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  • The Cooperation Between Kazakhstan And Armenia Develops In A Friendl

    THE COOPERATION BETWEEN KAZAKHSTAN AND ARMENIA DEVELOPS IN A FRIENDLY AND MUTUALLY BENEFICIAL SPIRIT
    Alexandr Avanesov

    ArmInfo, 14 June 2007
    2007-08-01 16:04:00

    The cooperation between Kazakhstan and Armenia develops in a friendly
    and mutually beneficial spirit Exclusive interview of the Extraordinary
    and Plenipotentiary Ambassador of Kazakhstan to Armenia Ayimdos
    Bozjigitov with ArmInfo

    -Mr. Ambassador, how do you estimate the situation of
    Armenia-Kazakhstan cooperation? Don't you think that, presently,
    the level of political interrelation between the two countries
    significantly outstrips the trade-economic cooperation? If yes,
    what is it connected with?

    -The political interrelation, of course, significantly outstrips the
    level of trade-economic cooperation, but, in course of time, with
    the development of the two states' economies the economic constituent
    will also develop.

    In general, speaking about the political interrelation between
    our countries, it is necessary to emphasize that no politics can be
    without economics. Since diplomatic relations were established between
    Armenia and Kazakhstan, the cooperation between the two states has been
    developing in a friendly and mutually beneficial spirit. The mutual
    aspiration to expanse the trade-economic cooperation was mentioned
    during the first official visit of Kazakhstan's president Nursultan
    Nazarbayev to Armenia on 23-24 May, 2001. Likewise, on 6-7 November,
    2006, President of Armenia, Robert Kocharian paid an official visit
    to Astana, over which summits and a roundtable on the topic "Economy
    of Kazakhstan and Armenia" were held.

    Armenia's economic opportunities were presented in order to attract
    investments from Kazkhstan into Armenian economy. R. Kocharian made
    a speech before the representatives of business circles of Kazakhstan
    during which he presented Armenia's economic situation, macroeconomic
    indicators of your Republic. This proves that trade-economic relations
    between the two states are stable and developing according to the
    plan. Armenian president's visit to Kazakhstan became a new starting
    point in trade-economic relations between the two states, since it
    made possible to outline the basic directions of mutual interest. One
    of the main issues of the mentioned visit's agenda became the further
    enhancement of contractual-legal basis of the bilateral cooperation. A
    range of basic intergovernmental agreements were signed, such as
    the Convention on Avoiding Double Taxation and Prevention of Tax
    Avoidance Regarding Income Tax and Property Tax, that on Promotion
    and Mutual Support to Investments and on Cooperation in the Sphere of
    Culture. In this respect, we still have to strive to strengthening of
    the contractual-legal basis of the bilateral cooperation, and in the
    future to proceed to reviewing the project of Agreement on "Cooperation
    between the Republics of Kazakhstan and Armenia in the sphere of
    science and education". Besides, the issues of possible development of
    future cooperation in the sphere of seismology, weather forecasting
    and reducing earthquake risks, including the issue of concluding a
    bilateral agreement in this sphere, were discussed. The agreement
    on mutual visits of citizens signed in Astana is no less important,
    especially, taking into account that Armenian Community in Kazakhstan
    includes 25 000 people, most of whom often visit Yerevan. When we were
    opening the Embassy of Kazakhstan in Armenia, we didn't think that so
    many consular issues would emerge. An agreement on transport has also
    been signed, which was ratified by the Government of Kazakhstan. A
    draft agreement in the sphere of tourism is being worked out.

    At the same time, I'd like to emphasize that not all the existing
    resources of the trade-economic sphere have been mobilized, yet. These
    issues are included in the agenda of our dialogue, as well as in
    the intergovernmental commission. Of course, commodity circulation
    between the two states is presently insignificant, the development
    of which is in no small measure hindered by objective reasons, the
    main of which is the transport problem.

    Even the ratification of the present agreements and formulation of
    new documents will not give their result immediately, the results
    appear in a mid-term prospect. In this respect, it is necessary to
    establish contacts among corporations and companies of the two states.

    -You said about intergovernmental commission. When will its next
    meeting take place?

    -The next meeting of the Armenian-Kazakh Commission will take place
    approximately in autumn 2007. It depends on how quickly we will
    manage to prepare all the documents. There are no firm frames, the
    Commission's work will be oriented to its content.

    -During the last few years Kazakh capital has actively been invested
    in the economy of Georgia and Azerbaijan, while, in Armenia, with the
    exception of the bank sector, no serious progress is observed. What
    is this connected with, and what measures are you going to take for
    activating the bilateral trade-economic cooperation? Which spheres
    do you personally consider more prospective?

    Today, investments of Kazakhstan in the economy of Armenia total
    40 million dollars. The investments were made mainly in the banking
    sector of Armenia.

    In general, Kazakhstan considers Armenia as a country with high-level
    economic freedom. Moreover, there is rather favorable climate for
    investors and exporters in Armenia. All this alongside with impressive
    macroeconomic indicators create favorable conditions for bilateral
    economic cooperation.

