Monthly Archives: October 2008

08ASTANA2161, KAZAKHSTAN PROVIDES UPDATED CONTACT INFORMATION

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Reference ID Created Released Classification Origin
08ASTANA2161 2008-10-31 12:01 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0020
RR RUEHWEB

DE RUEHTA #2161 3051201
ZNR UUUUU ZZH
R 311201Z OCT 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 3712

UNCLAS ASTANA 002161 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PARM PINR PINS PREL PTER MCAP KGIC KZ
SUBJECT: KAZAKHSTAN PROVIDES UPDATED CONTACT INFORMATION 
FOR THE GLOBAL INITIATIVE TO COMBAT NUCLEAR TERRORISM 
 
REF: SECSTATE 109152 
 
1. (SBU)  On October 21, we delivered reftel points 
requesting updated Global Initiative to Combat Nuclear 
Terrorism contact information for Kazakhstan to Fairzarkhman 
Kasenov, Counselor in the MFA,s Department of Multilateral 
Cooperation.  Kasenov expressed the Government of 
Kazakhstan,s continuing support for close cooperation 
between Kazakhstan and the United States on the Global 
Initiative.  On October 30, Kasenov informed us that the key 
contacts for Global Initiative in Kazakhstan are Sergey 
Savelyev, Deputy Director of the MFA,s Department of 
Multilateral Cooperation and Kasenov himself.  Both Savelyev 
and Kasenov said that they have valid Global Initiative 
Information Portal accounts. 
HOAGLAND

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08ASTANA2160, KAZAKHSTAN: DEMARCHE DELIVERED ON DISCOURAGING

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Reference ID Created Released Classification Origin
08ASTANA2160 2008-10-31 11:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0021
RR RUEHWEB

DE RUEHTA #2160 3051146
ZNR UUUUU ZZH
R 311146Z OCT 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 3711

UNCLAS ASTANA 002160 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR ISN/RA 
 
E.O. 12958: N/A 
TAGS: PREL MNUC TRGY KNNP IR KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON DISCOURAGING 
ATTENDANCE AT IRAN,S NOVEMBER 30 NUCLEAR CONFERENCE 
 
REF: SECSTATE 112229 
 
1. (SBU) We delivered reftel points and non-paper on 
discouraging participation in Iran,s November 30 "First 
International Conference on Nuclear Power Plants, 
Environmental and Sustainable Development" on October 31 to 
Sergey Savelyev, Deputy Director of the MFA,s Department of 
Multilateral Cooperation.  Savelyev promised to pass our 
non-paper to appropriate agencies in the Kazakhstani 
government.  Savelyev said he would report any comments back 
to us. 
HOAGLAND

Wikileaks

08ASTANA2156, CENTRAL ASIAN LEADERS REACH AGREEMENT ON WATER AND ENERGY

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Reference ID Created Released Classification Origin
08ASTANA2156 2008-10-31 09:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9960
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2156/01 3050946
ZNR UUUUU ZZH
O 310946Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3706
INFO RUCNCIS/CIS COLLECTIVE 0755
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0154
RUEHKO/AMEMBASSY TOKYO 0864
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2038
RUCNDT/USMISSION USUN NEW YORK 1987
RUEHNO/USMISSION USNATO 2323
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0316
RUEKJCS/SECDEF WASHDC 0233
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002156 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, OES (PHUDAK, NFITE) 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SENV TX TI KG UZ KZ
SUBJECT:  CENTRAL ASIAN LEADERS REACH AGREEMENT ON WATER AND ENERGY 
FOR THE UPCOMING WINTER 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  The presidents of the five Central Asian states 
overcame their disagreements and signed an agreement in Bishkek on 
October 10 to share water and energy resources this winter.  One 
expert sees Gazprom's influence behind this deal, which, if 
implemented, would represent an important step forward on water and 
energy cooperation in Central Asia.  END SUMMARY. 
 
SUMMIT AGREEMENT ON WATER AND ENERGY 
 
3. (SBU) The presidents of the five Central Asian states overcame 
their disagreements and signed an agreement on October 10 in Bishkek 
to share water and energy resources over the winter period.  If 
implemented, the agreement should improve the winter situation in 
Kyrgyzstan and Tajikistan.  Ruslan Ayabov, head of the Bilateral 
Cooperation Division of the Kazakhstani MFA's Central Asia 
Department, confirmed to the Regional Environmental Officer (REO) 
the results of the October 10 Biskhek meeting, which followed a CIS 
heads of state gathering.  Ayabov gave the REO a non-paper with the 
following details about the agreement: 
 
-- Kazakhstan will supply Kyrgyzstan the amount of coal it needs for 
the winter period. 
 
-- Uzbekistan will guarantee an uninterrupted supply of natural gas 
to Kyrgyzstan during the first quarter of 2009, an amount that will 
exceed by 150 million cubic meters the amount delivered in the first 
quarter of 2008.  (NOTE:  The media in Kazakhstan have reported that 
Uzbekistan will be supplying its natural gas to Kyrgyzstan at a cost 
much lower than the current market rate.  END NOTE.) 
 
-- Tajikistan and Uzbekistan agreed on the transit of approximately 
1.3 billion kilowatt hours of electricity from Turkmenistan through 
Uzbekistan's electrical power grid. 
 
-- These agreements are directed toward maintaining the level of 
water in Kyrgyzstan's reservoirs necessary to guarantee the demands 
of neighboring countries for water for the irrigation period (i.e., 
the 2009 crop season). 
 
DID GAZPROM GREASE THE SKIDS? 
 
4. (U) In an article entitled "Kyrgyzstan Could Deny Uzbekistan the 
Status of Gas Monopolist," which appeared on October 20 in the 
Russian newspaper "Vremya Novosti," Central Asia expert Arkady 
Dubnov reported that Gazprom has signed memoranda of understanding 
regarding buying controlling shares in Kyrgyzstan's state-owned gas 
company KyrgyzGaz and in Kyrgyzneftegaz.  Dubnov claimed that 
Gazprom also bought up a significant amount of Uzbekistan's natural 
gas, and that Gazprom informed the Uzbeks that if they refused to 
supply gas to Kyrgyzstan this winter at subsidized rates, then 
Gazprom would do so using part of the gas that it had purchased from 
Uzbekistan.  According to Dubnov, Gazprom's hidden hand thus greased 
the skids for the Central Asian presidents to reach the water and 
energy agreement for the winter. 
 
5. (SBU) COMMENT:  In the past, various factors inhibited water and 
energy cooperation, causing the countries to negotiate annual 
bilateral deals.  The interests of the upstream countries 
(Kyrgyzstan and Tajikistan) in using water for electricity 
generation have clashed with the interests of the downstream 
countries (Kazakhstan and Uzbekistan) in using water for crop 
irrigation.  Additionally, Uzbekistan has held out from cooperating 
because of disputes with Kyrgyzstan over the status of the Amu-Darya 
and Naryn rivers, and has retained ambitions to remain the monopoly 
supplier of electricity in the region.  If implemented, this 
agreement will represent an important step forward on water and 
energy cooperation in Central Asia, even if Gazprom/Kremlin Inc. 
banged the table to make it happen.  END COMMENT. 
 
