In this issue:
Parliamentary Elections Highly Competitive, Runoffs Needed for Third of Seats
Astana, Seoul Sign Oil, Uranium, and IT Deals, Issue Joint Call for Peace on Peninsula
Marriott International to Manage Hotels in Aktau, Atyrau
Industrial Output Up in January to August 2004
IMF Praises Kazakhstan’s “Prudent Macroeconomic Policies,” Says Challenge Is to Manage “Substantial Petroleum Wealth”
Say it in Kazakh:
Where is the…--- …qaida?
movie theater --- Kinoteatr
grocery store --- Azyk tylik dukeni
post office --- Pochta bolymshesi
Parliamentary Elections Highly Competitive,
Runoffs Needed for Third of Seats
A highly competitive election to fill 77 seats in the lower house of Parliament, the Majilis, was the highlight of last weekend in Kazakhstan. The elections were so hotly contested that runoffs will be needed to fill almost a third of the seats.
Sixty-seven seats are filled from single-seat constituencies,
and 10 seats are allocated to political parties according to
the national vote for the party lists.
Twelve political parties contested the elections with more
than 700 candidates running for office.
Kazakhstan shows that the election was valid. A total of
56.7 % of overall number of 8.5 million voters participated.
The election for the first time featured both paper balloting
and electronic voting, introduced in around 10 percent of
the 9,500 precincts.
According to preliminary results announced Thursday by
CEC Chairwoman Zagipa Baliyeva, 45 constituencies
returned clear winners. Runoff elections will be held on
October 3 in 22 single seat constituencies.
Of the 45 elected deputies, 26 represent the presidential
Otan party, 9 – the bloc of Agrarian and Civic parties
called AIST, 2 represent the Asar party, and 8 are
self-nominated.
According to the vote for party lists, three parties and one bloc cleared the 7-percent barrier needed to gain seats. The Otan party gained 60.62 percent and took 7 seats, the opposition Ak Zhol party took 12.04 percent (1 seat), the Asar party took 11.38 percent and 1 seat, and the AIST bloc took 7.07 percent and 1 seat also.
Ms. Baliyeva said: “The election was held not very badly, but also not splendidly. An acute problem was faced with the accuracy of voter lists. It is not just local authorities and commissions who should take part in compiling the lists, but also the citizens themselves.”
There were 1,029 foreign observers of the election in Kazakhstan, including more than 400 from the Commonwealth of Independent States, and more than 300 from the Organization for Security and Cooperation in Europe (OSCE). There were also thousands of local observers.
In its preliminary assessment issued September 20, the OSCE observation mission noted both positive and negative aspects of the election.
The mission noted: “The 19 September Majilis elections were the first elections to be held since the 2003 elections to local government bodies and the 1999 Parliamentary elections. They are also the first elections to be held under the amended election law, which provides the basis for increased transparency of the overall election process, even though further improvements are necessary to bring the election legislation fully in line with OSCE commitments.”
The report continued: “However, as in previous elections, there were serious shortcomings. A number of aspects of the improved election legislation were not implemented in an effective and impartial manner. This has resulted in an election process that fell short of OSCE commitments and other international standards for democratic elections in many respects.” The OSCE mission is due to present its final report in six weeks.
S. Frederick Starr, chairman of the Central Asia and Caucasus Institute of the John’s Hopkins School of Advanced International Studies, and Daniel Witt, president of Washington-based International Tax and Investment Center, observed the election at the invitation of CEC. In a joint statement issued in Almaty on September 20 they said: “Overall, Kazakhstan’s third Majilis election was a step forward, notwithstanding the imperfections. Democracy is not a decoration in Kazakhstan, but a principle that is lively embraced and practiced by the people. Regardless of their individual poll outcomes, all parties have expressed their commitment post-election to keeping political reforms moving. The West must acknowledge this and continue to offer its assistance to all democratic forces in Kazakhstan.”
