Kazakhstan’s President Nursultan Nazarbayev visited Italy over the weekend, signing a number of agreements worth $500 million at the Kazakh-Italian business forum and announcing the extension and expansion of Kazakhstan’s trial visa-free regime. Nazarbayev’s visit centered on attending the Kazakhstan National Day at EXPO Milan 2015, and in addition to the business forum, included bilateral talks with Italian Prime Minister Matteo Renzi.
While the 20 agreements made encompassed everything from agricultural machinery to textiles, food to construction, the most notable deal involved oil. Italian energy giant Eni and the Kazakh state oil and gas company, KazMunayGaz (KMG), finalized a deal to transfer 50 percent the subsoil use rights in the Isatay block, a section of the Caspian Sea believed to hold significant oil deposits. Last summer, Eni and KMG settled a deal to jointly explore the Isatay block.
Eni holds a 16.8 percent stake in the beleaguered Kashagan oil field and a 29.25 percent stake in the Karachaganak gas field. Overall, Italy and Kazakhstan have significant and growing economic ties. According to World Bank data, Kazakhstan exports to Italy were worth over $15 billion in 2013, more than the export trade with either China or Russia. A decade earlier, in 2003, Kazakhstan’s exports to Italy barely topped $1 billion. Nazarbayev said at the Kazakh-Italian business forum that last year bilateral trade reached $17 billion.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The other big news to come from Nazarbayev’s trip to Italy was the announcement that Kazakhstan would not only extend its visa-free trial but expand it. Last summer, Kazakhstan lifted visa requirements for citizens of ten countries (U.S., UK, Netherlands, France, Germany, Italy, Malaysia, the UAE, South Korea and Japan) for stays up to 15 days. The pilot program, set to end on July 15, will be extended and citizens from ten additional countries will be eligible–Switzerland, Spain, Belgium, Hungary, Monaco, Singapore, Australia, Norway, Sweden and Finland.
The focus on investors and tourists is a major aspect of Nazarbayev’s grand plans to make Kazakhstan a top 30 global economy by 2050, and the country has placed focus both on Europe and Asia. According to the Astana Times, Nazarbayev said in his remarks at the business forum that Kazakhstan can serve as a gateway to the Eurasian Economic Union. EXPO 2017, which will be held in Astana, will be a key opportunity for the country to show off–in fact, the theme of its Milan pavilion is “land of opportunities.”
In 2015, Kazakhstan scored the best regionally (aside from Russia), in the World Bank’s Doing Business ranking. But while doing business in Kazakhstan is easier than in the other countries of Central Asia, corruption remains a problem. Additionally, Kazakhstan’s reliance on the energy sector, and the drop in oil prices last year, has caused its economy considerable pain. Italy’s endeavors in Kazakhstan focus largely on oil and gas, expansion into other areas of mutual economic interest will be critical.