    At the same time, the investment cooperation between Armenia and
    Kazakhstan is insignificant. Our countries have solid mutually
    advantageous potential that, unfortunately, is not used completely.

    It is important that the constructive political dialogue is
    strengthened by effective partnership in the trade and economy
    sphere. We are to elaborate effective cooperation models, open
    new cooperation possibilities, especially, in energy and transport
    spheres. Kazakhstan is considered the possible shareholder in the
    stably developing banking sector of Armenia.

    Kazakh banks rapidly increase their assets and enter markets of the
    neighbouring countries, using surplus resources and low interest rates
    in the local market, which makes crediting in abroad profitable. The
    second largest bank in Kazakhstan "Turan Alem" has strong positions in
    the financial markets of a number of CIS member-states. It established
    a branch in Armenia in 2005. Moreover, given Armenia's interest in the
    supply of hydrocarbon material from deposits in Western Kazakhstan,
    the planned construction of Kazakh oil terminals in the territory of
    Georgia will help organizing oil supply to Armenia. In the nearest
    future, the bank intends to extend its presence in you country,
    increasing the credit volumes by $10mln.

    In particular, these funds will be directed to mortgage loan
    activity. In general Kazakhstan has serious resources to invest in
    abroad. As of today, the volume of Kazakhstan's investments totals
    $18bln.

    Only in Georgia about $1bln was invested and this is not by
    chance. Being a landlocked country, Kazakhstan like Armenia
    doesn't have access to sea in order to export its goods in the
    world markets. Thereby, it was decided to construct oil and grain
    terminals in Georgia, from the services of which Armenia can also
    benefit. Taking into consideration Armenia's interest in hydrocarbon
    raw material delivery from the deposits of West Kazakhstan the
    planned construction of Kazakh oil terminals in the territory of
    Georgia will promote Kazakh oil supply to Armenia. Delivery of Kazakh
    grain to Armenia is also considered from this point of view. Joint
    ventures have always been considered an effective and strong form of
    bilateral cooperation. Armenia is shareholder of 45 small enterprises
    in Kazakhstan, including 21 JVs. These enterprises are mainly engaged
    on wholesale trade, services and production of building materials. We
    are ready to discuss possible establishment of JVs in the sphere of
    machine building, tourism and jewelry.

    -At the last meeting with Azerbaijan's President Ilham Alieyv in Astana
    Kasakhstan's President Nursultan Nazarbayev expressed Kazakhstan's
    interest in Baku-Tbilisi-Ceyhan projects and in TransCaspian gas
    pipe- line.

    A month later, when meeting Russia's President Vladimir Putin they
    touched on Kazakhstan's participation in the joint project of Caspian
    gas pipeline with Russia and Turkmenistan. Moreover, Kazakhstan intends
    to export its hydrocarbon material to China. Will the country resources
    be enough? And what's your opinion on RA Foreign Minister Vardan
    Oskanyan's statement about the possibility of Armenia's participation
    in the project of TransCaspian gas pipeline taking into consideration
    that it was a project of transporting Kazakh and Central Asian gas

    - Kazakhstan's government is holding an active work on learning
    possible options of the export oil and gas pipelines taking into
    consideration their economic and political expediency, technical
    ability and economic security.

    The decision about construction of the TransCaspian gas pipeline may
    be adopted only after preparing of the technical and economic basis
    of the project, as well as after having progress in settling the
    international and legal status of the Caspian Sea. Without thorough
    study of the technical and economic assessment of the TransCaspian
    gas pipeline project, I think it is untimely to comment on the
    participation of any country in it.

    In general, today Kazakhstan is in the group of states which have
    strategic hydrocarbon reserves, which directly influence the formation
    and condition of the international energy market. Kazakhstan accounts
    for two-third of the whole volume of oil recovered in the Caspian
    region. Evaluation of the proved oil stores of Kazakhstan amounts to
    9-17,6 bln barrels. It is predicted that by 2010 gas recovery will
    grow and amount to 45 bln sq/m.

    Exploratory reserves and assay value of natural gas taking into
    consideration the new deposits on the Caspian shelf in Kazakhstan
    totals about 3,3 trillion sq/m while potential resources reach 6-8
    trillion sq/m.

    Because of the inner-continental geographical situation of Kazakhstan
    and the absence of access to the world oceans, it has a serious
    task - to ensure the ways for compatible export of the local raw
    materials to foreign markets by means of creation and development
    of an effective and rational pipeline infrastructure. The growing
    gas and oil recovery in explored and producing fields overland and
    on the shelf of the Caspian Sea will inevitably demand increasing of
    the general capacity of the existing export systems.

    Conducting of the multi-vector export policy of the local resources
    is the most acceptable option for Kazakhstan. Legal and commercial
    conditions of the oil and gas transportation through transit countries
    will play a key role when choosing the export directions of Kazakh
    hydrocarbon. Presently Kazakhstan's government pays a maximal attention
    to this aspect. For example, Kazakhstan doesn't participate in the
    construction project of "Kars-Akhalkalaki-Baku" railway.

