Article authors::
Iskaliyev Erkhat Serikovich
MBA, DBA, PHD, IPMA, ID
Chairman of the Subcommittee of Transport Logistics and Transportation of NCE "Atameken"
Member of the Presidium of the Union of transport workers of Kazakhstan "KAZLOGISTIC"
Chairman of the Board of SK-Pharmacy LLP
Seniority:
Scientific titles, degrees, activities:
CREATION OF TRANSPORT AND LOGISTICS HUBS –
THE FOUNDATION FOR THE DEVELOPMENT
OF THE ECONOMY OF KAZAKHSTAN
Logistics is an extensive professional area responsible for the process of supplying goods and services to the market. From the point of view of practical application, logistics is the choice of the most effective option for providing goods of the right quality, quantity, at the right time, in the right place at minimal cost.
The logistics industry is the circulatory system of the economy, ensuring the timely delivery of goods along the entire production chain, from raw materials and equipment to the final customer.
The development of transport logistics is a state task. The head of state always notes the special role of the transport and logistics industry in the Kazakh economy. According to him, this area is important for enhancing the interaction of regions.
The main tasks of logistics are to ensure the availability and competitiveness of services, the elimination of imbalances, the integrated development of infrastructure, the increase in throughput, the creation of an integrated system of logistics centers and the creation of information support.
All over the world, logistics is a very profitable segment. The global transport logistics market is valued at nearly $3 trillion. In the current realities, logistics plays a key role in the industrial development of countries. Moreover, in a number of states this area is the main factor in stimulating the economy. The logistics industry, like any other field of activity, is at a constant stage of improvement.
The dynamics of economic development requires a corresponding evolution of the transport system, capable of efficiently serving logistical needs. It should be understood that today there are a number of problems in the industry related to the development of infrastructure, the development of technologies, information support, the creation of a single information space, the further improvement of corridors for transit cargo flows, the organization and development of optimal conditions and infrastructure for incoming and outgoing cargo flows, followed by local distribution to final destinations.
Today, logistics is trying to adapt to constantly changing conditions and emerging problems that require a quick response and solution. There is no stability in the whole world. Therefore, the transport and logistics industry of Kazakhstan must become flexible in relation to the changing market conditions, eliminating key problems.
The global coronavirus pandemic has significantly transformed the transport and logistics industry around the world. Political, economic and technological changes have had and continue to have a large-scale impact on the transport industry. Because of this, the prices of key resources - from personnel, transport and fuel to packaging materials and storage facilities - have risen significantly. At the same time, a number of industry segments showed record growth.
The current infrastructure of the transport industry continues to face bottlenecks, such as weak integration and synchronous interaction of the main stakeholders, insufficient development of aviation and maritime logistics, an acute shortage of qualified specialists, insufficient readiness of transit infrastructure in Azerbaijan and Georgia within the Middle Corridor.
According to the results of the analysis carried out by the World Bank for Development, Kazakhstan has a rather low index of logistics efficiency. So, in the ranking we are on the 84th place, while China is on the 20th. At the same time, our other neighbors, like Russia, Uzbekistan and Kyrgyzstan, are several steps below us. And the highest indicators of the logistics efficiency index are in Singapore, Finland and Denmark.
During the meeting on the development of transport and transit potential with the participation of the Government leadership, heads of relevant ministries and departments, national companies for the development of the country's transport and transit potential, the President of the country previously instructed to take a set of measures to ensure safe and uninterrupted export and import of goods, create alternative routes of communication and delivery of goods, as well as the diversification of the economy.
TRANSIT POTENTIAL OF KAZAKHSTAN
Logistics and transport is the sector of the economy, thanks to which the transit potential of Kazakhstan is not just words, but real numbers and opportunities for economic growth.
The transit potential should be considered as a point of the country's economic growth. To do this, it is necessary to increase the attractiveness and create the most modern and efficient transport and logistics system in the CIS. Our country, being in the center of the Eurasian continent and possessing a wide transport and communication network, has sufficient potential to be a significant link in the Europe-Asia transcontinental bridge.