Astana, Seoul Sign Oil, Uranium, and IT Deals,
Issue Joint Call for Peace on Korean Peninsula
The governments of Kazakhstan and South Korea have signed three major economic pacts this week, following the first-ever state visit to Kazakhstan by Korean President Roh Moo Hyun. The two countries issued a joint call for peace on the Korean peninsula and a peaceful resolution of the North Korean nuclear problem.
President Nursultan Nazarbayev met with President Roh in Astana on September 20. Following that meeting, officials of the two countries signed pacts calling for cooperation in oil exploration and production, uranium mining and sales and increased cooperation in the IT sector.
Kazakhstan and South Korea, the world’s fourth-biggest oil importer, has agreed to jointly develop an 800-million-barrel oil project in the oil rich Caspian Sea. The agreement, reached at the end of a meeting between energy ministers paves the way for South Korea to establish an entry point in the Caspian Sea. Kazakhstan’s Minister of Energy and Mineral Resources Vladimir Shkolnik and Commerce Minister Lee Hee Beom also agreed to jointly develop uranium ore mines. Kazakhstan’s reserves of uranium are believed to be the world’s largest.
Kazakhstan’s state oil firm, KazMunaiGas, signed a protocol with state-run Korea National Oil Corporation (KNOC), which will allow KNOC to tap into viable oil wells, along with receiving oil well development rights in the Tenge region.
Korea Resources Corporation signed a similar deal with Kazakhstan’s state-run uranium company, KazAtomProm, for joint development of uranium mines in southern Kazakhstan. This will make it possible for South Korea to secure 1,000 tons of uranium every year over the next 30 years, about 10 percent of the country’s annual uranium demand, South Korean officials said.
The summit is the second in 10 months, since President Nazarbayev visited Seoul in November last year. President Roh flew into Astana Sunday for the first visit here by any South Korean head of state. The two nations established diplomatic ties in 1992.
The situation on the Korean peninsula was also featured during presidential talks. In a joint statement, Kazakhstan expressed its support for South Korea’s “Peace and Prosperity” policy aimed at strengthening peace on the Korean peninsula. Kazakhstan also supported South Korea drive for a peaceful settlement of the North Korean nuclear problem through dialog.
The two countries also agreed to promote tourism and cultural exchanges, and praised the ethnic Korean Diaspora in Kazakhstan for promoting better relations between the two countries. Joseph Stalin exiled ethnic Koreans to Kazakhstan during WWII for their alleged cooperation with the Japanese. They have since become part of Kazakhstan’s remarkable multiethnic society.
Marriott International to Manage Hotels in Aktau, Atyrau
Marriott International, an international hotel chain based in the United States, will manage two new five star hotels in Kazakhstan under the agreement with a number of private companies in Kazakhstan.
Under the agreement, signed in the city of Aktau on the Caspian seashore, September 20, Marriott will manage the 120 room Renaissance Aktau Hotel and the 202 room Renaissance Atyrau Hotel when they are built by the summer of 2005. The two cities, Aktau and Atyrau, are considered “capitals” of Kazakhstan’s booming oil industry in the west of the country.
Two Kazakhstan companies, Capital Partners, overseeing the construction, and Kazkommertzbank, Kazakhstan’s largest private bank, which provides long-term financing for the construction, signed the agreement with Marriott.
It is expected that Marriott will initially bring 220 foreign staff to run the hotels, then will gradually increase the local content.
Karl Kilberg, Mariott International’s Senior Vice President for Continental Europe, said “Kazakhstan has tremendous growth prospects in terms of economy, and we are happy these hotels will become part of this process.”
Kazkommertzbank’s managing director Magzhan Auezov noted the project is unique “because it is the first instance of building five-star hotels in Kazakhstan without government financing or guarantees.”
Industrial Output Up in January to August 2004
Industrial output in Kazakhstan rose by 9.8 percent between January and August of 2004, compared to the same period last year.
Kali Abdiev, chairman of Kazakhstan’s Statistics Agency, made the data public at a news conference last week. He explained industrial production growth came from 12.8 percent growth in mining, 7.8 percent growth in processing industries, and 4.4 percent growth in production and distribution of electricity, gas and water.
