Prime Minister of the Russian Federation Mikhail Mishustin visited the Innoprom exhibition in Astana

Trade turnover between Russia and Kazakhstan is “breaking historical records,” Russian Prime Minister Mikhail Mishustin said at the Innoprom exhibition held in Astana. Under the conditions of sanctions restrictions, Russia is interested in the possibilities of cooperation with the EAEU countries. Kazakhstan is actively implementing its plan to diversify the economy and reduce dependence on extractive industries and expects significant growth in processing, including by attracting new industrial investors who have been promised generous benefits in special economic zones and industrial parks.

Trade turnover between the Russian Federation and Kazakhstan last year reached record levels and amounted to about 2 trillion rubles; in 2023, from January to July, it grew by another 10%, exceeding 1.5 trillion rubles, Russian Prime Minister Mikhail Mishustin said at a meeting with President of Kazakhstan Kassym-Jomart Tokayev during a visit to the Innoprom exhibition held in Astana (at which, in particular, a Belarusian laptop with an Intel system and an unmanned KamAZ dump truck were presented).

Under the conditions of sanctions, the Russian Federation needs industrial partnership with the countries of the EAEU – additional subsidies will be launched to finance “cooperative” projects with the participation of at least three countries in the union.

The details of the country will be discussed at the intergovernmental council in Bishkek on October 26, and then the criteria for selecting such projects will be approved, Mr. Mishustin said.

The plenary session of the exhibition was also held with the participation of the prime ministers of four countries – Russia, Kazakhstan, Belarus and Kyrgyzstan. In his speech at it, Mikhail Mishustin predicted that the share of manufacturing in the structure of Russian GDP will grow this year by 0.2 percentage points – excluding oil refining and the food industry, the figure will be 13.8%. Deputy Prime Minister Denis Manturov, in turn, predicted that the main innovative trends in industry will be the production of battery cells for electric vehicles, unmanned systems and new materials.

Kazakhstan is also interested in increasing the share of processing – the country has already adopted a concept for its development, and there are special benefits within 14 free economic zones to attract investors. “The government of Kazakhstan is taking measures to create high value-added clusters in petrochemicals, metallurgy, heavy engineering, the production of auto components and fertilizers, and the uranium industry,” listed Prime Minister Alikhan Smailov, adding that over five years the volume of industrial production in processing has more than doubled . Kazakhstan’s trade turnover with all the “five” countries last year increased by 10.4%, to $29.4 billion; over the six months of this year, the increase was 4% (to $14 billion), Mr. Smailov said. However, the main processing industry in the country is still mining and metallurgy, which accounts for 23% of exports.

Competition for investment will only intensify, as will the worldwide race to find the right technology partners, believes Minister of Industry and Construction of Kazakhstan Kanat Sharlapaev.

According to the chairman of the board of the Atameken association, Raimbek Batalov, Kazakhstan can be used as an engineering hub, which is beneficial for everyone – technology transfer is discussed with Western manufacturers, and companies entering the local market count on access to the Russian and Chinese markets and markets countries of Central Asia. According to Kommersant’s interlocutors, Russian business in Kazakhstan is attracted by the familiar environment, so many companies enter the market directly – investors are actively attracted to Kazakhstan’s regions, including by providing preferential electricity tariffs, as well as areas with ready-made infrastructure. “Last year, direct investment flows slowed down, but in the first quarter of 2023, the net inflow of FDI from Russia to Kazakhstan increased by 16%, this year for investments will be very good,” concluded Dmitry Volvach, Deputy Minister of Economy of the Russian Federation, encouragingly.

Tatiana Edovina, Astana