FORUM

Special Tastes

Business acquires its own special flavor dependent on the destination, and Kazakhstan is no different in that regard. Three top business leaders share their experiences on what makes the Kazakhstani market unique.

MIKHAIL BETIN

Kazakhstan is a huge country. The Caspian region is the center of the oil and gas industry. Almaty is the financial center of the country, and Astana is the capital of administration and national business. This is quite a tricky setup, as we still do not have a network in Kazakhstan like we do in Russia. At the same time, being the market leader and having first-comer advantage brings us great opportunities. We recently invested a substantial amount in a 2,250-sqm storage facility located by Almaty International Airport. It is the biggest storage facility between the Urals in the west and Siberia in the east. We are in the process of moving our operations to that facility. It is a state-of-the-art facility with 24-hour video monitoring, climate control, and fire-safety features. It has the capacity for a quarter of a million storage boxes. We took into account future demand and growth when obtaining this facility.

VEYSEL ARAL

In the early 1990s, Turkey introduced mobile telecommunications systems based on GSM technology, which had been considered by some entrepreneurs and businessmen as “not worth going into”. From today’s view one can easily say that they missed apprehending “the paradigm shift”. Iran invested hugely in the 1990s in developing fixed telephony, and it wasn’t until the middle of the first decade of the new millennium that Iran started to introduce mobile telecom services. Azerbaijan and Kazakhstan exhibit similarities, as they were both member states of the former Soviet Union. Investments were made on the fixed side well into the late 1990s. The introduction of mobile telecommunications licenses in both countries started to change the industry in the early 2000s. In all the countries above, the regulatory bodies and ministries had to adopt new regulations to cope with the newly arisen requirements, and they also underwent some structural changes. The above examples show that there is a phase difference amongst the countries in time domain, but once the decision is given and the action taken, such differences can disappear very quickly.

ROGER HOLLAND

It’s a very young market, and there is a long way to go here in real estate sector development. Valuations have become increasingly important due to price fluctuations since the crisis. People need valuations to obtain credit and mortgages, and for restructuring and refinancing. It’s clear from the fallout of the financial crisis that a lot of valuations provided pre-boom were not realistic and the banks are now much more careful. In addition, many of the development projects were highly speculative and were not based on sound research and analysis. The market will become more sophisticated as more students return to Kazakhstan having studied property-related subjects overseas. A key development in 2010 was the visit of Royal Institute of Chartered Surveyors’ representatives, which is encouraging for those working in the property industry to obtain a professional property qualification.