In late October, Kazakhstan’s recently appointed Minister of Economic Development and Trade Yerbolat Dossayev informed the country’s Parliament that the Kazakh economy was expected to grow by 5.4 percent in 2012, which is 0.6 percent lower than the previous forecast. According to the minister, the unfavorable situation on world commodities markets had led to the weakening of demand for Kazakhstan’s energy exports and encouraged the Government to temper its optimism. At the same time, Kazakhstan’s southern neighbor, Uzbekistan, was credited with a 7.5 percent economic growth rate by the European Bank for Reconstruction and Development whose July 2012 forecast had been reconsidered in favor of better expectations. In this context, the continuous inflow of foreign direct investment to Kazakhstan is decidedly not sufficient to offset the currently observed slowdown of its economic and industrial development as well as the country’s unabated dependence on raw materials.

While the deterioration of economic conditions presents a potential risk to Kazakhstan’s domestic stability, its political leadership has multiplied official visits abroad in a search for diversified commercial partnerships and new promising market opportunities. Following his trips to Russia and Turkey, President Nazarbayev was received by the Austrian President Heinz Fischer on the steps of the Hofburg Palace in Vienna on October 22. Currently, Austria is Kazakhstan’s seventh largest trade partner, after Italy, the Netherlands, France, and Switzerland in the European Economic Area. Last year, the Kazakh-Austrian bilateral trade turnover amounted to US$ 4 billion. The total volume of Austrian direct investments into the Kazakh economy has exceeded US$ 2.5 billion since 1995, which is almost 1.5 percent of the overall FDI for that period. As for Kazakhstan’s standing vis-à-vis Austria, it is ranked third among CIS countries, mostly due to the intensity of its energy exports. In 2011, Kazakhstan exported almost 37 percent of Austria’s oil consumption.

During Nazarbayev’s visit, the two countries signed 19 contracts worth US$ 220 million, including 10 investment agreements. Kazakhstan’s national oil and gas company KazMunaiGaz agreed to partner with OMV Petrom SA in the joint exploration of several mineral deposits on Kazakh territory. Additional cooperation projects were officially adopted in such sectors as construction, machinery manufacturing, and tourism. The two presidents participated in the launching ceremony of the Kazakhstan-Austria Business Council whose main responsibility will consist in the promotion of commercially significant cross border economic interests. Moreover, Nazarbayev and Fischer witnessed the signing of a sectoral agreement concerning international road transportation, which is aimed to increase volumes of trade between Kazakhstan and the European Union as well as on the bilateral level. While the two countries jointly registered 3,000 tons of cargo shipments in 2009, this figure was equal to 4,700 tons one year later and almost 8,000 tons last year. 

On October 23, Nazarbayev paid his first official visit to Prague, where he was greeted by Czech President Vaclav Klaus. In 2011, the trade turnover between Kazakhstan and the Czech Republic amounted to US$ 800 million, which according to Nazarbayev was far from reflecting the full potential of the two countries’ economic cooperation. While Nazarbayev and Klaus pledged to increase this volume up to US$ 1 billion in the near future, the Kazakh-Czech business forum made possible the conclusion of contracts worth US$ 250 million. Two of them concern the sector of pharmaceuticals, where Czech companies are especially well placed to share technological expertise with Kazakhstan-based partners. For instance, Prague’s Favea Europe committed itself to building modern pharmaceutical factories in Northern and Eastern Kazakhstan whose cost was estimated at around US$ 50 million.

At the same time, Kazakhstan’s new Prime Minister Serik Akhmetov visited Germany on a working visit. While in Berlin, Akhmetov met with the German Chancellor Angela Merkel and Foreign Minister Guido Westerwelle. He also had talks with the chairman of the German Industrial Association Ulrich Grillo on the issue of large scale industrial projects jointly implemented by Kazakhstan and Germany. Between January and August 2012, the Kazakh-German bilateral trade turnover exceeded US$ 2.5 billion, which is 8.7 percent higher than one year before. More than half of German imports from Kazakhstan is constituted by ferrous alloys (52.1 percent) followed by hydrocarbons (18.3 percent) and silver (7.8 percent). Furthermore, Kazakhstan is in the top three suppliers of oil products to the German economy. While Austria and the Czech Republic may boast of only 100 and 76 joint-ventures with Kazakhstan respectively, the Kazakh-German economic cooperation is based upon the wide-ranging activities of almost 1,200 enterprises. During Nazarbayev’s February 2012 visit to Berlin, the two countries signed a partnership agreement related to the extracting, industrial, and technological sectors. Thus, although Kazakhstan is already party to the Customs Union with Russia and Belarus, it stills looks for closer contacts with its primary European clients.