Kazakhstan Trade Profile
Table of Contents
Overview
The Republic of Kazakhstan is the largest landlocked country in the world and is located mostly in Central Asia and partially in Eastern Europe. Russia borders Kazakhstan in the north and west, China borders it in the east, and Uzbekistan, Turkmenistan, and Kyrgyzstan border it in the south.
Kazakhstan dominates Central Asia in political and economic terms and generates 60% of the region’s GDP, with oil and gas being its primary industries. In 2020, according to official data provided by the World Bank, the GDP in Kazakhstan was worth $169.84 billion. The GDP value of Kazakhstan represents 0.15% of the total economy.
However, due to Covid-19, 2,434 deaths were reported in Kazakhstan due to the pandemic in December 2020 and the economy was predicted to contract by 2.7% for the year.
Kazakhstan’s top 5 export and import countries of 2020 are presented in Figures 1.1 and 1.2 below respectively.
| Figure 1.1 - Exports | |
|---|---|
| China | $9,000,000,000 ($9.00 billion) |
| Italy | $6,640,000,000 ($6.64 billion) |
| Russia | $4,900,000,000 ($4.90 billion) |
| Netherlands | $3,150,000,000 ($3.15 billion) |
| Uzbekistan | $2.130,000,000 ($2.13 billion) |
| Figure 1.2 - Imports | |
|---|---|
| Russia | $13,300,000,000 ($13.30 billion) |
| China | $6,350,000,000 ($6.35 billion) |
| South Korea | $4,890,000,000 ($4.89 billion) |
| Germany | $1,790,000,000 ($1.79 billion) |
| United States | $1,120,000,000 ($1.12 billion) |
Pakistan - Kazakhstan Trade Profile
Pakistan’s Exports to Kazakhstan
According to the Observatory of Economic Complexity (OEC), in 2019, Kazakhstan received imports worth $71.6 million from Pakistan out of which the top products were rice ($38.1 million) at 53.1%, citrus ($7.61 million) at 10.6%, and other oily seeds ($6.31 million) at 8.81%. Other imports consisted of chemical products ($9.56 million), textiles ($3.84 million), foodstuffs ($950 thousand), and animal hides ($514 thousand). As per the Trading Economics and World Bank, in 2019, Kazakhstan received imports worth $25.1 million from Pakistan out of which the top products were vegetables, fruits and nut food preparations ($150.2 thousand) as well as raw hides and skins and leather ($36.3 thousand). Other imports consisted of consumer goods ($15.1 thousand) at 60.1%, vegetables (10.2K) at 41.1%, raw materials ($9.6 thousand) at 38.5%, chemicals ($8.3 thousand) at 33% and textiles and clothing ($4.19 thousand) at 16.7%.
As per the United Nations COMTRADE database on international trade, Kazakhstan’s imports from Pakistan were $29.4 million in 2020. The top products imported from Pakistan in 2020 are presented in Figure 2.1 below.
| Figure 2.1 | |
|---|---|
| Articles of apparel, knit or crocheted | $1.24M |
| Sugars and sugar confectionery | $928.2K |
| Articles of leather, animal gut, harness, travel good | $350.1K |
| Coffee, tea, mate and spices | $270.9K |
| Miscellaneous edible preparations | $270.9K |
Pakistan’s Imports from Kazakhstan
In 2019, Kazakhstan exported $2.52 million to Pakistan, which mainly consisted of scrap iron ($1.38 million) at 54.7%, oxometallic or peroxometallic acid salts ($545 thousand) at 21.6%, and iron pipes ($194 thousand) at 7.69%. The country exported other iron products ($89.2 thousand) at 3.54%, sheep hides, including tanned ones ($73.2 thousand) at 2.91%, and dried legumes ($70.9 thousand) at 2.81%. Other exports included machines ($57.4 thousand), instruments ($4.9 thousand), plastics and rubbers ($2.5 thousand), animal products ($1.99 thousand), and paper goods ($126).
As per the United Nations COMTRADE database on international trade, Kazakhstan’s exports to Pakistan were $16.15 million in 2020. The top products exported by Kazakhstan to Pakistan in 2020 are presented in Figure 2.2 below.
| Figure 2.2 | |
|---|---|
| Works of art, collectors’ pieces and antiques | $11.9M |
| Iron and steel | $3.95M |
| Cereals | $207.7K |
| Miscellaneous chemical products | $28.4K |
| Raw hides and skins (other than furskins) and leather | $19.15K |
| Edible fruits, nuts, peel of citrus fruit, melons | $11.33K |
| Soaps, lubricants, waxes, candles, modelling pastes | $8.14K |
| Other made textile articles, sets, worn clothing | $5.86K |
| Edible vegetables and certain roots and tubers | $3.57K |
Increasing Exports to Kazakhstan
As of 2019, the Pakistan Business Council (PBC) estimated Pakistan’s export trade potential to be $270.8 million for the export of numerous food products such as rice, black tea, mangoes, wheat, guavas, oranges, bananas, onions, and tamarinds. Other potential products for expansion include surgical instruments, pharmaceutical products, medicaments, gloves, and textile articles, while sugar, Portland cement, footwear, and bedding are those products that have the potential to be developed in Kazakhstan’s market.
