Kazakhstan – the New Place to do Business!

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Luc Jones

When multinational companies have looked to expand their operations from Russia further afield in the CIS, the traditional route has been Ukraine. After all it is the largest country wholly in Europe with a population of almost 50 million, and Kiev is a mere hour & twenty minutes’ flight from Moscow. What’s more, Kiev is a beautiful city (well, the centre, at least) and the culture isn’t vastly different from Russia. Westerners have been able to travel there visa-free for a decade, and the girls are pretty cute too! Yet there is the famous Russian expression, that ‘dyengi lyubat tishinu’ (money likes calm) which given current events have sent businessmen in a different direction in search of pastures new to expand their operations – the logical choice for many now being Kazakhstan.

Typically anywhere ending in ‘Stan’ sends shivers down the backs of executives back in corporate HQ, who instinctively think of war zones and potential ransom payments. Yet Kazakhstan is not only peaceful & stable, but increasingly prosperous and offers ripe rewards for those heading to what is the world’s 9th biggest country and a natural resources heaven! Firstly however, please get any thoughts of Borat out of your head before we even begin (incidentally, the movie was in fact filmed in eastern Romania, in case you were wondering).

Whereas my first visit to Russia was back in February 1991, it wasn’t until March 2004 that I popped my Central Asian cherry and boarded the overnight flight to Kazakhstan’s largest city, Almaty. First impressions were that we were still very much in the Former Soviet Union, but with a distinctly Asian flavour as we drove from the airport into the city centre in the early morning mist which descends from the surrounding mountains. Unlike in the other ‘Stans’ where the bulk of the Russian population fled in the 1990s, most in Kazakhstan remained and Almaty is a particularly cosmopolitan place with Russian the favoured language – in fact Kazakhstan as a whole boasts around 130 nationalities, yet only the ethnic Kazakhs speak any Kazakh and the more educated still generally feel more comfortable using Russian.

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Unlike Russia, where you essentially have Moscow, followed by everything else tagging along behind, Kazakhstan is more spread out – both physically and literally. Almaty is by far Kazakhstan’s biggest city, with a population of 1.5 million and was the capital until 1997, when it was moved north to Astana. Nevertheless, apart from the lack of embassies and government buildings, Almaty remains very much a business hub due chiefly to its size and legacy. Why the change? Theories abound that Almaty is a little too close to the Chinese border for comfort, or that northern Kazakhstan is over-populated by ethnic Russians, although it’s unlikely to be a conspiracy; south-west Kazakhstan is prone to earthquakes – Almaty was almost entirely destroyed in 1887, and until recently the city had few high-rise buildings so common in Soviet-built cities – and since it is partly encircled by the Alatau mountain range, there is little scope for expansion. It’s also a bloody long way from anywhere, although it’s likely to be your first port of call when making initial forage into Kazakhstan.

Curiously Almaty doesn’t have what could be described as a single, main street running through the centre, such as Moscow, Tverskaya or Kiev’s Khreshchatik; it’s simply a criss-cross of roads (admittedly some larger than others), and confusingly the city slopes downwards to the north – hint, the mountains behind you are in the south – on the other side is Kyrgyzstan and lake Issyk-Kul, if you fancy a hike of several days! There also a knack to getting around town; the majority of Almaty streets have been changed since independence, with names of Kazakh warrior heroes taking preference over Communists. This would not be a problem in itself (Moscow has also changed some road and metro names) yet old habits die hard and the majority of the population, regardless of ethnicity still refer to the ‘old’ name even though street signs list only the new one. And just to make your life even more difficult, since roads can be many miles long you will need to tell your driver not only the (old) name, but also the name of the nearest intersection. Sounds daunting but you get used to it – just allow ample time as buildings are large and what looks like a stone’s throw away on a map could be a half hour drive, and traffic jams are common throughout the day. A metro has been built recently but currently only has one line and whilst beautifully decorated is of limited use to business travelers, but cabs are cheap and plentiful. Do keep some energy for Almaty’s nightlife which has to be the best in Central Asia, boasting an excellent & growing selection of bars, cafes, restaurants & nightclubs. There is a solid Expat crowd which is welcoming & easy to break into, and plenty of networking events if you’re new to town – the remoteness results in foreigners still being much more of a novelty than in Moscow. The only ones complaining are those who have been forced to relocate to Astana or the Caspian!

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If you’re in the energy business, then the Caspian is where you’ll be headed for, namely Akyrau for the Kashagan oilfield (nicknamed ‘Cash-all-gone’ due to the high cost & harsh conditions), Aksai for nearby Karachaganak or Aktau. Mining operations tend to located in the north of the country, metals in the middle, and manufacturing in the south. The space between cities is vast with a lot of nothing in between!

