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


No 4, August 20, 2007

Kazakhstan votes in elections hailed as a step “forward” by the OSCE observers
Chinese President visits Kazakhstan, signs important agreements
Chairman of Kazakhstan’s Senate met with OSCE/ODIHR Director

China, Kazakhstan agree on Sino-Kazakh oil pipeline extension to Caspian Sea
Kazakhstan's president proposed establishing an oil and gas regulating body for the SCO                         member states
Kazakh stake in nuclear company
Investment in fixed assets in Kazakhstan totalled 1.4982 trillion tenge in January-July, an 11.6                per cent increase on a year-to-year basis
Kazakhstan's economy ranked 55th by the World Bank

Lufthansa and Air Astana to enter a partnership. Memorandum of understanding signed
Kazakhstan to host international conference against nuclear weapons


Kazakhstan votes in elections hailed as a step “forward” by the OSCE observers

On 18 August voters in Kazakhstan cast their ballots in early elections to Kazakhstan’s Parliament widely seen as a crucial test for the country’s fledgling democracy.
The Central Electoral Commission of Kazakhstan (CEC) indicates in its preliminary report that the ruling “Nur Otan” party emerged victorious from the parliamentary elections, winning 88.05% of the vote. However, this figure will be revised after the CEC completes the counting of all election protocols.
According to the international observers missions deployed to Kazakhstan’s elections, the polls were quite positive. Elections did not meet all of international democratic standards but “welcome progress” was made, the OSCE (Organization for Security and Cooperation in Europe) said in its preliminary report issued on Sunday.
"Notwithstanding the concerns contained in the report, I believe that these elections continue to move Kazakhstan forward in its evolution towards a democratic country," said Senator Consiglio Di Nino, Special Co-Ordinator of the OSCE short-term observers and Head of the OSCE Parliamentary Assembly delegation.
David Wilshire, the Head of the delegation of the Parliamentary Assembly of the Council of Europe, said: "Building a democracy is a long and hard task. However, the people of Kazakhstan are making real progress. I am not surprised that more needs to be done but saddened that the outstanding challenges include some fundamental matters."
Ambassador Lubomir Kopaj, who heads the long-term election observation mission of the OSCE Office for Democratic Institutions and Human Rights (ODIHR), stressed that the election legislation reform, which was interrupted by the early elections, needs to be resumed as soon as possible. "The authorities have demonstrated a willingness to improve the election process, but our observations show that Kazakhstan still needs to make many improvements."
“In the pre-election period, candidates enjoyed increased ability to convey their messages to voters. Candidate list registration was inclusive. The Central Election Commission worked transparently and adopted numerous decisions to regulate the election process and conducted extensive voter education. Observers enjoyed good co-operation with the authorities”, - says the OSCE report.
However, in the preliminary report on its findings the OSCE mission points out some drawbacks which need to be addressed in future: “a combination of restrictive legal provisions stands in the way of developing a pluralistic political party system and decreases accountability of elected representatives to voters. Those include a high threshold for representation in the parliament, provisions that parties choose only after the elections which candidates become members of parliament and undue limitations on the right to seek public office”.
Special issue of the News Bulletin on parliamentary elections with more features, comments and assessments by domestic and international observers will be released shortly by the Embassy of Kazakhstan.

Chinese President visits Kazakhstan, signs important agreements

On Saturday Chinese President, Mr. Hu Jintao, concluded his state visit to Kazakhstan having reached a number of important agreements.

President of Kazakhstan, Mr. Nursultan Nazarbayev, stressed his high appreciation of the visit’s results. “This visit will galvanize the development of Kazakh-Chinese relations”, he said. President Nazarbayev also emphasized that his Chinese counterpart arrived in the country on a very important day in the nation’s history, when a milestone election to Kazakhstan’s legislature was being held.

“Our people respect considerate and positive attitude of the Chinese Government to Kazakhstan”, Kazakh leader said.

“The Chinese Government welcomes the increase of Chinese companies’ investments into machinery, telecommunications, transport and other spheres of Kazakhstan’s economy. We are also interested in participating in the development of Kazakhstan’s scientific and industrial parks”, President Hu said at a press briefing after the meeting.

During the visit representatives of the two countries put pen to paper to a number of agreements, including on interaction with the UN and the SCO, development of cross-border, financial and humanitarian cooperation.

In recent years, the two countries have achieved fruitful results from cooperation in economy, trade, energy and transportation. In 2006 the bilateral trade volume hit USD 8.36 billion, up 22.8 per cent as compared to 2005. During the first half of 2007 the volume of trade turnover reached USD 5.97 billion, up 60.4 per cent as compared to the first half of 2006.

