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KAZAKSTAN


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 29,749 24,205 22,400 60
         
GNI per capita
 US $ 1,780 1,510 1,350 119
Ranking is given out of 208 nations - (data from the World Bank)

Books on Kazakstan

REPUBLICAN REFERENCE

Area (sq.km) 
2,717,300 

Population
15,143,704

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




Update No: 310 - (26/10/06)

Mr Nice Guy in the Central Asian plateau
George W. Bush, and his vice-president, Dick Cheney, say lots of nice things about President Nursultan Nazarbayev, president of Kazakstan. It is increasingly evident that his country has an awful lot of oil; and both greatly respect that. 
On September 29th, Bush portrayed the leader of Kazakstan, who came to Washington for a state luncheon, as a "steadfast partner in the international war on terrorism." Nazarbayev leapt onto the post-9:11, anti-terrorist bandwagon like a tiger, with marvellous, indeed, munificent results.
He could not have got his timing better. The global prices of oil were soaring; and then they soared still further. The economy is booming. It has the highest rates of GDP growth in the world - after Azerbaijan- around 10% per annum.
According to Bush and US state-controlled media, he is leading a transition to democracy and liberalizing his nation's economy. He's been lauded for privatising old Soviet-era state industries and inviting foreign companies to invest in the exploitation of what may be the world's largest untapped oil reserves. 
Kazakstan, Bush says, "is now a free nation." It depends on what your definition of "free" is, of course. 

Nazarbayev the pragmatist
There are several things to be said about Nazerbayev in his favour. He is sane, not a fact to be taken for granted about Central Asian despots. He gave up nuclear weapons in 1994, a very intelligent thing to do. After all whom could he have possibly used them against?
This decision is rebounding to his credit in the wake of the birth of the North Korean nuclear bomb. He is regarded as the one Central Asian despot with whom one can do business, indeed in every sense. This is profoundly true.
Considering that his Central Asian neighbours are ruled by megalomaniacal despots (Turkmenistan) and mass murderers (Uzbekistan), or are disintegrating into anarchy and civil strife (Kyrgyzstan and Tajikistan), President Nazarbayev's regime appears relatively benign.
But he's merely the best of a bad lot, perhaps inevitably so in Central Asia.

The other side needs to be stated
Scratch the gloss of the gleaming energy-boom-funded skyscrapers rising over the Kazak metropolises of Almaty and Astana, and it becomes clear that the United States is giving the red-carpet, 21-gun salute treatment to another right-wing dictator of the variety propped up during the Cold War. Back then, selling out democratic values undermined US credibility on human rights and provoked anti-Americanism. It is arguable that the same policy is sowing the seeds of the next 9/11. 
Nazarbayev, the Communist Party boss of the Kazak S.S.R. at the time of the 1991 collapse of the Soviet Union, has been Kazakstan's strongman since independence. He points to the 91 percent of the vote he received in the most recent presidential election as proof of his popularity, but international observers universally condemned the December 2005 vote as tainted by fraud and violence. 

Counting the corpses of the opposition
It would have been difficult to lose an election like this. Galimzhan Zhakianov, leader of the main opposition Democratic Choice of Kazakstan (DVK) party, had been rotting in prison since 2002. Finally, early in 2005, Nazarbayev had the DVK banned entirely for "inciting social tension" and "extremism."
A few weeks after promising to release evidence that Nazarbayev and his family were involved in oil-related corruption, Zamanbek Nurkadilov, a former Nazarbayev cabinet minister who joined the nation's sole remaining viable opposition party, For a Fair Kazakstan (NAZ), was found dead at his home in Almaty, a pistol lying at his side. Nurkadilov had been shot three times--twice in the heart and once in the head. Kazak authorities ruled his death a suicide. Well, well.
Even after he won another seven-year term, misfortune continued to befall Kazaks who spoke out against Nazarbayev. On February 13th 2006, reported Radio Free Europe, the bodies of Nurkadilov's replacement as NAZ leader and four aides "were discovered on a desolate stretch of road outside Almaty...their bodies riddled with bullets and their hands bound behind their backs." Altynbek Sarsenbayev had recently announced his own intention to release proof of Nazarbayev and his cronies' misuse of oil revenues. 
The government blamed five rogue officers of its KNB (ex-KGB) security service for the contract killing. No one believes the official story. 
The Kazak regime, which presents itself as the kinder, gentler face of Central Asian autocracy, has ruthlessly crushed attempts to curtail freedom of expression, a crucial building block of an open society. Journalists have been threatened, beaten and jailed. After the leading independent newspaper Respublika published an interview with a Russian politician that criticized Nazarbayev in May 2005, it was ordered closed. A printing house that agreed to publish a successor newspaper, Set-kz, was shuttered as well. The state Internet monopoly, controlled by one of Nazarbayev's daughters, blocks access to opposition and independent Web sites. 
Since a presidential proclamation signed by President Bush in 2004 bans visits by corrupt foreign officials to the United States, Nazarbayev--embroiled in a "Kazakgate" influence peddling scandal scheduled for federal court later this fall--was legally ineligible to come to Washington last week. Consultant and lobbyist James Giffen will soon face charges that he funnelled more than US$78 million in bribes from his energy company clients, most of it to Nazarbayev and his former prime minister. According to the Justice Department, Giffen also gave Nazarbayev's wife fur coats and a snowmobile, and even paid Nazarbayev's daughter's tuition at George Washington University. U.S. officials call Kazakgate one of the largest violations of the Foreign Corrupt Practices Act in history. 
According to a reliable source, high-ranking White House officials are pressuring the Justice Department to drop the case. 

