. Kazakhstan is also developing renewable energy projects, including wind, bioethanol, hydro energy.

In addition, 2006 saw Kazakhstan announcing a major strategy to put the country amongst the world’s 50 most competitive nations in the world in ten years’ time.

Kazakhstan is taking active steps to increase the sustainability of its economy. Using foreign best practices, particularly Norway’s policy on utilizing oil surplus profits, Kazakhstan in 2000 created the National Fund, which is used as a mechanism to control inflation, make efficient investments, and as a financial “pillow” in case of fluctuations of the world economy. Today it accumulated $21 billion.

Kazakhstan has become a great business destination. The number of JV with foreign capital increased from 1865 in 1999 to 7000 in 2005. Companies of over 60 countries established their presence in the Republic. 80% of all the investments attracted to Central Asia is in Kazakhstan. This has become possible because of the economic stability and excellent business climate in Kazakhstan.

My country is gradually emerging as a hub of ideas, technologies, and value added goods and services.

Based on the experience of successful countries, we have established development institutions and holding companies in the priority sectors such as Samruk (oversees public companies), Kazyna (oversees development institutions), KazAgro (Agriculture) and Samgau (IT, Science and Technology). We have established special economic and industrial zones, technology parks, social and entrepreneurial corporations to help promote competitive manufacturing.

At present there are four operating Special Economic Zones in Kazakhstan: Astana-New City, Aktau Port, the Information Technologies Park, and Ontustyk (South). The Tax Code provides tax privileges for the companies operating in zones that qualify for exemption from land and property tax.

The zone Astana- New City was created with the purpose of accelerating development on the left bank of the river Ishim in Astana. Tax privileges have been granted until 2010 for the construction of infrastructure, offices, and apartment buildings within an area of 1600 hectares.

The Aktau Port zone will be operating as from 1 January 2015 and covers 230 hectares of port territory near Aktau city and located on the Caspian Sea.

The Information Technologies Park zone was created on 1 October 2003 for a period of ten years. This zone is located on 340 hectares in Almaty and grants tax privileges for information technologies projects.

Ontustyk zone was created on 200 hectares in Southern Kazakhstan on 1 July 2005 for a period of ten years and provides tax privileges for cotton production and for the textiles and clothing industry.

To tap the financial potential of Kazakhstan and Central Asia, the Almaty Regional Financial Center (ARFC) has been recently established. The activities of the Financial Centre are aimed at attracting foreign investment, developing the region’s securities market and ensuring its integration with international capital markets, and facilitating Kazakh investment in international securities markets. On 1 September 2007, 128 issuers of stocks and bonds had been registered on the Centre with a total capitalization of $71.8 bln.

The Centre has an International Advisory Board of local and foreign experts to advise on matters related to its strategy and development. The members of International Council include former World Bank Chairman James Wolfenson, former President of the Singapore Stock Exchange Lim Choo Peng, and heads of such major companies as Deloitte, Numis, Renaissance Capital, ABN Amro Bank, and Bracewell and Guiliani.

As the globalization gets faster, I can also visualise the need for establishment of the links between the ARFC and BSE. 

Here I would like to highlight that 18 Kazakh leading companies have been listed at the London Stock Exchange. As Mumbai is emerging as an important financial hub of Asia, I can not exclude the possibility that in future shares of Kazakh major companies can be traded at Bombay Stock Exchange (BSE).     

Recent events on the US home mortgage markets were a good test for the financial system of Kazakhstan, showing up the effectiveness of the domestic financial regulators, particularly of the National Bank, which managed to minimize the effects of the crisis. The pressure on the national currency has been decreased, with the result that inflation growth was stopped and the long-term forecast for economic growth remained positive.

Along with the economic progress, Kazakhstan is also known for its political and social stability, which is the main precondition for flourishing business.

Kazakhstan is a democracy, where rule of law is preserved and human rights are protected. Kazakhstan’s recent election (30 September 2007, Madrid) as the Chairman of the Organization for Security and Cooperation in Europe (OSCE) for 2010 speaks volumes of the democratic credentials of my country.

Recently Kazakhstan has become a presidential-parliamentary republic with transfer of significant powers from the President to the legislative power.

Kazakhstan has a vibrant civil society, with over 5000 NGOs. Freedom of speech is ensured. Censorship is prohibited by the Constitution. The number of Kazakh media outlets increased from 600 in 1991 to 2500 today. Media, 80% of which is private, speaks 13 languages. Major international and regional TV, internet, traditional media are available in Kazakhstan.

Like India, Kazakhstan is a multiethnic and multi-religious country. It is a home to 130 ethnic groups with various religious outlooks. They live in peace and harmony in the country thanks to the ethnic and religious tolerance prevailing in the society which has a predominant moderate Muslim population. Businessmen surely will feel the comfort and enjoy their stay to witness the warmth and hospitality from the local people.

Kazakhstan has also decided to swiftly conduct the major administrative reforms to be up to the challenges of fast changing world. Our goal here is to form highly professional state service and efficient government structures. The main idea is that government officials should be as effective and highly paid as businessmen in the corporate sector, cutting red tape and delivering the government service in a time-bound manner.

Kazakh foreign policy is predictable, consistent and peace loving. Thanks to the pro-active diplomacy, Kazakhstan is engaged in international initiatives by hosting a large of number of forums, among them recently UN ESCATO Summit, Shanghai Cooperation Organization meeting and others.

