News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan
April 14, 2005                                   Vol. 5, No. 15

In this issue:

Kazakhstan to Provide Food, Technical Assistance to Kyrgyzstan
New Election Chief Pledges Fairness and Transparency
American Top Sergeant Visits Kazakhstan Counterpart
Government Proposes 12 Percent Budget Deficit Increase
Kazakhstan Attracts US$8.4 Billion in Foreign Investment in 2004
EDC Agrees on CDN$30.5 Million Credit for Exports to Kazakhstan

Say it in Kazakh:
Here are some colors:
blue --- kok; yellow --- sary; white --- aq; black --- qara; red ---qyzyl; green --- zhasyl

Kazakhstan to Provide Food, Technical Assistance to Kyrgyzstan

President Nursultan Nazarbayev has instructed the Government to quickly provide food and technical assistance to Kyrgyzstan and be ready to open credit lines for the neighboring country guaranteed by its government.

The President was responding to a request from acting President of Kyrgyzstan, Kurmanbek Bakiyev. In a phone conversation between the two on April 13, Mr. Bakiyev said Kyrgyzstan’s economic situation worsened because of the upheavals in March which cost his country an estimated US$100 million plus. He added Kyrgyzstan was in urgent need of diesel fuel for spring planting campaign, means to deal with natural disasters and medicines.

New Election Chief Pledges Fairness and Transparency

Onalsyn Zhumabekov, the former Minister of Justice and new Chair of the Central Election Commission has pledged to ensure elections in Kazakhstan are held fairly and transparently during his confirmation hearings in the Majilis on April 13.

Mr. Zhumabekov said he “will spare no efforts to make sure elections at all levels are conducted with maximum openness, transparency, are fair, and our laws are observed.” He added “coordinated actions of the entire system of election bodies, from Central Election Commission down to all district election commissions, are the key” to achieving this goal.

Kazakhstan’s parliament approved Mr. Zhumabekov, 57, as the new head of the Central Election Commission, following the retirement of Ms. Zagipa Baliyeva, on the same day.

Ms. Baliyeva, 46, served two five-year terms as election chief. President Nursultan Nazarbayev proposed to the Majilis replacing her with the Minister. The Majilis voted 56 to nothing to approve Mr. Zhumabekov in his new post. The deputies also reappointed the remaining six commission members.

The first priority on the new election chief’s agenda will be preparations for the trial elections of local akims (mayors) of districts due to take place this summer.

On April 14, Ms. Baliyeva was appointed the Minister of Justice, bringing to four the number of women holding Cabinet-level posts in Astana.

American Top Sergeant Visits Kazakhstan Counterpart

Chief Master Sergeant Curtis Brownhill, U.S. Central Command Chief Master Sergeant, arrived in Kazakhstan April 13 to exchange experiences with his counterpart, the newly appointed Sergeant Major of the Kazakh Armed Forces as the republic’s military moves ahead with the introduction of professional sergeants.

According to Kazakhstan’s Ministry of Defense, the U.S. delegation is expected to visit the Cadet Corps in Schuchinsk, where professional sergeants are trained, and will also visit Kazbat, Kazakshtan’s peacekeeping battalion stationed in Kapshagai. Kazbat has been active with coalition forces in Iraq since 2003.

Government Proposes 12 Percent Budget Deficit Increase

The Government of Kazakhstan has introduced an amended budget bill in the Parliament on April 14 seeking to increase the current year’s deficit by 12 percent providing enough resources to finance wage and pension increases proposed by the President in his annual state of the nation address in February.

Bakhyt Sultanov, Deputy Minister of Economy and Budget Planning, presented the bill in Parliament saying both revenues and expenditures would go up. Revenues will increase by 108.1 billion tenge to 1,249 billion tenge (1 dollar=130 tenge), or 19% of GDP. Expenditures would increase by 120.4 billion tenge to 1,362.7 billion tenge.

Even with the expected increase in budget deficit of 113.7 billion tenge, the deficit will reach the low level of 1.7 percent of GDP which is expected to reach 6,580 billion tenge.

According to Government estimates, annual inflation is projected to be in the range of five to seven percent, and the average exchange rate for tenge versus US dollar will float at 130 tenge per dollar. The Government calculations were made based on an estimated annual price for Brent crude oil of 42 dollars per barrel.

Kenzhegali Sagadiyev, Chairman of the Majilis Finance and Budget Committee, said the bill “will likely be reviewed by the Majilis by April 27, and by May 13 it can go to the Senate.”

Kazakhstan Attracts US$8.4 Billion in Foreign Investment in 2004

According to the National Bank of Kazakhstan, the country’s economy received foreign direct investments of US$8.4 billion in 2004, up 83 percent compared to 2003.

The United States remains the biggest investor by far with US$3.1 billion. This figure represents an increase of 86 percent year on year.

The oil and gas sector still attracts the largest amount of foreign investment. Of the total amount of US$8.4 billion, US$5.4 billion or 64 percent went into mining and extraction industries. Almost all, US$5.3 billion, went into oil and gas.  Oil and gas investment was up 52 percent over 2003.

Though oil and gas remain the most attractive industries in Kazakhstan, the Government has introduced measures to diversify the country’s economy and boost small and medium businesses.

In 2004, foreign investments in the consumer goods industry grew by 63 percent, reaching US$268 million, and investments in transport and communications related industries rose to US$81.9 million, an increase of eight percent compared to 2003.

Growth in the non-oil sector is mostly due to the government’s economic development program known as “Strategy of Industrial and Innovation Development for 2003-2015”. This program is designed to help create and develop at least five or seven clusters in such sectors as tourism, oil and gas machinery building, foodstuffs and textiles manufacturing, transports and logistics, metallurgy and construction materials manufacturing.

EDC Agrees on CDN$30.5 Million Credit for Exports to Kazakhstan

Export Development Canada (EDC), an export promotion Crown corporation, has signed a deal to establish a CDN$30.5 million line of credit to finance exports of Canadian goods and services to Kazakhstan.

As reported by Canadian Press, EDC announced the financing arrangement with Bank TuranAlem (BTA) of Kazakhstan on Friday April 9.

“We value our partnerships in Kazakhstan, and the signing of this new line of credit shows the significance of BTA as a primary counterpart for EDC,” Rod Lever, EDC Regional Manager for Russia and Central Asia, said in a press release. He added “this new multi-sector line of credit with BTA helps to meet the need for buyer financing in Kazakhstan so that more Canadian companies can conclude transactions with buyers in this rapidly developing market.”

Kazakhstan is keen to buy Canadian agricultural equipment and is EDC’s priority market in Central Asia. Emphasis is on farming, energy and mining sectors.

The volume of Canadian export sales helped by EDC in Kazakhstan more than doubled from $38.47 million in 2003 to $94 million, with 42 Canadian exporters, in 2004.

Previously, EDC and BTA have co-operated on short-term insurance transactions where payment is due in less than one year. EDC provides trade finance and risk management services to Canadian exporters and investors in about 200 global markets.

Things to Watch:


For back issues, more news and information visit us at www.kazakhembus.com
News Bulletin of the Embassy of the Republic of Kazakhstan to the USA and Canada
(Compiled from own sources and agency reports)
Contact person: Roman Vassilenko
1401 16th Street NW, Washington DC 20036
Tel.: 202 232 5488, ext. 104, Fax: 202 232 5845

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