Monthly Archives: May 2008

08ASTANA1016, KAZAKHSTAN: ADDITIONAL INFORMATION DELIVERED ON

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Reference ID Created Released Classification Origin
08ASTANA1016 2008-05-30 11:44 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0004
OO RUEHWEB

DE RUEHTA #1016 1511144
ZNY SSSSS ZZH
O 301144Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2508
INFO RUEHUNV/USMISSION UNVIE VIENNA IMMEDIATE 0056

S E C R E T ASTANA 001016 
 
SIPDIS 
 
DEPT FOR ISN/RA ARIEL STUKALIN AND IO/T HEATHER VON BEHREN 
 
E.O. 12958: DECL: 05/30/2033 
TAGS: KNNP IAEA ENRG PREL AORC KZ
SUBJECT: KAZAKHSTAN: ADDITIONAL INFORMATION DELIVERED ON 
IAEA BOG MESA SEAT 
 
REF: (A) STATE 57703 (B) ASTANA 0988 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
 1. (S) Per ref A, Pol-Econ Chief delivered additional 
information on the IAEA BOG MESA seat to MFA Americas 
Department head Talgat Kalivey on May 30.  Kaliyev 
appreciated the additional information, and said he had 
already sent a memo on the issue to Deputy Foreign Minister 
Sarybai.  He promised to inform us once a decision is made as 
to whether Kazakhstan will put forward its candidacy for the 
seat. 
ORDWAY

Wikileaks

08ASTANA1007, KAZAKHSTAN – ALMATY NOTES, MAY 12 – MAY 23, 2008

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Reference ID Created Released Classification Origin
08ASTANA1007 2008-05-29 12:18 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXYZ0010
RR RUEHWEB

DE RUEHTA #1007/01 1501218
ZNR UUUUU ZZH
R 291218Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2497
INFO RUEHVEN/USMISSION USOSCE 1910
RUEHEK/AMEMBASSY BISHKEK 8278
RUEHNT/AMEMBASSY TASHKENT 8159
RUEHAH/AMEMBASSY ASHGABAT 7323
RUEHDBU/AMEMBASSY DUSHANBE 2357
RUEHMO/AMEMBASSY MOSCOW 1531

UNCLAS ASTANA 001007 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KZ
SUBJECT: KAZAKHSTAN - ALMATY NOTES, MAY 12 - MAY 23, 2008 
 
1.  The "Almaty Notes" series is intended to maintain focus on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital," following the move of the Embassy 
to Astana. 
 
National Social Democratic Party Initiates Coalition 
--------------------- ------------------------------ 
 
2.  The National Social Democratic Party (OSDP) has initiated a new 
political coalition called "Khalyk Kenes" (People's Discussion), 
party leader Zharmakhan Tuyakbay told Inkar internet radio in a May 
15 interview.  According to Tuyakbay, the coalition is an 
alternative to parliament and a place for dialogue among various 
political forces.  About 30 political leaders, including leaders of 
small pro-government political parties, have signed on to the 
project.  However, two key opposition parties -- Bulat Abilov's Azat 
(formerly True Ak Zhol) Party and Serikbolsyn Abdildin's Community 
Party refused to join.  Tuyakbay attributed this to the fact that 
Azat and the Communists are at odds with two parties that did join 
the coalition:  Alikhan Baimenov's Ak Zhol Party and Vladislav 
Kosaryev's People's Communist Party. 
 
Media Watchdog NGO Facing Financial Problems 
--------------------- ---------------------- 
 
3.  The AdilSoz media watchdog NGO is on the verge of ceasing its 
activities, its head, Tamara Kaleyeva, announced at a press 
conference in Almaty on May 13.  Beginning June 1, AdilSoz's 
principal source of funding, the Open Society Institute, which has 
paid its office rent, staff wages, and communication expenses, will 
terminate AdilSoz's financing.  According to Kaleyeva, AdilSoz will 
try to survive on small grants and by cutting its expenses. 
 
Newspaper Publisher Accused on Bribery 
---------- --------------------------- 
 
4.  The publisher of the newspaper Anti-Corruption Bulletin, 
Tokbergen Abiyev, was detained while passing a bribe to an officer 
of the Financial Police, law enforcement authorities reported on May 
20.  Abiyev was reportedly offering $1,600 plus 50,000 tenge ($417) 
to the officer in exchange for comprising information about judges. 
A criminal case has been filed against Abiyev. 
 
5.  Tokbergen Abiyev was previously the publisher of Zakon i 
Pravosudiye ("Law and Justice"), a newspaper which was closed 
several months ago by a court ruling.  He subsequently launched 
Anti-Corruption Bulletin.  Abiyev published a number of articles 
criticizing corruption in the judicial system. 
 
Bomb Goes Off Under Journalist's Car 
--------------- -------------------- 
 
6.  A bomb was apparently placed under the car of journalist 
Yermurat Bapi of the Taszhargan opposition newspaper on May 8. 
Though it went off, the detonation was not powerful enough to damage 
the gas tank and cause it to explode.  "Mostly likely, it was purely 
an act of intimidation.  If somebody wanted truly to make an attempt 
on my life, there are many opportunities," Bapi commented at a May 
13 press conference in Almaty.  Bapi suggested that the incident was 
the latest "warning" for his critical reporting about high ranking 
officials and businessmen.  In March, Bapi claimed that unidentified 
individuals shot two bullets through his office window.  The police 
launched a criminal investigation into that case, but Bapi has 
received no word about the status of the investigation.  Bapi has 
filed a report on the bombing incident with the Almaty branch of the 
National Security Committee (KNB). 
 
Call for Granting Amnesty to Squatters 
---------------------- --------------- 
 
7.  "We consider it necessary to pass a law legalizing ownership of 
land plots that have been illegally occupied by squatters.  They 
have been living there for three to five years.  There are only two 
ways to solve the problem:  either to drive out these people by 
force or to legalize their status," the leader of the Shanyrak 
movement, Asylbek Khozhakhmetov, remarked at conference on internal 
migration issues held at parliament on May 15.  Kozhakhmetov also 
proposed setting up public commissions on land plot and demolishment 
issues in every major city in Kazakhstan.  According to 
Kozhakhmetov, in 2007, 24 protest actions against confiscation and 
demolishment of residences were held in Almaty.  As a result, 144 
people were detained and 28 brought to administrative account. 
 
8.  Almaty's new mayor, Akhmetzhan Yesimov, has set up a special 
commission on the problems of illegal settlements in Almaty's 
outskirts, Megapolis weekly reported on May 12.  The commission is 
supposed to propose recommendations within several weeks.  Heads of 
Almaty district administrations have been instructed to help the 
residents of these settlements with registration and obtaining 
social benefits. 
 
Hunger Strike Against Confiscation of Houses 
---------------------- --------------------- 
 
9.  A group of Almaty residents intends to start a hunger strike in 
protest
 against a city government ruling on seizing their residences 
for "state needs," www.kub.info reported on May 16.  Their request 
to set up a protest tent behind Almaty's Saryarka Cinema was denied 
by the authorities.  The residents instead plan to hold a protest 
action in the courtyard of the residential building where they live. 
 
 
ORDWAY

Wikileaks

08ASTANA1005, KAZAKHSTAN LEANS TOWARD AMB. SWING AS IOM DG

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Reference ID Created Released Classification Origin
08ASTANA1005 2008-05-29 07:28 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0002
RR RUEHWEB

DE RUEHTA #1005 1500728
ZNR UUUUU ZZH
R 290728Z MAY 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 2495

UNCLAS ASTANA 001005 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREF PREL SMIG AORC KZ
SUBJECT: KAZAKHSTAN LEANS TOWARD AMB. SWING AS IOM DG 
 
REF: STATE 54603 
 
(SBU)  On May 29, we delivered reftel points to Asel 
Utegenova, Counselor to the Director of MFA's Department of 
International Organizations and Multilateral Cooperation. 
Ms. Utegenova informed us that GOK strongly leaned toward 
supporting Amb. Swing's candidacy as IOM's Director General, 
although a final decision has not yet been made.  She expects 
that the MFA will send final instructions to Geneva within 
the second week of June. 
ORDWAY

Wikileaks

08ASTANA1004, KAZAKHSTAN – DEMARCHE DELIVERED ON COOPERATION

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Reference ID Created Released Classification Origin
08ASTANA1004 2008-05-29 07:14 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0009
RR RUEHWEB

DE RUEHTA #1004 1500714
ZNY SSSSS ZZH
R 290714Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2494
INFO RUEHAK/AMEMBASSY ANKARA 2170
RUEHAH/AMEMBASSY ASHGABAT 7322
RUEHEK/AMEMBASSY BISHKEK 8277
RUEHDBU/AMEMBASSY DUSHANBE 2356
RUEHBUL/AMEMBASSY KABUL 0401
RUEHNT/AMEMBASSY TASHKENT 8158

S E C R E T ASTANA 001004 
 
SIPDIS 
 
DEPARTMENT FOR EUR, ISN, SCA, T 
 
E.O. 12958: DECL: 05/29/2033 
TAGS: PARM PREL MNUC KZ KN
SUBJECT: KAZAKHSTAN - DEMARCHE DELIVERED ON COOPERATION 
REGARDING AIR KORYO FLIGHT 
 
REF: STATE 56778 
 
Classified By: Pol-Econ Chief Steven H. Fagin, Reasons 1.4 (b) and (d) 
 
1. (S) Pol-Econ Chief delivered reftel points thanking 
Kazakhstan for its cooperation regarding an Air Koryo flight 
of proliferation concern to MFA Americas Department head 
Talgat Kaliyev on May 29.  Kaliyev was appreciative, and 
remarked that this is the type of cooperation clearly 
envisioned by the U.S.-Kazakhstan strategic partnership. 
ORDWAY

Wikileaks

08ASTANA992, KAZAKHSTAN – DEMARCHE DELIVERED ON PARTICIPATION

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Reference ID Created Released Classification Origin
08ASTANA992 2008-05-27 09:22 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0003
OO RUEHWEB

DE RUEHTA #0992 1480922
ZNR UUUUU ZZH
O 270922Z MAY 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC IMMEDIATE 2486

UNCLAS ASTANA 000992 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR NEA/I 
 
E.O. 12958: N/A 
TAGS: EAID PREL IZ KZ
SUBJECT: KAZAKHSTAN - DEMARCHE DELIVERED ON PARTICIPATION 
IN IRAQ COMPACT MINISTERIAL 
 
REF: STATE 43799 
 
1. (SBU) Pol-Econ Chief delivered reftel demarche on the 
Stockholm International Compact with Iraq (ICI) ministerial 
meeting to MFA Americas Desk head Talgat Kaliyev on May 20, 
and discussed the issue a second time with Kaliyev on May 27. 
 Kaliyev assured Pol-Econ Chief on May 27 that Kazakhstan 
would be well-represented at the Iraq Conference in June in 
Abu Dhabi, with Deputy Defense Minister Sembinov and MFA 
Special Envoy Orazbay likely to be in attendance.  However, 
Kaliyev remained uncertain as to who would represent 
Kazakhstan at the Stockholm ICI ministerial. 
ORDWAY

