Timur Urazaev: we should think of being pragmatic, so that state tools should work in benefit to our nationals and public society

It is almost a year that Timur Urazaev, Ambassador Plenipotentiary and Extraordinary of Kazakhstan to Armenia, holds a diplomatic mission in our country. ArmInfo reporter met Ambassador Urazaev and asked him to share his expressions and opinion regarding wide range of international relations concerned to Armenia.

Mr. Ambassador, parliamentary elections were held recently in Armenia, marked with the beginning of serious changes in the state structure of the country, which is the transition from presidential model of country administration to parliamentary one. What are your impressions with those?  

First of all, as a representative of a friendly country, I would like to congratulate Armenian nation, your agency’s subscribers, Armenian Apostolic Church with the recent Holiday of Saint Easter, and to wish peace and bless of God to all of you. I would like also to congratulate with the results of the parliamentary elections all those  political powers which have won the race, having the support of the people and who have yet to do a  lot on the path of the further development of Armenia. Kazakhstan side and particularly the Government of Kazakhstan is intended to have good and open relations with all the political streams that represent Armenia. The more so in our country we also implement political reforms on the path of step by step transformation towards the parliamentary administration model.

As it is known, within the framework of  CIS  monitoring mission, the parliamentary elections flow  has been observed also  by representatives of  Kazakhstan . What is their conclusion in respect to the electoral procedures held in Armenia recently?

A large team of observers arrived from Kazakhstan, and not only under the mission of CIS Interparliamentary Assembly, but also within the OSCE   monitoring missions. Those are our senators, law makers, representatives of our local legislative entities, including, by the way, Kazakhstan citizens of Armenian origin. It was a good opportunity for them to learn about regulatory framework of Armenia, to compare it to that of Kazakhstan, to see how it works. According to our observers’ estimates, the elections conducted were held at good technical and organizational level. First of all I mean technical innovations, which allowed avoiding   any falsifications during the voting process. Except some insignificant technical omissions, no violations or breaks were fixed or recorded that could make an impact on elections results. Everything was organized very well and very precise, and people also treated their civil duties with a highest sense of responsibility. However, for such liberal society like Armenian is, 60% voters participation is a quite good result. That’s why the elections in Armenia are very important from the point of constitutional reforms that are initiated here. In Kazakhstan we also launched constitutional reforms and we also move towards liberalization and parliamentary model of administration. The difference is that our path will be a longer one. In Armenia it will be passed completely already next year, and in Kazakhstan it will last longer due to our specific features. But we do understand which tolls work efficiently and which do not, that is why here we should think about being pragmatic, so that state tools should work in benefit to our nationals and public society, should conform certain requirements of development- for instance, to the rules of informational space, public intentions etc.  All these should be taken into consideration.

This year Armenia and Kazakhstan mark the 25^th Anniversary of Diplomatic relations establishment. Summarizing the results of 25 year cooperation, how do You estimate the current level of relations and the prospective of those development?

This is a good reason to recall what a difficult    path  have we passed together,  and to think about what we  have to do in the future. The time came to make first conclusions regarding our   mistakes, regarding   gaps in our work. But, to be more optimistic in this jubilee year, I would say that during these 25 years we have reached many targets. First of all, we could keep our relations within the framework of CIS, to keep the connectivity between our societies – this is the visa-free status, as well as other forms of interaction. Talking about essential integration achievements, one could hardly overestimate the creation of joint security system under CSTO. And, of course the ultimate point of this common work is the Eurasian Economic Union.

If we follow the thematic line, we could talk also about many initiatives of Kazakhstan and Armenia that we have implemented successfully – this is our common intention to create a joint system of air defense, it is also the nuclear-free world, this is also securing the main freedoms and rights for our nationals to communicate within the framework of integral treaties mentioned. You know that over 40 thousand Armenians live in Kazakhstan. The vast majority of them are our nationals, and they have an option to travel free between Kazakhstan and Armenia, and that is a great achievement for us. We should seriously estimate how deep our reforms are, to make the achievements I speak about non-reversible, moreover – to make them turn into a platform for the further development of our societies, industries, political systems.

Mr. Ambassador, as it is known, the most successful diplomacy is based on mutual economic interests. About fifteen years ago Kazakhstan and Armenia began to improve the relations mentioned, a Kazakhstani capital founded bank started its activities in Armenia, which expressed a readiness to undertake the funding I mission in respect to Kazakhstani-Armenia economic cooperation. Contacts and meetings between Kazakhstani and Armenian entrepreneurs and businessmen were initiated. But all these had been destroyed   due to financial crisis, but even when it expired, no signs or tendencies to recover the cooperation mentions could be observed.  How much your mission is aimed at recovering and developing the cooperation mentioned? Which concept of bilateral relations development do You support, how do you estimate possible risks?

