Session II: “Towards a Common Economic Space: – How to Enhance Economic Connectivity and Cooperation between the Euro-Atlantic and the Eurasian-Pacific Area"
16 May 2018, Vienna
Thank you, Ambassador Žugić,
Ladies and gentlemen,
I would like to join earlier speakers in expressing my gratitude to the Republic of Austria for its excellent organization of this year's OSCE Asian Partnership conference in the beautiful Palais Niederösterreich and its effective stewardship of the OSCE's Contact Group with its Asian Partners for Cooperation.
Kazakhstan joins other delegations in welcoming Austria's continued work, initiated by its Chairmanship last year, on reinvigorating discussions and implementing projects focused on economic connectivity across the OSCE space.
We are particularly pleased to note that, owing to our joint efforts, the Vienna Ministerial Council succeeded in demonstrating the constructive potential of the second dimension. Notable achievements include the adoption of a Ministerial Decision on promoting economic participation in the OSCE area, the Declaration of the Austrian OSCE Chairmanship and the Chair of the Economic and Environmental Committee on greening our economies and fostering our environmental co-operation, as well as the joint statement by the ministers of foreign affairs of the Eurasian Economic Union member states on connectivity and alignment of integration processes in the OSCE area.
These documents serve as a solid blueprint for our activities in the economic sphere, and have paved the way for improved cooperation in the second dimension. Kazakhstan believes that this positive momentum can lead us towards advancing the vision of the 2010 Astana Declaration of a single security community stretching from Vancouver to Vladivostok in the name of peace and prosperity.
I would like to again thank our hosts for inviting me to speak here today, as economic connectivity is a key pillar of Kazakhstan's foreign policy.
I would like to frame our country's perspective by stating the obvious. Kazakhstan is located in the heart of Eurasia and is the OSCE's largest land-locked participating State. These factors, together with the demanding realities of globalization, have meant that issues of transit and logistics have become vital to our diplomacy. This turns the attraction of foreign investments, integration of innovative technologies into our economy, and the promotion of Kazakh exports into some of the chief priorities of our government.
The future of economic connectivity and cooperation between the Euro-Atlantic and the Eurasian-Pacific Area will primarily depend on our ability to create and maintain efficient intercontinental trade flows. The pace at which we meet this objective will be determined by the quality of infrastructure, ease of doing business, and transportation costs and logistics that set the framework for inter-state economic collaboration.
Over the past decade, Kazakhstan has invested approximately $30 billion in its national transportation infrastructure. We have plans to invest an additional $8.4 billion by 2020. This will complement the already dynamic development of our trade routes in concert with China's Belt and Road Initiative, in which our country plays a vital role. It will also breathe new life into transcontinental shipping routes between Asia, Europe and among OSCE countries.
To put this in perspective, transporting goods by land has distinct advantages over other transport methods. For instance, journeys by rail from China to Europe across Kazakhstan are three times faster than by sea, and almost 10 times cheaper than by air. Joint plans and projects worth more than $10 billion are currently being implemented. These are focused on developing infrastructure towards the Caspian Sea and the ports of Kazakhstan and Azerbaijan, as well as the Georgian and Turkish ports on the Black Sea. Once complete, they will contribute to delivering the speed and technological interlinkages that are required to meet the growing demand for goods and produce.
As a result of all these multi-national efforts, transporting goods within the Eurasian area over distances of 10,000-12,000 km takes just two weeks by train on average, which serves as a stimulus for increased land-based shipments of goods between European and Asian markets.
Back in 2010 such transcontinental shipments via Kazakhstan did not exist, and in 2011 there were only 1,200 twenty-foot equivalent units (TEUs) transported. But in 2017, in cooperation with 17 Chinese provinces, Vietnam, and South Korea, our railways transported more than 200,000 containers to Europe and back. In 2018, we project this number to grow further to 350,000. Overall, rail transportation across Kazakhstan in all directions will reach 550,000 TEUs this year, and we expect these volumes to grow rapidly over the next few years reaching 2 million containers by 2020.
Kazakhstan has succeeded in creating an efficient and modern national transport infrastructure and in promoting greater economic integration. This strategic programme has allowed Kazakhstan to capitalize on its geostrategic location and succeed in linking its national development programs with those of neighbouring countries.
A good example is the connection between the $24 billion Kazakh national “Nurly Zhol" (Bright Path) infrastructure development program and Belt and Road Initiative. This integration has created synergies between transportation and logistics systems and formed a new infrastructure network for transcontinental shipments.
Kazakhstan has been implementing the Nurly Zhol programme since 2015 to stimulate the growth of trade flows across the country by linking it with global infrastructure networks. Nurly Zhol provides for large-scale transportation and infrastructure projects, and has seen the completion of the Western China - Western Europe road transportation corridor, an ambitious undertaking that allows for faster and safer travel of passengers and goods.
