Contracting along the Caspian frontier: overview

A break from the norm is how some UK IT contractors look at overseas contracting but what about a break from the normal locations? Come on; Luxembourg is so last year!

Combine this desire for something new with the slowdown we’ve recently seen in a few of the major global economies and a number of up and coming nations begin to emerge. These nations are ‘hot’ because they both pick up the slack as the incumbents slow down and offer challenges to contractors who might feel as if they’ve ‘done’ Europe. Two such ‘hotspots’ are Kazakhstan and Azerbaijan, writes Christopher Menger, regional director at Fircroft Group.

While some ContractorUK readers might have a bit of experience of the region, the vast majority won’t. So what do UK contractors need to keep in mind when working along the Caspian frontier and what factors are driving the demand?

Where IT contractors will find Kazakhstan hot

In Kazakhstan, the key factor is the number of major energy projects that are currently taking place, with enterprises like TengizChevroil, the North Caspian Operating Consortium (NCOC) operated Kashagan Field and BG Group-led Karachaganak all running across the country. These are enormous schemes that require huge numbers of skilled and temporary specialists, many of whom are being recruited from around the world.

The range of positions and placements involved is wide, but the majority of demand for UK personnel has been for construction and design specialists who help to develop supportive infrastructure that allow these projects to get ‘off the ground.’ In addition, there’s also been the inevitable appetite for engineers, particularly those who specialise in project management as well as mechanical and electrical fields. And, as with the vast majority of major projects, we’ve also seen firms seeking IT experts.

In fact, not dissimilar to what London’s financial firms are going to do this year, Kazakh organisations in almost every sector are utilising technology to cut costs and drive improved efficiency, thus raising demand for specialist contractors. Particularly highly sought-after are network engineers who can develop and integrate highly complex networks at new sites in order to get them ‘off the ground’ and, crucially, to remain functional in often challenging environments. More on those challenging environments later (and what they’ll mean for you, personally).

Those with a little knowledge of the country (as well as space exploration enthusiasts!) may think that Baikonur Cosmodrome, the world’s first and still largest spaceport facility, would further contribute to demand for IT contractors. However this actually isn’t the case. The site is owned by Russia and leased back to the Kazakh government, meaning that anyone working there requires a Russian visa. This, combined with the fact that many Soviet-era specialists still operate in the region, means there aren’t as many opportunities for foreigners – Britons included - at this particular location as many tend to think.

Where IT contractors will find Azerbaijan hot

Over in Azerbaijan, the economy is similar in that it too is largely led by the energy markets. Distinguishing it at the time of writing is the fact that it’s suffered from the falling oil price more than Kazakhstan, but it’s still a country ‘on the up.’ Indeed, the country’s fourth and current president, President IIham Aliyev, has stated it should be recognised as the fastest growing economy on earth.

What’s certainly true is that Azerbaijan has branched out in recent years and shaken off its Soviet chains. Adverts for its growing tourism industry are even displayed on the front of Atletico Madrid football shirts, highlighting the nation’s move into the international arena. The capital, Baku, is home to a number of major oil pipelines as a result of its geographical location in between two continents and on the edge of the Caspian Sea. Western energy firms are able to tap into deepwater oilfields which remained untouched by Soviet exploitation and the area is still considered as one of the most important spots for exploration and development anywhere on earth. All of these factors have contributed to a 4% growth in the Azeri economy and have led to similar demand for contractors as that seen in Kazakhstan.

Know before you go

While the expat presence has been growing in Kazakhstan for some time, most UK contractors probably tend not to hold too much knowledge of the nation, outside of a rather unflattering portrait of it in a Sacha Baron Cohen film. The reality is that the country is generally friendly and welcoming. The same can’t be said however about the climate. Temperatures will vary from extreme to extreme; in the summer it can be as hot as 40 degrees while in the winter it can fall way below zero on a regular basis. Contractors are also likely to find themselves the subject of much attention from the local mosquito population.

But once you get to grips with these aspects (which those who contract overseas regularly will have their own preparations and remedies for), Kazakhstan can be a highly attractive place to live and work, particularly if based in a major city like Astana or Almaty. But do take into account that it has very strict drink-driving laws – a single drink can potentially send you over the legal limit. 

As regards the working day, you may face minor challenges securing roles as quotas are utilised to ensure that firms employ a specific number of Kazakh nationals and therefore you aren’t likely to have much luck approaching organisations directly. On top of this, the domestic tax system is renowned for its complexity, and that’s by those who speak the language, so ensure you have a point of contact who can assist with this. Looking into getting such resources set up before you go is a given.

In Azerbaijan, the situation is largely similar although contractors should keep in mind that they will require a work permit which can only be gained by having a secure job offer in place. This offer will need to be renewed when taking on a new role as each permit is tied to the length of time the contractor spends with the firm that sponsors you and is limited to a specific employer.

Once you’re ‘on the ground,’ you’ll notice that Azerbaijan’s transcontinental location means that the nation is highly multicultural, particularly Baku. While many rural towns keep their traditions and character, the capital is a 21st century city driven by energy money. As a result, there are low taxes on oil and relatively low VAT levels although as with any major energy hub, prices can be high in more up-market spots. Like Kazakhstan, the country experiences huge swings in climate so ensure you pack your flip-flops and your Parka, just to be safe.

Tuesday 12th January 2016