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Reference ID Created Released Classification Origin
07ASTANA1449 2007-05-29 08:15 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

DE RUEHTA #1449/01 1490815
R 290815Z MAY 07

E.O. 12958: N/A 
(SBU) Summary:  Kazakhstan is proud to be hosting the third 
meeting of the Global Initiative to Combat Nuclear Terrorism, 
which will attract significant attention within the country. 
The Kazakhstanis will be eager to trumpet their 
non-proliferation accomplishments.  Since renouncing its 
nuclear arsenal soon after independence, Kazakhstan has 
proven to be a reliable security partner and a steady, 
positive influence in a turbulent region.  The Kazakhstanis 
also see the event as an opportunity to highlight their 
country's achievements - a thriving economy, a  rapidly 
expanding capital, a harmonious multiethnic society - and to 
demonstrate that they are capable of leadership, a key goal 
as they continue with their bid to chair the OSCE in 2009. 
The U.S. enjoys a positive security relationship with 
Kazakhstan, although not without the occasional obstacle. 
Several important programs are slowed or delayed by 
Kazakhstan's labyrinthine bureaucratic procedures. Your visit 
presents an excellent opportunity to reemphasize to the 
Kazakhstanis the need to push forward on projects such as the 
BN-350 spent fuel program and the HEU fresh fuel downblending 
project.   End summary 
Political Context 
2. (SBU) Your visit comes soon after the introduction of 
constitutional amendments which on balance represent a 
positive step toward democratic reform.  The long-awaited 
changes increase the size and power of parliament, strengthen 
the role of local legislatures, eliminate the death penalty 
except in cases of terrorism and war crimes, provide for 
judicial sanction of arrest, and pave the way for government 
financing of public organizations and political parties.  The 
president retains significant powers, however.  In a surprise 
move which has stolen headlines and provoked an outcry from 
the opposition, a group of parliamentarians added a provision 
exempting President Nazarbayev from existing term limits. 
3. (SBU) Kazakhstan is certain to point to the constitutional 
amendments as evidence of reform as they continue to push 
forward with their candidacy to chair the Organization for 
Security and Cooperation in Europe (OSCE) in 2009.  The U.S. 
has made clear that we welcome Kazakhstan,s aspirations, but 
that any chair must exemplify the principles of the 
organization.  While the constitutional amendments have the 
potential to lead to greater democratization, Kazakhstan will 
need to take further steps to bolster its still 
underdeveloped democratic political institutions, civil 
society, and independent media. 
The Central Asian Tiger 
4. (SBU) Kazakhstan is the region,s economic powerhouse, 
with an economy larger that those of all the other Central 
Asian states combined (2006 GDP: $68 billion).   The economy 
has averaged 9.2% real growth over the past three years, and 
the percentage of Kazakhstan,s population living below the 
level of subsistence has dropped from 28.4% in 2001 to 9.8% 
in 2005.  The energy sector is Kazakhstan,s dominant earner, 
with oil exports accounting for roughly a third of GDP. 
Kazakhstan produced 1.3 million barrels of oil per day in 
2006 and is expected to become a top ten oil producer soon 
after 2015.  Kazakhstan also possesses substantial proven gas 
reserves (3 billion cubic meters), although it currently 
exports very little gas. 
5. (SBU) The U.S. is encouraging the GOK to diversify its oil 
and gas export routes.  Currently, the bulk of Kazakhstan,s 
crude is exported via Russia, both through the Transneft 
system and the independent Caspian Pipeline Consortium (CPC). 
 The majority of Kazakhstan,s near term oil production 
increases are projected to flow to market either through the 
Baku-Tbilisi-Ceyhan pipeline or an expanded CPC.  All of 
Kazakhstan's gas exports currently flow through Russia.  Two 
projects under GOK consideration, a trans-Caspian Pipeline 
and a gas pipeline to China, would reduce dependence on 
A Positive Regional Influence 
6. (SBU) Kazakhstan has cooperated extensively with the 
United States in the Global War on Terrorism.  Kazakhstan has 
directly supported efforts in Iraq by deploying a military 
engineer unit which has disposed of over 4.5 million pieces 
of ordnance.  Kazakhstan has provided over 4800 cost-free 
overflight and emergency landing rights for U.S. aircraft 
supporting Operation Enduring Freedom.  The GOK has made 
strong statements in support of U.N. resolutions sanctioning 
ASTANA 00001449  002 OF 003 
Iran and North Korea. 
7. (SBU) Kazakhstan has also expressed its eagerness to play 
an enhanced role in achieving regional integration.  In 
April, President Nazarbayev spoke of a Central Asian union 
with a common market, an idea he has raised on several 
