Kazakhstan
News Bulletin
Released weekly by the Embassy of the Republic of Kazakhstan
www.kazakhembus.com
                                               
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  No 8, September 19, 2007

POLITICS
Kazakh President visited Turkmenistan on September 11-12, and discussed energy                                   cooperation
Kazakhstan considers Tajikistan important Central Asian partner
Special Rep of US State Department visits Kazakhstan
Ambassador Idrissov presents  “New Kazakhstan” at John Hopkins University’s Central Asia-                Caucasus Institute in Washington DC
Kazakhstan: Nazarbayev's Regional Tour Shows Growing Economic Influence (article from                      Radio Free Europe / Radio Liberty)

ECONOMY
Kazakhstan to publish its first EITI report in November
Kazakh biofuel production can be twice cheaper than production in the US, article from Trend                 Capital
Kazakhstan plans to attract about USD 21 billion to electric power development by 2015 -                         "KEGOC" president

OTHER NEWS
Republican Representative Jo Bonner (R-AL) presents Kazakh Ambassador with money from                  Mobile students
The Kazakhstan Open to welcome golfers in September
Kazakhstan soccer national team rallies to draw 2-2 with Belgium


POLITICS

Kazakh President visited Turkmenistan on September 11-12, and discussed bi-national energy cooperation

Within the framework of a two-day official visit to neighbouring Turkmenistan Kazakh President Nursultan Nazarbayev discussed with his Turkmen counterpart, President Gurbanguly Berdymukhamedov, the possibility of Turkmen natural gas transportation to foreign markets through Kazakhstan’s territory.

"Energy cooperation is mutually profitable and in the best interests of both countries. The transportation of Turkmen gas via Kazakhstan to foreign markets, Kazakh companies’ participation in exploration and development of hydrocarbons in Turkmenistan and other aspects of bilateral cooperation were discussed", the Kazakh President explained.

Also, the parties agreed to hold Turkmen culture days in Kazakhstan as well as organizing a Forum for the two countries’ cultural representatives next year.

"Undoubtedly, the agreements we reached mark a new stage of our partnership and present new opportunities for the implementation of large-scale joint projects for the benefit of both countries", said President Nazarbayev after the meeting. "I would like to stress that Kazakhstan intends to develop a strategic partnership with Turkmenistan", he added.


Kazakhstan considers Tajikistan important partner in Central Asia

Kazakhstan considers Tajikistan to be an important strategic partner in the Central Asian region. Kazakh President Nursultan Nazarbayev made the point in the course of his September 13-14 official visit to Tajikistan.

“Kazakhstan is ready to develop political, economic, humanitarian ties and relations with Tajikistan. I consider this visit as a continuation of the constructive dialogue between our countries”, the Kazakh leader said.

According to Tajik President Emomali Rakhmon, his country is interested in developing cooperation with Kazakhstan in all possible spheres. “We regard Kazakhstan as a model”, he said.

A bilateral agreement on the establishment of Kazakh-Tajik investment fund with  authorized capital of $100 million was signed within the framework of the visit.


Special Representative of US State Department visits Kazakhstan

Special Representative for Commercial and Business Affairs of the US Department of State J. Frank Mermoud visited Kazakhstan in early September to discuss the prospect of enlarging Kazakh-American cooperation.

In the course of his visit Mr. Mermoud  met with Kazakh officials, including Prime-Minister Karim Massimov, Transport Minister  Serik Akhmetov and others. One of the main topics for discussion was the launch and implementation of the US-Kazakh Public-Private Partnership dialogue.


Ambassador Idrissov presents “New Kazakhstan” at John Hopkins University’s Central Asia-Caucasus Institute in Washington DC

On Wednesday, 12 September, Kazakh Ambassador to the US, Erlan Idrissov, visited the Central Asia-Caucasus Institute of the John Hopkins University to deliver a speech entitled "A New Kazakhstan".

Representatives of the US State Department, the World Bank, diplomatic corps, oil companies, mass-media and NGOs attended the event.