 
ASTANA 00002156  002 OF 002 
 
 
HOAGLAND

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08ASTANA2153, KAZAKHSTAN: ALMATY NOTES, OCTOBER 13-24

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Reference ID Created Released Classification Origin
08ASTANA2153 2008-10-31 06:08 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9742
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2153/01 3050608
ZNR UUUUU ZZH
R 310608Z OCT 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3700
INFO RUCNCIS/CIS COLLECTIVE 0753
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0152
RUEHKO/AMEMBASSY TOKYO 0862
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2036
RUCNDT/USMISSION USUN NEW YORK 1985
RUEHNO/USMISSION USNATO 2321
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0311
RUEKJCS/SECDEF WASHDC 0231
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 0862

UNCLAS SECTION 01 OF 02 ASTANA 002153 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN:  ALMATY NOTES, OCTOBER 13-24 
 
ASTANA 00002153  001.2 OF 002 
 
 
1. The "Almaty Notes" series from U.S. Office Almaty focuses on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital." 
 
"PUBLIC PARLIAMENT" SUPPORTS ELECTION AMENDMENTS 
 
2.  During an October 13 meeting, the "Khalyk Kenesy" ("People's 
Parliament") expressed its support for a package of proposed 
amendments to Kazakhstan's election law drafted by the National 
Social Democratic Party (OSDP) and Azat, two of Kazakhstan's largest 
opposition parties.  The "Khalyk Kenesy" is an association of 
political parties, NGOs, and independent labor unions established in 
June at the initiative of OSDP leader Zharmakhan Tuyakbay as an 
"alternative" to Kazakhstan's one-party parliament.  (NOTE:  Azat, 
the Communist Party, and the ruling Nur Otan party are not 
participating in the "Khalyk Kenesy."  END NOTE.)  Under the draft 
election law proposed by OSDP and Azat, electoral commissions at all 
levels would include representatives of all political parties, 
political parties would be permitted to run together in electoral 
coalitions, electronic voting would be eliminated, and equal 
conditions would be mandated for all candidates and parties during 
election campaigns, including equal access to the broadcast mass 
media.  The "Khalyk Kenesy" threatened that its member organizations 
would boycott future elections if the government and parliament 
ignore the joint OSDP-Azat proposal. 
 
AZAT'S PROPOSALS FOR THE FINANCIAL CRISIS 
 
3.  On October 21, Azat party leaders held a press conference to 
publicize the party's strategy for dealing with the global financial 
crisis.  Azat head Bulat Abilov claimed the $5 billion that the 
government has allocated from the National (Oil) Fund to capitalize 
the Samruk-Kazyna National Welfare Fund will be used to buy up 
shares of companies at inflated prices, to the benefit of President 
Nazarbayev's son-in-law Timur Kulibayev (who is Deputy Chairman of 
Samruk-Kazyna's Management Board) and other wealthy insiders. 
Abilov maintained that this money will be transferred overseas 
rather than flow back into the economy, doing nothing to alleviate 
the financial crisis.  He went on to lay out Azat's economic 
strategy:  use the funds to support pensioners, students, invalids, 
and low-paid government employees; renegotiate existing oil and gas 
contracts on terms more advantageous to Kazakhstan; and buy up 
shares of Kazakhstani companies in the extractive sector, such as 
KazakhMys, Ispat-Karmet, KazZinc and Eurasian Natural Resources 
Company.  Abilov demanded that Prime Minister Masimov resign because 
"the government has failed to cope with its duties; the economy is 
collapsing." 
 
HOUSING PROTESTS 
 
4.  On October 17, several dozen Almaty residents picketed the 
offices of KUAT -- one of Kazakhstan's largest construction 
companies -- demanding a meeting with KUAT President Oleg Nam.  The 
protestors said that Nam should resign his seat in the Almaty 
maslikhat (city council) and focus on his duties at KUAT.  They told 
the press that the company did not complete the construction of two 
apartment buildings and failed to hook up utilities to several 
others.  The group was received by a KUAT representative who assured 
them that the company would return their money invested into 
unfinished construction projects by the end of November. 
 
5.  On October 22, more than 100 Almaty residents who invested money 
in apartments that have not been completed gathered at the entrance 
of the Almaty city administration building demanding a meeting with 
Mayor Akhmetzhan Yesimov.  The protesters were holding placards with 
slogans such as "we will not permit 10 billion tenge allocated by 
the government to be embezzled" and "give us our apartments."  They 
demanded the transparent use of 10 billion tenge (approximately $83 
million) allocated to support the completion of construction 
projects in Almaty, including the publication of construction 
timetables and public control over the distribution of the funds. 
Deputy Mayor Serik Seydumanov received the protesters and promised 
 
ASTANA 00002153  002.2 OF 002 
 
 
to review their demands. 
 
6.  On October 23, several dozen Almaty residents who failed to meet 
their mortgage payments picketed Bank Turan Alem.  The group was 
protesting the fact that the
 bank started to auction off the 
properties of borrowers who failed to make their mortgage payments. 
They maintained that auctions in the absence of court rulings on 
foreclosure violate the constitution.  The protestors also wanted 
the bank to stop charging fees for late mortgage payments.   A bank 
official received representatives of the protest group and promised 
to examine every case individually.  According to the bank, 
approximately 2,000 of its mortgage borrowers are currently in 
arrears.  Civil society activist Aynur Kurmanov, head of the Talmas 
movement, asserted that mortgage borrowers face similar problems at 
every bank in Kazakhstan. 
 
HOAGLAND

Wikileaks

08ASTANA2152, KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, OCTOBER 12-25

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Reference ID Created Released Classification Origin
08ASTANA2152 2008-10-31 05:56 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9724
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2152/01 3050556
ZNR UUUUU ZZH
O 310556Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3698
INFO RUCNCIS/CIS COLLECTIVE 0751
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0150
RUEHKO/AMEMBASSY TOKYO 0860
RUEHIT/AMCONSUL ISTANBUL 0077
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2034
RUCNDT/USMISSION USUN NEW YORK 1983
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RHEBAAA/DEPT OF ENERGY WASHDC
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RUEAIIA/CIA WASHDC
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RHEHNSC/NSC WASHDC 0309
RUEKJCS/SECDEF WASHDC 0229
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 0860

UNCLAS SECTION 01 OF 02 ASTANA 002152 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
STATE PLEASE PASS USTDA FOR DAN STEIN, EXIM FOR GLAZER, OPIC FOR 
BALLINGER, USAID FOR EE PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
COMMERCE FOR 4231/ITA/MAC/MLONDON, 6110/ITA/TD/BI/RHALPERN 
 
E.O. 12958:  N/A 
TAGS: PGOV ECON EIND EAGR EPET EFIN KZ
SUBJECT:  KAZAKHSTAN:  ECONOMIC AND ENERGY UPDATE, OCTOBER 12-25 
 
ASTANA 00002152  001.2 OF 002 
 
 
1.  SUMMARY:  The information in this Kazakhstan economic and energy 
update is drawn primarily from the Kazakhstani press. 
 
-- Deposit Insurance Increased 
-- EU-Kazakhstan WTO Talks:  Update From Aitzhanova 
-- News From the Agricultural Sector 
--  Pipeline News 
-- K-WAC Ltd. To Design Facilities for Kashagan 
-- Samruk-Kazyna May Purchase Energy Assets in Europe 
-- New Oil Refinery in Aktobe 
-- Energy Statistics 
 
DEPOSIT INSURANCE INCREASED 
 
2.  The Kazakhstani government has raised the ceiling for bank 
deposit insurance from 700,000 tenge (approximately $5,833) per 
account to 5 million tenge (approximately $41,666).  According to 
"Khabar" television, 54% of accounts at Kazakhstani commercial banks 
hold deposits of less than 5 million tenge. 
 
