Economic Newsletter on Kazakhstan |August 2020

Home , Dostyk, Gold reserve, Pavlodar Region, Turkistan Region, United Chemical Company, Usharal

CONTENTS

MACRO-ECONOMICS & FINANCE ...... 2 ENERGY & NATURAL RESOURCES ...... 5 TRANSPORT & COMMUNICATIONS ...... 9 AGRICULTURE ...... 10 CONTACTS ...... 14

The Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan intends to distribute this newsletter as widely as possible among Dutch institutions, companies and persons from the Netherlands. The newsletter summarises economic news from various Kazakhstani and foreign publications and aims to provide accurate information. However, the Embassy cannot be held responsible for any mistakes or omissions in the bulletin. ECONOMIC NEWSLETTER, August 2020 Embassy of the Kingdom of the Netherlands MACRO-ECONOMICS & FINANCE Kazakhstan’s GDP decreases by 2.9% over 7 months Minister of National Economy Ruslan Dalenov spoke about the results of the country's socio-economic development in January-July 2020. “The production of goods increased by 2.1%, while the production of services decreased by 6.2%. As a result, according to operational data, GDP fell by 2.9%. Annual inflation amounted to 7.1%. This is below the expected inflation corridor of 8-8.5%,” the minister said at a government meeting. Growth continues in the real sector of the economy. First of all, in construction, manufacturing, agriculture. The trade balance remains positive amid falling imports. There is a decrease in the volume of services due to quarantine restrictions, as well as a planned decrease in the rate of oil production, which has become a constraining factor in economic growth. “The manufacturing sector shows an increase by 2.1%, including construction by 6.3%, manufacturing by 3.8%, agriculture by 2.5%. In the service sectors, there is a decrease in transactions with real estate by 4.3%, in administrative services by 5.3%, trade by 11.9% and transport by 15.6%. Communication services increased by 8.7%,” the speaker emphasised. In July, compared with June of this year, indicators continue to grow in a number of service sectors. “Over the month, financial and insurance activities increased by 29%, accommodation and catering services by 10.2%, data transmission by 6.7%, mobile communications by 4.1%, Internet by 2.9%. Cargo turnover also increased by 5.6%, including rail transport by 5.5%, transportation by pipelines by 2.9%,” he said. In January-June of this year, foreign trade turnover amounted to $42.5 billion. Exports amounted to $26 billion, imports to $16.5 billion. The trade surplus remains at $9.5 billion, Kapital reported.

Cabinet of Ministers sets oil price at $35 per barrel in the forecast for the development of the economy of Kazakhstan for 2021-2023 The oil price is set at $35 per barrel in the forecast for the development of the economy of Kazakhstan for 2021-2023, the Minister of National Economy Ruslan Dalenov said. “The oil price is set at $35/barrel in 2021-2023, taking into account a conservative approach,” Dalenov said at a government meeting. Oil production in 2021 will amount to 86 million tons, in 2025 to 100.7 million tons. Positive growth is expected in all basic industries. The ministry hopes that the manufacturing industry will grow by 6.7% on average per year, the mining industry by 2.9%. The authorities expect the average annual growth rate to reach 6.2% in agriculture and 5.5% in trade. Nominal GDP should reach 76.7 trillion tenge in 2021, and 104.8 trillion tenge in 2025. In the baseline scenario, real GDP growth is projected at 2.8% in 2021 and at 4.6% in 2025, KazTAG reported.

Kazakhstan decides on plans to attract investment until 2025 According to the draft law on the approval of the Comprehensive Plan for Attracting Investments for 2020-2024, the growth of financing in fixed assets should exceed 30% of GDP by 2025. To achieve such goals, according to Prime Minister Askar Mamin, it is necessary to attract 30 trillion tenge to fixed capital within 5 years. In 2019, a pool of projects worth more than 12.5 trillion tenge was determined, while an additional 3 trillion tenge should be injected on average annually. The gross inflow of foreign direct investment in the manufacturing industry is expected to grow by 8.3% this year compared to the 2019 figure. In 2021, growth should be by 16.7%, in 2022 by 25%, in 2023 by 35%, in 2024 by 45%. According to the results of the first

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quarter of 2019, the gross inflow of FDI to Kazakhstan reached $6 billion. Thus, by 2024 the figure should be $8.7 billion. The value of reinvestments in the economy of Kazakhstan by current foreign investors in 2020 is planned to grow by 2.8% compared to 2019. In 2021 by 7.4%, in 2022 by 17%, in 2024 by 23%. Financing of the non-resource sector of the economy, excluding the budget, in 2020 will increase by 8.8%, in 2021 by 18.5%, in 2022 by 19%, in 2023 by 20%, in 2024 by 22%, according to LS.

