Indo-Kazakh Contacts and Complementarity

Indo-Kazakh contacts go back to the days of the Great Silk Route which passed from China to the Western world through the Central Asian region (then called Turkestan) touching Southern Kazakhstan, especially Shymkent and Zambul regions. During the period between 12th and 3rd century B.C., there were nomadic and semi-nomadic tribes of the Sakas living in Southern Kazakhstan who later on invaded India. Through the Silk Route, Chinese silk was traded, while Indian goods moved to the Far East. The Silk Route was the highway for Buddhism from India to Kazakhstan. Buddhist relics have been discovered in the Sairam region of South Kazakhstan. Indo-Kazakh ties date back to those days and have continued since then, resulting in mutual penetration and enrichment of the two civilizations and cultures.

India, the inheritor of one of the oldest civilizations in the World, has gone through its own ups and down in the long march of history. When India attained Independence in 1947, India inherited an economy drained by more than a cen­tury of colonial extortion, dislocated by World Wars and suffering from frequent famines and epidemics. India inherited an administration, which had in the past served mainly the colonial interests. On independence, India chose democracy as a form of Government. India’s main achievements over this half century have been that we succeeded in turning the colonial administration into a development oriented administration working for the people, and our democratic institutions have stood the test of time. Democracy has permeated all the state and private structures. On economic front, we succeeded in creating a vast industrial and technological base. We created a self-reliant economic development process. We have achieved growth with stability. Country, which was awfully short of food on the eve of Independence, is in a position today not only to feed its entire people but also to export. Our production of food grains alone has gone up from a little over 50 millions tonnes in 1950 to nearly 210 million tonnes today.

Today we are a country of billion people with one of the lowest unemploy­ment rates in the world. We have been able to produce world-class scientists and technologists and have been able to achieve significant breakthroughs in high-yield agriculture, biotechnology, atomic energy and space technology. We have had major achievements in Information technology. Last year, we exported more than USD 4 billion worth of computer software.

The Indian economy has performed well over the past two decades. Aver­age annual real GDP growth accelerated from 5.4 per cent during the 12 year period ending 1991-92 to 6.4 per cent during 1992-93 through 200—2001. During this period, it has gone through significant structural change that has been in­

duced by a continuous process of economic reforms. The pace of reform was intensified in the 1990s and the economy has responded well to the new changes that have been introduced in almost all sectors of the economy during this period. As a consequence, the economy has also shown a great degree of resilience even in the presence of adversities, such as the East-Asian financial crises of 1997-98 and the abnormal increase in oil prices more recently.

Kazakhstan’s economy, after going through a period of dislocation and crisis in the post-independence era (1991-98) has considerably stabilised. The country has vast oil and mineral reserves, which have attracted considerable amount of foreign investment. The infrastructure is being renovated at a fast pace. For the year 2000 the GDP growth rate has been 9.6 per cent. Kazakhstan has a freely convertible currency and has a comfortable foreign exchange position. The economic and financial institu­tions, which earlier did not exist or had collapsed during the crisis period, have now recovered and are now working well. The country has discovered vast oil reserves, which will probably put it at part with the countries with the largest oil reserves. The economy is looking up in all respects. Therefore, Kazakhstan could be one of the best investment destinations among the CIS countries.

There is a vast level of natural complementarity between the economies of India and Kazakhstan. India is emerging as a vast market for energy and other commodities. India has technology and experience to offer in market-based industri­alisation, market management, financial systems and information technology. These complementarities between India and Kazakhstan can mutually support each other’s growth and development.

Political Relations

During the days of the Soviet Union, direct ties between India and Kazakhstan were not very extensive. All contacts with the various autonomous republics of the USSR were through Moscow only. Pandit Nehru along with Mrs. Indira Gandhi visited Almaty in 1955. Later Dr. Radhakrishnan visited Kazakhstan in his capac­ity as the Indian Ambassador to the USSR. He had met Satpaev, the then Presi­dent of the National Academy of Sciences of Kazakhstan.

India was one of the first countries to recognise the independence of Kazakhstan. Diplomatic relations were established in May 1992 when the Embassy of India was opened in Almaty. Ambassador Kamalesh Sharma presented creden­tials as India’s first Ambassador to Kazakhstan on 1st October 1992. The Embassy of Kazakhstan was opened in New Delhi in September 1993. Relations in different areas have strengthened since then, notably in the political, economic, trade, cul­tural, scientific and sports spheres.

India and Kazakhstan mutually have a very good political understanding. Bilateral political interaction has been regular. Interaction in UN and other inter­national fora have been close and mutually supportive. These consultations have revealed a close level of understanding and shared perceptions on each other’s concerns in the region.

India has consistently supported President Nazarbaev’s initiative on con­vening a Conference on Interaction and Confidence Building Measures in Asia (CICA). India is an active member of the Special Working Group (SWG) created

for the drafting of the documents of CICA. There have also been two meetings of the CICA at the Deputy Foreign Minister level, which took place in February 1996 and December 1997 in Almaty. The Foreign Ministers of the CICA member States met in Almaty on 14th September and signed the Declaration on the Principles Guiding Relations among the CICA Member States. Indian External Affairs Min­ister participated in this meeting.

A number of high-level visits have taken place between India and Kazakhstan. Indian Prime Minister Shri Narsimha Rao visited Kazakhstan in May 1993. Vice- President of India Shri K.R. Narayanan visited Kazakhstan in September, 1996. President of Kazakhstan Mr. Nursultan Nazarbaev visited India in February 1992, in July 1993 and in December, 1996. There have been other high-level exchanges at the level of Speaker of the Parliament, Deputy Prime Minister, Foreign Ministers and other Ministers. A large number of agreements have been signed during these visits.

Trade and Economy

Trade between India and Kazakhstan is nowhere near its potential. Trade between the two countries is mainly confined to the traditional commodities, which India used to supply to the former USSR. The main commodities being exported from India are tea, pharmaceuticals, woollen goods, leather goods, etc. Exports from Kazakhstan are restricted to wool, raw materials like hides & skins and small quantities of metals. Of late, gold and silver have been exported from Kazakhstan to India.

Bilateral trade figures for the last eight years are given below: (millions of US $)

Exports to India	1.9	7.3	0.5	2.3	33.3	7.9	26.43	29.62
Import	13.4	33.5	14.1	17.4	19.9	36.1	31.24	38.29
Turnover	15.3	40.8	14.6	19.7	53.2	44.0	57.67	67.90

To give impetus to bilateral trade, economic and scientific cooperation, an inter-governmental Joint Commission has been set up by the two Governments, which had its three meetings. The last Joint Commission Meeting was held in Almaty on March 29-30, 1999. The Fourth Joint Commission Meeting is likely to be held in India this year. A beginning in establishing joint ven­tures has been made under a credit line extended by India to Kazakhstan for projects in food processing, pharmaceuticals, consultancy services and consumer durable sectors.

While private sector investment in Kazakhstan from India is not very large, an NRI company, Ispat International, has bought the 6.5 million tonne capacity Karaganda steel plant, a linked power plant and 15 coal­mines. This is the big success story. The Karaganda Metallurgical Plant ‘Karmet Kombinat’ was one of the largest integrated steel plants in the former Soviet Union. As is known, President Nazarbaev started his profes­sional career from this plant where he worked for 17 years. The plant had become sick after the collapse of the Soviet Union and was only partially operating. It was taken over by Ispat International in November 1995 and

since then the Indian management of Ispat has been able to bring about a major turnaround in the performance of plant. Privatisation of this plant has become a model in Kazakhstan and a major success story.