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Opinion

Kazakh foreign investment must not come from only one source

Companies from Japan, South Korea and Malaysia besides China are all welcome

A Chinese flag is seen on the end of a railway track at the Khorgos Gateway in Khazakstan. The country is trying to diversity sources of inward investment.   © AP

Kazakhstan is transforming itself into a modern transit hub at the heart of Eurasia -- making it the ultimate test case for balancing the competing interests of East and West in an age of economic globalization.

My country sits at the heart of one of the world's busiest land routes, 70% of all land transit between the EU and China currently passes through Kazakhstan. This will only increase as the New Silk Road -- a program that includes growing transport, energy and communications links -- continues to develop.

Kazakhstan is increasingly viewed as the "buckle on the belt" of China's Belt and Road Initiative, its pan-continental infrastructure program. But we are now striving to broaden our appeal to foreign investors. If other developed nations want to engage in the largest infrastructure project of the 21st century, the time to move is now.

Harnessing this potential has required no small amount of international cooperation, major investment to develop and improve thousands of kilometres of transport links, and a commitment to remove and reduce bureaucratic obstacles to cross-border trade.

For the rest of the world, Kazakhstan's central position on the New Silk Road presents a potentially lucrative opportunity to invest in one of the major frontiers for global transit infrastructure.

Investment opportunities in the fields of logistics, innovative technologies, physical and digital infrastructure and finance remain apparent. The future of economic connectivity and enhanced cooperation between Europe and Asia will primarily depend on Eurasia's ability to create and maintain efficient intercontinental trade flows.

All of this will be determined by the quality of infrastructure, the ease of doing business, stability of transportation costs, and the technology and logistics which are currently being put in place. As the preeminent transit hub between Europe and Asia, Kazakhstan will play a central role in helping to implement and sustain these developments.

Investment must not just come from once source. Leading Asian nations including Japan, South Korea and Malaysia, as well as the EU, including the U.K., can play an integral part in this ambitious Eurasian infrastructure project.

Kazakhstan is itself investing heavily. Over the past decade we have invested approximately $30 billion into the national transport infrastructure and we have plans to invest an additional $8.4 billion by 2020. This will help complement the investment which has already been secured by our foreign partners.

As it stands, approximately 25 industrial freight trains now pass through our country from China direct to markets in Europe every week. To put this in perspective, in 2010 such transcontinental shipments via Kazakhstan did not exist. In 2011 there were only 1,200 20-foot containers transported. But in 2017, in cooperation with 17 Chinese provinces, Vietnam and South Korea, our railways transported more than 200,000 such containers to Europe and back.

Overall, rail transportation across Kazakhstan in all directions will reach around 550,000 containers this year. We expect these volumes to grow rapidly over the next few years reaching 800,000 containers by 2020.

Logistically, transporting goods via Kazakhstan has many distinct advantages versus other routes. It is three times faster than by sea, and almost 10 times cheaper than by air. As part of the improvements to the transport infrastructure across the Eurasian corridor, transporting goods from Asia to Europe -- approximately 10,000km -- takes just two weeks on average by rail.

Kazakhstan's unique geographical location, as the world's most land-locked country is something we view as a distinct asset. We prefer to think of ourselves not as land-locked but rather as land-linked. This unique position allows us to act as a connecting bridge between continents, countries and cultures.

The newly built, expansive Khorgos dry port on the eastern border of our country and Aktau in the west are important logistic gates for the New Silk Road. From Aktau, raw materials and goods flow not just to Europe but also to Russia in the north and Iran to the south. As well as facilitating international trade, these hubs are also attracting industry and creating jobs in our local communities.

Unquestionably, political and technical challenges remain. Dealing with the impact of mutual EU and Russian sanctions policies, improving railway infrastructure where wide gauge rails meet narrow gauge rails, and expanding the use of the Baltic Sea ports, are areas where closer Eurasian cooperation is needed.

We in Kazakhstan must also robustly tackle the domestic hurdles to investment, by continuing to improve transparency, cutting bureaucratic delays and ensuring a level playing field for foreign companies.

These challenges are surmountable. We strongly believe that further growth in transcontinental trade will go some way to helping to resolve them.

The development of the New Silk Road corresponds to Kazakhstan's drive to position Central Asia as the main strategic bridge between the largest markets in Europe and Asia, which have a combined population of 4.4 billion people. Our region played this role in the past, and can fulfill it anew with increased regional economic and political cooperation.

In a world in which too often we seem to be lowering our sights, the Silk Road is an exciting example of international co-operation which will see benefits spread far and wide, just as it did for past generations.

Zhenis Kassymbek is the minister for investments and development of the Republic of Kazakhstan.

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