【Original】 New observation of Kazakhstan
Almaty, Kazakhstan's largest city, recently hosted an online investment forum, Almaty Investment Forum-2020 (AIF), with the participation of a number of foreign investors, and signed 55 memorandums of cooperation worth a total of US$3.5 billion.
In the aftermath of the pandemic, Almaty remains attractive for investment
The event was co-hosted by the City of Almaty, the Atamcon Entrepreneur Association, the Almaty Group of Social Entrepreneurs and the Kazakhstan Growth Forum. Businessmen from Kazakhstan and around the world, representatives of domestic banking and international financial institutions, enterprises, IT and investment companies, as well as experts in the field of international development, participated in the largest investment conference of the country's financial sector.
During the meeting, experts sought to find a way out for SMEs that have been hit during the pandemic and to open up new opportunities for business development, as well as new investment opportunities for the economies of Almaty and Kazakhstan in the post-PANDEMIC era.
Fixed asset investment in Almaty grew by nearly 17% in 2020, still showing strong appeal in the context of the pandemic.
As acknowledged by representatives of the municipality and other speakers, COVID-19 has had a huge impact on Almaty and the world economy as a whole, with an unprecedented impact on almost all areas of life – healthcare, education and culture, business trade, employment and more. At the same time, speakers agreed that the difficulties were a test of the city's strength and its ability to adapt to life and work in digital conditions.
After the forum, 55 memorandums worth $3.5 billion were signed, a result that seems to be intended to show that Almaty has not only not lost after the fight against the pandemic, but has become stronger, retaining its investment appeal.
Sargentayev: Create a "Greater Almaty" agglomeration
Although Almaty is not the capital, it is often referred to as the heart of Kazakhstan. Its importance depends in particular on its location on the Silk Roads. As part of a new strategy to develop the southern capital into an important financial centre, economic and cultural metropolis of the country, plans for the creative industries will continue to be active.
In light of this, Almaty Mayor Sarkintayev delivered a report entitled "The Challenges of the Pandemic and the Prospects for 2021" at the forum, which attracted attention. "Almaty should be a hub for the creative industries, attracting investment and talent from all over the world," he said. ”
Participants of the 2020 Almaty Investment Forum, representatives of foreign investment firms, including Chinese, showed great interest in the mayor's speech, which could become a development point for their business and will have wider access to the Kazakh market in the future.
According to Sarkintayev, according to the Almaty 2050 strategy, the share of creative industries should account for 12% of the city's gdp within 30 years. To this end, the city is creating a creative industries park and a global business center.
"Today, in terms of attractiveness, our city of Almaty ranks 177th in Mercer's ranking of the most convenient cities. Our goal is to enter the top 100 of the best big cities in the world. The mayor said.
In this context, the municipal government is pinning its hopes on the development of the "Greater Almaty" agglomeration area and strengthening Almaty's logistics role throughout the region as well as on the Eurasian route, which is also a project for the city to attract investment. The state has formulated an interregional action plan for the development of the Almaty agglomeration area in 2030, within the framework of which it plans to invest nearly 1 trillion tenge (US$ 2.3 billion) over the next five years to implement the "New Almaty" comprehensive plan. Key developments worth nearly 2 trillion tenge (over $4.6 billion) are also being developed: "Dongdaemun", "AlmatyCity New Commercial Center", Downtown and Theme Park.
Almaty Mayor Sargentayev attended the forum and delivered a speech.
As the mayor said, in the 2020 pandemic, there was a shortage of hospital beds and medicines, and the municipal government decided to speed up the development of the medical industry, making it one of the key industries in the metropolis. To this end, efforts will be made to develop high-tech and modern medicine to provide assistance to the population. Sargentayev also stressed the need to improve medical logistics, strengthen medical education and develop the pharmaceutical industry.
The development of the industrial zone in Almaty is highly valued, where new enterprises are being created that affect not only the city's economy, but also the entire national economy, as exemplified by the Hyunday Trans Kazakhstan Automobile Manufacturing Plant. In the food industry, examples of successful projects include the greenhouse complex at BRBAPK LLP and the Bizhan meat processing plant.
During the pandemic, almaty's trade, services, transport and logistics, small and medium-sized enterprises have been severely affected. Still, by January-October 2020, industry grew by 4.3 percent, construction by 11.8 percent, residential construction by 3.6 percent, and communication services by 8 percent.
In this regard, the Almaty authorities have set themselves the main goal: to maintain growth by the end of 2020 in order to activate the mechanism for large-scale economic recovery in 2021. To this end, efforts are being made to create conditions to promote commercial activities and investment attractiveness in cities.
"Despite the current dire global situation, Almaty's investment potential shows its resilience to external shocks. In 2020, the city's economic fixed asset investment increased by nearly 17%. This shows that our cities remain attractive not only to investors and businessmen across the country but also around the world. Sargentayev said.
Almaty's IT industry will be the driving force behind capital inflows
Another strong attraction for economic investment in Almaty and Kazakhstan as a whole is the scientific potential of the city of Almaty, which has a long educational base and is a key area for the development and implementation of new technologies in the IT field.
Minister of Digital Development, Innovation and Aerospace Industry of Kazakhstan Mushin spoke at the forum. He proposed new plans for the development of the IT industry for Almaty and Kazakhstan and talked about the development of e-government services for businesses after the pandemic.
