Spanish Secretary of State for Trade: bilateral trade between Kazakhstan, Spain surpasses pre-pandemic level
- Mrs. Méndez, welcome to Kazakhstan! Could you elaborate on the outcomes of your visit so far and the agreements reached? You have participated in the meetings of the B usiness Council and the Inter-governmental Commission.
- Well, first of all, even during the pandemic, we managed to keep these fluent and regular dialogues at an institutional level. This is the 10th commission for intergovernmental cooperation on economy and industry because we held the last one two years ago. This is something that we do with every country. I think that this reflects very well the depth of our relations in trade and investment, and especially the willingness from both sides, both governments, to strengthen the relationship.
The first outcome is to deepen the collaboration between governments during the commission, and the second outcome is both communities of the private sector, companies getting together, having these B2B meetings, also B2G meetings and trying to identify new projects, not only the traditional sectors but new sectors such as water, renewable energy and health.
- What are the current barriers and challenges in the development of bilateral trade moving forward?
-In fact, we didn't just return to the pre-pandemic level, but trade increased a lot. Now it's at record levels. For example, if we take the export and import data from 2022, they increased in both directions by 74 percent and 78 percent, compared to the 2021 levels. So, this means that the bilateral trade is now stronger than ever, which is something very important.
Investment also continues to flow, but there's scope for improvement. That's important that we take that into account in order to work together to identify new opportunities and identify new financing solutions and put together both communities.
In terms of barriers, there are not many barriers. In fact, we see that nowadays, this country is growing in a very dynamic trend, even the public deficit and public debt are very reasonable. Macroeconomic indicators are very positive in Kazakhstan. There's a growing population, there are well-educated, qualified workers. You can see it at every level, institutional and the private sector too. Additionally, there is the window of opportunity of investment coming out of Russia and going to this region in Central Asia with new projects in logistics and infrastructure and energy.
One of the tasks of this joint commission is to identify barriers to trade. We haven't found new barriers. We are on a very constructive agenda with Kazakhstan.
- What are some of the key areas and sectors in the Kazakh economy that are of great interest to Spanish companies? What can Kazakhstan offer to Spanish companies and vice versa, what can Spain offer to Kazakhstan and Kazakh companies?
-Kazakhstan is a country with a growing population, especially the urban population. There's also a need to improve the public services provided by the municipalities, as the ones that exist right now are put under stress. I think that in this case, for example, it is water management, wastewater management, traffic, and, of course, electricity. Those are the examples of public services that they can improve through the transfer of technology and through new solutions for digitalization. That's something that Spanish companies can provide to these municipalities and the Kazakh government. Technology on the water sector is a very obvious area for collaboration.
The second thing that Spanish firms can offer in the sector is their knowledge, their international experience, and their knowledge of the legal framework that is efficient for these public services to work right. PPP (public–private partnership) models, for example, are something that they really know, what they have experienced in different legal frameworks all around the world. They are excellent partners in order to set the right model to exploit and provide this kind of public service.
What Kazakhstan also has to offer is an excellent business climate for the development of renewable energy. The agenda for renewable energy is very ambitious here in Kazakhstan, provided that they want to set a reduction of 10% on carbon emissions for 2030. 50% of electricity will be produced by renewable energy by 2050, and net zero emissions by 2060. These are very ambitious goals. This is also the kind of investment that the Spanish companies are looking for.
There are some other needs, such as in the health sector and also the mapping of natural resources. Kazakhstan has to offer a very important provision of raw materials that are so important and necessary for the green and digital transition. That's why the European Union signed a memorandum of understanding with Kazakhstan last year. Collaboration in this sense is on raw materials and integration of Kazakhstan in the value chain related to raw materials, such as the electric and connected vehicle, for example. That's something that Spanish companies can offer. The technology to map the resources, for example, with the right software to know exactly what exists on the ground for the authorities to decide whether to preserve them or to exploit them. Also, the industrial Spanish companies that are coming here to build these manufacturing capabilities relate to this value chain of the digitalized industry. So, there's also a perfect match.