Kazakhstan adopts master plan to mitigate COVID-19 fallout The Kazakh government and the National Bank have adopted a new plan that includes measures to support the economy in case the social and economic situation continues to worsen, said Kazakh Minister of National Economy Ruslan Dalenov at a July 29 press briefing. The plan goes in line with instructions from Kazakh President Kassym-Jomart Tokayev to develop a package of additional measures to support the nation’s economy amid the pandemic. “The joint action plan consists of measures with fixed deadlines in four areas. These include maintaining employment and incomes within the population, urgent measures to support small and medium-sized enterprises, active import substitution and macroeconomic stability,” said Dalenov. He said the “new economic reality requires radical changes in economic policies.” To do so, the government plans to revise the country’s Strategic Plan 2025 and redefine key economic targets. The updated document will be drafted by August 1. The main goal will be developing a new economic structure with increased self-sufficiency and import substitution, the targeted attraction of investments and boosting export potential. Global adverse trends have been affecting the Kazakh economy since the beginning of the year, said the minister. “Kazakhstan, like all other countries, is witnessing a decline in business activities amid negative consequences stemming from the coronavirus pandemic. The services sector has been worst hit – falling 5.6% in six months. At the same time, the real sector of the economy has seen sustainable growth. Production grew by 4.1%,” said Dalenov. Construction, which increased by 11.2%, and the processing industry, which grew by 4.8% became the main drivers. Dalenov also spoke about lending support to small and medium-sized businesses. Kazakhstan has nearly 1.6 million small and medium-sized businesses. Their share in the gross domestic product grew from 24.9% in 2015 to 30.8% in 2019, while the nation set a goal to bring the figure to 35% by 2025 and 50% by 2050 to include nearly four million people. Businesses have access to preferential lending, said Dalenov, as the government has allotted 1 trillion tenge ($2.4 billion) for that purpose this year. This includes 600 billion tenge ($1.5 million) through the National Bank announced by Tokayev in March to support businesses that suffered losses due to the pandemic and 400 billion tenge ($1 million) as part of the Economy of Simple things program designed to boost domestic production of goods and services used by consumers on a daily basis. “Since the beginning of this year, as part of the 2025 Business Road Map, more than 1,700 projects received financing for a total of 112 billion tenge ($265.6 million). As part of the Enbek program, 5,216 projects were implemented and loans worth 22.9 billion tenge ($54.3 million) were provided. As part of the Economy of Simple Things program, nearly 1,500 projects worth 382 billion tenge ($905.8 million) were supported,” said Dalenov. To maintain employment, the government allocated one trillion tenge ($2.4 billion) to its Employment Road Map and nearly 5,900 projects were launched with the intent to improve the quality of life in the regions and create 123,000 jobs, the Astana Times reported.

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Kazakhstan allocates 192.64 billion tenge to support business over 3 years The Ministry of Finance has calculated how much money will be required to support and develop business in Kazakhstan. According to the draft national budget for 2021-2023, 192.64 billion tenge is planned to be allocated for the programs Business Road Map - 2025 and Loan Mechanism for Priority Projects. In 2021, they want to spend 66.2 billion tenge for these purposes, 64.4 billion tenge in 2022, 62 billion tenge in 2023. “The purpose of the budget program is to ensure sustainable and balanced growth of regional entrepreneurship, as well as maintaining existing and creating new permanent jobs,” the document says. It is expected that the share of the manufacturing industry in the structure of gross domestic product by 2021 will be at least 12.5%. It is also predicted that the increase in output by 2021 will grow by 3% from the level of 2014, and the number of employed in SMEs will grow in 2021 by 17% from the level of 2014. The program will be implemented in 11 budget subprograms. Thus, it is planned to spend 564 million tenge on Improvement and strengthening of entrepreneurial potential in 2021-2022. They want to use this money to attract highly qualified foreign specialists in the implementation of new management methods, production technologies, equipment and personnel training Senior Seniors. It is also planned to train Kazakhstanis in small, monotowns and regional centres. It is planned that in 2021-2022, 7.5 thousand people will be trained annually. They want to allocate 700.6 million tenge to pay for the services of the operator and financial agent in 2021-2022. The document explains that these costs will be used to pay for the services of an authorized microcredit organization and a financial agency that monitor the implementation of the Business Roadmap - 2025. It is forecasted that the number of subsidized projects serviced will be 1,228 units in 2021, 1,259 units in 2022, 1,575 units for guaranteed projects in 2021, and 1,656 units in 2022. Information support for entrepreneurs in 2021-2022 is estimated at 546 million tenge. The money will be directed to information, consulting assistance and training in starting and running a business, as well as promoting the development of an existing SME facility. In 2021, 1.8 billion tenge will be allocated for the development of regional budgets, budgets of cities of national significance, the capital for the development of industrial infrastructure, and 623.06 million tenge in 2022. In 2022-2023, 124 billion tenge is planned to be spent on subsidizing the interest rate and on guaranteeing loans within the framework of the Business Roadmap - 2025 and the Loan Mechanism for Priority Projects, and 62 billion tenge in 2021. It is expected that the number subsidized and guaranteed projects of entrepreneurs will reach 6,409 units each year for 2021-2022. 600 million tenge were allocated for the provision of grants to young entrepreneurs for the implementation of new business ideas within the framework of the Business Roadmap-2025 at the expense of a targeted transfer from the National Fund for 2021. The document is under discussion until September 4, LS reported.