EU-KAZAKHSTAN WTO TALKS:  UPDATE FROM AITZHANOVA 
 
3.  Kazakhstan's proposed export duty on minerals, energy transit, 
and financial services access are key outstanding issues in 
Kazakhstan's WTO accession talks with the European Union, the press 
reported on October 15.  According to Vice Minister of Industry and 
Trade Zhannar Aitzhanova, the EU opposes introduction of the export 
duty.  She also said that Kazakhstan is not yet ready to allow 
foreign banks and insurance companies to open branches in the 
country.  Nevertheless, Aitzhanova believes that Kazakhstan's WTO 
entry talks are nearing completion.  Kazakhstan has finalized 
bilateral negotiations with 21 of 25 countries. 
 
NEWS FROM THE AGRICULTURAL SECTOR 
 
4.  Agriculture Minister Kurishpayev is encouraging foreign 
investment in Kazakhstan's agricultural sector, Reuters reported on 
October 23.  Kurishpayev said that Kazakhstan is positioned to meet 
booming agricultural demand in the region.  According to official 
statistics, only 1.2 percent of the $76 billion in total foreign 
investment in Kazakhstan since 1993 has been in the agriculture 
sector. 
 
5.  A quota on sugar imports initially introduced in March of this 
year has been extended to July 1, 2009.  It had been set to expire 
on October 1. 
 
6.  According to the Tajik Chamber of Industry and Trade, Kazakhstan 
will resume wheat exports to Tajikistan.  Kazakhstani grain 
companies are ready to supply wheat within the framework of 
agreements reached during Tajik President Emonali Rahmon's visit to 
Kazakhstan in May 2008. 
 
PIPELINE NEWS 
 
7.  Nurtas Shmanov, Director General of KazTransOil, a KazMunayGas 
subsidiary, announced that the capacity of the Atyrau-Samara oil 
pipeline will be expanded to 17 million tons in 2009.  Separately, 
Russian Energy Minister Sergey Shmatko said that Kazakhstan is 
seriously studying the possibility of transporting oil through the 
Eastern Siberia-Pacific Ocean pipeline.  However, Kazakhstani 
Minister of Energy and Mineral Resources Sauat Mynbayev called this 
just "a hypothetical possibility," adding that actual oil volumes 
have not been discussed. 
 
8.  The "Interfax" wire service reported on October 13 that at a 
 
ASTANA 00002152  002.2 OF 002 
 
 
meeting with Prime Minister Masimov, China National Petroleum 
Corporation (CNPC) Director General Wang Dongjin said that the 
construction of the Kazakhstan-China gas pipeline might be completed 
ahead of schedule. 
 
K-WAC LTD. TO DESIGN FACILITIES FOR KASHAGAN 
 
9.  Agip KCO has chosen K-WAC Ltd., which is owned by Worley Parsons 
Europe Ltd (45%), CB&I UK Ltd. (25%), and Aker Engineering & 
Technology AS (30%), for front-end engineering and design services 
for Phase II of the Kashagan project. 
 
SAMRUK-KAZYNA MAY PURCHASE ENERGY ASSETS IN EUROPE 
 
10.  The press reported on October 22 that the newly-established 
Samruk-Kazyna National Welfare is considering buying energy 
infrastructure assets in Europe as part of the implementatio
n of the 
government's "Road to Europe" program. 
 
NEW OIL REFINERY IN AKTOBE 
 
11.  According to an October 22 "Khabar" television report, 
AktobeMunayGas plans to build an oil refinery in Aktobe with an 
annual processing capacity of 8 million tons of crude. 
 
ENERGY STATISTICS 
 
12.  According to the National Statistics Agency, from January to 
September, Kazakhstan produced 43.25 million tons of crude oil and 
24.49 billion cubic meters (bcm) of natural gas, an increase of 5.4% 
and 10.7%, respectively, over the same period in 2007.  From January 
to August, Kazakhstan exported 41.17 million tons of crude oil and 
gas condensate, valued at $30.78 billion, which represented a 0.6% 
decrease in export volume, but (because of higher prices) a 78% 
increase in export value over the same period in 2007.   From 
January to August, Kazakhstan exported 11.98 bcm of natural gas, 
valued at $709.4 million -- which constituted a 16.6% increase in 
volume and a 60.1% increase in value over January to August 2007. 
 
HOAGLAND 
1

Wikileaks

08ASTANA2148, KAZAKHSTAN: NUR OTAN DISCUSSES PARTY ACTIVITIES

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Reference ID Created Released Classification Origin
08ASTANA2148 2008-10-30 11:12 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO9025
OO RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHPW RUEHROV RUEHSR
DE RUEHTA #2148/01 3041112
ZNY CCCCC ZZH
O 301112Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3693
INFO RUCNCIS/CIS COLLECTIVE 0747
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0147
RUEHKO/AMEMBASSY TOKYO 0857
RUEHIT/AMCONSUL ISTANBUL 0074
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0306
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0226
RUEAIIA/CIA WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2031
RUCNDT/USMISSION USUN NEW YORK 1980
RUEHNO/USMISSION USNATO 2316
RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002148 
 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: DECL: 10/30/2018 
TAGS: PGOV PHUM PINR EAID SOCI KDEM KZ
SUBJECT: KAZAKHSTAN:  NUR OTAN DISCUSSES PARTY ACTIVITIES 
AND PLANS WITH THE AMBASSADOR 
 
Classified By: Ambassador Richard Hoagland, Reasons 1.4 (b) and (d) 
 
1. (SBU) SUMMARY:  During an October 29 meeting with the 
Ambassador, Nur Otan party First Deputy Chairman Darkhan 
Kaletayev explained that Nur Otan aims to become a party of 
"real deeds."  The party sees itself as a conduit between the 
public and government, helping to solve socio-economic and 
other problems.  Fighting corruption is also a Nur Otan 
focus.  Kaletayev described the opposition parties as 
patriotic rivals, not enemies.  He said that Nur Otan 
welcomes additional cooperation with USAID's political party 
training problem, but would like concrete proposals from the 
U.S. side.  He assured the Ambassador that Kazakhstan would 
implement its "principal" Madrid commitments.  END SUMMARY. 
 
"DOMINANT PARTY," WITH 850,000 MEMBERS 
 
2. (SBU) During an October 29 meeting with the Ambassador, 
Nur Otan party First Deputy Chairman Darkhan Kaletayev 
described Nur Otan as the country's "dominant party," with an 
"absolute majority" in parliament. (COMMENT:  "Absolute 
majority" is somewhat of an understatement, given that no 
other party holds a single parliamentary seat.  President 
Narazbayev is the Chairman of Nur Otan, but Kaletayev 
essentially runs the party's day-to-day operations.   END 
COMMENT.)  Nur Otan has 800,000 members and 8,500 party cells 
throughout the country.  Kaletayev explained that Nur Otan's 
aim is to become a party of "real deeds," not just words, and 
named further democratization, ensuring the country's 
prosperity, and overcoming the impact of the global financial 
crisis as top Nur Otan priorities. 
 