The republic has already created a fairly developed network of transit routes passing through Kazakhstan in three priority areas: Russia, European and Baltic countries; China, Japan and countries of Southeast Asia; the countries of Central Asia, Transcaucasia, the Black Sea, the Persian Gulf and Turkey.
The development of the transport and logistics sector is of particular importance for landlocked countries. And there are a number of reasons for this.
With this tool, it is possible to provide access to world markets, promote regional integration, economic diversification, job creation and efficiency gains, which are crucial for sustainable economic growth.
Thus, in aggregate, this will lead to a significant economic effect for the industrial breakthrough.
Kazakhstan, as a landlocked country, needs direct maritime access to world markets. Therefore, the development of an efficient transport and logistics infrastructure is critical to accessing global markets, facilitating trade and boosting economic growth.
We rank ninth in the world in terms of territory, located in the very center of Central Asia, bordering Russia, China, Uzbekistan, Kyrgyzstan and Turkmenistan. A reliable transport and logistics network will help Kazakhstan integrate into the region, facilitate cross-border trade and attract foreign investment.
Another effect is the diversification of the economy. Kazakhstan has vast agricultural and mineral resources, which can attract new industries and stimulate entrepreneurship by developing infrastructure to transport goods.
The benefits of a well-designed logistics system will also be to create jobs, especially in rural areas with limited employment opportunities, reduce the cost of doing business, increase foreign investment and stimulate exports.
Transport and logistics are critical to national and food security. A well-developed transport and logistics system can ensure the efficient movement of goods and people, support the country's mining and agricultural sectors, promote international trade and investment, and, most importantly, corporate and regional diplomacy.
CURRENT ISSUES IN THE INDUSTRY
Despite the importance of the transport and logistics industry in Kazakhstan, there are a number of challenges that the sector currently needs to overcome. In today's global environment, tasks require modern, and most importantly, effective solutions.
Kazakhstan needs significant improvements in logistics infrastructure development and integration, including soft infrastructure development. The country's road, rail and air transport systems need to be upgraded and integrated to meet international standards.
Since Kazakhstan is landlocked, the country faces significant geographical constraints in terms of transport and logistics. We are heavily dependent on the transport infrastructure of our neighbors, which can create bottlenecks and slow down the movement of goods.
The next issue is the complexity of customs procedures, which leads to delays at the border, an increase in transport costs and a decrease in the competitiveness of Kazakhstani goods. As for the regulatory framework, it is very controversial and needs to be clarified. As a result, there are difficulties for enterprises operating in the country.
In addition, Kazakhstan is a party to several international conventions for the carriage of goods by land, sea and air. However, they have yet to be fully implemented and integrated into applicable national legislation.
Security remains an important issue. The Kazakh transport and logistics industry is vulnerable to security threats such as smuggling, theft and piracy. This can increase the cost of doing business in the sector and make it harder to attract foreign investment.
Due attention should be paid to the lack of qualified personnel. It is worth reviewing educational programs in universities, creating platforms for the exchange of experience with the involvement of Kazakhstani industry experts and foreign specialists, and ensuring that the country has the necessary personnel reserve to support the development of the warehouse sector and the logistics industry as a whole.
Solving these problems will require significant reforms. Improving transport infrastructure, simplifying customs procedures, clarifying the regulatory framework and developing a skilled workforce are all critical steps to overcome existing challenges and unlock the full potential of the sector in Kazakhstan.
Already today we need a stable basic transport and logistics system that will seamlessly serve logistics needs at a competitive cost. At a new stage of the economy, logistics should already acquire a complex character. It is necessary that domestic logistics become not only an impetus for the development of the economy, but also give impetus to growth.
Let's take a local and detailed look at specific problems and consider the ways and possibilities for their reasonable solution in global modern conditions.
LOW LOGISTICS PERFORMANCE INDEX
Earlier, we focused on the problem of a low logistics performance index, which, according to the World Bank, is 2.7 LPI. Globalink Logistics conducted an analysis and identified a number of reasons for such a low rating.
