The lure of work, tourism and study in the EU is growing fast among Ukrainians, according to a public opinion survey conducted in December by the Kyiv International Institute of Sociology. From February to December the percent of Ukrainians who plan to work in the EU jumped from 17% to 27%; to visit friends and relatives, from 8% to 21%; to study in the EU, from 7% to 12%; and to open a new business in the EU, from 4% to 10%. Eastern Ukrainians registered marked attitude changes in the survey, "Opinions and Views of Residents of Ukraine Regarding the Visa-Free Regime with the European Union." Among easterners, the belief that Ukrainian entrepreneurs now have better access to the EU market jumped from 25% one year ago, to 38% in December. The belief that visa-free travel attracts discount airlines was supported by 39%, up from 25% at the start of 2017.   Ukraine could become a "European China" for producing electric cars and batteries for the EU, Oleg Boyarin, board chairman of Eurocar, tells Liga.net. Boyarin, whose company makes Skoda cars in Uzhgorod, said he works with the Infrastructure Ministry to work out an electric car strategy for Ukraine. With government support, Ukraine could develop an export-oriented car industry in partnership with American, Chinese or European brands.   Ukraine’s industrial output surged 3.6% yoy in January, the State Statistics Service reports. Manufacturing accelerated by 9.7%. The manufacturing jump was due to machinery – up 22.1%; metallurgy – up 8% ; chemicals – up 6%; and food – up 3%. Growth was the strongest in Lviv – up 18%; Mykolayiv – up 16.5%; and Chernivtsi – up 16%.   Mobile operator Kyivstar intends to launch this year its first 4G networks in: Kyiv, Kharkiv, Dnipro, Odesa, Uzhgorod, Vinnytsia, Khmelnitsky, Ivano-Frankivsk, Ternopil and Lviv. There also will be 4G connections near border crossings in Volyn and Lviv regions and in resort towns in Odesa and Zaporozhye. 4G tariffs will be unrolled in late summer and will be “10, 15, 20 UAH more expensive than existing ones," Peter Chernyshov, Kyivstar president, tells reporters. According to the company, Kyivstar’s 3G network now reaches 9,800 settlements, or 80% of the population.   Kyivstar, Vodafone Ukraine and lifecell are authorized to bid in the March 6 auction of six lots of 4G communications licenses, the National Commission for State Regulation of Communications and Informatization reports. ZN.ua reports that Ukraine’s “4G lag” will be eliminated by the end of this year. An earlier 4G auction was held Jan. 31.   Renovating its rolling stock, Ukraine Railways added 907 ‘open top’ wagons in the first two months of this year. These cars are used for transporting bulk goods such as coal, scrap, steel, wood and other cargo that can be tipped, dumped or shoveled.   Ukraine’s highway construction boom has prompted Poland’s Mirbud S.A. construction company to open a subsidiary in Kyiv. Mirbud President and majority shareholder Jerzy Mirgos says on his company’s website: “We see here a great potential for our activities in the field of engineering and road construction.”   Betting on a driving upswing, Poland’s UNIMOT S.A. plans to open 100 gas stations across Ukraine under the Switzerland’s Avia brand. By 2020, UNIMOT intends to open the Ukraine network and an equal number of Avia stations in Poland.   German furniture company Polipol plans to build an upholstered furniture factory in Lviv region, according to Oleg Synyutko, head of regional administration. Herbert Vitver, a Polipol representative, tells Ukrinform that by 2021, the company will employ 1,000 people with an average salary of 500 to 600 euros.   Ukraine exported 357 new goods to the EU last year, and the number of exporting companies grew 5%, to 14,136, Natalia Mikolskaya, Ukraine’s chief trade representative reports. The fastest growing items were: artificial fabrics, apricots, cherries, milk, condensed cream, fructose, projectors and electric kettles.   Polish egg producers worry that egg exports to EU by Ukraine’s Avangard and Ovostar will have "serious consequences" for Polish producers. “A significant deterioration in the profitability of egg exports from Poland should be expected," warns Poland’s National Chamber of Poultry and Fodder Producers. Avangard is shifting from the Middle East to target the EU. In October, Ovostar Union’s Yasensvit plant started exporting Class A eggs to the EU. Today, Ukraine accounts for one half of the EU’s egg imports, up from 4% in 2014.   Ukraine will mount a large exhibition stand at the first China International Import Expo, Nov. 5-10 in Shanghai, Stepan Kubiv, Minister of Economic Development and Trade, tells Ukrinform. Kubiv says: "China is a multi-billion-dollar consumer market, where Ukraine can supply many products, ranging from food to industrial goods, clothing, various equipment and services." Although China has a large trade surplus with Ukraine, Ukraine exports to China, largely food, increased by 11.3% last year.   The State Property Fund will auction 25% of PJSC Sumyoblenergo shares on the PFTS stock exchange on March 30, according to Vedomosti. The initial value of the block of shares is $4 million.   About one third of Ukrainian workers, or 5 million people, are paid in cash, without being enrolled in health and retirement plans, the State Labor Service reports. Offering a lower estimate, Andriy Revi, Social Policy Minister, says the number of ‘shadow’ workers is 3.7 million.   Venture capital investments in Ukraine start-ups tripled last year to $300 million, Andrey Kolodyuk, board head of the Ukraine Venture Capital Association, tells liga.net. This year will be even higher, predicts Kolodyuk, managing partner of AVentures Capital. On Monday, AVentures announced that it is investing in CoreValue, a fast-growing IT-outsourcing company. With 350 employees and R&D offices in seven regions, CoreValue specializes in pharmatech, fintech and healthcare.   President Poroshenko is preparing to sign a bill regulating limited liability companies, the most common form of business in Ukraine. Rada Chairman Andriy Parubiy tweeted after submitting the bill to the President: “I am convinced that this law will improve the business climate and attract foreign investment in the Ukrainian economy.”   Infrastructure Minister Volodymyr Omelyan wants to double traffic in and out of Boryspil to 20 million passengers by 2020. At the same time, he tells reporters, he wants to promote Lviv, Odesa and Kharkiv as regional air hubs.

Astana Times, 16 February 2018

The Ministry of National Economy leadership outlined Kazakhstan’s economic results for 2017 and shared its plans for the current year at a Feb. 12 press conference, reported the ministry press service.

National Economy First Vice Minister Ruslan Dalenov (С)

Kazakhstan’s gross domestic product (GDP) grew 4 percent in 2017, said National Economy First Vice Minister Ruslan Dalenov. The outcome was determined by the following factors: two-thirds of the growth was provided by non-extractive industries, almost all sub-industries showed growth (31 against 22 in 2016), manufacturing hit a five-year maximum (5.1 percent), the “desired” industries showed a significant increase (e.g., pharmaceuticals grew 41.8 percent) and non-primary exports and deeply processed goods also grew.

“The contribution to the country’s economic growth in 2017 was also made by the implementation of the Nurly Zher programme, due to which 11.2 million square metres of housing were commissioned, 4,000 kilometres of roads were reconstructed within the Nurly Zhol programme and 120 projects were implemented as part of the Industrialisation Map. The Export Strategy provided support to 400 exporters and 192,000 business entities were supported within the Business Roadmap 2020,” he noted.

The ministry’s tasks for 2018 include ensuring the country’s macroeconomic stability, improving intergovernmental fiscal relations, strengthening the tax policy, expanding the tools and approaches of public-private partnership and effectively managing the country’s debt.

“To date, 1,145,994 SMEs (small and medium-sized enterprises) are operating in the country, manufacturing products worth 14.44 trillion tenge ($44.5 billion) and employing 3,118,448 people,” said ministry representatives.

In the past year, the ministry developed systemic measures aimed at deregulating businesses, including reducing the administrative pressure and significantly improving conditions for doing business. A full-scale audit of governmental bodies’ control and supervisory functions was carried out to reduce and optimise them. “To date, 114 spheres of control and 18 spheres of supervision have been revised, with 25 control and three supervision spheres proposed for exclusion due to duplication and lack of efficiency. In addition, 17,654 requirements for SME inspection were proposed for exclusion,” said the ministry.

A new concept of state control and supervision has also been proposed by introducing preventive control to replace selective inspections. The main tasks of preventive control will be identifying the reasons and conditions for unlawful conduct, explaining the legal consequences of offenses and reinforcing law-abiding behaviour.

In order to ease the burden on businesses of presenting various papers, information requirements are to be reduced 30 percent. Certain new legislative amendments have also been elaborated to improve the business climate. “Our long-term objective is to let the private sector take the leading role and increase the share of the SMEs in the GDP to 50 percent by 2050,” said the ministry.