Ambassador Idrissov discussed the diversification of Kazakh economy, good governance, foreign and energy policy, investment climate and recent developments at the giant Kashagan oilfield in Kazakhstan.

He stressed that the recent constitutional reform is beneficial for long-term political modernization in Kazakhstan. 


Kazakhstan: Nazarbayev's Regional Tour Shows Growing Economic Influence

By Gulnoza Saidazimova, Radio Free Europe / Radio Liberty, 14 September, 2007

Kazakhstan has for years wanted to be the flagship country in Central Asia. It now seems to be realizing that ambition.

With its vast hydrocarbon resources, Kazakhstan has achieved nearly 10 percent annual economic growth in recent years, mostly due to its oil industry. Rising oil revenues have also allowed Kazakh companies to invest in neighboring countries.

Kazakh President Nursultan Nazarbayev visited both Turkmenistan and Tajikistan this week, holding talks focused mostly on economic issues. The visits are seen as the latest moves in Kazakhstan's increasing economic expansion in the region.

Reaching Out To The Region

In Dushanbe, Nazarbayev promised on September 13 to provide Tajikistan with grain - a timely offer for a country where prices for bread and flour have risen sharply in recent weeks.

Nazarbayev and his Tajik counterpart, Emomali Rahmon, agreed to set up a joint investment fund, with Kazakhstan providing 80 percent of the money. "We agreed to establish a special investment fund of $100 million," Nazarbayev said. "The Kazakh side will contribute its significant part. The fund will work for the benefit of the Tajik economy. I believe it will be a good support."

Nazarbayev also said that Kazakhstan is ready to finance the construction of the Nurobod hydroelectric power plant in northern Tajikistan.

Rahmon said Kazakh-Tajik trade has increased 57 percent in January-July 2007 compared to the same period last year.

Economic issues were also at the center of Kazakh-Turkmen talks in Ashgabat on September 12. Turkmen President Gurbanguly Berdymukhammedov said economic cooperation with Kazakhstan is a "priority aspect."

Nazarbayev and Berdymukhammedov also discussed the construction of a gas pipeline that would deliver Turkmen gas to Russia via Kazakh territory. Kazakh energy companies have expressed interest in investing in the development of Turkmenistan's oil fields, too.

The two sides also discussed the railroad project going through Uzen-Gyzylgaya-Bereket-Etrek-Gorgan -- stretching from Kazakhstan to Iran via Turkmen territory.

But Kazakhstan's regional economic aspirations are not only limited to Tajikistan and Turkmenistan. In recent years, Kazakh companies have made significant investments in Kyrgyzstan's economy, with the banking sector leading the trend.

Leaving Traditional Rival Behind

Sergei Luzynanin, a professor at the Moscow Institute for International Relations (MGIMO), tells RFE/RL that Nazarbayev's recent trips to neighboring countries are part of Astana's policy to establish itself as a regional leader.

"All this proves that Astana wants to be a center of influence -- actually it has already become one. Kyrgyzstan and Tajikistan are willing to cooperate [with Kazakhstan]. They have received Kazakh loans and investments. They have gained some advantage" from the cooperation, Luzynanin says.

"But others, like Uzbekistan, are cautious about Astana's initiatives. There's been some rivalry and jealousy [between Kazakhstan and Uzbekistan]," he adds. "Tashkent has often criticized Astana's actions. It demonstrates an old, traditional antagonism." 
Uzbekistan is Kazakhstan's rival for regional leadership, but it lags behind Kazakhstan in economic development. Astana introduced free-market economic reforms shortly after gaining independence in 1991, whereas the Uzbek economy remains state-controlled and still bears resemblance to the Soviet command-administrative economic system.

Luzyanin says Uzbekistan could strengthen its position in the region in a decade or more. "But Kazakhstan undoubtedly has taken a leading position in Central Asia for the time being," he says.

Russia, China Also Look To Move In

But it is not only officials in Astana who aim to develop economic ties with its neighbors. Kazakh companies -- state-owned as well as private ones -- have shown the interest and financial capacity to invest in neighboring countries' energy sectors, construction businesses, and general services. Luzynanin says the political will of the authorities has coincided with the companies' pragmatic interests at present.

