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kazakhstan

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KAZAKSTAN


 

 
Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 24,205 22,400 18,300 60
         
GNI per capita
 US $ 1,510 1,350 1,250 117
Ranking is given out of 208 nations - (data from the World Bank)

REPUBLICAN REFERENCE

Area (sq.km) 
2,717,300 

Population
16,731,303

Principal 
ethnic groups 
Kazaks 44.3%
Russians 35.8%
Ukrainians 5.1%
Germans 3.6%
and many others

Capital 
Astana
(formerly Akmola)

Currency
Tenge

President 
Nursultan Nazarbayev

  

Background:
Native Kazaks, a mix of Turkic and Mongol nomadic tribes who migrated into the region in the 13th century, were rarely united as a single nation. The area was conquered by Russia in the 18th century and Kazakstan became a Soviet Republic in 1936. During the 1950s and 1960s agricultural "Virgin Lands" program, Soviet citizens were encouraged to help cultivate Kazakstan's northern pastures. This influx of immigrants (mostly Russians, but also some other deported nationalities) skewed the ethnic mixture and enabled non-Kazaks to outnumber natives. Independence has caused many of these newcomers to emigrate. Current issues include: developing a cohesive national identity; expanding the development of the country's vast energy resources and exporting them to world markets; and continuing to strengthen relations with neighbouring states and other foreign powers. 

Update No: 274 - (27/10/03)

The nomad guru
The president of Kazakstan, Nursultan Nazarbayev, is a remarkable man in many respects. He is a ruthless dictator all right, who exerts repression of all dissent. He, or at least certain of his entourage a la Yeltsin, are massively corrupt. But he has ideas.
It was he who was behind the bold decision several years ago to move the capital from Almata in the far south under the T'ien Shen mountains, an attractive place with leafy avenues and broad vistas of the mountainous natural scenery, to Astana, a bleak, windy oasis in a desert, right in the heart of the huge country. Diplomats have been appalled. There are none of the fine bars and restaurants, the night clubs and places of entertainment, in short the fleshspots of a true metropolis worth living in, as in Almata. People commute there from Almata at the end of the weekend, gritting their teeth for the grim week ahead. It should be added that Astana is being developed as a capital city, with broad avenues and modern architecture la Brasilia, but like that city it is regarded as a place to vacate at weekends

So why did Nazarbayev do it?
There were sound geopolitical reasons. The republic has a large Russian minority, concentrated in the north. Almata was far too far south for them to relate to in the same way. It is essential then to keep the Russians happy, providing many of the skilled people. A secession of the north to Siberia becomes correspondingly less likely.
Actually it is now unlikely on all counts, the local Russians being keen to participate in an ideal combination of a country, a small population of 16m and utterly vast resources, 60% of all of them in the former USSR.
It is as if Nazarbayev has an ingrained ascetic streak. He does. He is a nomad at heart, happier in the saddle than in a council of state, happier hunting wild boar than debating tame domestic issues, but then he is unquestionably "the boss".
The central monument in the city, actually in its outskirts, is a huge glass tent girt with gold adornments. A capital fit for nomads.

Religious centre
Nomads are not generally prone to religious fanaticism. Kazakstan, of yore a vast stretch of desert and steppe inhabited primarily by nomads, has no serious problem with Islamic fundamentalism, unlike the long settled populations of the rich Fergana Valley, which stretches from Uzbekistan through Northern Tajikistan to Southern Kyrgyzstan. The Islamic Movement of Uzbekistan, which is active in the three latter 'stans' and in Afghanistan, has no serious presence in Kazakstan at all.
But that does not mean that nomads are uninterested in religion. Quite the contrary. Their wanderings bring them into contact with many different manifestations of it and their natural curiosity, and perhaps gullibility, can make many a convert out of them to strange cults and ways. One just has to think of shamanism. The prophet Mohammed himself, as a merchant, was a wanderer who became familiar with Judaism and Christianity before himself founding a world religion.
Nazarbayev was once the Soviet President of the country and a member of the Politburo. This did not necessarily mean that he was a Marxist; but he probably subscribes to some broad principles of social justice. There was always something spiritually empty about Soviet communist doctrine. It had no place for the numinous and the transcendental. Nor of course do Western political credos; but unlike Soviet ideology they refrain from trying to provide an all-encompassing creed for life. They are not totalitarian,
Hence the strengthening rather than the weakening of religion under communism. In Kazakstan, as in Russia, there has been a great outburst of open enthusiasm for, and curiosity in, religion, since religious freedom has been allowed, the one undoubted advance in liberalism in the country. Nazarbayev, whether out of political calculation or shared interest, has encouraged a global religious forum to develop in Kazakstan.
Eighteen delegations representing different religions, including Islam, Christianity and Buddhism, attended the Congress of World and Traditional National Religions in Kazakstan on September 23-24th. Islam was represented by delegations from Iran, Saudi Arabia, Pakistan, Egypt and Indonesia. Roman Catholic, Constantinople Orthodox, Russian Orthodox and Anglican churches represented Christianity.
Nazarbayev can doubtless see the immense advantage of raising Kazakstan's profile internationally by having such a religious forum on a regular basis. It would then also be associated with something more elevated than oil.
Following a recent meeting with Nazarbayev in Astana, Mehdi Hadavi Moghaddma, leader of the delegations of the Iranian Culture and Islamic Communications Organisation, said Iran would provide 100 per cent aid to Kazakstan in its bid to make the activities of its international religious forum operate on a permanent basis.
"Iranian President Khatami once suggested establishing dialogue between civilizations," Hadavi Moghaddam was quoted as saying. "We view this conference as a follow-up to this initiative. That is why Iran is ready to do everything in its power to help Kazakstan promote this dialogue," he added.
The Kazak leader called on the Islamic state to support the forum's initiative to hold a meeting of heads of several religions once every three years and an annual lower-level meeting to religious leaders. Still mundane economics provides the basis for such cultural innovation.