The main factors are state monopolies and strong industry regulation. Other sources of the problem are: outdated fixed assets and their shortage, inefficient operations and coordination between stakeholders, lack of international transport and logistics specialists, and high business lending rates.
There is a list of recommendations that would change the situation for the better. To begin with, it is worth conducting a comprehensive market research and developing a 360° master plan for the development of the transport and logistics industry in Kazakhstan. This will be facilitated by the involvement of all stakeholders and the formation of a public-private advisory council for an open dialogue.
The private sector and investments in the logistics market should be attracted. This measure is necessary to create a competitive environment by reducing state monopolies and/or eliminating competition with the private sector. And to attract foreign investors, in turn, incentives should be offered to participate in the development of the transport and logistics industry.
Providing affordable funding and incentives is a priority. For example, the involvement of financial institutions to provide low interest rates for loans to enterprises in the field of transport and logistics, using the example of already implemented financial programs, the development of public-private partnerships involving financial instruments and guarantees from both parties, and the provision of targeted grants or subsidies for infrastructure development , and the introduction of new technologies in the logistics sector.
The next step is the rearmament and modernization of equipment and infrastructure. In this case, it is necessary to develop credit programs with low rates to encourage investment and investment of own funds in new transport equipment, railway rolling stock, freight fleet and others. Also, there is a need to update the terminal equipment of railway stations in the main directions in accordance with international requirements and the prospects for increasing freight traffic. The development and maintenance of roads, railways, storage facilities and terminals is indispensable to improve the overall efficiency of the transport environment as a separate outsourcing industry.
The digitalization of transport logistics is also important. That is, the introduction of advanced IT solutions for better data management, the integration of digital platforms and tools to optimize communication and cooperation between stakeholders, as well as the development of a single window system for tax and law enforcement, customs, border control and sanitary control, railway services and customs.
The training of qualified personnel remains an urgent issue. How to come to this? It requires the formation of faculties in universities focused on education in the field of international transport and logistics, cooperation with international and educational institutions and industry experts to develop and update curricula and requirements. And it is possible to improve the skills of existing personnel in the field through offline and online training as a requirement.
Don't forget to develop and implement effective legal and regulatory frameworks and policies. Achieving this goal will require: developing an integrated logistics policy and strategy that prioritizes efficiency and sustainability; ensuring transparent and understandable rules that promote fair competition and lower entry entry barriers; and promote public-private partnerships to capitalize on the strengths of both parties.
And, perhaps, the last, but no less important stage is the promotion of regional and international cooperation. Using its strategic position, Kazakhstan has the opportunity to strengthen relations with neighboring countries and participate in regional logistics initiatives. Do not neglect cooperation with international organizations to share best practices and access resources for the development of logistics.
By implementing these solutions and exploring international best practices, Kazakhstan will be able to significantly improve its logistics performance and create a more efficient, competitive and sustainable transport and logistics sector.
TRANS-CASPIAN INTERNATIONAL TRANSPORT ROUTE
“Kazakhstan has never been a maritime country and therefore has not fully utilized the possibilities of maritime transportation. Now is another time. I set a strategic task for the Government - to transform our ports, turning them into one of the leading hubs of the Caspian Sea. Conceptually, I agree that it is necessary to strengthen the navy and create a container hub in the port of Aktau.”
The head of state pays special attention to the development of maritime transportation, calling the Trans-Caspian route a priority for development. Improving the efficiency of the Trans-Caspian International Transport Route (TITR or Middle Corridor), which connects Kazakhstan to the Black Sea via Baku and Poti, is needed to support the economic development of the region and boost trade.
According to experts, there is an opinion among many international clients that transit through the Middle Corridor takes up to 80 days. Experts believe that the time along the entire route can be significantly reduced (halved or more) with more efficient management (dry and sea ports, terminals, stations, etc.) and minor investments in infrastructure.
Where to begin? Improving the efficiency of the Middle Corridor should start with investment in new transport infrastructure, including roads and railways, as well as sea terminals. This may include upgrading existing infrastructure, building new facilities and improving transport links to connect different parts of the corridor.