Wikileaks

08ASTANA988, KAZAKHSTAN: DEMARCHE DELIVERED ON IAEA BOARD OF

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Reference ID Created Released Classification Origin
08ASTANA988 2008-05-27 07:10 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXYZ0002
OO RUEHWEB

DE RUEHTA #0988 1480710
ZNY SSSSS ZZH
O 270710Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2481
INFO RUEHUNV/USMISSION UNVIE VIENNA IMMEDIATE 0055

S E C R E T ASTANA 000988 
 
SIPDIS 
 
DEPT FOR ISN/RA ARIEL STUKALIN AND IO/T HEATHER VON BEHREN 
 
E.O. 12958: DECL: 05/27/2023 
TAGS: IAEA KNNP PREL AORC KZ SY
SUBJECT: KAZAKHSTAN: DEMARCHE DELIVERED ON IAEA BOARD OF 
GOVERNORS' MESA SEAT 
 
REF: STATE 55259 
 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
 
1. (S) Per reftel demarche, the Ambassador discussed 
Kazakhstan's putting itself forward as a candidate for the 
IAEA BOG's MESA seat with Industry and Trade Minister 
Vladimir Shkolnik on May 26.  Shnolnik was supportive of the 
idea in principle, and suggested the USG follow-up with the 
MFA.  Pol-Econ Chief thus raised the issue with MFA Americas 
Department head Talgat Kaliyev on May 27.  Kaliyev was 
positively inclined toward Kazakhstan's membership on the 
IAEA BOG, recognizing that this could be yet another 
demonstration of Kazakhstan's international leadership on 
non-proliferation matters.  He doubted, however, that Syria 
would back down -- which would mean a competition between 
Kazakhstan and Syria and thus be problematic for the 
Kazakhstanis.  Kaliyev promised to bring our demarche to the 
attention of Foreign Minister Tazhin, but asked that the USG 
first provide additional details on the IAEA's process for 
selecting a candidate to fill the seat, including whether at 
any point there could be a vote pitting Kazakhstan against 
Syria, either within the MESA group or among the full IAEA 
membership.  He also requested a list of the countries that 
constitute the MESA group and asked whether Kazakhstan would 
additionally have to lobby non-MESA countries should it put 
itself forward for the seat. 
 
2. (S) ACTION REQUEST:  Post asks that the Department provide 
us the information necessary to respond to Kaliyev.  We also 
suggest that these details be provided to DFM Yermekbayev 
during his meeting in Washington with Acting U/S Rood, and 
that UNVIE be prepared to discuss them with the Kazakhstanis 
in Vienna. 
ORDWAY

Wikileaks

08ASTANA975, KAZAKHSTAN – DEMARCHES DELIVERED ON FOOD SECURITY

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Reference ID Created Released Classification Origin
08ASTANA975 2008-05-22 13:17 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0934
OO RUEHLN RUEHVK RUEHYG
DE RUEHTA #0975 1431317
ZNR UUUUU ZZH
O 221317Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2471
INFO RUCNCIS/CIS COLLECTIVE 0515
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS ASTANA 000975 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/TPP/MTA, EEB/TPP/ABT, EEB/IFD/ODF 
USDA FOR FAS CJACKSON AND MHOUSE 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD TBIO ECON KZ
SUBJECT: KAZAKHSTAN - DEMARCHES DELIVERED ON FOOD SECURITY 
INITIATIVE, EXPORT RESTRICTIONS, AND BIOTECHNOLOGY 
 
REF: (A) STATE 52628 (B) STATE 53346 (C) STATE 53353 
 
1. (SBU)  On May 22, Pol-Econ Chief delivered ref A, B, and C 
demarches to Kazakhstani Vice Minister of Agriculture Dulat 
Aitzhanov, explaining the USG approach to the global food 
crisis, the President's global food security initiative, and 
USG positions on Doha, food staple export restrictions, and 
biotechnology. 
 
2. (SBU) In response, Aitzhanov explained to Pol-Econ Chief 
that the reason the Kazakhstani government had imposed a 
temporary ban on wheat exports in April was to ensure 
domestic food security and thus avert any possibility of 
social or political instability that could result from 
shortages.  The government needed to hedge against the 
prospects of a bad 2008 wheat harvest.  Aitzhanov said that 
during the July-August period, the government should know how 
the overall harvest will turn out, and thus the export ban 
could actually be lifted as early as August 1.  (Note:  The 
government's public position is that the temporary ban will 
be reviewed on September 1.  End Note.)  In exigent 
circumstances, Kazakhstan could permit humanitarian wheat 
exports to specific countries, such as Tajikistan, even 
before then.  All indications thus far, Aitzhanov stressed, 
point to a successful 2008 harvest.   He told Pol-Econ Chief 
that Kazakhstan's annual domestic wheat consumption is 
approximately 9 million tons.  Last year's harvest yielded 21 
million tons, and even in a worst case scenario, an annual 
harvest should result in at least 13 million tons. 
 
3. (SBU) Regarding U.S. objectives for Doha, Aitzhanov 
reminded Pol-Econ Chief that agricultural subsidies are an 
issue in Kazakhstan's ongoing WTO accession negotiations with 
the U.S.  He contended that a compromise on this issue is 
necessary given that so many countries -- notably the U.S. -- 
provide significant subsidies to their agriculture and food 
processing sectors. 
 
4. (SBU) Turning to biotechnology, Aitzhanov said that 
Kazakhstan would soon ratify the Cartagena Protocol, perhaps 
in the coming days.  Kazakhstan, he explained, is ready to 
import GMO seeds, so long as they have undergone the proper 
analysis to ensure their safety.  Importation of GMO food 
products, however, is a more complicated issue, because of 
opposition in parliament. 
 
5. (SBU) Prior to the meeting with Aitzhanov, Post shared the 
substance of the demarches with the World Bank office in 
Kazakhstan, and confirmed that their views are consistent 
with ours.  They informed us that on April 30, World Bank 
representatives met senior Kazakhstani officials, including 
Prime Minister Masimov, to discuss agriculture sector reform. 
 The World Bank representatives conveyed to their Kazakhstani 
interlocutors that agricultural export restrictions are 
harmful and market-distorting.  While the Kazakhstanis 
promised that they would take the Bank's views under 
consideration, they explained that the government's decision 
to ban wheat exports resulted from concerns about domestic 
supplies and the need to ensure the food security of 
vulnerable population groups -- which is fully consistent 
with what Aitzhanov told Pol-Econ Chief. 
ORDWAY

Wikileaks

08ASTANA971, KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, APRIL 19 – MAY 3,

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Reference ID Created Released Classification Origin
08ASTANA971 2008-05-22 07:33 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0584
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #0971/01 1430733
ZNR UUUUU ZZH
R 220733Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2464
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0513
RUEHAK/AMEMBASSY ANKARA 2168
RUEHBUL/AMEMBASSY KABUL 0399
RUEHNE/AMEMBASSY NEW DELHI 0505
RUEHAST/USOFFICE ALMATY 0442

UNCLAS SECTION 01 OF 02 ASTANA 000971 
 
DEPT FOR SCA/CEN (O'MARA) 
DEPT PASS TO OPIC - BALLINGER 
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER 
DEPT PASS TO AID - EE-PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS 
USDOC FOR 6110/ITA/TD/BI/RHALPERN 
ANKARA FOR CFC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ENRG EPET EFIN KTDB KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, APRIL 19 - MAY 3, 
2008 
 
ASTANA 00000971  001.2 OF 002 
 
 
1.  Summary:  This information is drawn primarily from the 
Kazakhstani local press, and has not been verified for accuracy. 
 
-- Kazakhstan-Uzbekistan Commercial Ties 
-- Trade Increases within Eurasian Economic Community 
-- Astana Finance Enters Russian Market 
-- Return of Ex-Finance Minister 
-- First Drilling in Atash 
-- Court Rules in Favor of Karachaganak Petroleum Operating B.V. 
-- Zhambyl Hydropower Plant To Be Privatized 
-- 70% of Equipment in Mittal Mines is in Disrepair 
-- Samruk to Buy A 50% Stake in Two Open-Pit Coal Mines 
-- Kazakhstan Seeks More Oil Transit via Georgia 
 
Kazakhstan-Uzbekistan Commercial Ties 
------------------------------------- 
 
2.  "We are close to reaching a consensus on creating a free trade 
zone between our countries," said President Nazarbayev at a press 
conference following talks with Uzbekistan's President Islam Karimov 
on April 22 in Astana.  Nazarbaev announced plans to open chambers 
of commerce in both Uzbekistan's and Kazakhstan's capitals. 
Kazakhstan-Uzbekistan trade doubled in 2007 compared to the previous 
year totaling $1.4 billion: $871.8 million in exports from 
Kazakhstan to Uzbekistan and $538.5 million in exports from 
Uzbekistan to Kazazhstan.  (Interfax-Kazakhstan, April 23) 
 
Trade Increases within Eurasian Economic Community 
-------------- ----------------------------------- 
 
3.  According to Tair Mansurov, Secretary General of the Eurasian 
Economic Community (EEC), trade between members states has tripled 
over the past seven years: from $27 billion in 2000 to $97 billion 
in 2007.  Mansurov noted that these encouraging statistics will 
encourage EEC countries to think more concretely about a future 
customs union.  (Interfax, April 28) 
 
Astana Finance Enters Russian Market 
------------------------------------ 
 
4.  Russia's Alfa Bank sold a 100% stake in its subsidiary Alfa Bank 
Bashkortostan for $16.88 million to Kazakhstan's Astana Finance. 
Astana Finance provides a number of investment-banking services, 
including long-term project finance, leasing, and mortgage services. 
 The government holds a 25.5% stake in Astana Finance.  (Interfax, 
April 30) 
 
Return of Ex-Finance Minister 
----------------------------- 
 
5.  Natalia Korzhova, former Minister of Finance, has been appointed 
the Executive Secretary of the Ministry of Finance.  The positive of 
executive secretary for all government agencies was introduced by 
President Nazarbayev in August 2007.  Executive secretaries are 
equal in rank to first vice ministers.  (Interfax-Kazakhstan, April 
29) 
 
First Drilling in Atash 
----------------------- 
 
6.  Atash Co., owned by KazMunaiTeniz and Russia's Lukoil Overseas 
Shelf B.V., started its first drilling operations in the Atash 
section of the Caspian Sea using floating drilling facilities.  The 
estimated reserves at Atash are 141.7 million tons of crude. 
(Delovoi Kazakhstan newspaper, May 1) 
 
Court Rules in Favor of Karachaganak Petroleum Operating B.V. 
------------------ ------------------------------------------ 
 
7.  The West Kazakhstan regional court has ruled unlawful the 
refusal of the regional environmental office to review environmental 
payments made by Karachaganak Petroleum Operating B.V. (KPO) in the 
3rd and 4th quarters of 2007.  Because the regional environmental 
office refused to review its submissions, KPO did not submit a tax 
report, and in turn the West Kazakhstan Tax Committee has blocked 
 
