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“Georgia should not Expect New Investments from Kazakhstan”

New, large-scale investments from Kazakhstan are  not expected in Georgia at this stage.

Olzhas Khudaibergenov,   advisor to Chairman of the National Bank of the Republic of Kazakhstan and Executive Director of the Kazakhstan Economists Association  told “Commersant”.

It was announced about Kazakhstan’s plans to made  large investments in Georgia after  the  Georgian delegation’s visit to Kazakhstan at the end of August 2014.

In addition, Georgian wine exporters say that after the Ukraine and Russia, where economic problems have reduced consumer activity, crisis begins in Kazakhstan which is why the year 2015 is likely to be difficult for the wine business.

Olzhas Khudaibergenov at this stage does not see any reason for concern for the Georgian wine producers and says that the weakening trend in the purchasing power of the population in Kazakhstan is not yet observed.

As for “the second wave” of investment from Kazakhstan, the advisor to the head of the National Bank of Kazakhstan doesn’t expect  a large-scale investment outside the country, including in Georgia. He says that the second wave of the global crisis isexpected in 2015 that excludes the activity in the foreign markets.

As for the Kazakh economy dependent on oil prices, he notes that  the decline in oil prices, of course, creates risks for the economy, but here the situation is different – Kazakhstan is working on anti-crisis measures and in a case of their effectiveness, negative effects of the fallen price will be compensated.

Commenting on the impact of the Russia’s crisis  on  Kazakhstan , the expert says that  the situation is quite specific: the exports from Russia to Kazakhstan exceeds  three times exports from Kazakhstan to Russia. And due to  the current crisis,  Russian import to Kazakhstan has reduced. The reduction totals $ 3 billion, which is a third of imports. This, as economistsays, is positive moment for Kazakhstan.

As for the drop in oil prices, he says, it is also a stimulus to the economy of Kazakhstan.

Recall that  in the backdrop of the global  oil price fall, Azerbaijani President Ilham Aliyev speaks of the need fordevelopment of non-oil sector economic and diversification of economy. Advisor to the President of the National Bank of Kazakhstan focuses on the same trend in a conversation with us.

Several projects have been implemented in Georgia with Kazakh investments  in recent years. On January 14, a 5-star hotel complex in Likani was  opened with  joint investment of the Georgian  Partnership Fund (PF)  and the Kazakh company KazMunaiGas  which total value amounts to $ 48 million. The Partnership Fund’s participation  in the project is 50% of capital.

Silk Road Group as well as Batumi Industrial Holdings that is 100% subsidiary company of KazTransOil, KazTransGas Tbilisi and other are  operating in Georgia.

Kazakh capital is represented in the Georgian banking market  by Halyk Bank and BTA Bank.