Decline in Kazakhstani exports to Russia is due to economic cycles: expert12 august 2014, 14:09
Exports from Kazakhstan to the countries of the Customs Union (CU) - Russia and Belarus - declined in 2013. Head of Kazakhstan’s Economic Research Institute, the center for macroeconomic and applied economic-mathematical studies, Sara Alpysbayeva claims this decline has to do with the slowdown and technical recession of the Russian economy, Tengrinews reports.
Citing the Statistics Agency, she notes that while imports from the CU countries to Kazakhstan in 2010-2013 were up from $12.9 billion in 2010 to $18.7 billion in 2013, the exports from Kazakhstan to the CU countries fell from $7.1 billion in 2011 to $5.9 billion in 2013.
“We associate the current decline in exports to Russia with the slowdown and practically technical recession of the Russian economy. Naturally, in this period, it [Russia] consumes fewer manufacturing resources, including those coming from Kazakhstan. That is, the trade is influenced by the economic cycle that Russia has found itself in. We assume that as Russia emerges from the crisis, the Kazakhstani exports will grow,” Alpysbayeva said.
The share of Russia in Kazakhstan's exports is relatively small – about 7 percent. It mostly consists of raw materials. In the meanwhile, Russia is very important for Kazakhstan, because 36% of its import comes from Russia. It is mostly oil for Kazakhstani oil refineries, technological equipment and food products.
Considering that Kazakhstan’s economy is growing more dynamically than the Russian economy, the import from Russia to Kazakhstan is growing faster than its export to Russia, Alpysbayev explained.
“It is plausible to purchase the goods imported from Russia from other countries instead. But in this case we have geographical proximity, well-established production linkages, optimal combination of price and quality of the Russian and Belarusian goods and lack of customs duties – all these are stimulating the local businesses to trade with the Russian business. These are objective market conditions and the choice of businesses. We believe that with our countries entering the next economic cycle, our [Kazakhstan’s] exports to the countries of the CU will begin to grow," she said.
She, however, did not specify when the next economic cycle had to be expected.
Reporting by Renat Tashkinbayev, writing by Dinara Urazova