In this issue:
Kazakhs Learn to Love Plastic
Runoffs Complete Kazakh Elections
Kazakhstan Ratifies ICC Agreement With U.S.
Kazakhstan Seeks Increase to 1.3 Million Barrels Daily by 2005
Nuclear Technology Park May Be Built at Former Soviet Testing Center, Similar Parks Planned Elsewhere
Foreign Investment Grows 13 Percent in First Half of 2004
Credit Card --- Kredit karta
Cash --- Aksha
Are you paying with cash or a credit card? --- Siz akshalai toleisizbe nemese kartamen toleisizbe?
Kazakhs Learn to Love Plastic
“Are you paying with cash or a credit card?” That was a question shop workers could not have asked a customer in Kazakhstan until October 7, 1994, when the first plastic card linked to VISA International was introduced by a Kazakh private bank.
Leaders of several large Kazakh banks held a news conference in Almaty on October 6 to mark the tenth anniversary of that event. It introduced a brand new “capitalist” concept to a population that was more accustomed to keeping money under their mattresses instead of in banks.
Developments since that day have shown the people in Kazakhstan have learned to love their plastic and many other trappings of a modern banking system economy such as mortgage credits and small business loans. There are now 2.1 million people in Kazakhstan with debit or credit cards, 14 percent of the overall population. Today there are 35 private banks in Kazakhstan which use plastic for payments of all sorts, while 20 banks have licenses to issue the cards. These include TuranAlem Bank, which introduced the original cards a decade ago, Kazkommertzbank, Kazakhstan’s largest private bank, Narodnyi Bank and others.
More innovation is on the way with the expected introduction later this year of a national payment smartcard which uses M-chip4 MPAD standard.
Grigoriy Marchenko, Assistant to the President of Kazakhstan on economic affairs and former Chairman of Kazakhstan’s Central Bank, who was in Washington last weekend for meetings of the World Bank and the International Monetary Fund, explained people began to trust banks more because of stringent regulation of banking operations and a deposit insurance system. Today more than 3 billion U.S. dollars are deposited in private household accounts in Kazakhstan, a growth of 10 times over the figure for 1999.
Runoffs Complete Kazakh Elections
Runoff elections in one third of Kazakhstan’s districts have filled the 22 remaining seats in the Majilis on October 3.
The big winner was pro-presidential party Otan, followed the bloc of centrist parties AIST, the pro-government Asar party and the moderate opposition party Ak Zhol. Independent candidates swept 18 seats.
Kazakhstan Ratifies ICC Agreement With U.S.
President Nursultan Nazarbayev signed a law on October 5 ratifying an agreement with the United States on the provision of persons to the International Criminal Court (ICC).
The two countries signed this Article 98 agreement (Article 98 refers to the founding charter of the ICC) in New York in September 2003. In September of this year, both houses of Kazakhstan’s parliament ratified the agreement.
Under the agreement, the United States provides guarantees it will not would produce citizens of Kazakhstan for trial by the International Criminal Court without the written consent of the Kazakhstan’s Government. Kazakhstan accepted similar obligations for U.S. citizens.
Kazakhstan Seeks Increase to 1.3 Million Barrels Daily by 2005
Vladimir Shkolnik, Kazakhstan’s Energy and Mineral Resources Minister announced at the opening of the annual oil and gas exhibition and conference in Almaty on October 5 that the Government of Kazakhstan expects oil production to grow to 1.3 million barrels per day by 2005.
He said production is expected to further grow to 3.5 million barrels per day by 2015. Currently, the national production, by all entities including foreign private companies, is slightly more than 1 million barrels per day.
The Minister delivered his remarks at the 12th international oil and gas exhibition KIOGE-2004. More than 400 companies from 30 countries are participating in the exhibition which is scheduled to last until October 8. The UK, Germany, Iran, Italy, Canada, China, the Netherlands, Poland, Russia, Romania, Ukraine and, for the first time, Norway have opened their national showrooms at the exhibition. Around 15,000 businesspeople, experts and government officials are expected to visit the exhibit during the four days of its operation.