CONDUIT BETWEEN THE PUBLIC AND GOVERNMENT 
 
3. (SBU) Kaletayev detailed Nur Otan's role as a conduit 
between the public and government.  The party has "public 
reception" hours at its offices nationwide where citizens can 
register complaints about socio-economic and other problems. 
Nur Otan then presses the authorities to take action to 
resolve them.   Citizens come to the party for assistance 
because often local bureaucrats are inaccessible.  Most of 
the complaints are about water, roads, health care, 
education, housing, and telecommunications.  Nur Otan 
recently gathered detailed information about such problems in 
every settlement, and intends to turn the information over to 
the authorities at all levels of government.  Some problems, 
Kaletayev explained, cannot be solved at the local level, but 
rather only by the national government.  The party will set 
deadlines for solving problems, and if they are not resolved, 
will insist that explanations be given to the public.  Nur 
Otan will use "party control" mechanisms to force government 
action. 
 
4. (SBU) Kaletayev stressed the importance of Nur Otan's 
efforts to fight corruption.  The party is implementing a 
program called "Ten Blows Against Corruption."  On November 
7, Nur Otan is hosting an anti-corruption forum at its 
national headquarters which Nazarbayev will participate in. 
 
CHANNEL FOR THE OPPOSTION? 
 
5. (SBU) Kaletayev argued that Nur Otan can serve as a 
channel between the opposition and government.  He said he 
views opposition parties as political rivals, not as enemies. 
 "There are a lot of smart people in the opposition -- half 
of them came from the government originally -- and they are 
patriots," he stressed.  Nur Otan is willing to sit down with 
the opposition and use its access as the ruling party to pass 
the opposition's views to the government. 
 
 
ASTANA 00002148  002 OF 003 
 
 
PARLIAMENT OPEN TO OUTSIDE INPUT 
 
6. (SBU) The Ambassador asked about Nur Otan's role in 
drafting legislation.  Kaletayev explained that Nur Otan 
participates in legislative activities through its 
parliamentary faction, which adheres to tight party 
discipline.  The party also has an institute of 
parliamentarianism which has experts who analyze legislation. 
 Kaletayev described parliament as very open to input from 
civil society and all parties, pointing to the Public Council 
of the Majilis (the lower house of parliament) as a venue for 
dialogue. 
 
SEEKING CONCRETE PROPOSALS ON USAID COOPERATION 
 
7.  (SBU) The Ambassador noted that Nur Otan is partici
pating 
in USAID's political party training program, and asked 
Kaletayev about his impressions of the training.  He 
responded that the United States has a long history of 
political party building and thus important experience to 
share with Kazakhstan.  Nur Otan has good contacts with NDI 
and received a briefing from IRI on the results of its poll 
of political attitudes in Kazakhstan.  Kaletayev said that 
there are many avenues for further cooperation with USAID's 
program -- including on local self-government and on 
legislation dealing with political parties, the media, and 
corruption -- but he would like concrete proposals from the 
U.S. side. 
 
MADRID COMMITMENTS WILL BE IMPLEMENTED 
 
8. (SBU) The Ambassador stressed to Kaletayev the importance 
of Kazakhstan's implementation of its Madrid commitments on 
democratic reform.  This is yet another opportunity for 
Nazarbayev to demonstrate his leadership as an international 
statesman, he explained.  Kaletayev responded that the 
government's "Road to Europe" program provides a blueprint 
for implementation.  Discussion is ongoing regarding the 
details of the necessary legislation.  Kazakhstan will not 
meet international standards in all areas, but it will 
implement its "principal" commitments from Madrid, Kaletayev 
argued. 
 
BIO NOTES 
 
9. (U) Thirty-six year-old Darkhan Kaletayev was born in a 
village in East Kazakhstan oblast.  He is a graduate of East 
Kazakhstan University and the National Higher School of 
Government Administration.  Kaletayev has served in 
government positions for his entire professional career. 
During 1997-2002, he occupied various positions in the 
Ministry of Information.  During 2002-08, he worked in senior 
posts in the Presidential Administration, his last year as 
Deputy Chief.  He was appointed First Deputy Chairman of Nur 
Otan on October 13. 
 
9. (C) COMMENT:  While neither western-educated nor, as far 
as we could tell, English-speaking, Kaletayev (born 1972) 
nevertheless represents generational change at Nur Otan.  His 
predecessor, Adlybek Dzhaksybekov (born 1953), did not seem 
to have his heart in a position he ultimately held for less 
than a year.  In fact, Dzhaksybekov, a close Nazarbayev 
associate, appeared less interested in party work than in his 
outside pursuits, including producing a movie about the 2005 
Kazakhstani presidential election campaign based on his 
perspective as then Chief of the Presidential Administration. 
 In appointing Kaletayev, Nazarbayev presumedly believes he 
has found someone who will take party-building more 
seriously.  Nur Otan, not surprisingly, continues to model 
itself along the lines of the Soviet-era Communist Party, 
 
ASTANA 00002148  003 OF 003 
 
 
with the division between Nur Otan and the government a 
tenuous one, made more so by the fact that opposition parties 
are not represented in government at any level, save for 
holding a handful of seats in local legislatures.  Nur Otan's 
youth wing, Zhas Otan, organized celebrations on October 30 
to mark the 90th anniversary of the Komsomol, the youth wing 
of the Soviet Communist Party.  END COMMENT. 
HOAGLAND

Wikileaks

08ASTANA2147, KAZAKHSTAN: FM TAZHIN REAFFIRMS MADRID

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Reference ID Created Released Classification Origin
08ASTANA2147 2008-10-30 11:02 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO9011
OO RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHPW RUEHROV RUEHSR
DE RUEHTA #2147/01 3041102
ZNY CCCCC ZZH
O 301102Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3690
INFO RUCNCIS/CIS COLLECTIVE 0744
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0144
RUEHKO/AMEMBASSY TOKYO 0854
RUEHIT/AMCONSUL ISTANBUL 0071
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0303
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0223
RUEAIIA/CIA WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2028
RUCNDT/USMISSION USUN NEW YORK 1977
RUEHNO/USMISSION USNATO 2313
RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002147 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL, ISN, H 
 
E.O. 12958: DECL: 10/30/2018 
TAGS: PREL PGOV PHUM ETRD KDEM KNNP IZ AF KZ
SUBJECT: KAZAKHSTAN:  FM TAZHIN REAFFIRMS MADRID 
COMMITMENTS 
 
Classified By: Ambassador Richard Hoagland, Reasons 1.4 (b) and (d) 
 
1.  (C) SUMMARY:  During an October 29 meeting with the 
Ambassador, Foreign Minister Tazhin: 
 
-- reaffirmed Kazakhstan's commitment to fulfilling its 
Madrid commitments; 
 
-- made a case for building a more mature bilateral 
relationship by noting his government's desire to be released 
from the requirements of the Jackson-Vanik Amendment and 
Human Rights Certification, and its desire to have President 
Bush visit before he leaves office; 
 
-- restated Kazakhstan's continued interest in playing a more 
active role in Afghanistan, including through its 2010 OSCE 
chairmanship; 
 
-- predicted no surprises at the October 30 Shanghai 
Cooperation Organization's prime ministerial meeting in 
Astana; 
 
-- explained Prime Minister's Karim Masimov had postponed his 
planned visit to Kabul because of the global financial 
crisis; 
 
-- expressed pleasure at President Bush's letter of thanks to 
President Nazarbayev for Kazakhstan's just concluded 
2003-2008 contribution of troops to the coalition forces in 
Iraq; and 
 
-- took note when the Ambassador urged that parliament ratify 
the Cooperative Threat Reduction Umbrella Agreement by 
December 13.  END SUMMARY. 
 