ASTANA 00000971  002.2 OF 002 
 
 
its bank accounts since December 2007.  KPO expects that the tax 
authorities will unblock its accounts after verifying its 
environmental payments.  (Press release of KPO, April 22) 
 
Zhambyl Hydropower Plant To Be Privatized 
----------------------------------------- 
 
8.  Energy Minister Sauat Mynbayev has suggested that Kazakhstan 
sell a 50% state stake in the Zhambyl Hydropower Plant (Zhambyl 
GRES), which supplies electricity to  South Kazakhstan.  Zhambyl 
GRES operates only in wintertime, and it is the only power plant in 
the country that has no reserve capacity in case of an emergency. 
(Interfax-Kazakhstan, April 22) 
 
70% of Equipment in Mittal Mines is in Disrepair 
------------------ ----------------------------- 
 
9.  After an inspection of eight coal mines belonging to the 
ArcelorMittal Temirtau steel company, the prosecutor's office 
alleged that 70% of equipment used in the mines is in disrepair, 
equipment being installed is obsolete, and labor safety standards 
are not being met.  The prosecutor's office gave ArcelorMittal one 
month to correct the violations discovered.  (Kazakhstan TV channel, 
April 24) 
 
Samruk to Buy A 50% Stake in Two Open-Pit Coal Mines 
------------------ --------------------------------- 
 
10.  The Samruk state asset management holding company will pay 
United Company Rusal $345 million for a 50% stake in the Bogatyr and 
Severniy open-pit coal mines.  Access Industries Inc. is the 
operator of the mines.  (Panorama newspaper, April 25) 
 
Kazakhstan Seeks More Oil Transit via Georgia 
------------------ -------------------------- 
 
11.  Energy Minister Sauat Mynbayev and Samruk Chairman Kanat 
Bozumbayev held talks in Astana with Georgia's Minister of Economic 
Development, Ekaterina Sharashidze.  Kazakhstan is interested in 
increasing to 10 million tons per year the volume of its crude oil 
which is exported via Georgia's railroad and oil pipelines.  (Astana 
TV channel, April 25) 
 
ORDWAY

Wikileaks

08ASTANA970, SCENESETTER FOR CODEL RAHALL’S MAY 25-27 VISIT TO

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Reference ID Created Released Classification Origin
08ASTANA970 2008-05-22 06:45 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0530
OO RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #0970/01 1430645
ZNR UUUUU ZZH
O 220645Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2461
INFO RUCNCIS/CIS COLLECTIVE 0510
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE

UNCLAS SECTION 01 OF 03 ASTANA 000970 
 
SENSITIVE 
SIPDIS 
 
H PLEASE PASS TO CODEL RAHALL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EPET OVIP OTRA KZ
 
SUBJECT: SCENESETTER FOR CODEL RAHALL'S MAY 25-27 VISIT TO 
KAZAKHSTAN 
 
------- 
Summary 
------- 
 
1. (SBU) Summary:  Your visit to Kazakhstan comes at a particularly 
opportune time.  With its thriving energy sector and recent 
selection as 2010 chairman of the Organization for Security and 
Cooperation in Europe (OSCE), Kazakhstan is showing increasing 
confidence on the international stage.  The country is rightly proud 
of its achievements:  a booming economy, rapidly expanding national 
capital, and largely harmonious multi-ethnic society.  Kazakhstan 
has proven to be a reliable security partner and a steady influence 
in a turbulent region.  The pace of democratic reform, however, has 
been slow, with political institutions, civil society, and the 
independent media still underdeveloped.  Our fundamental strategic 
objective is a secure, democratic, and prosperous Kazakhstan that 
embraces market competition and the rule of law; continues 
partnering with us on the global threats of terrorism, WMD 
proliferation, and narco-trafficking; and develops its energy 
resources in a manner that bolsters global energy security.  We 
would welcome your assistance in underlining to your Kazakhstani 
interlocutors the importance of maintaining a good investment 
climate, diversifying energy transport routes, and following through 
on the democratic reform commitments Kazakhstan made when selected 
to be 2010 OSCE chair.  End Summary. 
 
--------------------------------------------- ----- 
Strong Growth, But Short- and Long-Term Challenges 
--------------------------------------------- ----- 
 
2. (SBU) Kazakhstan is the region's economic powerhouse, with an 
economy larger than that of all the other Central Asian states 
combined.  Economic growth averaged 9.2% a year during 2005-07, and 
the percentage of the population living below the subsistence level 
dropped from 28% in 2001 to under 10% at present.  The energy sector 
is the dominant earner, with oil exports accounting for roughly a 
third of GDP.  In the long term, Kazakhstan must focus on 
diversifying its economy, building up non-extractive industries, 
agriculture, and the service sector.  In the short term, Kazakhstan 
is facing duel challenges of rising inflation, propelled by soaring 
international prices on food and agricultural commodities, and 
reduced economic growth, a reflection of the domestic impact of the 
global financial crisis -- which has caused a significant 
contraction in Kazakhstan's construction and real estate sectors. 
In April, the government imposed a temporary ban on the export of 
wheat in order to ensure adequate domestic supply and to keep 
domestic prices down on bread. (Note: Kazakhstan produces much more 
wheat than it consumes.  We thus expect the export ban to be lifted 
once the next harvest comes in.  End Note.)  At the end of 2007, the 
government announced a $4 billion assistance program for 
construction and real estate. 
 
------------------------ 
An Emerging Energy Power 
------------------------ 
 
3. (SBU) Kazakhstan exported just over 60 million tons of crude oil 
in 2007 and is expected to be one of the world's top ten oil 
producers soon after 2015.  The country also has significant natural 
gas reserves -- 1.8 trillion cubic meters is a low-end estimate -- 
but for now, natural gas exports are relatively small, just 10.2 
billion cubic meters in 2007, in part because gas is being 
reinjected to maximize crude output.  U.S. companies have 
significant ownership stakes in Kazakhstan's three largest oil and 
gas projects:  Kashagan, Tengiz, and Karachaganak. 
 
4. (SBU) Kashagan -- the largest oil field discovery since Alaska's 
North Slope and perhaps the world's most technically complex oil 
development project -- is expected to commence production in 2012. 
In January, the Kazakhstani government and the Kashagan consortium's 
international partners agreed on revised terms for the Kashagan 
contract which resulted in a new operatorship model, financial 
compensation to Kazakhstan for several years of production delays 
and significant cost overruns, and an increased ownership stake and 
management role for Kazakhstan's state oil and gas company, 
KazMunaiGas (KMG).  Kashagan's current equity stakeholders are as 
follows:  ExxonMobil (16.8%), Shell (16.8%), Total (16.8%), Eni 
(16.8%), KMG (16.8%), ConocoPhilips (8.4%), and Inpex (7.6%). 
 
5. (SBU) Tengiz -- with a 50% Chevron stake, 25% ExxonMobil, 20% 
KMG, and 5% LukArco - is the world's deepest operating "super-giant" 
oil field, with the top of the reservoir at about 12,000 feet deep. 
Crude production at Tengiz is expected to increase later this year 
from 400,000 barrels per day to 540,000, once the project's second 
generation expansion comes on line.  Karachaganak (with a 32.5% BP 
Group stake, 32.5% Eni, 20% Chevron, and 15% Lukoil) is one of the 
world's largest oil and gas condensate fields.  Karachaganak 
 
ASTAN
A 00000970  002 OF 003 
 
 
produced 10.4 million tons of oil and 12 billion cubic meters of gas 
in 2007. 
 
6. (SBU) The Kazakhstanis recognize they do not have the capability 
to exploit their oil and gas resources on their own, especially 
given the complexity of Kazakhstan's oil and gas projects. 
Kazakhstan thus continues to welcome foreign investment in energy 
exploration and production, and both the Kazakhstani government and 
the international companies are committed to an enduring 
relationship.  That said, Kazakhstan has grown increasingly 
assertive in its energy sector in recent years, reexamining the 
terms of existing contracts, driving a harder bargain with 
prospective investors, and aggressively pursuing environmental and 
tax claims against international oil companies.  (For example, the 
Tengiz consortium is currently fighting a $300 million environmental 
fine for on-site storage of several million tons of sulfur.  The 
consortium received all the proper permits for sulfur production, 
and maintains that no permits are necessary -- or available -- for 
sulfur storage.)  In October 2007, President Nazarbayev signed 
legislation which gives the government the right to terminate a 
subsoil use contact if it determines that a company's actions 
violate Kazakhstan's national economic security interests. 
Nazarbayev has stressed publicly that the legislation would be not 
be applied retroactively, against contracts that already existed 
when the legislation went into effect. 
 
------------------------- 
Bringing Energy to Market 
------------------------- 
 
7. (SBU) With major production increases on the horizon, Kazakhstan 
must develop additional transport routes to bring its oil and gas to 
market.  Our policy is to encourage Kazakhstan to seek diverse 
routes, which will ensure the country's independence from transport 
monopolists.  Currently, the bulk of Kazakhstan's crude oil is 
exported via Russia, including through the Transneft system and the 
independently-owned Caspian Pipeline Consortium (CPC) pipeline, in 
which Chevron holds a 15% interest.  Near-term crude production 
increases are likely to flow by rail through Russia, by tanker 
across the Caspian Sea to Baku, and through the CPC pipeline, should 
an agreement be reached with Russia on CPC expansion.  We believe 
that a trans-Caspian oil pipeline must be built to handle later 
production growth; however, Kazakhstan is reluctant to openly pursue 
this option in the absence of an agreement on delimitation of the 
Caspian Sea among the five Caspian littoral states.  Moving 
increased volumes of Kazakhstani oil from Baku onward is also a 
challenge, and will likely require expansion of existing pipelines 
or construction of new ones that run through Georgia, such as 
Baku-Tbilisi-Ceyhan.  Over 90% of Kazakhstan's limited gas exports 
currently flow through Russia.  Kazakhstan hopes to export 5 billion 
cubic meters of gas annually to China by 2009. 
 
--------------------------- 
Democratic Development Lags 
--------------------------- 
 
8. (SBU) While the Kazakhstani government articulates a strategic 
vision of democracy, it has lagged on the implementation front. 
This in part reflects the political reality that President 
Nazarbayev remains extraordinarily popular, while the opposition is 
weak and fractured.  It also is a result of the government's 
resistance to fully competitive political processes.  In May 2007, 
significant amendments were adopted to Kazakhstan's constitution 
which were touted as strengthening parliament, but also removed 
terms limits on Nazarbayev.  In parliamentary elections held in 
August 2007, Nazarbayev's Nur Otan party received 88 percent of the 
vote and took all the seats in parliament.  The OSCE election 
observation mission concluded that the elections did not meet OSCE 
standards. 
 
