| "As
the largest, most stable and prosperous Central Asian state, Kazakhstan
casts a long shadow not just on neighbouring countries, but across
the Caucasus and beyond."
Richard Armitage, US Deputy Secretary of State
Washington, 27th April 2004
"I
would like to commend Kazakhstan, its president and its parliament
for the nation's support for the peacekeeping mission in Iraq.
We
live in a dangerous world, and I am sure the growing relations between
Kazakhstan and NATO will help stabilise the situation in the
world."
Lord Robertson, Secretary General of NATO
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Politics
Kazakhstan, US to sign five-year military coop plan
ASTANA, November 7. KAZINFORM. A five-year military cooperation plan of Kazakhstan and the US will be signed in January, 2008.
Daniyal Akhmetov, the Defense Minister of Kazakhstan, has maid it public today during the meeting with the US military delegation chaired by Admiral William Fallon, Kazinform reports.
It is planned to increase a number of the events, connected with the informational exchange, directed to the study of the advanced experience of the US Armed Forces within the frame of bilateral cooperation.
More than 80 events are expected to be held in 2008, in accordance with the military contacts’ plan between the defense departments of Kazakhstan and the US.
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Kazakhstan to follow evolutionary path
LONDON, Oct 27 - Dr Dastan Yeleukenov, the Kazakhstan Charge d'Affaires, has promised that as the emerging regional leader of Central Asia, Kazakhstan would continue to follow its evolutionary way of development and would play an active role in the cause of international as well as regional peace and security.
This he said while speaking at a seminar held here on October 22, organised by the Centre for Caspian Information Centre (CIC), a not-for-profit think-tank based in London, on the subject of Kazakhstan's August 18 elections to the Majilis, the lower house of the Kazakh parliament.
Yeleukenov eloquently described the objectives of Kazakhstan's 2030 strategy, pointing out that many of these had already been achieved.
How far and fast has democratic reform proceeded in Kazakhstan? Could it go faster without putting at risk the country's impressive record of stability and inter-ethnic harmony? These questions underlay much of the discussion at the seminar.
Professor Kenneth Minogue of the London School of Economics pointed out that democracy emerged in Europe only out of a long history, including the feudal balance between king and barons, and a modern development in which interests and factions became political parties.
"It bubbles up from society, and can be facilitated by governments, but not created by them," he said. "Nor is it a risk-less option, because democracy depends on conflict within the rule of law, and conflict -- especially between religions, or ethnic groups -- can get out of hand and disrupt the harmony of the state."
About the integrity of the elections, CIC Director Gerald Frost said "I believed these to have been the freest and fairest in the country's brief democratic history."
Despite its somewhat equivocal conclusions, this also appeared to be the view of the OSCE (Organisation for Security and Cooperation in Europe).
But it was important to bear in mind that the OSCE applied a universal "gold-standard" to elections without regard to the facts of history and geography. When these were taken into account, Kazakhstan's record of reform, although rightly cautious and gradual, was deeply impressive.
Professor Dennis O'Keeffe of the University of Buckingham praised Kazakhstan as a model of inter-ethnic and inter-religious harmony "from which the world can learn much."
He added, "The country has committed itself to the struggle against international terrorism."
This, he said, might relate to the fact Kazakhstan had avoided parasitic status by taking the initiative in forging its own development model.
The seminar, which was attended by diplomats, academics and business leaders, took place at the Reform Club - whose members were at the forefront of democratic reform in Britain some 150 years ago.
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USA OPTIMISTIC ON KAZAKHSTAN’S OSCE BID
Astana, 17 October - At a meeting with the Kazakh secretary of state, Kanat Saudabayev, the US permanent representative to the OSCE, Julie Finley, has said that the USA views Kazakhstan’s application for the OSCE chairmanship in 2009 with great optimism, a report released by the president’s press service says.
During the meeting in Astana today, Saudabayev and Finley discussed priority areas for Kazakhstan during its chairmanship of the OSCE in case the country’s application is approved by 56 members of the organization at a meeting of foreign ministers in Spain at the end of November.
"The world community respects Kazakhstan’s achievements gained in the process of establishing a democratic society and successful economy only within 15 years [of independence. Kazakhstan’s application for the OSCE chairmanship is viewed by the USA with great optimism," the report says quoting Finley.
For his part, Saudabayev said during the meeting that one of the priorities for Kazakhstan during its chairmanship of the OSCE would be raising the efficiency of measures aimed at ensuring humanitarian security.
"Kazakhstan intends to step up the OSCE’s efforts to fight all forms of racism, intolerance and discrimination based on its own experience of interethnic accord, to strengthen the organization as a bridge between the West and the East in the dialogue of civilizations, to focus on expanding the OSCE’s presence in Central Asia and ensuring the stable development of the region, as well as on more active cooperation between the organization and Afghanistan," Saudabayev said.
"Positive consideration of Kazakhstan’s application could be a great contribution to further developing democracy not only in our country but in the entire region of Central Asia. The chairmanship of economically strong and dynamically developing democratic Kazakhstan over the OSCE will be not only a high assessment of our achievements during the years of independence, but it will also favourably influence the general situation in the organization, which, by this will demonstrate the equality of all members and raise its reputation," the report says quoting Saudabayev as saying.
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Iran, Kazakhstan sign 4 MoU
TEHRAN, 15 October - Iran and Kazakhstan have signed four memorandums of understandings (MoU) and issue a joint statement to expand cultural and trade ties.
The agreements were hammered out on the sidelines of a visit by Kazakh President Nursultan Nazarbayev to Tehran to attend the Caspian Sea Summit.
Foreign ministers of both countries signed the agreement on shipping and tourism in Caspian Sea, the world's largest inland body of water.
Two sisterhood pacts were also signed between Kazakhstan's Aktau Port and Iranian ports of Amirabad and Anzali located in northern provinces of Mazandaran and Gilan.
Another MoU was also reached to expand bilateral library cooperation while presidents of the Caspian littoral states signed the joint statement.
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Troubled Caspian Waters Await Putin
MOSCOW, 14 October — Russian President Vladimir Putin's visit to Tehran this week will include participation in a summit of Caspian Sea leaders. Iran, Russia and three former Soviet republics along its shores have been locked in tough talks on dividing the resources of the vast inland sea.
The legal status of the Caspian, which is believed to contain the world's third-largest energy reserves, has been in limbo since the 1991 Soviet collapse, leading to tension and conflicting claims to seabed oil deposits.
Iran, which shared the Caspian's resources equally with the Soviet Union, insists that each coastal nation receive an equal portion of the seabed. Russia, Azerbaijan and Kazakhstan want the division based on the length of each nation's shoreline, which would give Iran a smaller share.
Turkmenistan is also vying for the Caspian's resources.
The five nations failed to strike a deal at their previous summit in Turkmenistan in 2002, straining ties between Moscow and Tehran. Shortly after, Russia flexed its muscles by conducting massive naval maneuvers in the Caspian.
The failure to negotiate a settlement has remained a major obstacle to international energy projects in the region, such as Western-backed energy pipelines under the sea that would deliver oil and gas to Western markets via Azerbaijan, bypassing Russia.
Russia opposes such pipelines, but fears that escalating tensions could hurt its interests, said Alexander Pikayev, an Iran expert with Russia's Institute for World Economy and International Relations.
The main issue is a dispute between Iran and Azerbaijan in delineating their shelf, which is rich in hydrocarbons. "Russia fears that the tensions could push Azerbaijan deeper into the U.S. sphere of influence," Pikayev said.
Russia, Kazakhstan and Azerbaijan have signed their own bilateral deals dividing 64 percent of the sea among them. Iran does not recognize the agreements, but the countries have used the deal to start developing oil and gas resources in its northern areas.
The Caspian is also home to several varieties of sturgeon, the source of premium caviar.
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Strategy Kazakhstan 2030 on track, says President
ASTANA, October 12 - "For 10 years, 'Strategy Kazakhstan
2030' has proved to be effective and viable. We have ensured a breakthrough
in the nation's development and managed to accomplish tasks that normally
take several decades. 'Strategy 2030' has irrevocably changed the paradigm
of our development from survival model to robust growth model".
President Nazarbayev informed delegates that Kazakhstan's GDP has grown
nearly 5-fold - to reach USD 100 billion. "GDP per capita for the same
period has increased 3.7 times and is expected to reach USD 7000 in 2007"
he said. The President emphasised that capital investments have been on the
rise every year; foreign direct investments have grown to over USD 70
billion, which constitutes 80% of the total investments into Central Asia
economies. "International reserves, including the National Oil Fund's
money, exceed USD 40 billion. If we recall that we started with an empty
public treasury, the achievements are not scant" said the President.
"Kazakhstan's foreign trade turnover has grown more than 6 times over
the last ten years; this year the figure will reach USD 80 billion. We can
boldly assert that Kazakhstan has successfully completed its transit period
and is ready and capable of ensuring new quality growth in the years to
come. In the future," continued Mr Nazarbayev, "the state needs to shape
'smart' economy which would follow global changes and trends."
The President added that large-scale, long-term investments should be
attracted into the Kazakh processing industries in order to ensure economy
modernisation. "The state will be putting in place all the legal,
administrative and other conditions to bolster innovation and ensure
structural realignment of the economy". The President called on subsoil
investors to invest in the nation's processing industries. "Of course," he
continued, "they will own stakes in the new entities."
President Nazarbayev stated that by 2010 oil production output will
reach 80 million tons, rising to 130 million tons by 2015 (internal demand
stands at 25 million tons). Gas production is expected to reach 40 billion
cubic meters by 2010 - reaching 80 billion cubic meters by 2015.
