News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan


No 16 November 14, 2007

Kazakhstan’s State Secretary visits US
Kazakhstan to continue its cooperation with the OSCE on further election reform

First Summit of CIS Independent Directors to be held in Almaty, 27-28 November 2007
Almaty's ratings affirmed with stable outlook - Fitch
Japan steals march on Asia rivals over uranium supply
Kazakhstan to automate ATM testing with Level Four

Handball: Kazakhstan – a 50-year-long quest to join the world’s elite


Kazakhstan’s State Secretary visits US

On Nov. 5-9 State Secretary of the Republic of Kazakhstan, Mr. Kanat Saudabayev, paid an official visit to the United States and met a number of key officials and law makers, including Secretary of State Condoleezza Rice, National Security Advisor Stephen Hadley, Energy Secretary Samuel Bodman, Senate Majority Leader Harry Reid, Chairman of the House Foreign Affairs Committee Tom Lantos. 

Kazakhstan’s former envoy to Washington, Mr. Saudabayev enjoyed especially warm welcome on behalf of US officials and took the opportunity to have friendly discussions over a wide range of important bilateral and international issues, including democratic reforms, reconstruction in Afghanistan and Iraq, global and regional energy security, development and integration in Central Asia as well as Kazakhstan’s bid to chair the Organization for Security and Cooperation in Europe in 2009.

American interlocutors hailed swift development of Kazakhstan-American cooperation and openly expressed their optimism on Kazakhstan’s OSCE bid. However, Astana – Washington’s strategic ally in a turbulent region – still looks for official US support of its long-term aspiration to lead the OSCE; chairmanship in Europe’s largest security and cooperation organization is expected to precipitate the pace of political reforms and facilitate further democratic progress in the country.   

The Washington Times published a piece on the visit on Nov 9.

Kazakhstan to continue its cooperation with the OSCE on further election reform

Mr. Christian Strohal, Director of OSCE’s election watchdog – the Office for Democratic Institutions and Human Rights (ODIHR) – visited Kazakhstan on Nov 5-6 to discuss the country’s democracy record and further election reform.

During his visit Mr. Strohal met many influential decision makers, including Head of Presidential Administration Adilbek Jaksybekov, Supreme Court Chairman Kayrat Mami, Chairman of Human Rights Commission Sagynbek Tursunov and Central Election Commission Chairman Kuandyk Turgankulov.

Also in Astana the ODIHR Director presented OSCE’s final report on August 18 parliamentary elections in Kazakhstan. Earlier, the OSCE Election Observation Mission concluded that the vote reflected welcome progress, though some of the Organization’s criteria were not met.

“It is important now that we continue to work on the basis of our recommendations and build on the progress and eliminate the problems”, Mr. Strohal said after meetings in Astana.

Kazakhstan eagerly agreed to continue its work on OSCE’s observations and proposed holding a meeting of experts in November as well as a series of roundtables in 2008 in order to discuss issues raised in the report and continue election reform in Kazakhstan in close cooperation with the OSCE.


First Summit of CIS Independent Directors  to be held in Almaty, 27-28 November 2007

First Summit of CIS Independent Directors, 27-28 November, is organized by The Kazakhstan Independent Directors Association (KIDA)
Summit’s main goal is to promote the initiative of the Government of the Republic of Kazakhstan to develop the institute of independent directors in the country. According to the Kazakhstan’s new legislation at least one third of the board members in a joint stock company should be independent directors.

It was proved in practice that availability of effective corporate governance system in a company can, in most cases, boost a company’s financial performance, provide for better quality management decisions and bring about other advantages. Delegates to the summit will discuss a number of current issues of the development of the institute of independent directors in the Commonwealth of Independent States, share their experience of introduction of the best Western practices in terms of independent directors operation, and hear success stories from Russian and Ukrainian companies.

It is envisaged that the summit will provide room for two days of plenary sessions and interactive discussions addressing the following issues:

What contribution in the company is expected from an independent director?  Primary goals and objectives. Owner’s view. CEO’s view.
CEO, director and owner: how to capitalize on an independent director in companies?
Potential conflicts between independent directors and company’s management, solution methods.
To what extent the independent directors are independent?
Russian and Kazakhstan experience of introduction of Corporate Governance Codes in companies.  How this influences the status of independent directors and company operations?
Whom to select as independent director in order to boost the company’s investment appeal?

