Christoph Leitl, President of the Austrian Federal Economic Chamber, on developing relations between Austria and Kazakhstan.
Kazakhstan is a high growth engine in Central Asia and has achieved remarkable macroeconomic stability and rising living standards among the country’s population. It is true that the country was hit by a banking crisis and that the repercussions are still being felt, but this is the case for most of the world. It is also true that Kazakhstan enjoys a vast wealth of oil and other natural resources. However, one should not underestimate that prudent management is required in order to utilize this wealth and channel revenues into other industry sectors, thereby diversifying the economy. We believe that Kazakhstan is now on the verge of a transition into a high-income economy, but efforts are needed to stimulate this process.
Some will ask; what can unite the ninth largest country in the world with my tiny home country in the heart of Europe? The answer is simple: Austria is well positioned to contribute to Kazakhstan’s successful transition from a highly resource-dependent country into a high value-added economy.
Austria and Kazakhstan have been partners for many years. Austrian delegations were among the first to visit newly independent Kazakhstan in the early 1990s and to provide support in the first stages of the transition of this large country. Trade turnover reached a record high of €1.6 billion in 2011. Kazakhstan is a strategic partner in Austria’s energy supply and purchases various technologies, equipment, and machinery as well as pharmaceuticals and other high-value finished products from Austria. Austrian companies have invested €2 billion into the Kazakhstani economy and 60 Austrian companies are represented in the country, among them Austria’s oil and gas company OMV. The Austrian Federal Economic Chamber opened its office in Almaty in 2010 and is now well placed to foster bilateral business ties. Austria’s success story in Central and Eastern Europe underlines that Austrian business is prepared to enter markets early and create successful new business ventures.
Also, Austria’s economy has been traditionally strong in some areas that are of major importance to Kazakhstan now: manufacturing high value-added goods based on innovative technologies and providing high-value services that are competitive in international markets forms the backbone of Austria’s economy dominated by SMEs. Austria ranks seventh in exports per capita and exports account for well over 50% of GDP. Well-educated staff, high productivity, and resource efficiency in production are the keys to success. Kazakhstan recognizes the importance of SMEs and is now pushing for improvements in vocational education and training as well as in productivity of its industrial enterprises and higher energy efficiency in industry and buildings. Austrian institutions and businesses are well experienced and ready to share and form partnerships. In 2010, Kazakhstan started an ambitious program to diversify its economy, and again Austrian business is able to supply the latest, but at the same time reliable, technologies for new production bases. One distinctive feature of Austria’s economy has been to foster social peace by providing opportunities and ensuring a high living standard and accessible social services for its population. You will find Austria at the bottom of rankings of strike days per year, but on top for GDP and income per capita.
Austrian business can also make a real contribution in tourism, health care, and infrastructure, including railways, roads, and municipal and environmental technologies. Kazakhstan and Austria also share some common ground given their geographical locations: Kazakhstan is implementing ambitious road and rail projects in order to link Europe and China; Austria has been serving as a logistics hub at the very center of Europe and Vienna as a regional hub and center of expertise for doing business in central as well as southeastern Europe. The opportunity to create and become a regional hub in Central Asia is there for Kazakhstan given its more advanced economic and regulatory environment.
Kazakhstan shows commitment and interest to work with institutions such as the UN, OSCE, and the OECD, some of which are based in Vienna. Austria, itself a long time member of these institutions, appreciates their work, and, from an economic perspective, the positive effect of open market access and more standardized rules for business. Kazakhstan’s quick accession to the WTO and a closer cooperation with the EU are all being well supported.
Finally, “the people make the difference” is not a mere slogan, but in fact matters. My personal experience of talking to guests from Kazakhstan and to Austrian businessmen tells me that we like to work with each other. People from Kazakhstan appreciate quality made in Austria and enjoy Vienna, linked by a direct flight to Astana and other parts of the country. Austrians in turn highly value the hospitality of their partners and the dynamic development of Kazakhstan. This is the foundation for joint success in the future.
© The Business Year