By Chris Devonshire-Ellis
There are significant e-commerce opportunities in one of Central Asia’s biggest cities, while increasing financial ties with Urumqi will see the two develop further as investment bases for Central Asia. .
Kazakhstan’s Ministry of Commerce released data showing that Almaty holds the largest share of retail trade in Kazakhstan with 31.5%.
Bakhyt Sultanov, Deputy Prime Minister of the Ministry of Trade and Integration, said the figures during a meeting in Almaty on trade, consumer prices, food products and compensation for losses suffered during the January riots.
Almaty (also known as Alma-Ata) is the largest commercial, financial and cultural center of Kazakhstan, where about a third of Kazakh businesses are registered.
Commerce is Almaty’s main economy, Sultanov said, with retail trade exceeding 4.2 trillion tenge ($9.8 billion) last year, a growth rate of 13.5 percent from 2020.
He also noted that the January riots had a negative impact on the work of some business entities, especially in the trade sector. The Kazakh government commission has approved a mechanism for compensation of damages to affected businessmen, in which several changes are to be made.
These include compensation for damage to enterprises according to a simplified calculation with payments of up to 10 million tenge ($23,000) for all categories of damage, as well as the application of a simplified mechanism for the category “equipment” and compensation for attorney’s fees. .
“This will reduce the time for reviewing claims from one month to two weeks and significantly speed up the process of compensating business damages,” Dosayev said. Almaty-based law firms are also ready to receive a client bonus for renewed processing work.
The question of stabilizing the prices of socially important food products was also addressed. To stabilize the prices of socially significant food products, within the framework of “revolving” loans, 11 billion tenge (26,000 dollars) were allocated from the local budget to fix the prices of vegetables, meat products, eggs and products groceries. The allocation of credits to large producers of “social bread” [a variety of bread sold at a fixed lower cost]dairy products and sunflower oil are also being developed.
The Almaty city administration also said it is considering the creation of mini-business and commercial centers by allocating concessional funding and land in the city for the construction of easily erectable temporary storage warehouses. These will reduce convenience stores’ reliance on resellers and relieve owners of small retail outlets of the need to purchase from large wholesale markets themselves. In general, this should have a positive impact on the price level in small Mom & Pop style convenience stores.
Sultanov instructed the Almaty Trade Committee to continue to monitor and analyze prices, to take measures to increase the “turnover regime” within the framework of stabilizing prices of socially important food products. He also asked to intensify the activities of the regional commissions to investigate intermediary schemes along the food price chain, in order to eradicate price gouging and unfair trade practices.
There are also fuel concessions, an issue related to the January unrest. The Kazakh government announced in late January that it was reinstating some price caps on liquefied petroleum gas, reducing overall costs.
Many Kazakhs have converted their cars to run on LPG, which is cheaper than gasoline as an automotive fuel in Kazakhstan due to price caps. But the government argued the low price was unsustainable and lifted the discounts on January 1, prompting protests across the country.
These new measures aim to appease the Kazakh population as a whole and contribute to the maintenance of civil order. They also helped launch the process of economic reform in Kazakhstan, which may ultimately see the January unrest as a watershed moment in steering the country in a new, open and more transparent direction.
Almaty is Kazakhstan’s largest city with a population of around 2 million and a local GDP per capita of around US$9,250 – the equivalent of Chinese consumers in Liaoning and Sichuan, nearly twice that average Indian consumers in Delhi and Mumbai, and over one compared to those in Bulgaria and Brazil.
East of Almaty, connected by road, rail and air, lies Urumqi, 869 km across the Tian Shan mountain ranges in China’s Xinjiang province. Urumqi is the richest city in Central Asia and the second most populous after Kabul. Much of the Sino-Kazakh trade passes a little further north, at the port of Khorgos in Kazakhstan, 306 km from Almaty. Nonetheless, business ties between Almaty and Urumqi are strong and will see a combined effort to connect resources with business, financial and related opportunities in Central Asia.