The countries may also adopt alternatives routes for consignments to ease the export process from Pakistan to Kazakhstan by establishing two railway links between Kazakhstan-Turkmenistan-Iran and Pakistan-Iran-Turkey for greater rail connectivity between Islamabad and Nur-Sultan. Additionally, a direct air corridor by PIA and Air Astana may be established as opposed to on-arrival-visas in order to promote tourism.
In addition, with the Belt and Road Initiative (BRI), if the Central Asia Regional Economic Cooperation (CAREC) Program is put into action earlier, it could potentially be a gateway for trade via Corridor No.5 which connects Central Asia to the Gwadar and Karachi ports of Pakistan.
Trade Framework with Pakistan
Bilateral Agreements
Bilateral relations have been established between Kazakhstan and Pakistan through agreements and memoranda of understanding (MoUs) which have been provided in the table below.
| Sr. | Name of Agreement/MoU | Description | Date |
|---|---|---|---|
| 01 | Agreements regarding Scientific and Technical Cooperation. Culture, Sports and Tourism Cooperation and Trade and Economic Cooperation were signed, as well as an agreement on presentation of the Credit of US$10 Million. | 1992 | |
| 02 | Agreement on Air Services between Kazakhstan and Pakistan. | It was in relation to Air Services and was a Protocol of Negotiations between the Aeronautical Authorities of Kazakhstan and Pakistan. | 1993 |
| 03 | Protocol on Cooperation between the Ministry of Foreign Affairs of Pakistan and Kazakhstan. | 1994 | |
| 04 | Agreement for Traffic in Transit | 1995 | |
| 05 | Agreement on International Motor Transportation. | 1995 | |
| 06 | Executive Protocol on Application of the Agreement on International Motor Transportation | 1995 | |
| 07 | Agreement between Pakistan and Kazakhstan for a State Credit of US$51.9 million for purchase of cement plant | 1995 | |
| 08. | Agreement on Cooperation in Fight against Illicit Traffic in Narcotic Drug and Psychotropic Substances | 1995 | |
| 09 | 1) Agreement between Pakistan and Kazakhstan of Mutual Legal) 2) Assistance on Civil, Family and Criminal cases. 3) Agreement between Pakistan and Kazakhstan on matters of Mutual Visits of Citizens. | 1995 | |
| 10 | 1) Cooperation Agreement between Government of Pakistan, Ministry of Education and the University of Al-Farabi (Almaty) concerning the Establishment of Allama Iqbal Chair in Urdu and Pakistan studies. 2) Cooperation Agreement between the Government of Pakistan, Ministry of Education and the Kazak-Turkish International University, Turkestan concerning the establishment of Urdu Chair. | 1996 | |
| 11 | Memorandum of Understanding between the Federation of Pakistan Chamber of Commerce and Industry and the Republic of Kazakhstan Chamber of Commerce and Industry. | 1996 | |
| 12 | Agreement on Cooperation in the field of Education between the Ministry of Education of the Islamic Republic of Pakistan and the Ministry of Education and Science of the Republic of Kazakhstan | 2001 | |
| 13 | 1) Agreement on Reciprocal Promotion & Protection of Investment. 2) Agreement on Development of Academic Cooperation between the National University of Modern Languages and the Ablai Khan University. 3) Agreement between the State Bank of Pakistan and the National Bank of the Republic of Kazakhstan on Conditions for Opening Subsidiary Banks and Cooperation in the Area of Banking Supervision. 4) Agreement on the Establishment of bilateral relations in the field of Urban Economic Management between the Capital Development Authority of Islamabad and Akimat of Astana of the Republic of Kazakhstan. | 2003 | |
| 14 | Agreement on Cooperation between the Chamber of Commerce and Industry of Kazakhstan and Federal of Pakistan Chambers of Commerce and Industry | 2011 | |
| 1) MOU between the Government of the Islamic Republic of Pakistan and the Government of the Republic of Kazakhstan on cooperation in the military field (Signed on 13 November 2012). 2) MoU for setting-up of Joint Business Council between the Chamber of International Commerce of Kazakhstan and the Federation of Pakistan Chambers of Commerce and Industry. 3) MoU between National Export and Investment Agency “KAZNEX INVEST” JSC and Trade Development Authority of Pakistan (TDAP) on cooperation on bilateral trade. 4) MoU on cooperation in the area of defence and strategic studies between National Defense University (NDU), Islamabad and Centre for Military Strategic Research (CMSR), Astana 5) Agreement between the Ministry of Defense of the Islamic Republic of Pakistan and the Ministry of Defense of the Republic of Kazakhstan on Training of Military Personnel of the Armed Forces of the Republic of Kazakhstan at Military Training Institutions of the Ministry of Defence of the Islamic Republic of Pakistan. | 2015 | ||
| 14 | Agreement on Military Technical Cooperation between Pakistan and Kazakhstan was signed by the Minister for Defence Production and the Minister of Defence of Kazakhstan | 2016 | |
