07ASTANA2728, KAZAKHSTAN’S TEXTILES AND APPAREL SECTION: UPDATED

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Reference ID Created Released Classification Origin
07ASTANA2728 2007-10-01 11:37 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3189
RR RUEHAST RUEHBI RUEHCI RUEHDBU RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #2728 2741137
ZNR UUUUU ZZH
R 011137Z OCT 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 0843
INFO RUEHAST/USOFFICE ALMATY
RUCNCIS/CIS COLLECTIVE 0269
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS ASTANA 002728 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR SCA/CEN - O'MARA 
 
E.O. 12958: N/A 
TAGS: ECON ETRD KTEX KZ
SUBJECT: KAZAKHSTAN'S TEXTILES AND APPAREL SECTION: UPDATED 
STATISTICS AND PROJECTION OF FUTURE COMPETITIVENESS 
 
Ref: (a) State 114799 (b) 06 Astana 150 
 
1.  (U) The following data for Kazakhstan in 2007, provided by Lubov 
Khudova, representative of the Kazakhstani Association of Light 
Industry Enterprises, and sources from the National Statistics 
Agency, responds to questions in ref A and updates information 
provided in ref B. 
 
-- Industrial production (including extractive industry):  $52.7 
billion (2006); $38.7 billion (January - August 2006) 
 
-- Total textile and apparel production: Approx $281 million 
 
--  Exports in textiles and apparel to the U.S.: N/A (negligible) 
 
--  Total manufacturing employment: 714,600 (as of July 2006) 
 
--  Total employment in textiles and apparel: 21,000 (including 
2,100 in shoe manufacturing) 
 
2.  (SBU) Khudova told Econoff that the internal textile and apparel 
market remains very much unregulated.  She said that the vast 
majority of the textile and apparel products on the Kazakhstani 
market are imports, of which 95% are undeclared.  While Kazakhstan 
has laws on the books which levies customs duties on textile and 
apparel imports, customs enforcement is woefully inadequate.  This, 
Khudova stated, is due to rampant corruption on the part of customs 
enforcement officers, and loopholes found in the Kazakhstani customs 
code. 
 
3. (SBU) Khudova expressed enthusiasm about regulations recently 
passed by Parliament that attempt to close some of the loopholes in 
the Customs Code.  These new regulations primarily aim at preventing 
illegal or undervalued (and hence, undertaxed) Chinese textile and 
apparel products from entering the Kazakhstani market.  Still, 
Khudova was not optimistic about the prospects of a reduction in 
corruption on the part of customs officials. 
 
4.  (SBU) Khudova stated that as a result of post-Soviet economic 
decline and readjustment, Kazakhstan's textile industry is today 
dominated by foreign imports, particularly counterfeit products. 
She noted, however, that the quality of the counterfeit goods has 
improved in recent years, most likely due to Chinese manufacturers' 
improved production methods.  Khudova added that the Government of 
Kazakhstan has not provided any special support mechanisms for 
recently unemployed Kazakhstani textile laborers. 
 
MILAS

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