The Minister of Trade and Integration Arman Shakkaliyev reported on measures to support domestic exporters of non-resource products at the Government session chaired by Prime Minister Olzhas Bektenov. 

According to the results of last year, the number of exported non-resource goods increased by 278 items. Permanent active exporters from 2019 became 300 more companies: from 460 to 760.

According to the Minister, the geography of exports has expanded to 135 countries. In particular, deliveries of finished products to Asian countries have increased: to China by 8%, to South Korea by 26%, to Vietnam by 46%.

At the same time, with the growth of exports of services by 29%, there is a decline in the supply of industrial goods, such as copper, ferroalloys, zinc, silver, petroleum products. The Ministry of Trade attributes this decline to external factors: volatility of world prices, lower demand and increased competition in the target market.

At the same time, physical volumes of supplies of processed agricultural products have increased: flour by 1.1%, sunflower oil by more than 55.5%, beverages by 42.8%. 

"The export of food products is of particular importance, as 80% of exporters in this sector are small and medium-sized businesses. Moreover, small investment investments and their quick turnover make the food industry more profitable compared to capital-intensive industries. In order to achieve the target of $45bn by 2029, the following key areas have been identified for increasing exports. First and foremost, the focus is on China. We set a goal to increase exports of finished products 2.5 times in the medium term and reach $12.5 billion," Arman Shakkaliyev said. 

The government will continue in-depth work on increasing trade turnover with the EAEU and Central Asian countries. For this purpose, the necessary infrastructure of cross-border trade is being created. 

The government is also working on increasing the supply of high-margin goods to the Middle East countries. These are chilled lamb, poultry meat and offal products, i.e. goods for which there is a high demand.

European Union markets, which are ready to buy Kazakhstani food and organic products, are also a priority.

"We are launching a trade accelerator on the basis of QazTrade JSC together with professional market participants, which will structure niche trade flows. This will be preceded by the conclusion of long-term contracts for the supply of products with advance payments for the forward purchase of a guaranteed volume of export products. For effective implementation, the Ministry of Trade and Integration will undertake inter-ministerial coordination with the involvement of development institutions. Taking into account the current situation, it is proposed to use off-budget funding by instruments of NUH Baiterek JSC. Thus, to stimulate business and increase the number of active exporters, we have formed an infrastructure for the development and promotion of non-resource exports," the Minister reported.

Following the experience of advanced countries, Kazakhstan established an export credit agency this year, which offers business entities a range of insurance and financial support measures at all stages of the export cycle.

In order to reduce the dependence of export flows on external factors, financial measures will be oriented to support goods of deeper processing.

Service measures are concentrated on the basis of QazTrade JSC, which annually cover more than 450 companies. Over the past three years, for vegetable oils and fats alone, exports have grown 2.2 times, fertilisers 1.7 times and mutton 4.4 times.

"According to our calculations, for every 1 tenge spent on export support, there is 500 tenge of export revenue. At the same time, the average annual volume of support for service goods and services is about KZT2.3bn, or 0.02% of non-resource exports. While the average figure for countries with similar economies is 0.11%," the head of the Ministry of Trade stressed.

The priority task of the department is also to increase the recognition of products. On the instructions of the Head of State in early May a trade representative office of "QazTrade" was registered in XUAR (Urumqi). In the UAE on the territory of the national pavilion located on the site of EXPO Dubai "Qazaq Trade House" began to function. In addition, participation of Kazakhstani companies in two major exhibitions in China is planned: in Urumqi and Shanghai.

The Minister of Trade and Integration stressed the importance of creating competitive conditions for domestic business through optimising logistics costs and improving its efficiency. For this purpose, together with government agencies and organisations, a Roadmap for the development of export potential has been developed, a methodology for transporting export goods with a focus on processed products and their seasonality has been developed and submitted to the national railway operator for consideration. In order to reduce the cost of transporting Kazakhstani products, the approach to the instrument of reimbursement of expenses on the principle: "shipped - paid" is being revised, with priority given to the export commodity, direction and route. 

One of the drivers of export revenues for the country's economy is the services sector, where export volumes last year totalled $10.3 billion. To date, a passportisation has been carried out and a register of 320 export-oriented service companies has been compiled. IT, oilfield services and medical services are in priority.

The main support measures for businesses working in this direction will be reimbursement of costs for marketing promotion of services, obtaining international certification, as well as legal and technical support. 

"We will continue to work on increasing the volume of non-resource exports, with a focus on agro-industrial complex goods. And we will also structure approaches to support exporters, with a focus on supporting more deeply processed goods. The implementation of all these measures will increase the number of active exporters by 120 companies and ensure this year's growth of non-resource exports by 6%," Arman Shakkaliyev summarised.

#Government session #Manufacturing industry #Ministry of Trade and Integration #Trade