Kazakhstan
News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan
www.kazakhembus.com
                                               
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No 2, August 8, 2007

POLITICS

Briefing for foreign diplomats held in Astana
High Goals Mean High Responsibility, article by the State Secretary of Kazakhstan
Political and national mechanisms established by the President are like clock-work
Japan views Kazakhstan as important partner in the region

ECONOMY

Prime Minister Karim Massimov on Kashagan: Contracts with foreign extraction companies                   shall be respected by both sides
The road to sustainable economic growth. Economist Intelligence Unit to hold the first Business                Roundtable with the Government of Kazakhstan in Astana on 4-5 September, 2007
Ascott Ventures into Kazakhstan with two management contracts
Kazakhstan planning Foreign Trade Increase to $200 Billion
Kazakhstan drafts renewable energy legislation

OTHER NEWS

Kazakhstan carrier posts record first half growth


POLITICS

Briefing for foreign diplomats held in Astana

A briefing for foreign diplomats initiated by the Central Electoral Commission (CEC) of Kazakhstan was held on August 6 in the Astana Radisson Hotel.

Kuandyk Turgankulov, Chairman of the Kazakh CEC, briefed the audience about the distinctive features of the current electoral campaign in the light of the amendments introduced to the Constitution of Kazakhstan.

According to him the Central Electoral Commission of Kazakhstan is paying close attention to the implementation of existing electoral legislation.

Head of the OSCE/ODIHR Election Observation Mission Lubomir Kopaj thanked the Kazakh CEC for its support and efforts aimed at facilitating the work of foreign observers.


High Goals Mean High Responsibility

Article by Kanat Saudabaev, Secretary of State of the Republic of Kazakhstan

High goals set by President Nursultan Nazarbayev of Kazakhstan , the initiator and driving force of new developments in our country, impose high responsibility. Organization of the upcoming elections for the Majilis (Lower House) of the Parliament and maslikhats (local legislatures), the political culture and ethical criteria of the participants  in the electoral process should demonstrate a greater maturity in our society and its willingness to reach new heights of socio-economic and political development.

The upcoming election will have very great significance for the future of the Kazakh democracy as a whole, for the rapid modernization of our country and the successful implementation of the strategy of the President in transforming Kazakhstan into one of the most developed and competitive countries in the world. This election, for the first time in our history, will be conducted on a proportional system and will show a real demand for one or another party in a society, a degree of its popular support.

One of the most important innovations in the coming elections will be election of nine members of the Majilis from the People’s Assembly of Kazakhstan, a unique tool for the promotion of peace and harmony in our country. Hopefully, the Assembly will express the interests of the multiethnic peoples of Kazakhstan and send to the Majilis its best representatives, real statesmen and true patriots.

Overall, this parliamentary election should give greater momentum to modernization of our country, consolidating the impressive economic achievements of Kazakhstan with a political leadership. This will only happen if the elections are free and fair, open and honest.

I would like to stress particularly that the President personally is interested in such conduct of the election. Addressing the 11th extraordinary congress of the Nur Otan political party in early July, Nursultan Nazarbayev said that as head of state and guarantor of the Constitution, he would do “everything to make elections free and fair” and those parties which will enter the Parliament will have “genuine popular support.” He also stressed that all Kazakh parties participating in the elections, “should in fact prove to the world community that competitive elections without increasing social tensions and outbreak of political crisis are the norm for Kazakhstan!”

With this statement, the head of state and Nur Otan leader called on organizers and participants of the electoral process to make this electoral campaign a model of free and fair elections. The parties and all levels of the executive branch of the government, the Central Election Commission and local election commissions should demonstrate a high degree of responsibility, strict compliance with the letter and spirit of the Constitution, the Law on Elections in the Republic of Kazakhstan and adherence to democratic principles. That is the way the Government and candidates can confirm readiness of our society for a new stage of development.

A most important factor is the international perception of our election which has  already attracted worldwide interest and high expectations. The evidence of this is not only the quantity but also the level and quality of foreign observers. The Organization for Security and Cooperation in Europe (OSCE) alone will be presented by nearly 450 election observers, led by an experienced and authoritative diplomat Lubomir Kopaj. Special interest in Kazakhstan is best shown by the decision of the President in office of the OSCE for the first time to appoint an influential Canadian Senator Consiglio Di Nino, widely known for his international activities, as his Special Coordinator - Head of the OSCE observer mission at the parliamentary elections in Kazakhstan.