Kazakhstan is not the only country expanding its economic presence in Central Asia. Russia has had a strong economic position in its former "soft underbelly." The Russian state gas monopoly Gazprom has been the major foreign partner of Turkmenistan and Uzbekistan. Russia is also Tajikistan's biggest trade partner.

In recent years, China has also greatly strengthened its economic position in the region. Many Central Asians have even expressed fears of China's "creeping expansion."

Turkmenistan has reached an agreement with Beijing on the construction of a gas pipeline that is expected to start transporting Turkmen gas to China by 2009, while Russia's Gazprom also has an agreement to export Turkmen gas.

Will these developments produce a clash between the economic interests of Astana and those of Moscow and Beijing in Central Asia? Luzyanin is optimistic that they will not.

"Undoubtedly, there are contradicting [interests]. But Astana, Moscow, and Beijing are bound by dozens and even hundreds of bilateral contracts, agreements, and treaties as well as big institutional projects, like the Shanghai Cooperation Organization [SCO]," he says. "The SCO summit in Bishkek [in August] proved that -- at least in the energy sector -- China, Russia, and Kazakhstan are interested in settling those contradictions on Turkmen gas."

As the gap deepens between the rich and poor in all Central Asian countries, there are also growing discrepancies between Kazakhstan, on the one hand, and poor countries like Kyrgyzstan, Tajikistan, and Turkmenistan on the other. Luzyanin says that this makes regional stability more vulnerable.

He adds that Kazakhstan "should help its neighbors by investing not only in, let's say, the gas sector, but also build hospitals, schools, and roads."


ECONOMY

Kazakhstan to publish its first EITI report in November

Kazakhstan will publish its first report within the Extractive Industries Transparency Initiative (EITI) next November, Deputy Minister of Energy and Mineral Resources Bolat Akchulakov told a press briefing in Astana.

Currently the Energy Ministry is looking for an audit company for the EITI program.

The audit company awarded with the contract "will be mandated to collect information from extractive industry companies and request the government to reveal tax payment data. Having examined all submitted information the mandated auditor will compile a report to submit it to the EITI national council for media distribution.”

This year the report will feature the tax audit for 2005, Akchulakov said. The EITI report will be published annually.

According to the deputy minister, currently 92 Kazakh companies have joined the initiative, including 51 from the oil and gas sector and 41 mining businesses.

Akchulakov called for other companies to join the initiative.


Kazakh biofuel production can be twice cheaper than production in the US

By Vagif Sharifov, Trend Capital, 7 September, 2007

Global biofuel market grows at 20-25 per cent annually, Deputy Agriculture Minister of Kazakhstan, Mr. Akylbek Kurishbayev said at the Kazenergy Second Eurasian energy forum.

“Recently we have seen intensive use of technologies for biofuel production on global scale”, he added.

According to the Deputy Minister, Kazakhstan has the necessary economic potential for the production and development of bio fuels.   

“(We can judge by) the growing domestic demand (in Kazakhstan) and huge export potential, free spaces for growing grain and oilplants, technical and human potential”, Kurishbayev said at the Forum.

He said that using common wheat for the production of bioethanol is most appropriate in Kazakhstan’s climatic conditions. According to the Deputy Minister by using low-quality wheat (1 million tons) and unused grain leftovers (about 1.9 million tons) only Kazakhstan can produce 1 billion litres (812,000 tons) of bioethanol by 2010. At the second stage can involve long-fallow lands to allow for the production of some 2.1 billion litres (1.7 tons) of environmentally friendly fuel.       

“Kazakh biofuel production costs are expected to be quite low – 10 per cent lower than in Brazil and 1.5-2 times lower than in the United States or Europe”, - he stressed.

Kuryshbayev claimed that even adjusted for the domestic demand, export potential of Kazakh biofuels will amount to 3-6 billion litres annually. 