“The volume of commodity trade turnover between Kazakhstan and China will reach USD 10 billion in 2007. According to previous plans, this figure was to be reached only by 2010”, President Nazarbayev stated.

In their Joint Communiqué the two parties agreed to cooperate to increase bilateral trade turnover by USD 15 billion by 2015, strike balance between bilateral export and import flows and diversify the structure of commodity trade.

Chairman of Kazakhstan’s Senate met with OSCE/ODIHR Director

On Saturday Chairman of Kazakhstan’s Senate (upper chamber of the Parliament) Kassym-Jomart Tokayev held a meeting with the OSCE/ODIHR Director Christian Strohal.

During the meeting Mr. Strohal highlighted positive results of the election campaign in Kazakhstan as well as fruitful cooperation between the OSCE/ODIHR observers’ mission and Kazakhstan’s Central Electoral Commission (CEC).

The ODIHR Director said he hoped for the development of constructive cooperation between the ODIHR and Kazakh Parliament and CEC on further improvement of the election legislation.


China, Kazakhstan agree on Sino-Kazakh oil pipeline extension to Caspian Sea


China and Kazakhstan have agreed to extend an oil pipeline that will link mainland China to the Caspian Sea, giving Beijing direct access to an energy-rich region controlled by Kazakhstan, the China National Petroleum Corp (CNPC) said.

CNPC, the parent of PetroChina, has signed an agreement with state-run oil company KazMunaiGaz for the second phase of the Sino-Kazakhstan crude oil pipeline. The signing was made during a recent visit to Kazakhstan by Chinese President Hu Jintao.

The two parties agreed to extend the existing Atasu-Alashankou pipeline 700 km westward, linking it to the Caspian Sea.

China and Kazakhstan invested a combined USD 700 mln in the 962.2-kilometer Atasu-Alashankou pipeline which was completed in November 2005.

The pipeline is ultimately designed to carry 20 mln tons of crude oil per annum, with annual output at 10 mln tons in its initial phases.

Kazakhstan's president proposed establishing an oil and gas regulating body for the SCO member states

Speaking in Kyrgyzstan at a session of the regional group, whose members include major hydrocarbon producers, Nursultan Nazarbayev presented a draft of strategy for creating an SCO oil and gas club, an idea which has been considered since February.

"The draft Asian energy strategy envisions the establishment of an SCO energy agency, which would be a type of “brain center” and database, while transactions on the market for energy resources could be made through an SCO energy bourse," Nazarbayev said.

The Kazakh president said that establishing an oil and gas club was one of the pivotal ideas for the SCO, as the existing pipeline system linking Russia, Kazakhstan, Central Asia and China, could serve as a basis for setting up a uniform SCO market.

Russian President Vladimir Putin said expanding fuel trade cooperation could give an impetus to regional projects. "I am sure that the initiated energy dialogue and accompanying national energy strategies as well as the establishment of an energy club will set the priorities for our further cooperation," Putin said.

Besides Russia and Kazakhstan, the SCO comprises China, Kyrgyzstan, Tajikistan and Uzbekistan, as well as Iran, India, Pakistan and Mongolia as observers.

At the talks in Bishkek on Thursday, Iranian President Mahmoud Ahmadinejad reiterated his proposal to hold a meeting of SCO energy ministers.

"I suggested last year that a meeting should be held between oil and gas ministers of SCO member states to optimize cooperation in transportation, prospecting, development and refining. As before, Iran is ready to organize such a meeting," he said.

Iran, the world's second largest natural gas producer after Russia, proposed in January to establish an international gas cartel similar to the OPEC. These plans being still no more than mere discussions have already angered the West, in particular the United States.

Kazakh stake in nuclear company

By BBC News

Japanese firm Toshiba has sold a 10% stake in its majority-owned nuclear firm Westinghouse to uranium maker Kazatomprom for $540m (£268m).

The Kazakh firm hopes the investment will help it to expand. Toshiba aims to gain access to key uranium sources.

Toshiba bought 77% of Westinghouse, the US power plant arm of British Nuclear Fuels (BNFL), for $5.4bn in 2006.

Interest in nuclear energy has grown as an alternative to oil. Japan gets 25% of its energy from nuclear sources.

"By welcoming Kazatomprom - a global leader in resource exploitation - as a Westinghouse investor, Toshiba will strengthen the global development of its atomic energy business," said the Japanese conglomerate.