MADRID COMMITMENTS 
 
2.  (C) During their initial business meeting following the 
Ambassador's presentation of credentials, the Ambassador 
reminded Foreign Minister Marat Tazhin of Washington's 
high-level attention to Kazakhstan fulfilling its 
OSCE-related Madrid commitments before the end of this 
calendar year.  He suggested successful fulfillment would 
enhance President Nursultan Nazarbayev's status as a 
statesman and would help reduce international criticism of 
Kazakhstan often seen in the mass media.  Tazhin said he 
agreed "100%, even 200%," and noted the required legislation 
is moving forward.  He said the government had already 
prepared a draft mass-media law and would present it to 
parliament "in the nearest time."  This law, which Tazhin had 
already signed off on, will ease registration requirements 
for media outlets, decrease the grounds under which the 
government can shut them down, and "eliminate other 
bureaucratic idiocies."  Tazhin assured the Ambassador draft 
election and political party laws would go to parliament in 
November or December.  All three laws will represent steps 
forward on liberalization, though will not go as far as he 
personally would like, Tazhin admitted.  He noted he himself 
is an adherent of "serious liberalization and broadening of 
civil society," which he believes is a strong guarantee of 
stability and national security.  He said, "A government that 
is too tightly controlled will eventually collapse."  He 
added that the general view in the Kazakhstani leadership is 
that the pace of liberalization has to be calibrated to the 
realities (both objective facts and political mentality) of 
the country.  In response to a question about the role of 
OSCE'S ODIHR in reviewing the draft legislation, Tazhin 
replied there has been regular contact and consultation. 
 
3.  (C) COMMENT:  Tazhin is one of the leading voices in the 
 
ASTANA 00002147  002 OF 003 
 
 
government of Kazakhstan for democratic progress toward 
Western standards -- but he is not the only voice.  Among the 
competing voices are those of the old guard from the former 
Soviet system as well as those susceptible to the Kremlin's 
noise about the danger of "color revolutions."  We probably 
should not expect 100% fulfillment of our expectations about 
the Madrid commitments, but we do need to be able to say that 
Kazakhstan has made a good-faith effort and has moved 
forward.  END COMMENT. 
 
TAZHIN'S THREE TALKING POINTS 
 
4.  (C) The foreign minister raised three points:  his 
government's desire to be released from the Jackson-Vanik 
Amendment and Human Rights Certification, and its desire to 
welcome a visit by President Bush before he leaves office. 
 
5.  (C) JACKSON-VANIK AMENDMENT.  Tazhin reminded the 
Ambassador that during a meeting on the margins of UNGA, he 
had raised with Secretary of State Rice Kazakhstan's strong 
inte
rest in "graduating" from the provisions of the 
Jackson-Vanik Amendment.  The Kazakhstan Embassy in 
Washington has initiated discussions with Congress.  Tazhin 
recognized that this is not within the State Department's 
direct purview, but asked for assistance from State in making 
Kazakhstan's case with the Hill.  The Ambassador explained 
that concluding a bilateral WTO accession agreement would go 
a long way toward removing the barriers to lifting 
Jackson-Vanik.  He reminded Tazhin a window of opportunity 
exists now for progress in the WTO accession negotiations and 
urged Kazakhstan to take advantage of this opening. 
 
6.  (C) HUMAN RIGHTS CERTIFICATION.  Tazhin said he had 
raised with the Secretary Kazakhstan's concerns about the 
annual human rights certification required under the Foreign 
Operations Appropriations Act -- specifically, that 
Kazakhstan believes this is not the way to treat a strategic 
partner.  The Secretary had promised to get back to him on 
the issue.  The Ambassador responded that the State 
Department as a rule has always opposed such legislative 
provisions and has done so in Kazakhstan's case.  He passed 
Tazhin a non-paper with the Department's view drawn from the 
talking points prepared for Secretary Rice's October 5 visit 
to Astana, and suggested that the Kazakhstani Embassy in 
Washington work to make its case with Congress and with 
non-governmental organizations. 
 
7.  (C) DESIRE FOR PRESIDENT BUSH TO VISIT.  Tazhin expressed 
Kazakhstan's strong interest in hosting a visit by President 
Bush before the end of his term.   He admitted this might not 
be realistic, but reminded the Ambassador that in August he 
had heard rumors about the possibility of a "technical 
layover" for President Bush in Kazakhstan in conjunction with 
his trip to the Beijing Olympics.  A presidential visit, 
Tazhin stressed, would be very important politically and 
strategically.   He suggested that it could be done in 
conjunction with a trip to another country in the region, 
such as Afghanistan or India.  Tazhin said he understands 
that a new U.S. president would be unlikely to visit 
Kazakhstan during his first year in office.  He noted that 
Chinese President Hu Jintao visits every two years, and that 
there are frequent visits by the Russian leadership.  The 
Ambassador promised to relay to Washington the request for a 
presidential visit. 
 
8.  (C) COMMENT:  We fully agree with the value of a U.S. 
presidential visit to Kazakhstan, even in the final days of 
this Administration.  Should President Bush make a farewell 
visit to U.S. troops in Afghanistan, we strongly recommend he 
make a short stop in Astana.  END COMMENT. 
 
ASTANA 00002147  003 OF 003 
 
 
 
OTHER BUSINESS 
 
9.  (C) SHANGHAI COOPERATION ORGANIZATION.  The Ambassador 
noted Astana would be hosting a meeting of Shanghai 
Cooperation Organization (SCO) prime ministers on October 30 
and inquired about the expected outcomes.  Tazhin said that 
there would be nothing of great significance and no important 
decisions would be taken, especially since the issues for 
this meeting had been affirmed at the recent Bishkek 
ministerial.  Further, the organization's general direction 
had been set by the SCO Summit in Dushanbe.  He stressed to 
the Ambassador that despite Western concerns, the SCO is 
principally an economic organization -- though of course 
there are political aspects too.  Tazhin expected that on the 
margins of the SCO meeting, Kazakhstan and China would sign 
agreements on water issues connected to trans-boundary 
rivers. 
 
10.  (C) AFGHANISTAN.  Tazhin explained that Kazakhstan 
continues to be interested in playing a more active role in 
Afghanistan, including through its 2010 OSCE chairmanship. 
The Ambassador said that the United States welcomes 
additional assistance from all our partners, and asked why 
Prime Minister Masimov had canceled his planned late-October 
visit to Kabul.  Tazhin replied that Nazarbayev had told 
Masimov that he had to stay in Kazakhstan to deal with the 
government's response to the global financial crisis. 
Masimov also had to postpone a planned trip to Malaysia.  In 
any event, the Foreign Ministry had sent Masimov 
recommendations for his 2009 travel which included a trip to 
Afghanistan. 
 