Another tool will be digitization, that is, the use of digital technologies such as GPS tracking, RFID and blockchain to improve the tracking of goods and reduce the risk of delays or losses.
The next aspect is the simplification of customs procedures. These include streamlining customs processes, reducing documentation requirements, and introducing electronic systems to expedite the customs clearance process.
It is worth noting that tax incentives, subsidies and simplified administrative procedures can help attract private investment in transport infrastructure along the Middle Corridor.
The harmonization of technical regulations, product standards and customs procedures in countries along the Middle Corridor will in turn help reduce costs and improve efficiency by eliminating the need for multiple certifications and inspections.
And collaboration between the public and private sectors can help open up new sources of funding, expertise and technology. Earlier, the President instructed KazMunaigas to work out the best option for its implementation, including the possibility of attracting investors from the Tengiz project. The government, together with Samruk-Kazyna, should take measures to increase the capacity of the Atyrau-Kenkiyak and Kenkiyak-Kumkol oil pipelines, the President noted.
In general, improving the efficiency of the Middle Corridor requires a combination of infrastructure development, digitalization, simplification of customs procedures, harmonization of standards, investment incentives and public-private partnerships, as well as diversification of oil supplies.
TRANSPORT CORRIDORS: KAZAKHSTAN-CHINA BORDER
Improving the efficiency and effectiveness of the Kazakh-Chinese borders is critical to facilitating trade and expanding economic cooperation between the two countries. To achieve this goal, consider the following specific steps.
First, you need to start with the foundation - the development of infrastructure. Investing in new border facilities, upgrading existing ones and improving transport links will help reduce waiting times and increase the volume of goods transported.
The next step is the simplification of customs procedures. The process includes reducing documentation requirements, streamlining screening procedures, and introducing electronic systems to expedite the customs clearance process. Earlier, the President of the country instructed the Government to fully automate the process of customs clearance and border control.
It is worth improving the coordination between the relevant authorities on both sides of the border. For example, the creation of joint committees to coordinate the process of crossing the border, the exchange of information on customs procedures and the improvement of communication channels.
For transparency of border crossing, the level of corruption should be reduced. In this case, the emphasis is on the use of cameras and other technologies to monitor the movement of goods and people.
Safety is always an important issue. Strengthening border security can help reduce the risk of smuggling and other illegal activities.
It is worth paying attention to the issues of increasing the number of security personnel at the border, improving the security infrastructure and introducing advanced security technologies.
Facilitating trade and investment between Kazakhstan and China can help increase the volume of goods crossing the border, which in turn can improve the efficiency of the border crossing process.
This may include encouraging businesses to invest in the border region and developing marketing campaigns to promote the goods and services of the border region.
Ultimately, through a combination of infrastructure development, customs facilitation, better coordination, greater transparency, greater security, and promotion of trade and investment, the two countries will be able to facilitate trade and increase economic cooperation, which will benefit both countries in the long term.
CROSS-BORDER TRADE, TRANSPORT AND
LOGISTICS HUB ON THE BORDER OF KAZAKHSTAN AND UZBEKISTAN
The development of logistics centers on the border of Kazakhstan and Uzbekistan is an important component of economic cooperation between the two countries. A transport, trade and logistics hub for storing, distributing and transporting goods can facilitate trade and strengthen bilateral partnerships.
The development of logistics centers at the border will increase the efficiency of the transport and logistics sector by reducing transit time, improving coordination and reducing costs associated with transportation.
In addition, they will promote the development of trade by providing a central place for the storage and distribution of goods and simplifying customs procedures, strengthening regional cooperation and regional stability, providing a platform for dialogue and cooperation between the two countries.
Thus, the efficiency of the logistics infrastructure will increase, regional cooperation will expand, and trade will be simplified. The development of logistics centers on the border of Kazakhstan and Uzbekistan will definitely benefit both countries.