When Toshiba invested in Westinghouse, the final stake it bought was far larger than originally planned after another investor pulled out.

Since buying its share, the firm has been trying to spread the cost by including other investors.

The latest deal needs to be given the go-ahead by US and Japanese regulators.

Kazatomprom, which holds 10% of the global uranium market, aims to increase that stake to 40% over the next decade or so.

The firm hopes to boost uranium production three-fold to 17,500 tonnes a year by 2015.

The combination of higher oil prices and the need to reduce greenhouse gas emissions has prompted countries to seek an alternative to fossil fuels, including nuclear fuel.

Investment in fixed assets in Kazakhstan totalled 1.4982 trillion tenge in January-July, an 11.6 per cent increase on a year-to-year basis

The main sources of investment in fixed assets were households with 59.2%, foreign capital with 18.5 per cent, state budget with 11.2% and corporate transfers with 11.1%.

Of the total, 30.1 per cent went to the oil and gas industry, 28 per cent to the real estate sector, 11.1 per cent to transport and communications and 10.6 per cent to the processing industries.

The oil-rich Atyrau region received 68.2 per cent of the investment.

Kazakhstan's economy ranked 55th by the World Bank

The World Banks presented its ranking of the world economies in terms of the GDP size in 2006. Kazakhstan ranked 55th out of 183 countries with the GDP as large as USD 77 billion.

Other CIS countries were ranked as follows: Belarus – 68th, USD 47 billion. Azerbaijan is 81st, USD 20 billion. Uzbekistan is 89th, USD 17 billion. Turkmenistan is 104th, USD 10.5 billion. Georgia is 117th with USD 7.5 billion. Armenia and Moldova were ranked 122nd and 139th with the GDP of USD 6.41 and USD 3.3 billion respectively. The lowest-ranked CIS country is Kyrgyzstan (143rd) with the GDP of USD 2.7 billion.


Lufthansa and Air Astana to enter a partnership. Memorandum of understanding signed

Joint press release

Lufthansa and Kazakhstan flag carrier Air Astana are planning a bilateral cooperation. A corresponding memorandum of understanding (MoU) was signed on Tuesday, August 14, 2007 by representatives of both airlines. The objective of the partnership is to expand the flight offering for customers of both companies.

Peter Foster, President of Air Astana, and Götz Ahmelmann, Vice-President Alliances, Strategy and Subsidiaries of Deutsche Lufthansa, signed the memorandum of under-standing in the Kazakhstan capital Astana on Tuesday, August 14, 2007.

As of 2008, customers of both airlines can benefit from codeshare flights and mutually coordinated flight schedule as well as an extended offer of flights between Germany and Kazakhstan. In addition, Lufthansa passengers will enjoy better onward connections within Kazakhstan and Central Asia. For the passengers of Air Astana the cooperation intends to offer better connections to the worldwide Lufthansa network, in particular, to destinations within Europe, the USA and Canada.

Furthermore, the aim is to coordinate the frequent flyer programmes of both airlines, in order to facilitate the combined collection and redemption of miles. Miles & More members should already be able to collect miles on various Air Astana routes as of the end of October this year.

Lufthansa is the leading European airline in the Kazakhstan market with a daily flight to Almaty, the economic metropolis and former capital, twice weekly with an ongoing flight to Astana. Air Astana is the market leader in Kazakhstan and one of the fastest growing carriers in the CIS region.

Kazakhstan is the ninth largest country by landmass in the world and is characterized by its extensive natural resources and the high growth rate of its gross domestic product (2006: 10.6 %). In total, around 400 German companies are represented in Kazakhstan.

About Air Astana

Air Astana was founded in 2001 and is owned by the Kazakhstan state (51%) and BAE Systems (49%). Air Astana is run to international aviation standards, its management team consisting both of local managers trained to western standards, and foreign experts from some of the world's leading airlines. With a modern fleet (average age six years), consisting of Boeing 757, Boeing 767, Airbus A 320/321 and Fokker 50s, Air Astana is one of the most respected airlines within the former CIS states and with its hubs in Almaty and Astana offers a good supplement. Thanks to its reliability and operating efficiency, Air Astana enjoys an excellent reputation amongst its peers and the travelling public.

About Lufthansa

Lufthansa is a leader among foreign airlines operating in Russia and the CIS. Lufthansa currently offers 200 direct flights a week from 18 cities in the CIS (Almaty, Ashgabat, Astana, Baku, Donetsk, Kazan, Kiev, Minsk, Moscow, Nizhniy Novgorod, Perm, Rostov-on-Don, Samara, St. Petersburg, Tbilisi, Ufa, Yekaterinburg and Yerevan) to Germany and onwards to Lufthansa’s international network encompassing 192 destinations worldwide.