Economy booms
Kazakstan is an undoubted success story in one respect; the rate of growth of GDP is the highest in the FSU and one of the highest in the world. GDP has soared by 10% rates of annual growth or thereabouts throughout the 2000s. Few countries can match this.
The reason has been obvious, buoyant global oil prices. Exports have been rising by spectacular rates, by well over 20% per year and for years. Kazakstan is becoming a global player on the world oil stage, which it never was in communist times, being an anonymous part of the USSR.
The find of a massive field in the Caspian at Kashagan, in the 9-15 billion barrels range of reserves, makes sure that the rapid rise to prominence will continue, given that something of the same magnitude obtains at Tengiz, already in full production, with the investment of Chevron. 
The capital of the oil industry is Atyrau on the Caspian and near both vast oilfields. It is the 'gold-rush city,' the gold being black gold, oil, of course. It is three thousand kilometers from Kazakstan's border with China, indicating how vast the republic is, larger than Western Europe in sheer territory. That makes it very difficult for 'trickle-down' effects to operate, with the new capital, Astana, nearly two thousand kilometers away and the old capital, Almaty, nearly three. 

The shenanigans mount
Actually, given the nature of the political system in Kazakstan, some of the proceeds from the oil boom have been flowing, not trickling, and not down, but out. This is a source of grave embarrassment to all concerned, in the US and in Kazakstan.
The US Justice Department has been investigating huge irregularities in commercial relations. But it has been agreed to disagree and not bring things to a head. 

Scenarios for gas pipeline to China
One country where one can be sure that there would be no legal process threatening any Kazak entity whatsoever with charges of corruption is China. Here lies the future destination for probably the bulk of Kazaz energy exports. These are already flowing in abundance to China. But exports of natural gas have lagged behind for lack of pipelines.
Kazakstan and China are going over three possibilities for the building of a gas pipeline running from Kazakstan to Western China, Kazak Prime Minister, Danial Akhmetov, said after a recent visit to China.
"At my meeting in Beijing with State Council Premier, Wen Jiabao, we discussed three variants for building a gas pipeline from the republic to China's west. All are still considered effective, but the most economically advantageous one has to be chosen," Akhmetov said.
The first scenario would make use of the already existing Tashkent-Almaty gas pipeline. The second envisions the building of a pipeline from Western Kazakstan through Kyzlorda, Chimkent and Almaty, also using existing stretches of pipeline. The third would see the building of a completely new line running 2,000 kilometres along the Petropavlovsk-Astana-Karaganda-Balkhash route from Kazakstan's north through the country's centre to the border with China.
All three possibilities, Akhmetov said, envision joining the border between the two countries in the area of the international railway terminal at Dostyk-Alashankou.
Experts from both sides are working on the three scenarios, work that will be based on the observation of mutually advantageous interests." Akhmetov expressed hope that the two parties' positions coming closer together will "make it possible to increase the mutual economic relations between the two countries."
The president of Kazakstan's national oil and gas company KazMunaiGaz, Uzakbai Karabalin, was quoted as saying in Beijing that demand for gas is high in China, since the country is for ecological reasons planning to significantly reduce the use of coal and depend on gas instead. The only question now is the choice of one of the three scenarios, and in the event that the two countries agree on one there will be a feasibility study done and all the needed financial and technical documentation worked up. Kazakstan extracted more than 14bn cubic metres of gas last year. The country plans to increase that number to 70bn cubic metres by 2015, exporting 40-45bn cubic metres.

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ENERGY

Kazakstan may help build Burgas-Alexandroupolis pipe

Kazakstan may participate in the construction of the Burgas-Alexandroupolis oil pipeline as a shareholder, Kazak president, Nursultan Nazerbayev, said in Astana on September 25th after meeting Bulgarian president, Georgi Purvanov. 
"Russia has invited our oil company, KazMunaiGaz, to look at the terms for participation and to join the project. We are considering this. It may be that our company will have to be a shareholder in the pipeline, if it is built," Nazarbayev said, Interfax News Agency reported. Kazakstan will first have to look at the feasibility study and think about whether it is a good idea for oil producers, he said. 
Russia, Greece and Bulgaria plan to build a 300km oil pipeline from Burgas (Bulgaria) to Alexandroupolis (Greece) that would bypass the Bosporus channel. The cost of the project is estimated at US$600m to US$700m and should start showing a return after eight years. Russian companies interested in the project include YUKOS, Rosneft and LUKoil.

