July 5th, 2010
12:17 PM GMT
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Astana, Kazakhstan - Sometimes I feel like a hopeless romantic when it comes to the fabled Silk Road. The arteries of trade going back a half millennium conjure up images of Marco Polo in pursuit of Chinese silks and crossing the treacherous terrains of Central Asia where minus 40 degrees centigrade is common on the Kazakhstan steppes.

This week I went to the young capital city of Astana for the annual economic forum bearing the same name. Three Nobel laureates in economics, the animated former Prime Minister of Canada, Jean Chretien and 3,000 other participants from 68 countries gathered at the crossroads of East and West.

Kazakhstan is interesting in so many ways. It is a vast land - the size of Western Europe - and shares a 2,000 kilometre border with China and 7,000 kilometre border with Russia. Leaders here express their concerns about neighbouring Kyrgyzstan and tensions with and attacks on Uzbek minorities.

There is a reason –- in fact many reasons - businesspeople are willing to make the long trek to this sparsely populated corner of the world.

Kazakhstan is natural resource heaven. Oil production is set to double to three million barrels a day in a decade’s time; so is gold production. The country surpassed Canada last year as the largest uranium exporter. Then there are ample supplies of copper, iron ore and coal. The country is a key figure in the energy security equation.

Wen Jiabao has visited five times, most recently to expand supplies into an energy pipeline to Western China. The Central Asian state doles out its riches quite evenly to Russia, Western Europe and China, despite its historic ties to Moscow.

Kazkahstan despite all its wealth borrowed heavily from western banks - it was considered in vogue to list in london and borrow from western banks. They don't plan to overexpose themselves again.

Larger-than-life building sites were brought to standstill in Astana as the country looked for and delivered a home-grown solution in a year-long bank restructuring. Lenders took a sizable hit (losing up to 70 cents on the dollar), but the final deal is now considered by World Bank and IMF regional officials to be a model for others to follow.

With the banking crisis behind it after a cash injection by the country’s sovereign fund Samruk-Kazyna, Kazahkstan managed to stay above water in 2009, posting growth of 1.3 percent. In the first five months of the year, we are witnessing growth of eight percent, more in line with its pre-crisis track record.

As I was chairing this forum, it struck me how incredibly different this world seems from the scenarios in the U.S. and Europe - where job creation is minimal and unemployment rates hover at or near 10 percent.

Kazakh officials have learned a few lessons in the last few years. It is now utilising the same approach in attracting foreign investment that it uses when selling its natural resources - it is wise to have a diversified base.

Chinese, Russian and Canadian companies are big players, but the latest entrants are coming from the Middle East. Abu Dhabi is finalising a half billion dollar fund and the Kingdom of Bahrain is exploring Islamic finance operations. The region is also keen to boost agriculture productivity to serve the needs of desert populations in the Gulf.

The team supporting the long-serving 70-year-old President Nursultan Nazarbayev are 40-something multi-lingual globalists who are busy with a decade-long diversification plan.

They want the country to move up the value chain, creating a larger middle class to bring Kazakhs into the global economy. They know it won’t be easy and have been frustrated by early attempts to expand into the fields of technology, textiles and energy services.

But challenges are all relative. Their two sovereign funds have about $50 billion on hand and the extractive industries are busy looking at ways and means to add value.

Human rights groups want to see more progress on developing an open society with a vibrant opposition and freer press. Both would raise the comfort levels of foreign investors.

The government, now holding the year-long chairmanship of the Organisation for Security and Cooperation in Europe (OSCE), is promising results, as it has for some time.

Kazakhstan points to a per-capita income that has risen ten-fold in ten years as a sign of economic security - something it believes the OSCE should make a priority.

While that debate continues, leaders want to leverage their geo-strategic position as a stable hub in a less than secure neighbourhood, made more valuable by an array of natural resources that everyone else wants a piece on this key outpost of the modern Silk Road.

soundoff (One Response)
  1. Agit

    Christine, As a result of your Gold fnsiih at the World Cup #2, our Speed Skating Club, the Gloucester Concordes was picked to win a $1000 cash award as part of the World Cup Podium Tracker Program by Intact Insurance. I look forward to discussing with the Club executives where the funding will be best used for the Concordes. I can tell you that our club is focused on the development of our athletes and coaches alike. We’d love to have you come visit us the next time you’re in Ottawa! You can contact Sandra Chenard at or at 613-830-8214 AND/OR Louise Tailleur at or at 613-834-4738 and they would please to coordinate this visit.We are proud of you.Allen McGuire President Gloucester Concordes Speed Skating Club

    June 20, 2012 at 11:32 pm |

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