Kazakhstan’s external trade showed good results in all categories in 2017, noted Ministry of National Economy Vice Minister Baurzhan Bekeshev. “We observed a significant increase of 25.1 percent in foreign trade turnover compared to 2016. In monetary terms, the 2017 indicator amounted to $69.5 billion (in 2016, the indicator reached $55.5 billion),” he said.

He added Kazakhstan’s foreign trade structure changed significantly in 2017, with an increase in non-primary products and some new export items. Export volume increased 31.6 percent to $43.1 billion compared to $32.7 billion in 2016. The share of non-raw materials increased 22.1 percent. Kazakhstan exported more than $14 billion in non-primary products, which represented 32.7 percent of the total export volume. Export growth was seen in timber, paper and paper products, busses and medicine.

Bekeshev also dwelled on the digitisation of the Eurasian Economic Union (EAEU) economies that are Kazakhstan’s main trade partners. The key aspects have been determined to implement the union’s 2025 digital agenda, which primarily affect the speedy launch of initiatives and project approach to executing the EAEU digital agenda.

Using the EAEU platform allows expanding access to the markets of third countries through trade agreements, he said. “For example, exports to Vietnam, with whom we concluded a free trade agreement in 2015, rose to $274.2 million in 2017, which is 25 times higher than in 2015 (before the conclusion of the free trade agreement). To date, we have also completed negotiations on a free trade agreement with Iran and on trade and economic cooperation with China. This will help increase the volume of trade with these countries in the future,” he said.

In 2018, the ministry plans to enhance the access of Kazakh goods to wider markets. “We are actively negotiating free trade with Israel, Serbia and India. In addition, this year we will continue working on the implementation of the provisions of the treaty with the EAEU and improving the regulatory framework, as well as removing obstacles in mutual trade in order to create favourable conditions for doing business,” he added.

Vice Minister Aibatyr Zhumagulov spoke about the ministry’s work on developing local self-government (LSG). According to the LSG development law adopted in 2017, LSG budget and municipal property have been introduced since Jan. 1 in rural districts with a population of more than 2,000 people. The rule will be introduced throughout the country starting Jan. 1, 2020. Rural district budgets have already received seven types of tax revenues and five types of non-tax revenues. “The main peculiarity of LSG budgets is the obligatory participation of citizens in LSG budget and municipal property management,” he said.

Kazakh Investment Ministry to focus on manufacturing, exports and labour productivity Astana Times, 16 February 2018

The Ministry for Investment and Development will concentrate this year on manufacturing, focusing on export-oriented sectors and labour productivity under the Accelerated Industrial and Innovative Development programme, said Minister Zhenis Kassymbek during a Feb. 13 weekly government meeting.

Minister Zhenis Kassymbek (Photo credit: primeminister.kz)

“To meet the tasks given by President Nursultan Nazarbayev during the Feb. 9 extended government meeting, we will start working on the industrial projects to back export-oriented sectors and increase labour productivity. This year, we plan to introduce 150 projects worth one trillion tenge (US$3.06 billion) and create 15,000 jobs,” he said.

The next stage of industrial expansion involves transitioning to a new level of technological development with key elements of Industry 4.0. Last year, basic industries were re-equipped in an attempt to create an ecosystem to introduce digital technology under the Digital Kazakhstan state programme. “Some support measures will be partially revised for a more targeted stimulation of digitisation in terms of determining the types of costs when reimbursing enterprises, providing grants, etc,” he added.

Kassymbek said the ministry will also concentrate on the third five-year industrialisation plan focused on the digital-era industry to fulfil the tasks set by the President in the state-of-the-nation address “New opportunities for development under the Fourth Industrial Revolution.”

“In general, the implementation of scheduled activities will increase the value of processed exports by 10.3 percent (compared to the level of 2017), boost labour productivity of the manufacturing industry by 6 percent and attract investment worth one trillion tenge (US$3.06 billion) in fixed assets of the manufacturing industry,” he said.

Within the Nurly Zhol programme, the ministry will strengthen control over the efficient and transparent use of funds allocated for road construction and repair. Mechanisms will be revised to continue executing the Nurly Zher programme. “We have begun work to improve the national standards in architecture, urban planning and construction,” he added.

This year, commercial banks will grant real estate developers 125 billion tenge (US$382.5 million) in subsidised loans and 105 billion tenge (US$ 321.3 million) in mortgages. The banking sector revival will increase the annual loan volume to 350 billion tenge (US$1.07 billion) and investors’ share of the House Construction Savings Bank to the economically active population up to 12 percent. “Planned measures are supposed to increase housing construction volume 6-8 percent, or 11.2 million square metres of housing,” said Kassymbek.

Oilfield service companies seek state support to increase competition in industry Astana Times, 16 February 2018

The Union of Kazakhstan Oilfield Service Companies wants to increase the involvement of domestic businesses and state support for the $45 billion in projects underway by Tengizchevroil, Karachaganak Operating Company and North Caspian Operating Company, according to a Feb. 13 press briefing.

“Proper use of resources is an essential task for all parties. In this regard, the Union of Oilfield Service Companies Union traditionally acts as an important dialogue platform for protecting the interests of Kazakh companies. Domestic enterprises face a number of challenges including low margins of service-based businesses, closed tender procedures, certain preferences proposed by foreign companies and other things. They believe that the effective measures will be taken to resolve all existing disputes,” said union presidium chairperson Rashid Zhaksylykov, adding the three operators account for 75 percent of all the domestic oilfield service purchases.

He noted the companies need state support, as they currently must compete in unequal conditions with foreign enterprises that are exempt from import duties and have access to finance.

“Our oilfield service market is profitable for foreign companies. More than 20 out of the 100 largest contracting companies operate in Kazakhstan. Domestic companies have been able to improve their competences due to competition in the local market. At least 1,000 companies with a total number of more than 170,000 employees work in the oilfield service industry. Turnover of oilfield services averages $7 billion per year in the subsoil use sector. The share of the three large operators accounts for 77 percent of the oilfield services. There are 66 oilfield service companies in the list of top 500 largest companies in Kazakhstan with a total tax payment of 280 billion tenge (US$868 million) by the end of 2016,” he said.

Kazakhstan Oilfield Service Companies Union Presidium chairperson Rashid Zhaksylykov.

Photo credit: Abctv.kz.

Foreign investments enable local companies to improve their competencies as part of the joint ventures and consortia. “One of the conditions proposed by the government is that the subsoil user provides the transfer of knowledge, technology and experience. The increase of local content share through the participation of Kazakh companies in major oil and gas contracts is an important part of bilateral cooperation,” said Zhaksylykov.

Russia remains an important market for Kazakhstan’s oilfield services. Domestic companies participate in the projects in Moscow, Sakhalin, Yamal and other oil and gas regions, providing construction, engineering and drilling services. They also operate in Georgia, Iran, Iraq and Jordan.

The active phase of the future expansion project at Tengiz field will start this year. Tengizchevroil has obligations that the share of local content should be at least 50 percent. The company purchased goods and services from Kazakh suppliers for $494 million in the first quarter of 2017.

Precision agriculture technology, digitisation introduced to boost productivity Astana Times, 16 February 2018

The Kazakh Ministry of Agriculture has presented plans to focus this year on introducing precision technology and intensive irrigation, livestock development and renewing agricultural machinery. The four key areas are expected to increase labour productivity in the agro-industrial sector. To increase technical equipment, 5.5 billion tenge (US$17 million) will be allocated to subsidise the agricultural leasing interest rate and raise the investment subsidy by 20 billion tenge (US$62 million) by reducing inefficient subsidies.

“We plan to introduce electronic field mapping, accurate weather data and wireless sensors, space monitoring and other solutions to validate precision agricultural practices. We will develop an economic model for introducing precision technologies for different types of farms and an entirely new system of subsidy. We will launch pilot projects in certain farms in cooperation with local executive bodies. The educational institutions, research institutes and the world’s leading companies that are engaged in agriculture digitisation and development of technologies will assist in training farmers,” said Deputy Prime Minister and Minister of Agriculture Umirzak Shukeyev during the Feb. 13 governmental meeting.