People of Kazakhstan and President Nursultan Nazarbayev who started a deepening of democratic processes in the country, today has the right to count on the support and objective assessments by our Western partners. We believe the upcoming election will show the world that Kazakhstan rightfully is a member of the international community and shares democratic values.

In this context, I would like to stress the importance of this election for Kazakhstan’s bid for the OSCE chairmanship in 2009. The Republic has every reason to expect a positive decision on its bid at the meeting of the foreign ministers next November in Madrid and to become, in the next eighteen months, the first post-Soviet country to chair the OSCE.

From the first days of our independence, the first President, the founding father of our modern state, Nursultan Nazarbayev wisely and courageously, firmly and consistently, and without disruptions leads Kazakhstan’s people to the desired goal of building an economically strong and democratically developed Kazakhstan. But, as the President rightly stressed, “Democracy cannot be proclaimed, it can be only created through hard work.” It must be remembered that the building of democracy in a country which only recently came out of a totalitarian system is a very complex and lengthy process. It is therefore very important to make the upcoming election a decisive step towards a truly democratic state for Kazakhstan.

This article was first published in Kazakhstanskaya Pravda daily newspaper on July 31, 2007.


Political and national mechanisms established by the President are like clock-work

In an interview to the Novaya Gazeta Yuri Solobozov, Special Projects Director of the Russian National Strategy Institute, mentioned that specific parliamentary elections were necessary for speeding up the pace of democratic changes in Kazakhstan.

According to Mr. Solobozov President of Kazakhstan Nursultan Nazarbayev has taken the course of General de Gaulle who established Gaullism as a system of efficient public bureaucracy defining strategic aims for the future decades. The same pattern is being established in Kazakhstan: with political elite swiftly developing in Astana, Almaty, Shymkent and Aktau.

According to the Russian expert about 70-80 per cent of voters are ready to vote for the “Nur Otan” party. The opposition in Kazakhstan plays its own role of a generator of valuable alternative ideas with every wise innovation being taken up by the ruling party.


Japan views Kazakhstan as an important partner in the region

Two-day consultations between foreign departments of Kazakhstan and Japan have been wrapped up on Tuesday, July 31 in Tokyo.
According to a Kazakh Foreign Ministry statement Japan officials stressed during the talks that Kazakhstan is regarded as the key partner in their region. Japan also said that it attaches great importance to enhancing ties in all aspects of bilateral cooperation.
Deputy Director-General of the Manufacturing Industries Bureau from the Japan Ministry of Economy, Trade and Industry Masakazu Toyoda reportedly said that Japan supports Kazakhstan’s efforts to join 50 most development world countries. He also underlined a growing interest of Japan business community, especially big business representatives, to Kazakhstan and their intention to participate in non-resource and innovative projects.
The sides exchanged opinions on a wide range of issues including the UNO reform. The sides declared that they shared similar opinions on multiple topical international issues such as fight against terrorism, extremism and separatism. Japan said it supported CICA initiatives and confirmed it’s attendance of CICA top officials meeting in October in Almaty.
Kazakhstan and Japan also agreed on the exchange of visits of economic block ministers and scheduled meetings of foreign top officials.


ECONOMY

Prime Minister Karim Massimov on Kashagan: Contracts with foreign extraction companies shall be respected by both sides

Start of production at Kashagan has been delayed from H2 2008 to H2 2010, announced Kazakhstan Energy Minister Baktykozha Izmukhambetov.
The delay was proposed by Agip KCO, the project operator. The delay has been decided following “revision and reconfiguration of the project with a view of ensuring safety of the technological process and the workers’ safety”.
According to the Minister, given the changes in the timeline, costs of the project will rise from USD 56 billion to USD 136 billion. Talks between the Ministry and Agip KCO will take place in August. Kazakhstan plans to increase its share of profit oil from 10% to 40%.  Prime Minister Karim Massimov warned Agip KCO through a statement for the media that any change of the time schedule to start production at Kashagan is equivalent to a contract breach. Therefore the Kazakhstan Government will respond adequately. “Kazakhstan has been and remains committed to inviolability of contracts, and the contract should be respected by both sides in parallel”.
“Kashagan is the unique project not only for Kazakhstan, but for the entire world in terms of production output, anticipated results, and environment requirements (as it will be implemented in a sensitive environment). There has been no such projects developed earlier; and we need to bear this situation in mind when carrying out further work”, Energy Minister Izmukhambetov said. He assured that the Government would take measures in line with the law.


The road to sustainable economic growth

Economist Intelligence Unit to hold the First Business Roundtable with the Government of Kazakhstan in Astana on 4-5 September, 2007.

