Steppe Change

The expanding role of UK Trade & Investment in Central Asia

uk trade

UK Trade & Investment works with UK based businesses to ensure their success in international markets through exports. The organisation encourages and supports overseas companies in looking at the UK as the best place to set up or expand their business. With professional advisers around the UK and staff across more than 120 countries UKTI is responsible for international trade and investment by helping UK companies achieve their potential overseas through exporting and encouraging investment in the UK by overseas businesses. Working closely with the department of Business Innovation & Skills, with the Foreign and Commonwealth Office and with its staff in Embassies, High Commissions and Consulates around the globe, UKTI is represented in most Central Asian countries.

In Kazakhstan UKTI works closely with the Kazakhstani government and the business sector to improve market access, the business environment and market share for UK companies. It supports discussions between major UK business ministers and leaders, and important decision makers and opinion formers in Kazakhstan. The UK’s open, transparent and business-friendly system makes it easy to start up a new company; there are no separate rules for foreign business entities. Kazakh companies are increasingly listing on the London Stock Exchange. To date Kazakh Initial Public Offerings (IPOs) have had a joint value in excess of US$14 billion since 2005.

The UK and Kazakhstan enjoy a strong trade and investment relationship based on free market access, significant bilateral trade and investment flows and regular dialogue at senior levels. The UK is one of the largest investors in Kazakhstan, usually placed either in second or third position for Foreign Direct Investment. UK exports to Kazakhstan in 2011 were £530 million and UK imports from Kazakhstan were £459 million. Both imports and exports were up 124% year-onyear from 2010. Much of the export total was from machinery and specialized equipment for the oil and gas, mining, power generation and manufacturing sectors.

BG, Shell and Rio Tinto have strong investment interests in Kazakhstan, as do some of the UK’s large contracting companies such as GlaxoSmithKline and Invensys. A large number of smaller oil-field service and supply companies have established themselves in the market, usually in tandem with Kazakh partners.

In Uzbekistan UKTI works to boost the UK’s reputation as a place to do business, to broker commercial partnerships and raise local knowledge of what the UK has to offer with a view to increasing the number of contracts and tenders to UK business. An important aspect is UKTI’s help for UK companies to find new market niches and export their products and services to the Uzbek market. To do this it develops links with innovative, knowledge-driven companies with high growth potential and promotes inward investment projects, as well as supporting existing and potential current investors with their UK growth. Support for UK companies already operating in Uzbekistan is also given as they seek to expand and grow their business.

One of the key stakeholders is the Uzbek-British Trade and Industry Council (UBTIC), a government-sponsored trade promotion body designed to assist and support British and Uzbek businesses to strengthen bilateral economic cooperation. It was established under a bilateral agreement in 1992, with the objective of developing closer business links between the two countries. UBTIC meets annually, in alternate capitals, with the 20th UBTIC Session taking place in London in November 2013 (reported in OCA issue 15).

Of importance is UKTI’s improved business links being pursued through the Turkmenistan-UK Trade & Industry Council (TUKTIC), which was established in October 2010. It has the support of the Prime Minister’s Trade Envoy for Turkmenistan, Charles Hendry MP, who was appointed in November 2012. Turkmenistan is undergoing an ambitious industrialisation programme and bilateral trade with the UK has increased significantly. UK businesses currently export to a wide range of sectors in Turkmenistan, including energy, industrial machinery and equipment manufacturing, aviation, textiles, agriculture and ICT. Currently Turkmenistan offers significant opportunities in and around the energy sector (including service and supply chain) and construction. Turkmenistan also offers opportunities for UK companies looking to sub-contract from the large Turkish general contractors.

UKTI are working closely with the Mongolian government and businesses to improve business links between the UK and Mongolia, contributing towards change to an open, stable and equitable low-carbon economy. Mongolia is expected to be the fastest growing economy in the world over the next two decades, with GDP per capita expected to more than quadruple by 2020. This rapid growth is largely to do with a mining boom, where some of the largest untapped gold, copper, precious metals and coal deposits in the world have been discovered. Mongolia already has a young, well-educated population, and a vibrant democracy with a pro-Western outlook. The mining sector expansion is  expected to have a strong multiplier effect on the wider economy in the years ahead. The Mongolian – British Chamber of Commerce, chaired by John Grogan MP, is very active in promoting bilateral relations between London and Ulaan Baator.

High-quality imported consumer goods are increasingly popular and this demand is expected to increase rapidly in the years ahead. Opportunities exist in a variety of sectors
including agriculture, construction, professional, financial and business services, education and tourism.

Finally, in Azerbaijan, in partnership with the Azerbaijani government, UKTI champions UK business interests in the country. It encourages market growth so UK business can enjoy the mutual benefits of trade and investment. Working closely with both UK and Azerbaijani companies to increase business awareness of the opportunities in their respective countries and assisting with their entry into the market place, UKTI supports the reforms necessary to allow Azerbaijan to accede to the World Trade Organization.

Author: Carl Woolf
International Trade Adviser, Energy & Infrastructure
UKTI London

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