The President announced that Kazakhstan intends to adhere to its
multi-vector energy export policy. "Kazakhstan intends to further diversify
routes to supply its hydrocarbons to international markets and relies on
the EU's assistance in this... Kazakhstan is fully aware of its
responsibility for ensuring global energy balance and energy security. As
early as 2017, we will feature on the world's top ten list of hydrocarbon
exporters and this position will further define the economic role to be
played by Kazakhstan."
The President reminded delegates that at the 62nd session of the UN
General Assembly last month he recommended "adopting a Eurasian pact for
energy security."
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US Navy to help Kazakhstan with security
ASTANA, Kazakhstan, October 8 - A top U.S. Navy commander met with officials in Kazakhstan in an effort to help the country's fledgling naval and border-security operations.
Vice Adm. Kevin J. Cosgriff, commander U.S. Naval Forces Central Command U.S. 5th Fleet, met with the officials in Astana, Kazakhstan, the largest country in the NAVCENT area of responsibility to discuss the range of activity needed to build and sustain a ready and relevant force in the region, according to the U.S. Navy.
The trip was Cosgriff’s first visit since assuming command of NAVCENT/C5F in February.
“One of the challenges the U.S. Navy has historically faced and has repeatedly managed to successfully overcome is how to take a force that was designed for one type of work and apply that force to be successful in a new mission,” Cosgriff said, in a statement. “We have learned how to continually adapt to the changes demanded by changing times, and this may be of interest to Kazakhstan.”
Officials say Cosgriff made an effort to draw similarities of the challenges facing Kazakhstan in the Caspian and Persian Gulf states and that Kazakhstan could benefit from NAVCENT experience in the Gulf.
“I think the challenge for Kazakhstan is pretty complex,” Cosgriff said. “You must educate the public that the Caspian is Kazakhstani territory, and you must have a vision of a Kazakhstani navy that exists within the foundation of other forces, such as the Border Guard Service. Then you have to get the money for your concept, and then the people. And you have to do it all at once.”
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Russia, Belarus, Kazakhstan agree customs union
DUSHANBE, Tajikistan 6th October - Russia, Belarus and Kazakhstan moved a step closer to a long-delayed customs and trade union on Saturday.
Vladimir Putin of Russia, Alexander Lukashenko of Belarus and Nursultan Nazarbayev of Kazakhstan signed agreements that will speed up the creation of a three-nation union as part of an effort called the Eurasian Economic Community.
The agreements were signed during days of meetings among leaders of 12 ex-Soviet republics that were dominated largely by Russian priorities.
Putin said the customs union ought to be operational in three years.
The grouping, which includes other former Soviet states, aims to restore economic ties lost after the 1991 Soviet collapse. Its long-held integration plans, however, have stalled, in part because of the differences in the size of the countries' economies and their levels of development.
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"The results are almost revolutionary," Putin told reporters in the Tajik capital of Dushanbe. "We have agreed on forming a customs union and creating a national agency, a commission that will deal with customs regulation."
The economic community would give Moscow another regional organization to use to try to preserve its influence in its former Soviet backyard and to resist what it perceives as U.S. efforts to expand its role in the region.
The expansion of NATO and the European Union into former Soviet bloc nations in Europe is also an underlying motivation.
A day earlier, the leaders sought to breathe new life into another organization — the Commonwealth of Independent States — which has struggled to be effective despite internal divisions and bureaucratic barriers.
The CIS presidents adopted a plan calling for a "qualitatively new level of interaction" among member nations. But not all members signed the document, reflecting rifts.
Georgia's president refused to sign, suggesting that CIS membership had done nothing to help it survive punitive trade and travel restrictions imposed by Russia. Turkmenistan, a natural-gas rich Central Asian nation, also declined to sign, while oil-rich Azerbaijan registered reservations.
Also Saturday, another Moscow-driven group comprising six other ex-Soviet republics, the Collective Security Treaty Organization, signed two agreements, including one expressing concern about the situation surrounding Iran and its nuclear program and the situation in Afghanistan.
More notable was an agreement that allows members of the CSTO to buy Russian military equipment at Russian domestic prices, instead of international prices. That would give a boost to Russian arms manufacturers, which are trying to increase exports, as well as to the cash-strapped militaries of some of the ex-Soviet nations.
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Prodi in Kazakhstan as oil row simmers
ROME, 5th October - Italy's prime minister heads to Kazakhstan on Sunday with oil company Eni's talks with Kazakh authorities over the giant Kashagan field expected to top his agenda.
Premier Romano Prodi will play a neutral role in an Eni-led consortium's dispute over Kashagan, the world's biggest oil find in three decades, a government source said. He will head a business delegation on a three-day visit to the Central Asian state.
"This is a question between private parties, there is no political or governmental role. We are observers," the source said.
The centre-left leader also plans to discuss a new law that lets the Kazakh government break or alter contracts with foreign investors, the source said. The law has alarmed foreign companies after the government suspended operations at Kashagan.
Kazakhstan is seeking $10 billion in compensation over delays and rising costs at Kashagan and has threatened to strip Eni of its leading role in the consortium. Talks face an Oct. 22 deadline.
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Kazakhstan adopts amendments to subsoil law
ASANA, 26 September - The lower house of Kazakhstan’s parliamet has adopted amendments to the law on subsoil use that will allow the government unilaterally reconsider and even break effective contracts with subsoil users.
Parliamentarian Valery Kotovich pointed out that the government could use this right, if subsoil users’ actions pose a threat to Kazakhstan’s national security and may affect the republic’s economic interests.
The amendments will enter into force, if approved by the upper house of parliament and signed by President Nursultan Nazarbayev.
The amendments are being discussed against the backdrop of the Kazakh government’s dispute with the international consortium led by Italy’s ENI that explores and develops one of the world’s largest oil fields – Kashagan.
The Kazakh government accused investors of violating the contract terms. Astana demands the consortium should pay 40 billion US dollars in compensation and grant the status of the project’s second operator to the state-run KazMunaiGaz concern.
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Giuliani Fund Raising Reaches into Kazakhstan
NEW YORK, 25th September - Former New York Mayor Rudy Giuliani's campaign is looking for political cash this week in an unlikely place: Resource-rich Kazakhstan, where the Republican presidential front-runner's law firm does substantial business in the often murky oil, gas and minerals industries.
A fund-raising event tomorrow in Almaty, the commercial center of the former Soviet republic, will mark the campaign's third foray overseas for cash. Last week, Mr. Giuliani flew to London for a fund-raising luncheon where about 100 Americans living in Europe paid between $1,000 and $2,300 for a ticket -- the second his campaign has held in the United Kingdom.
Mr. Giuliani won't attend the event in Kazakhstan. Instead, he is scheduled to go to small-donor "house party" fund-raising events in New Jersey, his campaign said. The candidate will appear at the Kazakh event by videoconference, campaign spokeswoman Maria Comella said. She declined to say how much the campaign expected to raise in Kazakhstan.
Only Americans may donate to U.S. campaigns. Many Americans live in Kazakhstan and work for oil, gas, law, accounting and other firms. The event was reported this week in the New York Post newspaper.
The unusual fund-raiser comes as presidential candidates in both parties are rushing to rack up big money totals before the books close on the third quarter this Sunday.
After leaving office as mayor of New York in early 2002, Mr. Giuliani went into various businesses, and, among other things, became a partner in a Houston-based law firm that changed its name to Bracewell & Giuliani LLP. The firm has long done a lot of work in the oil business, in the U.S. and abroad. Since 1997, Bracewell has had an office in Kazakhstan, a Central Asian country that controls oil deposits in the Caspian Sea.
Mr. Giuliani's partnership agreement guarantees him a minimum income of $1 million a year from the law firm. His firm's close ties to Kazakhstan, meanwhile, have generated some controversy, because the country's president, Nursultan Nazarbayev, has been accused of antidemocratic practices. Questions have also been raised by U.S. prosecutors and good-government groups about whether Mr. Nazarbayev has taken kickbacks related to oil-industry deals. Mr. Nazarbayev has denied such allegations.
Gas, oil and mineral companies in Kazakhstan have worked to comply with Western corporate-governance standards. The companies aim to go public on stock exchanges in the West.
The Almaty fund-raiser is being hosted by Greg Vojack, a Bracewell Giuliani partner who has been based in Kazakhstan since 1994.
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Join us in renouncing nuclear arms - Nazarbayev
NEW YORK,25th September - The President of Kazakhstan today called on national leaders attending the annual United Nations General Assembly’s high-level debate to follow the example set by his country by renouncing nuclear arms and enjoying the peace dividend that will ensue.
Nursultan A. Nazarbayev told the Assembly that the people of Kazakhstan, having endured over 450 blasts at the Semipalatinsk nuclear testing ground, “have lived through all the horrors of the effects of nuclear explosions.”
In response, the country, after gaining independence, shut down the site and renounced its nuclear arsenal – the fourth largest in the world. “Those steps have shaped the strategy of our State in the area of global security,” he said. As a result, he added, Kazakhstan “has witnessed an inflow of considerable investments.”
The President then posed a question to the assembled leaders: “Why not follow our example instead of wasting astounding amounts on the arms race?”
He said that beyond ethical, economic and other motives, legal barriers are needed to combat stop nuclear proliferation, and toward that end proposed adapting the Nuclear Non-Proliferation Treaty (NPT) to today’s realities.
“It should be acknowledged that the NPT has turned into an asymmetric agreement; it provides for sanctions applicable only to non-nuclear States,” he said. “If nuclear powers call for banning the development of nuclear weapons, they themselves should set an example of reduction and renunciation of nuclear arsenals.”
Currently, he observed, “That is not the case.”
