Exactly a year ago, the first official visit of the President of the Republic of Kazakhstan Kassym-Jomart Tokayev to the Kingdom of Saudi Arabia took place. The visit, which took place at the invitation of King Salman bin Abdulaziz Al Saud in the year of the celebration of the 30th anniversary of diplomatic relations between the two countries, marked a new stage in the history of Kazakh-Saudi cooperation.
During the visit, at a meeting with the Crown Prince of the Kingdom, Mohammed bin Salman, the full range of issues of trade, economic and investment cooperation was discussed, and views were exchanged on topical international and regional issues.
Saudi Arabia is one of the leading strategic partners of Kazakhstan, President Tokayev stressed.
In addition, the leader of Kazakhstan held talks with OIC Secretary General Hissein Brahim Taha, President of the IDB Mohammed Al-Jasser, Manager of the KSA State Investment Fund (PIF) Yasir Al-Rumayan, Chairman of Ajlan & Bros Holding Group Ajlan Al-Ajlan and Chairman of Acwa Power Muhammad Abunayan.
At a meeting with the Manager of the State Investment Fund of Saudi Arabia, Yasser Al-Rumayan, President Tokayev proposed to establish close cooperation between the Investment fund of Saudi Arabia and Samruk-Kazyna JSC, as well as Baiterek NUH JSC to implement projects of common interest.
Petrochemical industry, green energy, metallurgy and mining sectors, deep processing of agricultural products were named among promising areas of Kazakh-Saudi investment cooperation.
During Tokayev’s official visit to Saudi Arabia, 13 bilateral documents were signed, ten of which are directly focused on expanding trade and economic relations, including:
- Memorandum of Understanding between Astana International Exchange Ltd. and the Saudi Stock Exchange (Tadawul).
- Protocol of sanitary and technical requirements for the import of cattle and lamb meat.
- Memorandum of Understanding between the Ministry of Energy of Kazakhstan and ACWA Power.
- Cooperation agreement between JSC “Samruk-Kazyna” and Ajlan & Bros Holding Group Ability.
- Memorandum of Understanding between KazBioSorgo LLP and Ajlan & Bros Holding Group.
- Cooperation agreement between JSC “Center for Trade Policy Development “QazTrade” and Ajlan & Bros Holding Group Ability.
- Memorandum of Understanding between Optograd LLP and Ajlan & Bros Holding Group on the supply of Kazakh meat to Saudi Arabia.
- Memorandum of Investment Cooperation between KAZAKH INVEST National Company JSC and Al Rajhi International for Investment (RAII).
- Memorandum of cooperation between the joint-stock company “Center for the Development of Trade Policy “QazTrade” and LLC “Lulu Saudi Hypermarkets”.
- Agreement between Eurasia Invest LTD LLP and Jamjoom Pharma on the supply of dry mare’s milk from Kazakhstan to Saudi Arabia.
The cultural and humanitarian vector of cooperation is designed to strengthen such documents as a Memorandum of Understanding between the Ministry of Culture and Sports of Kazakhstan and the Ministry of Sports of Saudi Arabia in the field of sports; a memorandum of understanding on cooperation in the field of mass media between the Ministry of Information and Public Development of Kazakhstan and the Ministry of Mass Media of Saudi Arabia; a memorandum of Understanding on cooperation and exchange of news between “Saudi Press Agency” and NAC “TV and Radio Complex of the President of the Republic of Kazakhstan”.
A very bright moment of the visit of the head of Kazakhstan to Saudi Arabia was his performance of the rite of the small Hajj (umrah) in Mecca. Tokayev was awarded a special honor – he entered the Kaaba, which testifies to the deeply respectful attitude of the leadership of Saudi Arabia to the leader of Kazakhstan.
There is no doubt that the prospects for the development of cooperation between Kazakhstan and Saudi Arabia will develop on the principle of mutual benefit and industry complementarity. It should be emphasized that the Saudi Vision-2030 and Kazakhstan-2050 strategies are close. Both programs aim to diversify the economy, reduce dependence on raw materials, and invest in human capital.
First of all, the fuel and energy sector is a top priority. Both countries are world oil powers, which today are striving for deep processing of hydrocarbon raw materials in order to produce products with high added-value.
The logical continuation of the agreements reached during Tokayev’s visit was the signing in June of this year by Saudi Arabia and Kazakhstan of a memorandum of understanding in the energy sector.
The agreement signed by the Minister of Energy of the KSA Prince Abdulaziz bin Salman and the Minister of Energy of Kazakhstan Almasadam Satkaliyev provides for the promotion of cooperation in the field of oil and petroleum products, gas and gas products, refining, petrochemicals, electricity, renewable energy, clean hydrogen, energy efficiency. The memorandum also covers cooperation in the field of closed-loop carbon economy and its technologies aimed at reducing the effects of climate change.
The memorandum also includes the development of high-quality partnerships between the countries in the field of localization of materials, products and services related to all sectors of energy, supply chains and technologies; cooperation in the development of innovative uses of hydrocarbons in various sectors; cooperation in the field of energy related to digital transformation.