TRANSSORMATION OF "KAZAKHSTAN TEMIR ZHOLY"
“Perhaps the time has come to transform KTZ into a national transport and logistics company. This will expand the mandate and tasks of KTZ, will allow the company to work more comprehensively to develop the country's transport and transit potential."
Kazakhstan Temir Zholy is the largest operator of the main railway network in Kazakhstan. KTZ is responsible for the security of rail freight, baggage and postal cargo transportation throughout the country, and therefore the network must provide high data transfer rates, as well as the highest level of protection of the company's internal resources, in order to resist network attacks.
The transformation of the company into a national transport and logistics company will significantly increase the country's transit potential.
According to the President, it is necessary to take a set of measures to ensure the safe and uninterrupted export of domestic products. The head of state stressed the need to maintain the country's leadership in the Central Asian region and develop it as a reliable transit hub.
Kanata Almagambetova, Deputy Chairman of the Board of NC KTZ JSC, noted that the company is preparing proposals for the development of transit traffic, which will be considered at the Government level and agreed with partners.
It is expected that KTZ will organize multimodal transportation involving rail, road and sea transport, as well as the provision of logistics services at places of cargo formation abroad through the development of a network of terminals. This will give impetus to the development of transnational transport corridors, the formation of new logistics chains and open up additional opportunities for domestic business.
Strengthening the competence of the national company in the field of transit transportation should become an important direction. It is quite logical that KTZh as a national company should be at the forefront of all transformations.
Special attention should be paid to the development of the logistics block. It would be expedient to create a competence center that will develop new routes, attract new volumes, build new terminals, grain elevators, and develop port infrastructure outside of Kazakhstan.
In addition, it is necessary to focus on the development of domestic railway engineering and take measures to strengthen the railway fleet and overhaul the tracks.
Kazakhstan will have to form alternative railway routes. In particular, we are talking about the implementation of the Dostyk-Moiynty, Bakhty-Ayagoz, Maktaaral-Darbaza projects, the construction of a bypass railway line bypassing Almaty.
DEVELOPMENT OF THE PROGRAM OF CONTAINERIZATION OF THE RK
Container shipping or containerization is the transportation of goods using standard containers. They allow to carry out non-reloading delivery of goods from the sender to the recipient, thereby significantly reducing the volume of intermediate loading and unloading operations.
The growth rate of global container traffic is many times higher than the growth rates of the world economy and trade. The effectiveness of this mechanism is due to a number of advantages. Firstly, a higher speed of transshipment of goods from one mode of transport to another and the safety of goods. Due to the elimination of complex transshipment and repacking, transportation is much more economical. In addition, the speed of the cargo becomes higher, with the exclusion of repacking. Thus, the passage time in the port can be reduced by 3 times.
It is worth recognizing that Kazakhstan lags far behind developed countries in terms of containerization, a more efficient and cost-effective way to transport goods. In terms of the level of containerization of cargo transportation in the world, our eastern neighbors - China - are leading - 73%. Europe accounts for 71%, and the US closes the top three - 69%. Kazakhstan's index in this ranking is only three percent.
The development of containerization would allow Kazakhstan to increase the volume of transit and export traffic to 4.1 million TEU. Our country has great potential to increase the volume of cargo transportation. The most advantageous is the advantageous geographical position, which allows to reduce the transportation time relative to sea transportation. For example, from China to Europe, the transportation time is 9-15 days versus 45 by sea. The formation of the EAEU allows for the transportation of goods in the direction of Asia-Europe with a minimum number of customs checks.
When developing the Containerization Program of the Republic of Kazakhstan, it is extremely important to determine the possible market capacity, development scenarios, the role of KTZ and the state. Also, it is worth paying attention to the trends that affect and determine the development of the transport and logistics market, the current state of the transport and logistics market of the Republic of Kazakhstan in the context of containerization, and what are its prospects until 2025, without the use of incentive mechanisms, under the influence of key trends and the role of KTZ as a backbone market player.
With proper use, containerization can become one of the drivers for optimizing the logistics of enterprises in Kazakhstan.
