Collaboration Quite High, Going Even Further

Q: Major Korean companies such as Samsung and LG have recently been participating in several of your national projects, the scale of which is incredible. Please tell us about the background and meaning of such cooperation. Furth-ermore, what do you think are Korea’s strengths and advantages?

A: I believe that the advancement of technologies and the high quality of products has made Korea one of the most wishful business partners in the world. In addition, the reputation and the world-leading positions of South Korean companies such as Samsung, LG, Hyundai, KIA, STX, SK Group, and POSCO in various fields are clear indicators of Korea’s development.

I would also like to stress historical ties between our nations that arose from the Altay region, as well as the common origin of Kazakh and Korean languages, which belong to the Altay group of languages. Kazakhstan also has a large Korean ethnic community, one that is an inseparable part of the Kazakhstan nation. Therefore, one of the most important factors behind the strong ties between Kazakhstan and Korea is that it is easy to communicate and establish relations for our people, such as in business circles.

During President Lees’ visit to Kazakhstan in 2011, the Kazakhstan-Korea Business Forum was held in Astana, which resulted in the signing of agreements and contracts for construction of the “Balkhash” Thermal Power Plant and Petrochemical Complex in Atyrau City, projects worth more than US$ 8 billion.

The main framework agreement for construction of the “Balkhash” Therm-oelectric Power Plant between JSC “Samruk-Energy”, “KEPCO” and “Sam-sung” was signed on March 25, 2009. Agreements on construction of the petrochemical complex in Atyrau City were signed by the Government of the Republic of Kazakhstan, LG Chemical, and Korea Eximbank.

Since the end of the 1990s, South Korean large businesses have shown rising interests in conducting business in Kazakhstan. The two large projects confirm the mutual business interests from both nations to cooperate. In particular, Samsung and LG have been at the forefront of such relations. These companies are well known in Kazakhstan for their quality and respectability.

In turn, Kazakhstan is highly interested in the realization of joint projects that incorporate South Korea’s advanced technologies and scientific research, and the rich raw material base of Kazakhstan to create a unique platform in Kazakhstan for the advancement of joint-developed products in neighboring markets. In addition, we are deeply interested in studying how South Korea formed its economy, one that is based on knowledge and the development of human resources.

Q: In addition to the large-scale plant business, the two countries are also known to be expanding cooperation in the development of medical technology, eco-friendly business, BT and IT areas, including financial systems. Could you please provide us with more details about this?

A: More than 300 joint venture companies with the participation of Korean capital have been registered in Kazakhstan. South Korean companies are operating in various sectors of Kazakhstan’s economy.

During President Lee’s visit to Kazakhstan in 2009, the Kazakhstan-Korea Business-Forum resulted in the signing of 7 documents regarding cooperation in the areas of energy, transportation, construction and telecommunication technologies.

In April 2010 during President Nursultan Nazarbayev’s visit to Korea, another business forum was held, at which 23 commercial agreements and contracts worth more than US$ 1 billion were signed. Among these were agreements for mutual cooperation in the spheres of oil, gas, petrochemical industries, machinery manufacturing, atomic energy, uranium exploitation, construction, and Kazakhstan grain exports.

Eight documents were signed at the business forum in Astana during the visit of Minister of Knowledge Economy to Kazakhstan in October last year, including a memorandum of understanding between Committee of Geology and Resource Exploitation and Korea Resources Corporation.

Cooperation in IT, innovation, bioscience, telecommunication sectors according to these agreements has already been started.

On August 25, 2011, the first Kazakhstan-Korea Center for Technolog-ical Cooperation was opened in Astana, followed by a second in Daejeon in September. We conducted the “2011 Kazakhstan-Korea Joint Cooperation Seminar” on November 17 in Daejeon.

Since 2009, Korean companies have worked on the construction of pharmaceutical plants in Kazakhstan. Today, we are already looking at a few potential projects, including the establishment of a Joint Venture in the East-Kazakhstan region.