Minister of Agriculture Umirzak Shukeyev

The approach to cooperatives will also be revised to increase meat export. The action is expected to encourage cooperation of small and medium-sized businesses with large feedlot sites to ensure marketing, technology distribution, knowledge and access to financing. “We expect to ensure the investments in technology up to 240 billion tenge (US$742 million) by 2021 with a gradual increase of support measures. The renewal of agricultural machinery will reach approximately 6 percent in three years; now, it stands at 2 percent,” he added.

Measures will also be taken to rehabilitate irrigation. Water supply will be restored this year to 65,000 hectares. The agricultural producers and processing enterprises will join as meat cooperatives to solve the issues concerning processing agricultural products. Agricultural science aims to focus mainly on introducing new technologies rather than inventing livestock breeds.

“There are three universities and 23 research institutes at the ministry. This number will be reduced to 12 due to consolidation. Agricultural universities will become research institutions with research institutes and farms,” said Shukeyev.

An effective system ensuring epizootic, veterinary and sanitary well-being will be developed to increase the efficiency of state control and supervision. Veterinary border control will be established and unified approaches developed in cooperation with Russian and Kyrgyz veterinary services to combat transboundary animal diseases, monitor quality control of vaccines at the World Organisation for Animal Health (OIE) laboratories and implement against nodular dermatitis and foot and mouth disease.

January’s agriculture, forestry and fishery gross output was 113.4 billion tenge (US$350 million), a 3.7-percent increase compared to the corresponding month in 2017, reported the committee on statistics.

China's CSRC signs MOU with Kazakhstan's AFSA xinhuanet.com, 15.02.2018

China's top securities regulator has signed a Memorandum of Understanding (MOU) with its Kazakhstan's counterpart to enhance cooperation on securities and futures regulation.

The document was signed by Liu Shiyu, chairman of China Securities Regulatory Commission (CSRC) and Stephen Glynn, chief executive officer of the Astana Financial Services Authority (AFSA) in Beijing last week.

With the signing of the document, China-Kazakhstan cooperation on securities and futures regulation has entered a new stage, the CSRC said in an online statement.

The MOU also signed against the backdrop of growing economic, trade and financial cooperation between the two countries in the past several years, said the CSRC, adding that the two sides had achieved positive progress in capital markets cooperation.

In May 2015, CSRC signed an MOU with the National Bank of Kazakhstan on securities and futures regulation cooperation. In May 2017, Shanghai Stock Exchange and Astana International Exchange established a strategic partnership, and the former became a shareholder of the latter.

The MOU between the CSRC and AFSA will help bilateral exchanges, cooperation and coordination in regulations, promote financial and economic and trade cooperation between the two countries, and support the real economy and the building of the Belt and Road, the statement said.

CSRC has signed 67 MOUs on regulation cooperation with 61 countries or regions, according to the statement.

http://www.xinhuanet.com/english/2018-02/15/c_136977966.htm

Kazakhstan launches online platform to monitor greenhouse gas emissions Astana Times, 12 February 2018

The Kazakh Ministry of Energy and the World Bank recently launched an online platform to monitor and report greenhouse gases (GHG) emission sources.

“Kazakhstan’s emissions trading system is the first of its kind in the Central Asia region,” said World Bank Country Manager for Kazakhstan Ato Brown. “With support from the Partnership for Market Readiness, the country has made a great effort to develop policy options for mid- and long-term emissions pathways and to develop an action plan on GHG emissions reductions by 2030. The World Bank will continue to support the government during the crucial stages of policy implementation.”

According to the press service of the World Bank in Kazakhstan, the system has no analogues in the Commonwealth Independent States and meets all information security requirements.

This platform is an essential part of the National Emissions Trading System of Kazakhstan, which was launched in 2013 as the main instrument for regulating internal CO2 emissions and developing low-carbon technologies. Today, the system covers all major companies in the energy, oil and gas, mining, metallurgical and chemical industries.

The platform enables Kazakhstan’s major emitters to transmit and record data on GHGs emissions, as well as trade online.

“The electronic platform undoubtedly proves the evolution of the Kazakhstan emission control system, which will allow the monitoring, reporting and verification system to be upgraded to a much higher level,” said Deputy General Director of Zhasyl Damu Sergei Tsoi.

Emissions data is confirmed by accredited bodies for verification and validation and transferred to a registry using an electronic digital signature. To date, there are seven verification companies accredited in Kazakhstan, with five more in the process of accreditation.

Zhasyl Damu developed the platform with the support of France’s Technical Centre on Air Pollution and Greenhouse Gases. Since 2014, the World Bank has provided technical assistance to Kazakhstan in the implementation of this system and related measures to mitigate the climate change impact.

Green Bridge Partnership Programme offers tool for Paris Climate Agreement implementation

Astana Times, 13 February 2018

President of Kazakhstan Nursultan Nazarbayev, in his state-of-the-nation address earlier this year, as a priority, underlined the importance of increasing requirements for energy efficiency and energy saving by enterprises, as well as the environmental friendliness and efficiency of the energy producers themselves. The implementation of this objective requires the enhancement of environmental and energy programmes at the national and regional levels and strengthening international cooperation in these areas. A dynamic acceleration to this process was the successful holding of the EXPO 2017 and Kazakhstan’s participation in the Paris Climate Agreement.

Dr. Bakhyt Yessekina

As is known, the 23rd UNFCCC Conference on global climate change (COP-23) was held in Bonn on Nov. 6-17, 2017, where all countries agreed that climate change is a real challenge for the world economy. Numerous activities of COP-23 were discussed, including low-carbon initiatives and successes at the level of sub-national actors: states, provinces, cities, companies and associations. Successes of low-carbon development and examples of solving climate problems were demonstrated.

For other Kyoto mechanisms that exist up to 2020 – Clean Development Mechanisms (CDM) and Joint Implementation (JI), – they are yet to be recommended for use, but with a number of features in the new context of the Paris Agreement. Now, emission-buying countries (mainly developed countries) must adopt nationally defined goals, and their projects will be considered primarily as a tool for promoting business and technology and not as an instrument for acquiring emission reduction units.

Future implementation mechanisms can encompass a wider range of activities that contribute to reducing emissions and sustainable development in general. Accounting for activities can be, in particular, financial resources transferred for action in another country.

It should be noted that the costs of reducing of greenhouse gas emissions for different countries and sectors of the economy will be different. Those countries where economic growth is traditionally provided by the development (expansion) of industries with high specific emissions, more significant structural and technological changes will be required, and hence more time for transition to a low-carbon development model.

World experience demonstrates that the transition to low-carbon development at the first stage will require significant financial costs. In terms of value, measures on reduction of greenhouse gas emissions include: the costs of developing and implementing high-performance, climate-friendly technologies that reduce emissions, and consumers’costs of switching from goods and services whose production and/or consumption involve significant greenhouse gas emissions, to low-emission products and services. Together, these costs and expenses are estimated to average 1 percent of global GDP and, in the worst case scenario, 3.5 percent of global GDP. It should be noted that under certain scenarios, measures on reduction of greenhouse gas emissions on a global scale may not lead to a decrease, but, on the contrary, to additional GDP growth. Costs can be further reduced by increasing energy efficiency, demand management as well as through the use of energy-saving technology in the production of energy, heat and in the transport sector.

For the most developed and richest countries the agreement will optimise their financial and technological role in the global effort. As for the less developed countries, but with a large carbon potential, such as China, Brazil, Turkey, the financial component of agreement is secondary for them, since international assistance is relatively small or approximately equal to their help to weaker states. The economy of these countries depends significantly on the global trend on development of low-carbon, and, to a large extent, they shape it by themselves, especially China.

For Eastern Europe, Caucasus and Central Asia (EECCA), then for the Trans-Caucasian countries, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, the agreement should be a powerful factor of international support; and for Russia, Belarus and Kazakhstan, it should help their integration into the global investment process and encourage a deep modernisation of economy structure.

International experts have identified at least three trends within the framework of the Paris Agreement, which now underpin and strengthen its implementation.

Firstly, planning the development of economy and energy taking into account possible changes in the 2020-2040. In many cases, it leads to delays in the approval of international and national projects while maintaining the current situation would have been profitable.

Second, introduction of carbon price (fees for greenhouse gas emissions in a particular stimulating form), carried out or expected in the future, which shifts the competitiveness of various projects and trade flows. This is clearly demonstrated by the results of bilateral meetings of major issuers (China, the U.S., the EU and India).

Third, a global trend towards choosing low-carbon solutions, if they are not more expensive than traditional solutions, when the planning horizon is set for 20-30 years. This is clearly confirmed by signing partnership deals and the choice of investment options in virtually all countries of the world and in state and private companies in all sectors of economy.