The Bank you speak about and the plans existed before the global financial-economic crisis attack, turned the victims of the crisis mentioned and of unfair administration of its (bank) management. As you probably know, the bank started facing losses, and our Government had to provide him too large financial aid at the cost of national reserve funds. And now, to rescue the nationals’ deposits, this bank’s activities are   restricted within the limits of domestic market. What is to the projects, destiny of those turned the same. I would like to mention that the crisis did not expire fully, and slighted softly from 2008 up to 2013-2015. This is a system-based crisis, with additional load of geopolitical flows –bans war, adversarial positions of Russia and West. At that, I do not rule out that this is not only a chronological coincidence – most probably there is a deep and detailed targeting process, the project of powers trying to destroy any hopes that integration at the post-soviet area is possible, because each and any ways here end with the same factor of Russia’s leading role in  these integration projects. On one hand, we should be impartial, and on the other we should not be afraid of getting to risks. However, we will take the path of enrichment of our economic capabilities, accentuating the small and medium business first. And to make SME-s work, we should give them the option to work together in regional limits and to make them compliant to each other.

What is to Kazakhstani-Armenian projects, let’s divide those into two parts - trade and investments. First of all, this is an opportunity for every country to attract, to involve resources at the cost of promotional investment environment, and in this respect we are even a bit competitors with Armenia - I mean that In the end we all are recipients, beneficiaries of large direct investments. But either Kazakhstan and Armenia could cooperate. I talk about largest investments, which are implemented at the level of transnational corporations and not at the level of second-rate banks. As they say, “the money loves tranquility”. And investments also do need tranquil and promotional conditions,. And here we have got no options in investment and trade sectors, and even having invested in some projects, we could not be sure on good, strong, long lasting logistics and supply chains.

For instance, the pic of Kazakhstani-Armenian relation was at 2009-2011, when our annual turnover reached $25-30 mln, though that is a quite  small figure, but at that time the 90% of the export was formed by grain, grain products, oil and oil products, liquid gas and others. Now our turnover dropped down to an incredibly small volume – in 2015 it formed only $5 mln, though in 2016 due to the activation within the limits of EEU it increased for 46%. In 2009-2011 Kazakhstani exporting companies could enter Armenian market with  their own products, which was competitive. And after the conditions changed (here I charge nobody   - that ios a market, it si dynamic, it is like water flowing to a deeper place, the same is for products – those go there, where they could resist any competition) our grain products became non-competitive at Armenia market, and not only here. The same happened at Iranian, Indian markets and others, because  our  position  has been conquered by cheaper products of the same category, but also of a lower quality. Our mill was substituted with Pakistani production, having a lower quality. That was something like dumping. 

On the other hand, the absence of supply chain and logistics is an essential problem as well. We have arranged a number of business forums either in Armenia and Kazakhstan. We say to the business community: “Here the state provides any possible help, setting the conditions you need”…And they give the following answer: “We calculate the expenditures, and those are pretty high”. And, indeed, the northern route through the Upper Lars, being closed or blocked very often, is not expedient.  Besides, there are lot expenditures like different tariff rates set by Russia – all this makes not only   our products non-competitive at Armenian market, but Armenian products face the same at our markets. And what is to Iran – you know what situation is there now. I do not even speak about 85% of Armenian border being blocked from West to East by neighbor countries. And here the only wish of mine is not enough, and the intentions of our business are not enough as well, because the business uses to go there where normal conditions exist and where the main thing is available – the direct supply chains. When there are no roads and ways, all my efforts should be in vain, and I cannot help that. But we have one, though temporary, solution, which is the EEU. Due to different procedures simplification we could reach the 46% growth. And if we apply some bonus tariffs, let’s suppose, in tripartite plan of Kazakhstan-Russia-Armenia, than our products could penetrate Armenian market, and that will promote the turnover increase. We have a pretty wide range of export-oriented goods, and our companies   do possess all the capabilities sufficient for making investments in export-oriented projects. But unless we have sustainable and reliable communication paths, any investors will face troubles in their work. This is not a fall of Armenia or Kazakhstan, simply the situation remains like it is by now. We should correct that situation on a tripartite   basis, which is Armenia, Kazakhstan and Russia - within the purpose of providing fair competitive environment at least.

Could You clarify, which exactly “tripartite   problems” do you mean? It looks like everything goes well and harmonic within the EEU framework?