Kazakhstan increases import of Dutch goods, but reduces exports Kazakhstan reduces exports to the Netherlands, while simultaneously increasing imports from there. Kazakhstan’s supplies to the Netherlands decreased by almost 11% and in the first half of 2020 amounted to $1.8 billion. Exports are almost entirely represented by oil and oil products. The list also includes titanium, ferroalloys, lead and fish fillets. Imports for the reporting period increased by 21.4% to $120.7 million. The largest share is occupied by mechanical devices and industrial equipment, the supply of which increased 2.5 times. In addition, Kazakhstan purchased medicines, tractors, flowers, medical equipment, freight vehicles, dyes, oil products and other goods from the Netherlands, LS said.

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Assets of the National Fund of Kazakhstan increase by 7.25% on-year

If as of June 1, 2019, the assets of the National Fund of Kazakhstan did not exceed 22.4 trillion tenge, then on the same date of 2020 they reached 24 trillion tenge. Since the BANKING beginning of the year, the fund's assets have increased insignificantly, by only 1.5%. Based on the data of the National Bank, since the beginning of the year, the volume of transfers to the budget from the National Fund amounted to more than 3.1 trillion tenge. In June, this figure reached 608 billion tenge, 5.7% more than in January and 2 times more than in February. Tenge receipts to the National Fund in June did not exceed 6.3 billion tenge. Due to quarantine, falling oil prices and a sharp reduction in state budget revenues, this year it was decided to increase the size of the guaranteed transfer from the National Fund to 4.7 trillion tenge. “The loss of revenues of the national budget for 2020 is estimated at 1.7 trillion tenge. Now budget stability is achieved through transfers from the National Fund,” the head of state said. Transfers can be directed exclusively to solving social problems and infrastructure development. Quotes for black gold really sank noticeably. Brent crude oil futures are down 34% since the beginning of the year, according to Investing.com. If at the beginning of the year oil futures traded at $66.2 per barrel, now they cost $43.6. In June 2020, the investment income of the National Fund was about $690 million, which partially offset the withdrawals from the fund. Earlier it was noted that the fund’s profitability for 2019 was about 7.4%, and investment income was more than $4.2 billion, Kapital reported.

Kazakhstan’s international reserves grow by 21.8% since the beginning of the year If on January 1, 2020, Kazakhstan’s gold and foreign exchange reserves were estimated at $29 billion, then on August 1, they reached $35.3 billion. These are the data of the National Bank of Kazakhstan. Gold prevails in the structure of international reserves. Its share reaches 67.7%. Since the beginning of the year, the share of monetary gold has increased by 26.4% and reached $23.8 billion. The growth of international reserves was due to the purchase of gold, as well as an increase in its price on world markets. In 2020, gold quotes were skyrocketing. Since the beginning of the year, prices for this precious metal have increased by 24.9%. According to Finam.ru, if at the beginning of the year gold was traded at $1,520 per troy ounce, then on August 12 it was already worth $1,898.8 per ounce. According to the World Gold Council as of June 2020, the TOP-3 countries in terms of gold reserves include the United States at 8,133.5 tons, Germany at 3,363.6 tons, and Italy at 2,451.8 tons. Kazakhstan is on the 15th line in the ranking of countries in terms of gold reserves, followed by Uzbekistan, Saudi Arabia and the United Kingdom. Russia ranks fifth in terms of gold reserves, Belarus ranks 46th. Gold reserves in Kazakhstan are estimated at 377 tons, in Russia this figure is 6 times higher at 2,298 tons. In Belarus, the gold reserve barely exceeds 49.5 tons. The share of assets in freely convertible currency in the international reserves of Kazakhstan since the beginning of the year has decreased from 34.8% to 32.3%. As of August 1, 2020, assets in hard currency amounted to $11.4 billion, Kapital reported.

ENERGY & NATURAL RESOURCES Kazakhstan reduces oil production in January-July by 1.4% In Kazakhstan in January-July, the production of oil and condensate amounted to 51.5 million tons, which is 1.4% less compared to the same period last year, the head of the Ministry of Energy Nurlan Nogayev said.

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“The failure to fulfil the plan for oil production is associated with a decrease in economic activity in the world due to the introduction of quarantines in many countries, which led to an excess of supply over demand. The growth of oil reserves in oil storage facilities in the world had a negative impact, which creates risks for stopping oil production. To prevent overstocking of oil storage facilities, measures have been taken to reduce oil production,” Nogayev said at a government meeting. Oil exports amounted to 42 million tons, which is 0.4% more than the same period last year. During the reporting period, gas production amounted to 33.4 billion cubic metres, which is 1% more than in the same period last year. The plan for oil and condensate production in Kazakhstan for 2020 is 85 million tons, In Business reported.

Kazakhstan’s July oil output up 2% Kazakhstan raised its oil output in July to 1.331 million barrels per day (bpd), by 2% from June, two industry sources familiar with preliminary data told Reuters, meaning the country was slightly over its target under a global pact among producers. According to Reuters calculations, that was 12,000 bpd above Kazakhstan’s target under a deal between members of the Organization of the Petroleum Exporting Countries (OPEC) and allies, a grouping know as OPEC+. The Energy Ministry did not reply to a request for comment. The former Soviet Union country agreed to cut its May-July output by 23% from November 2018 levels, or by 22% from its average output in the first quarter of 2020, to around 1.319 million barrels per day, according to Reuters.