The name of the game
Kazakstan's geopolitical importance is obvious. It is the largest producer of Caspian Sea oil, borders Russia, China and the other Central Asian states, and has granted the US Air Force landing rights at Almaty's airport for operations in Afghanistan. Moreover, it's a rare "friendly" country in the Muslim world: Kazakstan is the only Central Asian republic to have sent troops to Iraq. 
In all the ways that matter, however, Nazarbayev presides over a police state that is indistinguishable from his more notorious neighbours, such as Islam Karimov, president of Uzbekistan. Karimov ordered and personally supervised the massacre of at least 700 demonstrators in the Uzbek city of Andijan. The May 13, 2005 incident, known in the region as "Uzbekistan's Tiananmen Square," prompted criticism from the Bush Administration and thousands of anti-Karimov refugees to seek political asylum in neighbouring republics. 
Kazakstan recently deported eight Uzbek refugees granted official asylum-seeker status by the United Nations to Uzbekistan, whose military police are infamous for boiling political prisoners to death. 
Nazarbayev appeared at a joint press conference with Karimov in March 2006, nearly a year after the Andijan massacre. 
"Of course, we regret everything happened [at Andijan]," said Nazarbayev. "However, it should be said that another end [i.e., not killing the demonstrators] would have destabilized now the whole region." 
Destabilisation might have given Kazakstan's 15 million citizens, 99 per cent of whom live in poverty while Nazarbayev steals the oil and gas beneath their feet, a chance to liberate themselves. Sadly and once again, the US government is siding with a dictator over the people. 

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ENERGY

North Caspian operator estimates Phase-1 investment 


The initial stage of development of the North Caspian project, which involves the development of the Kashagan field and a number of other oil structures in the Kazak sector of the Caspian Sea, will involve total investment of US$14-15 billion. "The figure that was announced to the public concerns the first phase. This figure is US$14 billion - US$15 billion," Eni CEO, Paolo Scaroni, said at a briefing on October 10th after a meeting with Kazak President, Nursultan Nazarbayev. Eni is the operator of the North Caspian project, New Europe reported.
Scaroni was unable to say what the total cost of the project would be. He said that this would be known after a new schedule and budget for the project are agreed by Agip KCO shareholders. The Eni chief said that the revised schedule and budget would be submitted to consortium participants by the end of this year. Agip KCO Managing Director, Umberto Carrara, said earlier that commercial oil production at the Kashagan field in the Kazak sector of the Caspian Sea would not begin before 2009. However, according to the production sharing agreement for the project, commercial development should have started in 2005. Scaroni said at the briefing that the delay in the start of commercial development of the Kashagan field is due to additional steps to protect the environment and workers. He said that for the company the main thing is to protect workers, and their health, particularly from hydrogen sulphide. As a result, the company is making certain changes in the construction of its offshore infrastructure, he said. He said that of course this is resulting in certain delays and in additional costs. However, he said that their impact would be limited and would not influence the economics of the entire project.

ConocoPhillips, Shell eye Nursultan project 

Shell and ConocoPhillips are ready to become participants in the Nursultan (N) project in the Kazak sector of the Caspian, KazMunaiGaz First Vice president, Zhaksybek Kulekeev, said at the KIOGE-2006 oil and gas conference in Almaty. "We currently have strategic partners with which we are involved in dialogue. For the N project, at the finish line are Shell and ConocoPhillips, and one of these could become our partner. This will be decided in the near future," he said, New Europe reported.
Meanwhile, KazMunaiGaz Managing Director, Zgakyp Marabaev, said that a production sharing agreement for this project would be signed by the end of this year.
"It has been decided to provide the development rights under a PSA. A contract should be signed by the end of 2006," he said.
"We have held a formal tender, which has highlighted two companies and we should now carry out a final appraisal of which of the partners it will be more profitable for us to progress with. We will announce this soon," he said. He said that there are several possible options for this project. In particular, he did not rule out that KazMunaiGaz might have two partners.
The Nursultan section is in the Kazak sector of the Caspian Sea and covers an area of 7,625 square kilometres. Forecast geological reserves at the section amount to 637 million tonnes of fuel equivalent. According to current legislation, Kazakstan's share in new oil production projects should not be less than 50 per cent.

