Visiting Kazakh President Nursultan Nazarbayev said on October 3 in Tbilisi that Kazakhstan’s major interests in their relationship with Georgia is the latter’s transit capabilities to transport Kazakh oil and other freight to Europe. Georgian President Mikheil Saakashvili hailed relations with Kazakhstan as “free from any problems” and supported the Kazakh bid for OSCE Chairmanship.

The Kazakh President arrived in Georgian on October 2 for a two-day official visit. His Georgian counterpart Mikheil Saakashvili hosted Nazarbayev in Batumi, Adjara Autonomous Republic, where the Kazakh leader toured the local port.    
 
“Economic cooperation [with Georgia] is of major interest for Kazakhstan. On the shores of the Caspian Sea we have built the largest port in the Caspian Sea – Aktau - which is currently capable of handling 15 million tons of oil [per year]… Another port of this kind is being constructed, designed to obtain access from Kazakhstan via the Caucasus and Black Sea to Europe. To become acquainted with the [Black Sea port's] capacity was very important in this regard and I want to thank Mikheil Saakashvili and the Adjarian leadership for giving us opportunity to see the capabilities [of the Batumi port],” Nazarbayev said at a joint news conference with Saakashvili after talks in Tbilisi.

“Secondly, the railway link between Baku [Azerbaijan] and the Black Sea [in Batumi] is also very important and interesting for us in respect to transportation of ferrous and non-ferrous metals and other freight,” the Kazakh President added.

While visiting Batumi, Nazarbayev noted that Kazakhstan also plans to transport its oil through the Baku-Tbilisi-Ceyhan (BTC) oil pipeline.
 
According to the Georgian Economy Ministry, Kazakhstan exported a total of 3,300 tons of freight through the Georgian railway to the west in 2004 (the latest data available). The total amount of cargo transported through the Georgian railway, including those imported to Kazakhstan via Georgia, totaled 38,000 tons in 2004. 

Kazakhstan transported a total of 332,800 tons of oil through the Georgian railway in 2004. Saakashvili said that this figure will double in 2005. The Georgian port in Poti handled a total of 15,800 tons of Kazakh freight in 2004.

President Saakashvili said at the joint news conference in Tbilisi that a new terminal and port in Kulevi, which is currently under construction, will make it possible to increase these figures.

But bilateral trade between the two countries is low. According to the Georgian Economy Ministry, bilateral trade decreased in the first half of 2005. Total trade volume was up to USD 30 million in 2004, against USD 8.7 million in the first half of 2005.

But officials say that recent investment projects being implemented by the Kazakh side in Georgia can help increase these figures as well.

Kazakh BankTuranAlem (BTA), which holds assets of USD 5.5 billion, has recently opened a branch office in Tbilisi and launched, in cooperation with its local partner the Silk Road Group, the implementation of a USD 100 million investment project, involving reconstruction of the hotel Iveria, in downtown Tbilisi, into a five-star hotel, as well as renovating all of Republic Square, where the hotel is located. The two Presidents visited Republic Square on October 3 and attended a presentation of this project.

Nazarbayev said at a news conference that Kazakhstan is also interested in investing in Adjara’s tourism industry.

The two Presidents also discussed a possible supply of Kazakh gas to Georgia, which desperately seeks an alternative gas supply source to decrease its dependency on Russia in this regard. But in the event that Georgia begins importing gas from Kazakhstan, Russia would still play the role of transit country. Nazarbayev said the he thinks Russia will not oppose this project. 

Saakashvili said that all three states – Georgia, Russia and Kazakhstan – will benefit from the gas supply from Kazakhstan. "I think Russian and Georgian interests coincide here, as Russian enterprises also operating in Georgia consume gas,” Saakashvili said.
 
Both, Saakashvili and Nazarbayev spared no words to praise the reforms going on in each others' countries. The Georgian President said that the Kazakh experience of economic reforms is an example for Georgia.

“We have the most pleasant experience of relations with Kazakhstan and this has been observed through the past decade. Kazakhstan never creates any problems for anyone… And Kazakhstan’s participation in international processes is welcomed and we count on them [the Kazakh side],” Georgian President Saakashvili said at the joint news conference, adding that Georgia supports Kazakhstan’s OSCE Chairmanship bid in 2009.

Nazarbayev, who has led Kazakhstan since 1989 and who is accused by opponents of suppressing any dissent, has, on several occassions, expressed skepticism towards the regime changes which took place in Georgia and Ukraine through peaceful revolutions.

But in Tbilisi he said: “Now I am convinced that there is a stable situation in Georgia… I am now convinced that the Georgian authorities are on the right path of [economic] reforms.  I was pleasantly surprised.”

During this visit, Georgian and Kazakh officials signed a number of bilateral agreements, including one outlining economic cooperation targets for 2006-2010.