First of all, the tariff rates set in EEU are not the same for different kinds of products. For instance, the Russian railroad rates for the oil and oil products, for liquid gas essentially vary of those set in Kazakhstan. And this fact generates many disputes and disagreements, which being often discussed not in public. We should make the rules of engagements absolutely fair and transparent.  We should have minimum obstacles in here  and less  protective barriers  raised by member countries, because in certain meaning the unfair game could destroy the very idea of this integration rules being useful and feasible.  We use to speak about it, and we speak it out loudly and frank. The mutual turnover share in EEU countries forms only 13%, while in EU countries it makes up to 65%. Europeans have a quite large range of various products, and  the range of products manufactured in Russia and Kazakhstan have a lot of similarities, and that is natural when our exporters, being unable to find clients in Russia or in Armenia, go for Indian, Iranian of Afghanistan markets, and due to that reason the EEU internal trade share sharply decreases.  Toi be truth, I would say that in respect to actual volumes Kazakhstan trade activities   have increased recently, but in figures these indicators are not very high, first of all due to the depreciation of national currencies. The “bans war” and some financial stocks critical conditions have had their negative impact as well.  At that, these two factors impacted the integral trade structure much more than our mistakes and omissions.

Do you remember when the first bans were claimed and the roads were blocked? Polish, Ukrainian and Slovakian truck drivers, who have been   carrying cargo to Kazakhstan, could not pass through Russian territory. And what they did? The simply turned back and left, because that was better than standing at the border and facing losses. Could you imagine how many entrepreneurs faced troubles because of that? And the main thing was that the faith of business community in the state ability to solve the problem without harming any business had been destroyed. That is why we should carry out very practice, sensitive and at the same time very fair and open policy.

There is another very attractive  global project existing – that is the Great Silk Road.  How do you think, could Armenia be more and stronger integrated to that project? Could EEU be “amended” with the Great Silk Road?

If You remember, last year, when Kazakhstan held a membership in EEU, we announced the cooperation of EEU with third countries as one of priorities – we should not get restricted on ourselves. If I am right, about 40 countries expressed their wish to set free economic zones or preferential trade statuses with EEU. And we say – yes, we should go that way, we should get every possible things from there until we will be able to feed up our market by our own means. Yes, the “ban war raises obstacles for that, but the eastern dimension is open, it is dynamic, and it is possible to work there.

The Silk Road economic zone is an important additional project, which should be developed under the consideration of China’s today abilities. The Silk Road passes through the territory of Kazakhstan and we are ready to implement all the changes related to the infrastructure. The way leads to the Caspian Sea, after it goes to the Black Sea. The problem is that Kazakhstan, just like Armenia, has no exit to the open sea that is why Kazakhstan considers the transport sector policy as one of the priorities in the foreign policy. We have raised a railroad network connecting all the 14 provinces of the country, with appropriate exits to external markets. For example, in Aktau we have built great cargo airport, railroad sector, sea port. We implement cargo transportation through Caspian Sea to Iran and after to Georgia, Turkey and so on. We have launched a great railroad way through Turkmenistan as well, which gives an option to get to the Persian Gulf and Indian Ocean   through Afghanistan, Pakistan and Iran, and there exactly the great advantages of oriental market are opened and waiting. The level of exported products accumulation there is unlimited, at least in visible future.

What is to Armenia, of course, Armenia stands a bit aside of this route, and the question here is first  of a political  nature – there is a need to settle all the contradictions with neighbors and to move ahead. If this issue could be solved at least in average-term prospective, so that the borders would be opened than it will become possible to join to that huge trade project. But, to all regrets, the politics always raises obstacles for the economy, and that is a great problem. I cannot give any advises, there is only one way – to solve the political problems and to open the access to external markets.

What could you say about the project that is being spoken over very often- I mean the railway project connecting Iran and Armenia?

I talked about that with my Armenian and Iranian counterparts and colleagues, and could be ruled just and only by their words. I would prefer not to present the desirable as the real, but the problem there is the funding and the indemnity of facilities. We should understand that whole world is under the conditions of competition, and Armenia could be slightly involved in the North-South corridor. Here we have two routes -: Georgia-Azerbaijan-Caspian Sea and so on and second is the Georgia- Armenia-Iran. There is an urgent need to work on this without losing time. This is not only getting transit tariff rates or cargo transportation – such things are always being followed by human flows, activation of economic life. The slightest move, any rotation generates many opportunities and advantages never heard about and known before. The main thing here is not to be late.  Because once the markets become unable to be integrated and involved in global economy, in global division of labor, such markets are being sentenced to something like raw materials attachment or all is left for those is to implement some cheap supportive function.