Books on Kazakstan
and many others
Update No: 308 - (29/08/06)
Phenomenal growth figures are still the order of the day
Economic success is the background to understanding Kazak politics. GDP has been
growing at an incredible 10 per cent per annum in this decade, even if this
phenomenal progress is dipping a bit recently. Kazakstan's GDP is projected to
have grown by 7.7 per cent in the first half of this year, the first deputy
chief of the country's national statistics agency, Yury Shokamanov, told
Interfax News Agnecy. Shokamanov believed that the Kazak government will
hopefully be able to keep average annual inflation at 7 percent; but consumer
prices might end the year up rising by 8 percent.
The Washington-based International Republican Institute has commissioned a poll
that found, to no one's surprise, that despite gripes about corruption, the
citizens of this booming former Soviet republic were optimistic about the future
and supported President Nursultan Nazarbayev. He was re-elected by a whopping
majority last year, whose exact extent is not to be taken too seriously in a
By inviting Western oil companies to invest billions in huge but hard-to-reach
oil deposits that the Soviets had ignored, Nazarbayev, a former steel engineer
who has ruled Kazakstan for 15 years, has created one of the most vibrant
economies in the former Soviet Union. Given that the population is only 16
million and that the country, the size of Western Europe, enjoys 60% of the
FSU's mineral resources, the prospects could hardly be better.
Like Putin's Russia, Kazakstan is reaping vast revenues from the world's highest
as yet oil prices, over US$75 per barrel in early August, 2006, which can be
used to renovate the decrepit infrastructure and despoiled environment inherited
from communist days.
Both countries are embarking on a massive programme of public works, which open
up huge opportunities for enterprising private firms abroad.
Transport strategy until 2015 unfolded
As part of this, Nazarbayev has approved a Transport Strategy of his
republic until 2015.
The government has been ordered to work out and approve a plan of events on the
strategy's implementation. The government has to inform the President of
Kazakstan on the strategy implementation each year by January 30th.
The strategy was worked out by the Ministry of Transport and Communications on
orders from the head of state. The strategy includes construction of 50 thousand
km of roads, around 2 thousand km of railways, to develop Aktau and Kuryk ports,
and to build up a fleet of air vessels.
New opposition party consolidates in Kazakstan
Kazakstan's opposition Alga! (Forward!) party held its second congress on
July 23rd. It is still in existence this year, the great thing in Central Asia
for any oppositionist cause.
Alga! will have the same objectives as the Democratic Choice of Kazakstan, an
opposition party banned by court order in 2004 for an allegedly
anti-constitutional statement, Asylbek Kozhakhmetov, head of the Alga!
organising committee and one of the former leaders of the Democratic Choice of
Kazakstan, told the congress, held in Almaty.
Kozhakhmetov said Alga! planned to become an active participant in the Kazak
opposition and "struggle for the democratisation of Kazakstan." That
is they want the next elections to be genuine ones, a tall order in Central
Experts say Kazakstan has all the resources for tourism
Kazakstan's Chairman of the Committee on Regulation of Commerce and Tourism
under the Ministry of Industry and Trade Kairbek Uskenbayev spoke at a recent
meeting about the plans of the committee on the creation and development of the
tourism sector. According to him, Kazakstan possesses everything, all the
necessary resources to set up and promote tourism.
The committee has worked out a plan of the profitable promotion of tourism,
which suggests removal of administrative barriers in the sphere of visa and
registration procedures for foreign citizens. The expert council, set up under
the ministry of industry and trade, will be regularly evaluating the problems of
tourism in Kazakstan. In this connection there has been concerted a joint decree
of the ministry of internal affairs, national security committee and the
ministry of foreign affairs of Kazakstan.
