INTERVIEW/Vassilenko: For Kazakhstan, the biggest challenge is to contribute to the reduction of tensions among key-players

Right now, in modern circumstances where there are heightened tensions among the global players, for Kazakhstan, the biggest challenge we see is to contribute to the reduction of these tensions among these key-players, Deputy Minister of Foreign Affairs of Kazakhstan Roman Vassilenko told AGERPRES in an interview.

"We fully understand the limitations of our own capability, obviously. We are a middle-size country, but with a very pro-active foreign policy and a very positive background of being seen as an objective mediator," the Kazakh official said.

He also spoke of his country's investments in Romania, as well as the collaboration prospects in agriculture and IT.

"For Kazakhstan this activity by KazMunayGas International in Romania is a prime example and a very important priority project," Vassilenko pointed out.

He said that this autumn, "all the required documents were signed for the establishment of the investment fund."

"Now this fund is to be created, it will provide for the investment of 200 million dollars, and the plans are for the construction of 80 new petrol stations throughout the country, but I think also there are some plans about the modernisation of the plant. What I would like to say is that for Kazakhstan this activity by KazMunayGas International in Romania is a prime example and a very important priority project," the Deputy Minister of Foreign Affairs of Kazakhstan said.

AGERPRES: Today you had a meeting with State Secretary from the Ministry of Foreign Affairs Dan Neculaescu, and I suppose you also talked about the Romanian community in Kazakhstan, which is about 40,00 people. What are the main challenges of the Romanian community in Kazakhstan, because foreign communities always face challenges, in the different countries where they live.

Roman Vassilenko: In Kazakhstan, the Romanian community is not a foreign community, it is an important part of our life, an important part of our very diverse ethnic mix. As you know, in Kazakhstan, we have 120 ethnic groups living together in peace, in harmony. The biggest challenge, I guess, for the Romanian community, as for another number of smaller communities, is to preserve the cultural heritage, the language. In that community people try to obviously maintain those traditions - they learn dances, songs, they have Sunday schools, where they learn languages. But it's obviously for them to maintain these traditions in the more than hectic life. What I would like to say is that such activities are fully supported by the government. It's a state policy to encourage as much as possible the preservation of this uniqueness of every ethnic community. We created the Assembly of the People of Kazakhstan in 1995, which is not a parliament, but one can describe it as a sort of an ethnically-based quasi-parliament. Because we have a proper parliament, but this Assembly, its job is to work to strengthen these foundations of inter-ethnic harmony in Kazakhstan. In the past, the representative of the Romanian community was vice-chair of this Assembly. It's chaired by the President, so this is the highest ranked position available. Since 2007, since the constitutional reform in 2007, the Assembly is sending 9 of its representatives to the Lower House of Parliament. This is in addition to those members who are elected by popular vote. The Assembly itself has not this constitutional status, where it can and it nominates, elects 9 members, and they are selected from diverse cross-section of ethnicities. So, again, it's there to protect the interests of all ethnic groups in Kazakhstan. The Romanian community, as I said, isn't facing unique challenges, it's facing similar challenges to other smaller ethnic groups, such as Bulgarians, for example, or the Chechens or the Koreans.

AGERPRES: When we talk about Kazakhstan, we definitely talk about the energy market. On the energy market, you have a dialogue with Russia regarding the energy market, but also with you have to have a dialogue with Europe, because you have operations in the European Union. The European Union is pretty skeptical when it comes to the dialogue with Russia. How do you balance these two aspects?

Roman Vassilenko: I will try to answer this question to the best of my understanding of this question, because I am still not sure that I understand it correctly. In Kazakhstan, we are obviously one of the largest oil producers now in the world and for us there's always a challenge of getting our oil to the international markets. This was the challenge which was especially serious in the early years of independence. We have always worked to make sure that we have many options to export our oil products, which resulted in this implementation of various pipelines that ensure our flexibility. So there are now pipelines purposely built that go across Russia to the Black Sea Port of Novorossiisk. This was the first such privately-owned pipeline built in 2001- CPC it's called, Caspian Pipeline Consortium. We have established a communication transportation system across the Caspian Sea, which allows us to ship oil by tankers across the Caspian Sea to Baku, from where it's then shipped by Baku-Tbilisi-Ceyhan or other pipelines towards the European market. We have built a pipeline to China, which is also operational.