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MiG Upgrades & Missiles for Kazakhstan
ASTANA, 17th September - Kazakhstan Today reports the Russia's RSK-MiG signed a $60+ million contract at the MAKS 2007 aerospace show to refurbish and upgrade Kazakh aircraft. Reports indicate that the aircraft are 10 of Kazakhstan's 50 MiG-31 Foxhounds, a derivative of the MiG-25 Foxbat interceptor optimized for high-altitude flight, radar overwatch and control, and cruise missile defense. The planes were inherited from the Soviet Union during its breakup, since they were based on Kazakh territory.
Yet Kazakhstan may be using many of these interceptors for a different purpose entirely. StrategyPage points to the Kazcosmos company in Kazakhstan, which helped develop an aircraft-launched anti-satellite weapon for the Soviet Union after the USA shut down its own program to avoid provocation. It seems the firm has taken this expertise and put together a satellite launching operation, using MiG-31 to launch small 1,000 – 6,000 pound rocket boosters that can carry small "micro-satellites" into space. This may well prove to be a cheaper option than conventional rockets or converted ICBMs, as aircraft expend far less power to get off the ground, and offer the option of frequent reuse to amortize fixed purchase costs.
In other news, Kazakhstan recently announced its intention to build a modern air defense system with Russian equipment, specifically "double-digit SAMs" like the SA-10 Grumble/S-300 Favorit, and the SA-20 Gargoyle/ S-400 Triumf with its multiple missile types. This will give oil-rich Kazakhstan an advanced long-range air defense system that would also have anti-ballistic missile capabilities.
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Italy PM to visit Kazakhstan as oilfield row grows
ROME, September 13 - Italian Prime Minister Romano Prodi will visit Kazakhstan on October 7-9, amid an escalating row between the Central Asian state and an Italian-led consortium over the giant Kashagan oilfield.
Prodi's office issued a statement on Thursday giving the dates of a visit which had been widely expected since Kazakhstan suspended operations at Kashagan in the Caspian Sea last month.
Kazakhstan is demanding that the Eni-led consortium pays billions of dollars in compensation, citing ecological violations, cost overruns and repeated delays.
Eni Chief Executive Paolo Scaroni met the Kazakh Prime Minister Karim Masimov and his energy minister in Astana this week to be told that delays in developing the oilfield were harming the country's growth prospects and development plans.
Emboldened by high oil prices, resource-rich Kazakhstan has long been mounting pressure on the group of mostly Western oil majors working on the Kashagan project, which is Astana's entry ticket to the club of top 10 global oil producers.
Kazakhstan accuses the consortium of violations ranging from environmental issues to fire safety rules, triggering talk among industry analysts about so-called resource nationalism and harmed investor confidence.
Last week, Masimov demanded a leading role for state energy firm KazMunaiGas [KMG.UL] in running the field -- the biggest oil discovery in the last three decades -- after Astana had threatened to replace Eni as operator.
Italy's government has talked of hopes for a breakthrough in negotiations before Prodi's visit.
The other participants in the Kashagan consortium are Royal Dutch Shell , Exxon Mobil Corp , Total , ConocoPhillips , Japan's Inpex Holdings Inc <1605.T> and KazMunaiGas.
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New Opposition Party Registered In Kazakhstan
ASTANA, 25 January - Kazakhstan's Justice Ministry today registered the opposition Social Democratic Party.
The party is headed by a former speaker of the lower house of parliament, the Mazhilis, Zharmakhan Tuyakbai, who confirmed the party's registration to RFE/RL's Kazakh Service.
"Yes, today Justice Ministry decided to registered [our] party and we received the registration papers," Tuyakbai said. "It took three long months [to get registered] -- longer than it should take."
Other opposition parties have also faced difficulties and delays in the registration process.
Tuyakbai ran unsuccessfully against incumbent President Nursultan Nazarbaev in the December 2005 presidential election as a candidate from the For A Just Kazakhstan political bloc.
The Social Democratic Party has some 140,000 registered members.
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Nazarbayev to vist Ukraine
KIEV, 23 January - President Nursultan Nazarbayev of Kazakhstan to officially visit Ukraine on February 2
This was disclosed by Deputy Chief of the Presidential Secretariat Oleksandr Chalyi at today's news briefing.
According to him, the visit will result in signing the 2007 to 2008 Ukraine-Kazakhstan Action Plan and a number of agreements in the energy sector. The parties will also hold a business forum. Nursultan Nazarbayev will open a year of Kazakhstan in Ukraine.
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Kazakhstan to host Sustainable Development Summit
ASTANA, 22 January The Ministry of Environment proposes that Kazakhstan hosts the III World Sustainable Development Summit in 2012, Nurlan Iskakov, Minister of Environment, said Saturday, January 20, at a meeting in the Ministry, Kazakhstan Today correspondent reports.
"We propose to unify the European and Asian development processes into a single Eurasian process, with a secretariat in Astana, and to host the в 2012 III World Sustainable Development Summit in 2012," - Mr. Iskakov said.
The Minister also said that currently "a plan of events on these issues has been approved and corresponding activities are already carried out."
Besides, according to Mr. Iskakov, "in compliance with the presidential orders, organising in Astana a so called "Solar" centre for renewable energy sources in co-operation with Germany and an Eurasian Water Centre in co-operation with Russia is regarded."
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Energy policy of Kazakhstan remains unaltered - PM
ASTANA, 18 January The energy policy of Kazakhstan remains unaltered. Karim Massimov, Prime Minister of Kazakhstan, has stated this today, January 18, at a meeting of the Ministry of Energy and Mineral Resources of RK, Kazakhstan Today correspondent reports.
"I read a lot of issues raised by the consumers of our energy and our neighbours in the press about the possible future energy policy of Kazakhstan. I declare officially that the energy policy of Kazakhstan remains unaltered, it is determined by the head of state, and Kazakhstan will remain a responsible supplier of energy to foreign markets," - he has said.
The PM has stressed that "Kazakhstan stands for a stability of the contracts. The concluded agreements will be observed, but at the same time I have to say that all the agreements must work for the good of the Kazakhstani people. The activities of the Ministry of Energy and Mineral Resources and of the National Company "KazMunaiGaz" must turn the situation resulting from the current contracts in favour of our country, our people."
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New government formed in Kazakhstan
ASTANA,11 January - A new government has been formed in Kazakhstan, the majority of the Ministers from the former government chaired by Danial Akhmetov have retained their posts, Kazakhstan Today reports.
Karim Massimov, former Vice Premier has been assigned Prime Minister of Kazakhstan. Aslan Mussin has been assigned the sole Vice Premier - Minister of Economy and Budget Planning. Victor Khrapunov has been assigned Minister of Emergencies of Kazakhstan and relieved of the duties of the governor of East Kazakhstan region. Marat Tazhin has been assigned Foreign Minister of Kazakhstan and relieved of the duties of the presidential aide - secretary of the Security Council of Kazakhstan.
Danial Akhmetov, former PM, has taken the position of the first civil Defence Minister. Besides, among the new Ministers there are Galym Orazbakov, new Minister of Industry and Commerce of RK, and Zhanseit Tuimebayev, new Minister of Education and Science.
Other Ministers have retained their positions: Baurzhan Muhamedjanov, Minister of the Interior, Anatoliy Dernovoy, Minister of Health, Akhmetzhan Yessimov, Minister of Agriculture, Serik Akhmetov, Minister of Transport and Communications, Guljana Karagussova, Minister of Labour and Social Protection, Temirkhan Dosmuhambetov, Minister of Tourism and Sports, Natalia Korzhova, Minister of Finance, Bahtikoja Izmuhambetov, Minister of Energy and Mineral Resources of RK, Zagipa Baliyeva, Minister of Justice, Akhmetzhan Yessimov, Minister of Agriculture, Nurlan Iskakov, Minister of Environment, Yermuhamet Yertysbayev, Minister of Culture and Information.
As per the Constitution of RK, the Prime Minister of Kazakhstan during one month after his assignment has to present a new government programme to the Parliament.
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Kazakhstan moves to name new PM
ASTANA, 9 January -- Kazakhstan President Nursultan Nazarbayev hurried Tuesday to name a replacement candidate for prime minister in Astana a day after a surprise resignation.
Without giving reasons, Prime Minister Danial Akhmetov resigned Monday after 3 1/2 years in office, and under Kazakhstan law, a premier's departure requires the resignation of the entire government.
Tuesday, Nazarbayev nominated 41-year-old Deputy Prime Minister Karim Masimov as a replacement, and both houses of parliament scheduled a Wednesday session to discuss the nomination, the Novosti news agency reported.
In the early 2000s, Masimov served as the economics minister and the transportation and communications minister and became a deputy premiere a year ago. He is considered to be an influential figure close to Nazarbayev, the report said.
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Kazakh Prime Minister Resigns
ALMATY, 8 January — The prime minister of Kazakhstan resigned Monday,
officials said, in the wake of criticism of his performance by the
authoritarian president of the oil-rich Central Asian country.
Daniyal Akhmetov, who served as prime minister since 2003, offered his
resignation at a Cabinet meeting, the government's press office said. It
gave no reason for the move, which will lead to the appointment of a new
government.
Akhmetov came under President Nursultan Nazarbayev's criticism last year for
poor strategic planning, overspending and other mistakes.
Nazarbayev weakened Akhmetov's role in the new Cabinet that formed following
his re-election in December 2005, putting in charge of strategic decisions
new Deputy Prime Minister Karim Masimov — Nazarbayev's former chief aide,
who is seen as one of the most influential figures in the president's inner
circle.
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Business & Economy
China, Kazakhstan to press ahead with pipeline
ALMATY, November 8 - China and Kazakhstan agreed to press ahead with plans to construct a natural gas pipeline in 2008-2009 that would give Beijing access to Caspian Sea gas reserves, the Kazakh state energy company said on Thursday.
KazMunaiGas said in a statement it had signed an agreement with China National Petroleum Corp. (CNPC) setting out principles of future work on the pipeline, which would annually pump 40 billion cubic metres of gas.