In general, COP-23 has achieved the understanding of the leading role of global low-carbon development trends and its impact on the economy. The outcome document, the Fijian moment for implementation (Fiji was chair of COP-23), reflects the need to accelerate work on the set of rules of the Paris Agreement and its adoption at the COP-24, the organisation of special session of the subsidiary bodies in the second half of the 2018, Dialogue-2018 on consideration of the actions and goals of countries in the field of greenhouse gas emissions and the summing at COP-24 of the intermediate results of activities of countries until 2020. As a result of COP-23, the 20th partnership initiatives were presented, including cities, infrastructure, transport, waste, education, risks assessment, financial support and tools.

The famous environment partnership initiative presented by Kazakhstan on the global level is the Green Bridge Partnership Programme (GBPP) proposed by President Nazarbayev at the 66th Session of the UN General Assembly in 2011. This initiative was entered to the final declaration of the UN Summit in 2012. The GBPP was also supported at the sub-regional conferences by ESCAP, UNECE, ISESCO and was supported by more than 120 states of Europe, Asia and the Pacific. The reason for this interest in the GBPP is its potential to support the transition to a green economy and sustainable development, including the following.

The international status establishes a more reliable political and legal framework for long-term green investments and additional guarantees for investors in conditions of political instability in countries with economies in transition. Agreements on projects that have been granted a status of the GBPP –between countries and investors – must be long-term, and international agreements must not depend on changes of governments, decision-makers or withdrawals from international agreements (similar to agreements of UN, EU, WB, etc.).

It establishes a broader regional and inter-sectoral basis for mutually beneficial cooperation (water-energy-food-climate). Within the GBPP, there are mutually beneficial regional agreements between countries on interregional green business and trade with maximum productivity of water, energy, land or in sharing ecosystem services among Eurasian countries, for example, within the framework of the Belt and Road Initiative.

It allows to create more trustful business environment, to involve additional parties for mutually beneficial solutions of problems, i.e. go out in search of solutions beyond the limited formats of regional agreements (IFAS, ICWC, etc.).

It creates a more professional basis for analytical work and searching for best solutions through participation of authoritative and internationally recognised experts of the GBPP, working groups, including elimination of cases of lobbying for “dirty” technologies, equipment or environmentally unfriendly programmes and laws.

It provides a special status of international expertise of projects and technologies that have a status of the GBPP – international, professional and neutral. This expertise will substantially complement the capacity of local, national and regional organisations in the interests of saving budgetary and other resources as well as to prevent mistakes in implementing green reforms, procurement, etc.

Presently, the GBPP Charter has been signed by 16 countries and 16 NGOs from Kazakhstan, Russia, Finland, Kyrgyzstan, Germany, Austria, Turkey, Estonia, Uzbekistan and Tajikistan.

The GBPP and Paris Climate Agreement have a common goal – the need to find joint solutions to the problems of the transition to low-carbon development and adaptation to climate change. Reducing greenhouse gas emissions and environmental pollution is one of the main areas of the GBPP at the global level.

In this regard, Kazakhstan could re-start activity in GBPP promotion in terms of the Paris Climate Agreement implementation and to suggest to UNFCCC to register this global Partnership. This step will allow Kazakhstan to strengthen cooperation with global financial institutions and to join Dialogue-2018 in terms of COP-24.

The author is a member of the Green Council under President of the Republic of Kazakhstan, Director of the Green Academy Scientific-Education Centre.

The IP team of international law firm, Gowling WLG, has been nominated in multiple categories at this year's Managing Intellectual Property (MIP) Awards.

MIP is one of the most respected intellectual property publications, globally. This year, the team has been recognised across several of its key jurisdictions and acknowledged for many of its core IP expertise.

The MIP EMEA Awards will take place on 8 March 2018 at The Savoy, London.

The Gowling WLG Russia/CIS IP team has been shortlisted in 3 categories of the MIP EMEA Awards: 

•           Eurasia

•           Russia Contentious

•           Russia Prosecution

In addition to the Russia/CIS nominations, Gowling WLG has been nominated in 10 additional jurisdictions/categories for both MIP EMEA and North America Awards.  For more information on the MIP Awards short lists, please see: http://bit.ly/2si4V6W

4G mobile service could start in Ukraine as early as March, telecom providers said after winning licenses at auction Wednesday. Kyivstar, Vodafone and Lifecell together will pay $85 million to provide the services. At first, according to AIN.ua, service will be launched in Ukraine’s five largest cities -- Kyiv, Kharkiv, Lviv, Odesa and Dnipro. By 2022, 4G service is to be available in all Ukrainian cities with populations over 10,000. On 4G, Olha Ustinova, general director of Vodafone Ukraine, told Ukrinform: "We are ready. We are testing it so far. And we’ll start in March-April." Kyivstar, the nation’s largest mobile provider, prepared for the auction by erecting more than 500 4G towers in Ukraine’s largest cities, sea resorts, and border crossing points, the company said. This year, it plans to double that number, erecting another 600 towers. Additionally, the operator has 7,300 3G towers In February-March, a second tender is to be held to sell 4G licenses for 150 MHz frequency band. The starting price is to be $137 million. Concorde Capital’s Alexander Paraschiy writes: “The purchase of the licenses will stimulate mobile operators' investments into new technologies and may have an overall positive effect on Ukraine’s economy in the mid-term. This also may improve the country’s investment attractiveness.” Ukraine’s grain harvest fell 7% last year, to 61.3 million tons, according to the State Statistics Service of Ukraine. Last year, Ukraine threshed 26 million tons of wheat, down from 26 million tons in 2016. The corn crop fell to 24.1 million tons, down from 28 million tons. Barley fell to 8.3 million tons, down from 9.4 million tons. Poor rains and lack of irrigation reduced crops from the levels of 2016, a bumper crop year. Indonesia has unexpectedly traded places with India as the world’s largest buyer of Ukrainian grain, UkrAgroConsult reports. Indonesia is taking 16% percent of Ukraine grain sales, while India’s take has plummeted to 4%. India’s wheat harvest has recovered making the country more self reliant. Ukraine competes with Russia, which is pumping cheap grain from a bumper crop into international markets, Bloomberg reports. Russia has dominated this season’s tenders in Egypt, the world’s biggest wheat buyer. Ukraine’s trade deficit in good and services increased by one quarter last year, to $6.8 billion. The trade deficit in goods jumped 32%, to $9.2 billion, according to the State Statistics Service. This was offset by a surplus in trade in services – largely IT – which increased 60%, to $2.3 billion.

Imports from Russia jumped last year 40%, to $7.2 billion, largely due to imports of coal, oil products and fertilizers. Exports increased by only 10%, to $3.4 billion. The U.S. displaced Russia last year as the leading source of official private remittances to Ukraine, the National Bank of Ukraine reports. The rise in payments from the US was largely due to the increase in the export of IT services. Overall, remittances to Ukraine – largely from US, Eastern Europe and Russia – increased last year by 30%, to $5.2 billion. Ukrainian workers in Poland may have sent home $5 billion last year, equivalent to 5% of Ukraine’s GDP, Deutsche Welle reports from Warsaw. Work permits more than doubled last year, to 250,000. Another 1 million Ukrainians work temporary jobs on the 90-day visa free regime. Almost half of employers sought Ukrainians because no local hires were available and 40% of firms in sales and services rely on Ukrainians, according to a survey of 300 companies in January by Work Service, a Warsaw recruitment company. Analysts cite labor shortages as the major threat to Poland’s continued high economic growth.