occasions.  Kazakhstan is already a significant econ
force in the region, the largest foreign investor in 
Kyrgystan and soon to be the largest investor in Georgia, 
according to the Georgian government.  In an April 19 speech 
at the Eurasia Media Forum, President Nazarbayev announced 
that Kazakhstan is developing a "Special Action Program" to 
increase humanitarian and economic cooperation with 
Afghanistan and to invest in the Afghan economy.  According 
to Nazarbayev, Kazakhstan plans to construct a school in the 
Samangan region and a hospital in the Bamian region. 
A Strong Non-Proliferation Partner 
8. (SBU) Non-proliferation has been a cornerstone of the 
bilateral relationship since Kazakhstan,s independence. 
With the collapse of the Soviet Union, Kazakhstan was left 
with the world,s fourth largest nuclear arsenal. 
Nazarbayev,s 1991 decision to give up Kazakhstan,s nuclear 
arsenal was groundbreaking.  Kazakhstan returned all tactical 
nuclear warheads to Russia by January 1992, and all strategic 
nuclear warheads by April 1995.  Through the Nunn-Lugar 
Cooperative Threat Reduction Program (CTR) program the U.S. 
assisted Kazakhstan with the destruction of bombers, silos, 
and related ICBM infrastructure. 
9.  (SBU) The U.S.- Kazakhstan non-proliferation relationship 
remains productive.  Cooperation continues under the CTR 
program to secure the former Soviet nuclear weapons test site 
in Semipalatinsk.  The U.S. is working with Kazakhstan under 
the Proliferation Prevention Initiative agreement to 
strengthen its ability to prevent proliferation of WMD and 
related materials across its borders by enhancing its WMD 
detection and interdiction capabilities along the Caspian Sea 
border.  Through the Biological Threat Reduction Program, the 
U.S. is supporting Kazakhstan in its efforts to combat 
bioterrorism and prevent the proliferation of biological 
weapons technology, pathogens and expertise.   The DOE met 
several key milestones in 2006 as preparations are made to 
move three tons of weapons grade plutonium from the 
decommissioned BN-350 nuclear reactor in Aktau to long term 
storage at the Baikal 1 facility near the city of Kurchatov 
in western Kazakhstan. 
But Not Always a Prompt One 
10. (SBU) Although non-proliferation and security cooperation 
with Kazakhstan is generally good, maintaining progress often 
requires a firm push.  Early in the year, the Department of 
Defense warned the GOK that it would suspend its CTR 
programming if Kazakhstan failed to implement an effective 
value added tax (VAT) exemption mechanism.  With only a few 
days to spare before the DOD deadline, Kazakhstan approved 
pending subcontracts and avoided a shutdown.   Kazakhstan 
must still demonstrate, however, that the mechanism created 
to approve the contracts is an efficient and effective 
long-term solution. 
11. (SBU) The U.S. and Kazakhstan must also extend the CTR 
Umbrella Agreement in 2007.  Renewal this year may prove 
trickier than 2000, the last time the agreement was extended. 
  Some in the GOK have suggested that the language of the 
agreement needs to be broadened to reflect all U.S. efforts 
and aims (for example, to emphasize a focus on proliferation 
of all weapons of mass destruction, rather than just 
offensive strategic arms).  Proposing changes to the text 
will require delicate maneuvering, however, in order to avoid 
the lengthy delays that would arise from a full-scale 
reexamination of the text or by triggering Kazakhstani 
requirements for re-ratification. 
12.  (SBU) Other important U.S. programs face frequent delays 
more often due to the stuttering bureaucracy than to a lack 
of will.  In January, senior-level policy talks were held in 
Astana on the permanent disposition of BN-350 spent fuel.  An 
agreement in principle was reached on a communique on 
permanent disposition establishing the framework for further 
talks.  The Kazakhstanis have yet to sign the communique, 
however, as it still has not received full interagency 
13. (SBU) During President Nazarbayev,s 2006 visit to the 
ASTANA 00001449  003 OF 003 
U.S., the U.S. and Kazakhstan reached agreement in principle 
to down blend approximately 21 kilograms of highly enriched 
uranium (HEU) stored at the Institute of Nuclear Physics 
(INP).  Although the project has the president,s blessing, 
progress has been delayed because no specific authorization 
has been given to the Ministry of Energy and Mineral Resource 
or to INP to implement the program. 
14.  (SBU) In September 2006, the five nations of Central 
Asia signed the Central Asia Nuclear Weapon Free Zone Treaty 
(CANWFZ), despite reservations voiced by the U.S., France, 
and the U.K.  The U.S. and other nuclear weapons states have 
stressed repeatedly that they cannot support the treaty 
unless their concerns were addressed in a satisfactory 
manner.  One significant concern is that other international 
treaties can take precedence over the CANFWZ. 


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