"This project would help transport gas to China and diversify Kazakhstan's gas export routes," KazMunaiGas said.
Currently Central Asia's top gas producers, Kazakhstan and Turkmenistan, use a pipeline network operated by Russian gas monopoly Gazprom to sell their gas internationally.
Energy-hungry China sees the new gas pipeline, as well as a separate oil pipeline linking it with Kazakhstan, as a step towards entrenching itself in Central Asia where most exports are now channelled west to Europe.
The statement did not say how much the pipeline would cost.
It said the sides would set up a 50-50 operator to build and maintain the pipeline, due to be constructed in two stages.
Kazakhstan and China agreed in August to route the gas pipeline from Turkmenistan through Kazakh territory. The pipeline is also expected to go through neighbouring Uzbekistan.
The first stage of the Kazakh part of the pipeline would connect Kazakhstan's Uzbek border with China, and the second one would separately help link Kazakh gas to the trunk pipeline.
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Energy ties 'not politicallu drive
ASTANA, October 29 - Bilateral energy cooperation between Russia and Kazakhstan is not politically driven, but guided by economic factors, Russia's foreign minister said on Monday.
Sergei Lavrov arrived in the Central Asian country's capital, Astana, earlier in the day on a two-day official visit.
"Energy cooperation between Russia and Kazakhstan is based on common sense, economic usefulness, mutual advantage, and an understanding of common interests... It has nothing to do with attempts to politicize the energy sphere," Lavrov told a news conference following talks with his Kazakh counterpart, Marat Tazhin.
The Russian diplomat said the countries had a strong record as reliable oil and gas suppliers to world markets.
Lavrov highlighted the two countries cooperation through a Caspian gas pipeline project, and several other gas and nuclear energy projects.
Russia, Turkmenistan and Kazakhstan clinched a deal in May to build a pipeline along the Caspian Sea coast to pump billions of cubic meters of natural gas from Turkmenistan to Kazakhstan into Russia's network of pipelines running to Europe.
The Kazakh foreign minister said the pipeline project has no political motives behind it.
"There are technical issues, but we are optimistic about the future," he said.
Kazakhstan will maintain its energy partnership with Russia for the foreseeable future, he added.
In an interview with the Kazakhstanskaya Pravda newspaper ahead of his visit to Astana, Lavrov said bilateral trade reached $13 billion last year and was "constantly increasing."
Last year Kazakhstan transported 42 of its 52.3 million metric tons (384.4 million bbl) of oil exports via Russia. Kazakh President Nursultan Nazarbayev earlier set a goal of doubling oil exports by 2012-2015, saying this required the diversification of pipeline routes.
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Kazakhstan PM steps up oil fight
ASTANA, 15 October - Hopes of a swift resolution to the dispute between the Kazakhstan government and a consortium of Western oil majors were dashed this weekend, as the Kazakh Prime Minister hinted at new legislation.
The consortium, led by ENI of Italy, and also including Shell, Total and Exxon, is trying to develop the giant Kashagan field in the Caspian Sea.
It is the most important oil deposits discovery in the world in three decades, and, if it came fully on stream, would propel Kazakhstan into the big league of oil producers.
However, the field is in a difficult offshore position and has suffered from delays, to the irritation of the Kazakh authorities.
The Prime Minister of Kazakhstan, Karim Masimov, said that while he was content that it was a "purely commercial" dispute that could be resolved "peacefully", and that politics were not involved, he did not believe new legislation, which would allow the Kazakh government to cancel existing contracts, should be withdrawn. A renegotiation of the deal would then follow, probably with a bigger stake for the Kazakh state. The so-called "subsoil" legislation has been passed unanimously by the Kazakh parliament and awaits President Nazarbayev's signature to pass it into law.
Mr Masimov maintained that the President's decision was up to him, but that as Prime Minister he was in favour of the new law. All the parties involved have given themselves until 22 October to come to an agreement.
Arecent visit by the Italian Prime Minister, Romano Prodi, had failed to result in an accord. Mr Masimov was unfazed by suggestions that it would make Western companies less likely to do business with him, citing a "big line of potential investors". Speaking in the capital, Astana, during a conference on the country's economy, Mr Masimov announced that it was Kazakhstan's "ambition" to develop a more "aggressive" strategy in using its oil wealth to buy stakes in Western companies, along the lines of the Kuwaiti, Chinese and Singaporean sovereign funds when it gained more expertise in these matters.
"More than two" investment banks in France and theUnited States have been approached to achieve that end. The Kazakh National Oil Fund has funds of $40bn (£20bn) according to Mr Masimov.
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Kazakhstan cuts oil output forecass
ASTANA, Oct 12 - Kazakhstan will produce 13 percent less oil than expected by 2015, removing 400,000 barrels per day from forecast global supply, due to delays in launching the massive Kashagan field, government officials said on Friday.
Kazakh President Nursultan Nazarbayev told reporters oil output would reach 130 million tonnes by 2015, down from a previous estimate of 150 million. Output will reach 80 million tonnes in 2010, up from the current 65 million.
"This is all Kashagan. They delayed production (start-up) from 2008 to 2010. Of course we are making adjustments," Kazakh Prime Minister Karim Masimov told reporters, referring to the ENI-led group in charge of developing the project.
Kazakhstan has severely criticised Italian oil group ENI (ENI.MI: Quote, Profile, Research) and its partners for delays and cost overruns at Kashagan, saying slow development could hamper Kazakhstan's economic growth.
The field was expected to produce more than 50 million tonnes a year, adding to Kazakhstan's existing production of about 65 million tonnes, which comes mainly from two giant oilfields, Tengiz and Karachaganak.
Kazakhstan has threatened to strip ENI of its leading role at Kashagan and give a bigger role to Kazakh state oil company KazMunaiGas [KMG.UL], which has an 8.3 percent stake in the project, but later reassured it would not change the terms.
It has threatened to impose billions of dollars of fines on the consortium after it said development costs had escalated to $136 billion from $57 billion. Talks on disagreements face an Oct. 22 official deadline.
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Angry Kazakhstan props up bank shares
ASTANA, 13 October - Kazakhstan will respond to an "attack" by hedge funds by buying shares next week in the country's banks that are listed on foreign exchanges to support prices, its prime minister said.
"Kazakhstan is under attack from hedge funds and we will fight back," Karim Masimov said, after president Nursultan Nazarbayev complained the country was suffering from "unfounded" downgrades of its credit ratings.
Standard & Poor's cut Kazakhstan's debt ratings and lowered the outlooks on three banks this month, citing concern that falling confidence would end the country's eight-year boom. The former Soviet republic holds 3pc of the world's oil.
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The government said it would buy stock of banks until prices reach "pre-August levels" and will do the same for non-banking stocks "if warranted". The state was also prepared to lend $4bn (£2bn) to banks to ensure liquidity, he said.
Kazakh banks have been hit by the ripples from the US sub-prime crisis. Kazkommertsbannk, Alliance and Halyk Savings Bank are all listed in London. Many banks in the country have also been hurt by an outflow of deposits and waning confidence in the national currency, the tenge. In August, banks suffered "massive withdrawals".
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S&P Marks Down Kazakhstan's Ratings
MOSCOW, 9 Oct - International ratings agency Standard & Poor's has downgraded Kazakhstan's sovereign ratings to within a notch of losing its investment grade rating on concerns that the country's banks are overexposed to foreign borrowings.
A week after the agency put Kazakhstan's sovereign ratings on "credit watch," Standard & Poor's said in a statement late Monday that it had lowered its long-term foreign currency sovereign credit ratings to BBB- from BBB.
Kazakhstan has been hit harder by the global financial turmoil than Russia, because its banks have relied on foreign capital to finance aggressive growth.
"Kazakh banks have borrowed quite heavily on international capital markets and have lent on to the domestic economy," S&P credit analyst Ben Faulks said by telephone from London. "Our real concern is that the environment to borrow has changed quite significantly in the last few months and banks are consequently finding it more difficult to renew that external financing."
Since the summer, S&P said, the country's central bank has doled out about 1.3 trillion tenge ($10.9 billion) in support, equivalent to three quarters of the country's monetary base. The bank's international reserves have been drained by about $5 billion to $18.4 billion.
S&P said it did not rule out a further downgrade. "The key is how the authorities manage this and the measures they take to shore up confidence in the sector," Faulks said. "If the policy response falls short and there is a wider loss of confidence, that will put downward pressure on the rating."
Fitch Rating said Monday it was maintaining its sovereign ratings at BBB for Kazakhstan, while lowering its issuer default ratings from positive to stable. It noted that Kazakhstan's sovereign ratings continue to be propped up by the government's strong finances, underpinned by the country's natural resources.
The Kazakh authorities have indicated that they will step in again to help the ailing financial sector. At the end of last week, the Kazakh government pledged to provide the "necessary financial liquidity," prompting a recovery in the country's banking stocks.
"The fizz has gone out of Kazakhstan's champagne a little bit because the banks have been such a key driver of the economic boom," said Jarmo Kotilaine, associate director of financial services at London-based Control Risks Group. "Overall the crisis should be manageable. The government has quite a bit of cash in the bank. It could invest some of the oil fund money or it could gently nudge pension funds to invest more in Kazakh banks."
Consumer confidence remains fragile. There was a short-lived run on the country's banks in the summer after the tenge dropped against the dollar, and Alliance Bank said this week customers had withdrawn more than one-tenth of deposits, 27 billion tenge ($225 million), in July and August. The bank further warned that it could violate its loan covenants if depositors were to take out a further 10 billion tenge ($83 million).
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Kazakhstan rejects new Kashagan oil contracts
LOS ANGELES, Oct. 8 -- Kazakhstan will not revise the terms of its contract with the Eni SPA-led consortium developing Kashagan oil field, according to Kazakh President Nursultan Nazarbayev.