One week after the central bank raised interest rates, Prime Minister Groysman called on the bank to cut interest rates. Groysman said Wednesday at a televised cabinet meeting that Ukraine should target annual economic growth of 5-7 percent. Groysman said: “At the moment we’re thinking that the interest rate on loans needs to be lowered, as loans need to be available for the national economy.” Last Thursday, the National Bank of Ukraine raised the main interest rate 1.5 percentage points, to 16%, to contain inflation, was 13.7% last year. Ukraine’s digital economy can create 300,000 to 400,000 new jobs and over 50 new professions, according to the Economic Development and Trade Ministry. At present, only 17% of Ukrainian industries use digital innovations, far below the EU indicator of 49%. Through public-private partnerships, Ukraine can reach 80% broadband coverage in five years. Ukraine’s government has fired tax and customs service chief Roman Nasirov 11 months after he was suspended from his post after his arrest on suspicion of embezzlement. Nasirov is being investigated on suspicion of defrauding the state of the hryvnia equivalent of $70 million. After his arrest, Nasirov was released on bail, but ordered to wear an electronic bracelet and barred from leaving Kyiv. He is one of a handful of high officials to face prosecution after Ukraine’s 2014 Revolution of Dignity. Denmark’s Maersk and Ukrainian Railways started Wednesday what is to be a twice a week container train running 500 km between the TIS terminal at Yuzhny port and the Kyiv Liski container park on the Dnipro left bank. In practical terms, this will take 12,000 tractor trailer trucks off the Kyiv-Odesa highway each year, Egor Grebennikov, co-founder of TIS, tells Interfax. The train will take 19 hours, three times as long as a truck. But shippers can load 28 tons in each container, 17% more than the 24-ton truck limit. Container traffic by rail is set to grow in Ukraine, Ukrzaliznytsia CEO Yevhen Kravtsev tells Interfax. Ukrainian Railways plans to build container terminals in Vinnytsia and on Ukraine’s EU borders. Last year, rail container traffic grew by 10% to 291,900 containers. Next summer, the TIS stevedoring and logistics company plans to start a container rail line from Yuzhny to Dnipro, a 600 km distance. Work is to start next year on a 5-year, $500 million ski resort in the 1,000-meter high Carpathian mountains surrounding the village of Verkhnia Rozhanka, 145 km south of Lviv. The resort “should become the best one in Ukraine,” asserts Volodymyr Beha, head of the Slavske united territorial community, which includes the village. The project is being financed by Galnaftogaz Concern, owner of Ukraine’s 400 Okko gas stations. Vitaliy Antonov, chairman of Galnaftogaz, is a rock climber, mountaineer, and native of Lviv Region.

Uzbekistan plans to involve Deloitte in developing long-term strategy The Uzbek Ministry for the Development of Information Technologies and Communications held negotiations with the representative of the regional department of Deloitte Christopher Armitage which focused on the involvement of Deloitte in developing a national concept in the field of ICT. In particular, the issue of studying best international practices and applying it in Uzbekistan was considered, according to the message on the ministry's website. The future concept should cover such areas as telecommunications infrastructure, e-government, information security, innovation, mail, logistics and e-commerce. This will also include the issues of education, training and retraining of personnel. Deloitte is the brand under which tens of thousands of dedicated professionals in independent firms throughout the world collaborate to provide audit & assurance, consulting, risk and financial advisory, risk management, tax, and related services to select clients. These firms are members of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"). Each DTTL member firm provides services in particular geographic areas and is subject to the laws and professional regulations of the particular country or countries in which it operates. In 2015, Fortune magazine included Deloitte in the rating of the 100 most outstanding companies in the world. Since 2018, Uzbekistan has refused to approve annual investment programs, preferring long-term investment strategies. The industries and regions are tasked to develop a ten-year investment attraction strategy. At the same time, forecasted demographic indicators and unique "growth points" for each region or industry should be taken into account. Later, long-term plans for the development of industries and regions will make it possible to compile short-term three-year programs. It is planned to start operating in accordance with them in 2019.

Uzbekistan imposes moratorium on inspection of entrepreneurs Uzbekistan has imposed a moratorium on inspections of financial and business activities of business entities, with the exception of inspections conducted in criminal cases and in connection with the liquidation of a legal entity. This is stipulated by the presidential decree "On the State Program for the Implementation of the Action Strategy on five priority development directions of Uzbekistan in 2017-2021" in the Year of Support of Active entrepreneurship, innovative ideas and technologies." Under the decree, the President abolished the Republican Council for Coordination of the Activities of the Control Authorities from April 1,2018. At the same time, the head of state handed over 228 authorized units of the state tax service to the prosecutor's office. Since April 1, the duplicating functions and powers of the justice bodies to protect the rights and legitimate interests of small businesses, private entrepreneurs, foreign investors and enterprises with foreign investment are excluded. Under the presidential decree, the audit of financial and economic activities conducted within the framework of criminal cases should not exceed one month, in exceptional cases, the period of verification may be extended for not more than one month by the General Prosecutor of the Republic of Uzbekistan or his deputy. The launch of criminal cases on facts related to offenses in the conduct of entrepreneurial activity is carried out exclusively with the consent of the prosecutor of the Republic of Karakalpakstan, regional prosecutors, the city of Tashkent and equal prosecutors. Information on violations in the activities of business entities, information about the inspections and monitoring (the basis, time of inspections or monitoring, employees who conducted them, and others) and the measures taken to eliminate the violations are included in mandatory manner into a special electronic information system of the prosecutor's office.

WB issues loan to Uzbekistan for modernization of the district heating sector The World Bank's Board of Executive Directors approved financing of the District Heating Energy Efficiency Project, through which over 240,000 residents in five cities across Uzbekistan are to benefit from improved efficiency and quality of heating and hot water services. The Project will be financed by a $140 million credit from the International Development Association, a part of the World Bank. "The World Bank is pleased to support the modernization of the District Heating sector," said Hideki Mori, World Bank Country Manager for Uzbekistan. "These measures will improve the living conditions of hundreds of thousands of people across Uzbekistan." Uzbekistan often experiences cold and harsh winters. A stable heat supply is therefore critical for ensuring the well-being of its citizens and for preventing environmental, safety, and health-related hazards. The District Heating Energy Efficiency Project aims to address all challenges in this field by introducing, for the first time, a modern District Heating model for Uzbekistan. The Project will specifically benefit residents living in multi-apartment buildings in the cities of Andijan, Bukhara, Chirchik, Samarkand, and Tashkent (Sergeli district), and which are connected to or will be connected to the District Heating service. Users of public and administrative buildings, including kindergartens, schools, hospitals, and municipality offices, will also experience an improvement in the quality of heating services. The Project will also invest in District Heating infrastructure, enhancing their capacity, and improving the regulatory framework to make selected District Heating companies more viable, efficient, and sustainable. The electricity distribution subsidiaries of the state-owned energy company Uzbekenergo will experience a reduced overloading of their power networks and consequently there will be lower technical losses, fewer breakdowns, and less power outages in the five participating cities. The Project is expected to reduce natural gas and electricity consumption, as well as CO2emissions, in the cities. The World Bank is helping Uzbekistan to reach a wide range of development goals by supporting 16 projects worth $ 2 billion. These projects support agriculture and water resources management, energy, transport, healthcare, education, urban development, water supply and sanitation.

CONTACT INFORMATION: The American-Uzbekistan  Chamber of Commerce   1030 15th Street, N.W.,  Suite 555W   Washington, DC 20005   phone: 202.509.3744   info@aucconline.com www.aucconline.com

SUMMARY OF 2017 IN FOREIGN TRADE POLICY OF THE REPUBLIC OF UZBEKISTAN

 