Belarus could assist Kazakstan in the development of petro-chemistry through
Kazakstan has an unlikely new courtier in Belarus, which claims that it
could assist Kazakstan in the development of petro-chemistry through know-how in
this sphere, says the Trend special correspondent in Astana, citing the
Extraordinary and Plenipotentiary Ambassador of Belarus to Kazakstan, Larisa
This may be nonsense; or it might just not be:-
"There is a well-developed petro-chemical industry in Belarus. The
country's income from crude refinery amounts to over US$1bn. 30% of the GDP is
gained from the petro-chemistry. Belarus which has unique designs could sell its
know-how," the diplomat claimed.
Moody's may upgrade insurer Kecic
Moody's Investors Service has placed the insurance financial strength rating of
the State Insurance Corporation for the Insurance of Export Credit and
Investment of Kazakstan (Kecic), currently Ba1, on review for possible upgrade,
Moody's said in a press release, New Europe reported.
Headquartered in Almaty, Kazakstan, Kecic was founded in August 2003 and started
operations in February 2004. It is 100 percent owned by the Republic of
Kazakstan and is mandated to be the primary provider of export credit insurance
in the country, both commercial and political. In addition, Kecic is writing
inward reinsurance business in the Kazak market. A number of recent developments
have put upward pressure on Kecic's rating, in Moody's view. On June 9, 2006,
the foreign currency bond rating of the government of Kazakstan was upgraded by
Moody's from Baa3 to Baa2, thus improving the quality of both Kecic's asset base
and support by the owner.
Turanalem bank raises 800m syndicated loan
Kazakstan's TuranAlem Bank (BTA) has appointed Bank of Tokyo-Mitsubishi UFJ,
Commerzbank and Standard Chartered Bank as the organisers of an 800 million Euro
syndicated loan, BTA said in a release, New Europe reported.
TuranAlem Finance BV, an SPV company for BTA, will serve as the borrower. The
loan will be divided into two tranches of 18 and 36 months with an interest rate
of Libor + 0.35 per cent and Libor + 0.65 per cent, respectively. The funds are
being acquired for general corporate purposes, including the refinancing of a
777 million Euro syndicated loan the bank received in September 2005. TuranAlem
Bank, the third largest bank in Kazakstan, ranked eighth by assets among CIS
banks in 2005, according to the Interfax-1000 ranking of CIS banks. BTA
shareholders are Raiffeisen Zentralbank Oesterreich AG of Austria, the European
Bank for Reconstruction and Development, the International Financial Corporation
and FMO of the Netherlands, as well as a number of entities and individuals and
Kazaks strengthen ties with European Union
Never before has Kazakstan seen such a vast range of international opportunities
as this year in Europe and worldwide. Astana is bidding to take the 2009-OSCE
rotating presidency, hosting its second success forum - dialogue of
civilisations, President Nursultan Nazarbayev participating, as a single CIS
invitee, in the G8 meeting in St. Petersburg, and above all these launching its
first telecommunication satellite into orbit, as well as esculating relations
with its trading partner number one - the European Union.
Recently the European Union was holding its Eight Cooperation Council meeting
with Kazakstan, New Europe reported.
The meeting was chaired by Akhmetzhan Essimov, Minister of Agriculture of the
Republic of Kazakstan, former Ambassador to the EU, the only participant of all
previous EU-Kazakstan Co-operation Council meetings. The Kazak heavy artillery
delegation was represented by 10 profile vice ministers. The delegation of the
European Union was led by Pertti Torstila, Secretary of State at the Ministry of
Foreign Affairs of Finland, Benita Ferrero-Waldner, Commissioner for Foreign
Affairs, Hugues Mingarelli, Director of the European Commission for East Europe,
Caucasus, and Central Asia. The incoming German Presidency was represented by
Ulrich Brandenburg, Deputy Political Director.
The Cooperation Council reaffirmed the desire to see EU-Kazakstan relations
continue to strengthen politically, economically and commercially, especially in
the context of the Partnership and Cooperation Agreement between the EU and
Kazakstan. Alongside, there is a strong desire to go beyond a standard
cooperation and look ways for strategic partnership.