9. (SBU) While Kazakhstan's diverse print media includes a plethora 
of opposition papers sharply critical of the government and of 
Nazarbayev personally, the broadcast media is almost exclusively in 
government hands and maintains a pro-government line.  Several 
opposition web-sites were temporarily shut down by the government in 
late 2007 for uploading recordings of embarrassing conversations 
between senior government officials that were apparently made by 
Nazarbayev's former son-in-law, Rakhat Aliyev, who was recently 
convicted in absentia of plotting to overthrow Nazarbayev.  Since 
mid-April, the Kazakh- and English-language websites of Radio Free 
Europe/Radio Liberty (RFE/RL) have been inaccessible in Kazakhstan. 
On May 20, RFE/RL issued a press release which maintained that the 
Kazakhstani government likely blocked the sites deliberately.  We 
have raised the issue with senior Kazakhstani officials, but it 
remains unresolved. 
 
10. (SBU) When Kazakhstan was selected as 2010 OSCE chairman at the 
 
ASTANA 00000970  003 OF 003 
 
 
OSCE ministerial in Madrid in November 2007, Kazakhstan publicly 
committed to undertake several democratic reforms:  specifically, 
that by the end of 2008, it would amend its election and media 
legislation to better meet international standards and liberalize 
registration procedures for political parties and media outlets. 
Kazakhstan also promised to support the OSCE's "human dimension" and 
preserve the mandate of the OSCE's Office of Democratic Institutions 
and Human Rights (ODIHR), including its critical role in election 
observation.  The government has recently initiated working groups 
with participation from the political opposition and NGOs to discuss 
amendments to the election and media legislation.  Ensuring that 
Kazakhstan follows through on its so-called "Madrid commitments" is 
one of our bilateral priorities for 2008. 
 
-------------------- 
Iraq and Afghanistan 
-------------------- 
 
11. (SBU) Kazakhstan is the sole Central Asian country participating 
in Operation Iraqi Freedom (OIF).  Since August 2003, the 
Kazakhstanis have maintained a military engineering unit at FOB 
Delta in Al-Kut (Wasit province) which has disposed of over 4.5 
million pieces of unexploded ordnance.  The unit also provides 
training to Iraqis in ordnance destruction.  Kazakhstan is an 
important partner for Afghanistan's Operation Enduring Freedom 
(OEF).  To date, Kazakhstan has facilitated over 4000 cost-free 
overflights for U.S. military aircraft supporting OEF.  Kazakhstan 
is also providing Afghanistan with $2.88 million in assistance in 
2008, which is being used for food and seed aid and to construct a 
hospital, school, and road.  The Kazakhstanis are encouraging their 
private sector to seek out investment opportunities in Afghanistan, 
and have indicated that they want to make Afghanistan a focal point 
for their OSCE chairmanship. 
 
----------------------------- 
Non-Proliferation Cooperation 
----------------------------- 
 
12. (SBU) Non-proliferation cooperation has been a hallmark of our 
bilateral relatio
nship since Kazakhstan became independent and 
agreed to give up the nuclear arsenal it inherited from the USSR. 
Our bilateral Cooperative Threat Reduction (CTR) program has 
facilitated the dismantlement of Kazakhstan's intercontinental 
ballistic missile launchers, closure of test tunnels and boreholes 
at the former Soviet nuclear test site in Semipalatinsk, and 
elimination of an anthrax weapons production facility.  Several 
critical CTR programs are ongoing, including the effort to secure 
and store spent fuel from a closed plutonium production reactor, as 
well as a biological threat reduction program aimed at ensuring 
effective Kazakhstani control of dangerous pathogens.  In December 
2007, the U.S. and Kazakhstan agreed to extend our bilateral 
umbrella agreement for the CTR program for an additional seven 
years.  However, the Kazakhstanis still have to ratify the 
extension.  In the interim, we have faced difficulties in receiving 
the tax and customs exemptions necessary for us to continue 
uninterrupted implementation of the CTR program. 
 
------------------------------- 
Relations With Russia and China 
------------------------------- 
 
13. (SBU) The Kazakhstanis continue to deftly balance relations with 
Russia, China, and the U.S., and view the U.S. as a critical 
counterweight to their two very powerful neighbors.  Social, 
cultural, and personal links help provide Russia with unmatched 
influence in Kazakhstan.  Kazakhstan's population is approximately 
one-third ethnic Russian, and Russian remains the dominant language 
of the country.   The most popular TV stations provide a heavy diet 
of programming from Russia, and the most widely-read newspapers 
cover events in Russia closely (and rarely unfavorably).  Nazarbayev 
and Putin met more than 15 times over the last two years.  New 
Russian President Medvedev is visiting Kazakhstan during May 22-23, 
his first trip abroad as president -- a clear signal of the 
importance Russia attaches to its relationship with Kazakhstan. 
Relations with China have strengthened as fears of Chinese 
encroachment have largely receded.  Kazakhstan-China trade grew by 
66% in 2007.  China is also a major player in Kazakhstan's energy 
sector.  A Kazakhstan-China oil pipeline has an annual capacity of 
ten million tons of crude, with capacity to double when its 
expansion is completed. 
 
ORDWAY

Wikileaks

08ASTANA962, KAZAKHSTAN – OIL EXPORT DUTY GOES INTO EFFECT, BUT

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Reference ID Created Released Classification Origin
08ASTANA962 2008-05-19 11:02 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7469
OO RUEHLN RUEHVK RUEHYG
DE RUEHTA #0962 1401102
ZNR UUUUU ZZH
O 191102Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2451
INFO RUCNCIS/CIS COLLECTIVE 0509
RUEHAK/AMEMBASSY ANKARA 2167
RUEHBJ/AMEMBASSY BEIJING 0048

UNCLAS ASTANA 000962 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EPET ECON ETRD PGOV KZ
SUBJECT: KAZAKHSTAN - OIL EXPORT DUTY GOES INTO EFFECT, BUT 
DOES NOT APPLY TO MAJOR PROJECTS 
 
 
1. (U) Kazakhstan's recently announced duty on the export of 
crude oil and oil products went into effect on May 17.   The 
duty does not apply to companies whose contracts set fixed 
tax regimes, which means that Kazakhstan's three principal 
oil and gas projects -- Tengiz, Karachaganak, and Kashagan -- 
are exempted.  (Note:  Kashagan, of course, is still in the 
pre-production phase.  End Note.)  Energy Minister Mynbayev 
has previously explained that approximately 40 percent of 
Kazakhstan's current crude exports will be subject to the 
duty. 
 
2. (U) The crude oil duty is to be calculated on the basis of 
a sliding scale formula, taking into account the average 
market price for crude.  The initial duty will be $109.91 per 
ton, with a lower $27.43 rate applicable to those companies 
which already pay rent tax on crude exports. 
 
3.  (SBU) The Ministry of Finance published on May 16 a 
preliminary list of 38 companies to which the crude oil duty 
will apply.  Most are Kazakhstani, including KazMunaiGas 
Exploration and Production, a subsidiary of Kazakhstan's 
state oil and gas company, KazMunaiGas (KMG).  The list 
includes at least one U.S.-owned company, Caspi Neft TME, a 
subsidiary of Transmeridian Exploration Inc.  Caspi Neft TME 
is involved in developing the South Alibek oil field in 
Aktobe oblast.  (Note: Caspi Neft TME told the Ambassador in 
a recent meeting that they do not have a tax stabilization 
clause in their contract and thus did not expect to be exempt 
from the export duty.  End Note.) 
 
4. (SBU) Comment:  In introducing export duties on crude oil 
and oil products, the Kazakhstani government appears to have 
principally been motivated by a need to increase budget 
revenues.  Tax revenues from the non-extractive sector are 
lower than originally planned, and expenses are higher, both 
as a result of the domestic impact of the global financial 
crisis -- which has led to lower economic growth, a sharp 
contraction in the construction and real estate sectors, and 
a government program to prop up those two sectors.  The 
government is also considering introducing an export duty on 
metals.  We had previously been informed of plans for an 
export duty on wheat; however, that appears to have fallen by 
the wayside for now, with the government instead imposing a 
temporary export ban on wheat to ensure adequate domestic 
supply and to keep domestic prices down on wheat and bread. 
End Comment. 
ORDWAY

Wikileaks

08ASTANA905, KAZAKHSTAN: KMG EXPERT DISCUSSES CPC EXPANSION,

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Reference ID Created Released Classification Origin
08ASTANA905 2008-05-13 10:44 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0000
PP RUEHWEB

DE RUEHTA #0905/01 1341044
ZNY CCCCC ZZH
P 131044Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2400
INFO RUCNCIS/CIS COLLECTIVE 0507
RUEHAK/AMEMBASSY ANKARA 2165
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC

C O N F I D E N T I A L ASTANA 000905 
 
SIPDIS 
 
STATE FOR SCA/CEN M. O'MARA 
DEPARTMENT OF ENERGY FOR EKIMOFF 
DEPARTMENT OF COMMERCE FOR HUEPER 
 
E.O. 12958: DECL: 05/13/2018 
TAGS: PREL ECON ENRG EPET KZ
SUBJECT: KAZAKHSTAN: KMG EXPERT DISCUSSES CPC EXPANSION, 
CROSS-CASPIAN TRANSPORTATION 
 
Classified By: POL/ECON CHIEF STEVE FAGIN FOR REASONS 1.4 (B) AND (D) 
 
1. (C) Summary: KazMunaiGas' Executive Director for Oil 
Transportation Arman Darbayev believes that Russia has, for 
the first time, created a framework that may make CPC 
expansion possible.  He disputes reports, however, that 
expansion will be directly linked to Kazakhstan's supplying 
oil to the Bourgas - Alezandroupolis pipeline.  On 
trans-Caspian oil transportation plans, Darbayev expressed 
frustration with Azerbaijan, claiming that the Azerbaijanis 
continue to move slowly.  End Summary 
 
Some Optimism on CPC Expansion 
---------------------------- 
 
2. (C) On May 13, KazMuniaGas Executive Director for Oil 
Transportation Arman Darbayev told Poloff that he believes 
prospects for CPC expansion have improved after recent talks 
between Russia and Kazakhstan.  According to Darbayev, the 
MOU on expansion developed by Kazakhstan and Russia has now 
been released to other shareholders for consideration. 
Darbayev called some of the terms "controversial" for the 
shippers but believes there is "a big chance they will 
accept."  Most importantly, he noted, the Russians have for 
the first time laid out all conditions for expansion. 
Previously, the Russians added a new obstacle each time a 
condition was met. 
 
3. (C) Darbayev speculated that high-level Russian leaders 
are not pleased with the ongoing CPC deadlock, and that if 
the Russian CPC team can prove to their superiors they are 
gaining something of value, Russia will move forward.  "The 
Russians have the will," he said.  Darbayev also underlined 
that CPC is still the most profitable route for Kazakhstan, 
and said that expansion under the conditions sought is better 
than continued prolonged discussions. 
 
4. (C) Poloff asked Darbayev about a linkage between CPC 
expansion and the supply of Kazakhstani oil for the Bourgas - 
Alexandroupolis pipeline (BAP).  Darbayev was skeptical that 
Kazakhstan will be providing BAP oil in the near future.  He 
told Poloff that he had recently seen a presentation on BAP 
and was left with the impression that progress on the project 
is lagging.  Many commercial mistakes have been made, he 
said.  Transneft wants guarantees, but shippers cannot make 
any guarantees without conditions.  Kazakhstan cannot wait 
for BAP, according to Darbayev.  The Russians, said Darbayev, 
"always want to get everything, plus a little bit more." 
BAP, he believes, is the "little bit more." 
 
