TBY talks to the heads of two major development banks on target areas, industrialization, and prospects for the Customs Union.
How has the bank been involved in the country’s development since independence, and what are some of the highlights from the work of the Asian Development Bank (ADB) in Kazakhstan?
GUANGHUI LI The ADB commenced operations in Kazakhstan when the country became a member state in 1994. The ADB’s operations in Kazakhstan involve both public and private sector operations. For public sector operations, since 1994 up to June 2010, cumulative total public sector loan commitments amounted to $2 billion, covering 17 loan-financed projects in agriculture and natural resources, education, finance, transport and communications, water supply, sanitation, and irrigation. In recent years, ADB public lending has been mainly focused on the areas of road transportation, SME development, budget support for the government’s anti-crisis plan, energy efficiency, and renewable energy development. The ADB’s private sector operations in Kazakhstan began in 2006, and they have historically focused on the banking sector, with five private sector financing arrangements to the amount of $375 million. For the time being, the ADB’s private sector financing prospects are concentrated on infrastructure projects.
The Eurasian Development Bank (EDB) has a mission of forging integration. In what areas would you say most cooperation is taking place?
IGOR FINOGENOV The EDB is unique in its mission to facilitate economic integration. I would like to note that governments and businesses of all our member states support the integration processes. There is a robust economic approach behind such support for integration. Based on the needs of the member states, the EDB focuses on electric power, transport infrastructure, agro-industrial complex, high-tech and innovative sectors, and projects implemented through public-private partnership, as the development of these infrastructures has the most effect on our development of the economy at large.
The state program 2010-2014 envisages the diversification of the economy through accelerated industrialization. How has the ADB specifically looked into aligning its efforts with the government’s program?
GL The ADB’s new Country Partnership Strategy (CPS) will be aligned with Kazakhstan’s Strategy 2020 and the new Five-Year Development Plan, focusing on industrialization and innovation. The CPS is being conceived with the goal of helping Kazakhstan to move beyond middle-income country status. Hence, a strong public-private partnership angle will be forged. This will be synergized with the ADB’s and the government’s sub-regional (CAREC) activities to foster a “walk nationally and think regionally” concept. It will build on the ADB’s past experiences in the country and focus on areas where we have comparative advantages and can contribute to achieving the outcomes envisaged in the government’s plans.
Do you have strategies to develop trade among your member states that will eventually contribute to the expansion of the Customs Union?
IF The creation of the Customs Union was a breakthrough in the integration processes. It will result in positive changes in business, and we would like to facilitate these positive processes. We have observed an intensification of trade and investment activities taking place between members of the Customs Union, and that the number of applications for financing trans-border transactions is increasing. This is easily explained because the Customs Union reduces administrative barriers to transactions, and the EDB is working to further limit the effects of borders through its activities. We have a program to finance trade operations. We also have a program to support SMEs. For these we work with the commercial banks of our member states. The reduction of customs barriers provides a good impetus for the development of trade and support of SMEs in trans-border areas.
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