"There is no revising the contract signed 10 years ago," said Nazarbayev after concluding talks with visiting Italian Prime Minister Romano Prodi in the Kazakh capital, Astana.
But Nazarbayev also warned that if investors break their contracts, Kazakhstan "reserves the right" to take measures envisaged by its laws, i.e., to review contracts with foreign companies on the development of subsurface resources if such contracts are deemed damaging to the country's strategic economic interests.
The president based the threatened action on a bill the Kazakh parliament passed last month that will become law when Nazarbayev signs it.
Nazarbayev said the disagreement between his government and the consortium arose from increased estimated development costs and a delay in the onset of production. The two changes mean delays in the country's economic development, which could violate the new law.
"This year Eni, which became the operator with the backing of Kazakhstan's government, presented a new budget under which the outlays grow by $100 billion and the beginning of oil extraction is put off until 2010," Nazarbayev said.
"The government has estimated that large funds envisaged in our strategic plans for economic development will thus be lost to Kazakhstan's budget," the Kazakh president said, adding that, "For this reason both sides entered the negotiations."
Nazarbayev said the current negotiations are purely commercial and "have nothing to do either with Kazakhstan's president or with the Italian prime minister." Instead, he said, "We will offer the opportunity to carry them through."
For his part, Prodi expressed hope that the disagreement will be settled in the spirit of friendship and cooperation. The Italian leader said that "specialists are holding negotiations; they are working, and when they sum up the results, we will familiarize ourselves with them and express our views on them."
Late last month, Prodi and Nazarbayev—meeting informally at the United Nations—agreed that the situation regarding the Kashagan oil project should not be politicized.
The consortium includes ExxonMobil Corp., ConocoPhillips, Royal Dutch Shell PLC, Total SA, and Inpex Corp.
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Kazakhs Rebuff Hedge Funds
ALMATY, 5th October - Kazakhstan's central bank said Friday that it was capable of stabilizing the country's banking system after what it called a "speculative attack" by large hedge funds.
"The National Bank of the Republic of Kazakhstan has ... the necessary means and resources at its disposal and is also ready to undertake all necessary measures to maintain financial stability," it said in a statement.
The central bank broke its silence after a torrid week for Kazakhstan's banks, whose heavy borrowing abroad has made them vulnerable to the global credit crunch triggered by the U.S. subprime mortgage crisis.
The cost of credit default swaps offering insurance against possible default by Kazakh banks has blown out this week.
Banks' bonds and stocks have slumped after ratings agencies Standard & Poor's and Moody's this week put under review several Kazakh ratings, including those of the sovereign and leading bank Kazkommerts, for a possible downgrade.
"The heightened concerns of international investors and creditors may represent, in our view, the result of a speculative attack by large hedge funds on the market for credit derivatives of Kazakhstan's banks," the statement said.
Luis Costa, emerging debt strategist at ING Bank in London, welcomed the verbal intervention. He said yield premiums on Kazakh bank bonds had narrowed by 50 basis points and by 300 pips for consumer lender Alliance Bank.
"It's good that the central bank is coming to the headlines and bringing more optimism to the Kazakh [corporate] curve," he said. "There are much better buy flows on the cash curve, and I expect this to continue."
Speculative demand for Kazakhstan's tenge currency by foreign investors betting on a devaluation has also forced up money market rates, with one-month interbank rates spiking to over 20 percent.
Troika Dialog said the pressure might force Kazakhstan's central bank to abandon a strong tenge policy that has made it possible for banks to borrow abroad freely and cheaply in recent years.
"This policy is only tenable in a favorable global environment where liquidity is on the rise," Troika economists Anton Strutchenevsky and Olga Veselova wrote in a note. "If foreign capital inflow drops off, tenge volatility may increase. Given the negative current account, a moderate devaluation should not be ruled out."
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Kazakhstan-based EDB affirmed
MUMBAI, 4th October - Standard & Poor's (NYSE:MHP) Ratings Services said it has affirmed its 'BBB+' long-term and 'A-2' short-term issuer credit ratings on Kazakhstan-based Eurasian Development Bank (EDB), with a stable outlook, despite the recent creditwatch action on the sovereign.
The rating agency said it has affirmed its 'ruAAA' and 'kzAAA' national scale ratings on the bank.
S&P has placed the sovereign ratings of Kazakhstan on negative watch.
S&P said it regards the bank as a supranational institution and its credit standing is thus not constrained by the lowest rating of its sovereign members, but, the bank's financial strength and shareholder support continue to be dominant factors in assessing its creditworthiness.
The ratings on the bank remain supported by its initial strong capitalization and expected support from majority shareholder, The Russian Federation, rated 'foreign currency BBB+/A-2' with a stable outlook and local currency 'A-/A-2' with a stable outlook and national scale rating at 'ruAAA', S&P add
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Turnover between Kazakhstan and Russia surges
NOVOSIBIRSK, 3rd October - The first half of 2007 saw a 30 % year-on-year turnover increase to $7.7 billion between Kazakhstan and Russia, Kazakhstan Deputy Minister of Industry and Trade Kuandyk Bishimbaev said Wednesday.
Speaking after the opening of a Novosibirsk exhibition devoted to commodity producers in border regions, he said the figure grew by 30% in 2006 to $12.8 billion, and had had a 30% increase within the first half of 2007.
The deputy minister of the oil-rich central Asian republic also said that, according to industrial development strategy, finished commodity export increase was primarily targeted at Russian, Middle Asian, and Chinese markets since Kazakhstan could "meet the product requirements set by these markets".
He added that under the strategy for the next year, "The state will assist the exporting enterprises in introducing their products into foreign markets. In this regard, Russia is our number one priority".
Bishimbaev said up to 80% of turnover was due to Russian-Kazakh border enterprises.
He said Kazakhstan and Russia had two-way exchanges of engineering, power industry, agriculture, and steel products, maintaining technological cooperation between enterprises.
Vladimir Nikonov, the deputy governor of Siberia's Novosibirsk Region, said the Kazakhstan exhibition was of great interest for the region's business.
He said Russia and Kazakhstan had "close economic and cultural ties," paving the way for the development of cooperation in all fields.
Kazakhstan and Russia are members of the Collective Security Treaty Organization (CSTO), which also comprises the former Soviet republics of Armenia, Belarus, Kyrgyzstan, and Tajikistan.
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Kazakhstan fines Chevron consortium
ASTANA, 4th October - Kazakhstan on Wednesday imposed a fine of more than half a billion dollars on an oil consortium led by Chevron, in a move that threatens to worsen the investment climate on the natural resources-rich Central Asian republic.
The fine for ecological violation at the Tengiz oilfield comes after the Kazakh government imposed a fine and stopped work at the Eni-led consortium developing the large Kashagan oilfield.
Chevron's fine comes ahead of a key visit this weekend by Romano Prodi, the Italian prime minister, to Astana to help resolve the row between an Eni-led consortium and the Kazakh government.
Nurlan Iskakov, the Kazakh ecology minister, said the government imposed a $609m fine on the Chevron-led Tengizchevroil venture. "Any company that does not fulfil ecological requirements will be dealt with in the harshest way," Mr Iskakov said.
Chevron declined to comment, referring all questions to the consortium, which is expected to contest the fine.
Chevron, Kazakhstan's biggest private oil producer, has a 50 per cent stake in the Tengizchevroil oil venture. Other shareholders are Exxon (25 per cent), KazMunaiGas, Kazakhstan's state oil and gas company (20 per cent) and Lukarco, a joint venture between Lukoil and BP (5 per cent).
The row between the government and the international oil companies risks compromising the country's target of becoming a large oil producer. Kazakhstan aims to export as much as 2m barrels a day by 2015.
Analysts said the fines for environmental violations were an attempt to force international oil companies to sweeten contracts in favour of a greater share of the oil revenues to the Kazakh government.
Andrew Neff, an energy analyst at Global Insight, said western companies would decry the erosion of the investment climate in Kazakhstan.
"With oil prices at record levels and competition continuing to increase for access to oil reserves around the globe, Kazakhstan is utilising its leverage as the owner of the hydrocarbons, pressuring the energy companies in an effort to secure a greater share of the revenues and profits to be had from the development of those oil resources," Mr Neff said.
Kazakhstan has set an October 22 deadline for settlement of the row over Kashagan.
The government has de-manded compensation for delays to production and cost overruns, the core development in the republic's plan to triple oil output within a decade.
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Kazakhstan holds rates as squeeze hits local mkt
ALMATY, 28th September - Kazakhstan’s central bank kept interest rates unchanged on Thursday and delayed a rise in banks’ reserve requirements to smooth the effects of the global liquidity squeeze on the local market.
The National Bank said in a statement it was keeping its key refinancing rate unchanged at 9.0 percent despite inflationary pressure. It said it would also postpone raising its minimum reserve requirements on banks’ foreign liabilities to Jan. 15 next year from the previously planned Oct 9.
“Keeping the official refinancing rate unchanged, despite higher yearly inflation, is aimed at smoothing problems with banks’ short-term liquidity, as well as easing inflationary expectations,” the central bank said.
Kazakh banks rely heavily on foreign borrowing to fund their rapid growth and the global credit squeeze has had a knock-on effect in the oil-rich central Asian state.
The central bank has already postponed raising minimum reserve requirements due to the domestic liquidity squeeze at the end of last month.
Reserve requirements define what proportion of funds borrowed by banks must be held in special accounts and cannot be lent to customers. Consumer prices rose 6.3 percent in the first eight months this year compared with 5.3 percent in the same period last year. Inflation accelerated to 8.6 percent in 2006 from 7.6 percent in 2005.