"The 20,000 IT experts who are launched in the market every year form the 'Golden Thousand Team' in Almaty. What does that mean? These people have high-quality IT skills. All are entrepreneurial potential stocks and are highly qualified specialists. Therefore, we believe that Almaty is the driving force behind the development of the IT industry. All this is happening thanks to the fact that the city has many universities that offer high-quality education, as well as a new generation of programming schools (BITLAB, IT School, and Ecole42), which are new unofficial educational institutions that are able to train qualified personnel in two years. Minister MuHin shared it with the participants.
He also said that Almaty has already established an IT hub, which has begun to operate even without government support. "In the case of SmartPoint, the success stories of Kaspi.kz and Choco are also good examples, and at the same time, the state cannot stand idly by, it must support the overall development of the IT industry."
The minister believes that during the pandemic, the demand for e-commerce has increased dramatically, more and more businesses have begun to transform, and more and more Kazakhs are using the internet for shopping, and this conclusion is also supported.
Mikhail Romtadze, head of the Kaspi.kz, who also attended the forum, shared the secret of the project's success, highlighting in particular the special importance of investment in education, which clearly shows that the transformation of Kaspi.kz cannot succeed without adequate knowledge and professional training, nor will it become a leader in retail e-commerce in Kazakhstan. He said that even when his parents had problems eating, they did not give up on educating him.
Notably, Kaspi.kz app has maintained its position as Kazakhstan's e-commerce leader for the third consecutive year, with revenues Kaspi.kz reaching $475.1 million in 2019, with 8.5 million Kazakhs using the app every month.
Panel discussion participants.
In addition, Muhin mentioned that Nur-Sultan launched the AstanaHub project. Judging by the reactions of forum participants, most people agree with Muhin's position that it is not enough to concentrate on the development of it departments in the capital alone.
"Today, we are promoting the idea of AstanaHub growing in all regions and as a kind of franchise. It is impossible to develop just a capital hub, and it is necessary to transfer the AstanaHub project to Almaty, radiating these support measures, including tax incentives, to start-ups in Almaty. Muhin added.
Today, according to him, startups have attracted nearly 20 billion tenge investments in the AstanaHub Technology Park. More than 200 startups have gone through the process, some of which are already in operation, attracting significant investment.
Probably due to Muhin's invitation to private companies to invest and cooperate in the development of the IT industry in Kazakhstan, foreign investors, including China, which has become a global leader in e-commerce volume during the COVID-19 pandemic, are particularly interested.
Starting in 2021, he said, start-ups in Kazakhstan will receive grants — 10 million tenge for project development. Under the programme, 1.5 billion tenge has been allocated. The goal is to attract 500 billion tenge of private funds for new projects by 2025 and train globally competitive IT specialists.
"A new centre will also be created in Almaty and we invite all private companies to collaborate. We are confident that Almaty will be able to nurture the right startups for our IT industry and even set an example for Nur-Sultan, as all the best talent in our country is concentrated in Almaty. Muhin stressed.
China is ready to work with Kazakhstan to promote economic and trade exchanges
Li Ying, General Representative of CITIC Group's Representative Office in Kazakhstan, introduced the investment projects to various government departments in Kazakhstan, especially the city of Almaty, and she drew attention to the strong investment potential of interaction between countries along the "Belt and Road". In the first three quarters of this year alone, China's trade with countries along the "Belt and Road" reached $963.42 billion.
Li Ying (left), General Representative of CITIC Group Representative Office in Kazakhstan, introduced investment projects to various sectors of the Kazakh economy, especially the city of Almaty.
"China's outbound investment has been growing steadily," she said. From 2013 to 2019, chinese companies invested more than US$100 billion in direct investment in countries along the Belt and Road. By the end of 2019, $41 billion had been invested in the Zone of Foreign Economic Cooperation, creating 330,000 jobs in the region. ”
It is clear that the projects announced by the Almaty Forum 2020 can take advantage of the investment potential within the framework of the Belt and Road Initiative. After all, Kazakhstan is China's largest partner and investment target in Central Asia, and has become an important fulcrum of cooperation between the two countries, complementing each other in bilateral cooperation along the "Belt and Road", Li Ying said.
At the same time, she also said that as a model of effective cooperation, China has opened 5 perennial ports, 5 oil and gas cross-border pipelines and 1 international border cooperation center, and the Khorgos land port - Dongdamen and the Western Europe - Western China Highway have been put into use. Many projects have also been implemented in the field of production facilities in various fields. The number of bilateral investment projects reached 55, covering a variety of fields: industry, construction, industrial processing of products.
At the end of 2006, CITIC Resources, a subsidiary of CITIC Group, completed the acquisition of the Karazhanbas-Munai oil field, and then CITIC Group invested in the construction of the first asphalt plant in Kazakhstan and became the main contractor for the project.
"In the future, CITIC Group will take advantage of its advantages as the largest conglomerate and will also actively seek new investment opportunities in order to take advantage of all opportunities for cooperation with Kazakh enterprises to jointly promote economic and trade cooperation between the two countries along the 'Belt and Road'." Li Ying said.
【News Background】
CITIC Group is one of the investors active in the Kazakh market for more than a decade and has successfully paved the way for innovative development and modernization in China since its establishment in 1979.
CITIC Group is a multinational conglomerate with a business structure that combines financial services and industrial investment. Commercial companies cover more than 60 sectors, including finance, energy, processing, engineering, healthcare, publishing, tourism, real estate, and more.
The group has established more than 100 divisions in more than 60 countries and has been named one of the 500 largest companies in the world by Fortune magazine, a well-known American business magazine, since 2010. In 2020, the company ranked 126th on the list.
Source: 87th issue of the Kazakh Silk Road Today newspaper Chinese edition
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