For more information on the event and the KIDA please contact:

Zhanat Alimanov, Executive director
Kazakhstan Independent Directors Association
+7 727 320 13 25 /6/7/8/9/0 (ext. 122)

Almaty's ratings affirmed with stable outlook - Fitch

Forbes, Nov 8, 2007 

Fitch Ratings said it has affirmed Kazakhstan's City of Almaty long-term foreign and local currency 'BB+' ratings and a short-term foreign currency 'B' rating. Fitch also assigned it a national long-term 'A+(kaz)' rating.

All the rating outlooks are stable to reflect Fitch's expectation that economic growth will underpin stable revenue growth, allowing the city to compensate for increasing expenditures and maintain an operating balance at satisfactory level.

The ratings reflect the city's well-diversified and growing economy, stable growth in tax revenue, high level of capital spending and low debt burden, the ratings agency said.

The ratings also factor in the city dependence upon the central government in terms of decisions on inter-regional equalization transfers, and limited financial flexibility of the city, it added.

Almaty is the largest city in Kazakhstan and is located in the south-eastern part of the country.

Japan steals march on Asia rivals over uranium supply

By Mari Iwata, Dow Jones Newswires, Nov 13, 2007

Japanese firms can afford to wait for uranium prices to fall before buying fresh stakes in uranium mines owing to a run of deals in resource-rich Kazakhstan, said a senior government official.

"Japan has secured (the equivalent of) 30%-40% of its annual uranium imports just from its Kazakh stake buys," said Harufumi Mochizuki, director-general of the Agency for Natural Resources and Energy, a unit of the Ministry of Economy, Trade and Industry.
Kazakhstan holds the world's second-largest reserves of uranium, a key fuel in the generation of nuclear power.

As a result, the Central Asian nation is increasingly a target of major energy consumers including China which are planning to expand their nuclear power output over the next few decades to cut their reliance on coal and oil.

Rising demand for uranium in Asia has coincided with supplies becoming tighter on bad weather.

Flooding has delayed the opening of Cameco Corp.'s Energy Resources of Australia Ltd. (ERA.AU) unit to declare force majeure on uranium deliveries from its Ranger mine in Australia.

The resulting surge in uranium prices led to a wave of industry consolidation. French nuclear giant Areva (CEI.FR) bought Canada's Uramin, while Australia's Toro Energy Ltd. (TOE.AU) made a A$276 million friendly takeover offer for fellow uranium explorer Nova Energy Ltd. (NEL.AU) among other sector deals.

"Uranium business has basically been a seller's market, but we moved slightly ahead" of rivals in China and South Korea, said Eiichiro Otsuka, deputy general manager of the Nuclear Energy Department at Sumitomo Corp. (8053.TO).

In January 2006, Sumitomo Corp. bought a 25% stake in the West Mynkuduk uranium project in Kazakhstan.

Some months later, Junichiro Koizumi visited Kazakhstan for the first time as Japan's prime minister, to talk about uranium exports to Japan. Another government delegation led by METI minister Akira Amari visited the country early in 2007 to maintain the relationship.

Kansai Electric Power Co. (9503.TO), Japan's second largest utility by capacity, also bought a 10% stake in the West Mynkuduk project, while the remaining 65% is held by state-owned uranium company Kazatomprom.

The project, expected to start test production in the next few months, is scheduled to reach full output of about 1,000 metric tons a year in 2010 and keep going for more than 20 years. All of the output will be sold to Japanese utilities, Otsuka said.

Marubeni Corp. (8002.TO) and other Japanese companies including Tokyo Electric Power Co. (9501.TO), Japan's largest utility by capacity, have invested in another Kazakh uranium project, namely the Kharassan mine project, through a Japanese holding company since the start of last year.

The holding company has indirect ownership interest in two affiliates, each of which operates one uranium block.

Details of the stakes haven't been disclosed, but the Japanese side has the right to take 2,000 tons a year of uranium from the project, which is scheduled to reach full production in 2014, according to Marubeni.

"Thanks to (these deals), we won't have to worry (about uranium supply) for a substantial period of time," said ANRE's Mochizuki.

Kazakhstan to automate ATM testing with Level Four

BobsGuide, 7 November 2007

Level Four, a leading supplier of open standards-based ATM software, today announced that Kazkommertsbank, the largest private bank in Kazakhstan, will go live with its automated, end-to-end ATM testing and development software, ATM Developer, in November 2007. Level Four’s solution will enable the bank to design, configure and test new ATM content directly from a desktop PC for enhanced customer experience at the ATM. As a result, the bank will benefit from reduced testing cycles of ATM sequences for faster time to market of new services and drive operational efficiency. As the first bank in Kazakhstan to deploy EMV (Europay, Mastercard and VISA) smart cards and offer telephone and Internet banking to all of its customers, Kazkommertsbank is leading the region in its customer-centric approach to retail banking. The bank recognises that adding content to the ATM network can dramatically enhance its customers’ ATM experience as well as the bank’s brand image. End-to-end testing of the ATM network is crucial to ensure that customer’s ATM experience is not compromised when content is deployed.