Oil exports from Kazakhstan through the CPC terminal in July decrease by 20% The volume of oil exports through the terminal of the Caspian Pipeline Consortium in July 2020 decreased compared to the same period last year by 20.2% to 4.55 million tons. This is reported by the CPC. A year earlier, oil exports through the CPC terminal in July amounted to 5.7 million tons. In January-July 2020, oil exports through the CPC reached 35.746 million tons, which is 1.3% less than in the same period last year at 36.202 million tons. Out of 4.55 million tons of oil shipped in July 2020, oil from the Tengiz field accounts for 2.015 million tons, oil from the Karachaganak field for 944.319 thousand tons, oil from the Kashagan field for 967.003 thousand tons, oil from other Kazakhstani producers for 10.07 thousand tons. In total, Kazakh exporters shipped 3.937 million tons of oil in July, another 613.481 thousand tons of oil shipped came from Russia. The shipping schedule for July was fully met. CPC is a pipeline system connecting Kazakhstan with a seaport in the Novorossiysk region, where oil is loaded onto tankers for further shipment to world markets, RNS reported.

Kazakhstan compensates for overproduction of oil in the framework of OPEC+ Kazakhstan promises to fulfil its oil production obligations under the OPEC+ agreement and offset the May overproduction in August and September. “In August-September of this year, production is planned at a level sufficient to fulfil obligations and compensate for excess production in previous months,” the Energy Ministry said. The department believes that the level of oil production in the republic in August will amount to 1.397 million barrels per day. “Data on oil production for August and on the fulfilment of obligations will be known by the end of the month,” the ministry said. As the head of the Ministry of Energy Nurlan Nogayev previously reported, Kazakhstan exceeded oil production under the OPEC+ agreement by 3.13 million barrels from May 1 within 12 days. Reimbursement of this volume is scheduled for August-September.

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Kazakhstan will reduce oil production in July by 23% from the level of November 2018, in August-September by 21% and October-December by 18%. “In this regard, the forecast for oil production for 2020 is 86 million tons, 4% less indicative forecast of 90 million tons,” Nurlan Nogaev explained earlier. Kazakhstan, within the framework of OPEC+, assumed obligations in May-June and July of this year to cut production by 390 thousand barrels per day. With a decrease in production by 390 thousand barrels per day from the level of production in November 2018 by 1.709 million barrels per day, excluding condensate, daily oil production in Kazakhstan should be 1.319 million barrels per day, Kapital reported.

Kazakhstan plans to produce 86 million tons of oil in 2021 Oil production in 2021 will amount to 86 million tons with an increase to 100.7 million tons in 2025. This was announced by the Minister of National Economy Ruslan Dalenov at a meeting of the Government. “Positive growth is expected in all basic industries. The manufacturing industry will grow at a faster pace by 6.7% on average per year, over the mining industry by 2.9%. The average annual growth rates will be 6.2% in agriculture and 5.5% in trade,” Ruslan Dalenov said, voicing the forecast of socio-economic development for 2021-2025. Exports of goods, as the minister noted, will amount to $41.4 billion in 2021 with an increase to $51.5 billion in 2025. Imports will increase from $36.3 billion in 2021 to $37.8 billion in 2025, according to Kazinform.

Kazakhstan vows to fulfill its obligations under GLOPEC agreement A meeting of the OPEC+ Joint Monitoring Committee was held on July 15, as reported by the press service of the Ministry of Energy of the Republic of Kazakhstan. Earlier, the OPEC+ countries reached an agreement on a collective reduction in oil production by 9.7 million barrels per day in May-July 2020. During the meeting of the OPEC+ Joint Monitoring Committee, the results of the fulfillment of obligations by the countries for June 2020 were discussed. The participants noted the positive impact of the agreement on the global oil industry Kazakhstan expressed readiness to fulfill its obligations under the OPEC+ agreement. Under the terms of the OPEC+ agreement, the collective reduction in oil production is to be reduced from 9.7 million barrels per day up to 7.7 million barrels per day from August until the yearend, the Oil and Gas Information Agency reported.

Dry gas separation unit to be built at Tengiz in Kazakhstan KLPE and Tengizchevroil signed an agreement on the basic terms of interaction in the design of a gas separation unit, which will be located on the territory of the Tengiz field. Samruk-Kazyna NWF held a meeting with portfolio companies in Atyrau, during which a project for the construction of a polyethylene plant with a capacity of 1.25 million tons per year was discussed. The project is being implemented by KLPE as part of the creation of a gas chemical complex on the territory of the National Industrial Petrochemical Technopark in the Atyrau region. The participants of KLPE are United Chemical Company at 99.9%, and Polymer Production at 0.1%. UCC itself is a subsidiary of the Samruk-Kazyna fund. In June last year, KLPE was transferred under the control of the KazMunayGas national company. Previously, partners in the implementation of the project for the construction of a polyethylene plant were UHK and the Austrian company Borealis. However, the latter in May this year announced its decision to withdraw from the project. The decision was based on a thorough assessment of all aspects of the proposed project and is subject to the impact of the COVID-19 pandemic, as well as increased uncertainty about future market assumptions, Borealis said at the time. The fund said that, despite the refusal of the Austrian company, which was supposed to supply two polyethylene production units, in order to develop the petrochemical industry,