Kazakh banks nearly doubled their assets in the same period, having become heavy issuers on international bond markets. But the global squeeze put an end to this stellar growth as lenders have much less funding available and are becoming pickier. “We are switching from the strategy of active growth to that of stabilisation,” Roman Solodchenko, chief executive of TuranAlem, Kazakhstan’s number two bank, told reporters at a banking conference on Thursday.
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Kazakhstan takes 71 place in World Business ratings
WASHINGTON D.C. 27th Septmber - Kazakhstan takes 71 place out of 178 in the research "Business Execution 2008" done by World Bank and IFC, reports the agency with reference to current data information.
In particular, IFC report on "Business Execution 2008" states the rating of 178 countries in accordance with the figure of business execution conditions improvement taking into account data in 10 spheres of business regulation.
Composing a rating agency took into consideration time and cost of state requirements execution on new enterprise registration, its activity, external trade operations execution, taxation and the enterprise shutdown. At this the following factors are not considered: macroeconomic policy, infrastructure quality, foreign currency fluctuation, investors' opinions, and criminal level.
Two years running Singapore takes the first place in combined rating among 178 countries. Top-10 leaders of Eastern Europe and Central Asia hold by Estonia (17), Georgia (18), Latvia (22), Lithuania (26), Slovakia (32), Armenia (39), Hungary (45), Bulgaria (46), and Romania (48). Kazakhstan is on the 71st place. In particular, the report specifies that during reforming "Kazakhstan lessened tax burden changing amortization stake".
In the whole, the report states, the project "Business Execution" helped to realize and provided the information for 113 reforms execution in different world countries.
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Holdup in Benkala mining deal
LONDON, 24th September - Frontier Mining Ltd said the approval of its 50 pct stake purchase of Benkala Project located in northwestern Kazakhstan from Coville Intercorp has been delayed on administrative grounds affecting the approval of its subsoil use contract (SUC).
On 27 August, three days before Frontier's SUC was due to be approved, the Republic of Kazakhstan announced the appointment of a new Minister of Energy and Mineral Resources, which has resulted in administrative delays, the company said.
Upon government approval, the contract will cover an area of 1.194 square kilometres and will be effective for a four year exploration period followed by a 25 year mining licence.
On Sept 6, the company said it signed a conditional agreement with Coville to acquire a stake in the Benkala in Kazakhstan for 21 mln usd in cash and shares.
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Kazakhstan to attract $21 billion to electric power
ASTANA, 21st September - Kazakhstan plans to attract about 21 billion dollars to the electric power development by 2015, said Almasadam Satkaliyev, the president of JSC "Kazakhstan Electric Grid Operating Company (KEGOC) at the Kazenergy Second Eurasian energy forum. "Total investments volume needed for the electric power development amounts to nearly USD 21 billion by 2015", - he said. The KEGOC president stressed that "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 to increase 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 that 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.
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Kazakhstan to publish its first EITI report in November
ASTANA, 20 September - 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, Kazinform refers to News Bulletin of the Embassy of the Republic of Kazakhstan.
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First American Express cards launched in Kazakhstan
ALMATY, September 18, - "Kazkommertsbank" today announced the launch of the American Express Gold Card and The Platinum Card from American Express in Kazakhstan. The new cards, available in Kazakhstani tenge or US dollar denominations, have been designed to meet the needs of a wide range of local consumers who seek a card product that can support their financial and lifestyle needs.
Kazkommertsbank is the exclusive issuer of American Express Cards in the market and is also responsible for signing new merchants in Kazakhstan to accept American Express Cards.
Yermek Shamuratov, Managing Director of JSC "Kazkommertsbank" commenting on the launch of the first American Express cards in Kazakhstan said: "Stability, guarantees, quality are our day-to-day values, and we are pleased to partner with American Express to create card products that provide financial flexibility as well as features never before seen in this market."
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Chagala Group buys up land
LONDON, Septmber 17th - Chagala Group Ltd said it has bought 0.8 hectares of land in Atyrau in Kazakhstan, thus completing the land purchase phase of its 8 hectare complex in the city.
The specialist Kazakh real estate developer and operator said the land will be used for car parking space on the complex, and for further high end development on the site.
The company said it has already received strong interest in the first phases of developments, and forecasts to have the 150 apartment building ready for occupancy by the end of 2008.
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Bill will Let Kazakh Govts to Quit Oil Contracts
ALMATY, Sept 14- An amendment that will give the Kazakh government the right to pull out of natural resources contracts if there is a threat to national security and national economic interests is to be adopted in the next two weeks.
Valeriy Kotovich, one of the lawmakers who initiated the amendment, said the government has already expressed its support for the amendment which also aims to help Kazakhstan in its dispute with the Eni SpA-led (E) consortium over delays and rising costs at the giant Kashagan oil field in the Caspian Sea.
"The amendment will give the government the right to annul contracts on strategic fields, not only oil and gas if the conditions of the contracts are not being complied with and there is a threat to national security," Kotovich said by telephone from the capital Astana, adding that the amendment would certainly apply to the Kashagan dispute.
"The amendment should give the government more room in solving the Kashagan questions," Kotovich said.
The Kazakh government and Eni are currently holding talks on trying to agree terms for the further development of Kashagan. The talks will last until Oct. 22.
The postponement of the start of production and rising costs have angered the government. It has threatened to strip Eni of the operator's role. Kazakhstan wants "adequate compensation" for the delay and the inclusion state oil and gas company KazMunaiGas as a joint operator of the project.
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Kazakhstan seeks full control over Kashagan
ASTANA, September 13 -
The ongoing dispute between the Kazakh government and the Italian Agip KCO oil consortium reached a critical point when Kazakh Prime Minister Karim Masimov, addressing the second Eurasian Energy Forum held in Astana on September 6, issued what sounded like an ultimatum. He clearly articulated that the Italian company, which he held responsible for repeatedly delaying the commercial production of oil at the Kashagan oilfield, should either accept all five conditions presented by President Nursultan Nazarbayev as far back as in February 2001, when Agip KCO was selected as Kashagan project operator, or vacate the field for others. In late June of this year the Kazakh government voiced concerns over the Kashagan project, stating that none of the five obligations, including the original plan to start oil extraction in 2005, has been fulfilled.
It appears, however, that the Kazakh government is not concerned about environmental problems, harnessing the gas released at the oilfield, or purchasing Kazakh equipment and services. Rather, the basic goal of the government’s unrelenting pressure on ENI-Agip is to tighten Astana’s control over the Italian oil company in particular -- and over foreign oil companies in general -- by gradually returning foreign-operated oilfields to government control. Masimov stressed this point at the Eurasian Energy Forum, sending a clear message to Western companies that Kazakhstan will adopt harsher tactics in dealing with foreign oil companies and punish them for failing to satisfy their investment and production obligations. He told journalists that Kazakhstan will no longer be satisfied with an 8.33% share of the Kashagan project and KazMunayGaz, the leading national gas and oil company, should become co-operator of the project. But he evaded the question about the exact number of shares KazMunayGaz would obtain in Kashagan. Government officials believe ENI has a slim chance of retaining its position as operator, but everything hinges on the outcome of the ongoing talks between the Kazakh government and the Italian company, which are likely to drag on until the end of the year (Express-K, September 8).
Kazakh authorities have repeatedly inspected the Italian firm on suspicion of tax evasion. Kazakh Finance Minister Daulet Yergozhin announced that final results of inspections will be made public in October, but the estimated environmental damage caused by ENI in Kazakhstan stands at $40 billion.
Apparently, the already chilly relations between Kazakh authorities and the Italian company were further aggravated after ENI gave a negative response to Kazakh demands to increase the planned output of profit-oil from 10% to 40%. The cause of production delays at Kashagan cannot be explained by harsh climatic conditions or technical problems alone. Rather, Agip was taken hostage by its own ambitious plans to increase oil production from the initially projected 100,000 barrels a day at the end of 2005 to 450,000 barrels a day. This revised plan proved to be beyond the capacities of the company and accelerated the collision with the government.
Whatever the root cause of the row around Kashagan, the prolonged tension between the Kazakh government and Agip looks like the beginning of the end of the Italian company’s activities in Kazakhstan. Even if Agip remains a co-operator, KazMunayGaz will control all financial aspects of the project, leaving its Italian partner responsibility for oil production and technical problems. Prime Minister Masimov unambiguously declared Astana’s intention to change the project operator if ENI balks at Kazakhstan’s demands. Independent sources name Total and ExxonMobil as possible replacements for Agip KCO (Delovaya nedelya, September 7).
Government members are divided on how to reconcile tough penalties for ENI with the need for Western investment and technical assistance in the oil sector. More than half of the $50 billion Western investment money accumulated since 1993 in Kazakhstan comes from the oil and gas sector. Presumably Kazakhstan will not go so far as to strip the Italian company of its license to develop the Kashagan oil field. Masimov stressed that despite the complicated nature of the confrontation around Kashagan, the Kazakh government is leaving the door open for further cooperation with foreign oil companies, including ENI.
Astana is closely following European reaction to its pressure on the Italian company. The unsettled dispute will probably cause Italian Prime Minister Romano Prodi to reschedule his visit to Kazakhstan, now planned for October. But repercussions from the row between the Kazakh government and ENI reach far beyond European borders. Given the continuing trend for diversification of oil exports in Kazakhstan and growing global demand for energy sources, no foreign oil company operating in Kazakhstan, Europe, or the United States is immune from government pressure. In many ways the scandalous saga of Kashagan follows the Russian pattern, when Royal Dutch Shell, operating at the Sakhalin-2 oilfield, had to cede its controlling package to Gazprom. It is hard to expect that Kazakhstan will soften its tough position on Kashagan. The snowballing conflict with ENI, paradoxically as it may seem, raises Kazakhstan’s profile internationally and domestically. It warns foreign countries that Kazakhstan is no longer an economically weak country that can be treated like a beggar. Back at home, putting the squeeze on foreign oil companies takes the steam out of the brewing anti-government sentiments among the population over selling national resources to foreigners
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Other News
Rabbi on Kazakhstan State TV
ALMATY, 9 Oct - – Millions of television viewers in Kazakhstan turned on their televisions this week to see Chabad-Lubavitch Rabbi Menachem Mendel Gershovits, co-director with his wife Elka of the city's Jewish community, lead a discussion about the holidays taking up most of the Hebrew month of Tishrei and the traditions associated with them.