11.  (C) IRAQ.  The Ambassador handed Tazhin President Bush's 
letter to President Nazarbayev thanking him for Kazakhstan's 
troop contribution in Iraq.  Clearly pleased, Tazhin promised 
to deliver it personally to Nazarbayev the next morning, 
October 30.  He remarked that despite negative reporting in 
the mass media, significant progress had been made in Iraq, 
and the situation is much better than it had been a year or 
two ago. 
 
12.  (C) CTR AGREEMENT.  Tazhin expressed satisfaction that 
President Nazarbayev had finally signed a decree on extending 
the Cooperative Threat Reduction (CTR) umbrella agreement, as 
a result of which the agreement will be sent to parliament 
for ratification.  He explained that he had pressed for this 
action for some time, and that the hold up had resulted from 
the fact that there was nothing in the original 1992 CTR 
agreement about a biological threat-reduction program.  When 
such a program was established later and put under the 
agreement, nobody raised concerns within the Kazakhstani 
government.  However, this year, the Kazakhstanis finally saw 
that this was a problem for them.  The Ambassador noted that 
DOD/OSD CTR advisor Andy Weber had had productive October 
21-25 meetings in Astana with senior-level officials.  He 
said that the U.S. government strongly urged Kazakhstan to 
ratify the agreement by December 13, the 15th anniversary of 
the CTR program in Kazakhstan, and likewise urged expeditious 
movement on other pressing counter-proliferation issues. 
HOAGLAND

Wikileaks

08ASTANA2144, KAZAKHSTAN: BP SUPPORTS CPC EXPANSION – AT THE RIGHT

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Reference ID Created Released Classification Origin
08ASTANA2144 2008-10-30 08:48 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8906
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2144/01 3040848
ZNR UUUUU ZZH
O 300848Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3686
INFO RUCNCIS/CIS COLLECTIVE 0742
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0142
RUEHKO/AMEMBASSY TOKYO 0852
RUEHIT/AMCONSUL ISTANBUL 0069
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2026
RUCNDT/USMISSION USUN NEW YORK 1975
RUEHNO/USMISSION USNATO 2311
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0301
RUEKJCS/SECDEF WASHDC 0221
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002144 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
 
PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV EPET EINV KZ
SUBJECT:  KAZAKHSTAN:  BP SUPPORTS CPC EXPANSION - AT THE RIGHT 
PRICE 
 
REF:  ASTANA 1672 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY.  On October 29, Jonathan Popper of British 
Petroleum's (BP) Exploration Operating Company, briefed Energy 
Officer on the status of negotiations to expand the capacity of the 
Caspian Pipeline Consortium (CPC) pipeline from Atyrau to 
Novorossiysk.  He confirmed that BP is actively pursuing an exit 
strategy, identified several remaining legal issues, and expressed 
optimism that a deal would be reached before the end of 2008.  END 
SUMMARY. 
 
DON'T BELIEVE EVERYTHING YOU READ IN THE PAPERS 
 
3.  (SBU) Popper said that, despite press reports to the contrary, 
BP is "actively pursing a strategy of exiting CPC" and continues to 
negotiate with other CPC partners to sell its 6% share in the 
consortium, which it holds through its interests in LukArco, a 
Lukoil/BP joint venture, and Kazakhstan Pipeline Ventures (KPV) LLC, 
a KazMunaiGas/BP joint venture.  (NOTE:  Current CPC shareholders 
are Transneft - 24%; KazMunaiGas - 19%; Oman - 7%; Chevron - 15%; 
LukArco - 12.5%; Mobil - 7.5%; Rosneft - 7.5%; Agip - 2%; British 
Gas - 2%; Oryx Caspian Pipeline LLC - 1.75%; and Kazakhstan Pipeline 
Ventures LLC - 1.75%.  END NOTE). Popper emphasized that BP is not 
opposed to CPC expansion.  In fact, he said, two weeks ago, BP voted 
in favor of a resolution to spend $100 million on expansion 
engineering.  However, BP must "secure our exit" before it will sign 
a Memorandum of Understanding (MOU) on expansion. 
 
IN SEARCH OF A SECURE EXIT 
 
4.  (SBU) Popper suggested that BP would be willing to sign the MOU 
on expansion even before it completes the sale of its interests in 
KPV and LukArco, provided they receive certain legal guarantees.  In 
particular, BP wants a commitment that no one will block their exit 
and that CPC will release them from what they consider to be onerous 
financial guarantees.  Specifically, BP is pressing for the 
following legally binding agreements: 
 
-- Agreement with KMG to release them from the KPV joint venture; 
 
-- Agreement with Lukoil to release them from the LukArco joint 
venture; 
 
-- Agreement with CPC shareholders to (a) let BP sell its shares to 
Lukoil and KMG and (b) release them from the guarantees intrinsic to 
those joint venture agreements; 
 
-- Agreement with Tengizchevroil (TCO) partners to let BP sell its 
shares to one or more international oil and gas companies (as a 
contingency, should the share sales to Lukoil and KMG fail); and 
 
-- Agreements with the Republic of Kazakhstan to exit CPC and TCO. 
 
5.  (SBU) Popper reported "pretty good progress" in securing all of 
the above agreements and expressed optimism that negotiations could 
be concluded by the end of 2008, if not sooner.  BP teams have been 
meeting each week with both KMG and Lukoil to negotiate a sales 
price and Popper said that these negotiations are making progress. 
He also stated that BP has had "strong support" from both the 
Governments of Russia and Kazakhstan throughout these negotiations. 
 
U.S. PARTNERS PRESENT MORE OF A CHALLENGE 
 
6.  (SBU) According to Popper, a much bigger challenge has been 
obtaining the consent of Chevron and ExxonMobil.  In September, BP 
 
ASTANA 00002144  002 OF 002 
 
 
sent them and all other CPC shareholders a draft agreement that 
would allow BP to sell its interests in CPC to Lukoil and KMG. 
Surprisingly, BP received negative responses from both Chevron and 
ExxonMobil, neither of which was prepared to offer BP a firm, 
written approval.  However, late last week, BP received a 
counter-proposal, which does not satisfy all of their needs, but did 
show a good faith effort to reach an agreement.  As Popper put it, 
"At least we now know that Chevron and Exxon-Mobil accept the 
principle of a legally binding agreement." 
 
7.  (SBU) COMMENT.  Popper was positive and businesslike in his tone 
and outlook.  Since BP owns only a minor share in upstream oil 
assets (approximately 3% of TCO, through the Lukarco joint venture), 
it makes sense for them to exit CPC as expeditiously as possible so 
as not to complicate an expansion which is not in their commercial 
interests.  At this point, BP is not asking for the U.S. Government 

to facilitate negotiations or take sides in the matter.  BP does, 
however, seem eager to provide Washington with its perspective on 
negotiations, perhaps to counterbalance what it perceives as biased 
information from U.S. partners in the consortium.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2127, KAZAKHSTAN: OPTIMISM IN EAST KAZAKHSTAN OBLAST

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2127 2008-10-28 09:07 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6421
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2127/01 3020907
ZNR UUUUU ZZH
O 280907Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3670
INFO RUCNCIS/CIS COLLECTIVE 0740
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0140
RUEHKO/AMEMBASSY TOKYO 0850
RUEHIT/AMCONSUL ISTANBUL 0067
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0298
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0218
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2024
RUCNDT/USMISSION USUN NEW YORK 1973
RUEHNO/USMISSION USNATO 2309
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 002127 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, G/TIP 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON EINV KWMN KCRM CH KZ
SUBJECT: KAZAKHSTAN:  OPTIMISM IN EAST KAZAKHSTAN OBLAST 
 
REF: ASTANA 1867 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  Poloff visited Ust-Kamenogorsk, the 
capital of East Kazakhstan oblast, September 10-13.  In 
addition to attending a Global Initiative to Combat Nuclear 
Terrorism exercise (see reftel), poloff also conducted a 
series of meetings with representatives of industry, 
educational institutions, and non-governmental organizations. 
 East Kazakhstan oblast has a strong industrial base, 
particularly in metallurgy and mining.  While per capital 
income in East Kazakhstan is below the national average, 
poloff's interlocutors expressed satisfaction with local 
economic conditions.   Two NGO representatives described good 
cooperation with local authorities on trafficking in persons 
issues.   Though the oblast borders China, there was no 
evidence of a significant Chinese presence in 
Ust-Kamenogorsk.  END SUMMARY. 
 