"We regard Kazakstan as an extremely important partner. The European Union
is resolute in its wish to develop the relationship based on common values, such
as respect for the rule of law, multilateral democracy, human rights, and
freedom of media," Mingarelli said. The Cooperation Council discussed
recent developments in political process in Kazakstan in light of its bid for
the 2009-OSCE rotating chairmanship, as well as election legislation, activities
of political parties, mass media and freedom of speech. The core issues for
serious discussion became democracy and freedom. The Council took note of the
EU's intention to reach a decision on supporting Kazakstan's candidacy by the
end of this year. In this context, Mingarelli admitted: "We have been able
to acknowledge the success of Kazakstan in all these areas." In particular,
"there were improvements in the 2005 presidential election, the authorities
have also made efforts to strengthen the court system." At the same time,
Mingarelli noted that "as long as our relationship is constructed on the
basis of sincerity, the sides managed to define areas for further improvement.
We consider it necessary to carry out consolidated work on media, all opposition
members have to have equal opportunities," he stressed.
The Cooperation Council underlined the continued engagement of Kazakstan to
enhance regional cooperation and integration initiatives, as well as increasing
the volume of Kazak investment in the regional infrastructure projects, thus
welcoming its crucial regional role, which benefits conflict prevention,
sustainable economic development and cutting poverty.
The head of the EU delegation, Torstila of Finland, welcomed the forthcoming
visits of Nazarbayev and Foreign Minister, Kassymzhomart Tokaev, to Brussels at
the end this year. He expressed confidence that the forthcoming meetings in
Brussels will serve as an impulse for the further deepening of the EU-Kazakstan
relations. Torstila in particular reconfirmed that Kazakstan is the strategic
partner of the European Union in Central Asia, and the existing Partnership
Cooperation Agreement is the major tool of the EU-Kazak collaboration, which is
based on the high dynamics of trade and economic ties, rapidly growing economic
and geopolitic interests of the European countries, joint actions to address
global modern challenges, namely to maintain energy security and effective
dialogue of civilisations.
Ferrero-Waldner underlined the presence of both sides with common political and
economic interests, the progress Kazakstan had made in the field of firmly
improving democracy, establishment of the State Commission on designing concrete
definitions for the programme for democratic reforms, welcomed the planned
elections of representatives of local authorities, in Kazakstan in the autumn of
this year. The continued ban on the implementation of the death penalty, etc.
Ferrero-Waldner confirmed her intention to visit Kazakstan in October-November
The Cooperation Council discussed the growing problem of illegal immigration to
Kazakstan, and recalled the EU's offer of assistance to Kazakstan in border
management issues (BOMCA.) It welcomed the ratification by Kazakstan in November
2005 of the Convention on the fight against human trafficking and Prostitution
Exploitation by Third Parties, and the establishment of a special department at
the Ministry of Interior to deal with these issues. The Cooperation Council
welcomed Kazakstan's efforts to improve its anti-money laundering legislation,
with assistance coming from the EU expertise.
The Kazak delegation noted the sharp rise of a mutual trade turnover up to
US$15.3 billion in 2005, thus making the EU the number one Kazak foreign trade
partner ahead of Russia and China, as well as emphasising the booming energy
dialogue including those agreements reached during the visit in May of the
Energy Commissioner to Astana, and the Kazak oil minister pay-back visit to
Brussels last June. Further, Kazak Minister Essimov informed the EU side of
steady economic growth for a sixth consecutive year, social and economic reforms
undertaken in a resolute and effective manner, which has already positively
affected the well-being of citizens and the competitiveness of the economy, and
presented the brand new programme of modernisation of the country put forward by
President Nazarbayev - the strategy to make Kazakstan among top-50 world's
developed and competitive nations.
The Cooperation Council welcomed the continuing strong economic performance of
Kazakstan. It underlined that enhancing the transport of Kazakstan's energy
resources to the EU is a common priority for both sides.
