No easy business for Turks in Kazakhstan

By bne IntelliNews March 9, 2011

Justin Vela in Istanbul -

Despite a high level of interest, Turks aren't finding it easy to do business in Kazakhstan. No one wants to stop trying, but Kazakhstan's customs and banking systems are keeping the hungry Turks wary of doing business on the steppe.

According to Mahmut Yuksel Sune, a member of the foreign relations commission of Turkey's Independent Industrialists and Businessmen's Association (Musiad), Kazakhstan still has much to do in creating a good business environment. While Musiad member companies want to grow exports to Kazakhstan, a country that imports nearly all its products, two out of three requirements for doing business aren't there. "We have three conditions to go to a country," Sune says. "We must be able to go very easily by plane. Customs must be functioning and in good condition. Banking must be conducted in a good, easy way. Kazakhstan only meets one of these conditions - there is a direct flight. "

"When you are there, you cannot do your money transfer," says Sune. "You cannot feel yourself in [good] condition with the documents. How can you easily invest there?"

The Turks might be complaining, but things are definitely improving. Kazakhstan rose from 74th to 59th out of 183 economies in the World Bank's "Doing Business" survey for 2011. Turkey itself was ranked 65th, a fall from 60th.

Dr Kobil Ruziev of Aberystwyth University says there was no problem getting money in and out of Kazakhstan. "I cannot see why the banks would be a problem. There may be isolated incidents, not anything systematic, you can be sure of that."

However, compared to the highly transparent and restructured Turkish banking system, Kazakhstan has a lot to improve, Ruziev admits. On the customs side, it takes an average of 67 days to import goods and an average cost of $3,055. In the OECD area, the average is 11.4 days and $1,106.

While there is some work to do, the rewards could be great. Turkish contractors have completed an estimated $13bn worth of projects in Kazakhstan. In Istanbul in January, Kazakh Prime Minister Karim Qajymqanuly Massimov called Turkey a country with great production potential, according to local dailies. "With its noteworthy economic growth, Turkey is a country of interest for all," said Massimov.

Through Kazakhstan, Turkey can gain access to the customs union with Russia and Belarus, and increase its trade with China. Kazakhstan itself is a market of nearly 16m people.

No easy business for Turks in Kazakhstan

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