The program, which aired on the state television channel, featured a talk between Gershovits, Ran Yishay, Israeli ambassador to Kazakhstan, and the country's Jewish Agency head, Iosef Leibovitch. It took place in the sukkah built next to the Ohr Avner Chabad Jewish Community Center in Almaty.
Leibovitch saw in the program a message highlighting the national uniqueness of the former Soviet republic's Jewish minority, an important factor in preventing any form of xenophobia or prejudice.
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Kazakhstan compensation for Russian rocket crash
ASTANA, October 8 - Kazakhstan is seeking 1.5 billion rubles ($60 million) from Russia in compensation for a rocket crash on its territory, a Kazakh regional governor said Monday.
On September 6, a Proton-M rocket was launched from the Baikonur space center, which Russia leases in Kazakhstan. However, engine malfunction and second-stage separation failure led to its crash 40 kilometers (25 miles) southeast of the town of Zhezkazgan in the Karaganda Region with almost 219 metric tons of toxic fuel on board.
"By our estimates, the damage is worth 7.327 billion tenges, or 1.5 billion rubles," Karaganda Region Governor Nurlan Nigmatulin said. "Of this sum, 3 billion tenges is intended for health monitoring among the local population over a period of three years."
He said there are serious concerns that people exposed could develop health problems. The Proton is a heavy rocket which uses highly toxic heptyl as fuel.
The governor said part of the funds would be used to decommission affected land plots.
"The endangered zone covers 32,000 hectares of agricultural land," Nigmatulin said, adding that 19 farms would not be able to continue their activities due to a pasture ban.
The Kazakh side also insists that residents of the risk zone receive compensation. "This will require 2.13 billion tenges. Such a practice exists in the Russian Federation, and we are ready to submit our calculations," Nigmatulin said.
Russia meanwhile announced the completion of decontamination work on the crash site. "All the main work has been completed with positive results," Anatoly Perminov, the head of the Federal Space Agency, said at a meeting of an intergovernmental commission.
Search teams have surveyed a total of 1,743 square kilometers (1,083 sq miles) of territory around the crash site and have found 119 rocket fragments. Russian experts cleared the area where the rocket's booster came down four times, after post-decontamination laboratory tests revealed that toxic fuel concentration in more than a half of 20 soil samples taken from the site exceeded permitted levels.
The Kazakh emergency situations ministry said last week that the ban on Proton launches from Baikonur, suspended after the crash, should be lifted when Russia takes further environmental protection measures and makes payments for the "excessive damage to the environment."
Perminov said the commission would work throughout the night to draft a mutually acceptable decision by morning.
The incident was the sixth Russian rocket crash after takeoff from Baikonur. Preliminary estimates say the crash was caused by a thrust steering mechanism failure.
Last year, a Russian Dnepr rocket crashed on lift off from Baikonur, after which a special commission was formed to assess the resulting environmental damage. On the basis of its findings, Russia paid Kazakhstan $1.1 million in compensation.
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More HIV-Infected Children Found In S. Kazakhstan
Prague,October 3, 2007 -- A senior Kazakh health official has reported another rise in the number of children infected in hospital with HIV, the virus that leads to AIDS.
The chief of the South Kazakhstan Regional Health Department, Viachelsav Dudnik, said the number of children infected by HIV-tainted blood in southern Kazakhstan had now reached 133.
Most of the children have been infected with HIV in two major children hospitals in Shymkent, located in South Kazakhstan Province. It is thought that many were infected by the reuse of needles that had been tainted with the disease or had been given a transfusion of tainted blood.
The scandal surrounding the infection of the children -- several of whom have since died of AIDS -- initially broke in 2006 and caused fear among parents whose children had undergone treatment at the medical facilities.
Kazakh Minister of Health Protection Erbolat Dosaev was fired in connection with the incident, and several medical workers were sentenced to prison terms.
However, government critics say that Kazakh authorities have not taken enough measures to help the victims.
Sagadat Masagurov is the former head of a Shymkent-based nongovernmental organization, Protection for Our Kids from AIDS.
Masagurov told RFE/RL's Kazakh Service that the government has not kept its promise to support the children who have fallen victim to medical workers' negligence.
"In general, for the government this issue is like a closed book now," he said. "It just turned into a routine issue, that's all. We have predicted that in a half a year everybody would forget it. That seems to be true. Nobody wants to hear or discuss the issue of the compensation that is due [for the victims and relatives of the victims]."
It was Masagurov's NGO that brought the Shymkent incident to the public's attention.
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Kazakhstan for space tie-up with India
NEW DELHI, 1st October - Kazakhstan, which houses the world famous Baikonur satellite launching facility, is looking for a tie-up with the Indian Space Research Organisation, including joint projects for construction of various types of satellites and training of engineers and specialists.
A five-member high-level delegation led by the Chairman of the country’s space agency, National Cosmic Agency of the Republic of Kazakhstan, Talghat Mussabayev, is here for discussion with ISRO Chairman G. Madhavan Nair and other officials.
During the week-long visit, the delegation will visit the ISRO headquarters, the ISRO Satellite Centre, the ISRO Telemetry, Tracking and Commanding Network’s Headquarter and the Regional Remote Sensing Service Centre in Bangalore, the Vikram Sarabhai Space Centre in Thiruvananthapuram, the Satish Dhawan Space Centre at Sriharikota and the National Remote Sensing Agency in Hyderabad.
Speaking to reporters here on Saturday, Mr. Mussabayev said Kazakhstan was looking for long-term cooperation with India as the two countries had a lot of expertise to share in terms of construction of satellites as also their launching.
Pointing out that his country had become a space power with the launch of its first-ever telecommunication satellite, KazSat-1 last year, he said not only two more satellites were in the pipeline, the country was also developing a new generation rocket launcher that would be more eco-friendly than the Russian proton type boosters.
Called Baiterek, the new launcher will be capable of placing 30-tonne charge into orbit. Preliminary trials for a prototype were set for 2010 with more powerful versions to be tested one year later.
It will be launched from a specially designed launch pad at Baikonur, the construction of which will begin shortly.
Between now and 2020, the country hopes to construct a dozen telecommunication satellites and put in place a satellite navigation system.
Kazakhstan President Nursultan Nazarbayev is keen on developing the space industry in the country, notably in the domain of the telecommunication satellites, taking advantage of the Baikonur facility.
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Kazakhstan: make benefit funky cities
LONDON, 22nd September - When it comes to hedonistic hotspots, the central Asian cities of Astana and Almaty do not readily come to mind.
Both received a bad press at the hands of Sacha Baron Cohen in his 2006 film Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan. The locals were depicted as bigots, rapists and anti-Semites, while Astana was seen as a backward-looking place boasting a "Funworld" where wives could be left in cages for the day.
Despite Cohen's grotesque caricatures, travel companies did report some new interest in the former Soviet republic following the film. And now both Astana and Almaty - Kazakhstan's current and past capitals - are to be featured as hip destinations in a new guide. From the end of next month, curious visitors will be able to fly from Heathrow to Almaty directly with Bmi.
"Things are changing very quickly in Kazakhstan: there are now a lot of very good five-star hotels and funky clubs," said Lucy Kelaart, co-author of A Hedonist's Guide to Almaty and Astana. "In Almaty there are some wonderful old buildings; in Astana there are interesting new ones. In some of the clubs you feel you could almost be in New York or London. My favourite club in Astana is called Chocolate." Astana is enjoying a building boom on the back of revenue from the country's extensive oil and gas reserves. The city is a sea of cranes, skyscrapers and prestigious developments by architects such as Sir Norman Foster.
Tremayne Karew Pol, the founder of the "Hedonist's Guide" series, admitted the two Kazakh cities were not obvious choices. "Astana may be something of a construction site, but it is a very interesting place," he said. "In addition to more mainstream destinations for hedonists, we like to cover places that are a bit quirky." DA Hedonist's Guide to Almaty and Astana (£13.99) will be published in November (see www.hg2.com).
Bmi (www.flybmi.com) begins direct flights to Almaty on October 28.
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Kazakhstan: Aliev's Bodyguards Return To Testify
ASTANA,September 18, - Two men wanted by Kazakh police voluntarily returned on September 17. The two were, until recently, bodyguards for Rakhat Aliev, once one of the most influential people in Kazakhstan and President Nursultan Nazarbaev's son-in-law.
Aliev had many business interests and has held several government posts, most recently as Kazakh ambassador to Austria.
Introducing the two men to journalists, Interior Ministry spokesman Bagdad Kozhakmetov said they "expressed their desire to voluntarily cooperate fully with the investigation" of Aliev.
The return of Bektybaev and Koshlai is potentially very bad news for Aliev, who faces charges of abducting bank officials and assaulting them, as well as abuse of office. Aliev may also be connected to the killing of a television reporter three years ago.
Kazakh investigators are certainly hoping Bektybaev and Koshlai can provide more details about Aliev's alleged illegal activities.
In reading a statement on behalf of himself and Koshlai, Bektybaev sounded ready to help the investigators by denouncing their former employer.
"We were chosen by destiny to provide security for Rakhat Aliev. Unfortunately we only now clearly realize that we should have better assessed the situation much earlier; [a situation] that was formed due to the unrestrained deeds of Rakhat Aliev," Bektybaev said. "And [we should have] taken all the necessary measures not to allow any kinds of unlawful activities. We also declare that of our own free will we left our obedience to Rakhat Mukhtarovich Aliev and we used our own chances and operational experience to return to our country."