It noted progress in co-operation in a large range of areas, and discussed
further evolution in these fields, which include oil pipeline projects that will
enhance EU security of supply, the diversification of natural gas export routes,
nuclear energy, civil aviation and water resource management. The Council
discussed the possibility of concluding a new bilateral steel agreement, and
Kazakstan's accession to the WTO.
Kazak officials were open for discussion of the most sensitive topics, whether
they concern human rights or economic problems. They said they were ready for
and open to criticism provided it is constructive and well-based. "Our
country is determined to develop new relations with the EU by looking into the
future, in a pragmatic and a staged way based on common values and
interests," noted a statement at the closing press conference following the
Co-operation Council meeting made by the head of the Kazak delegation, Minister
Essimov. The EU-Kazakstan Cooperation Council has held eight meetings since its
foundation in 1999.
Kazakstan sets sights on London to stage floatations
A new wave of companies in Kazakstan are poised to choose London for listing
shares. It is thought that they will raise about £3 billion at the same time,
The Times reported recently.
KazMunaiGaz, the state oil and gas company, is likely to float a subsidiary in
the fourth quarter, giving investors exposure to Kazakstan's huge oil and gas
That deal, lead-managed by CSFB and ABN Amro, could raise up to £1 billion.
"It's a benchmark deal, Kazakstan's version of Rosneft," Jurgen
Rigterink, head of ABN Amro's Kazakstan office, said.
Eurasian Industrial Association, one of Kazakstan's largest holding groups, is
also planning to list in London. Its assets, including Aluminium of Kazakstan
and Kazchrome, account for 5 per cent of national GDP.
Margarita Rudakova, a director of Eurasian Bank, said: "A London listing
will be good for the company, but also good for Kazakstan. It's a reputation
Kazak banks are also lining up to list on the London Stock Exchange (LSE). The
Kazak banking sector is the envy of the region, thanks to liberal reforms pushed
through by Grigori Marchenko, the former governor of the national bank.
Mr Marchenko - now chief executive of Halyk Bank, the country's most profitable
bank, which is preparing to float a minority stake - said: "Some Westerners
might have the wrong idea of Kazakstan - from characters such as Borat, the
comedian, for example - but the image of Kazakstan that Borat portrays has
nothing to do with the real Kazakstan. We've got the most progressive financial
sector in the CIS [Commonwealth of Independent States, the former Soviet
The upcoming IPOs hope to follow the success of Kazak-mys, the Kazak copper
company, which raised £661 million in October in the first full listing from a
post-Soviet Union company, lead-managed by JPMorgan Cazenove. The company's
shares have more than doubled since listing, making the company the 49th biggest
on the FTSE 100.
Oleg Novachuk, Kazakmys's chief financial officer, said: "The market
perception of Kazakstan is better now, thanks to our deal. Future IPOs will be
easier because of it." Mr Novachuk, a British resident, owns 12 per cent of
the company, making him one of the richest people in the UK.
Bond investors are already quite familiar with the country, because Kazak firms,
particularly banks, have raised more than £10 billion on the Eurobond market
over the past three years. Yet local analysts say that investors should tread
carefully. Dosym Satpaev, head of the Risk Assessment Group in Almaty, said:
"Practically all big companies are controlled by the President's family.
It's safe for foreign investors, but only as long as this particular elite stays
Mr Satpaev also noted that "transparency is not Kazakstan's strong
point." Indeed, Kazakmys has already been finding the LSE reporting
requirements difficult. It walked away from KPMG, its previous auditor, when the
accounting firm said that it would take too long to do proper due diligence on
the firm. Ernst & Young said that it could do it more quickly and employed a
team of 156 people to go through the company's books.
Mr Novachuk denied that the company is controlled by the family of President
Nazarbayev, although he admits that the President's brother is on the board.
Turanalem bank acquires 75m loan from ADB
Kazakstan's TuranAlem Bank has acquired a five-year 75 million Euro loan
from the Asian Development Bank (ADB), the Kazak bank's press service said in a
release, New Europe reported.