STRONG INDUSTRIAL BASE 
 
3. (U) East Kazakhstan oblast is located in Kazakhstan's 
northeastern corner, more than 1,000 miles from Astana.  The 
oblast, which borders both Russia and China, is Kazakhstan's 
third largest in both territory and population.  In contrast 
to Kazakhstan's western oblasts, East Kazakhstan has no major 
hydrocarbon deposits, but it does have a well-developed 
industrial base.   Industry, especially non-ferrous 
metallurgy and mining, dominates the oblast's economy, 
accounting for 31.2% of its GDP.  The once top-secret Ulba 
Metallurgical Plant, which currently produces uranium, 
beryllium, and tantalum byproducts, is the oblast's most 
well-known industrial concern (see septel).  Kazzinc, a 
mining conglomerate, is a second notable East Kazakhstan 
enterprise.  The Asia Auto Joint Stock Company has invested 
$2.15 million in East Kazakhstan to begin the first phase of 
a project to assemble up to 9,000 General Motors automobiles 
per year. 
 
4. (U) East Kazakhstan's most famous local product is honey. 
While in Ust-Kamenogorsk, poloff stopped into a honey store, 
where prices ranged from $2 for 200 gram bottles with 
run-of-the-mill honey to $40 for 1000 gram wooden containers 
with specialty honey.  The store also sold elaborately 
packaged, honey-infused medicinal products, some designed 
"for men" and others "for women," which ranged in price from 
$40 to over $120 per one liter bottle.  Several local 
enterprises have established joint ventures with Chinese and 
South Korean firms to export honey products to Asian markets, 
the honey store's salesperson explained to poloff. 
 
UPBEAT ON ECONOMIC OPPORTUNITIES 
 
5.  (SBU) According to Kazakhstani government statistics, per 
capital GDP in East Kazakhstan oblast is $4,464, somewhat 
below the national average of $6,870.  Despite these numbers, 
poloff's various interlocutors in Ust-Kamenogorsk without 
exception expressed satisfaction with the current economic 
situation.  Managers from the Ulba Metallurgical Plant and 
Eastern Mining Institute, as well as students from the 
Kazakh-American Free University, all said they were 
optimistic about opportunities for economic development, 
employment, and career advancement in East Kazakhstan (see 
septels). 
 
NGOS REPORT GOOD COOPERATION WITH LOCAL AUTHORITIES 
 
6.  (SBU) NGO representatives Nazigul Akhmetkaliyeva and 
Yulia Natarova explained to poloff that they have had good 
 
ASTANA 00002127  002 OF 002 
 
 
cooperation with local authorities.  The two run NGOs which 
provide assistance to victims of trafficking in persons and 
legal consultation services on a number of issues.   The 
anti-trafficking NGO operates an information hot-line, 
provides training to those who assist trafficking victims 
(including police and lawyers), and conducts public education 
campaigns.  Akhmetkaliyeva said that local authorities even 
allowed her NGO to conduct training at government-run 
orphanages.  She described other examples of successful 
cooperation with the authorities on specific trafficking 
cases, including repatriating and rehabilitating a group of 
Kazakhstani women who had been trafficked to the UAE, 
returning a young man who had been a
 victim of forced labor 
in Kazakhstan to Russia, and returning several 
sex-trafficking victims from Kazakhstan back to Uzbekistan. 
According to Akhmetkaliyeva, local authorities 
rendered various types of assistance, from helping to 
coordinate the repatriations with other government entities 
to providing shelter and financial support to victims. 
Akhmetkaliyeva noted that local authorities even provided her 
with transport to travel to neighboring Pavlodar oblast to 
assist with a case that occurred there.  Akhmetkaliyeva 
praised East Kazakhstan officials for their willingness to 
confront, rather than try to conceal, trafficking problems. 
Both Akhmetkaliyeva and Natarova contrasted the good 
cooperation of East Kazakhstan authorities with reports they 
have heard that the authorities in Kazakhstan's southern and 
western regions are less constructive. 
 
OPTIMISM ABOUT RELATIONS WITH CHINA 
 
7.  (SBU) Despite the fact that East Kazakhstan oblast shares 
a long border with China, poloff saw surprisingly few visible 
signs of Chinese influence in Ust-Kamenogorsk.  Local 
residents told poloff that there is a "Chinese bazaar" on 
Saturdays, and that local grocery stores stocked more Chinese 
products than in Kazakhstan's capital, Astana, but there were 
no signs of a large Chinese trader or migrant worker 
community.  In addition, Akhmetkaliyeva said that her 
anti-trafficking NGO had dealt with just one or two cases of 
trafficking across the Kazakhstani-Chinese border, which she 
attributed to the fact that the border between Kazakhstan and 
China remains heavily fortified. 
HOAGLAND

Wikileaks

08ASTANA2126, KAZAKHSTAN: ULBA METALLURGICAL PLANT SECURE AND

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Reference ID Created Released Classification Origin
08ASTANA2126 2008-10-28 09:07 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6418
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2126/01 3020907
ZNR UUUUU ZZH
O 280907Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3668
INFO RUCNCIS/CIS COLLECTIVE 0738
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0138
RUEHKO/AMEMBASSY TOKYO 0848
RUEHIT/AMCONSUL ISTANBUL 0065
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0296
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0216
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2022
RUCNDT/USMISSION USUN NEW YORK 1971
RUEHNO/USMISSION USNATO 2307
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 002126 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, ISN, H FOR SENATOR RICHARD LUGAR 
 
E.O. 12958: N/A 
TAGS: PGOV PINR ENRG EINV OREP KNNP KZ
SUBJECT: KAZAKHSTAN:  ULBA METALLURGICAL PLANT SECURE AND 
SUCCESSFUL 
 
REF: ASTANA 1867 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Poloff met on September 10 in 
Ust-Kamenogorsk with several officials from the Ulba 
Metallurgical Plant, Kazakhstan's leading uranium production 
enterprise, to discuss the company's business plans.  Ulba is 
trying to increase its international cooperation, especially 
with Russia, Japan, and China.  Ulba's management also 
remains focused on maintaining the safety of their 
highly-secure facility.  END SUMMARY. 
 