Kazatomprom, CNNC look into joint projects 

Kazakstan's Kazatomprom nuclear company and the China National Nuclear Corporation (CNNC) are studying possible schemes for implementing joint projects. "Our Chinese partners asked us to put off the decision on setting up a joint venture until a program of advancing nuclear power engineering had been approved. This has now happened and the formation of the joint venture is being discussed," Kazatomprom Vice President, Sergei Yashin, said at an international conference on pressing problems of the uranium industry in Almaty recently, New Europe reported.
The Kharasan field in the Kyzylorda region was named as a possible raw materials base for the venture. The formation of the joint venture is only being discussed, and the pattern of cooperation may be reviewed. "So far it is impossible to say definitely that it will be set up. Priorities may change. It is possible that we will opt for long-term sales," he said. 

Extension of Altai pipeline discussed 

Russian gas giant Gazprom considers the previously planned route for the Altai gas pipeline through Khanty-Mansiisk autonomous district, Tomsk region and Altai to China to be the most effective, Bogdan Budzulyak, head of the company's gas transportation and storage department, said. He said some deputies are proposing to extend the Altai gas pipeline through Kazakstan, but the company believes its route to be more effective, New Europe reported.
The Gazprom representative said running the pipeline through a transit country would increase the costs of the project. He said that the exact cost of the pipeline has not yet been calculated, but that it would amount to between US$ four billion to US$ five billion, depending on the geological conditions on the route.
In March, Russia announced plans to build two gas pipelines to China from Siberia to export 60-80 billion cubic metres of gas per year.
The route of a pipeline from Western Siberia to China is to be agreed by the end of this year, it is to be designed in 2007 and construction is set to start in 2008. 

Central Asia declares itself a nuclear weapons free zone 

The five countries of Central Asia, Kazakstan, Kyrgyzstan, Uzbekistan, Tajikistan and Turkmenistan have signed a treaty creating a nuclear weapons free zone in their lands. Semipalatinsk, the former Soviet nuclear test site in eastern Kazakstan, was the scene for the treaty's historic signing on September 8th, New Europe reported.
Under the treaty, the five countries have committed themselves to ban the production, acquisition and deployment of nuclear weapons and their components. The treaty does not prohibit the use of nuclear energy for peaceful purposes. "This is our contribution to global security," Kazakstan' Foreign Minister, Kasymzhomart Tokayev, said. "It will become an impetus for the coordinated efforts of the world community in non-proliferation and prevention of the acquisition of weapons of mass destruction by terrorists. It will undoubtedly become an important step in the development of peaceful nuclear energy."

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FOREIGN COOPERATION

India committed to expand its presence 

Textiles, information technologies and jewellery are the three most promising directions for development of relationships between India and Kazakstan, the ambassador of India to Kazakstan, Ashok Kumar Mukerjee, said, New Europe reported.
"Kazakstan is not oil fields only. And I am pleased that over the last 18 months the relationship between our countries has become more active not only in the oil industry but also in the other sectors of economy," the Indian ambassador said. 
He noted that earlier India's interests in Kazakstan were limited to the oil and gas sector. The Indian National Company has been negotiating with the Kazak government for participation in the development of a number of oil fields in the Caspian Sea area. As is known, the National Company participated in a tender for purchase of shares of Canadian PetroKazakstan that owned oil fields at the south of Kazakstan and a refinery in Shymkent. But it lost the tender to the Chinese National Company.
The Indian ambassador believes that textiles, information technologies, and jewellery are the three most promising directions for development of relationships between India and Kazakstan.
"India can share its experience in the field of information technologies. In particular, we can share our experience in application of information technologies in education and healthcare," he said.
"India has already implemented a project of so-called tele-medicine in five African countries. This project allows a patient in, say, Kenya to receive an advice from a doctor who is in Ethiopia," - the ambassador explained.
He also noted that Kazakstan could benefit from India's experience in introducing e-government. "Both India and Kazakstan have large territories. We have already been using for years the electronic connection between the central government and the local bodies in different states of the country. And we could share our experience in this field," he said.
There has already been progress in this direction: at the end of September the two largest Indian IT companies will open their branches in Almaty.
In trade, jewellery appears to be the most promising direction. According to the Indian ambassador, India receives up to US$16 billion annually from the sale of jewellery. And one more thing: 10 to 11 diamonds out of 12 in the world are worked in India.
"We are considering opening a joint venture to make and market jewellery (and Kazakstan has the minerals for that) for export to other countries," the ambassador noted. "Especially since the northern Indian design is similar to that of Central Asia," he added.
Another direction is textiles. India is the second largest producer of textile after China. "In the south of Kazakstan, in Shymkent, where a cotton cluster is being formed, eight to nine Indian companies plan to invest their money and expertise in the industry," the ambassador said.
As for India's interests in the north of Kazakstan, it can cooperate with the national company Kazakstan Engineering to start a joint production of spare parts. "India has 10 years of experience of manufacturing spare parts for Mercedes and Ford," the ambassador noted. 
Tourism is another area for cooperation. There are direct flights between Almaty and Delhi.

