In this issue:
Kazakhstan Progresses toward WTO Membership, Seeks More U.S. Business at Upcoming Conference
President Says Common Economic Space Will Benefit All
Motorola Signs New $100 Million Deal in Kazakhstan
Parliament Approves New Law on Caspian PSAs
Please come in and take a seat. --- Zhogary shygynyz.
Do you have a family? --- Sizdin zhanuyaniz barma?
Do you have children? --- Balalarynyz barma?
What is your wife’s name? --- Zhubaiynyzdin aty-zhene kim?
What are your children’s names? --- Balalarynyzdin attary kim?
Kazakhstan Progresses toward WTO Membership,
Seeks More U.S. Business at Upcoming Conference
Sauat Mynbayev, Kazakhstan’s Deputy Prime Minister and Minister of Industry and Trade, said Kazakhstan is making progress toward membership in the World Trade Organization (WTO) during his recent visit to Washington.
Minister Mynbayev visited
Washington this week for talks
with the Office of the U.S. Trade
Representative concerning
Kazakhstan’s desire to join the
global trading bloc. Also on the
agenda was Kazakhstan’s
participation in TIFA (Trade and
Investment Framework
Agreement) signed by five
Central Asian countries and the
U.S. in June 2004. TIFA provides
for an expansion of government
to business consultations in
member countries (Kazakhstan,
Kyrgyzstan, Tajikistan,
Turkmenistan, Uzbekistan and
the U.S.) designed to promote
more business partnerships
and remove hindrances to trade.
Speaking to a group of
American business executives
at a U.S.-Kazakhstan Business Association meeting in Washington, DC, Minister Mynbayev said Kazakhstan is eager to promote more trade and investment between the two countries. In 2004, Kazakhstan-U.S. bilateral trade stood at US$840 million, which “is good, but we can do better,” he said. He noted the U.S. which accounts for one third of the US$34 billion in foreign direct investment in Kazakhstan now is the largest foreign investor and called for greater and more diverse investment from the U.S.
During his stay, Minister Mynbayev met key members of the U.S. Congress to discuss promoting more private partnerships between his country and the U.S. The meeting with Rep. Darrell Issa (R-CA), in particular, centered on the upcoming Kazakhstan business conference in San Diego, CA, scheduled for September 8-9, 2005, where Rep. Issa will be the host.
The conference (more information at www.jmkcontact.com) will focus on Kazakhstan’s new Strategy for Industrial and Innovation Development (SIID) intended to promote non-extracting industries in Kazakhstan, an oil rich country. Under the SIID, Kazakhstan plans to encourage the growth of industries where it enjoys competitive advantages, including food, textiles, construction materials, oil and gas machinery building, metallurgy, transportation logistics and tourism.
Tax breaks for machinery building are an example of measures the Government is willing to take to promote these industries: an investor in machinery building with a sound project may be exempt from corporate tax, property tax and land tax for up to 10 years.
President Says Common Economic Space Will Benefit All
President Nursultan Nazarbayev said the Common Economic Space (CES), a free trade zone to be established by Kazakhstan, Russia, Belarus and Ukraine, will benefit all parties involved.
President Nazarbayev remarked: “I am absolutely convinced the Common Economic Space is beneficial to the economies of all. It will open customs controls and unify customs legislation. Tariffs will become single, transportation of people and cargo will be simplified, and the volume of trade will increase.”
The President was speaking at a May 18 press conference in Astana after his meeting with visiting President Aleksander Lukashenko of Belarus.
Commenting on a recent meeting of top officials from the four countries, in Astana, where Ukraine stayed out of 15 out of 29 agreements reached, President Nazarbayev said “if this [Ukrainian position] hampers the process of creating the CES, then, perhaps, we will have to move forward without them.”
“We still have time though, and we will negotiate with Ukraine,” he continued. “What we are talking about is economic integration, not political concessions to the detriment of our countries’ independence. Without these documents it is impossible to create a free trade zone and a ‘common market’ for our countries.”
The next opportunity to discuss the extent of Ukraine’s participation in the CES will be when President Viktor Yushchenko visits Kazakhstan later this month.
Motorola Signs New $100 Million Deal in Kazakhstan
Motorola Inc. and Kar-Tel, one of Kazakhstan’s leading cellular phone operators, announced a new US$100 million expansion project on May 19.
The five year agreement will require Motorola Inc. based in Schaumburg, IL, to supply a Global System for Mobile (GSM) communications network to KaR-Tel, a subsidiary of Russia’s Vimpel Communications.
“This latest expansion of our network provides us with the necessary increase in capacity and coverage to help develop our business, while improving the experience for our subscribers through new data services,” Konstantin Markov, Director General of KaR-Tel, said in Motorola’s news release.
The project is set to begin in June this year. It is intended to boost Kazakhstan’s subscriber base. The addition of Motorola’s General Packet Radio Service enables KaR-Tel to offer its customers enhanced mobile data applications.
Motorola, the world’s No. 2 cell phone maker, had sales of US$31.3 billion last year. GSM is part of Motorola’s networks segment, which took in 17 percent of the company’s 2004 sales.
“It’s nice to see them continue to win in faster growing markets,” said Michael Walkley, an analyst at Minneapolis-based Piper Jaffray & Co., as reported by Medill News Service.
Motorola, the global communications provider will supply mobility products and solutions that will add coverage to KaR-Tel’s 900MHz networks across Kazakhstan.
The expansion comes at a ripe time for Kazakhstan. Earlier this month, Kazakhstan’s cell phone usage exceeded for the first time the number of land line users as rates go down and coverage improves.
Parliament Approves Caspian PSAs New Law
The Parliament approved a new law on production sharing agreements for oil projects in the Caspian Sea on May 18 with a view to the planned auctions of offshore oilfields.
Baibol Utepbayev, Member of the Parliament’s Majilis (lower house) said “the new law will regulate offshore oil operations, which are very capital and labor intensive.”
He said new legislation limits foreign participation to 50% in each project, providing them no guarantees of operatorship. The other 50% would belong to KazMunaiGaz, the Kazakh state oil and natural gas company. He also said the new law envisages that only Kazmunaigaz or the Government will hold tenders among subcontractors within each project.
As far as commercial production is concerned, the new law introduces mandatory oil supplies for local refineries.
Utepbayev said the new rules would not affect existing contracts with oil companies and would guarantee the stability of previously signed agreements.
Kazakhstan’s government planned to start the licensing round for up to 200 exploration blocks in the Kazakh part of the divided Caspian Sea in 2005 and 2006. Through massive development of the Caspian, Kazakhstan intends to triple its oil output by 2015 from the current level of 1 million barrels a day.
Things to Watch:
- An international conference of antinuclear movement opened in Almaty on May 19. Olzhas Suleimenov, president of the Semey-Nevada antinuclear movement since its inception in 1988, spoke at the event calling for continued nuclear disarmament. Attending the conference are representatives from Hiroshima and Nagasaki in Japan, and many other nations. The conference is expected to conclude with calls to Global Antinuclear Alliance, World Conference against Atomic and Hydrogen Bombs, and the organizing committee of the Nuclear Nonproliferation Treaty to take action.
- President Viktor Yushchenko of Ukraine is expected to visit Kazakhstan on May 30-31.
- Elections for Kazakhstan’s Senate will take place in September 2005. The election for half of the Senate’s 32 elected mandates is held every three years. Elections are indirect with members of local maslikhats (assemblies) electing two Senators from each of the 14 regions of Kazakhstan and two cities, Astana and Almaty. The President appoints the seven other members of the Senate.
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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