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KLPE continues to work on the implementation of this project and the efficiency of the technological scheme proposed by KMG has been confirmed. Also, for the uninterrupted supply of raw materials to the future plant, a gas separation unit with a capacity of 9.7 billion cubic metres of gas, which is necessary to extract ethane from dry gas, is currently being designed. “It is planned that the GSU will be located on the territory of the Tengiz field, which is the optimal solution to ensure the reliability of raw materials supplies to the polyethylene plant,” the Samruk-Kazyna NWF said in a statement. To date, jointly with TCO, the development of a feasibility study for the GSU has been completed. The agreement between KLPE and TCO on the basic conditions for interaction in the design of the unit provides for the transition to the next stage, the preparation of design estimates. The purpose of the agreement is to consolidate the interaction between the two enterprises in the design of a gas separation plant. The development of the design and estimate documentation will be carried out by KLPE with the support of TCO, the fund explained. Earlier it was said that the capacity of the GSU will be 7.7 billion cubic metres of dry gas per year, and its cost is $1 billion. In general, the project for the construction of a polyethylene plant, which is planned to be implemented in 2021-2024, is estimated at $6.9 billion. As part of the first stage of creating a gas chemical complex on the territory of NIPT, the construction of a polypropylene plant with a capacity of 500 thousand tonnes per year worth $2.6 billion is underway. To date, the construction of the plant is 74% complete. Commissioning is scheduled for 2021. The operator of the project is KPI. The participants in the partnership are UCC at 99%, and Firma Almex Plus at 1%, Kursiv reported.

Kazatomprom continues to reduce uranium mining until the end of 2022 Kazatomprom plans to continue to reduce uranium production by 20% in 2022 compared

to the planned level, the press service of the national company reported. MINERAL In 2021, uranium production will also be 20% lower than planned volumes under subsoil RESOURCES use contracts. The company does not intend to increase production in order to recover losses incurred in 2020 due to measures taken to combat COVID-19. At the moment, the impact and implementation of the plan is being assessed at all uranium mines in the country. “The decision to keep production at the level of previous years and extend the production cut until 2022 indicates that the global uranium market is still recovering from a long period of oversupply. We simply do not see the market signals and fundamental support needed to recover the pace of pre-production in 2021 and the return of our mines, which have one of the lowest production costs in the industry, to full capacity in 2022,” Galymzhan Pirmatov, Chairman of the Board of Kazatomprom, explained. Despite the expected supply shortage in 2020, uranium prices and contract volumes in the long-term market remain volatile. Although they are higher than the indicators of 2019. Pirmatov also did not rule out the possibility of further interruptions in production due to COVID-19 and the measures taken. Due to the implementation of the decision, up to 5.5 thousand tons of uranium will be excluded from the estimated volume of world primary production of minerals in 2022 and production will be kept at the level that was expected in 2021. The production volume of Kazatomprom in 2022 is expected to be at the level of 22-22.5 thousand tons of uranium, on a 100% basis, which is 20% less than the planned levels of subsoil use contracts, which are about 27.5-28 thousand tons of uranium as reflected in previous reports. The company expects consolidated production to decrease by more than 20,000 tons of uranium in total compared to its previous production plans under subsoil use contracts for the period 2020-2022. The national company has maintained a 20% decrease in production from the planned indicators since 2018. The reason was low uranium prices, LS reported.

ECONOMIC NEWSLETTER, August 2020 Embassy of the Kingdom of the Netherlands TRANSPORT & COMMUNICATIONS Cargo transportation in Kazakhstan decreases by 7% on-year In January-June of this year, the volume of freight traffic in the country decreased by 7.4% compared to the same period a year earlier and amounted to 1.8 billion tons against 1.9 billion tons in the first half of 2019. One of the main reasons for the reduction in traffic is the introduction of restrictive measures and quarantines due to the spread of COVID-19. Correspondingly, the revenues of companies in the transport and warehousing industry also decreased. In the first half of 2020, the revenues of companies amounted to 1.35 trillion tenge, while in the same period last year the amount reached 1.44 trillion tenge. By mode of transport, the largest volume of freight traffic falls on road and urban electric transport: 1.4 billion tons, or 81.3% of the total volume of freight traffic. Meanwhile, 196.6 million tons of cargo was transported by rail. Pipeline transportation amounted to 132.7 million tons of cargo. For the development of the transport industry in Kazakhstan, the logistics infrastructure is actively expanding. Currently, there are 21 transport and logistics centres in the country. In particular, in Almaty region there are 6 TLCs, in Nur-Sultan 5, in the Aktobe region 4, in Shymkent 2, in East Kazakhstan region 1, in Mangystau region 2, in Almaty 1. The developed system of logistics centres allows to reduce chains deliveries, optimize commodity flows and increase the manoeuvrability of deliveries. In fact, logistics centres are created in order to solve the problem of delivering goods from supplier to consumer in the shortest possible time and with the lowest financial costs. In addition, Kazakhstan Railways plans to build 9 TLCs in large cities of the country, including Nur-Sultan, Shymkent, Aktau, Aktobe, Atyrau, Kostanay, Uralsk, Pavlodar and Ust-Kamenogorsk. At present, together with Kazakh Invest, work is being carried out to attract investors, Finprom reported.