DEFICIENCY OF WAREHOUSE CAPACITIES
The capacity of modern warehouse facilities in Kazakhstan is constantly changing as the country's economy and logistics industry develop. According to a report by Colliers International, as of 2021, the total area of modern warehouse space in Kazakhstan was about 865,000 square meters, while demand exceeds 1.2 million.
This figure is expected to grow in the coming years, as demand for storage capacity in the country will be driven by the relocation of enterprises from Russia to Kazakhstan. Most of the modern storage capacity in Kazakhstan is concentrated in the two largest cities - Almaty and Astana, and small facilities are located in Shymkent and Aktobe.
Local logistics companies operate the majority of warehouse complexes in Kazakhstan. However, several international logistics companies are also present in the country, but they have yet to invest in infrastructure development.
In general, concrete steps need to be taken to improve storage capacity in Kazakhstan. The first step is to develop the infrastructure. Invest in new ones and upgrade existing ones.
We need to focus on investment incentives. Due to the lack of building materials, public infrastructure, qualified engineering and public utilities, the cost of developing a modern warehouse economy in Kazakhstan is much higher compared to a number of other countries. Moreover, due to high interest rates, developers and investors are reluctant to invest in the warehouse sector. And tax incentives, subsidies and simplified administrative procedures will attract private investment in warehouse complexes.
Simplification of rules and procedures related to the construction and operation of storage facilities will help reduce barriers to entry, stimulate competition and promote the development of new facilities.
Automation of processes will also become relevant. The use of warehouse management systems, automated storage and retrieval systems, and robotics can help improve inventory management, order processing, and transportation.
In addition, cooperation between the public and private sectors will be a powerful tool for opening up new sources of funding. In addition, there will be an opportunity to exchange experiences and technologies.
DEFICIENCY OF AUTOMOBILE AND RAILWAY FLEET
The shortage of trucks and railway rolling stock in Kazakhstan has significantly affected the country's logistics industry. Several key factors contribute to this.
The main one is an outdated car park. A significant portion of trucks and railroad rolling stock in Kazakhstan is aging, with some vehicles and rolling stock dating back to the Soviet era. This has led to increased maintenance costs and decreased efficiency, which has led to the need for more affordable vehicles and rolling stock.
The country's economic growth and international trade have been fueled by the demand for transport services in Kazakhstan. Increased demand put pressure on the existing fleet of trucks and rail vehicles. As a result, the costs and needs of affordable vehicles have increased.
The simplest approach to increasing the road and rail fleet is to invest in new vehicles and rolling stock. Due to high interest rates, lack of government incentives, and localized assembly of trucks and rolling stock, the private sector is reluctant to invest in new vehicles.
Kazakhstan is trying to establish a domestic assembly and manufacturing base for trucks and railroad rolling stock, but this has proven to be a difficult task due to a lack of investment, technology and experience.
Simplifying administrative functions related to the registration, licensing and inspection of vehicles and rolling stock will lower entry barriers and encourage more companies to enter the market.
State-owned enterprises, especially in the railway sector, create unfair competition for the private sector. The Government of Kazakhstan should consider applying the yellow page rule more effectively to manage competition between state-owned enterprises and the private sector.
Technology and digitization can help improve efficiency, reduce costs and, most importantly, reduce the risk of breaking the law. This may include the development of new vehicle and rolling stock designs using new technologies such as telematics and GPS tracking.
Also, it is worth providing access to financing. The cost of financing in Kazakhstan for the development of warehouses, roads and rail transport equipment is generally higher. Hence, the return on investment is low and long. This can make it difficult for businesses to access finance.
To improve access to affordable finance, private investment in warehouses, road and rail fleets should be supported. This can be achieved through the development of new financial products, the provision of government-supported loans and the creation of specialized investment funds to find qualified companies with a good track record, experience and tax history to invest in the transport and logistics sector.
Equally important, as a rule, remains the development of a skilled workforce. In this case, opportunities should be provided for the training and education of drivers, mechanics and other workers to improve the quality of service, reduce accidents and increase efficiency.