South Korean companies are also involved in the establishment of a Nuclear Medicine Center in Almaty, as well as supplying equipment for the production of pharmaceutical agents.

During a visit by the Korean Minister of Health and Welfare in August 2011, ten documents relating to health and medical cooperation were signed between our countries. According to the agreements, the Medical Center of President’s Affairs Administration of the Republic of Kazakhstan came to open Eastern Med-icine Center.

Meanwhile, approximately ten master class-surgeries were conducted by Korean doctors in hospitals in Astana this year. Furthermore, exchanges between professors and teaching staff in different fields, including medicine, continue to occur regularly.

The Ministry of Environmental Protection of the Republic of Kazakhstan and the Ministry of Environment of the Republic of Korea signed a Memorandum of Understanding on Cooperation in the field of Environment Protection, as well as a Programme of Action for Implementa-tion Policies for the Supply and Usage of Modern Technologies for Vehicles Operating on Natural Gas in Kazakhstan. In March 2011, Mr. Nurgali Ashim, Minister of Environmental Protection of the Republic of Kazakhstan, was elected as a member to the Board of Directors of the Global Green Growth Institute.

Cooperation between governmental bodies and companies related to ecology is developing rapidly, resulting in a number of joint projects in both countries.

Q: Could you please outline the business environment and some of the distinctive feature of the Kazakh economy, such as some of your major economic indicators?

A: First of all, on November 7, 2011, the Credit-Rating Agency, Standard & Poor's, upgraded the sovereign credit rating of Kazakhstan to “BBB+” from “BBB,” and gave a stable outlook, citing prospects for accelerating economic growth due to the increase of oil exports. According to a report by the agency, the rating upgrade reflects the improved budget flexibility, as well as being the results of double surpluses and the associated strong economic growth supported by rising oil production.

One of the main priorities of Kaza-khstan state policy is to support a congenial investment climate and promote direct foreign investment into Kazakhstan’s economy.

Today, Kazakhstan is a leader among CIS countries in regards to attracting direct foreign investment per capita.

Experts from the World Bank recognized Kazakhstan as a country with the most successful reforms for improving business conditions. In international ratings of countries with congenial investment climates, Kazakhstan ranked 59th out of 183 countries.

In recent few years, Kazakhstan has fundamentally changed its tax policy, decreasing tax rates.

Among factors contributing to Kazakhstan’s investment attractiveness is its comfortable business climate supported by congenial investment laws, attractive investment support, and economic and political stability.

Secondly, the presence of large amounts of natural and mineral resources is another contributor.

According to various scientists, Kazakhstan is the 6th largest country in the world in terms of natural resources. From 110 elements on Mendeleev’s chemical elements table, 99 have been found in Kazakhstan’s subsoil, 70 explored, and 60 are used.

Kazakhstan is the world leader in discovered reserves of zinc, wolfram, and bohrium, second in the world for reserves of silver, lead, uranium and chromites, third for copper and fluorites, fourth for molybdenum, and sixth for gold reserves.

Thirdly, the advantageous geographical position of Kazakhstan provides investors with the opportunity to enter consumer markets with population of more than 1 billion people, including the newly established Customs Union.

The list of basic measures of state-support for foreign and national investments in the Republic of Kazakhstan includes: investment preferences (investment tax preferences, exemption of customs duties, government land grants) regulated by investment and tax legislation; co-financing of projects through governmental development institutes; provision of rights to large investors for membership of the Foreign Investors’ Council chaired by the President of the Republic of Kazakhstan (indirect measure of support), with bi-annual meetings held under the chairmanship of the President.

In addition, all the necessary legal frameworks for the realization of investment activities have been established in Kazakhstan. In 2003, the Law on Investm-ent was adopted, which fully regulates the legal and economic basis of investment promotion.

This law, according to the evaluation of international experts, is one of the best legislations in the sphere of investment among countries with transitional economies.

