Kazakh Non-Oil Exports Expected to Increase

Due to the new tools of support, the volume of non-oil exports by 2019 should increase by 1.1 times compared to the level of 2012.

A comprehensive programme to support domestic export-oriented industries created during the first five-year stage of industrialisation has become a priority in the State Programme of Accelerated Industrial and Innovative Development-2 (SPAIID-2). Exports should become a driver of economic growth. To achieve the goals, it is planning to introduce such tools as pre-export financing, development of a supportive net for Kazakhstan’s businesses abroad and a mechanism to reduce transport costs through the guarantee of traffic volumes. The areas of export support in SPAIID-2 in 2015-2019 were considered by the government.

Kazakhstan is among the 50 leading exporters of uranium, flour, wheat, zinc, lead, iron ore and petroleum. The export basket consists of more than 900 commodity items delivered to 121 countries around the world.

However, according to the Ministry of Industry and New Technologies, Kazakh export has raw material orientation. The first 15 commodity items, including oil, gas, petrochemicals, uranium, copper and ferroalloys, make up 92 percent of the total exports of the republic.

Unfortunately, sale markets also demonstrate low diversification. Four-fifths of the total export is sent to 10 countries. Thus, raw commodities are supplied to Italy (18.4 percent), China (17.4), the Netherlands (12), France (6.4) and Switzerland (5.2); 7 percent of processed goods are exported to the Customs Union (CU) countries and 6 percent to the Commonwealth of Independent State (CIS) countries (Ukraine – 2.5, Uzbekistan – 1.4, Kyrgyzstan – 0.8 percent, etc.).

In order to diversify the national economy and improve the structure of the export basket, the government provided support to the export of processed goods, including free-of-charge assistance to the small and medium-sized entreprises (SMEs) in the promotion of exported goods (trade missions, trade shows, advertising and presentation activities), analytical support, implementation of the programme to reimburse expenses of exporters at developing foreign markets and the financial and insurance support through KazExportGarant Export Credit Insurance Corporation.

At the same time, the competition of countries for export niches in the context of globalisation is increasing and it is very important for Kazakhstan to achieve a new level of development in this field. Therefore, the government developed the National Export Strategy, the main provisions of which are included in SPAIID-2.

Thus, pre-export finance and insurance support for the purchase of raw materials in the manufacture of export products includes transport, storage and other expenses.

The second direction is the support of Kazakh businesses abroad. According to the World Bank’s study, a network of trade support abroad provides a 6-10 percent increase in export volumes. Many countries have a wide network of representative offices abroad; for example, the UK (UKTI) has 4,000 such offices. In Kazakhstan, today there is no such network of business support abroad to protect and promote the interests of domestic entrepreneurs. That’s why the government, together with the National Chamber of Entrepreneurs, defined a geographical structure of this network. Thus, it is planning to open representative missions in eight target markets – Afghanistan, Belarus, Georgia, Iran, Kyrgyzstan, Tajikistan, Turkmenistan and the border regions of Russia. The concept to form the supportive network for Kazakhstan’s business abroad will be developed until 2015.

Particular attention will be paid to such constraining factors as the high transport component in the cost of goods. Thus, the export of processed goods in 2013 amounted to $19.5 billion, of which 48 percent is transported by railway, 25 percent by motor road, 19 percent by multi-modal transportation and 4 percent by marine and air transportation.

It is also planning to introduce a mechanism to reduce transport costs by guaranteeing traffic volumes. This will increase the volume of sales and open up new markets.

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