| 15 | MoU on cooperation in the field of Disaster Management to be signed between NDMA of the Islamic Republic of Pakistan and The Committee for Emergency Situations of the Ministry of Internal Affairs of the Republic of Kazakhstan. | 2018 | |
| 16 | MOU between Associated Press of Pakistan Corporation (APP) and National Company Kazakh Information Agency (KAZINFORM), at Islamabad. (copy not provided by APP to this Mission) |
Regional Agreements
| Central Asia Regional Economic Cooperation (CAREC) Program 2030) | This program is a partnership which is formed between 11 countries and development partners who cooperate together to aid in development, which helps in reducing poverty and increasing economic growth. Kazakhstan has been a part of CAREC since 1997, and as of 2019, investment worth more than $9.04 billion has been made through the CAREC Program which has aided in the improvement of energy infrastructure, trade and transport in Kazakhstan. Pakistan has been a part of CAREC since 2010 and has gained more than $1.47billion in investment through it . |
| Charter of the Shanghai Cooperation Organization (SCO) – Preamble | Formed in 2001, the SCO is an intergovernmental organization with both Kazakhstan and Pakistan as signatories. It increases cooperation between the two nations in terms of developing trade and economic linkages. With the advantage of their geographical proximity, elimination of trade barriers, simplified customs procedures, and boosted investment under the purview of the agreement, Pakistan-Kazakhstan relations continue to thrive. |
| ECO Transit Transport Framework Agreement 2013 | In 1985, the Economic Cooperation Organization (ECO) was established to promote economic, technical and cultural cooperation amongst countries. In 2013, it enacted the ECO Transit Transport Framework Agreement to which Pakistan and Kazakhstan are both signatories. The agreement aims to promote regional integration and augment cooperation between the two states by enhancing connectivity, trade, energy, tourism, investment, industry, economic growth and productivity, social welfare and environment. It also prioritises the furtherance of education and scientific linkages, cultural and people-to-people contacts within ambit of the ECO. |
| Quadrilateral Traffic in Transit Agreement (QTTA) 1995 | The QTTA is a trade deal, for the purposes of facilitating transit trade and traffic, between Pakistan, Kazakhstan, China and Kyrgyzstan. This road project forms part of the China Pakistan Economic Corridor, which plans on offering access to the ports of Pakistan for Central Asia and China. Due to the political and security issues as well as the recurrent border closures with Afghanistan, the importance for Pakistan has grown. |
Recent Developments and Strategic Commitments
In 2021, Ambassador Yerzhan Kistafin of Kazakhstan engaged in a meeting with Sardar Yasir Ilyas Khan, CEO Sardar Group of Companies and the former president of the Islamabad Chamber of Commerce and Industry. They discussed the prospects of enhancing trade and economic relations between Kazakhstan and Pakistan. Khan greatly commended Kistafin’s efforts towards increasing bilateral trade volume from $6 million to $20 million during November 2021. There was great appreciation between the two representatives regarding the expansion of trade and business sectors. Various MoUs were also signed with educational institutions such as Quaid-e-Azam University to improve academic collaboration and integration of students from both states.
There is substantial potential for private-public joint ventures between the two brotherly nations. Prior to the COVID-19 pandemic, talks were in place to launch a number of projects, for instance, discussions on a joint venture were underway by two Pakistani companies, M/S Habib Syndicate and Fauji Fertilizer Company Ltd. (FFCL) to institute a $200 million soda ash plant in Pavlodar (SEZ for chemical and petrochemical industries) which is close to Kazakhstan’s capital.
Key Institutions
The financial institutions mutually affiliated with Kazakhstan and Pakistan are as follows:
- International Monetary Fund (IMF)
- The World Bank
- Central Asia Regional Economic Cooperation (CAREC) Program
The Central Asia Regional Economic Cooperation (CAREC) Program is a partnership of 11 countries and development partners, including Pakistan and Afghanistan, working together to promote development through cooperation, leading to accelerated economic growth and poverty reduction. The program may serve as a proactive facilitator of practical, results-based regional projects, and policy initiatives critical to sustainable economic growth and shared prosperity between the regions, by helping establish multimodal transportation networks, increasing energy trade and security, facilitating free movement of people and freight, and laying the groundwork for economic corridor development.
- Islamic Development Bank (IsDB)
- Asian Development Bank
- International Fund for Agricultural Development (IFAD)