Other noteworthy examples of economic connectivity and cooperation are the transport and logistics terminal that Kazakhstan and China jointly built at the port of Lianyungang on the Pacific coast in 2014 and the expansive Khorgos dry port on the border between Kazakhstan and China. Last year, the port of Lianyungang and COSCO Shipping became major shareholders of this dry port.
Our connectivity strategy involves using both inland and sea ports to achieve maximum results from our location and modern transportation infrastructure. I should add that we are equally focused on introducing digital solutions in this area, for managing processes and improving services based on blockchain technologies.
We also strongly believe that our country and Central Asia generally should not be regarded as a simple transit corridor between Europe and Asia. On the contrary, our region seeks to use the expertise of bodies such as the OSCE to achieve effective modernization, develop our logistical potential, attain economic diversification and, as a result, improve Central Asia's integration into the global economic system.
Earlier in my remarks I used the term “land-locked" when referring to Kazakhstan. This term sometimes carries negative connotations due to perceived developmental challenges from a lack of access to open waters and, in some cases, resources for investment. This, of course, is not always the case, as demonstrated by land-locked countries in Europe, including our host Austria.
Kazakhstan, having gained its independence only a quarter-century ago, leverages its geographic location as a positive asset. For this reason, Kazakhstan is increasingly seen internationally not as land-locked but rather as land-linked, acting as a connecting bridge between continents, countries and cultures.
Returning to the OSCE's potential for facilitating greater compatibility between regional economic and transport networks, I would like to note that our country remains committed to the idea of Greater Eurasia, a concept coined by our President, Nursultan Nazarbayev. It seeks to create mutually beneficial synergies between the European Union, the Eurasian Economic Union and the Belt and Road Initiative.
These initiatives correspond fully to Kazakhstan's drive to position Central Asia as the main strategic bridge between the largest markets in Europe and Asia, which have a combined population of 4.4 billion people. Our region played this role in the past, and can fulfil it anew with increased regional economic and political cooperation – the calling cards of the OSCE.
While there are numerous political and technical challenges that remain to be resolved – from dealing with the impact of reciprocal Western and Russian sanction policies, to improving railway infrastructure where wide gauge rails meet narrow gauge rails, or to expanding the use of the Baltic Sea ports – we strongly believe there is no alternative to further growth of transcontinental trade. Undoubtedly, this growth will benefit all countries in the Euro-Atlantic and the Eurasian-Pacific Area, and that is why Kazakhstan has consistently worked and will continue working to solve those issues through developing the concept of connectivity.
Almost a year ago Astana hosted an international ministerial conference “Meeting the Challenge of Sustainable Energy" and the Eighth International Forum on Energy for Sustainable Development (with the participation of then-OSCE Secretary General Lamberto Zannier). A decision was then made to establish on the territory of EXPO 2017 a “Future Energy" International Centre for the Development of Green Technologies and Investment Projects.
Kazakhstan also announced at the OSCE Vienna Ministerial Meeting last December that it was offering the former exhibition grounds to serve as a platform for the creation of an OSCE Thematic Center or hub on connectivity and green economy. It is planned that this entity also focuses on energy security and the advancement of economic cooperation and connectivity to provide security and promote cooperation within the OSCE. It is proposed that this Thematic Center joins the Astana International Financial Center, the International Green Technologies Center, and the International IT start up hub that will soon be fully operational on the Astana EXPO grounds.
At present, the OSCE Secretariat, Office of the Coordinator of OSCE Economic and Environmental Activities, Kazakhstan and other interested delegations are developing a feasibility study of the Thematic Center project. We believe the Center will represent a new stage in the development of the OSCE's field presence and research potential and, more generally, in the adaptation of our valued organization to modern challenges. What's more, this will raise the visibility of our organization in its Eurasian part, as was called for by President Nazarbayev at the OSCE summit in Astana in 2010.
In conclusion, I would like to quote Mr. Kairat Abdrakhmanov, our Minister of Foreign Affairs, who highlighted the many interlinkages between economic and security issues while speaking at the opening of the OSCE booth at last year's EXPO: “The reduction of environmental risks, resource efficiency and alternative energy uses go hand in hand with good governance, the cultivation of strong business partnerships and economic cooperation among the OSCE Participating States and Partners for Cooperation."
In light of the complex security challenges facing the OSCE region, our delegations should step up joint efforts to strengthen the economic and environmental components of our common Euro-Atlantic and Eurasian security and make the best use of economic diplomacy for our mutual benefit.
I wish the OSCE and the Austrian Chairmanship of the OSCE's Asian Contact Group continued success in building and strengthening economic connectivity and cooperation between and among all participating States and Partners for Cooperation.
Thank you for your attention.
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