As a part of the economic system reform of the Republic of Uzbekistan, over the past period the Ministry for Foreign Trade of the Republic of Uzbekistan (MFT) has initiated several policies on liberalizing foreign economic activity and increasing the export potential of the Republic.   l. In foreign economic sphere, the strategy of expansion and strengthening of trade and economic relations with foreign countries was continued, firstly with China, the Russian Federation, Kazakhstan, South Korea, Turkmenistan, Turkey, and Germany.   In 2017 the turnover of the Republic of Uzbekistan with foreign countries increased by 11,3%, incl. exports increased by 15,4%, imports - 7,2%. Volumes of trade has grown with all major foreign trade partners, incl. with China by 16,8%, Russia - 16,1%, Kazakhstan - 9,7%, Kyrgyzstan - 51,6%, Tajikistan - 20,2%, Afghanistan - 15,2%, South Korea - 27,1%, Turkey - 31,8%, Germany - 15,9% and others.   For the first time in the history of modem Uzbekistan, joint production of domestic products was launched abroad, assembly production of cars of JSC “GM Uzbekistan” has started in Kazakhstan, and the similar projects on establishing industrial assembly of cars, agricultural machinery, electrical products, construction materials and textiles are being implemented in Kyrgyzstan.   2. During 2017 there were 21 top level visits, 700 documents were signed in the trade, economic and investment spheres for a total of about USD 60,0 billion, including USD 11,0 billion trade contracts.   3. All export restrictions have been removed: the procedure for exporting goods without prepayment and guarantee obligations, expansion of tax benefits for exports has been introduced. Unnecessary and outdated permitting procedures have been eliminated.   The compulsory sale of foreign currency earnings, which in fact was a tax on exports, has also been eliminated.   The rates of import customs duties and excise tax on food products, imported consumer goods, and commodities used in the manufacture of finished products have been reduced drastically. As a result, the arithmetic average rate of customs duty in Uzbekistan became 6,45%.   4. Over the past period, more than 950 new enterprises have been involved in export activities, with exports amounting to over USD 0,6 billion, 118 new types of goods exported, the geography of supplies expanded to 62 new markets.   The share of high added value finished goods in the export of the Republic of Uzbekistan increased from 28,5% to 34,5%, export of cars grew by 3,3 times, electric and cable products -1,7 times, pharmaceuticals - 1,2 times, textile – 1,3 times.   The Ministry for Foreign Trade is working on trade expansion measures through establishing trading houses (with show-rooms) in foreign countries.   Today more than 1000 trading houses are operating abroad, out of which 75 have been established in 2017, including 26 in the countries of Central Asia.   In 2017 domestic enterprises have taken part in more than 80 international exhibitions and fairs in 20 countries of the world, we have signed export contracts and agreements amounting to USD 1,36 billion.   At the same time, in accordance with the Five priority areas of Uzbekistan's Development strategy for 2017-2021, and in order to further increase export volumes, involve new enterprises in export and develop export of new products, based on integrated marketing research, MFT has developed a Concept on development of export activities of the Republic of Uzbekistan for 2018-2022. According to this Concept, the Ministry is expecting an increase in exports of the Republic of Uzbekistan by 2022 to the level of up to USD 30 billion, or 2,6 times more than current export indicators.   5. In order to reduce the transport expenditure component in overall export of goods, Uzbekistan has received discounts of up to 40% on the transportation of mineral fertilizers, cotton fiber, fruit and vegetable products and non-ferrous metals across the territories of Kazakhstan, Russia, Turkmenistan, Azerbaijan, Georgia and Iran.   As part of the formation of efficient and reliable alternative transport and transit corridors, a pilot auto rally on the Uzbekistan-Kyrgyzstan-China road corridor was organized (the core direction of BRI), and the first meeting of the working committee of the Ashgabat agreement was organized for the practical implementation of the international transport and transit corridor «Uzbekistan-Turkmenistan-Iran-Oman».

ECONOMY

Kazakh companies boost cooperation with Boeing, GE and Pfizer

Astana Times, 25 January 2018

ASTANA – Air Astana, Kazakhstan Temir Zholy (KTZ), SCAT and Samruk Kazyna Sovereign Wealth Fund will be purchasing $2.5 billion in goods and services from such American companies as Boeing, Chevron, GE (General Electric) Digital and GE Transportation. The agreements were made during Kazakh President Nursultan Nazarbayev’s recent official visit to the United States.

The $1.3-billion agreement between Boeing and Kazakh airlines will support creating 7,100 direct and indirect jobs in the U.S. In particular, SCAT Airlines ordered six Boeing-737 MAX 8 aircraft. Taking into account the planned delivery of the first aircraft in March, they will be the inaugural 737 MAX models owned and operated in Kazakhstan and the Central Asian region, expanding SCAT’s regional and international network. In addition, Air Astana has confirmed its commitment, in accordance with the terms of the existing contract, to purchase three 787 Dreamliner aircraft with scheduled delivery in 2021.

GE and KTZ concluded two new strategic initiatives estimated at almost $900 million which will support or create 3,500 American jobs. GE Transport will develop and produce up to 300 shunting locomotives for KTZ which will be delivered in 2019. The company also signed an 18-year agreement to provide services for the maintenance and support of 175 GE Evo passenger locomotives owned by KTZ since 2018. The deal will include expanding KTZ’s main railway production in the Kazakh capital.

Pfizer signed a memorandum of understanding with Kazakhstan to possibly implement a project to localise production of secondary packaging of high-tech medical products. If the decision is positive, the project may include measures to improve the cold chain system to transport and store Kazakh medicine.

Kazakhstan and the U.S. recognise the importance of developing trade relations in the agricultural sector and will continue to explore opportunities to expand cooperation, including through joint agricultural research. The study helps both countries work towards achieving broad, safe food security.

Boeing is an American multinational corporation that designs and manufactures aircraft, rotorcraft, rockets, and satellites. The company is one of the largest global aircraft manufacturers and is the second-largest defence contractor in the world. It is also considered to be the largest U.S. exporter by dollar value.

GE is a U.S.-based multinational conglomerate operating in aviation, digital technologies, energy connections, scientific research, healthcare, lighting, oil and gas, power engineering, renewable energy, transportation, pharmaceutical, automotive and software development.

Pfizer is an American pharmaceutical corporation considered to be one of the world’s largest in the field. It develops and produces medicines and vaccines for a wide range of medical disciplines, providing them throughout the world.

All restrictions dropped on Kazakh airline flights to EU Astana Times, 25 January 2018

ASTANA – All restrictions have been dropped on Kazakh airline flights to European Union (EU) countries, according to Minister for Investment and Development Zhenis Kassymbek. Five domestic carriers (Air Astana, Comlux, KazAirJet, Prime Aviation and SCAT) are cleared for take-off.

The International Civil Aviation Organisation (ICAO) commission audited aviation security Nov. 22-30, completing a comprehensive check of the airport security system. According to preliminary estimates, ICAO experts note Kazakhstan has made significant progress and serious improvements are expected in the organisation’s rating indicators. The official results will be published by Feb. 1.

“Within the President’s 100 Concrete Steps plan, the transition to the British model of state regulation of the industry is planned (step 68). This will make it possible to meet the requirements of ICAO for the availability of qualified inspectors and achieve the goal of 80 percent in terms of flight safety,” Kassymbek told a recent government meeting.

He added the 72-hour visa-free regime introduced in June during EXPO 2017 for Chinese citizens who transit through the Astana and Almaty airports by Kazakh airlines was recently extended through the end of 2018. To further develop transit potential, a similar regime is being worked out for transit citizens from India.

Kazakh Minister for Investment and Development Zhenis Kassymbek

To date, Kazakhstan has nearly completed modernising the air transport infrastructure, as 15 runways and 11 terminals have been reconstructed in the years since independence. To develop small aircraft, constructing and reconstructing five airfields with a hard surface and 11 aerodromes with ground covering is envisioned.

“In total, Kazakhstan airports serviced 14.2 million passengers in 2017, which is 17 percent more than in 2016 (about 12.2 million passengers). Last year, as part of the execution of the state programme Nurly Zhol, the construction of a new terminal at Nursultan Nazarbayev Airport in Astana was completed, which will allow Astana to be developed as a regional hub in Central Asia,” said Kassymbek.

Prime Minister Bakytzhan Sagintayev noted the issue of civil aviation development is very relevant and important. At present, the domestic civil aviation infrastructure has been brought to international standards. He added an 800,000-person increase in passenger traffic is planned for 2018.

Sagintayev instructed the Ministry of Investment and Development together with other interested agencies to consider introducing a 72-hour visa-free regime for Indian citizens. He also directed relevant state bodies to regulate and reduce tariffs for airport service provisions if the action does not contradict domestic antimonopoly legislation. Control over executing the instructions is assigned to First Deputy Prime Minister Askar Mamin.

Kazakhstan ranks second in ensuring flights safety among CIS states Azernews.az, 23 January 2018

Kazakhstan ranks second in ensuring the safety of flights among the CIS countries, Kazakh Minister for Investments and Development Zhenis Kasymbek said at government meeting on January 23.

The country is a full-fledged participant of the world aviation market, according to the official.

"In 2016, an ICAO [International Civil Aviation Organization] safety audit was conducted and 74 percent of compliance with requirements was confirmed. Today, among the CIS countries, we are the second in this indicator and the 73rd among the countries participating in ICAO. Over the years Air Astana has become the region's leader in aviation transportation. For the last six years, the company ranked first as the best company in Central Asia and India and has one of the youngest aviation parks in the age of 6-8 years. At the same time, we are working towards ensuring that Kazakhstan's aviation meets 80 percent of ICAO requirements by 2020. Thus, it will enter the 51st aviation administration of the world,” he noted.

He informed that according to the results of the last year the growth of air transportation by the Kazakh companies was 21 percent.

“This is the best indicator for all the years of independence. Expo played an important role. Transit of passengers through Kazakhstan grew by almost 30 percent. Freight transportation by air increased by 24 percent,” Kasymbek noted.

The ministry set a task to increase the transit flow through the republic up to 1.6 million passengers, the volume of aviation works - by 30 percent, and to double the volume of cargo transportation by air before 2020, according to the minister.