Kazakhstan plans to attract almost USD 21 billion in electric power development by 2015, says "KEGOC" president

Kazakhstan plans to attract about USD 21 billion in electric power development by 2015, Mr. Almasadam Satkaliyev, president of JSC "Kazakhstan Electric Grid Operating Company (KEGOC) said at the Kazenergy Second Eurasian energy forum in Astana.

"Total investment volume needed for the electric power development amounts to nearly USD 21 billion by 2015", - he noted.

KEGOC president stressed "electric power consumption in Kazakhstan by 2015, according to forecasts, will grow by 60 per cent and amount to 124.5 billion kilowatts per hour". At the same time technological equipment of currently operating electric power plants, according to Satkaliyev, allows increased energy production only up to 80 billion kilowatts per hour. "In such conditions we plan to provide necessary enlargement, modernization and the construction of new sites, thus not only providing electric power for Kazakh consumers, but also enhancing export, transit potential and reserve capacity", - Satkaliyev said.

He reminded listeners the government has developed an action plan for electric power development up to 2015, which sets up a list of sites for reconstruction, modernization and construction.

Extract from a news report of the Kazakhstan Today news agency

OTHER NEWS

Republican Representative Jo Bonner (R-AL) presented Kazakh Ambassador with money from Mobile students

According to a press release by Jo Bonner’s press service
                                                                                                                                                      
WASHINGTON—U.S. Rep. Jo Bonner (R-AL) has presented the Ambassador of Kazakhstan, Erlan A. Idrissov, with $2,409.74 raised by students at Mobile’s Dodge Elementary School.

In an effort the students named “Coins for Cancer,” students at Dodge Elementary School collected coins for two years to donate to the Semipalatinsk Oncology Center in Kazakhstan.  Students donated their snack money, parents sent in contributions, and a school-wide art contest was held with a $1 entry fee – all to help provide medical assistance to the people now suffering from radiation-related diseases from the Semipalatinsk nuclear test site.

Kazakhstan was one of the 15 new states to emerge from the fall of the Soviet empire in 1991.  For 42 years, the Soviet Union tested 456 nuclear and thermonuclear weapons at Semipalatinsk.  Cancer rates in the region are now twice that of the world rate.  Many suffer physical deformities, mental underdevelopment, and heart disease.  The Kazakh government has estimated that a total of 1.2 million people have been affected by the nuclear testing. 


The Kazakhstan Open will welcome golfers in September

The 3rd edition of the Kazakhstan Open will return to the links at the Nurtau Golf Club and the excitement is growing. The tournament will be played on September 20-23, 2007 in Almaty.

The Kazakhstan Open is a men's professional golf tournament on the Challenge Tour, the official developmental tour of the PGA European Tour. It is the only Challenge Tour event in the Former Soviet Union (the Russian Open was the first Challenge Tour event in the Former Soviet Union, but it has been promoted to the main European Tour). The Kazakhstan Open was first played in 2005, in which year it had a $350,000 prize fund, and in 2007 it has a prize fund of $460,000, which makes it the second richest event on the tour after the Open de Saint-Omer, which is also an official money European Tour event.


Kazakhstan national soccer team rallies to draw 2-2 with Belgium

The Associated Press, 12 September, 2007

Kazakhstan fought back from a two-goal deficit to earn a 2-2 draw Wednesday with Belgium in a European Championship qualifier.

Samat Smakov converted a penalty in the 74th minute to claim an unlikely tie for Kazakhstan after Nurbol Zhumaskaliyev was brought down by Belgian defender Marouane Fellaini.

It spoiled a great opening for Belgium, which went 2-0 up in the first 23 minutes of the Group A game. Twenty-year-old Lille forward Kevin Mirallas scored his second goal in as many international games and assisted on another.

In the 12th minute, Mirallas headed into the path of Bruges forward Karel Geraerts who scored with a half-volley. In the 23rd, Mirallas hit the post and moved in for his own rebound.

Kazakhstan fought back and Dmitry Byakov beat goalkeeper Stijn Stijnen with a long-range shot in the 39th.

Belgium now has 11 points and is unlikely to qualify for the finals, while Kazakhstan has 7 points.





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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