The law guarantees the full protection of investors’ rights and the stability of made contracts, as well as clearly regulates the work of government bodies in regards to investors (free flow of capital, repatriation of capital, freedom of profit usage, and private property rights on land).

It is crucial to note that the government’s investment support is spread evenly for national and foreign investors.

Currently, Kazakhstan is realizing the State Program of Forced Industrial-Innovative Development for 2010-2014, which meets important requirements for investors, including the creation of an accessible infrastructure, an advantageous administrative environment, and available financing.

The creation of more attractive conditions for investors in the following priority sectors as part of the within Forced Industrial-Innovative Development is in progress. These priority sectors are: Oil refining and oil and gas sector infrastructure, mining and smelting complexes, nuclear and chemical industries, with the subsequent transition from primary production to higher levels; Machine-building, construction industry, pharmacy; Agroindustrial complexes, consumer goods industry, tourism; and Information and communications technologies, biotechnologies, alternative energy, space industry.

Q: The current world economy could be defined as “block economy.” Kazakh-stan also plans to build an economic union with members of the former Soviet Union. What impact do you think this plan will have on economic cooperation between Korea and Kazakhstan?

A: Three CIS countries; Kazakhstan, Russia and Belarus, have established the Customs Union. On July 1, 2011, customs control on borders between the three states was abolished. Furthermore, On Nove-mber 18, 2011, the Presidents of Kazakh-stan, Russia and Belarus signed the Declaration on Establishment of Eurasian Union, the formation of which will progress similarly to the European Union. The Union will serve as an effective “bunch” between Europe and the dynamic Asia-Pacific region.

Next year, in the territories of Kazakhstan, Russia and Belarus, the Single Economic Space will be established. The goal of this is to create conditions for the stable and effective development of member-states’ economies and to improve the quality of life of the populations. The core principle of the Single Economic Space is to provide a free flow of products, services, capital and labor forces among member-states.

Kazakhstan is also a member of the Eurasian Economic Community. All of these covers agreements on the abolition of customs duties, and to some extent foresee the creation of a “single custom territory.” Therefore, huge additional opportunities are opening for South Korean businesses in Kazakhstan. In particular, products manufactured in Kazakhstan with the participation of Korean companies can be delivered to a consumer market with a population of nearly 180 million without the need for customs or other difficulties. That is a great advantage regarding the development of business in Kazakhstan, I believe.

Q: After President Lee’s recent visit to Kazakhstan, cooperation between the two countries is expected to be extended to various fields. What cooperation has been done and is planned regarding cultural exchanges?

A: Apart from the exchange of Cultural Years between Kazakhstan and Korea in 2010 and 2011, the exchange of visits of various artists, including K-Pop stars, is developing rapidly. Activities related to cultural exchange are regulated by the Kazakhstan-South Korea Commission on Cultural Cooperation.

On November 24-25, 2011, the second Korea-Central Asia Film Festival took place, organized by our close partner - Silk Road Foundation. Three movies, including one Kazakhstan and one Kyrgyzstan, were shown. A joint Kazakhstan-Korean movie was also presented to the South Korean public, called “Regist Diary.”

Next year, a number of events are being planned due to the celebration of the 20th Anniversary of diplomatic relations between Kazakhstan and Korea. I hope our two countries will continue to support the same high level of cultural exchanges as in 2010 and 2011.

Q: As Ambassador of Kazakhstan in Korea, are there any particular requests or wishes you would like to share during your stay here in Korea?

A: This is my second posting to Seoul as Ambassador of the Republic of Kazakh-stan to Korea. I have to admit that I really enjoy living in such a wonderful country. In addition, in all my six years in Korea, I have became really fond of “HanShik” (Korean food), and enjoy eating it very much.

Of course, an Ambassador’s main purpose is to develop better relations between the countries. I wish and am trying to maximize cooperation opportunities with the Republic of Korea. I am confident that the collaboration between our two states is quite high nowadays, but I am sure that we can go even further.