    It is necessary to observe the agreement between Kazakhstan and
    Azerbaijan signed in June 2006 on assistance when transporting gas
    from Kazakhstan via the Caspian Sea to Azerbaijan and further to the
    world markets via the Baku-Tbilisi-Ceyhan oil pipeline, just from the
    point of view of strengthening of the energy security of Kazakhstan
    and of the region in general. Moreover, to transport oil via the
    TransCaspian route the Kazakh party together with recovery companies
    is drawing out the KCTS (Kazakh Caspian Transporting System) which
    includes an oil pipeline at the territory of Kazakhstan, sea terminals
    in Kazakhstan and Azerbaijan, sea transporting by tanker fleet and the
    connecting pipeline Baku-Tbilisi-Ceyhan. The trilateral declaration
    (Russia, Kazakhstan, Turkmenistan) about construction of the Caspian
    gas pipeline and the quadruple joint declaration including Uzbekistan
    as well about development of the gas transporting capacities in the
    Central Asia region, which foresee reconstruction of the existing gas
    pipeline from Turkmenistan via Kazakhstan to Russia, construction of
    the new Caspian gas pipeline as well as extension of capacities of the
    Central Asia - Center gas pipeline are of the same significance. It's
    but natural that the China export direction is also worked over.

    -Analysts think that the Russian President's proposal concerning
    the Caspian gas pipeline is directed to the neutralization of
    Azerbaijan. What do they think in Kazakhstan?

    -I understood your question. I don't know what the analysts you
    mentioned think about it but Kazakhstan keeps to the bottom-line
    approach, based on the commercial viability and on the competitive
    ability of the transit tariffs. Alternative and economically feasible
    directions for transporting the energy resources are important for
    Kazakhstan.

    -You mentioned of mid-term prospect of developing trade-economic
    relations between Armenia and Kazakhstan. Are there any calculations
    on the timeframes of activating the relations?

    -The most unappreciative job is to name concrete dates, like predicting
    the results of a sport competition. But basically, our relations
    develop according to plan. The meeting of the Intergovernmental
    Commission will take place in autumn, when, as planned, several
    documents will be signed as well as a business forum will be held. I
    think that just after it the market entities of our states will be
    activated. Without their participation our activities will be of a
    declarative nature.

    -Would you, please, tell what projects Armenia invites Kazakhstan to
    participate in?

    -We already got a proposal on concession of Armenian railroads. We
    also suggested that Armenia should participate in an open competition
    in Mangyshlak-Bautino railroad construction. We also invite Armenia
    not only to be an investor but also a contractor.

    -Did Armenia invite Kazakhstan to take part in the construction project
    of Iran-Armenia railroad, which would give Armenia an opportunity of
    direct entry into the markets of Central Asia and Kazakhstan?

    -No, we didn't get any official invitation for Kazakhstan's
    participation in that project.

    -What else can interest Kazakhstan in Armenia?

    -We are interested in the opportunity of investing both in the
    construction of new power plants and modernization of currently
    functioning blocks in Armenia. Moreover, Kazakhstan is interested
    in Armenia's mineral resource industry and in cement production. The
    point is that large-scale construction has started in Kazakhstan and
    we need cement. It is planned to establish three more cement plants
    in Kazakhstan. We are also interested in cooperation in the tourism
    sphere. Presently, models of cooperation in tourism business are
    under elaboration.

    -And what would be Kazakhstan's position on joint construction of
    "GasPromOil" of Iran-Armenia gas pipeline and of an oil-processing
    plant on the border of Armenia and Iran?

    -Presently, these projects are only studied by the participant-sides,
    for this reason it is untimely to speak about Kazakhstan's joining
    them. As I already mentioned, Kazakhstan may decide to participate
    in a project only after assessing its viability, as well as the
    political and economic dividends. At the same time, we can't exclude
    such possibility taking into consideration that Kazakhstan have good
    relations with Armenia, Russia and Iran including at the summit
    level, and is concerned about increasing cooperation with them;
    the projects are supported by the leadership of Russia and Armenia,
    we have the opportunity of their fulfillment especially, in case
    of cooperation with Russian business, which is widely represented in
    Armenian market. Basically, I am confident that the cooperation between
    Armenia and Kazakhstan will prosper. Establishment of partnership
    and business relations between our presidents will promote this.

    -How would you estimate the cooperation between Armenia and Kazakhstan
    within the frame of international structures?

    -We actively cooperate within the frames of CIS, CSTO and OSCE. As
    international organizations, OSCE in particular stated that
    well-organized and transparent parliamentary election was held in
    Armenia, which is also very interesting for us. As to the CIS, as you
    know, Kazakhstan's president has suggested that the structure should
    be reformed and that they should concentrate on 5 main directions-
    agreed migration policy, cooperation on creating of a single transport
    communication, cooperation in the sphere of science and education,
    fighting trans-frontier criminality and cultural-humanitarian
    cooperation. It is also necessary to follow the principle of base-line
    approach while making the agenda for the Commonwealth and to work by
    the formula "one year-one subject-matter". This implies determining
    and working every year till making final decision on a key issue,
    touching upon the interests of all the participants in the CIS.
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