Kazakhstan
News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan
May 14, 2003 Vol. 2, No.7
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In this issue:
Thousands of Miles from Ocean, Sharks Find Home in Astana
Marchenko Says National Fund Transparent, Criticizes New Book For Conceptual "Mistakes"
Disagreements Over Land Code Set Stage For Confidence Vote May 16
Thousands of Miles from Ocean, Sharks Find Home in Astana
Huge aquarium with sharks, sting rays and other oceanic species opened its doors for visitors in Astana, thousands of miles away from the ocean, on May 6, setting the ground for a bid to get it into the Guinness Book of Records as the most distant such facility from the ocean.
The highlight of the aquarium, which boasts 12 reservoirs of different shapes, is the 70-meter tunnel underneath the main water tank. The conveyor belt carries visitors past the hulk of a sunken ship and under the wild beasts of the oceans. To feed the fish, divers descend daily into the reservoirs providing extra entertainment for the visitors. Water requirements are met thanks to the specially built plant producing sea water.
Astanagorproekt, a local company, and Integrated Solution Group of the UK developed the project of the aquarium jointly. According to the plan, the aquarium will become part of a larger entertainment center, called Duman, which will also include the Jungles theme park, a hotel, a swimming pool, a spa and an aquapark. Right now a stereo cinema supplements the aquarium.
According to khabar.kz, the tickets cost as much as average movie tickets and are affordable for any family.
"During Astana's long winters any family will be able to come here, and there will be something to do for everybody," President Nazarbayev said while opening the aquarium.
Marchenko Says National Fund Transparent, Criticizes New Book for Conceptual "Mistakes"
National Bank chairman Grigori Marchenko said Monday the 2.23-billion National Fund of Kazakhstan provides for a clear and responsible mechanism for managing current and future oil revenues for the benefit of the people in a country that is set to triple its production by 2015.
Mr. Marchenko was speaking in Washington at the May 12 conference, "Caspian Oil Windfall: Who Will Benefit?", sponsored by the Open Society Institute and the Center for Strategic and International Studies. He criticized the Kazakhstan chapter of namesake book the OSI presented at the conference as riddled with conceptual and factual "mistakes".
According to Mr. Marchenko, the Fund, which is modeled on the similar Norwegian structure, has been made operational through the thorough legislative process. It is managed transparently by a council that includes the president, the two speakers of the Parliament, the chairman of the accounting committee, as well as the Prime Minister and several ministers. No funds can be used without prior consideration and approval by the legislature.
The Fund's revenue is accumulated through the receipts of excessive tax revenues from oil and some mining companies. Its portfolio is divided into 20% for the stabilization purposes and 75% for savings. Its assets are invested in the U.S., Europe and Japan under the supervision of the global custodian, ABN AMRO Mellon. The Fund's operations are audited annually by an international audit company, selected through bidding processes. For the past two years of the Fund's existence, Ernst & Young Kazakhstan Ltd. performed the audit, Mr. Marchenko said. Information on the Fund's operations is presented to the Parliament regularly, the National Bank chief added, thus ensuring its accountability to the people.
The biggest issue in the future will be to define the strategy of how to invest the Fund's assets to ensure the diversification of economy and a wider spread of economic growth, he stressed. So far the Fund has mostly been accumulating the resources and it has performed only once the stabilization function, when in early 2002 the oil prices decreased below 19 dollars a barrel and a portion of the Fund's assets was transferred back to the budget.
Speaking of the book, named as the conference, "Caspian Oil Windfall: Who Will Benefit?", Mr. Marchenko said he found up to 40 "mistakes" in its chapter on Kazakhstan, which "diminish the effectiveness of its recommendations."
One of the biggest blunders of the book, he said, was that it failed to recognize the legal basis under which the Fund has been established and operates. Referring to more than 30 amendments introduced into several pieces of legislation through the Parliament to make the Fund's operations transparent and to the procedures of control and accountability, Mr. Marchenko said the book's assumption that President Nazarbayev single-handedly controls it is "simply wrong".
Among other mistakes in the book, which came as a result of 2 years of research, he mentioned such passages as "the Russian Black Sea port of Ceyhan" (which is in Turkey and on the Mediterranean Sea) and other factual misstatements.
"Maybe it is a bit drastic, but I would propose that the book be recalled, and the chapter on Kazakhstan rewritten," Mr. Marchenko said.
Later during the conference, George Soros, the principal financier for the project, said he welcomed the dialogue and said that the team would be open for correcting the mistakes.
Officials from the U.S. Government, IMF and several U.S. and Kazakhstan NGOs addressed the conference. More than 100 experts on the Caspian attended. Several of them, recalling the harsh conditions in Kazakhstan of only 5 years ago, said the problem of how to spend oil revenue was an "enviable" one to have.
Disagreements Over Land Code Set Stage For Confidence Vote May 16
Disagreements over key details of a new Land Code between the Majilis and the Government set the stage for a vote of confidence after the Prime Minister withdrew the draft legislation on May 14 and asked for such a vote. Majilis Speaker Zharmakhan Tuyakbai announced that the two houses of Parliament, the Majilis and the Senate, will convene for the vote on May 16.
The showdown came about after the Majilis adopted the Government-sponsored draft Land Code on April 30, but with more than 600 amendments, five of which were unacceptable to the executive branch as changing the conceptual nature of the new law. While the deputies supported introducing private ownership for agricultural lands as the priority in aggressive market reforms, they halved sizes of local land slots private individuals can hold from 10% to 5% and introduced allocation of land slots for peasants for free. Among other things, the Majilis also reduced the size of land foreign entities can own and opted for the extension of sublease until 2007.
Prime Minister Imangali Tasmagambetov then asked the Constitutional Council to clarify whether the Government can call for a vote of confidence during the legislative process if it doesn't agree with the amendments. On May 13 the Council ruled that such a call could be made at any point. After the extraordinary Cabinet meeting on May 14 the Government withdrew the draft code and asked for the vote.
Speaking to reporters on May 14, Mr. Tuyakbai said "the Government-sponsored legislation is quite raw, takes into account neither the situation in the agriculture nor the mood of the people in the countryside nor their capabilities to own and buy land," Mr. Tuyakbai said.
He said he was "99 percent certain that the Majilis will stick to its position and will have the two thirds of the votes needed". "But I don't know what position the Senate will take," he noted, adding that as a whole the Parliament will "not likely support the vote of no confidence".
According to the Constitution, at least two thirds of the votes of both houses of Parliament are needed to approve the vote of no confidence. If the Parliament fails to achieve such majority, the draft legislation is considered to be adopted in the way proposed by the Government.
The debates over the new Land Code are ongoing since the plan to introduce private land ownership was announced by President Nursultan Nazarbayev in 2002.
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News Bulletin of the Embassy of the Republic of Kazakhstan to the USA and Canada
(Compiled from own sources and various agencies' reports)
Contact persons: Roman Vassilenko, Aibek Nurbalin
Tel.: (202) 232- 5488 ext. 104, 115, Fax: (202) 232- 5845