Kazakhstan Railways increases cargo turnover in the first half of 20202 by 3.9% Freight turnover of Kazakhstan Railways in January-June 2020 amounted to 111.8 billion ton-kilometres, which is 3.9% higher than in 2019, the press service of the company reported. Over 6 months of 2020, 121 million tons of cargo were loaded. “In particular, 49.5 million tons of coal were transported, which is 3% higher than last year’s data. 35.7 million tons were delivered to Kazakhstani consumers,” the agency said in response to the request. In the reporting period, 4.2 million tons of grain, 8.8 million tons of construction materials and 12.6 million tons of iron ore were also transported. Transportation of ferrous metals increased by 6.8%, to 2.3 million tons, chemical fertilizers by 3.5%, to 1.9 million tons, non-ferrous ore and sulphur raw materials by 15.6%, to 11.3 million tons. Kazakhstan Railways is a transport and logistics company, part of the Samruk-Kazyna state fund. The company manages the railway, sea port and airport infrastructure, transport and logistics centres, In Business reported.

Kazakhstan allocates over 140 billion tenge for 3-year road modernization In Kazakhstan, in the next 3 years, it is planned to spend almost 143 billion tenge on the development of roads. According to the draft national budget for 2021-2023, the share of national roads transferred to technical categories I and II will increase by 40% in 2021, 45% in 2022, and 50% of the total road length in 2023. Thus, 126.6 billion tenge is planned to be allocated for the reconstruction and construction of highways in 2021, 12.5 billion tenge in 2022, and 3.7 billion tenge in 2023. The total amount provided for the development of roads will amount to 142.9 billion tenge. 330 km are planned to be enough for road construction works, in particular, 260 km in 2021, 45 km in 2022, 25 km in 2023. For these purposes they want to attract 67.5 billion tenge of external loans, 14.59 billion tenge through co-financing of external loans from the national budget, and 60.84 billion tenge from internal sources of financing.

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According to the document, due to external loans and co-financing of external loans, the reconstruction of the roads Western Europe-Western China, Uzynagash-Otar, Kurty- Burylbaital (Centre - South), Aktobe-Atyrau-Russian border, Kandyagash-Makat, Balkhash- Burylbaital (Centre - South) continues. Construction and reconstruction of the highways Nur-Sultan-Petropavlovsk-Russian border, Pavlodar-Kalbatau-Ust-Kamenogorsk, Ust-Kamenogorsk-Zyryanovsk- Rakhmanovskie keys, Karabutak-Denisovka-Kostanay, Usharal-Dostyk, Aktobe-Atyrau, Pavlodar-Astrakhan-Uspenka-border of Russia, section Kyzylorda-Zhezkazgan, Taskesken- Bakhty (border of China), Atyrau-Uralsk, LS reported.

Kazakh government allows transfer of Almaty airport shares to TAV Kazakhstan The government of Kazakhstan has authorised the disposal of 100% of shares in Almaty International Airport to the subsidiary of TAV Airports. “Allow Venus Airport Investments BV to make a deal to alienate 78,414 common shares of Almaty International Airport joint stock company, which is 100% of the outstanding common shares of Almaty International Airport joint stock company, in favour of TAV Kazakhstan limited liability partnership,” the official document says. The resolution comes into force from the date of its signing on August 8, 2020. Almaty airport was sold to TAV Airports Holding for $415 million, LS reported.

AGRICULTURE Kazakhstan to develop fisheries in all regions of the country this year The development prospects of the fishing industry of the country were considered at a government conference call chaired by Prime Minister Askar Mamin. Ministers of Ecology, Geology and Natural Resources Magzum Mirzagaliyev, Agriculture Saparkhan Omarov, as well as representatives of the Hamit fish farms Bakhytzhan Sermanizov, Caspian Riviera Raushan Khamitova, King Fish Marlen Tursynali. Fishing and fish farming is one of the priority sectors in the production of food products. In Kazakhstan, 180 fish farms are engaged in the cultivation of commercial fish. As a result of a meeting held in February 2020 in Atyrau, chaired by the Head of Government, a number of legislative initiatives were developed aimed at minimizing administrative barriers and creating optimal conditions for the development of the fishing industry. Particular attention was paid to optimizing payments for the use of water resources, effective zoning and location of fish farms (including in the water protection zone), determining a rational fishing schedule and the operation of fishing vessels, tightening the rules for the sale of prohibited fishing gear. In September this year, the corresponding legislative amendments will be submitted to the Parliament. Additional measures of state support are provided in terms of subsidizing feed (up to 25%) and reimbursement of investment costs (up to 30%). Concessional lending for investment projects aimed at the development of commercial fish farming is provided. In general, the industry has significant potential and is showing dynamic growth. Thanks to the measures taken, the volume of farmed marketable fish this year is planned to be increased to 9 thousand tons with an increase of 1.6 times over the past two years (in 2018 — 5.6 thousand tons, in 2019 — 7.4 thousand tons). The main volume of farmed fish is in the Turkistan region (about 68%), Almaty, North Kazakhstan and East Kazakhstan regions. The prime minister stressed that fish production can be significantly increased and by 2030 brought to 600 thousand tons. At the same time, the fishing industry should become one of the basic in the structure of the agro-industrial complex, the volume of exports increased 10 times to 300 thousand tons and at least 100 thousand additional jobs were created.