Frustration with Azerbaijan Continues 
------------------------------------- 
 
5. (C) Darbayev, as he has done on previous occasions, 
expressed displeasure with the efforts of Azerbaijan to move 
forward on plans for trans-Caspian oil transportation. 
Kazakhstan sent to Azerbaijan two months ago a draft Heads of 
Agreement (which he described as only an eight page 
document), and still has not received any comments.  Poloff 
asked Darbayev why the Azerbaijanis have been slow to react. 
Darbayev responded that it may in part be a question of human 
resources, as SOCAR "is not an international oil company." 
When the political pressure is sufficient, however, they are 
capable of acting efficiently. 
 
6. (C) Looking at Kazakhstan's transportation options from 
Baku onwards, Darbayev said that Kazakhstan is ready to use 
the Baku-Supsa pipeline and would be willing to consider the 
possibility of a second Baku-Supsa pipeline.  The 
Azerbaijanis have cast doubt on Baku - Supsa, saying that it 
is a PSA pipeline and that if changes are made the Georgians 
will seek to change the conditions of the agreement. 
Darbayev seemed exasperated by this logic and said that such 
issues can be negotiated. He noted that the Azerbaijanis were 
the only party to vote against initial BTC expansion, and 
said that the Azerbaijanis may play difficult when the next 
stage of expansion comes to vote (and unanimity is required). 
 Darbayev suggested that the Azerbaijanis will pressure 
Kazakhstan to rail more of its oil to Azerbaijan's Kulevi 
terminal. 
 
7. (C) Darbayev claimed that 80% of the capacity at 
Azerbaijan's oil terminals is currently free.  He claimed to 
Poloff that no one wants to supply Azerbaijan oil when they 
are increasing tariffs and changing transit conditions.  He 
 
 
concluded by saying that "Azerbaijan needs to change its 
policies." 
 
8. (C) Comment: Given past history, it is easy to be 
skeptical about talk of CPC expansion.  This time, however, 
the Kazakhstanis feel that Russia is making more of a 
good-faith effort, and appear guardedly optimistic.  Russia's 
true intentions may be better known when President Medvedev 
travels to Kazakhstan on May 22-23 for his first trip abroad 
as head of state.  End Comment. 
ORDWAY

Wikileaks

08ASTANA888, EXBS KAZAKHSTAN ADVISOR’S MONTHLY REPORTING CABLE (APRIL

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Reference ID Created Released Classification Origin
08ASTANA888 2008-05-08 11:46 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO8478
RR RUEHAST
DE RUEHTA #0888/01 1291146
ZNR UUUUU ZZH
R 081146Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2387
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSJGA/COMDT COGARD WASHINGTON DC
RUEKJCS/SECDEF WASHDC 0104
RHEBAAA/DEPT OF ENERGY WASHDC
RUEKJCS/JCS WASHDC 0042
RUCQAAA/USCINCCENT MACDILL AFB FL
RUEHRL/AMEMBASSY BERLIN 0472
RUEHEK/AMEMBASSY BISHKEK 8272
RUEHNT/AMEMBASSY TASHKENT 8154
RUEHKB/AMEMBASSY BAKU 0045
RUEHDBU/AMEMBASSY DUSHANBE 2354
RUEHAH/AMEMBASSY ASHGABAT 7320
RUEHAST/USOFFICE ALMATY 0425

UNCLAS SECTION 01 OF 02 ASTANA 000888 
 
SIPDIS 
 
DEPT FOR ISN/ECC YWONG, ACHURCH, JHARTSHORN, SROBINSON 
DEPT FOR ISN/ECC-AMT LSPRINGER 
DEPT FOR EUR/ACE DFISCHER 
DEPT FOR SCA/RA JSPILSBURY 
DEPT FOR SCA/CEN MO'MARA 
CBP/INA FOR KCHAISSON AND RWATT 
USDOE/NNSA CWALKER, TPERRY AND EDESCHLER 
DOC FOR DCREED 
USCG FOR SHABETIMICHAEL 
AMEMBASSY BERLIN FOR CUSTOMS ATTACHE 
AMEMBASSY TASHKENT, BISHKEK, BAKU, DUSHANBE AND ASHGABAT FOR EXBS 
ADVISORS 
 
E.O. 12958: N/A 
TAGS: ETTC MNUC PARM PREL KSTC KNNP KZ
SUBJECT: EXBS KAZAKHSTAN ADVISOR'S MONTHLY REPORTING CABLE (APRIL 
2008) 
 
I. BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY MANAGERS: 
 
1.  Gulnara Abildaeva, Program Coordinator/Manager for the EXBS 
program in Kazakhstan has been named the "Astana Foreign Service 
National (FSN) of the Year for 2008".  This award is given in 
recognition of the high standards of performance and value to the 
U.S. Government through special contributions made by a Department 
of State FSN.  Ms. Abildaeva will represent Astana in competition 
for the Department-wide FSN of the Year award. 
 
 
II. COMPLETED ACTIONS FOR THE REPORTING PERIOD 
 
A. SITE ASSESSMENTS AND MEETINGS CONDUCTED 
 
1.   On April 15, 2008, the EXBS program team attended a meeting 
between the Kazakhstan Customs Control Committee 
of the Ministry of Finance and a delegation from the U.S. Department 
of Energy's Second Line of Defense (SLD) program, lead by the Bruce 
Pentola.  The purpose of this meeting was to discuss a broad range 
of matters concerning the SLD program, including training, 
acceptance testing, and equipment delivery issues. 
 
2. On April 15, 2008, the EXBS team was given a tour of the 
Kazakhstani Customs Control Committee's Communication Command Center 
in Astana.  From this Communication Command Center, representatives 
of the Customs Control Committee can monitor the activities at 13 
ports of entry throughout Kazakhstan.  Customs Entry/Exit Documents 
and Customs Declarations are scanned into the system at the border 
crossing and can be viewed by specialists in Astana.  These 
specialists can conduct further research in data bases from other 
Kazakhstani government agencies that are not available to the 
officers at the border crossings. The center also has a video feed 
that can monitor vehicles arriving and departing the ports of entry. 
 Future plans call for expanding coverage to additional border 
crossings, and for the participation of other Kazakhstani 
governmental agencies in the Communication Command Center, making it 
a one stop information clearance house for Kazakhstan 
government-wide assistance to front line Customs officers. 
 
3.  On April 17, 2008, the EXBS advisor attended a Security 
Assistance Working Group (SAWG) meeting held in Astana, Kazakhstan. 
Among the topics discussed was the status of the Second Line of 
Defense efforts in installing radiation portal monitors in 
Kazakhstan and the proposed U.S. Department of Energy's AirConOps 
program. 
 
4. On April 21, 2008, the EXBS team conducted interviews of seven 
candidates for the EXBS Program Assistant position in Astana.  As a 
result of these interviews, Elina Akhtiyarova was selected for the 
position and will start her employment with EXBS on May 25, 2008. 
 
 
5. On April 22, 2008, the EXBS team attended a meeting between 
Kazakhstani representatives of the Ministry of Foreign Affairs, the 
Ministry of Transportation and Communications, the Customs Control 
Committee, and the Border Guard Service and a U.S. Delegation lead 
by Dexter Ingram, State Department ISN/WMD, and Allison Johnson, 
U.S. Department of Energy.  The purpose of this meeting was to 
present to the Government of Kazakhstan a proposal to use Kazakhstan 
as a regional pilot of AirConOps, which is a new direction for the 
Second Line of Defense program.  Under this pilot program, U.S. 
Department of Energy would provide the Government of Kazakhstan with 
detection equipment that will provide the capability to detect 
 
ASTANA 00000888  002 OF 002 
 
 
nuclear/radiological material within aircraft after they have 
landed.  This proposal pilot program would bring the detection 
capability to the aircraft itself and the equipment could be used to 
search both full and empty aircraft. On April 28, the Embassy 
received a copy of a letter from the Customs Control Committee to 
the Ministry of Foreign Affairs in which the Customs Committee 
recommended that Kazakhstan participate in the program. 
 
B.  TRAINING DURING THE REPORTING PERIOD 
 
1.  From April 7-11, 2008, an International Counterproliferati
on 
Program (ICP) course, "WMD Crime Scene Skills Recertification 
Course" was held in Almaty, Kazakhstan.  The purpose of this course 
was to provide continuing education for 29 students that attended 
prior ICP courses. The students represented the following 
Kazakhstani organizations:  The Committee for National Security; The 
General Prosecutor's Office; The Agency for Economic Crime and 
Corruption Prevention; The Ministry of Internal Affairs; The Customs 
Control Committee; and The Ministry of Emergency Situations. 
 
C. EQUIPMENT DELIVERED DURING THE REPORTING PERIOD 
 
1.  None 
 
D. IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 
 
1.  None 
 
E. SIGNIFICANT DEVELOPMENTS IN EXPORT CONTROLS, NONPROLIFERATION, OR 
RELATED BORDER SECURITY 
 
1.  None 
 
F. CASPIAN SECURITY INFORMATION 
 
1. On April 23-24, 2008, the EXBS program manager assisted Lt. 
Michael Fisher, EXBS Regional Maritime Advisor, during meetings with 
Rear Admiral Abikeev and his staff in Aktau and Bautino, Kazakhstan. 
 The purpose of these meetings was to discuss SAFE boat maintenance, 
conduct an inventory of EXBS and U.S. Coast Guard purchased supplies 
and spare parts for the donated SAFE boats, and to discuss the SAFE 
Boat Operations Course to be conducted in Bautino, Kazakhstan from 
July 7 to 
August 1, 2008. 
 
 
III. RED FLAG ISSUES. 
 
1. None 
 
 
 
ORDWAY

Wikileaks

08ASTANA871, AKTAU: A CENTRAL HUB FOR THE CASPIAN REGION

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Reference ID Created Released Classification Origin
08ASTANA871 2008-05-06 09:56 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6211
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #0871/01 1270956
ZNR UUUUU ZZH
R 060956Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2346
INFO RUCNCIS/CIS COLLECTIVE 0502
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 04 ASTANA 000871 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN M. O'MARA 
ENERGY FOR EKIMOFF 
COMMERCE FOR HUEPER 
 
E.O. 12958: N/A 
TAGS: PGOV PREL KZ EPET
SUBJECT: AKTAU: A CENTRAL HUB FOR THE CASPIAN REGION 
 
1. (SBU) Summary: Aktau, situated on the Caspian coast and 
the capital of Mangystau Oblast, is poised to become 
Kazakhstan's next boomtown.  With four major ports in 
operation or under construction and improving road and rail 
infrastructure in Mangystau Oblast, Aktau is perfectly 
situated to become a key Caspian transportation hub. Revenue 
from oil and gas, while already a major earner for the city 
and the oblast, is likely to only increase with the 
development of "N" block and the Zhemchuzhina field.  Several 
other significant projects are also underway in the region, 
including the construction of a new downtown in Aktau which 
will double the size of the city ("Aktau City" with a 
projected ultimate cost of $38 billion) and the creation of a 
major resort complex, with 23 hotels and a new international 
airport. End Summary 
 
Aktau Dreams Big 
---------------- 
 
2. (SBU) On April 23, Poloff traveled to Aktau for three days 
of meetings with government officials, NGO representatives, 
and business leaders.  Aktau, located on shores of the 
Caspian and the capital of Mangystau Oblast, was only settled 
in 1961 and shows signs of its youth.  The city's streets are 
not named, and camels still roam free on the road between the 
airport and the city.  However, new construction projects are 
visible throughout the city.  Property prices are not far 
below those in Astana and Almaty.  Expats crowd bars with 
names like "Guns and Roses" and "The Shamrock."  Iran, 
Azerbaijan, and Russia have all already opened consulates in 
the city. 
 
