Kazakhstan
News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan
October 17, 2002 Vol. 4, No. 4
________________________________
In this issue:
Kazakhstan's athletes win 20 gold medals in Asian Games
UN Secretary General visits Kazakhstan
Kazakhstan turns Annaniyazov over to UN
Kazakhstan gathers record grain harvest
Fitch upgrades Kazakhstan's currency ratings
New oil discovery in Kazakhstan's Caspian sector
Kazakhstan's athletes win 20 gold medals in Asian Games
Set new world records, become 4th in medal count among 44 teams
Kazakhstan's athletes won 20 gold, 26 silver and 30 bronze medals, finishing fourth in total medal tally after China, the hosts South Korea and Japan. A total of 44 Asian teams competed in the two-week XIV Asian games in Busan that concluded October 14.
Kazakhstan's gold came in canoe-paddling, fencing, shooting, pole vaults, boxing, classical wrestling, weightlifting, cycling and the water polo.
Kazakhstan's Sergey Filimonov lifted173 kg during the snatch event of the men's weightlifting 77kg category competition setting the new world record and winning the combined snatch and clean and jerk event in this category.
In a dramatic overtime penalty shootout in the final, Kazakhstan's water polo team defeated the Japanese opponents clinching the title with the score of 15-14 on October 6, 2002.
The current games' slogan was "New look at new Asia".
UN Secretary General visits Kazakhstan
First visit to region for Annan
UN Secretary General Kofi Annan
and his wife arrived in Kazakhstan for an
official visit on Thursday October 17.
Mr. Annan will make the two-day visit
in the framework of his tour of Central
Asia, a spokesman for the Foreign
Ministry said Monday. In Astana, he will
hold talks with President Nursultan
Mr. Annan's "Silk Road tour", includes, in addition to Kazakhstan, visits to China, Mongolia and other Central Asian countries.
Kazakhstan turns Annaniyazov over to UN
Confirms its commitment to principles of democracy and rights
On October 4, Kazakhstan turned over Turkmen national Gulgeldi Annaniyazov to the United Nations High Commissioner for Refugees in Kazakhstan. Mr. Annaniyazov was transported to Norway where he is undergoing treatment from tuberculosis.
Last month, Mr. Annaniyazov, 42, illegally entered Kazakhstan from Turkmenistan and flew to Moscow where he was detained while presenting the forged passport. He requested political asylum in Russia, but was deported the following day to Kazakhstan.
Kazakhstan's decision to turn him over to the UN was welcomed in the world, and in particular in the U.S. The U.S. government hailed the move as a positive step in the area of democracy, the rule of law, and human rights. Human rights activists also praised the Kazakh government for making that step. "It's a big progress," said Yevgeny Zhovtis, director of the International Bureau of Human Rights and Rule of Law in Kazakhstan.
Kazakhstan gathers record grain harvest
Says ready to supply more grain to Afghanistan
A total of 18 million tons of grain were harvested in Kazakhstan this year, 2.1 million tons more than in 2001 and 6.7 million tons more than in 2000. This is also the largest ever grain harvest in Kazakhstan's history.
"On top of increasing grain yields, Kazakhstan's grain producers improved crop quality," the Ministry of Agriculture announced in an October 11 press release, saying the increase was also due to the systemic reforms in the agriculture.
Land cultivation this year totaled 14 million hectares, 24,000 hectares greater than last year, and the yield averaged 13 metric centners per hectare.
Kazakhstan has recently supplied grain to Afghanistan as part of humanitarian assistance package and said it was ready to supply up to 1 million tonnes more on paid basis.
Separately, on October 14, Kazakhstan joined other members of the Economic Cooperation Organization at the Istanbul summit in setting up a fund to help rebuild war-ravaged Afghanistan.
Fitch upgrades Kazakhstan's currency ratings
Good fiscal dynamics and well-supported external economic position cited as reasons
London-based Fitch Ratings has upgraded Kazakhstan's long-term foreign currency ratings from 'BB' to 'BB+', news agencies reported on October 14. Kazakhstan's long-term local currency rating has also been raised to 'BBB-' from 'BB+', while the short-term rating remains the same at 'B'. The rating outlook remains stable.