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“In each region, fish production should be organized, water bodies should be assigned to business entities, the number of outlets for the sale of high-quality fresh fish should be increased. To ensure a healthy diet of citizens, it is necessary to increase the level of fish consumption to the WHO recommended 16 kg per capita (today in Kazakhstan — 3-4 kg per year),” Mamin said. The Head of Government instructed, by Nov. 1, 2020, to develop and approve regional programs for the development of fisheries, indicating specific indicators and measures for priority subsidies, allocation of land plots, infrastructure and other measures of state support. The Ministry of Ecology, Geology and Natural Resources, together with interested state bodies, was instructed to work with the business community within a month on proposals to expand subsidies for the fishing industry, together with the Ministry of Education and Science — to revise the educational and practical programs of universities with a shift in focus from fishing to fish farming. The Ministry of Finance, together with the Ministry of Trade, was instructed to work out the issue of simplifying the procedures for registering supplies and passing all types of controls at the border when transporting fish seedlings of valuable fish species from abroad, the press service of the PM of Kazakhstan reported.

Livestock breeding is developing in Kazakhstan In Kazakhstan, the number of farms engaged in cattle breeding is increasing. Many farmers choose the Aberdeen Angus breed, one of the top brands in the global beef production, to improve the quality of commercial livestock. The value of gross output at the end of 2019 increased to 2.3 trillion tenge, which is 13% higher than in 2018. At the end of 2017, more than 6,745.4 thousand head of cattle were registered in the Kazakhstani database on the identification of farm animals, in 2019 this figure increased to 7 696,6 thousand. The livestock business is becoming more and more attractive to entrepreneurs. First, agricultural products in general and livestock products in particular are a category of essential goods, and this niche will always be in demand. The second reason is government programs aimed at supporting the industry. Thanks to them, 840 new livestock farms were created in 2019, which is 38% more compared to 2018. Choosing the meat direction, farmers often prefer the Aberdeen Angus breed, bred in Scotland, but adapted to local conditions. In 2019, 94,095 heads of pedigree Angus were registered in the database of the National Chamber for the Angus breed of Kazakhstan, in July 2020 this figure reached 100 thousand. A hundred-thousandth bull calf was registered in the Pavlodar region in one of the farms. Since 2015, the number of Angus heads born in Kazakhstan prevails over the number of livestock imported into the country. Of the 29 thousand heads registered in the chamber in 2019, 19 thousand were born in Kazakhstan. The number of sold livestock is also growing. Thus, in 2019, 16,604 Angus heads were sold in meat or live weight, which is 54% higher than in 2018. Kostanay, North Kazakhstan, Akmola, Almaty and Karaganda regions stand out among the sales leaders in the regions. In total, 169 thousand head of cattle were sold in Kazakhstan in 2019, of which 71 thousand or 42.3% are pedigree animals, including 16 thousand or 9.8% of Angus breeds, that is, one tenth of the total sold cattle, LS reported.

Kazakhstan allocates almost 2.5 billion tenge for subsidies to livestock breeders In Kyzylorda region, since the beginning of 2020, almost 2.5 billion tenge has been allocated to livestock breeders from the regional budget for subsidies. 625 farms have already received 1.5 billion tenge. Since August 2020, the Ministry of Agriculture of Kazakhstan has made amendments and additions to the order On approving the rules for subsidizing livestock breeding support, increasing the productivity and quality of livestock

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products in accordance with the order of the Minister of Agriculture of Kazakhstan dated July 17, 2020. Now, for selection and breeding work, 15,000 tenge are given for 1 head of the breeding stock of cattle. For 1 head of imported livestock from Australia, the USA, North and South America, Europe is now 300 thousand tenge instead of the previous 225,000 tenge. Subsidies were also increased for the purchase of breeding sheep from 8,000 tenge to 15,000 tenge. Subsidies for the purchase of broodstock of sheep increased from 2,500 tenge to 4,000 tenge, subsidies per head of brood sheep increased from 1,500 tenge to 2,500 tenge. The rules approved the requirement for artificial insemination, for the registration of the obtained offspring of cattle and sheep. They should now have boluses, chips, RFID tags. Other standards and requirements remained unchanged. In accordance with this requirement, farms that want to receive subsidies must, as soon as possible, transfer their own livestock to an electronic identification method, according to Kazakh Zerno.