The funds will be spent on financing small and medium-sized businesses in all
branches of the economy, the release said. Support will primarily be provided to
enterprises working in industry, construction, services and innovative
activities. The money will also be used to finance projects aimed at providing
bank clients with retail products. More specifically, the bank plans to acquire
a leading position in the car loan market, the release says. The loan represents
ADB's second private sector financing without central government guarantee in
Kazakstan. On June 15, ADB signed its first private sector loan to Kazakstan for
a 50 million Euro five-year senior loan to JSC Alliance Bank, which is also
meant to boost financing for SMEs.
MINERAL & METAL PRODUCTION
Gold production down 6.3%
Kazakstan produced 4,406 kg of refined gold in January-June, 6.3 per cent
less than in the same period of last year. Silver production fell 1.3 per cent
to 399,317 kg, the State Statistics Agency said, Interfax News Agency reported.
Kazakstan increased alumina production 2.9 per cent year-on-year to 768,026
tonnes, the agency said. Unprocessed zinc production rose 3.2 per cent to
185,678 tonnes but unprocessed lead output fell 16.1 per cent to 59,436 tonnes
and refined copper production fell 7 per cent to 196,264 tonnes.
Company to restructure telecom in August
In August Kazakstan will hold a competition to choose a foreign consulting
company for the restructuring of national telecom provider Kazaktelecom, Askar
Zhumagaliyev, chairman of the Kazak State Information Technology and
Communications Agency, said in Astana, Interfax News Agency reported.
"We will hold an appropriate competition that will determine a consulting
company, to which we will give the initial figures and the initial points for
restructuring Kazaktelecom," he said. Following an analysis, the consulting
company will say "whether we actually need to restructure Kazaktelecom and
whether this will lead to the creation of a competitive market," he said. n
May Kazak Prime Minister, Daniyal Akhmetov, instructed a number of agencies to
prepare measures in a three-year period to demonopolise the country's
telecommunications market. In particular, he raised the issue of holding a
competition to choose a foreign company for restructuring Kazaktelecom.
Kazaktelecom is the leading telecom operator in Kazakstan.
Kempinski Hotels plans 2 projects
Kempinski Hotels, a founding member of the Global Hotel Alliance, has signed
a cooperation agreement with Okan Holding, one of Kazakstan's leading real
estate development companies, covering Kazakstan, Uzbekistan, Kyrgyzstan and
Turkmenistan, Interfax News Agency reported.
Within Kazakstan, Okan Holding has invested in a number of prestigious
developments, including a national museum, first class bank, concrete
production, food production and trading, business and office complexes as well
as residences and hotels. The aim of Okan Holding is to attract foreign
investment in Kazakstan with the highest standards of construction and promote
the country's infrastructure and environment. According to the cooperation
agreement, Kempinski Hotels and Okan Holding have already signed a management
agreement for a new five star luxury hotel in Almaty, Kazakstan's largest city
with 2.8 million inhabitants scheduled to open in 2008. The Kempinski hotel will
be part of a luxury complex in the exclusive Bostand district.
Kempinski is assigned to manage the modern 230-room hotel and serviced
apartments, which will feature a conference centre with ballroom, business
centre, several restaurants as well as a Spa and fitness centre. The complex
will also house Almaty's largest shopping mall, covering 486,530 square feet,
with space for some 140 upmarket boutiques.
The futuristic complex in the Mikrorayon district features a base podium with
Astana's largest shopping mall as well as a business and convention centre.
An office tower on 16 floors will offer 172,223 square feet of office space. A
further two towers will be managed by Kempinski. Astana International Airport is
served by Lufthansa, Ukrainian Airlines, Turkish Airlines, Pulkovo Airlines and
Air Arabia, with several flights daily to Almaty on Air Astana. Kazakstan is
considered to be the largest state in Central Asia and the world's ninth largest
in terms of land surface. Economic reform and government led privatization have
created a positive growth momentum for the country, which has increased foreign
investment and exports since 2000.