Overall volume of cargo shipments rose by 9.5 percent compared to the same period of last year. Retails sales were up by 9.5 percent, and capital investment grew by 11.5 percent.
Foreign trade turnover between January and July of this year soared by 48 percent compared to the same period last year, reaching US$16.9 billion. That figure includes a 42 percent growth in exports, and a 57 percent growth in imports.
The consumer price index, a measure of inflation, was 3 percent at the end of August compared to December 2003.
Unemployment rate stood at 7.9 percent at the end of August, compared to 9 percent in January.
IMF Praises Kazakhstan’s “Prudent Macroeconomic Policies,”
Says Challenge Is to Manage “Substantial Petroleum Wealth”
The International Monetary Fund (IMF), in a report issued September 20 in Washington, DC, commended Kazakhstan for “continued prudent macroeconomic policies, which, supported by high oil prices and increasing foreign investment, have led to strong economic performance, broad-based economic growth, and the rapid accumulation of international reserves and assets in the National Fund.”
At the same, and “in view of a highly favorable medium-term outlook”, the IMF stressed the “main policy challenges facing Kazakhstan are to prudently manage the country’s substantial petroleum wealth, and to undertake the structural reforms necessary for sustainable broad-based economic and social development.”
The report was based on an Article IV consultation between IMF staff and the Government of Kazakhstan, which concluded in July of this year. It was then approved by the IMF’s Managing Director as a summary of executive directors’ recommendations and transmitted to Kazakhstan.
IMF closed its representative office in Kazakhstan in August 2003, citing the country’s success in implementing post-Soviet economic reforms. That took place after Kazakhstan also paid off its debt to the IMF eight years before it was actually due.
The IMF welcomed increased expenditures for pensions and wages and the reduction of the rates of the value added, income, and social security taxes. In view of rapidly rising revenues from oil, however, the IMF “underlined the need to increase spending on education, health care, anti-poverty programs, and infrastructure development, as well as the importance of enhancing institutional capacities, in collaboration with the World Bank, to ensure greater spending efficiency.”
The IMF believes Kazakhstan manages its increasing oil revenues prudently. The report noted the National Fund of Kazakhstan, which accumulates excess oil revenues, has played “a crucial role in easing the burden on monetary policy and reducing pressure for an appreciation of the exchange rate”. They urged Kazakhstan to safeguard the assets of the National Fund, currently US$3.7 billion, through enhanced transparency in the Fund’s operations and the regular release of external audit reports.
The IMF also observed encouraged the authorities “to strengthen the competitiveness of the non-oil economy by adopting measures to enhance productivity, and as a starting point, to develop a well thought-out public sector investment program with a focus on infrastructure investment.”
The Fund encouraged Kazakhstan to “press ahead further with the implementation of their structural reform agenda”. The IMF emphasized the importance of “improving the overall business climate by strengthening public administration and the judiciary, and by fighting corruption.” It particularly called on Kazakhstan’s authorities to work towards improving “the investment climate for small and medium-sized enterprises, with a view to creating more employment.”
In the background of the report, the IMF said: “Kazakhstan’s economy continues to expand rapidly, with average real growth of more than 10 percent over the past three years, and an estimated 9.1 percent in the first quarter of 2004. Economic growth has been driven by increasing oil production, supported by high oil prices and rising foreign investments… Led by the petroleum sector, other key sectors such as services, manufacturing, and construction have also shown significant gains.”
(Full report is available on the IMF website here)
Things to Watch:
- Prime Minister Daniyal Akhmetov joins his counterparts from the six nations of the Shanghai Cooperation Organization for a meeting in Bishkek, Kyrgyzstan, on September 23.
- A two-day roundtable discussion on the introduction of jury trials in Kazakhstan takes place in Astana on September 27-28. It is organized by the Supreme Court of Kazakhstan, Office of Democratic Institutions and Human Rights of the OSCE and the OSCE Mission in Almaty, as well as the government of the Netherlands.
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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