World leader in agricultural machinery sets up production in Kazakhstan Recently, one of the most successful manufacturers of agricultural machinery in Europe, the PÖTTINGER company, concluded a Cooperation Agreement with the largest domestic agricultural machine-building enterprise AgromashHolding KZ. This is another large world engineering company that is establishing work in Kazakhstan. In 2019, the Kirovets plant was launched in Kostanay, now the country is negotiating the construction of a German CLAAS machinery plant. Already this year, PÖTTINGER is ready to launch the first stage for the joint production of seed drills. The Austrian company will be based on the territory of the new Localisation Centre in Kostanay. “PÖTTINGER has established itself in the world as an innovative manufacturer. This applies not only to the manufactured equipment, but also to the approach to doing business. Therefore, despite the pandemic when enterprises around the world suspend their production, we highly appreciate the desire of AgromashHolding KZ for a kind of unification of all leading manufacturers in Kazakhstan,” Alexander Zernov, Sales Director of the company in the CIS, said. The localization centre is now at the stage of reconstruction and engineering. The area of the plant of over 27,000 sq.m. will include universal workshops with high- performance modern machine tools, office space, a training centre and a hostel for employees. “The proposed conditions are beneficial for business arrangement. We have long planned to introduce localisation of seeding complexes in Kazakhstan, where we feel an increase in demand for our product. Today it becomes possible,” Zernov emphasised. Representatives of the AgromashHolding KZ plant note that they are also open to new offers from manufacturers of both equipment and components. The business attraction in the second case is that the partners will receive a guaranteed sale of components that meet the technical specifications required by machine-building enterprises. The Localisation Centre is ready to provide advisory support, provide the necessary space, equipment, tools and labour resources, according to LS.

Fisheries in Kazakhstan increase output volumes by 2.7 times In January-June 2020, fish farmers of Kazakhstan produced 29.8 thousand tons of fresh, chilled or frozen fish, 2.7 times more than a year earlier. The output of cooked and canned fish and caviar also increased by 2.7 times, to 11.7 thousand tons. In monetary terms, the processing and preservation of fish, crustaceans and mollusks in the first half of the year amounted to 11.1 billion tenge, twice as much as a year earlier. In the regional context, the largest volume of cooked and canned fish and caviar fell on the Atyrau region at 6.9 thousand tons, 31.3 times more than last year.

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The 2 leaders also included the West Kazakhstan region at 1.7 thousand tons, plus 14.5% on-year, and the Turkestan region at 1.5 thousand tons, plus 53.1%. A significant increase in output in the sector was also noted in the Almaty region by 8.8 times, up to 203 tons, and the Kyzylorda region by 4.8 times, up to 100 tons. In January-May, Kazakhstani producers provided for processed and canned fish, crustaceans and mollusks by 58.5%, against 40.5% a year earlier. The share of imports, respectively, accounted for 41.5%. The volume of imports in the sector also increased by 14.5% on-year, and amounted to 21.8 thousand tons. The share of exports accounted for 18.8% of the resources: 9.9 thousand tons of processed products, 21.7% less than a year ago. At the end of January-July 2020, fish and seafood prices in the country increased by 11.6% compared to the same period a year earlier. The price of frozen fish increased by 16.5% on-year; for fresh fish by 11%; for salted and smoked non-delicacy fish by 11%; for gourmet canned fish by 12%; for non-delicious canned food by 8.6%, Energyprom reported.

Kazakhstan increased area of land suitable for agriculture The Ministry of Agriculture told about the regions through which it is planned to increase irrigated land to 3 million hectares by 2030. Thus, an increase is expected in the East Kazakhstan region by 157.7 thousand hectares, in the Akmola region by 112 thousand hectares, in the Pavlodar region by 94.5 thousand hectares, in the Turkestan region by 85.5 thousand hectares, in the Almaty region by 83.5 thousand hectares. Also, land plots will be expanded in the Karaganda region by 74.1 thousand hectares, in the Aktobe region by 57 thousand hectares, in the Kyzylorda region by 51.3 thousand hectares, in the Kostanay region by 16.9 thousand hectares, in the West Kazakhstan region by 6.5 thousand ha, and in the North Kazakhstan region by 4.9 thousand ha. At present, the Ministry of Ecology, Geology and Natural Resources has developed a draft program for water resources management until 2030, which is being approved by state bodies. In particular, it is planned to build irrigation facilities and 38 new reservoirs within its framework. After the adoption of the program, the development of a feasibility study and design estimates for the construction of these facilities will begin. The Ministry of Agriculture added that this will take some time, so basically the introduction of new irrigated land will begin in 2022. “The amount of funds is currently being worked out by the MEGNR with the ministries of finance and national economy,” the Ministry of Agriculture explained. It is also planned to increase export volumes or expand the range of countries to which agricultural products will be supplied. However, the figures were not announced by the department. The Ministry of Agriculture reported that more than 200 billion tenge would be spent on increasing irrigated land. The Ministry of Agriculture predicted that the gross production of 3 million hectares of irrigated land would amount to 3.7 trillion tenge per year, LS repoted.

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