Kazak oil from Baku-Ceyhan to be shipped from Aktau

Kazakstan plans to initially use the port of Aktau to transport oil to Baku to be supplied into the Baku-Tbilisi-Ceyhan pipeline, Kazak Deputy Energy Minister, Lyazzat Kiinov, said in Baku, New Europe reported. 
"In the future it is planned to build a new terminal, either in the port of Kurik (76 kilometres south-east of Aktau) or further to the south, close to the border with Turkmenistan," Kiinov said. He noted that at the moment the issue of building an underwater pipeline between Azerbaijan and Kazakstan is not being discussed. "Calculations have shown that transportation of up to 20m tonnes of oil per year is profitable by tanker," the deputy minister said, adding that a pipeline could be discussed for larger volumes. 
Talks between Azeri state oil company SOCAR and KazMunaiGaz on Kazakstan's inclusion in the Baku-Tbilisi-Ceyhan project have been underway since November 2002. The Kazak side has said that transportation of oil from the eastern coast of the Caspian by pipeline may begin in 2007-2010.

US$3.5bn Tengiz field expansion about to begin

Kazakstan and partners of the Tengizchevroil oil producing joint venture have signed a key agreement to expand operations at the Tengiz oil field at a cost of approximately US$3.5bn. The parties signed the deal on the Second Generation (SGP) and Sour Gas Injection Projects (SGI) on September 19th. These two projects will increase Tengizchevroil's oil production capacity from the current rate of around 13m tonnes per year to 19m tonnes, providing significant benefits to the Republic of Kazakstan during project execution and after their completion, Interfax News Agency reported.
"The agreement formalises earlier understandings between the parties and resolves the issue of the distribution of taxes," Vladimir Shkolnik, Kazakstan's energy minister, who was one of the signatories, said. Shkolnik stopped short of disclosing any details about the agreement, though, saying this could only be done with written permission from all the parties involved.
Shkolnik did say, though, that lawyers of the highest order worked on the document. "The desire to advance the project has helped us to find acceptable formulae," he commented. "All negotiations were conducted in keeping with the 'basic agreements on Tengizchevroil' and the parties 'did not breach one article' of those agreements."
Tengizchevroil is developing the large Tengiz oil deposits in the Atyrau region of Kazakstan. Shareholders in Tengizchevroil are ChevronTexaco Overseas with 50%, ExxonMobil Kazakstan Ventures Inc with 25%, the Kazak government as represented by KazMunaiGAz with 20% and the Russian-US joint venture LUKArco with 5%.
Oil production at the Tengiz field began in 1994 after Chevron and Kazakstan signed a 50:50 agreement in 1993. Tengizchevroil produced 13.2m tonnes of oil in 2002. It is producing two-three billion cubic metres of associated gas a year, in addition to increased production of associated dry gas, propane, butane and saleable sulphur products.
The SGI project will increase oil production and will develop state-of-the-art gas injection technology for enhancing oil recovery by injecting produced sour gas to maintain reservoir pressure. This will enable the company to pump more export crude along the Caspian Pipeline Consortium's pipeline to the Russian Black Sea port of Novorossiisk.
Other signatories to the agreement were Timur Kulibayev, senior vice president of the national oil and gas company KazMunaiGaz; Jim Taylor, vice president of ExxonMobil; Blake Kov, vice president for finance at ChevronTexaco; Viktor Pazhin, president of Lukarco; and Alexander Kornelius, director general of Tengizchevroil.

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TELECOMMUNICATIONS

Alcatel signs 20m Euro deal with KaR-Tel

French telco, Alcatel, recently announced it had clinched a deal with KaR-Tel, the number 2 mobile operator in Kazakstan, for the supply of an end-to-end mobile solution, New Europe has reported. With a price tag of 20m, the deal will help boost KaR-Tel's tranmission capacity to nearly one million users, while the capacity of the wireless network will expand two-fold, the French company said in a statement.
Leveraging its mobile leadership in the emerging countries, this first mobile agreement in the former Soviet republic will provide KaR-Tel with an enhanced infrastructure through the use of Alcatel's industry-leading EvoliumTM solution. This solution integrates all technologies, from GSM/GPRS to EDGE and UMTS for a smooth upgrade of existing networks and associated services, Alcatel said.
The French company will supply KaR-Tel with an inclusive Base Station Subsystem (BSS), an Operation and Maintenance Centre and the full EvoliumTM Toolchain. The extension of the core network sub-system (NSS) and a GPRS Core solution is comprised in the deal.
Alcatel will also offer power supply units, microwave links and associated antennas, cables and installation materials.

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