• Business People
  • August 3, 2020
  • Czas czytania

Business relations with Kazakhstan. What should we know?

Business relations with Kazakhstan. What should we know?

Against the common belief, Kazakhstan is not a poor country. Astana, the capital city, is even called Central Asia Dubai. Not without a reason, modern skyscrapers can bee seen in large cities, and there are plenty of luxury cars on the streets. Therefore, many investors and entrepreneurs see Kazakhstan as a fertile business ground. However, as the culture of Kazakhstan is so different than ours, it is worth remembering the differences to establish fruitful cooperation with that country.

Kazakhstan is one of the largest and most dynamically developing countries in Asia. It is the ninth largest country in the world with a population of over 18 million. This is an ethnically diverse country. Kazakh people represent approx. 67 per cent of the population, while Russians are the second largest nation - approx. 20 per cent Uzbeks, Ukrainians, Uighurs and the Tatars also live here. For historical reasons, among other things, a large ethnic group are also Poles, whose population, according to data from 2018, was over 31 thousand . Due to the dominant presence of Kazakhs and Russians, their languages are official languages of the country. Kazakhstan is also a conglomerate of cultures and religions. Among the believers there are followers of all monotheistic religions, including Islam (over 70%) and Christianity (over 26%).

Country with high investment potential

In Kazakhstan, the development of individual sectors of the economy is clearly visible, including mining and energy (including RES). This is quite a fertile ground for cooperation for Polish entrepreneurs. The government also supports these activities, on account of the fact that Kazakhstan would like to be among the 30 most developed countries in the world by 2050. And there is a good chance for that, as the state has rich natural resources - there are as many as 99  chemical elements of the Mendeleyev periodic table here, 60 of which are used in industry. The most important natural resources include oil, natural gas, coal, copper and gold. As for coal itself, Kazakhstan is in the 8th place in the world in terms of extraction of raw material, with 2.2 per cent of global stocks of this raw material, i.e. 25.6 billion tonnes (BP Statistical Review of World Energy data as of June 2017). The country has more than 300 coal deposits with geological reserves (170.2 billion tonnes), which are located mainly in central and eastern Kazakhstan. The coal industry provides production of as much as 74% of electricity production, which fully secures coke-processing production and fully satisfies the demand for fuel in the municipal sector and for the population.

What should you remember before a meeting?

First of all, it should be taken into account that the country is so vast that it has two time zones - the Western one (GMT+5), which includes Mangistau, Atyrau, Western Kazakhstan and Aktobe provinces, and the Eastern one (GMT+6) which includes the rest of Kazakhstan's territory, with such cities as Astana, Almaty, Karaganda, Shymkent, Khyzalorda, Kostanay. It is worth taking this fact into account when planning a meeting on the day of the trip or making a phone call.

The Kazakh market is more risky than the European one, as the law is very different from the one applicable in the EU.  Establishing solid relationships with people with various connections is very important - as in many Asian countries. Both recommendation from someone to be trusted and family connections are appreciated here.

The key to success in this market are the widest possible personal contacts that can provide recommendation for cooperation. The role of authorities in the akimates is also very important and contacts should be sought there. Recommendations of Polish authorities and institutions will also prove helpful. Effective methods of market penetration are economic missions as well as participation in numerous fairs during which products or services can be presented.   

Mental and cultural differences

The people of Kazakhstan are very hospitable and value personal contact, so relationships must be established in person. Kazakhs will not buy anything sight unseen, e.g. via the Internet. Nor should it come as a surprise if a potential contractor offers a much lower price for a product or service. This is an introduction and encouragement to negotiate, demonstrating interest in the offer. Consent to the proposed conditions, on the other hand, may mean an intention to deceive the bidder. It is also worth remembering that the initial failures are to create negotiating opportunities to achieve the planned effect.

The mentality of an average partner in this region is radically different from that of Europe. This is due, among other things, to a different value hierarchy. In Central Asia, personal contacts come first - family first, followed by social contacts. It is very important to understand this hierarchy when you decide to choose the right strategy for an effective form of promotion on the market in Kazakhstan. In marketing activities it is necessary to adapt sales and promotion techniques to the local mentality. This does not mean that modern market acquisition techniques are not applicable here. They often prove to be equally effective, but cooperation with a local intermediary is always a requirement.

consultation: Timur Kaidarov, a longstanding specialist in the field of promotion and investment at the Polish Embassy in Kazakhstan.

Iwona Sobczak

Iwona Sobczak

Public relations expert. Experienced journalist, PR specialist, trainer in business image, personal branding and communication. For over 15 years closely associated with the largest Polish TV stations, including: TVN, Telewizja Polsat, TV Puls.  As an author, she also cooperated with the press and web portals, including the magazines: Forbes,Twój Styl Man, Business Insider Polska, as well as online services: Onet.pl and TVN24.pl. She runs her own website "CEO Style" dedicated to imagecreation in business. She studied Arabic philology, political science and journalism.

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