We have, as a matter of foreign policy principle, we have worked also to create conditions for foreign companies to work in the oil and gas sector in Kazakhstan, in such a way that it is mutually beneficial, not excluding others. If you look at the major investors in the oil and gas industry in Kazakhstan, they would be the American companies, the European companies and the Chinese companies. Russia's investments are smaller, but also noticeable. This is to say that our multi-vector foreign policy has been also reflected in our multi-directional pipelines and multi-national presence in our oil and gas industry. I would also highlight a very important development that took place in August, in Aktau, when the convention was signed on the legal status of the Caspian Sea. That convention, which was called by our President, "the Constitution of the Caspian Sea", is about to create the fully-agreed upon legal status for the sea, which will not describe this as a sea or a lake, because there are different legal interpretations as to how a body of water is treated if it's called lake or sea. It's called Caspian Sea, for its sheer size. But the legal status that we are creating is unique. One, because it creates the legal ground for the separation of the seabed according to the national borders, into the national sectors, and of course the separation of the seabed and its resources, while we will maintain the water in common use. So we have a 15-mile stretch of territorial waters and then a 10-mile stretch of fishing zone, so beyond this 25-mile zone, the water will be in common use. Actually the water will be in common use beyond the 15-mile territorial waters. What the convention also explicitly stated is that now it will be possible to lay underwater cables and underwater pipelines across the Caspian Sea, if they meet stringent environmental standards. Of course, we are committed to maintaining those standards, so in the future this creates an opportunity for building an additional pipeline or maybe several pipelines from Kazakhstan or from Turkmenistan to transport oil to the western shore of the Caspian Sea so that it can be then transported on to Europe.

AGERPRES: Did the summit improve the political dialogue among the countries involved or was it just a discussion regarding economics?

Roman Vassilenko: It should be viewed the other way around. It was purely political that five countries, after 25 years of negotiations, have agreed to the principle upon which the sea will be divided and used for common benefit. I would highlight that Kazakhstan from the very beginning in the early '90s has advocated exactly the same principles. So we were always in favour of separating the sea, but keeping the water in common use. And this is now agreed upon. I also would note that in the convention it says that the seabed will be separated into these national sectors, based on the bilateral agreements between the countries that are lying on the opposing sides of the sea. For Kazakhstan, we have all these agreements already in place, so this convention, once ratified by all five countries and once it enters into force, it enshrines these principles according to which we have already these agreements. Again, this is clear in the way for further exploration and development of the resources under the seabed.

AGERPRES: To go on with the energy topic, one of Kazakhstan's main investments in Romania is KazMunayGas. Could you talk about the size of the investment of KazMunayGas and the future plans?

Roman Vassilenko: This past year was also significant because in October this year all the required documents were signed for the establishment of the investment fund which was to be established under the Memorandum of Understanding from 2013, that KazMunayGas International would setup such a fund with the Romanian side. Now this fund is to be created, it will provide for the investment of 200 million dollars, and the plans are for the construction of 80 new petrol stations throughout the country, but I think also there are some plans about the modernisation of the plant. What I would like to say is that for Kazakhstan this activity by KazMunayGas International in Romania is a prime example and a very important priority project. It's the largest investment by KazMunayGas outside of Kazakhstan, it's very significant and it's very sustained and it is a priority, not just for the national company that operates this, but because this national company is 100 percent owned by the Government, by the State of Kazakhstan. For us it will be important that this company continues to successfully operate in Romania and bring benefits to itself, to Kazakhstan, but also to Romania.

AGERPRES: Is the internal investigation in Romania regarding Rompetrol, which has to do with KazMunayGas, is it a challenge for Kazakhstan? Do you have a dialogue on this topic?

Roman Vassilenko: Yes. It's a challenge because it limits further investment that KazMunayGas International can make and was looking at making. From what I understand this investigation, of course, has nothing to do with KazMunayGas International, it had to do with the previous owners of Rompetrol, some of whom are already dead. This investigation relates to the time period when KazMunayGas has nothing to do with Rompetrol, it was way beyond when the company came to buy Rompetrol. So I think it will benefit both Kazakhstan and Romania if KazMunayGas International is allowed to use all the resources at its disposal to invest in Romania. Right now, it cannot do that...

AGERPRES: ...because the very investigation is blocking...

Roman Vassilenko: ...is blocking some resources, some assets.

AGERPRES: Do you have discussions with the Romanian authorities about this particular aspect?

Roman Vassilenko: Yes. Of course, we discuss this all the time and they are aware of our position. We are hopeful that this will be resolved to the mutual satisfaction in a not too distant future and KazMunayGas International is allowed to use all of its assets in Kazakhstan.

AGERPRES: Aside from the energy sector - which is the most important when it comes to Kazakhstan - , where is Kazakhstan looking when it comes to investing in Romania?

