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Reference ID Created Released Classification Origin
08ASTANA1222 2008-07-08 12:04 2011-08-30 01:44 CONFIDENTIAL Embassy Astana


DE RUEHTA #1222/01 1901204
O 081204Z JUL 08

C O N F I D E N T I A L ASTANA 001222 
E.O. 12958: DECL: 07/08/2018 
Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d) 
1. (C) President Nazarbayev told CODEL Hastings on June 29 
that Kazakhstan is committed to deepening its cooperation 
with the U.S.  He explained that Kazakhstan's crude 
production would increase significantly in the coming years, 
and that transport remains the big issue to resolve. 
Nazarbayev reminded the CODEL that Kazakhstanis had no prior 
history of democracy, but are trying to change their 
mentality.  He promised follow through on democratic reforms, 
but explained that the country would implement reforms 
because it wanted to, not because of external pressure. 
Prime Minister Masimov separately told the CODEL on June 30 
that Kazakhstan's development goal is to reach the standards 
of the developed world.  The country has thus made investment 
in human capital a top priority.  Masimov said that 
Kazakhstan's recent agreement with Chevron on a pipeline from 
the TengizChevrOil field to the Caspian had made the Russians 
take a more flexible position on expansion of the Caspian 
Pipeline Consortium (CPC) pipeline.  End Summary. 
--------------------------------------------- ------------ 
Nazarbayev:  We Will Implement Reforms Because We Want To 
--------------------------------------------- ------------ 
2. (SBU) CODEL Hastings visited Astana from June 28 to July 2 
to participate in the annual session of the OSCE 
Parliamentary Assembly (PA).  The CODEL also conducted 
bilateral meetings with President Nazarbayev and Prime 
Minister Masimov.  Both of these meetings were subsequent to 
Nazarbayev's address to the OSCE PA in which he publicly 
discussed for the first time Kazakhstan's Madrid commitments 
(see reftel). 
3. (C) In a June 29 meeting with the CODEL, Nazarbayev 
acknowledged that the U.S. has supported Kazakhstan 
throughout its years of independence.  Kazakhstan is 
committed to deepening its cooperation with the U.S.   The 
U.S., he noted, is the largest source of foreign investment 
in Kazakhstan, and U.S. companies are helping to diversify 
Kazakhstan's economy.  Nazarbayev reminded the CODEL that the 
U.S. and Kazakhstan had just launched the Public-Private 
Economic Partnership Initiative (PPEPI), which he understood 
as follow through on the December 2001 Houston Initiative. 
4. (C) Turning to energy issues, Nazarbayev noted that 30 
percent of the investment in Kazakhstan's oil and gas sector 
is from U.S. companies.  He said that Kazakhstan expected to 
export 3 million b/d of crude by 2013, up from 1.5 million 
b/d at present.  The long-term goal is for Kazakhstan to be 
among the world's top five or six crude exporters.  The big 
issue, Nazarbayev explained, is transport.  Kazakhstan is 
working with U.S. companies on transport options. 
5. (C) Discussing the domestic situation, Nazarbayev reminded 
the CODEL that Kazakhstan has been independent for just 16 
years.  Following the fall of the USSR, the country had to 
re-establish itself economically, get runaway inflation under 
control, avoid ethnic strife, and overcome other difficulties 
-- all of which it managed to do.  Kazakhstanis had no 
history of democracy, but have been trying to change their 
mentality.  At present, there are over 5000 NGOs in 
Kazakhstan and there is freedom of the media, he explained. 
Regarding freedom of religion, Kazakhstan has proven to be 
very welcoming to its Jewish population.  The political 
opposition, Nazarbayev stressed, should naturally focus their 
attention on problem areas; that is their job, but it must be 
remembered that they are not objective observers. 
6. (C) Senator Ben Cardin expressed the hope that Kazakhstan 
would follow through on its Madrid commitments on democratic 
reform.  Nazarbayev explained that it was difficult for 
Kazakhstan to get ahead of its neighbors on democratization, 
or else it risked undermining them.  He nevertheless 
reassured the CODEL that Kazakhstan would implement further 
democratic reforms, as he had just made clear in his remarks 
to the OSCE PA.  However, Kazakhstan would implement these 
reforms because it wanted to, not because of any external 
pressure.  While the country would take into account outside 
advice, it would do things in its own way, Nazarbayev 
Masimov: Human Capital is a Top Priority 
7. (C) In a separate June 30 meeting, Prime Minister Masimov 
told the CODEL that Nazarbayev's democratic reform remarks in 
his OSCE PA speech were essentially instructions to the 
ministries to move forward on implementing the Madrid 
8. (C) Masimov explained that Kazakhstan's long-term 
development goal is to reach the standards of the developed 
world.  Kazakhstan wants to diversify its economy,
 and has 
made investment in human capital, including in health and 
education, a top priority.  Kazakhstan is currently engaged 
in negotiations with the U.S. and EU on its WTO accession. 
Ultimately, Kazakhstan hopes to be able to also join the 
OECD, Masimov explained.  Kazakhstan had suffered from the 
effects of the global financial crisis.  The country's 
economy and financial system nevertheless remained strong, 
and the most serious problems had been overcome.  Masimov 
stressed to the CODEL that Kazakhstan would support its 
neighbors in trying to ensure their food security. 
9. (C) Masimov noted that most of Kazakhstan's energy exports 
flow through Russia, though now some volumes are sent to 
China as well.  The Kazakhstanis had just reached agreement 
with Chevron on a pipeline to bring crude from the 
TengizChevrOil field to the Caspian, from where it will be 
moved by tanker to Baku.  The Kashagan consortium wants to 
join in as well.  This pipeline agreement is a key reason 
that the Russians have become more flexible on expansion of 
the Caspian Pipeline Consortium (CPC) pipeline, Masimov 
10. (U) CODEL Hastings did not/not have an opportunity to 
clear this cable. 


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