In this issue:
Armitage Visits Astana, Praises Joint Efforts
Kazakh Observers to Monitor U.S. Election
Proposed Amendment Would Toughen Punishment for Copyright Violations
Fitch Upgrades Kazakhstan’s Ratings, Cites Progress, Future
Say it in Kazakh:
Visit --- Sapar
Election monitors ---Sailaudy baikaushi[Sai-lau-DY bye-kauo-SHI]
Copyright --- Avtorlyk kookyk [Av-tor-LIK Koo-KYK]
Deputy Secretary of State Armitage Visits Kazakhstan
U.S. Deputy Secretary of State Richard Armitage visited Kazakhstan on October 29 for talks with President Nursultan Nazarbayev and other officials, focusing on the fight against terrorism, bilateral economic cooperation as well as political and economic reform in Kazakhstan. At the same time, the Deputy Secretary carried a message from Washington in appreciation of Kazakhstan’s support in Afghanistan, Iraq and the war against terrorism.
Speaking at a news briefing in Astana
following his meeting with the President,
Armitage said “the United States is
interested in Kazakhstan as an open,
democratic, sovereign, strong, and a free
nation.”
He noted he had discussed with the
President relations between Kazakhstan
and the U.S., as well as the general
situation in Central Asia. He said they
“discussed hopes and aspirations the
President of Kazakhstan has for his
people.”
Army Gen. Mukhtar Altynbayev. The
two discussed Kazakhstan’s progress
toward a professional volunteer army,
the cooperation in the war on terrorism,
strengthening regional security as well
as development of Kazakhstan’s
peacekeeping forces. Armitage also met some of the Kazakh military engineers just returned from their mission to aid the coalition and the Iraqi people.
The Defense Ministry said “the military-to-military cooperation between the two countries has moved to a new level, and in the past year and a half the cooperation under [The Pentagon’s] Foreign Military Financing and International Military Education and Training programs has doubled.”
Deputy Secretary Armitage also met with leaders of many of Kazakhstan’s twelve political parties. He said he was “encouraged by the discussion. They have very strong views and an adequate understanding of the political process, and you can see that they are deeply committed to democratic processes.” [For full version of his remarks click here]
Just before coming to Astana, Armitage visited Moscow.
Kazakh Observers to Monitor U.S. Election
Four members of the Parliament of Kazakhstan will be observing the U.S. election next Tuesday as part of the observation mission of the Organization for Security and Cooperation in Europe’s Parliamentary Assembly.
Members include Sharip Omarov, Chairman of the Majilis Foreign Relations, Defense and Security Committee, Senator Tasbai Simambayev, Secretary of the Senate Foreign Relations, Defense and Security Committee, Senator Sagyndyk Yesimkhanov, member of the Senate Economy, Budget and Finance Committee, and Ramazan Sarpekov, member of the Majilis Legislation and Legal Reform Committee.
They will observe voting procedures in North Carolina. The OSCE is expected to issue its preliminary report on the U.S. election on Thursday November 4.
Proposed Amendment Would Toughen Punishment for Copyright Violations
The Ministry of Justice has drafted amended legislation which, if adopted, would drastically toughen punishment for violation of intellectual property rights.
Beket Aligozhin, Chairman of the Ministry’s Committee on Protection of Intellectual Property Rights, announced the proposed legislation at a roundtable discussion on October 28 in Almaty.
He said existing legislation does not adequately protect copyrights in Kazakhstan. Giving an example, he said those making and selling a counterfeit video make a profit of 200 percent and only have to invest the cost of a blank videotape. Maximum punishment for producing and selling pirated goods is a fine of 3 “minimal accounting indicators” (MAI), or about 20 U.S. dollars. According to Chairman Aligozhin, that huge profit margin serves as a stimulus for the “pirates”.
The new legislation would criminalize copyright infringement and increase the maximum fine to 500,000 MAIs, or more than US$3.5 million. The bill would also keep the copyright holders’ right to sue for damages. Aligozhin believes the new proposal will be enough to stem counterfeit production: “After paying 500,000 MAIs, a person will have to consider if it’s worth it.”
Fitch Upgrades Kazakhstan’s Ratings, Cites Progress, Future
Fitch Ratings, based in London and one of the world’s most respected credit rating agencies, has upgraded several of Kazakhstan’s ratings. On October 27 Fitch cited continuing economic growth, especially in the oil and gas sector, and good development prospects.
Fitch upgraded the Republic of Kazakhstan’s long term foreign currency rating from “BB+” to “BBB-” (BBB minus), which is considered investment grade. The short term foreign currency rating was upgraded to “F3” from “B” and the long term local currency rating was upgraded to “BBB” from “BBB-” (BBB minus). The outlook for the long term ratings is stable.
In a press release, Fitch explained the upgrades of Kazakhstan’s creditworthiness by pointing to the development of the country’s oil and gas sector and the effects of high oil prices. It said the economy is on track for a record fifth consecutive year of GDP growth above 9% and the authorities continue to manage oil revenues prudently.
Although social spending has increased, the consolidated general government fiscal position, including the National Fund, remains in surplus and the bulk of the oil windfall is banked in the National Fund. By the end of 2004, Fitch estimates the National Fund, which accumulates excess revenues, will hold more than US$5 billion, or 13.1% of GDP. It currently holds more than US$4 billion.
Government debt is low at 13.5% of GDP, and the public sector has a net external creditor position equivalent to 24% of GDP. Gross external debt for the country as a whole is relatively high, but more than 50% of the debt is in inter-company liabilities related to oil and gas projects. Without these liabilities Kazakhstan’s debt ratios would compare far more favorably with its peers’ and the liquidity ratio would rise above 100%.
Despite efforts to encourage economic diversification, and a relatively strong performance by the non-oil sector in recent years, the rapid growth of the oil and gas sector has ensured its continued dominance of the economy. Kazakhstan remains exposed to a sharp fall in oil prices. However, Fitch does not expect such a fall to happen in the near term, and, even if an unexpected oil price adjustment did occur, the economy and the country’s public finances are in a stronger position to cope with this sort of pressure now than at any time in the past.
Over the next 10 years oil output is set to rise to around 3.5 million barrels per day from 1.2 million barrels per day this year. That would be higher than current production levels in Norway and only slightly below production in Iran or Mexico. Natural gas production is also expected to rise sharply. Against this background, Fitch believes the current account is likely to record rising surpluses from 2008 onwards, the assets of the National Fund will continue to grow and the government’s net creditor position should further strengthen.
Things to Watch:
- Internet providers, media and commercial and public organizations will meet in Almaty on November 18 to mark the tenth anniversary of Internet in Kazakhstan. The anniversary is tied to the registration of the domain name “kz” - for Kazakhstan; additional information is available at www.10.kz.
- Tadao Chino, President of the Asian Development Bank, will visit Kazakhstan on October 31 as part of his regional tour of Central Asia and Caucasus. He will held talks on issues relating to regional economic cooperation as a means to fight poverty. Kazakhstan is a member of ADB.
________________________________________________________________________________
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