Roman Vassilenko: On this visit, I had the honour and privilege to meet with Minister of Agriculture Daea and Minister of Communications and Information Society Alexandru Petrescu. Then I had a chance also to visit Cluj-Napoca and meet with IT cluster executives there. I think in these areas we have a lot of the potential for cooperation which we will further explore next year. Kazakhstan is a major agricultural producer - we are dealing with both plant production, wheat and grain production, and also animal husbandry. And, of course, Romania is famous for its agriculture. What we think can be beneficial to all if Romanian companies work with Kazakh companies. Probably it would be even more beneficial to do it in Kazakhstan because of two factors. One is the presence of the activities of the Eurasian Economic Union, a union of 180 million people, and Kazakhstan is a founding member of that. That Union has now been in place since January 2015 and it creates this free market for labour, goods, capital and services. The other factor is China, which is the largest neighbour for Kazakhstan. It has enormous appetite for resources, for food.

We are gradually expanding the range of products we are able to export to China to include sheep, or lamb, or beef, and other products, but as you can imagine it's a market without bottom and it can and will be consuming anything that you can produce across the border in Kazakhstan and ship to China. I give you an example, there is an Italian company building a plant to produce salamy, near Almaty, in the south of Kazakhstan, and the investment to date is 150 million dollars. Kazakhstan produces a lot of grain, meat, etc. What we still need is technology to process, store, transport. Because in various segments in agriculture, industry, we sometimes may lose up to 25 percent of the products, because of the lack of storage, refrigerated means of transportation, etc. So that's one area. Speaking of IT, I was struck when I met with the Minister of Communications, Mr. Petrescu, but then the executives of the clusters in Cluj-Napoca. I was struck for the reason that the priorities and the goals and the methods that are used in Romania are exactly similar to what we now try to do in Kazakhstan with the establishment of the Astana IT start-up hub.

It was launched on November 5, just one month ago. It's an institution that will create an enabling environment for IT start-ups to be set up and already 40 companies are there present. So we spoke about how we can jointly develop digital economy, smart cities and other directions related to the IT sphere. We have agreed that both for agriculture and for IT our respective ministries will work next year, there will be exchanges of visits. Mr. Daea has confirmed that he would like to go to Kazakhstan with a business mission. We expect that our Minister for Information and Communications will visit here, if not for the start-up summit Europe, which is to take place in Cluj-Napoca on March 22, then on another occasion. But I am sure that there is a lot of potential for cooperation in these two industries in addition to energy. Speaking, for example, of IT clusters, they have been developing the smart city applications for things like paying for your car parking through the smart phone, numerous applications... This is exactly what we have been doing and we began later. In Astana we have done, we have had some success in Astana, but we have a lot of things to do similarly in all other big cities in Kazakhstan, that's a first thing. And then the second thing I would mention is the establishment earlier this year of a separate region in Kazakhstan, by separating one region into two. This new region, called Turkistan region, in the south of Kazakhstan, has a lot going for it, because we will need to build a whole new city there. It has now a population of 150,000 people, but we think that, as a regional capital, it will develop its own airport, railway station and it will be a spiritual center, because of the presence there of the Hodja Ahmed Yasevi Mausoleum from the 14th century. It's a critically important region because it is located on the border with Uzbekistan, it's the most populous region in Kazakhstan, it has the biggest number of inhabitants.

There we will need to develop all these new technologies from scratch and I think that Romanian companies, famous for their IT potential, will benefit from working with us on developing all this infrastructure. I would also mention the Astana international financial center, which is established on the premises of Expo 2017 from last year. This financial center will also focus on various financial services, including fintech, financial technologies. And there you need IT for that, for all those payments, new ways of transacting in the financial sphere.

AGERPRES: Did the Kazakh notice some Romanian actors that you were talking about, people in IT, did they notice them at the Expo 2017, how was Romania seen?

Roman Vassilenko: Romania had a very successful Expo2017 for itself, I think. Its national day, somewhere mid-way though, exactly half way through the exhibition, and Teodor Melescanu visited Astana for that National Day. I think Romanian companies, there are about 30 companies with Romanian participation in Kazakhstan already and I think that, including for example OMV Petrom and others, and I think that it's already a good start and good solid basis. But these new industries which I mentioned they are not represented in those industries yet. So we are thinking that there will be more cooperation in the future. In terms of investing in Romania, outside energy, again, this will be discussed by the ministries and relevant business people, and, who knows, maybe it's also beneficial to do it here and then, of course, benefit from being inside the European common market.

AGERPRES: Kazakhstan is remarkable for spectacular development of infrastructure. I'm talking about Astana, like cities. What would be Kazakhstan's lesson towards other countries that would like to do the same thing, when it comes to infrastructure?

