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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: 282 - (30/06/04)
The presidents of Kazakstan and Russia met at Yalta in the Crimea on May 23rd, where they 'got on a treat'. Nursultan Nazarbayev and Vladimir Putin speak each other's language and know that embarrassing questions like human rights or Chechnya will never be mentioned.
New economic space
The agenda was strictly practical. The most important is the creation of a new economic relationship between the two and Ukraine, with Belarus a partner too. Russia and Kazakstan form the vital hub here, with their vast energy and mineral resources.
"We have a large number of issues to discuss, but the most important one is naturally our progress in creating a single economic space (between Russia, Ukraine, Belarus and Kazakstan)," Putin said, who was on a working visit to the Crimea.
"Our work on the single economic space is proceeding in parallel with the two countries' highly successful relations in all areas - both in the economy and in politics," the Russian president said. "The foreign ministries will still have to take a number of steps to reach an agreement on the border's delimitation. But this work is proceeding normally, despite some purely technical difficulties," he said. "I am confident that we will reach agreements acceptable for both countries," Putin added.
Nazarbayev said: "Bilateral relations with Russia are developing. That is why what counts most now is to put our ideas on a single economic space into practice. I am glad that all four states have ratified and signed these documents.
"Now we need to work to produce actual results, including a single customs space and a free trade zone, so that this organisation can start working and become more interesting for everybody."
APFED session in Astana
Kazakstan is also looking to the Far East for greater trade and contacts. It was an absurdity in Soviet times that very little trade, let alone investment, took place with China and Japan. Both are now eager to remedy the situation, keen above all to have a new source of energy. A key forum is the Asia-Pacific Forum for Economic Development (APFED).
Ex-Japanese prime minister and Chairman of the 5th APFED session, Rutaro Hashimoto, came to Astana in May to discuss the opening up of the Kazak economy to Japanese investments. Ecology is a prime consideration, he said, aware of the dismal Soviet legacy on the issue, which has left large areas radio-active wasteland.
General outlook is positive, but poverty remains
The growth of GDP in Kazakstan is very strong, averaging 10% per year in the 2000s. But it is confined to the energy and minerals sectors by and large, which have little positive spin-off on the rest of the economy.
Hence the paradox that the oil-rich provinces of Atyrau and Mangystau have the worst poverty. Boom conditions breed local inflation, which makes life harder for those not in the employ of the vital sectors. Still the proportion of the population below the low-income threshold of 70 Euro per month has dropped from 34% in 1988 to 24% today. Economic growth clearly needs to be broadened.
The Saudis show interest
Kazakstan is relatively free of the besetting problem of fundamentalism that is plaguing Uzbekistan. As a former nomadic people, the Kazaks are not that pious, unlike the settled Uzbeks. Nazarbayev is comparatively enlightened on religious matters, hosting an ecumenical forum for world religions last year in Astana.
The Saudi Wahabbi sect were not able to target the republic with their madrassas or religious schools, by and large, unlike elsewhere in Central Asia during the post-Soviet 1990's. In a nice touch the Saudi Government has contributed 41 falcons to Kazakstan to raise the falcon population in the wild. The Falcon Centre, headed by Saudi Defence Minister Prince Sultan Ibn Abdul Aziz Al Saud, initiated the project; the prince called on falconers and falcon keepers to donate their birds. They are likely to be more welcome than
Kazak-German JV builds hops processing facility
The Kazak-German joint venture, FESA Textil, recently started building a hops processing facility in south Kazakstan. "The foundation for a unique hops processing facility has been laid. The plant is under construction in Shu on an assigned 15 hectares of land," the regional administration said, reports Interfax News Agency.
The feasibility study of the joint venture estimates the project at 90m Euro. Serik Kulmanov, director general of the joint venture, said that the project would be carried out in two stages. At the first stage, a section will be commissioned for making insulation materials, particle boards and medicines, estimated at 54m Euro. Out of the total sum the company will invest 20m Euro and borrow the rest.
For the second stage the company intends to draw loans of up to 20m Euro from the Kazak State Development Bank, 15m Euro from the European Bank for Reconstruction and Development and five million Euro from Kazkommerzbank to launch the production of textile and technical fibre. The facility would process a total of 45,000 tonnes of hops a year.
"Under the contract with the state, the company will at first be using wild hops and later start its own plantations," Kulmanov said.
