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Kazakhstan goes East to Korea

Kazakhstan goes East to Korea

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Published : 2013-12-15 19:51
Updated : 2013-12-15 19:51

Kazakhstan’s top diplomat here is celebrating his country’s 22nd Independence Day on Monday after a milestone three-day visit by the country’s new prime minister, Serik Akhmetov.

That visit, a first for a sitting prime minister, could very well underscore the nature of two-way ties between South Korea and the Central Asian behemoth over the past few years.

Kazakhstan is twice the size of the other four “stans” combined, and hugely wealthy in oil, gas and uranium. Although the country needs South Korea for technology, foreign investment and to fulfill its economic diversification plans, energy-starved South Korea needs Kazakhstan’s resource wealth just as much if not more.

President Park Geun-hye is also looking to Kazakhstan as an important partner in her ambitious “Eurasian Initiative,” which seeks to connect transportation, electrical and gas and oil links from Western Europe to East Asia.

“The prime minister traveled here to follow up on issues discussed in St. Petersburg. From our side, we are interested in developing alternative energy, and to learn from South Korea’s green growth experience, and clean technologies,” said Kazakh Ambassador to South Korea Dulat Bakishev in an interview with The Korea Herald at his office in Seoul on Friday.

Kazakh Ambassador to South Korea Dulat Bakishev talks about the significance of the recent visit to Korea by his country’s new prime minister in an interview with The Korea Herald at his office in Seoul on Friday.
(Philip Iglauer/The Korea Herald)
Park met with Kazakh President Nursultan Nazarbayev on the sidelines of the G20 Summit in St. Petersburg, Russia, three months ago.

“We are hosting Expo 2017 in (Kazakhstan’s capital city) Astana. The theme of the expo is ‘future energy.’ Although Kazakhstan has considerable reserves of oil and gas and uranium, Kazakhstan wants to focus on things that will help preserve our planet. We are interested in technologies that will preserve our planet’s environment.”

It is also focused on economic diversification away from oil and gas to avoid the asset curse that afflicts many similar economies, commonly known as “Dutch disease.” The two countries are working on a number of programs, but the bulk of South Korea’s investment there is in the energy sector.

South Korea has already poured more than $4 billion into gigantic projects, and the two countries have inked agreements totaling more than $10 billion.

The bulk of this investment centers on three large-scale projects: the construction of the Balkhash Thermal Power Plant in central Kazakhstan, a chemical plant near Atyrau city in western Kazakhstan and the Zhambyl oil and gas field in western Kazakhstan.

Two of them valued at $4 billion each were inked in September 2012.

The Korea Electric Power Corporation and Samsung C&T currently each hold a 35 percent stake in the building of a 1,320-megawatt power plant in Balkhash that, when online, is expected to generate about 7 percent of Kazakhstan’s electricity.

Kazakhstan has been developing the Zhambyl oil field together with a Korean consortium comprising the Korean National Oil Corporation, Daesung Corp., Samsung C&T and a number of other firms since May.

South Korea’s LG Chemical and Kazakhstan Petrochemical Industries (KPI) signed a contract on a joint venture to build a petrochemical complex in Atyrau on the northern banks of the Caspian Sea.

The close ties between Kazakhstan and South Korea are credited to more than 20 years of development and economic and political reforms since independence in 1991.

The progress that Nazarbayev has made in re-creating his country into a politically stable, economically dynamic emerging economy has earned Kazakhstan the moniker the “Singapore on the Steppes.”

“It is a good complement to us to be compared to Singapore,” Bakishev said. “We have some programs between our two nations that provide training to our civil servants and businesspeople, at Nazarbayev University and a university in Singapore.”

A study by the U.S.-based Heritage Foundation and The Wall Street Journal in 2012 praised Kazakhstan for its economic openness. The country scored 63.6 of out of 100 on their Index of Economic Freedom.

That makes the country freer than the four other Central Asian countries, much freer than Russia and freer than the world average of 59.5, according to the index.

For Bakishev, the role of Nazarbayev was crucial. He has led the country since 1989, even before the dissolution of the old Soviet Union, and was re-elected to yet another five-year term as president in 2011.

“Our president played a crucial role in terms of securing political stability despite the odds. As is well known, the 1990s were especially difficult for Central Asia and the post-Soviet Union area in general,” he said.

“Looking back from today, we can say that our model of development was chosen wisely. Even though we still have to go a long way, for the last 20 years, we have achieved more than what we expected.”

By Philip Iglauer (ephilip2011@heraldcorp.com)

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