Roman Vassilenko: I don't know if I can give advice on behalf of Kazakhstan in this matter, I will give my personal advice and that is to build not for today or tomorrow, but build for the day after tomorrow. So, immediately think about all the possible modern technologies that you can use to make those new cities even more livable, in the modern conditions. For example, we, in Kazakhstan, frankly speaking, we have built some roads only 20 years ago, expecting that the city of Astana will grow from 280,000 to 1 million by 2030, slowly-slowly. But it already passed one million last year, so now it's 1.1 million this year. And it keeps growing very exponentially and because of that we have traffic now. So we could have avoided that if we built wider roads, but also if we built roads that incorporate bus lanes immediately. I know that it's a relatively recent invention and when we began doing this, there was no such thing. Now, we are carving bus lanes out of the existing roads. Gradually, we are resolving the traffic issue, but we could have avoided it all together.

So again, I think that planners need to think, not just for their children, but maybe try to imagine what our grandchildren can possibly need and build cities that will be more comfortable like this. Astana is, of course, a source of pride for Kazakhstan. It has become a pulling force in the heart of the country and it will continue to grow. As I said, we now have plans, not plans, expectations that it will reach 1.5 million people by 2025 already. What I would like to mention are some of the other trends that, perhaps, will be able to describe Kazakhstan going forward: one is the ongoing process of switching the Kazakh language - from the Cyrillic based alphabet to the Latin based alphabet. And this process will need to be completed by 2025, completed in a sense that the switch will take place, but, of course, it will take several more years for people to learn. The alphabet is now approved and gradually the people will start using it, but formally it will be introduced in stages at the regional level, national level, in the education system obviously, so that by 2025 the switch is effected. I would also mention that Kazakhstan will continue to play a big role as the transit route and hub for transportation, as China and Europe more and more trade with each other. We will benefit from this grow in trade. The volumes of container traffic transportation from China across Kazakhstan to Europe and backwards have been growing for the past six years twice, every year. This will continue to grow. We had 200,000 containers cross Kazakhstan last year, we expect that the number this year will be 360,000, and we expect that, maybe by 2021, 2022, this volume will reach 2 million containers. I would also mention that Kazakhstan will continue to be growing population-wise, just as region will be doing this. We now have 60 million people in Central Asia, in five countries of Central Asia. We expect that by 2030 this number will reach 90 million. So, we need to really plan for the future and make sure that all those people, of course, will have work.

AGERPRES: So the state is encouraging people to have larger families and, at the same time, is giving them the opportunities of having a good life. But how?

Roman Vassilenko: Because we have been, obviously blessed with resources, but also we have pursued prudent policies by creating opportunities for people to realise their potential, investing in education. Two months ago, our President delivered his state of the nation address where he outlined plans for the Government, to raise expenditures for education and research up to 10 percent of GDP. Right now, it's barely one and a half or two percent. So, this will be another way of guaranteeing that people have resources to have education, to work for the future and the future of their children.

AGERPRES: When it comes to foreign policy, what are Kazakhstan's greatest challenges?

Roman Vassilenko: Our greatest challenges are to maintain peaceful relations around border of Kazakhstan with all and rather help. We see ourselves as being able to help in resolving some of the key-issues. For example, Astana has hosted the Syrian talks as part of the Astana process, which contributed to the reduction in the level of violence in Syria during the civil war there. We have been always pursuing what is known as multi-vector foreign policy, when we maintain equally beneficial relations with all. I was talking about oil in the beginning. This is a reflection of this multi-vector foreign policy. And we maintain strong and positive relations with Russia, with China, but also with Europe and the United States.

The European Union is the largest trading partner and largest investor in Kazakhstan. So, right now, in modern circumstances where there are heightened tensions among the global players, for Kazakhstan, the biggest challenge we see is to contribute to the reduction of these tensions among these key-players. We fully understand the limitations of our own capability, obviously. We are a middle-size country, but with a very pro-active foreign policy and a very positive background of being seen as an objective mediator. So that is why President Nursultan Nazarbayev has recently proposed in his remarks at the ASEM [Asia-Europe Meeting] Summit in Brussels, in October, to initiate the dialogue among the United States, the European Union, Russia and China - as the key-players internationally between whom it seems like there are a lot of tensions, in recent years, in various configurations. If you look at US - Chinese relations, there are trade issues, US - Russia relations, it's obvious there are a lot of tensions related to both Ukraine and nuclear agreement of the past. Even between the United States and Europe there are issues on both trade tariffs or different use on the Iranian nuclear deal, etc. So, it may sound far-fetched, but we will work with our international partners to promote this idea and maybe, it will come to fruition and, of course, we are aiming to have a meaningful dialogue, to help them have meaningful dialogue. We are not aiming for dialogue for the sake of having a dialogue. There needs to be a solid preparation of what needs to be discussed, at what level and what outcomes should be achieved. AGERPRES (RO - author: Oana Ghita, editor: Mirela Barbulescu; EN - authors: Adina Panaitescu, Rodica State, editors: Rodica State, Adina Panaitescu)