Strengthening fiscal dynamics, a drop in general government debt and a well-supported external economic position drove the improvement in Kazakhstan's sovereign ratings. Many of the positive developments of the past two years have stemmed from buoyant global oil prices, and the government has managed these windfalls wisely. Tight expenditure controls have closed budget shortfalls, allowing for net repayments of public external debt and limited net local debt issuance.
At the end of 2002, general government debt is expected to total 19% of GDP, well below the median for the 'BB/BB+' rating range. Kazakhstan continues to generate a sizeable balance of payment surplus, providing for healthy increases in foreign exchange reserves and growing foreign assets of the National Fund. Consequently, the net external creditor status of the public sector is strengthening and should end the year at around 15% of current account earnings.
The foreign exchange reserves of the National Bank and assets of the National Fund grew by 1.9% and totaled $4.8026 billion in September, the National Bank said October 9.
New oil discovery in Kazakhstan's Caspian sector
Kazakhstan aims to develop oil, but more importantly, other industries
Partners of the consortium developing Kashagan offshore oil field in the Kazakhstan's Caspian sector announced October 10 a new oil discovery within their sphere of operations. It is located in the Kalamkas structural feature, around 50 miles (80 kms) southwest of the Kashagan East #1 discovery. In June 2002, the consortium announced the commercial discovery of Kashagan at 7 to 9 billion barrels of oil in recoverable reserves making the field the most significant oil discovery in the world for the past 30 years. The consortium is due to start producing oil at Kashagan in 2005.
The Kalamkas-1 discovery well was spudded in August 2002. The well was drilled in 28 feet (8 meters) of water to a total depth of 7740 feet (2360 meters) and encountered an oil-bearing reservoir that flowed at a test rate of 2300 barrels of oil per day. Data analysis and additional studies are being conducted to fully evaluate this discovery.
In addition to U.S.-based ExxonMobil Corp. (16.67%), other companies involved in the consortium developing the North Caspian Sea PSA, which covers almost 1.4 million gross acres, are Eni (subsidiary Agip KCO is the operator - 16.67%), BG (16.67%), Inpex (8.33%), ConocoPhillips (Phillips Petroleum) (8.33%), Shell (16.67%), and TotalFinaElf (16.67%).
Oil executives sound optimistic about future prospects
Oil executives sound upbeat about the prospects for oil development in the Caspian Sea and Russia. "Production from Russia and the Caspian region is expected to grow at a larger rate than any other non-OPEC region. By 2020, production could almost double to more than 14 million barrels per day", Rex Tillerson, ExxonMobil's senior vice president said at the US-Russia oil forum in Houston in early October.
Experts agree that to meet such production increases Kazakhstan and other nations will have to attract and absorb significant amounts of foreign investment.
For example, the Agip KCO consortium is to invest $2 billion in the development of this area in 2002, according to Marlen Isakov, head of the socioeconomic analysis department in the Kazakh presidential administration who was quoted by a local newspaper last week. To date the consortium has already invested over $1.2 billion in work at the Kashagan field, and it is planned to invest another $800 million in 2002 to set up industrial and auxiliary infrastructure.
Government works to diversify economy and strengthen its competitiveness
In 2001, the foreign investment in Kazakhstan totaled more than $ 3.5 billion, which is 8 percent more than in 2000, Deputy Prime Minister Karim Massimov announced in Astana on October 10. The breakdown shows that 80 percent of the investment over the years went into oil and gas sector, he said, adding that this trend is likely to continue.
"The analysis of foreign direct investment inflows into Kazakhstan demonstrates that for the next 5 years oil and gas industry will keep the priority seat," Massimov added.
But, government officials say they realize the importance of spreading investment beyond already strong oil and gas industries.
The government is working to expedite the establishment of modern industries and to strengthen the economy's competitiveness, the deputy prime minister said. Advanced refining of raw materials in metallurgy, petrochemistry and machine building will be given the priority in the government's new industrial policy, according to Massimov.
The idea of spreading investment and business opportunities beyond oil was key in devising the Kazakhstan-U.S. multimillion public-private partnership, the Houston Initiative, announced by the two governments on October 3 (Please see Kazakhstan News Bulletin, vol. 4, N 2, October 3, 2002).
* * *
News Bulletin of the Embassy of the Republic of Kazakhstan
(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