At a time when the world is facing a growing demand for renewable energy, Kazakhstan and Saudi Arabia are contributing to this green transition. In March of this year, ACWA Power, a leading Saudi and world-renowned developer, investor and operator of power generation, water desalination and renewable energy plants, announced the conclusion of a partnership agreement with the Ministry of Energy of Kazakhstan and the National Welfare Fund “Samruk-Kazyna”.
The company is implementing a project in Kazakhstan for the construction of a wind power plant and batteries with a capacity of 1 GW in the Zhetisu region (Dzungarian Gate). Construction will start in 2025.
The volume of initial investments of ACWA Power entering the market of Kazakhstan will amount to 1.5 billion US dollars. The participation of ACWA Power will be the largest investment by Saudi Arabia in the energy sector of Kazakhstan until today.
Saudi Arabia’s investment in the exploration sector may become the next effective direction of the partnership.
“Kazakhstan ranks 1st in the world in tungsten reserves, 2nd in uranium and chromium deposits, we are among the five countries richest in manganese, silver, zinc, lead. These reserves will have to be explored and developed. Given our proximity to the rapidly developing markets of China and South Asia, this is really a great investment opportunity. Today we can offer more than 60 deposits of precious and non–ferrous metals for exploration and development,” the President of Kazakhstan said during an investment round table on the sidelines of his visit to Jeddah.
Mutual trade is among the areas of increasing cooperation with high potential.
Kazakhstan is ready to offer Saudi Arabia more than 100 types of non-primary goods worth about $ 400 million per year in such industries as mechanical engineering, iron and steel production, as well as food industry and agriculture.
And in the light of the global food crisis, the interest of Saudi business in investing in the agricultural sector of Kazakhstan is quite understandable, as Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud stated during the aforementioned meeting with the head of Kazakhstan.
Kazakhstan ranks second in the world in terms of arable land per capita and fifth in terms of pasture resources (180 million hectares). The country is one of the ten largest producers of wheat and flour and may in the future become one of the stable, long-term suppliers of high-quality wheat, flour and oilseeds to Saudi Arabia, which imports up to 80% of food.
Kazakhstan and Saudi Arabia have plans for nuclear energy. Since 2009, Kazakhstan has been ranked first in the world in terms of the volume of natural uranium produced. In 2022, this figure amounted to 21.3 thousand tons.
At the same time, the development of a civil nuclear energy program is an integral part of the Saudi Vision-2030 concept. In January 2023, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman announced that, given the recent discovery of local uranium reserves, the Kingdom intends to advance its plans to develop an entry-level nuclear fuel cycle infrastructure. The Saudi minister clarified that this may include the creation of joint ventures with interested partners.
The aerospace industry also opens up a lot of opportunities for cooperation between the two countries. The Kingdom is committed to supporting space exploration and increasing the role of Saudis in space and technology.
“We welcome the Kingdom’s intention to develop its own space program within the framework of the Saudi Vision-2030 strategy. Our countries have an appropriate legal framework for cooperation in the field of exploration and use of outer space for peaceful purposes. Kazakhstan has extensive experience and resources for the development of the aerospace industry. Our companies are ready to cooperate with public and private companies of Saudi Arabia in these areas,” Kassym-Jomart Tokayev suggested.
The development of bilateral trade and economic relations between Astana and Riyadh will inevitably have a multiplier effect on the development of transit, transport and logistics connectivity between the two states and, in general, between the two regions – the Middle East and Central Asia.
Kazakhstan’s transport networks open access to the markets of China, and the Caucasus (Azerbaijan, Georgia). The country is also a key link of the Trans-Caspian route, which connects the major markets of the West and the East.
Cooperation and mutual support between Kazakhstan and Saudi Arabia in the framework of multilateral platforms such as OPEC and BRICS can also be promising.
It is worth paying attention to the fact that the Government of Saudi Arabia recently confirmed its desire to activate measures within OPEC+ to maintain the stability of the oil and balance in the oil market. OPEC+ can be a stabilizing factor in the energy market, but subject to a consensus of interests among all members of the format. Kazakhstan is also making a positive contribution to ensuring such a consensus, since with a 1.9% share in world production, it is among the three leaders of OPEC+ after Russia and Mexico.
Regarding the future membership in the BRICS, both Saudi Arabia and Kazakhstan are obviously aware that the result of the changes in the system of international economic relations that have begun at the present stage may be the formation of a completely different economic (non-politicized) landscape, where settlements in national currencies are more likely to dominate. In the long run, BRICS is an alternative to any balance of power in the global economy. According to forecasts, based on IMF data, by 2030 the BRICS share in world GDP will exceed 50%.
In general, it can be stated that last year’s visit of the President of Kazakhstan Kassym-Jomart Tokayev to Riyadh has a long-term effect that will be felt at the regional level. From a geopolitical point of view, this visit to Saudi Arabia should be viewed through the prism of a balanced multi-vector foreign policy course of the country’s leadership. ///nCa, 19 July 2023
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