Earlier, the Civil Aviation Committee of the Kazakh Ministry of Investment and Development announced the launch of a number of international flights in Kazakhstan in 2018. Moreover, the committee will conduct 59 certifications and 434 inspections of air transport enterprises in 2018 in order to control the safety of flights.

In 2017, ten new international routes were opened, including by foreign carriers (Finn Air, LOT Polish Airlines, Wizz Air, Air China) in direction of Warsaw, Budapest, Helsinki, Beijing and Batumi as well as Kazakhstan airlines to destinations of Xi'an, Kiev, Minvody, Yerevan and Delhi.

At the same time, 20 flights a week were added to the current flight in eleven destinations, that is to Bishkek, Istanbul, Beijing, London, Seoul, Novosibirsk, Ekaterinburg, Omsk, St. Petersburg, and Tashkent.

There have been several crashes including the one on October 3, 2017, that killed five people in Kazakhstan. At the time, an Antonov An-28 ambulance plane fell near Almaty. On August 10, a training aircraft Tecnam 2002 collapsed in the Almaty region and two people were killed.

A similar catastrophe occurred on July 25 as a two-seater private plane crashed. As a result, a pilot was killed and a passenger was injured. Almost a month before that, the Yak-12 aircraft, owned by the airline Kazavia, crashed, and two people died.

Kazakhstan has airports in Shimkent, Atbasar, Karaganda, Kyzyl-Orda, Balkhash, Burundai, Zaisan, Petropavlovsk, Semipalatinsk, Ust-kamenogorsk, Uralsk, Taldy-Kurgan, Kokshetau, Pavlodar, Zhezkazgan, Atyrau, Zhambyl, Zhairem, Ekibastuz, Almaty, Aktau, Kostanay, Aktyubinsk, Arkalyk, and Astana cities.

Kazakhstan's existing airlines are Air Astana, Air Company MEGA, Avia Jaynar, Bek Air, Berkut Air, Euro-Asia Air, Excellent Glide, Irtysh-Air, SCAT, Semeyavia, Zhetysu, and Zhezkazgan Air.

https://www.azernews.az/region/125946.html

More than 20 agreements on cooperation in investment, trade and economy were signed during Kazakh President Nursultan Nazarbayev’s visit to Washington, his press service said on Wednesday.

"Within the framework of the head of state’s official visit, more than 20 commercial documents about cooperation in investment, trade and economy were signed, with an aim to carry out projects in aviation and space research, petrochemical and agricultural sectors, as well as infrastructure development projects, worth about $7 billion in total," the press service said in a statement.

Three intergovernmental agreements were signed during the visit.

The US Department of State said that as a result of the president’s visit to Washington, Kazakhstan purchased US goods and services worth $2.5 billion in total. The sides also set to develop bilateral trade, which stood at $1.9 billion in 2016.

"During the visit, numerous commercial contracts and documents were concluded, including new agreements between The Boeing Company, GE Transportation, GE Digital, Chevron, Air Astana, KazTemirZholy, SCAT Airlines, and the Samruk-Kazyna National Wealth Fund for the purchase of US products and services valued at over $2.5 billion," the Department of State said.

According a fact sheet, released by the US Department of State and the Kazakh president’s press service, the country’s air carriers signed agreements with Boeing worth $1.3 billion. "During their visit, the two leaders celebrated two separate deals between Boeing and Kazakh airlines totaling over $1.3 billion, sustaining an estimated 7,100 direct and indirect US jobs," the statement reads.

Specifically, Kazakh air carrier SCAT Airlines ordered six Boeing 737 MAX 8 airplanes. With the first aircraft scheduled for delivery in March 2018, these will be the first 737 MAXs owned and operated in Kazakhstan and Central Asia. In addition, Kazakhstan’s flagship air carrier Air Astana affirmed its commitment, under the terms of an existing contract, to purchase three 787 Dreamliners, which are scheduled for delivery in 2021.

Nazarbayev’s official visit to the United States began on Tuesday and will last through Thursday. During his visit, the Kazakh leader is expected to visit New York, where he will chair a high-level UN Security Council debate on confidence-building measures in the non-proliferation of nuclear weapons on January 18.

http://tass.com/economy/985395

Kazakh economy minister: inflation rate won’t exceed 7 percent this year

Astana Times, 13 January 2018

Kazakh Minister of National Economy Timur Suleimenov said the inflation rate will stay within the projected corridor of 5-7 percent this year. He discussed the preventive measures to curb inflation which the government will take by the end of 2018.

Suleimenov noted the inflation rate was 7.1 percent in 2017, when it was supposed to stay within the 6-8 percent corridor. He answered journalists’ questions about high prices for some types of fruits and vegetables in winter, saying Kazakhstan still has a problem with seasonal supply and demand.

“We can’t provide the same volume of offers for vegetables and fruits in December, January, February and March as in July, August and September. Therefore, this particular seasonal surge has been observed in our country at all times,” he said.

At the same time, he noted the Ministry of National Economy and the Ministry of Agriculture are actively engaged in expanding the supply of fruits and vegetables. In particular, a great deal of work is underway to increase inventories, the number of warehouses and wholesale centres and wholesale distribution and trade in all major cities and towns.

The Ministry of National Economy has also proposed reducing intermediary links, although Suleimenov emphasised there is no need to categorically dispose of all mediators.

“Trade intermediation is absolutely a normal economic activity, because not every farmer, not every peasant farm is able to deliver and produce its products on the shelves of bazaars and shopping centres at a distance of 100-200 kilometres. Mediation is just right for this,” he said.

The main thing, he noted, is that it does not become a dependent situation.

“Right now, our committee for regulation of natural monopolies and the protection of competition has legal levers: these are turn-over penalties and the withdrawal of monopoly income. While this year we did not stir anything, we will closely monitor the development of the situation,” he added.

The December inflation rate was 0.7 percent compared to the previous month and 7.1 percent year-on-year compared to 2016, according to the Ministry of National Economy statistics committee.

“One of the important trends of the past year was the slowdown of inflationary processes. Throughout the year, inflation was within the 6-8 percent target corridor of the National Bank and, as a whole, showed a downward trend. As a result of November, the consumer price growth index was 7.3 percent, which is lower compared to the end of last year – 8.5 percent,” said National Bank chair Daniyar Akishev.

Prices for confectionery rose 10.7 percent in 2017 and horsemeat and fresh fish prices grew 9.8 and 9.4 percent, respectively. The prices for sugar dropped 19.5 percent and sunflower oil by 9.9 percent.

Diesel fuel prices rose 31.8 percent last year, gasoline (17.6 percent), coal (17.4 percent) and liquefied gas (8.6 percent). Prices for healthcare services increased 7.9 percent, legal services (7 percent) and entertainment and culture programmes (6.9 percent).

Green energy to satisfy electricity demand in East Kazakhstan Astana Times, 17 January 2018

Solar installations, wind generators and a hydroelectric power station will be launched this year in the East Kazakhstan region.

“These projects are implemented to develop the green economy, one of the main aspects of EXPO 2017. The idea of constructing such power stations is particularly relevant in East Kazakhstan since the region has considerable resource potential and all the necessary prerequisites,” said East Kazakhstan Akim (Governor) Danial Akhmetov.

Clean energy stations are to be built in the Zharma, Ulan and Zyryanovsk districts.

The construction of hydroelectric power station on Turgusun River in the Zyryanovsk district is in full swing. The average annual electricity output is estimated to be 79.8 million kilowatt hours and the total cost of the project is 11.6 billion tenge (US$35.4 million).

Wind generating stations are to be completed in the Shar and Zhangiztobe villages in Zharma district. Another wind power plant is to be constructed in the Tainty village of the Ulan district with a production capacity of 25 megawatts per year.

In Zhangiztobe village, the construction of a solar power station is also coming to an end. The facility, with a price tag of 17.5 billion tenge (US$53.4 million), is capable of producing 30 megawatts a year. This project is included in the list of energy producing organisations of the Ministry of Energy of the Republic of Kazakhstan.

“The akims (mayors) of Zharma, Zyryanovsk and Ulan districts should monitor the implementation of these projects, hold monthly meetings and provide necessary support,” said Akhmetov.

This year, renewable energy will meet the electricity needs of the East Kazakhstan region and its neighbouring districts.

Ukraine’s IT exports should grow by 25% this year, to $4.5 billion, the IT Ukraine Association predicts. Last year, growth was 20% to $3.6 billion, the industry group says. It says that the sector employs 116,000 specialists and pays about $600 million in taxes.

