Kazakhstan-Uzbekistan Transport System Improvement

Taking into account the increasing trade flows in the Eurasian region, Kazakhstan started to make significant investments in the expansion of its transport capacity. Astana has a vital interest in deepening cooperation with the neighboring countries on the issue of development of its regional transport infrastructure with its further integration into the global transport system. Actually, in order to strengthen its transport capacity, in 2014 the Government of Kazakhstan adopted an infrastructure development program that provides for measures to increase the rail/road/air traffic via the country’s territory twofold by 2020 and tenfold by 2050. (Ministry for Investments and Development of Kazakhstan, 2014) As a result of the first steps within the framework of the program, Kazakhstan was able to improve its position in the World Bank’s Logistics Performance Index moving from 88^th place in 2014 to 77^th place in 2016 out of 160 countries.[1] (World Bank, 2016) Indeed, despite the downtrend in the total amount of cargo transportation in Kazakhstan (Tab. 1), within the framework of the program, the Government of the country is planning to increase the total amount of cargo transportation to 5,800 million tons by 2020 allocating over 5,220 billion tenge for the implementation process.

Table 1. Kazakhstan’s transportation of cargo (2003-2016, million tons)

Source: Committee on Statistics of Kazakhstan, 2017

Aiming to remove the physical and non-physical barriers for establishing high-quality transport and logistics infrastructure, as well as to create a flexible tariff policy, Kazakhstan implements its transportation policy by focusing on strengthening collaboration with both regional powers and the Central Asian partners. In fact, the protocol to extend the main directions in economic and trade cooperation between Kazakhstan and Uzbekistan was signed during the working visit of the First Deputy Prime Minister, Askar Mamin, to Tashkent on September 22-23, 2016. Moreover, further expansion of bilateral economic cooperation was discussed during the meeting between the Prime Minister of Kazakhstan, Bakytzhan Sagintayev, and the Deputy Prime Minister of Uzbekistan, Ulugbek Rozukukov, which was held in Astana in October 2016. (Shayakhmetova, 2016) In addition, as a result of the negotiations between the Deputy Prime Minister of Uzbekistan, Ulugbek Rozukukov, and the Head of the South Kazakhstan region, Zhanseit Tuymebayev, agreements on the improvement of the Kazakh-Uzbek relations and streamlining trade were reached. In fact, the agreement provides the establishment of the trade zone in the South Kazakhstan region, namely, on the border between the two countries. (Kazakhstan 2050, 2016) Therefore, in order to provide opportunities for strengthening bilateral economic ties and interregional trade Astana has turned its attention to further development of bilateral cooperation with Tashkent in the transport sector.

The main capacity building activities in transport for the nearest future were defined during the meeting between the railways companies of the two countries, namely, Kazakhstan Temir Zholy (Kazakh railways) and Ozbekiston temir yollari (Uzbek railways), held in Tashkent on February 22, 2017, within the framework of the 16th meeting of the Joint Intergovernmental Commission on Bilateral Cooperation. Mentioning that in 2016 the rail freight transportation between Kazakhstan and Uzbekistan increased to 19 million tons, the parties agreed to grant discounts on transportation of the Kazakh grain and flour in 45-foot dry cargo containers to Uzbekistan and transit of Uzbek fruits and vegetables and other agricultural products via the territory of Kazakhstan. Indeed, at the beginning of February 2017, the pilot refrigerated container train delivered Uzbek fruit and vegetable products to the Russian market via the territory of Kazakhstan.[2] It took 5 days for the specialized container train to arrive to the Russian city Novosibirsk from the city of Samarkand passing through the territory of Uzbekistan, then through the Kazakh cities of Almaty and Semey with access to Russia’s territory from the border station Lokot. (Kazakhstan 2050, 2017) Moreover, the railway companies signed an agreement on the electronic exchange of data on goods imported into the territory of Kazakhstan.

It is worth mentioning that Kazakhstan and Uzbekistan are interested in mutual involving in the large-scaled international transportation projects implemented by both countries. For instance, during the meeting between Kazakhstan Temir Zholy and Ozbekiston temir yollari, the sides discussed the possibility of Uzbekistan’s joining the Trans-Caspian International Transport route[3] that would allow Tashkent to use the Kazakh ports of Aktau and Kuryk located at the Caspian Sea shore for its export/import operations. On the other hand, in February 2015 Kazakhstan joined the Uzbek Government-led international transit and transport corridor Uzbekistan-Turkmenistan-Iran-Oman established under the Ashgabat Agreement.[4] The project’s member countries approved the accession of Kazakhstan to the transportation route during the first meeting of the Ashgabat Agreement’s Coordination Council. It is planned that the creation of the international transit corridor facilitating transportation of goods between Central Asia and the Persian Gulf would allow increasing the volume of traffic between Kazakhstan and the countries of the Ashgabat Agreement from 25 million tons of cargo in 2014 to more than 40 million tons per year by 2020.