Minister Shkolnik also announced plans to build new oil refineries in the country, and praised the recent start of construction of the oil pipeline to China, from Atasu to Alashankou.
Uzakbai Karabalin, President of the KazMunaiGaz National Company, also spoke at the conference, saying talks are continuing with the Chinese to build a parallel gas pipeline. “We have set up a working group with the Chinese which has until the end of the year to resolve issues and prepare feasibility study of this project.”
Nuclear Technology Park May Be Built at Former Soviet
Testing Center, Similar Parks Planned Elsewhere
Daniyal Akhmetov, Prime Minister of Kazakhstan, announced on a visit to the town of Kurchatov near Semipalatinsk, that the Government will soon decide whether or not to build a “Nuclear Technology Park” there. He said there is a need to examine the general plan for the development of such a park more thoroughly and noted the decision should be expected in a month.
Kurchatov, formerly a secret city not seen on any maps, was at the center of a Soviet nuclear weapons testing program carried out at nearby Semipalatinsk test site. Since Kazakhstan’s independence in 1991, Kurchatov has become the center of decommissioning and destruction work at the test site, much of it done with the United States under the Nunn-Lugar Program. Currently, it houses research facilities for the National Nuclear Center of Kazakhstan and employs scores of nuclear scientists and experts.
The idea of a peaceful “Nuclear Technology Park” is part of the innovative strategy to develop industries where Kazakhstan has considerable potential. The country will offer favorable conditions for local and foreign companies to produce internationally competitive goods. In the case of a nuclear center, it seeks to capitalize on existing research data and experts, as well as Kazakhstan’s abundant uranium reserves. The reserves are ranked number one in the world. Kazakhstan already is a major uranium producer and seeks to expand its share of the world market in the near future.
Other areas Kazakhstan seeks to develop include biotechonology, software and space technology. The Biotechnology Park is rising at Stepnogorsk, former home of a major Soviet biological weapons production facility close to Astana. The Information Technology Park is being built in Alatau, a suburb of Almaty in the south of Kazakhstan. Several foreign companies, including Microsoft and Cisco Systems of the United States, and firms from Singapore and South Korea are either working with local partners or have announced their intentions to set up shop in Alatau.
Foreign Investment Grows 13 Percent in First Half of 2004
Foreign direct investment grew by 13 per cent in Kazakhstan during the first six months of 2004 compared to the same period in 2003.
Kazakhstan has attracted US$2.5 billion million in foreign direct investment in the same period, up from US$2.3 billion a year ago.
Of that amount, US$1.2 billion were invested in the raw material extracting sector including 1,163 million U.S. dollars in the oil and gas sector. The processing sector attracted US$240.8 million, construction US$36 million and transportation and telecommunications attracted an additional US$130.1 million in the first half of 2004.
The United States continues to be Kazakhstan’s largest foreign investor, followed by Great Britain, the Netherlands, South Korea and Italy. American companies invested almost US$700 million during the first half of 2004; Dutch firms invested US$ 334 million U.S; while British companies poured in US$321 million.
Overall, Kazakhstan has attracted more than US$26 billion of foreign direct investment since independence in 1991.
In a related story, inflation stood at 0.8 per cent in September and 3.8 per cent in January-September 2004. Inflation is expected to reach 5 to 7 percent in 2004.
Also, Deputy Minister of Economy and Budget Planning Kairat Aitekenov announced on October 7 that Kazakhstan’s economy grew by 9.4 percent in the first nine months of 2004 compared to the same period of last year.
Things to Watch:
- Students from 12 countries will converge on Almaty on October 8 and 9 for the International Scientific Student Conference to discuss issues of economy and politics in Central Asia. The Kazakhstan Institute of Management, Economy and Prognostication, the first master-degree university in the former Soviet Union created in 1992, will host the event.
- The Second International Show “Prevention, Rescue and Assistance in Eurasia 2004” takes place in Almaty from October 13 to 16 focusing on emergency preparedness. The show is hosted by the Ministry of Emergency Situations, which has duties similar to the U.S. Federal Emergency Management Administration.
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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