Following the successful integration of SWISS, the Lufthansa Group is continuing to expand its position as a leading international airline. Last year, 53.4 million passengers flew with Lufthansa to 185 destinations. SWISS carried 10.5 million passengers to 70 destinations. Lufthansa operates a fleet of 430 aircraft, while the Swiss group currently operates services with 73 aircraft. The Lufthansa Group employs a total of 101,000 people worldwide originating from 165 nations.

For further information please contact:
Deutsche Lufthansa AG   Air Astana, JSC
Corporate Communications     Public Relations Department
Aage Dünhaupt / Eline Dermaut        Zhandos Zeineshev
Phone: +44 20 8750 3415         Phone: 7 327 258 41 35
Fax: +44 20 8759 1987    Fax: 7 327 259 87 01
http://media.lufthansa.com                 http://www.airastana.com

Kazakhstan to host international conference against nuclear weapons

RIA Novosti

Kazakhstan will host a conference entitled "Kazakhstan's way to a nuclear weapon-free world" to mark the 16th anniversary of the Semipalatinsk nuclear test site's closure. The symposium will be organized by the country's Foreign Ministry.

The event will be attended by high-ranking representatives from the International Atomic Energy Agency (IAEA), members of the United States Congress, Kazakh lawmakers and Cabinet ministers, the heads of scientific and research centers concerned with non-proliferation, diplomats and members of international organizations, and local and foreign journalists.

Kazakhstan was the first ex-Soviet state to scrap its nuclear weapons program. After the Soviet Union's break-up, the country inherited the world's fourth-largest nuclear arsenal, with around 1,400 warheads.

In 1991 President Nursultan Nazarbayev, who had just become president of the newly-independent Central Asian state, ordered the shutdown of the Semipalatinsk test site and the handover of all nuclear weapons to Russia. The previous year, South Africa had made history by becoming the first country to voluntarily terminate its nuclear deterrent.

Former Soviet republics Ukraine, with a vast nuclear arsenal of 5,000 warheads, and Belarus, with a smaller arsenal, concluded the handover of their atomic weapons five years after Kazakhstan.

The conference organizers said: "The symposium is intended to attract the world's attention to the example of Kazakhstan, which has shown that the most effective and preferable path to ensuring the security of a nation lies through a nuclear weapon-free choice and a consistently peaceful foreign policy, and not through the creation and development of weapons of mass destruction. In light of the international situation today, Kazakhstan's example can and should be very timely and useful."

Semipalatinsk, in northeast Kazakhstan's steppe, was the Soviet Union's largest nuclear weapons testing ground. The site, picked by Joseph Stalin's security chief Lavrentiy Beria after the Second World War, saw the country's first atom bomb test explosion, Operation First Lightning, in 1949.

Over the next four decades, hundreds of bomb tests were conducted at Semipalatinsk, dispersing dangerous radioactive contamination over a vast area.

The conference organizers said the upcoming event "will also highlight the Kazakhstan-U.S. partnership in non-proliferation and the Nunn-Lugar Program in Kazakhstan, which this year marks its 15th anniversary."

The list of speakers includes: Kanat Saudabayev, Kazakhstan's Secretary of State; Foreign Minister Marat Tazhin; Energy Minister Bakhtykozha Izmukhambetov; U.S. Congress Delegate Eni Faleomavaega; U.S. Republican Representative Chris Cannon; an un-named senior IAEA official; and academics and non-proliferation experts from the United States and Europe.

The conference organizers said: "The symposium will take place as the international attention is drawn to Kazakhstan's becoming a major global player in the peaceful use of atomic energy."

The conference organizers highlighted that Kazakhstan, although free of nuclear weapons, is an active player in the world nuclear energy market.

On August 13, the country's state nuclear energy company Kazatomprom and Japan's Toshiba Corp. announced a deal by which the Kazakh company is to buy Toshiba's 10% stake in U.S.-based nuclear power plant maker Westinghouse Electric Co.

"Kazakhstan, believed to hold the world's second-largest uranium reserves, plans to use the deal to enter new export markets for its uranium fuel. Kazatomprom is the world's third-largest uranium producer, and aims to become the leading uranium miner by 2010," the statement said.

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: info@kazakhembus.com
Web-site: www.kazakhembus.com  

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