3. (SBU) Poloff met with Oblast officials on April 24 to 
discuss development plans for the city and the region.  The 
officials began by citing a number of statistics in support 
of the Oblast's important place - the second highest GDP of 
any region, trailing only Atyrau Oblast, a 4.4 percent 
population growth rate (compared to the country's 1.1), 
67,000 applications for land plots, more than Astana's 
62,000, the third highest investment rate among the oblasts, 
a growing manufacturing sector.  The officials highlighted 
several important non-extractive industrial projects, 
including the establishment of an ammonium carbamide complex 
which will provide up to 10% of the world's market 
fertilizers and two new cement factories which will create 
900 jobs. 
 
4. (SBU) The Oblast officials then discussed the region's 
biggest priority, the "Earth - Sea - Sky" integrated 
investment project.  The project has seven main components: 
1) expansion of the Aktau Seaport; 2) development of Kuryk 
seaport and Kuryk working settlement; 3) establishment of the 
Caspian Energy Hub; 4) construction of "Aktau City"; 5) 
creation of the Caspian University of Technologies and 
Engineering; 6) improvement of transport infrastructure; 7) 
development of tourist infrastructure. 
 
An Emerging Transport Superhub 
------------------------------ 
 
5. (SBU) A first priority is to make the Oblast, with Aktau 
at the forefront, the center of Caspian transportation.  The 
oblast has three ports (Aktau, Bautino, and Kuryk), and 
another one planned (Sartas). Poloff visited the Aktau Port 
and was told that an expansion project is underway to 
increase the capacity of the port's terminals from 12 million 
to 20 million tons of oil.  The size of the port has grown 
from 227 hectares to 900 and further expansion will increase 
the size to 2000 hectares.  Kuryk, two hours from Aktau by 
car, is set to be the biggest port in Kazakhstan and of 
significant importance for producers after the completion of 
the Eskene - Kuryk oil pipeline. 
 
6. (SBU) Kuryk will also be the fleet base for an expanding 
Kazmortransflot.  Serik Ishmanov, Managing Director of 
Kazmortransflot, told Poloff on April 24 that Kazmortransflot 
currently has three 12,000 ton tankers and plans to buy three 
additional tankers in the near future.  Kazmortransflot 
ultimately intends to move to 60,000 ton tankers, he said. 
Currently, the company is chartering 10 million tons of oil a 
year, with three million to Azerbaijan, one million to Iran, 
and the rest to Russia.  Shipments to Iran are decreasing. 
Kazmortransflot is also looking to expand its base of 
operations, looking at options at "Batumi and beyond." 
Finally, he informed Poloff that Kazmortransflot is 
completing a feasibility study on LNG transport. 
 
ASTANA 00000871  002 OF 004 
 
 
 
7. (SBU)  Oblast officials told Poloff that they also believe 
that the region will be the focal point for both north- south 
and east-west road and rail traffic.  The first link of a new 
road network between Aktau and Atyrau, the capital of Atyrau 
Oblast and the center of Kazakhstan's oil industry, has been 
completed, and construction of the final link is planned. 
Plans are being developed to build a rail line between Aktau 
and the Bautino port.  Kazakhstan, Turkmenistan, and Iran 
signed an agreement to
build a railway line traversing the 
three countries. As Kazakhstan's east-west transportation 
system is strengthened, oblast officials believe Aktau will 
be an important transfer point for goods from China. 
 
 
Energy Potential 
---------------- 
 
8. (SBU) Mangystau Oblast has a number of established oil 
fields and several potentially significant finds still to 
come on line. The government made an initial estimate that 
the "N" Block not far off-shore from Kuryk has 349 million 
tons of oil, although KazMunaiGas has recently claimed that 
the figure is higher. Shell (55%), KazMunayTeniz (25%) and 
Oman Pearls (20%) hold stakes in the off-shore Zhemchuzhina 
oilfield, with estimated reserves of 100 million tons of oil. 
On April 25, Poloff met with representatives from Caspi 
Meruerty Operating Company (CMOC), the developer of the 
field. CMOC Deputy Manager Bulat Jumagaliyev  Jumagaliyev 
reported that CMOC drilled the first of four wells last year 
and is pleased with the results.  A second well will be 
drilled this year. Asked about the field's potential, 
Jumagaliyev laughed and said, "10 times less than Kashagan," 
Becoming serious, he then said that Zhemchuzhina has many 
advantages in comparison with other offshore fields, because 
of the high quality of the oil and cheaper production costs. 
 
9. (SBU) On April 24, Poloff met with MangistauMunaiGas (MMG) 
Director General Sagyn Krymkulov. MMG, owned by Central Asia 
Petroleum of Indonesia, has 6,000 employees and is one of the 
largest oil producing companies in Kazakhstan (Note: KMG is 
finalizing the acquisition of a 72% stake of the company). 
Krymkulov told Poloff that MMG has 15 fields with 1 billion 
tons of reserves.  Currently, the company is producing 5.7 
million tons per year but hopes to increase to 6 million tons 
by 2011.  MMG also has two offshore blocks, but has no 
drilling experience.  Krymkulov bemoaned the difficulty of 
finding capable Kazakhstani engineers, a theme echoed by 
Caspi Meruerty Operating Company (CMOC) and other oil 
companies in Aktau. 
 
10. (SBU) Several oil company representatives working in 
Mangystau Oblast told Poloff that they are facing increasing 
scrutiny from the government, mirroring a trend in other 
oil-producing regions of Kazakhstan.  Andrey Zimin, the 
Acting Director General of Arman JV (50% Shell, 25% Lukoil, 
25% Mittal; the Arman field has 200 million tons of proven 
reserves) told Poloff that Arman paid $1 million in 
environmental fines last year.  Zimin said they now receive 
two letters a day on average from the Ministry of Energy and 
Natural Resources with various requests. The latest 
requirement, he said, is to station a squad of 20 fireman at 
the field, which he called ludicrous when they only have 35 
employees working there. Hue Huiping, General Manager of 
Buzhachi Operating(Owned by Chinese National Petroleum 
Company (CNPC), Mittal, and Lukoil, developing the North 
Buzachi field, with 23 million tons of proven reserves), 
described a "difficult atmosphere in which to work." He told 
Poloff it is increasingly difficult to get necessary permits. 
 Although Buzhachi will not be affected by a new oil export 
tax, Huiping said that "one way or another, we will have to 
pay." 
 
11.  (SBU) Oil will not be the only energy source emerging 
from Aktau.  On April 24, Poloff met with officials at the 
Mangyshlak Atomic Energy Complex, home to three heat and 
power plants and the decommissioned BN-350 nuclear reactor. 
Poloff asked the officials about recent reports that a new 
nuclear power plant would be built at the facility. They 
responded that they were "99% certain" that the plant would 
be built.  The plant would produce enough electricity to 
support Kazakhstan's growing needs and to provide exports to 
Turkmenistan. 
 
12. (SBU) Underlining its potential for further growth in the 
energy sector, the Government of Kazakhstan recently signed a 
 
ASTANA 00000871  003 OF 004 
 
 
memorandum giving preliminary approval to establish an energy 
research and training complex in Aktau, the Caspian Energy 
Hub.  The proposed hub would include a science and technology 
park, a geophysical laboratory, a renewable energy center, 
and facilities for personnel training, information technology 
development and environmental research.  Development of the 
hub is expected to take 3-5 years, with a first stage 
investment of $400 million dollars and an ultimate cost of 
$10 billion.  In order to further increase the number of 
skilled industrial workers, planning has started to establish 
a Caspian University of Technology and Engineering in Aktau. 
The aim, according to Oblast officials, is to create an elite 
university that will attract students from across the Caspian 
region. 
 
The Caspian Riviera? 
-------------------- 
 
13. (SBU) Oblast officials told Poloff of plans to establish 
a large tourist complex in Kenderli, south of Aktau. The 
area, according to the officials, has 1.7 thousand hectares 
of resort area.  The Kazakhstanis intend to build 23 hotels, 
with KMG building two five star hotels.  An international 
airport will be built, and the Kazakhstanis hope to attract 
330,000 tourists annually, primarily from Russia and other 
CIS countries.  (Note: Many huge villas already dot the 
Caspian coast, including one given to President Putin as a 
gift by President Nazarbayev.) 
 
14. (SBU)  Oblast officials acknowledged to Poloff that they 
will need to attract workers to Aktau and the region in order 
to have the necessary manpower to complete many of their 
proposed projects.  They hope that the opportunities offered 
will attract workers not only from Kazakhstan, but also from 
Azerbaijan, Turkmenistan, and Iran.  They believe that in 
coming years the population of Aktau (currently 200,000) and 
the Oblast (400,000) will double.  As part of the expansion, 
project financing has started for the "Aktau City" project, a 
new downtown for the city.  Initial construction began on 
February 25. 
 
Civil Society in the Oblast: Differing Views 
-------------------------------------------- 
 
15. (SBU) On April 23, Poloff met with Yedil Jamburchin, Nur 
Otan first deputy chairman for Mangystau Oblast, in Nur 
Otan's modern headquarters (Note: Nur Otan will soon move 
their headquarters to an even more fashionable glass and 
steel building in Aktau). Jamburchin was stylishly dressed, 
charismatic, and concisely recited Nur Otan's strategy for 
the region.  After last year's parliamentary elections, he 
said, Nur Otan created regional programs focused on projects 
such as bringing health care systems to villages.  "We are 
not just in oblast centers," he said.  He identified rising 
inflation and the high price of food as the biggest problems 
facing Kazakhstan.  Asked about the state of civil society in 
the Oblast, Jamburchin responded that there "are no 
problems." and
that an independent print and TV media exists. 
 (Note: Nur Otan received 97% of the vote in Mangystau Oblast 
in the most recent election, its highest percentage in any 
oblast.) 
 