If your business is even remotely connected to the government, your travels are likely to take you to President Nazarbaev’s gleaming new capital, Astana. The city has undergone an incredible transformation over the past two decades and was described as ‘Canberra on steroids’ to me by an Aussie Expat! As a planned city, Astana is often compared to Brasilia or even Naypyidaw in Myanmar (Burma), although this is somewhat misleading since Astana was in fact founded back in 1830, albeit as Akmoly, and then a century later to Akmolinsk. It remained little more than a provincial outpost until the early 1960 when it was renamed Tselenograd to help kick off Khrushchev’s Virgin Lands Campaign, a plan to dramatically boost the Soviet Union’s agricultural production in order to alleviate the food shortages plaguing the Soviet Union. Following independence, the city reverted to the name Akmola, although since this sounds like ‘white grave’ in Kazakh, in 1998, a year after being awarded the title of the country’s capital, it became Astana, which unoriginally in Kazakh means – wait for it – ‘capital’! Pretty much bang in the middle of Kazakhstan, it hasn’t been easy to persuade executives to move to what is the world’s second coldest country (after Mongolia’s Ulan Bator) and is swelteringly hot in summer, and surrounded by nothing but miles of steppe.

In order to cement its status as the country’s capital, Astana has seen a recent influx of Kazakhs from all over the country and consequently is more homogenous & traditionally Kazakh than many other nearby cities; nearby Karaganda is practically Russian by comparison! It’s worth a visit as it is like nothing else in the region (many might cynically argue that there isn’t much else nearby anyway – Astana isn’t somewhere you’d choose to get to in anything other than a plane) and be sure to climb to the top of the Baiterek tower for excellent views across the city. Despite (or maybe because of) the number of embassies and government organisations, foreigners complain that despite the increasing number of evening options, after-work Astana lacks the excitement of Almaty; many Expats and Kazakhs fly to Almaty for a weekend R&R whenever they can.

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Being a former Soviet Republic, there are of course many similarities between Kazakhstan, and its northern neighbour, but there are also some subtle differences. For starters, you are in Asia so business is exceptionally male dominated, particularly within the state sector, and anything deemed to be strategic, such as natural resources. Accept the pace of business to be a little slower than you are used to and considerably less aggressive; personal contacts are particularly important although the hospitality of the steppe means that you are unlikely to encounter brusqueness often associated with ex-socialist countries. One of Kazakhstan’s major USPs is that there is very little competition in business, Kazakhs have money in their pockets and prepared to fork out and pay a premium for what they consider to be top quality products & services. It’s a long flight to go shopping abroad for a weekend so most opt to spend locally. Get down there before your competitors do!

Getting there:

From Moscow, Kazakhstan’s flagship carrier Air Astana flies twice daily to Almaty & daily to Astana, from where you can connect to around a dozen cities within Kazakhstan. Additionally Aeroflot fly daily to Karaganda and Transaero fly three times a week to Aktau, Atyrau, Aktobe & Shimkent, daily to Astana, twice daily to Almaty five times a week to Karaganda. S7 fly to Ust-Kamenogorsk & Almaty three times a week, and to Pavlodar, Semey (Semipalatinsk), & Shymkent twice a week. SCAT, a local carrier has a poor safety record and is probably best avoided.

Most flights leave Moscow late in the evening & arrive in Kazakhstan in the middle of the night or early the following morning, then turn around & make the return journey, although there are some daytime flights to Almaty from Moscow. There are frequent trains, but they take 2-3 days and carry mostly migrant workers on to Kyrgyzstan, Uzbekistan & Tajikistan so aren’t really what you’d refer to as a fun ride.

Getting in:

CIS citizens do not require a visa to visit Kazakhstan. Most others do, although in July 2014, the Kazakh authorities put into place a 1 year visa-free regime for the top ten non-CIS investors (which are, in no particular order, the USA, the UK, France, Germany, Italy, the Netherlands, Japan, South Korea, Malaysia & the UAE), so for the time being if you hold a passport from one of these countries, you can simply jump on a plane and go. There’s no word yet as to whether this is likely to be extended, so seize the moment! The rest require a visa and these must be obtained in advance. The Kazakh Embassy near metro Chistiye Prudy issues these in a week, and a hotel booking is usually sufficient; can be downloaded from their website. The rules seem to change and many people have been issued visas by sending their driver or secretary along, although applicants are sometimes made to show up in person. Why? Your guess is as good as mine!

Staying there:

Numerous international hotels have sprung up in the past few years, particularly in Almaty & Astana, but also on the Caspian. Prices tend to be high as Kazakhstan is very much a business destination so the bigger players have little incentive to offer discounts, even during period of low occupancy.

Speaking there:

If you speak Russian, you’ll be absolutely fine as this is the language of business & academia. You may (or may not) be surprised to find out that non-Kazakhs who were born in Kazakhstan and have lived there all their lives rarely speak more than the odd word of Kazakh. Outside of Grade A offices, don’t count on much English being spoken as few have had much exposure to the language. Signs tend to be in both Russian & Kazakh, and occasionally in English. Kazakh uses the Cyrillic script, with an additional nine letters thrown in to account for guttural sounds that you won’t hear in Europe!

Spending there:

The Kazakh currency is the Tenge (from where the Russian word ‘Dyengi – money, originates) – ATMs are ubiquitous in larger cities and high-end places accept credit cards but keep some cash for taxis and smaller items. USD, EUR & RUR as the easiest foreign currencies to change and there are plenty of obmeniki. Kazakhstan isn’t a particularly cheap place to travel around (domestic flights are particularly steep as flying is generally the only option) with costs similar to what you’d expect to pay in larger Russian cities.