Furthermore, as in 2016 road transport accounted for 85.45% of total freight transportation in Kazakhstan, it is quite essential for the country to improve the road links with Uzbekistan. Therefore, in order to contribute to further development of bilateral trade and tourism, Kazakhstan and Uzbekistan reached an agreement to reopen the Highway M-39. The agreement to rebuild a section of the Highway M-39 from 887.8 kilometer to 911.9 kilometer, which passes through the territory of the Maktaaral district of the South Kazakhstan region, was achieved in December 2016. It is expected that after commissioning of the 24 kilometers long section of the road via Kazakhstan there would be no need to use the 78 kilometers long bypass road. The parties also agreed to build a checkpoint along the reopened highway. (Seisembayeva, 2017)

Finally, as part of his working visit to Tashkent to participate in the meeting of the Joint International Commission on Bilateral Cooperation held on February 23, 2017, the First Deputy Prime Minister of Kazakhstan, Askar Mamin, discussed with the President of Uzbekistan, Shavkat Mirziyoyev, the implementation prospects of a number of infrastructural projects. For instance, the parties agreed to launch a high-speed railway train on the Almaty-Tashkent route in the nearest future. Moreover, the sides expressed their intention to increase the passenger traffic by improving bus and air transit via Astana. Actually, it was decided to increase a number of flights on the Astana-Tashkent route from four to six times a week.

Based on the above, it could be concluded that Kazakhstan is interested in deepening its relations with Uzbekistan in the field of railway, road and air transportation, as well as in establishing interregional transport corridors in Central Asia. Actually, in the recent years, Astana and Tashkent experienced some reduction in their bilateral trade turnover. For instance, the trade turnover between the partners decreased from $2.115 billion in 2013 to $2.101 billion and $1.667 billion in 2014 and 2015, respectively, leading to further decrease to $1.510 billion in 2016. However, despite this negative trend in monetary terms of trade, the share of Uzbekistan in the total trade turnover of Kazakhstan increased from 1.7% in 2013 to 2.4% in 2016 showing a positive trend. (Committee on Statistics of Kazakhstan, 2017) Consequently, since Uzbekistan confidently ranks 1^st among Kazakhstan’s trade partners in Central Asia, it is quite understandable that Astana will continue its active efforts to widen and strengthen economic ties with Tashkent.

References

Committee on Statistics of Kazakhstan. (2017). Osnovnye pokazatili vneshnei torgovli Kazahstana po stranam.

Retrieved from http://stat.gov.kz/faces/wcnav_externalId/homeNumbersCrossTrade?_afrLoop…

Kazakhstan 2050. (2016). Trade Zone to be Eestablished on Kazakh-Uzbek Border .

Retrieved from https://strategy2050.kz/en/news/39704

Kazakhstan 2050. (2017). Specialized Container of KTZ Brought Fruit and Vegetables from Uzbekistan to Russia.

Retrieved from https://strategy2050.kz/en/news/42417/

Ministry for Investments and Development of Kazakhstan. (2014). Gosudarstvennaya programma razvitiya i integratsii infrastruktury transportnoj sistemy Respubliki Kkazakhstan do 2020 goda.

oemmndcbldboiebfnladdacbdfmadadm/http://www.mid.gov.kz/images/stories/contents/gp_150520141656.pdf

Seisembayeva, A. (2017, January 17). Kazakhstan, Uzbekistan to Reopen Section of M-39 Highway in February. The Astana Times, p. 2.

Retrieved from chrome-extension: oemmndcbldboiebfnladdacbdfmadadm/http://astanatimes.com/wp-content/uploads/2017/01/at-115.pdf

Shayakhmetova, Z. (2016). Kazakhstan, Uzbekistan to Boost Trade and Economic Cooperation.

Retrieved from http://astanatimes.com/2016/10/kazakhstan-uzbekistan-to-boost-trade-and-…

Word Bank. (2016). INTERNATIONAL LPI GLOBAL RANKING.

http://lpi.worldbank.org/international/global/2016.

[1] Kazakhstan is planning to enter the list of top 40 countries with the best logistics climate by 2020.

[2] Works on the project of using 45-foot refrigerated autonomous container for transportation of fruits and vegetables from Uzbekistan to Russia and Kazakhstan started in December 2016.

[3] The Trans-Caspian International Transport Route runs through China, Kazakhstan, Azerbaijan, Georgia and then through Turkey and Ukraine to Europe. The agreement to create the Trans-Caspian International Transportation Consortium was signed in April 2016 in Baku by the railway authorities of Azerbaijan, Georgia and Kazakhstan. New competitive tariffs were introduced for the Trans-Caspian International Transport Route since June 1, 2016. In October 2016, Poland’s rail operator PKP LHS has become a member of the Coordination Committee of the Trans-Caspian International Transport Route.

[4] The Ashgabat Agreement on establishing the route was initially signed by Uzbekistan, Turkmenistan, Iran, Oman and Qatar in April 2011 and was given additional support in 2014 when a Memorandum of Understanding was signed. Qatar withdrew from the Ashgabat Agreement in 2013. In October 2016, Pakistan formally joined the Ashgabat Agreement.