Thus, by investing in new vehicles and rolling stock, stimulating private investment, simplifying administrative procedures, encouraging innovation, improving access to cheap financing, and providing education and training, Kazakhstan can increase the size and efficiency of its road and rail fleet.
BALANCED THE ROLE OF STATE ENTERPRISES
The question of whether Kazakhstan should minimize the role of state-owned companies in the transport and logistics sectors is a very complex one with no simple answer. State-owned companies can play an important role in this sector as they can provide infrastructure, funding and support for the development of the industry. At the same time, excessive state involvement in the industry can lead to inefficiency, corruption and loss of competitiveness.
As with all decisions, there are two sides to the coin to look at. By minimizing the role of state-owned companies, Kazakhstan can encourage private investment in the transport and logistics sectors, improve efficiency and reduce costs, and reduce corruption and increase transparency in the industry.
On the other hand, state-owned companies provide stability to the industry because they are less affected by market fluctuations or changes in government policy. In addition, state-owned companies are better placed to serve the public interest, as they may be subject to more stringent regulation and oversight than private companies.
Given all the pros and cons, the ideal approach might be to find a balance between the two. The government of Kazakhstan may consider a mixed ownership structure that includes both public and private companies, while ensuring transparent and fair regulation and oversight of the industry.
The government may also limit the role of state-owned enterprises, especially in the rail sector. Kazakhstan Railways and its freight division could become master operators and offer B2B services to private transport, freight and logistics companies rather than compete directly with them.
Private transport and logistics companies outsource rail fares and traction services to a national rail operator. Consequently, national railway companies do not need to compete directly with private freight and logistics companies. This could be a win for the national railway of Kazakhstan and private transport and logistics companies.
APPLICATION OF CLUSTER THEORY IN KAZAKHSTAN
Cluster theory is a system that emphasizes the importance of interaction and collaboration between companies, institutions, and other stakeholders in a particular industry or geographic area.
By applying this theory in Kazakhstan, there is an opportunity to create a favorable environment for the development of the industry, which will increase efficiency, reduce costs and stimulate economic growth. The government of Kazakhstan can create a policy environment conducive to the development of transport and logistics clusters in the form of tax incentives, subsidies and other incentives for companies in the cluster.
The development of modern transport infrastructure, including roads, railways and ports, will reduce transport costs and increase the efficiency of the sector. Other ways to apply cluster theory include: creating industry associations, organizing events and seminars, promoting relationships between companies and organizations, creating incubators or innovation centers that provide resources and support to companies to develop new technologies and products.
Don't forget to support education and training. This is the creation of training programs, partnerships with educational institutions and the provision of resources for professional development.
Thus, the application of cluster theory to the development of the transport and logistics sector in Kazakhstan will create a favorable environment for the growth and development of the industry.
EXPERIENCE OF THE UAE AND THE POTENTIAL OF KAZAKHSTAN
A group of experts studied the experience of developing the UAE logistics and transport sector, elements of which can be applied in Kazakhstan.
In recent years, Dubai's transport and logistics industry has grown rapidly, turning the city into a major global center of trade and commerce. The city's success in this sector can be attributed to several critical factors, including its strategic location, world-class infrastructure, supportive policies and a vibrant business environment.
Earlier, the Delivery Unit results management office presented the 2X national economic transformation project, which considers the path of Kazakhstan becoming a key regional trade hub by 2030. The presentation clearly outlines concrete steps to achieve this goal by successfully using the UAE case.
The following is a case study that highlights some of the key factors that have contributed to Dubai's success in the transport and logistics industry.
Strategic location. Dubai's location at the crossroads of major trade routes between Asia, Europe and Africa has become an important factor in its success in the transport and logistics industry. The city's proximity to major markets, combined with its strategic location on the Arabian Peninsula, has made it an ideal location for global trade and commerce.
Kazakhstan, in turn, is located at the crossroads between Asia and Europe and is an ideal gateway to Central Asia and the Caucasus.
