Malaysia Can Boost Exports To Russia, EU, Iran Via Direct Overland Rail Link With Kazakhstan - Envoy
KUALA LUMPUR, Aug 19 (Bernama) – The railway authorities of Kazakhstan and Malaysia are looking to develop a direct trade logistics rail link to enable increased trade between both countries.
Kazakhstan ambassador to Malaysia, Bulat Sugurbayev, said the route could facilitate Malaysian exports to lucrative markets in Russia, the European Union, Iran and other major markets close to Kazakhstan. He said this would be a better alternative and more competitive in terms of cost compared to maritime routes, which take longer and, at times, are disrupted due to geopolitical tensions.
“It could also boost tourism between both countries,” he told reporters after appearing as a guest on Bernama TV’s “The Nation” programme hosted by Jessy Chahal.
To this end, Kazakhstan’s railway authority, Kazakhstan Temir Zholy (KTZ), has been discussing with Keretapi Tanah Melayu Bhd (KTM) to explore a potential partnership to develop a direct rail link between both countries.
Sugurbayev said that Malaysian exporters could use the country’s Port of Khorgos, which is regarded as the world’s biggest dry port and gateway to China, by rail from Kazakhstan.
He said the railroad links would also connect Kazakhstan to ASEAN countries via China, which potentially could boost economic activities among them.
“We have discussed with KTM’s leadership on the potential to explore and develop a logistics link from Malaysia to China to Kazakhstan, and in the process use the latter as an overland freight gateway to major markets. We are looking forward to KTM visiting Kazakhstan, perhaps this year or next year, to meet with KTZ, to exchange ideas and map out the steps needed to connect our networks,” he added.
He said the introduction of the ASEAN Express, which is a freight rail route that connects Selangor to Chongqing in southwestern China, could be a stepping stone for the region to expand its rail connectivity to China.
“Malaysia has seen strong growth in the railway sector over the past decade, developing infrastructure to improve domestic connectivity, strengthening links within ASEAN and enhancing connections with China.
“ASEAN Express shows connectivity could become even faster. Even now, Malaysian goods can move quickly via China to Kazakhstan, and from there further into Europe and the Middle East through the north via Russia, west through the Caspian Sea and the Middle Corridor and the south through Turkmenistan to Iran,” he said.
The Port of Khorgos serves as a hub for multi-modal connectivity.
As an incentive to Malaysian investors and infrastructure companies, he said that dry ports in Kazakhstan are also free trade zones that allow economies to exchange goods and services faster and more competitively.
He cited how China uses Kazakhstan to connect their goods to European markets, with connectivity time much faster than maritime routes. Therefore, linking Kazakhstan, China, ASEAN, and Malaysia offers great potential.
Free trade zones and investment opportunities
Sugurbayev urged Malaysian companies to explore potential investments in Kazakhstan, given its competitive investment climate, supported by government incentives and easier processes.
“Malaysia can benefit from Kazakhstan through its vast land, abundant resources, a well-educated population, and ongoing legislative reforms and in turn, Malaysian investors can contribute expertise, advanced processing and value-added capabilities.
“This is why Kazakhstan actively incentivises investments that create jobs and add value locally.
“For Malaysia, given its strengths in electrical and electronics (E&E), as well as infrastructure development, the opportunities span a wide range of sectors,” he said.
He added that through the Astana International Financial Centre (AIFC), Malaysian businesses could operate under common law, in English, with British judges, as this removes the need to navigate unfamiliar legislation, languages or accounting systems.
“Once goods arrive in Kazakhstan, they are within a free trade zone. For Malaysian companies exporting to China or other markets, one option is to establish a presence in Kazakhstan - set up a company, import the goods, and operate from a warehouse here.
“Thus, investors could freely trade within the Eurasian Economic Union, as well as have access to markets in Russia, the EU and even Iran via efficient transport routes,” said Sugurbayev.
He said the embassy here is ready to assist Malaysians with business visas and guidance. “Under reforms led by our new president, Kassym-Jomart Tokayev, the country is working to create a predictable, open market economy, with protected property rights and ensuring businesses feel secure while taking advantage of our strategic trading position,” he continued.
Kazakhstan, with a population of about 20 million people, of which 70 per cent are Muslims, is bordered by Russia to the north, the Caspian Sea to the south-west, Turkmenistan, Uzbekistan and the Kyrgyz Republic to the south and China to the east. Its main exports are oil, natural gas and other commodities, and it is also a major wheat producer.
From January to November 2024, total trade between the two countries amounted to US$134.7 million (RM619.6 million).
-- BERNAMA