What is driving the economic powerhouse at the heart of Central Asia?

Business in Kazakhstan has every reason to be optimistic. Incomes, consumer spending, GDP: all are rocketing ahead, fuelled by surging world oil prices. Wisely though, President Nazarbayev is looking at ways of reducing his country’s reliance on natural resources. This means an emphasis on economic reform, infrastructure upgrades and attracting inward investment.

So what does business - domestic and international - want from government? And where are the real-world opportunities for investment in this country dubbed Central Asia’s “economic miracle”? You can put your views and questions direct to Kazakhstan’s political and business leadership at Economist Conferences’ inaugural Business Roundtable with the Government of Kazakhstan.

A forward-looking agenda focused on practical business realities This is your chance to gather with a select audience of senior executives and policymakers in Astana, to debate the way forward for Kazakhstan:

How far and how fast will WTO accession alter the business landscape in Kazakhstan?
A two-way street: what do business and government want from each other?
Can the President move Kazakhstan’s economy towards a truly diversified structure?
What are the prospects for continuing reform, innovation and inward investment?
Which financial issues are of most concern to business, from interest rates to tax reform?
What should the government do to improve the business environment?
Why you should attend
Go beyond surface analysis to discover the true picture of business in Kazakhstan
See how businesses already active in Kazakhstan are meeting and mastering the challenges
Ensure the Government of Kazakhstan knows exactly what your business wants from them
Meet your peers in a relaxed, informal environment with plenty of time for networking
Hear Economist Intelligence Unit experts give their considered view of the political and economic outlook for Kazakhstan
Debate key government policies with their architects, from fiscal reform to IT investment
Gain on-the-ground insights into business prospects in Kazakhstan


Ascott Ventures into Kazakhstan with two management contracts

The Ascott Group (Ascott) has secured management contracts for two prime serviced residences in Kazakhstan’s capital city of Astana, and Aktau, a city in the oil rich western region by the Caspian Sea. Ascott has been awarded the contracts by Tsesna Corporation, a well-established conglomerate in Kazakhstan with diverse businesses ranging from real estate and construction to banking.  The two serviced residences to be built by Tsesna Corporation will be named Ascott Astana and Citadines Aktau.

In addition, Ascott has signed a Memorandum of Understanding with Tsesna Corporation to establish a framework for a strategic partnership to develop and manage serviced residences in Kazakhstan.

Mr Lim Chin Beng, Ascott’s Chairman said: “Ascott’s entry into Kazakhstan is part of our strategy to further strengthen the Group’s global presence by venturing into emerging cities in Russia and the Commonwealth of Independent States.  The strong levels of travel between Kazakhstan, China, Russia and Western Europe also present opportunities for Ascott to further develop our cross-border expansion strategy by leveraging on the Group’s strong international brand reputation and established networks.”

Mr Liew Mun Leong, Ascott's Deputy Chairman, and President and CEO of its parent company CapitaLand Group said: “Ascott strengthens its front-runner position in the global serviced residences business by being the first international serviced residence owner-operator in Kazakhstan.  The country has strong oil and natural resource industries and has been attracting foreign investments and business travelers.  Ascott’s entry into Kazakhstan is yet another step for the CapitaLand Group to explore real estate development opportunities in fast growing oil rich countries.”

Mr Serik Jaxibekov, Chairman of the Board of Directors, Tsesna Corporation said: “Ascott is an international serviced residence company with proven track record in managing a strong portfolio of serviced residences worldwide. By leveraging on Ascott’s knowledge and expertise, we will promote new standards of living for business travelers in Kazakhstan. This is just a first joint project with Ascott and the CapitaLand Group.  We look forward to other successful projects.”

Mr Gerald Lee, Ascott’s CEO for Europe said: “Ascott’s partnership with an established company like Tsesna Corporation is a good start for us to enter an emerging market.  Astana as the new capital of Kazakhstan has been fast developing as an attractive financial and investment hub, while Aktau is a major port and logistics hub in the oil rich region. We will work with Tsesna Corporation to expand our presence in Kazakhstan across the key cities, and will consider the option of taking equity stakes in some of the future projects.”

Ascott Astana is targeted for opening in the first half of 2009. When completed, it will be located in the heart of Astana where new iconic real estate projects are being developed. A 10-minute walk to the Presidential Palace and across the landmark Central Mosque, Ascott Astana will be within World Trade Centre, an integrated development which is being developed by Tsesna Corporation. The development will comprise residential, retail, business centre, and an exhibition and convention centre when it is completed in 2009. 