16. (SBU) On the same day, Poloff held a roundtable 
discussion with representatives from the Ak Zhol, Alga, Azat, 
and National Social Democratic Parties.  All bemoaned 
political conditions in the Oblast.  Ak Zhol representative 
Agzam Zhumsakov said that nothing has changed in Kazakhstan 
since it was granted the OSCE chairmanship for 2010.  Alga 
Party representative Svetlana Chetvertnykh expressed her 
belief that opposition parties can appeal to those not 
benefiting from Kazakhstan's progress, such as pensioners, 
government workers, and the "socially vulnerable."  Beyond 
the shining facades of new buildings, little change is 
occurring, she said.  Each representative claimed that it 
remains difficult for opposition parties to operate.  In 
Aktau, it is impossible to criticize new projects because of 
Nur Otan's complete control of local government.  They also 
told Poloff that they face consistent government harassment 
and that after the roundtable talk "people will be waiting on 
the streets for us," according to NSDP representative Adil 
Uly.  The representatives were confrontational with Poloff 
and asked on numerous occasions why the United States is not 
doing more to promote democracy in Kazakhstan.  Chetvertnyk 
admitted, however,  that people still have faith in the 
government and all of the representatives were murky when 
discussing the plans of their parties to attract greater 
 
ASTANA 00000871  004 OF 004 
 
 
support. 
 
----------- 
Comment 
----------- 
 
17. (SBU)  Aktau is still a sleepy town in comparison with 
Almaty and Astana.  Its growth potential, however, is 
significant, particularly when oil from Tengiz and Kashagan 
is shipped westwards.  The Kazakhstanis see Aktau as a 
potential "capital city" of the Caspian region, the central 
point for transportation, regional educational cooperation, 
and even tourism.  If the cross-Caspian route is the new Silk 
Road for Central Asia, Aktau may yet prove to be its 
Samarkhand. 
ORDWAY

Wikileaks

08ASTANA870, KAZAKHSTAN – ALL IS CALM IN ALMATY OBLAST, AND THAT’S HOW

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA870 2008-05-06 07:32 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6084
RR RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHPW RUEHVK RUEHYG
DE RUEHTA #0870/01 1270732
ZNR UUUUU ZZH
R 060732Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2343
INFO RUCNCIS/CIS COLLECTIVE 0499
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHVEN/USMISSION USOSCE 1907
RUEHAST/USOFFICE ALMATY 0415

UNCLAS SECTION 01 OF 03 ASTANA 000870 
 
DEPARTMENT FOR SCA/CEN (M. O'MARA) 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KDEM KIRF PREL KZ
SUBJECT:  KAZAKHSTAN - ALL IS CALM IN ALMATY OBLAST, AND THAT'S HOW 
WE LIKE IT 
 
Ref:  Astana 0767 
 
ASTANA 00000870  001.2 OF 003 
 
 
------- 
SUMMARY 
------- 
 
1. (SBU) All is calm in Almaty Oblast and its capital, Taldykorgan, 
and residents are enjoying a steadily improving quality of life, at 
least according to oblast officials.  The urban population is 
growing, though the oblast remains largely rural and agricultural. 
Taldykorgan itself has experienced significant growth in investment 
since it was designated the oblast capital in 2001.  Civil society 
leaders report increasing government cooperation, though they are 
experiencing problems with corruption, tight government control over 
the media, and  severe restrictions on freedom of assembly.  The 
unregistered Alga party is very active in the region, and is 
building a grassroots network of supporters. End Summary. 
 
--------------------------------------------- --------- 
OFFICIALS SAY ALL IS STABLE, QUALITY OF LIFE IMPROVING 
--------------------------------------------- --------- 
 
2. (U) During April 14-17, poloff and pol FSN visited Taldykorgan, 
the capital of Almaty Oblast, for a series of meetings with local 
government officials, NGOs, and political party leaders.  According 
to Galiaskar Sarybaiyev, deputy director of Almaty Oblast's 
Department of Internal Policy, the population of Almaty oblast is 
largely rural.  Approximately 1.6 million people live in the oblast, 
though only 150,000 live in Taldykorgan, the largest city. (Note: 
The city of Almaty is not part of the oblast, but rather is 
administered as a separate entity.  End Note.) Sarybaiyev reported 
that the urban population in the oblast is growing as a result of 
internal migration from rural areas.  Nonetheless, he said, most of 
the population remains in rural areas, as agriculture dominates the 
regional economy. 
 
3. (SBU) Both Sarybaiyev and Ardak Sydykov, secretary of the Almaty 
Oblast Maslikhat (legislative body), portrayed Taldykorgan and 
Almaty Oblast as calm and stable, with a steadily improving quality 
of life. Sydykov said that when Taldykorgan became the oblast 
capital in April 2001, it looked like Berlin after World War II. 
Now, the city is clean and features newly renovated and newly 
constructed buildings.  (Note: We were impressed by the cleanliness 
and orderliness of the city, and rank it as one of the cleanest in 
Kazakhstan.  End note.) Sydykov said that the oblast budget is seven 
times larger than it was in 2001, and he pointed to a significant 
increase in the number and quality of cars in the city as evidence 
that the standard of living has improved.  He said that when he 
became a Maslikhat member in 1999, citizens primarily complained 
about failure to receive salaries and pensions.  Now, he explained, 
the standard of living has improved, and citizens are far more 
focused on community issues such as schools, health services, 
quality drinking water, and the construction of roads.  He said that 
citizens rarely participate in Maslikhat meetings, though they 
frequently come to the office to make complaints. 
 
4. (SBU) Sarybaiyev maintained that the situation concerning ethnic 
relations in the oblast is stable and positive, and that it is the 
oblast government's top priority to maintain stability and keep the 
peace.  He told us that 64% of the population is ethnic Kazakh, 18% 
is ethnic Russian, 9% is Uighur, and the remainder is a mix of other 
ethnic groups including Azerbaijanis, Koreans, Kurds, Tatars, 
Ukrainians, and Kyrgyz.  He explained that the government supports 
inter-ethnic relations by operating 71 ethnic cultural centers to 
promote the development of languages, customs, and traditions. 
 
--------------------------------------------- ------- 
OFFICIAL SEES NO CONTROVERSY IN THE RELIGIOUS SPHERE 
--------------------------------------------- ------- 
 
5. (SBU) Deputy director of the Almaty Oblast Ministry of Justice 
Murat Tanibergen told us that religious devotion is growing in the 
oblast, but there are few problems with religious groups and no 
incidents of religious extremism.  He said there are 538 religious 
groups registered in the region, including some non-traditional 
groups such as the Hare Krishnas and the Baha'i.  He said his office 
has no problems with the Jehovah's Witnesses active in the region; 
the government occasionally attends their services and conducts 
inspections to make sure that they are following legal requirements, 
and the Jehovah's Witnesses are very good about providing all of the 
information requested by the government.  He said that the Religious 
Issues Committee in the Ministry of Justice in Astana recently 
solicited proposals for inclusion in new draft amendments to 
Kazakhstan's religion law (see reftel), but he said his office has 
few problems with the current law and did not have much to 
 
ASTANA 00000870  002.2 OF 003 &#x000
A; 
 
contribute. 
 
6. (SBU) Tanibergen, without prompting, mentioned the ongoing 
dispute between local government officials and the Hare Krishna 
commune in the Karasai district, which is located in Almaty Oblast. 
He shared the usual government talking points on the issue (i.e., 
that the dispute is purely over property, not religion, and the 
government has no problem with the Hare Krishnas), and said that the 
local government was waiting for the Hare Krishnas to choose one of 
the alternate properties that had been offered to them. 
 
-------------------------------------------- 
CIVIL SOCIETY MATURING, WITH SOME ROADBLOCKS 
-------------------------------------------- 
 
7. (SBU) Representatives from the Taldykorgan City Society for 
Consumer Rights Protection NGO, the Democracy Support Center NGO, 
and the Taldykorgan Regional Women's Support Center NGO unanimously 
agreed that their relations with the government have improved 
significantly over the last five or six years, and the groups have 
significant freedom to operate.  In addition, the women's support 
center has received some contracts to provide services for the 
government.  However, the representatives said that local officials 
occasionally become very aggressive towards NGOs that attempt to 
monitor the government budget or question government expenditures. 
They also reported that the local government tightly controls the 
media, with the exception of one or two newspapers, though the NGOs 
are able to attract publicity through good relationships they have 
with individual reporters.  Finally, they maintained that there is 
significant corruption in the government contracting process; they 
claimed that many government officials or their friends create their 
own NGOs and then funnel government money to them. Saniya 
Kazabulatova of the City Society for Consumer Rights Protection 
asserted that only 10% of government grants go to support real 
projects, while the remainder of the grant money is stolen through 
fake NGOs. 
 
8. (SBU) Aliya Akhmediya, the Almaty Oblast representative for the 
Kazakhstan International Human Rights Bureau, described a tense 
relationship with local government officials.  (Note: Akhmediya is 
also the Almaty Oblast representative for the Azat opposition party, 
and was an opposition candidate for the parliament in last year's 
elections.  The Azat party maintains a small office and staff in 
Taldykorgan, but Akhmediya did not have much to report about party 
activities in the off year. End note.)  She works for citizens on a 
variety of legal and human rights complaints, including housing 
problems and unfair treatment in local courts. In her view, the 
government's attitude is that citizens would not worry about civil 
rights if activists like her were not provoking them.  She said 
local officials routinely deny or fail to respond her requests for 
permission to hold rallies, and described a recent incident in which 
she organized an unsanctioned rally with a group of citizens whose 
homes had been demolished by the government. The government summoned 
her after the rally and warned her that it was illegal to instigate 
protest actions.  Nevertheless, she told us she prefers to act 
rather than sit and wait for government permission. 
 
9. (SBU) Akhmediya told us that the government never invites her to 
roundtables or conferences, but she attends when she learns of them 
and asks tough questions.  She said, however, that her comments are 
never covered in the local media, because reporters know from their 
past experience that if they publish her comments, they will get in 
trouble.  Finally, she claimed that the religious freedom situation 
in the oblast was getting worse and that the government was 
increasing its intrusion, though she had no specific examples. 
 
--------------------------------------------- ---- 
UNREGISTERED ALGA PARTY BUILDS GRASSROOTS NETWORK 
--------------------------------------------- ---- 
 
10. (SBU) Beniyamin Faizulin, the Almaty Oblast leader of the 
unregistered Alga party, agreed that local authorities consistently 
refused to grant permission for peaceful rallies, and told us that 
he and others in the party have been administratively fined for 
organizing unsanctioned rallies.  He also said that the party has 
virtually no access to the media.  In addition, he told us the party 
was recently forced out of its rented office near the center of 
town, and is now renovating a house on the outskirts of town to use 
as their office.  (Note: We met in the house, which was full of maps 
and party materials and staffed by two or three workers.  End note.) 
Faizulin also claimed that not long ago his wife was forced to leave 
her job as deputy director of a local law school because of pressure 
resulting from his opposition activities. 
 