Bektybaev added that Aliev had tricked the two bodyguards and Austrian officials. "Only now do we clearly understand that when we were in Austria we received only information that was to the advantage of Rakhat Aliev," he said. "He deliberately led astray not only us but also the judicial and law-enforcement agencies of Austria, hiding [from us] the real situation. In order to achieve this, [Aliev] used his official and personal ties in Austrian circles, including those among influential businessmen."
Aliev remains in Austria where he has been since he was stripped of his ambassador's post in May. He is being investigated in Austria on charges of money laundering and is free after posting a 1 million-euro ($1.4 million) bail.
Kazakh authorities have already tried to have him extradited but an Austrian court ruled that Aliev would not receive a fair trial if he returned to Kazakhstan.
Aliev's name has also come up in the investigation into the murder of television reporter Anastasiya Novikova. She disappeared in 2004 and was last reported to be in Lebanon on vacation. But her body was discovered in an unmarked grave in southern Kazakhstan in early August and some Kazakh media suggested that she and Aliev were once romantically involved.
Aliev has maintained his innocence from the beginning and said he is a victim of political persecution.
Elite Want Aliev Returned
Analysts say Aliev's close connection to the president's family and inner circle have given the former son-in-law intimate knowledge of the workings of the Kazakh government and possibly knowledge of its corrupt practices.
Such analysts believe Kazakh authorities want Aliev back in Kazakhstan before he talks to the international media or an international court.
Interior Ministry spokesman Kozhakmetov was cautious in estimating how much Aliev's bodyguards can help in the investigation into Aliev's activities. "Maybe they can shed some light [on the case]. Maybe," he said. "We're hoping."
Even if the two former Aliev bodyguards cannot provide exactly what Kazakh investigators are looking for, it seems clear the Kazakh authorities are gathering all the evidence they can before they make another attempt to have Aliev extradited.
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HAILEYBURY IS UK’S EXPORT TO KAZAKHSTAN
LONDON,25 January - Haileybury last night signed an agreement with Kazakhstan-based international developers, Capital Partners, to develop a school reflecting Haileybury’s values in the city of Almaty in Kazakhstan.
Haileybury-Almaty will be the first British independent school to open in Central Asia, further expanding the global trend for the export of British schooling.
Building begins on the greenfield site, which is centrally located in Almaty on Al Farabi Avenue, on the banks of the Esentai River, in May 2007 and Haileybury-Almaty will welcome its first pupils in September 2008.
Recognising the demand for a British-affiliated educational establishment, Capital Partners is managing the development of the new school in Almaty. “We enjoy strong links with Kazakhstan, a country experiencing extraordinary levels of inward investment and economic growth – over nine percent in the first half of 2006,” says Capital Partners Director of Educational Development, Alister Bartholomew.
“With this school, we want to make our contribution towards complementing this incredible growth, adding a new alternative to the country’s existing schooling provision.”
The co-educational school will ultimately cater for pupils between the ages of 3 and 18 and will follow the British curriculum, the International General Certificate of Secondary Education (IGCSEs) and the International Baccalaureate Diploma Programme in the Sixth Form. In contrast to many other British schools abroad, Haileybury-Almaty will focus on the education of local pupils rather than the children of expats. Although most classes will be taught in English, the school will also focus on the teaching of the Kazakh language and history, with cultural considerations paramount. Capital Partners has been collaborating closely with the Kazakh Education and Science Ministry throughout the project.
Haileybury-Almaty aims initially to have 640 pupils, with room for expansion to 940. Up to 80 percent of the students are expected to be Kazakh nationals, and the remainder are likely to be children from the international diplomatic and business communities.
Master of Haileybury, Stuart Westley, says: “Haileybury is delighted to be part of this exciting opportunity which reflects the great interest in and respect for the values of the British public school clearly evident now in many parts of the world.”
Haileybury already has strong connections with Kazakhstan, with 14 Kazakh pupils currently at the school and another nine having attended the school in previous years.
Among the guests at the signing ceremony were Serzhan Zhumashov, the Chairman of Capital Partners, and Nurzhan Subkhanberdin, the Chairman of Kazkommertsbank which recently listed on the London Stock Exchange. They were joined by George Staple, the Chairman of the Haileybury Council, and Michael Gatenby, the Chairman of Haileybury’s Finance & General Purposes Committee.
To make the concept a reality, Capital Partners have brought together a group of top consultants, including the Schools Architecture division of HOK (Hellmuth, Obata + Kassabaum, Inc.), environmental engineering experts Arup, and Edicts, specialists in Information and Communications Technology in education. The school will be built by Enka, one of the largest construction companies in the world.
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Kazakhstan is new favourite for gap year travellers
LONDON, 24 January - A poll of 2,800 gap year and long-term travellers worldwide has named Kazakhstan as number three in their wishlist of European countries they want to visit.
The survey, by gap year website www.TravellersConnected.com, found Italy was the most popular, with 22% of the vote, whilst the UK came second with 18%, and Kazakhstan came third with 16%.
Following closely behind were Spain (12%), France (10%) and Greece (7%).
Kazakhstan has been thrown into the limelight by the recent film, Borat, by Sacha Baron-Cohen.
Alastair Banks, one of the seven TravellersConnected.com founders, said: "It's really quite fantastic what Borat has done to raise the public profile of Kazakhstan.
"For the country to get more votes than Spain demonstrates the sheer power of the media. When we compiled the same survey last year Kazakhstan barely got any votes at all!
"We understand that Kazakh president Nursaltan Nazarbayev thought that Borat had damaged the world's perception of Kazakhstan. For the right reasons or wrong, it looks however that the film has really put the country on the map."
Air Astana has now put a third scheduled weekly flight into Almaty from London to cope with surge in demand.
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Kazakhstan gambles on casinos
KAPCHAGAI, Kazakhstan, 24 January - The town's chief administrator sat next to an office window overlooking rows of dilapidated four-story, Soviet-era apartment buildings in this grim industrial town. As he looked down at the rooftops, he considered the potential impact of dozens — perhaps even hundreds — of casinos and thousands of gambling arcades setting up shop in this region.
"I haven't been to Las Vegas so I can't compare, but there are casinos in Almaty and in Astana and they look fine," said the administrator, Kuagdel Turuadeleav, referring to the two main Kazakh cities. "There will be some conspicuous changes, but I don't see any problems coming."
Local officials say that if all goes according to plan, Kapchagai will soon be transformed into a "Las Vegas on the steppe," as boosters here are calling it. Under a new law promulgated by President Nursultan Nazarbayev of Kazakhstan, to take effect in April, gambling will be restricted to two provincial cities — Kapchagai, not far from Almaty, the largest Kazakh city, and Shchuchinsk, north of Astana, the Kazakh capital.
Rich in oil, Kazakhstan, like Russia and some other former Soviet republics, has experienced a gambling boom. The country has 132 casinos and more than 2,000 smaller gambling parlors, slot halls and bookmakers, according to Nazarbayev's office.
The designation of two densely configured casino centers has attracted investors. Gambling industry officials say that two Chinese companies plan to build an enormous casino complex in Kapchagai.
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Managers of existing casinos say they cannot possibly relocate their businesses by April, and earlier this month they gathered in front of government offices to register a protest against the April deadline.
But the high visibility of Kazakh casinos — typically decorated like pinball machines, with blinking neon lights, even when located in quiet residential neighborhoods — has produced a backlash in this country of 17 million people.
Nazarbayev has said that creating two dedicated gambling centers will help isolate the social cost of gambling from the general population, and also create tourism destinations for foreign gamblers, especially the Chinese. Kapchagai is located about 640 kilometers, or 400 miles, from the border with China.
But many of the 51,000 residents of Kapchagai do not share their local government officials' enthusiasm for Nazarbayev's plan.
"People are afraid of chaos," said Sasha Imguleako, a 19-year-old who works at one of the low-stakes gambling arcades already in business in Kapchagai. "Criminals will come, and we are all afraid of trouble."
A fear of increasing crime is not the only source of concern.
People say they wonder whether a gambling culture will corrupt the town's young people, destroying the traditional work ethic. "We worry about it, but worry is all we can do," said Svetlana Bakiev, who owns a small grocery near the center of town and is the mother of two daughters, 14 and 18 years old. "We have no place else to go."
For many in Kapchagai, the far- reaching impact of many thousands of gamblers streaming into the city is simply hard to fathom. "We will need street lights working past midnight," said Bakiev's husband, Max Bakiev. "Right now, they stop working at 12 a.m. This is something that will need to change."
Some of the buzz in Kapchagai's smattering of restaurants and storefronts focuses on the price of real estate — apartments costing $2,000 just a few years ago now fetch as much as $10,000, with most of the increase coming in a recent, speculative frenzy over the coming gambling industry.
But one of the chief selling points of a major gambling center on the Central Asian steppe is also among the chief sources of anxiety among residents: Chinese gamblers. The Chinese appetite for gambling may stoke investment fervor from Macao to Singapore, but for many Kazakhs the idea of encouraging hundreds of thousands of Chinese visitors to cross the border raises the specter of an invasion.
"This town will be a lot like Hong Kong," said Sayassat Yusenbaev, 28, a businessman having dinner at a Kapchagai restaurant with friends from his office.
Not so, said another man at the table, Sayassat Dyussembayev.
"People in general are feeling negative about the Chinese, but they don't need to worry: the Chinese will come in large groups and stick together in one casino, like a herd," he said.
Turuadeleav, Kapchagai's chief administrator, acknowledged that many residents were worried. "We don't know what's going to happen and nobody else does, either," he said. "But we can expect new hotels, restaurants. That means new jobs for people who want them."
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