Kazkommertsbank sought to replace its dedicated ATM machines for manual network testing with a more time efficient, cost effective and reliable solution with comprehensive reporting capabilities. In particular for testing new services prior to implementation. The bank selected Level Four’s ATM Developer because it enables automated testing of multiple requirements simultaneously without costly hardware. From a desktop PC, users can develop and test new content prior to deployment. With ATM Developer’s in-built regression testing capabilities, users can test the breadth of ATM transactions more rigorously, which leads to improved ATM network uptime for optimal customer satisfaction at the ATM.

Inessa Yespenbetova, director of bank cards department. at Kazkommertsbank, said: “Our strategy is to maintain our leading position in the Kazakhstani banking market by introducing new banking services to customers as well as improving operational efficiency. We believe that Level Four’s ATM Developer is a solution that goes a long way to helping us meet our strategic goal. Not only does it provide more thorough testing of the ATM network end-to-end but it also reduces our testing cycles prior to rolling out new ATM content to our customers.”


Handball: Kazakhstan – a 50-year-long quest to join the world’s elite


By clinching a place at the world handball championship finals, due to be held in France next month, Kazakhstan women’s squad presented a precious gift for the national federation, which celebrates its 50th anniversary this year.

With a sensational win at the Asian handball championship in Almaty earlier this year, Kazakhstan also gained a place at the Beijing Olympic tournament. “The fact that Kazakhstan will play in the world finals is a great success itself,” the federation deputy president Nikolai Astafiev told AFP. “We are not setting any particular objectives for our squad,” he added. “They should just do their best at our first ever world finals and get a dose of international experience that they badly need ahead of next-year’s Olympics.”

Handball in Kazakhstan first appeared in 1957, when the women’s teams were founded in three of the then-Soviet republic’s cities – Chimkemt, Almaty and Karaganda. However, the game developed weakly in Kazakhstan, where it was always overshadowed by higher-level competition in Russia, Belarus and Ukraine – the Soviet republics that dominated the sport. Kazakhstan’s teams were usually relegated to the lower Soviet leagues and were always the underdogs on the rare occasions when they managed to appear in the country’s top division.

The participation of Almaty side Burevestnik in the 1989 national cup final, which they lost, remains the republic’s biggest ever success in the Soviet era. A decade after the fall of the Soviet Union in 1991, handball – never a traditionally popular sport in Kazakhstan – was in total disarray. Public interest, and funding along with it, had dropped to virtually nil. Nevertheless, diehard handball enthusiasts worked to keep the game alive in the now-independent republic. Although they were unable to hold national championships on an annual basis, their efforts began to pay off over time. After a decade of uphill struggle, federation leaders managed to find new sources of funding for the game and investments began to produce returns almost immediately.

In 2000, the Kazakhstan team won bronze medals at the Asian juniors championships, clinching another podium place a year later at the Eastern-Asian games. Finally the republic’s women’s squad produced a sensation, winning the 2002 Asian championship and confirmed their class once again by clinching the silver medal at the Asian Games just several months later. But the country’s winning squad failed to show up at the 2003 world championships as the team was almost disbanded after some of their leaders finished their career, while the majority of other top players were sidelined with injuries and pregnancies.

The game’s ruling body however managed to keep the newly-acquired winning traditions fresh and prepared the national women’s team for the 2006 Asian games in Qatar, where they finished as runners-up before winning the 2007 Asian championships at home. Local media reported that the 16-player team and their coaches received a $30,000 bonus for their victory. Before the start of the world championship, where Kazakhstan will battle in the round robin stage with France, Argentina and Croatia for a pass into the knockout round, the team set up their training base in Lithuania. On November 19-22 Kazakhstan will also practice in Moscow together with the reigning world champions Russia before their departure to France.

“We are dark horses at the event,” Kazakhstan national manager Lev Yaniyev said.

“This is our main and probably the only advantage. France are clear favourites in our group. They are really strong. But I believe we are capable of beating Argentina and can struggle with Croatia for a place in the play-offs.”

News Bulletin of the Embassy of the Republic of Kazakhstan
Contact person: Zhanbolat Ussenov
Tel.: 202-232-5488 ext 104; Fax: 202-232-5845
E-mail: zhan@kazakhembus.com
Web-site: www.kazakhembus.com  

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