World class infrastructure. Dubai's transport infrastructure, with a modern airport, seaport and road network, meets world standards and is capable of handling large volumes of cargo and passengers. The flagship Dubai International Airport is one of the busiest airports in the world, and Jebel Ali Port is one of the largest container ports in the region. The government has invested heavily in the development of these facilities, as well as in road and rail infrastructure, to provide the city with the capacity and capacity to support the growth of the transportation and logistics industry.
The airports of Almaty, Astana and Karaganda, the gates of Khorgos and the ports of Aktau and Kuryk can potentially become hubs for air and multimodal transportation in Kazakhstan. The main infrastructure has already been built, and with some improvements, digitization and integration, these assets can add value to the transport and logistics sector of Kazakhstan.
Support policy. The Dubai government has implemented a number of policies and initiatives to support the growth of the transport and logistics industry. This includes the creation of free trade zones, such as the Jebel Ali Free Zone, which provide a favorable regulatory and tax environment for businesses involved in logistics and trade. The government also introduced simplified customs procedures and reduced bureaucratic barriers, which contributed to the efficiency of the industry.
There are several free zones in Kazakhstan, and with positive market reforms, these zones can be integrated into the transport and logistics cluster of Kazakhstan.
Dynamic business environment. Dubai's dynamic business environment, coupled with its favorable policies and world-class infrastructure, attracts many businesses in the transport and logistics industry. The city is home to many logistics companies, freight forwarders and forwarding agencies who are attracted by growth opportunities and a favorable business environment.
UAE state-owned enterprises complement private business and avoid direct competition. The main focus is on the development of infrastructure, ports, airports, terminals, free zones, airlines and shipping lines offering B2B services in the field of transport, cargo transportation and logistics.
Kazakhstan and Dubai have different geographic locations, economic conditions and political systems, so there may be some difficulty in directly applying Dubai's experience to Kazakhstan. However, there are some lessons that Kazakhstan can learn from Dubai for the development of its transport and logistics industry.
For example, Dubai has invested heavily in infrastructure development, including airports, seaports and highways; established strategic partnerships with players in the transportation and logistics industry that have helped bring investment and expertise to the region; diversified its logistics industry from traditional areas such as shipping and air transport to include e-commerce and last mile delivery.
In addition, the government actively supports the logistics industry, including regulatory reform, investment incentives, and the creation of free trade zones, and introduces advanced technologies such as drones and autonomous vehicles to improve the efficiency of transport and logistics operations.
Kazakhstan has the full potential to learn from the UAE in a similar way, attract investment, create new growth opportunities and spur the growth of its logistics sector.
EFFECTS FROM IMPLEMENTATION
Modern logistics should be an integrated complex of the required volume of quantitative and qualitative services, ensure unhindered and uninterrupted transportation in any direction, at any distance, for any type of goods and services.
By increasing the competitiveness of domestic products, reducing delivery time, reducing costs, diversifying destinations, the logistics system of Kazakhstan will make a significant contribution to the development of the overall infrastructure of the industry.
Today, we are implementing many projects to develop the transit potential and trade conditions of Kazakhstan, and are forming transport and logistics centers. To attract investors, working trips are carried out to the leading developed countries, during which Kazakhstan is presented as a large hub between the Central Asian and Eurasian regions.
With a strategic location between the markets of Eurasia, we need to intensify trade flows, which, in turn, will give impetus to investment processes. Thus, logistics will become attractive for foreign investors in order to localize production in the territory of the Republic of Kazakhstan.
All the current industry gaps mentioned in the article and their effective solutions will positively affect the market of Kazakhstan in both the short and medium term, which together will increase the investment activity of this sector.
Today, Kazakhstan faces an ambitious task of developing its transit potential. I am glad that most of the initiatives are already reflected in joint projects for the development of the transport and logistics system of Kazakhstan. As a result, logistics will remain and become a more profitable and self-sustaining industry with a high level of reinvestment in its own development, which will open up new opportunities for economic growth.
The logistics and transport sector as a point for rapid economic growth and the disclosure of the country's transit potential.