Citadines Aktau is also targeted to open in the first half 2009. Aktau is in Western Kazakhstan, one of Kazakhstan’s leading economic regions due to its rich oil and gas resources. Aktau is also home to the country’s largest port facility, Aktau Port, which has been designated a Free Economic Zone. Ascott Astana will have about 200 units while Citadines Aktau will have 120 units.  The management contracts for these properties are not expected to have any material impact on the net tangible assets or earnings per share of The Ascott Group Limited for the current


Kazakhstan planning Foreign Trade Increase to $200 Billion

By the American Chamber of Commerce in Kazakhstan

Kazakhstan plans to increase its foreign trade to US $200 billion by 2015, Industry and Trade Minister Galym Orazbakov said during the forum titled, Competitiveness and Increasing Export Potential, which took place on June 13, according to a Kazakhstan Today correspondent.

"An analysis conducted by the ministry demonstrates that per every 1 USD of GDP, 70% is from foreign commerce," stated the minister. "Taking into account the fact that by 2015, Kazakhstan wants exceed a GDP level of US $300 billion, we forecast that foreign trade will total about US $200 billion," he stated. As a whole, according to Galym Orazbakov, "commodity trade since 1995 rose from USD 9 billion by 7 times, reaching a level of US $62 billion". "Annually commodity trade increased by 19%," he pointed out.

"Taking into account that 4/5 of our exports are raw materials, it is necessary to take radical steps toward diversification," he added.

He stressed that as part of the "30 Corporate Leaders" project, particular attention will be paid to breakthrough investment projects on non-raw hydrocarbon industries, including petrochemicals, chemicals, metallurgy, textiles, and bio-energy".

He said that, "new approaches will be adopted for the implementation of national economic policy, concentrated on increasing the competitiveness of Kazakhstan’s international business, and to pinpoint areas that need to be amended in the Industrial Innovative Development Strategy," according to Kazakhstan Today.


Kazakhstan drafts renewable energy legislation

Detailed legislation on renewable energy is being developed in Kazakhstan, according to the Renewable Energy and Energy Efficiency Partnership (REEEP), which has been helping the country with its renewable energy legislation over the past year. In May, draft legislation was approved that would regulate the country's renewable fuels industry. It is now subject to governmental consultations before being sent to parliament. By July 2009, the country plans for the modernization and development of ecology-friendly types of transport, transportation systems and fuel, including non-carbonic fuel. Currently, Kazakhstan relies on coal for power.


OTHER NEWS

Kazakhstan carrier posts record first half growth

By Cargonews Asia

Air Astana cargo revenue rose by more than 100 percent as the Kazakhstani flag carrier pitched in with record growth during the first half of 2007.

No freight tonnage figures were given by the carrier, but Air Astana provides belly cargo services to Beijing, Seoul and Bangkok from its Almaty base that has become a busy transhipment hub on the China-Russia and Asia-Europe routes.

Passengers carried during the first six months of 2007 increased by 42 percent to 970,000 and are expected to exceed two million for the full year. Passenger revenue increased by more than 50 percent.
The Air Astana fleet grew to 18 aircraft during the first half of 2007 following the delivery of two Boeing 767-300ERs, two Airbus A320s and two A321s. The fleet is destined to grow further with the arrival of additional Boeing and Airbus types over the next 12 months, and the carrier is on track to reach its target of 34 aircraft by 2014.

Service frequencies from Almaty to destinations in Asia have been increased in 2007, with Beijing currently served six times a week and Seoul twice a week. All year round services to Bangkok have been introduced and will be increased to three times a week with effect from October.

"Air Astana has entered a very dynamic and profitable phase of development, with record growth in capacity, passengers carried and fleet," said Peter Foster, president of Air Astana.

"These achievements are matched by the commitment to continuously improve the quality and range of services available to our valued passengers both in the air and on the ground."

Air Astana is a joint venture between the Government of Kazakhstan (51 percent) and BAE Systems (49 percent). The airline commenced regular flight operations in May 2002 and currently operates a fleet of 18 western aircraft on a network that includes 25 domestic and 17 international destinations. The airline is a full member of the International Air Transport Association.




News Bulletin of the Embassy of the Republic of Kazakhstan
Contact person: Askar Tazhiev
Tel.: 202-232-5488 ext 106; Fax: 202-232-5845
E-mail:Task7@hotmail.com 
Web-site: www.kazakhembus.com  



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