11. (SBU) Despite these obstacles, Faizulin was optimistic about 
 
ASTANA 00000870  003.2 OF 003 
 
 
Alga's future, and described a very active and energetic local 
organization.  He said the party spends considerable time on 
outreach activities through door-to-door campaigning and working in 
the villages, and was very active in helping citizens resolve 
various social problems.  He told us that 20 to 30 people come to 
the Alga party offices every week with various complaints, and the 
party helps them organize into groups to resolve their problems, 
such as disputes with utility companies and problems with schools. 
The party also helps them file complaints and lawsuits.  He said 
that Alga is not focused on winning seats in parliament or competing 
in a rigged election process, but rather on building a network of 
leaders and activists at the local level.  He explained that the 
party was encouraging citizens to lobby and pressure their elected 
members of local Maslikhats, and would ultimately like to create 
"shadow" governments on the local level.  He described the party's 
work in rural areas as particularly important, because people there 
are completely suppressed by local akims and have no awareness of 
their civil or political rights.  (Note: Faizulin's description of 
Alga's focus and activities mirrors what we have been told by 
Vladimir Kozlov, Alga's national-level chairman.  End Note.) 
 
------- 
COMMENT 
------- 
 
12. (SBU) Local officials emphasized stability and an improving 
quality of life in our meetings, and from what we observed, we have 
no reason to doubt them: Taldykorgan in all respects appeared to be 
a clean, healthy, well run city, and we did not detect any unusual 
undercurrent of discontent in our meetings with civil society and 
opposition party leaders.  Nevertheless, the tight government 
control of the media and its efforts to prevent public assemblies is 
undoubtedly responsible for some of the calm, though human rights 
and opposition party leaders have found some traction.  The Alga 
party in particular has seemingly developed a systematic and 
long-term approach to building their movement in the region. &#x
000A;Finally, Taldykorgan represents only a small portion of the oblast 
population; whether the atmosphere of stability and improving 
quality of life extends to the much larger rural population is an 
open question.  End comment. 
 
ORDWAY

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08ASTANA869, RESPONSE: IMPACT OF RISING FOOD/COMMODITY PRICES –

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Reference ID Created Released Classification Origin
08ASTANA869 2008-05-06 06:45 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6043
OO RUEHLN RUEHVK RUEHYG
DE RUEHTA #0869/01 1270645
ZNR UUUUU ZZH
O 060645Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2341
INFO RUCNCIS/CIS COLLECTIVE 0497

UNCLAS SECTION 01 OF 02 ASTANA 000869 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EEB/TPP/ABT/ATP JANET SPECK 
 
E.O. 12958: N/A 
TAGS: EAGR ETRD PGOV KZ
SUBJECT: RESPONSE: IMPACT OF RISING FOOD/COMMODITY PRICES - 
KAZAKHSTAN 
 
REF: STATE 39410 
 
1. (SBU) This cable constitutes post's response to reftel, 
which requested specific information regarding the impact in 
host country of rising food and agricultural commodity 
prices. 
 
2. (SBU) DEMAND:  The most important foods and agricultural 
commodities consumed in Kazakhstan include flour, bread, meat 
(beef, pork, horsemeat, and mutton), chicken, butter, 
sunflower oil, milk, eggs, potatoes, rice and sugar. 
According to Kazakhstan's National Statistics Agency, prices 
on these products rose by 26.6 percent during the second half 
of 2007.  Prices on fruits and vegetables, a large portion of 
which are imported from neighboring countries, rose 
significantly as well: apples by 42 percent, cabbage by 45 
percent, tomatoes by 29 percent.   The reasons for food price 
rises in Kazakhstan are multifold.  A high economic growth 
rate over the past several years has pushed up consumer 
purchasing power, thus generating an increased demand for 
specific food products.  Increased demand for meat and daily 
products has led to increased demand for grain to feed 
livestock. 
 
3. (SBU) SUPPLY:  Increased agricultural commodity demand and 
higher prices have led to increased domestic investment in 
agriculture, more government support for the sector, and 
utilization of additional farmland to expand crop production. 
 In April 2008, the government imposed a temporary ban on the 
export of wheat (though not of flour) effective through 
September 1, at which time the government will decide whether 
to lift the ban, taking into account the summer wheat 
harvest.  The temporary export ban was motivated by the 
government's desire to ensure adequate domestic wheat supply 
and to keep domestic prices down on wheat and wheat products. 
  Kazakhstan must ultimately return to exporting, as annual 
wheat production far exceeds consumption.  In fact, 
Kazakhstan is the world's fifth largest wheat exporter.   In 
general, agricultural commodity supply in Kazakhstan is 
impacted by ineffective land use, state subsidies for 
inefficient large farms at the expense of smaller family 
farms, and bottlenecks in food supply chains such as 
shortages of storage facilities that contribute to crop 
losses.  There are also high transportation costs and 
administrative barriers that make food production expensive. 
 Grain production in Kazakhstan is highly dependent on 
weather conditions. 
 
4. (SBU) POLITICAL IMPACT:  There have been small protests 
against rising bread prices in Kazakhstan's largest city, 
Almaty, but no major demonstrations.  There has been no 
measurable affect on the stability of the government, nor has 
there been a meaningful impact on relations between classes, 
ethnic groups, or urban vs. rural dwellers. 
 
5. (SBU) ECONOMIC IMPACT:  Kazakhstan faces a double 
challenge with regard to the current food inflation as high 
levels of natural resource-fueled growth since 2000 have lead 
to a steady rise in overall inflation from 6.7 percent in 
2004 to 18.8 percent in 2007.  The 2007 figure was well above 
the initial 7 percent inflation projection of the National 
Bank of Kazakhstan.   There has been no significant impact of 
agricultural price increases on Kazakhstan's trade balance, 
as agricultural products make up only 10 percent of overall 
external trade turnover.  As Kazakhstan is a major energy 
exporter, its private sector development and medium-term 
economic growth prospects are principally influenced by oil 
and gas prices, though the global financial crisis has had an 
important impact on shorter-term growth. Kazakhstan's 
agricultural sector had a growth rate of 8.4 percent during 
2007.  Further increases in agricultural production can make 
an important contribution to the country's economic 
diversification strategy. 
 
6. (SBU) ENVIRONMENTAL IMPACT: Thus far, there has been no 
direct environmental impact apart from utilization of 
additional farmland to expand crop production in response to 
rising demand and rising prices.  It remains unclear whether 
plans to manufacture biofuels from wheat and corn will be 
reconsidered. 
 
7. (SBU) GOVERNMENT POLICY RESPONSE:  In response to rising 
agricultural commodity and food prices, the government 
announced national food security to be a priority in 2008 and 
increased budget allocations for agricultural production. 
Kazakhstan's Kazyna National Development Fund has provided a 
$200 million a credit line for agricultural producers.  The 
government has also increased subsidies for the production of 
oil-bearing crops, sugar beet, and corn, and has subsidized 
 
ASTANA 00000869  002 OF 002 
 
 
purchase of seeds and fuel.  In addition, Prime Minister 
Masimov proposed a new law on food security in order to 
prevent food shortages and the creation of a special reserve 
for major food products. The government has also created 
so-called "stabilization funds" to store up basic food 
products (bread, flour,
sugar, oil) in case of shortages or 
speculation.  Some regional government administrations have 
signed MOU's with large food producers to stabilize prices 
and have provided discounts and targeted cash transfers to 
vulnerable groups.  In October 2007, the government imposed a 
ban on the export of oil-bearing seeds in response to a 
shortage of sunflower seeds; this ban has been extended to 
October 1, 2008.  As noted in para 3, in April 2008, the 
government imposed a temporary ban on the export of wheat 
(though not of flour) effective through September 1, at which 
time government will decide whether to lift the ban, taking 
into account the summer wheat harvest. 
 
8. (SBU) IMPACT ON POST PROGRAMS:  USAID has one regional 
technical assistance program in the agricultural sector --the 
"Regional Agricultural Linkages Project" -- which attempts to 
strengthen supply chain linkages among the five Central Asian 
countries.  The focus is on wholesalers, packagers, and 
distributors of agricultural products.  Thus far, the food 
price rises have not affected this assistance program. 
 
9. (SBU) POLICY PROPOSALS:  Based on a policy study completed 
last year to which the USG contributed and which provides 
guidance consistent with USG assistance, the World Bank 
recently made a presentation to the Kazakhstani government 
which reviewed and assessed policy options with respect to 
controlling agricultural prices, increasing supply, reducing 
demand, protecting consumers, and reducing marketing margins. 
 The policy choices Kazakhstan faces will determine whether 
it will pursue an outward-looking approach to food security 
-- increasing agricultural exports to generate the income 
needed to contribute to imports -- or will turn inward to 
regulate prices in its domestic market, which will undermine 
its long-term competitiveness and sector productivity.  While 
all of the choices available to the Kazakhstani government 
have both pros and cons, broadly speaking, we would advise 
the Kazakhstanis to avoid market-distorting interventions, 
such as price controls and export bans.  The most efficient 
and least market distorting option would be focusing on 
social support programs which directly assist the most 
vulnerable parts of the population.  These can include direct 
cash transfers to the needy, food stamps, and food-for-work 
programs.  The World Bank's report also recommends scaling 
down input subsidies and instead strengthening research and 
development, training and education, and rural 
infrastructure, including irrigation and transportation to 
improve farm efficiency.  Furthermore, the report recommends 
improving the economic enabling environment for an efficient 
agricultural sector by not skewing subsidies towards large 
farms and avoiding discretionary powers of local governments 
to control prices in local bazaars.  The report further 
recommends improving the functioning of the land market by 
redistributing agricultural land for a nominal fee while 
gradually raising the land tax, which would create incentives 
to increase efficiency. 
ORDWAY

Wikileaks

08ASTANA867, KAZAKHSTAN: OUTREACH ON DEMOCRACY, HUMAN RIGHTS, AND

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To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08ASTANA867.
Reference ID Created Released Classification Origin
08ASTANA867 2008-05-06 03:36 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5992
RR RUEHAST
DE RUEHTA #0867 1270336
ZNR UUUUU ZZH
R 060336Z MAY 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2339
RUEHAST/USOFFICE ALMATY 0414

UNCLAS ASTANA 000867 
 
DEPARTMENT FOR SCA/CEN (M. O'MARA) 
 
SENSITIVE 
 
SIPDIS 
 
FOR THE AMBASSADOR FOR DRL A/S KRAMER 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KDEM KIRF PREL KZ
SUBJECT:  KAZAKHSTAN:  OUTREACH ON DEMOCRACY, HUMAN RIGHTS, AND 
DISSIDENTS 
 
REF: State 108924 
 
1. (SBU) In response to reftel, there are no high profile dissidents 
from un-free nations living in exile or seeking asylum in 
Kazakhstan. 
 
2. (SBU) In the course of my work, I do, however, regularly meet 
with leading Kazakhstani democracy and human rights activists, 
including Yevgeniy Zhovtis, director of the Kazakhstan International 
Bureau for Human Rights, Galymzhan Zhakiyanov, chairman of the Civil 
Society Foundation, and Zauresh Battolova, head of the Polyton Club. 
In addition, I frequently meet with the leadership of the main 
opposition political parties, including Bulat Abilov, Oraz 
Zhandosov, and Tulegen Zhukeyev of Azat (the former True Ak Zhol 
party), and Zharmakhan Tuyakbay and Amirzhan Kosanov of the National 
Social Democratic Party. 
ORDWAY

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