An official from the regional administration said that he expects the facility to produce its first output in September 2005. It is expected that the project will create 860 new jobs.
Kazakstan, China to build Atasu-Alashankou pipeline
During the Kazak President's visit to China a number of bilateral agreements were signed in Beijing on May 17th, Interfax News Agency reported.
Among the signed documents were a bilateral agreement on the construction of the Atasu-Alashankou stretch of the inter-state oil pipeline between Kazakstan and China that will begin this summer and will last until December 2005, and a railway transport cooperation agreement.
President Nursultan Nazarbayev and his Chinese counterpart Hu Jintao signed a joint declaration on cooperation. The 988-km-long Atasu-Alashankou stretch is the second phase in the Kazakstan-China oil pipeline project. It is to run from the oil loading railway rack in Atasu in the Karaganda region (central Kazakstan) to the Chinese border near the Druzhba - Alashankou railway terminal.
The cost of construction of this stretch of the pipeline is estimated at €700m.
In accordance with the feasibility study around €650m is to be put into the first phase of the Atasu-Alashankou stretch and €40m in the work to increase the handling capacities.
The construction of this stretch of the pipeline is to be financed by drawing credits against Chinese guarantees. The 813-metre-long first phase in the oil pipeline will have an annual handling capacity of 10m tonnes and the second phase 10m tonnes. The first phase is to be put into operation in 2006 and the second phase in 2011.
A 448.8km-long pipeline with an annual handling capacity of up to 12m tonnes was built in western Kazakstan in the spring of 2003. Under reverse flow conditions it will become the first part of the oil pipeline to link Kazakstan and China.
Gold reserves exceed 10bn Euro
Kazakstan's gold and foreign-exchange reserves, including gross reserves at the National Bank and reserves of the National Fund, surged by 18% from the start of 2004 and exceeded 10bn Euro on May 28th, the chairman of the National Bank, Anvar Saidenov, said on June 1st at a joint meeting of parliament, Interfax News Agency reported.
National Bank reserves grew almost 30% from the start of 2004 and were 6.4bn Euro on May 28th, he said. The gross reserves increased because forex supply exceeded demand on the market during the five months, Saidenov said. Last year Kazakstan's gold and foreign-exchange reserves including gross reserves at the National Bank and reserves of the National Fund, grew 69%.
ICC to develop metro in Almaty with Kazak backing
Intercontinental Commerce Corporation (ICC) of the United States is ready to start building a metro in Almaty on condition that Kazakstan co-finance the project, Almaty Mayor Viktor Khrapunov, said, New Europe reported recently.
"To avoid being left stranded with the problems that might arise in constructing a metro and monorail in Almaty, the American company requests co-financing (from the Kazak government) of US$160m of the total US$1.2bn over four years," he said. The Kazak government is currently considering the ICC proposal, he said. ICC has also proposed Kazakstan provide it with a concession on the metro for 25 years, Khrapunov said. The metro is expected to have 47km of over-ground monorail and 8.4km of underground metro. Kazakstan and ICC have been discussing the metro construction since June 2003.
Astana and Beijing sign rail transport contract
An agreement was signed recently between China and Kazakstan to strengthen collaboration in railway transport. Chinese Minister of Railways, Liu Zhijun, and Kazak Minister of Transport and Communication, Kazhmurat Nagmanov, signed the agreement at the Great Hall of the People in Beijing on May 17th, chinaview.cn website reported.
Chinese President, Hu Jintao, and visiting Kazak President, Nazarbayev, served as witnesses during the signing ceremony. According to the agreement, the Kazak side will help the Chinese Ministry of Railways set up a branch office in Beijing. Both countries will further cooperate in the railway transport sector in the future, based on the principle of equality and mutual benefit and in line with the laws of each country and the international treaties joined by the two countries.
There will also be developments in direct international passenger and freight transport and trans-border transport. Container train transport linking the two countries and at the border will also be promoted. Other benefits include strengthening research and regulations on the development of railway stations at the border, further improve transport services and freight price system of the trans-border passenger and freight transport, and conduct more cooperation on science and technology in the railway transport sector. With the joint efforts of both governments and both railway sectors, the total freight transported each year through the Alataw Pass increased 12 times from 570,000 tonnes in 1993 to 7.52m tonnes in 2003.
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