Yuzhmash will supply 20 rocket engines to the European Space Agency through 2020, the Dnipro-based company reports. The engines are used in Vega rockets which launch satellites. Since 2013, Ukrainian engines have powered 11 rockets, which placed 26 satellites for 20 customers into orbit.

Ukraine’s central bank says an investigation by Kroll Inc. confirmed fraud at Privatbank that caused a loss of at least $5.5 billion before the country’s biggest lender was nationalized one year ago. The National Bank of Ukraine hired the American corporate investigations firm to study Privatbank’s operations during the decade before the December 2016 nationalization. The investigation blamed a ‘bank within the bank’ for the fact that more than 95 percent of borrowing was to parties related to the former shareholders and their affiliates. Citing the Kroll study, the central bank charged Tuesday that Privatbank “was subjected to a large, coordinated money-laundering scheme and bank fraud with the characteristics of a pyramid scheme.” Last month, London’s High Court granted a worldwide freeze against $2.5 billion of assets held by Privatbank’s ex-owners, Ukrainian billionaires Igor Kolomoisky and Gennady Bogolyubov.

Today, lawyers for the new management of PrivatBank will argue in the Economic Court of Dnipropetrovsk for the bank’s $65 million claim against Dniproavia, a bankrupt airline once controlled by Igor Kolomoisky.

Farm production in Ukraine decreased by 2.7% last year, compared to 2016, reports the State Statistics Service. The decline came after a 6.3% jump in 2016.

Production of grapes for wine, grew by 7% last year, slowing down after a 31% jump in 2016, the State Statistics Service reports. In southern Ukraine, the big growth regions this year were Odesa with a 24% growth in grape production and Kherson which recorded a 30% jump.

Ukraine is preparing tenders to sell 20 large state companies, including 68% of Zaporozhye Aluminum Smelter, 99.567% of Odessa Port Plant and 99.995% of Sumykhimprom and five regional energy companies, Vitaly Trubarov, head of the State Property Fund, writes on Facebook. At the same time, Rada, deputies are to start debating a new privatization law this week.

A 6-hectare site near Chernobyl is about to put for tender for a 30-year-lease, the State Property Fund reports. The Fund says it already has one proposal, from a company that wants to build a 3M solar power plant.

Ukraine almost cut in half its consumption of anthracite coal last year, a cut prompted by Kyiv’s boycott of coal from secessionist controlled mines Increased nuclear power production saved 2.3 million tons of coal, and a switch to gas coal saved another 1.8 million tons of anthracite, Deputy Prime Minister Volodymyr Kistion said.

Ukraine has enough proven natural gas reserves to guarantee production at current rates through 2040, reports Yaroslav Klymovych, chair of Nadra Ukrainy, the state geological survey company. Reserves available for production amount to 453 billion cubic meters. However, he said 10 times that volume could be identified if Ukraine undertook a nationwide survey program using modern technology.

Ukraine nearly doubled exports of scrap metal last year, to 486,500 tons. Most of the scrap goes to Turkey and Moldova for the production of new steel, according to the Ukrainian Association of Secondary Metals.

Ukraine increased its butter exports to the EU nearly seven times, taking second place after long term supplier New Zealand. The EU imported 2,300 tons of butter from Ukraine. Perhaps pulled along by the export surge, domestic butter prices jumped 27.6% last year, well above Ukraine’s overall inflation rate of 13.6%.

The Eva drugstore chain expanded by one third last year, opening 154 new stores across Ukraine, according to the owner, Rush LLC of Dnipro. Employing 7,600 people, Rush saw its profit during the first three quarters of last year increase to $6 million.

As part of the fight against the shadow economy, Ukraine will require that all merchants have point of sale card terminals within two years. Customers will have the option of paying with cash or card. The new rule will extend terminals to 183,000 new businesses, the Economic Development and Trade Ministry calculates.

The Financial Times reports that Ukraine’s push to regulate cryptocurrencies is prompted by worries “that exploitation of the digital assets by criminals and geopolitical adversaries presents a growing national security risk.” The article quotes a government statement: “The lack of external and internal control over the cryptocurrencies’ turnover, and anonymity of payments, create prerequisites for their use in order to legalize criminal assets [and] to pay for prohibited goods, in particular, drugs and weapons.” This unregulated means of payment could mean, the government said, that cryptocurrencies are being used to “provide for financing of terrorism, in particular, in the occupied territories of Ukraine.”

As the Ukrainian banking sector stabilized last year, the closing of bank branches slowed to 8%, half the 2016 percent closure rate of 16%. Today, Ukraine has 9,489 bank branches, according to the National Bank of Ukraine. By shuttering 443 branches, Oschadbank accounted for about half of last year’s closings.

In advance of a visit to Kyiv by Albania’s Foreign Minister next month, Ukraine is ready to discuss a free trade pact with Albania, says Ivanna Klympush-Tsintsadze, deputy prime minister for European and Euro-Atlantic Integration. The western Balkan nation is an official candidate for accession to the EU. Ukraine has 16 free trade agreements, covering 45 countries. Historically wary of Moscow, “Albania is one of the Balkan countries that unquestionably support Ukraine in countering Russian aggression,” Pandeli Majko, Albania’s Minister of State for Diaspora, said after meeting Klympush-Tsintsadze here. About 3,000 Albanians live in Ukraine. Last year, bilateral trade was $22 million.

New state support will allow the production of over 120 films this year in Ukraine, says President Poroshenko. He writes on Facebook: “A bright future awaits Ukrainian cinema!"

President Poroshenko’s office rejects IMF criticism of his draft law to create an anti-corruption court, saying Monday evening: “All discussions about certain norms must be held within the legal framework in the Ukrainian parliament." Earlier in the day, news outlets published a letter to Ihor Rainin, head of the Poroshenko administration, from Ron van Rooden, IMF mission chief for Ukraine. “We have serious concerns about the draft law,” van Rooden wrote June 11, referring to the draft law. “Several provisions are not consistent with the authorities’ commitments under Ukraine’s IMF-supported program.” Analyst Timothy Ash writes: “[Poroshenko] obviously does not think Ukraine needs cheap IMF financing. It always amazed me to read analysis suggesting IMF disbursements in Q1 or earlier. As is, Ukraine will be lucky to get any IMF disbursements this side of elections next year."

The hryvnia weakened by 1.6% over the first two weeks of January to UAH 28.5 to the dollar. This comes after the national currency only weakened by 3.1% during all of 2017, it’s most stable performance in four years. To prevent exchange rate spikes, the National Bank of Ukraine has injected $53.5 million into the banking system this month. Concorde Capital’s Evgeniya Akhtyrko writes: “By the end of 2018, we expect the hryvnia will touch UAH 29 to the dollar on the back of further current account deficit widening.”

Rents in upscale Kyiv shopping centers rebounded last year by 23%, to $960 per square meters per year, the highest jump in the history of the local index, reports Jones Lang LaSalle, the real estate consultancy. At the same time, vacancies dropped by 6.5 percentage points, “a record drop in the annual vacancy rate,” JLL reports. Pressing the market, real wages in Kyiv increased last year by 11.3% and, for the first time in recent memory no new shopping centers opened. Due to construction delays, five new shopping centers are to open in 2018, adding 114,000 square meters of new retail space. Also, this year, Kyiv is to see several new international brand stores: De Facto, Decathlon, FLO, H & M, IKEA, Koton, and Zara Home.

The average sale price for a Kyiv apartment fell 6% last year, to $977/square meter, consulting company SV Development tells UNIAN. While prices fell across the city, the lowest drop was in Podil, where prices fell by 4.4% to $905/square meter.

Nuclear power production increased by 5.7% in 2017, Energoatom reports. About half of Ukraine’s power comes from its four nuclear power plants, a ratio topped in Europe only by France. Last year, the nation’s 15 nuclear reactors produced 85 billion kWh.

Despite foreign press reports that imply that Ukraine has a high crime rate, the number of murders is one third the level of 20 years ago, Viacheslav Abroskin, deputy chief of Ukraine's National Police writes on Facebook. In 1997, 4,529 people were murdered in Ukraine, three times as many as the 1,551 murders recorded in 2017. He wrote: "In 2017, culprits were identified in 1,387 out of 1,551 murder cases, while 466 cases were solved that had been dragging over the years." Last November, The Wall Street Journal started a feature story: “Bodies are piling up in Kiev...” Last week, The New York Times published a lengthy story on the murder of Iryna Nozdrovska, the human rights lawyer