Nazarbayev, Putin set priorities in bilateral cooperation 

Russia will welcome any investments from Kazakstan, Russian President, Vladimir Putin, said. Asked at a press conference in Uralsk on October 3rd why Russian investments in Kazakstan kept growing in the 1990s and are now on the decline, Putin replied, "Money always looks for opportunities to be used better, and we will welcome any investments from Kazakstan," Interfax News Agency reported
Kazak President, Nursultan Nazarbayev, said in reply to the same question, "Some money has appeared." Having saturated the needs of the Kazak market, local investors are looking for other markets, he said. "According to my data, Kazak companies have invested some eight billion Euro in the Russian economy," Nazarbayev said at a joint press conference with Putin after the forum of border regions on October 3rd in Uralsk, the administrative centre of Western Kazakstan, Interfax News Agency reported.
The Kazak president said that Russia's LUKoil alone has invested 2.4 billion Euro in the Kazak economy. Putin said that trade between the two countries was nearing 12 billion Euro a year. "We are working on ennobling the structure of the trade turnover," Putin said.
Russian-Kazak trade will reach 11 billion Euro this year, Nazarbayev said. Earlier forecasts indicated a 30 percent rise in the two countries' trade to nine billion Euro, Nazarbayev said. Border districts account for 70 percent of bilateral trade, Putin said. At the same time, as the structure has not yet changed significantly, the share of the processing industry has considerably grown in absolute terms, Putin said. 
Russian Industry and Energy Minister, Viktor Khristenko, believes that the intergovernmental agreement signed in Uralsk with Kazakstan on the creation of a joint venture on the basis of the Orenburg gas processing plant may be ratified this year.
"Everything related to prices and terms is a matter of contracts between companies. I know that such a package is under the works and there is quite enough time until the end of the year to complete the package and ratify the agreement," he told Interfax in Uralsk after the signing ceremony.
Meanwhile, Vnesheconombank (VEB) Chairman, Vladimir Dmitriyev, and Kazak Development Bank (KDB) Board Chairman, Kayrat Kelimbetov, signed an Action Program between the two banks meant to support inter-regional cooperation, trade and economic links between the border regions of Russia and Kazakstan. The agreement was signed in the presence of Putin and Nazarbayev in Uralsk. The objective of the program is to stimulate economic and investment cooperation between companies located in the border areas of Russia and Kazakstan, especially joint projects with state support at the national or regional level, a VEB press release says.
According to the document, the parties intend to cooperate in the financing of investment projects, support commodity producers and extend consulting services to enterprises and power structures in Russian regions and in Kazakstan. Priority will be given to investment projects in such economic sectors as power engineering, agriculture, metallurgy, the building industry, the development of transports, forest industry, advanced technologies, etc., the press release says. During the talks, Putin said, "The fuel and energy sector, nuclear power, the agro-industrial complex and space research are the priorities in Russian-Kazak cooperation."
"Relations between our countries, as well as regional and international issues, were on the agenda. Among the priorities we singled out the fuel and energy sector, nuclear power, agro-industry, transport infrastructure and space research," he said. "It is obvious that joint activity in these spheres will not only bring substantial financial benefits, but also raise the competitiveness of Russian and Kazak companies in world markets," he said.
Special attention was also paid to integration, including CIS reforms and the development of cooperation within the Eurasian Economic Community and the Common Economic Space, he said. "Russia and Kazakstan are the locomotives of many integration processes in the former Soviet space," Putin said. The boom in foreign borrowing by the private sector in Kazakstan and Russia could create big risks for the economies of the two countries, President of the Economic Analysis Institute and former Russian Presidential Adviser, Andrei Illarionov, told Interfax.

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