Kazakh diplomacy is distinguished by its integrational approach to tackling regional issues.Astana’s initiative to convene CICA (Conference on Interaction and Confidence Building Measures in Asia), which unites 18 Asian countries, is a constructive factor to build security mechanism in Asia.  This year CICA members celebrate 15^th anniversary of the CICA Day.

The aim here is to make our Eurasian region prosperous and secure so that people-to-people contacts are strengthened.

2. Bilateral Cooperation: New Dynamism

This year we are celebrating the 15^th anniversary of diplomatic relations between our countries. However I should underline that links between our nations have been there for thousands years. During the period between 12th and 3rd century B.C., nomadic and semi-nomadic Saka tribes reached India from Southern Kazakhstan.

Kazakhstan is located in the cross road of civilizations, meeting point of Islam, Christianity and Buddhism thanks to its location in the heart of Eurasia. India-Kazakhstan contacts go back to the days of the Great Silk Route which passed from China to the Western world through the Central Asian region touching Southern Kazakhstan.This route was the bridge between civilizations and carried not only goods, but also progressive ideas. Building on the experience of our forefathers and familiarize ourselves with the past, today we need to revive the Silk Route.

India was among the first countries to recognize the independence of Kazakhstan. President Nursultan Nazarbayev’s first official visit after Kazakhstan got independence was made to India in 1992, which shows importance of New Delhi to Astana.

Interaction in UN and other international fora has been close and mutually supportive. Kazakhstan backs India’s candidacy for the UN Security Council Permanent Membership. India has constructively and actively participated in the Conference on Interaction and Confidence-Building Measures in Asia (CICA) process, initiated by Kazakhstan, ever since its inception. Kazakhstan facilitated India’s entry into the Shanghai Cooperation Organization as Observer. India also supports Kazakh foreign policy’s another initiative - Congress of Leaders of World and Traditional Religions.

As for the economic relations, they have been witnessing rapid upsurge in the last few years. In 2006, the bilateral trade has witnessed 74% growth and reached 210 million USD. I am sure this is not a match to the huge potential we have. However, it indicates the immense scope for business-to-business ties between our regions. Kazakhstan’s main exports consist of mineral products; leather, and raw materials, imports from India include vegetable products, food stuff, chemicals, plastic, machinery and equipment. At the same time, there is a vast scope for cooperation in various fields including manufacturing sectors, such as textiles, construction materials, leatherwear, plastics, pharmaceuticals, IT, oil and gas, tourism, etc. It is especially relevant, since the Government is establishing industrial clusters in: tourism, oil and gas machinery building, food processing, textiles, transport logistics, metallurgy and construction materials (see the table of these clusters).

Last year, Indian investment to Kazakhstan has increased to $ 16 million, indicating the growing confidence of Indian businessmen in the favourable environment in the Kazakh economy.

May I assure you that political and business risk is low in Kazakhstan. It’s ensured by political stability, free flow of capital, repatriation of investment. There’re are many Indian companies doing business in Kazakhstan, including more than 70 pharmaceutical companies and other big Indian players as Mittal, Punj Lloyd, Larsen and Toubro and etc.

On their part, Kazakh companies are also establishing their presence in India.We have Kazakh firms such as KazStroy (infrastructure), Kaspain Shelf (oil exploration), TVL (retail equipment), STL (transportation and logistics).

Importance of direct transport routes Kazakhstan to India can not be underestimated. For better of passengers, including business people, we have Air Astana flights between Almaty and New Delhi, which operate twice daily on Wednesdays and Saturdays. It plans to open the third flight early next year.Its Boeing and Airbus aircrafts make the travel convenient. It takes only 3.5 hours to reach Kazakhstan from here. Air transport could be used for trade of light items like pharmaceuticals, tea, etc.

For transportation of cargo, mainly Kazakhstan-China-India is used. Although it is time-consuming, it is the reliable route preferred by the private sector. We hope that with the realization of North - South Corridor, powerful impetus will be given to the bilateral commercial activities, as this is expected to cu the time and transportation related costs significantly.

In the XXI century, people-to-people contacts hold the key to the success of cooperation. India enjoys great affection among the people of Central Asia thanks to its benevolent image and popular movies. Kazakh people admire India’s culture and civilization and keen to know more about your great country.We have two Centers for Indian Studies, there is an Indian Friendship Association comprising of Indian as well as Kazakh citizens. Kazakh Musician Marat Bisengaliev has helped to establish the first-ever Symphonic Orchestra of India and we have a new Kazakh teacher lectures Kazakh language course in the Jamia Millia Islamia University, New Delhi.

Yoga classes taught by Indian masters have become popular in Kazakhstan.There are several Kazakh dancer groups who perform Indian classic dances. In the 4th International Film Festival “Eurasia” held on 23-29 September 2007, Indian Star Nandita Das represented Indian cinema. At the event, film “Kamli my daughter”, where she played a leading role, was screened and watched by Indian movie funs with great interest.

3.Conclusion

Kazakhstan is not only interesting place from the business and political points of view, but it is also a wonderful tourist destination. It is now often called “a Paradise of Central Asia”.

In conclusion, I wish to express optimism that we are confident that with dynamic strides of our countries to move in tandem in bilateral relations we will surely bring mutual prosperity.

I thank one again everyone here for the interest in my country. I also want to call on present people to visit Kazakhstan and personally experience and see tremendous opportunities available in my country.

Thank you.