ANALYSIS - Uzbekistan, Kazakhstan ally to tap economic potential
At summit-level meeting, both countries unveil projects and connecting plans to integrate region
The writer is a UK-based analyst and has worked with universities in three Central Asian countries.
Two Central Asian nations, Uzbekistan and Kazakhstan have decided to take their relations to the next level upgrading them from interstate relations to forging an alliance dictated by a mutual desire for closer international cooperation based on common interests.
The summit-level meeting held between Uzbek President Shavkat Mirziyoyev and his Kazakh counterpart Kassym-Jomart Tokayev in Nur-Sultan -- the capital city of Kazakhstan -- on Monday unveiled many projects to boost bilateral economic cooperation.
To upgrade relations into an alliance a supreme interstate council, an interparliamentary council, and the council of foreign ministers are being established. The principles of the alliance are reflected in the declaration signed by the two leaders.
Mirziyoyev, expected the volume of bilateral trade to reach $ 4 billion by the end of 2021. The two leaders discussed future cooperation in large projects for chemical products, pharmaceuticals, modernizing the infrastructure, creating agricultural enterprises, calibrating efforts for gearing joint automobile production with efficient marketing. For the Uzbek president, Kazakhstan's support is crucial to enable his country to pursue economic and industrial revival.
Tokayev reciprocated by announcing several initiatives including showing interest in building a plant for producing phosphorus and a range of fertilizer products in the Tashkent region at the cost of $1 billion. Kazakhstan’s largest construction company is also planning to build a new residential district in Tashkent.
Among joint industrial projects, both countries had started to manufacture cars, buses and are now planning to produce tractors in Kostanay, Kazakhstan. Household appliances are being produced in Turkestan and Shymkent. They are also upgrading textile enterprises. In Uzbekistan over 1,000 enterprises with investment from Kazakhstan are also being planned. The Kazakh Tenge Bank is operating to expand its network in the country.
Both countries are also expecting the cross-border bilateral trade to grow dynamically to overcome the consequences of the slowdown caused by the pandemic, said Bakhyt Sultanov, Kazakhstan’s trade minister.
Border ties expanding
Meanwhile, in South Kazakhstan’s Turkestan city, a forum of border regions of the two countries concluded a package of agreements and contracts to expand bilateral border cooperation. Another joint venture includes the launch of textile production at the Turkistan Textile garment factory.
Border ties are expanding as new mechanisms for enhancing economic relations are being identified. Kazakhstan Deputy Prime Minister, Roman Sklyar, announced that Kazakhstan is planning to establish 24 distribution centers for wholesale trade along its borders in addition to establishing six industrial and logistic hubs to allow smooth and speedy progress for economic cooperation with adjoining countries.
Favorable conditions are being created to facilitate the movement of the people. Key projects including the construction of the Uchkuduk - Kyzylorda railway, as well as the launch of the Turkestan - Tashkent high-speed link, is also likely to roll out soon.
In recent years, the air links, besides the volume of rail and road cargo transportation have been increasing. New railway routes are being worked out to remove barriers and simplify travel requirements, Tokayev told reporters.
In Nur-Sultan, Uzbek and Kazakh entrepreneurs concluded bilateral agreements in the field of mechanical engineering to the tune of over $500 million. As part of Kazakh-Uzbek industrial cooperation, the Astana-Motors company plans to build a plant for the production of Hyundai cars in Jizzakh in eastern Uzbekistan. In Kostanay, the joint production of Chevrolet cars had commenced in 2020. In November 2021, a joint venture for producing tractors has been established in Kostanay in northern Kazakhstan.
Mirziyoyiev’s efforts for rapprochement have come as an urgent response to a long-overdue need for establishing effective regional cooperation, restoring trust, and improving mutual understanding, as well as, seeking a solution to accumulated problems. Following the hardships posed by the prevalent pandemic, it had become all the more necessary.
As a full member of the Turkic Council held in November, Uzbekistan supported its transformation into the Organization of Turkic States. It has put forward a proposal to establish a Center for Research on Trade Cooperation of the Turkic States to develop proposals to increase the volume of mutual trade. Tashkent also strives for the adoption of the plan for connecting the participating countries in the transport sector, which will be of paramount importance in realizing the integration potential of the organization.
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