FROM TOP SECRET TO ISO-CERTIFIED 
 
3.  (SBU) Located in Ust-Kamenogorsk, in East Kazakhstan 
oblast, the Ulba Metallurgical Plant -- originally a 
top-secret Soviet uranium production facility -- is currently 
one of the world's largest producers of fuel for nuclear 
power plants.  In addition to uranium, the plant also 
produces beryllium and tantalum byproducts.  Ulba advertises 
that its facility was certified in 1999 by General Electric 
to supply uranium dioxide ceramic powder to the U.S. market 
and was ISO certified in 2000.  Ulba maintains that since 
leading global companies such as General Electric, 
Westinghouse, AREVA, NFI, and MNF certify its uranium dioxide 
powders and fuel pellets, its products are among the highest 
quality in the world.  Ulba invested $4 million over the last 
four years to develop lower-cost and more effective uranium 
production techniques.  Ulba, which is one of the largest 
enterprises in the world capable of processing a full 
production-cycle of beryllium and tantalum, also announced 
plans to begin a five-year $20 million investment program to 
improve its tantalum production line. 
 
SEEKING MORE COOPERATION WITH RUSSIA, CHINA, AND JAPAN 
 
4.  (SBU) Poloff met on September 10 with two Ulba officials 
and one from Kazatomprom, majority owner of Ulba, to discuss 
Ulba's role in Kazakhstan's efforts to become a leading 
producer of uranium products.  The meeting took place on the 
margins of a Global Initiative (GI) exercise conducted at 
Ulba (see reftel).  Kazatomprom Deputy Security Director 
Victor Pshenichniy, Ulba Security Director Roman Nadtochniy, 
and Ulba Nuclear Materials Control and Accounting Director 
Yevgeniy Yasko underlined to poloff that Ulba has been very 
successful commercially and plans to continue to grow its 
scope of business.  The three officials emphasized that Ulba 
is seeking cooperation with international partners, 
especially with Russia, China, and Japan. 
 
5.  (SBU) Pshenichniy reminded poloff that Kazakhstan does 
not currently enrich uranium, despite the fact that the 
country has some of the world's richest deposits of uranium. 
Thus, while Ulba produced highly enriched uranium (HEU) 
during the Soviet period, the bulk of the plant's current 
production involves turning lowly enriched uranium (LEU), 
imported into Kazakhstan from Russia, into fuel pellets for 
nuclear power facilities.  The Ulba and Kazatomprom 
representatives hinted that they hoped cooperation with 
Russia would open up new business opportunities, but did not 
clarify whether this would take the form of more LEU fuel 
pellet production or production of other uranium products. 
(NOTE:  Kazatomprom, majority owner of Ulba, is a partner in 
two uranium enrichment projects with Russia, both located in 
Angarsk, Russia:  the International Uranium Enrichment Center 
and the Russian-Kazakh Uranium Enrichment Center.  Analysts 
suggest that Kazatomprom may gain added value for its uranium 
exports from this cooperation.  Russia, on the other hand, 
 
ASTANA 00002126  002 OF 002 
 
 
would like to gain guaranteed access to Kazakhstani uranium 
deposits, which are the second largest in the world.  END 
NOTE.)  Other areas of Ulba's cooperation with Russia include 
the production of high-precision equipment through Ulba 
subsidiary Mashzavod LLP and the production of hydrofluoric 
acid through Ulba Fluorine. 
 
6.  (SBU) Regarding cooperation with China and Japan, Ulba 
has a  Chinese joint venture called Yingtan Ulba Shine Metal 
Materials Company Ltd., and also sells aluminium-beryllium 
master alloys through its subsidiary, Ulba-China Company Ltd. &#x0
00A; On its website, Ulba advertises its cooperation with 
Japanese companies NFI and MNF, as well as with General 
Electric Japan Ltd. 
 
PLANT REMAINS SECURE 
 
7.  (SBU) All three officials emphasized that Ulba's main 
achievement has been avoiding any nuclear smuggling incidents 
as a result of its excellent physical security and accounting 
procedures.  IAEA inspectors conduct a thorough annual 
inspection of the plant, especially the uranium production 
process.  Poloff personally observed that the Ulba facility 
was, in fact, shut-down, ostensibly for an IAEA inspection, 
during the GI exercise. 
 
HOPES FOR NUCLEAR COUNTER-TERRORISM CENTER 
 
8.  (SBU) Pshenichniy, an ethnic Russian with a Ministry of 
Defense background who has over 17 years of experience in the 
nuclear security field, stated that he is deeply worried 
about the potential for nuclear terrorism and that his goal 
is to establish a nuclear counter-terrorism center in 
Kazakhstan before he retires.  For detailed information on 
Ulba's security, Pshenichniy occasionally deferred to Yasko, 
a "rising star" within Ulba's bureaucracy.  Yasko, an ethnic 
Russian who spoke excellent English, had previously been to 
the United States on a training program for several months. 
Yasko was very willing to talk about Ulba's prospects with 
poloff, and expressed genuine appreciation for the Nunn-Lugar 
Cooperative Threat Program, explaining that much of Ulba's 
state-of-the-art security system is based on U.S. equipment 
provided through the program. 
HOAGLAND

Wikileaks

08ASTANA2124, KAZAKHSTAN: UST-KAMENOGORSK,S EASTERN MINING

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Reference ID Created Released Classification Origin
08ASTANA2124 2008-10-28 08:32 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6381
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2124/01 3020832
ZNR UUUUU ZZH
O 280832Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3666
INFO RUCNCIS/CIS COLLECTIVE 0736
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0136
RUEHKO/AMEMBASSY TOKYO 0846
RUEHIT/AMCONSUL ISTANBUL 0063
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0294
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0214
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2020
RUCNDT/USMISSION USUN NEW YORK 1969
RUEHNO/USMISSION USNATO 2305
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 002124 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: ECON EMIN BTIO TNGD KZ
SUBJECT: KAZAKHSTAN:  UST-KAMENOGORSK,S EASTERN MINING 
INSTITUTE SEEKS ADDITIONAL INTERNATIONAL COOPERATION 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Poloff met on September 10 in 
Ust-Kamenogorsk with the Director of the Eastern Mining 
Institute, a largely self-financing research entity that had 
been part of a mining conglomerate during the Soviet era.  He 
discussed specific projects with international partners from 
Canada, South America, and Europe.  Eastern Mining's Director 
believes cooperation with Russia, Japan, and China is most 
critical to the Institute's future, but also expressed 
interest in expanding cooperation with U.S. enterprises.  END 
SUMMARY. 
 
OFF THE GOVERNMENT DOLE 
 
3.  (SBU)  Poloff met on September 10 in Ust-Kamenogorsk with 
Eastern Mining Institute Director Nikolay Ushakov, along with 
two of his deputy directors, Aleksandr Ananin and Viktor 
Shumsky.  The Eastern Mining Institute was formerly a 
research branch of a large Soviet mining conglomerate which 
encompassed mining concern Kazzinc and three other research 
institutes.  The Institute is now a largely self-financing, 
quasi-government entity with 250 employees.   According to 
Ushakov, direct government funding currently accounts for 
only a small percentage of Eastern Mining's budget; the 
Institute thus supports itself through the sale of its 
research, and from revenue streams from patents and 
joint-venture operations. 
 
NOSTALGIA FOR THE SOVIET ERA REMAINS 
 
4.  (SBU) Ushakov, who has been with the Institute for 37 
years, was clearly nostalgic for the reputation and network 
of connections that the Institute had enjoyed during the 
Soviet period.  He still has a map of the Institute's 
Soviet-era campus on his wall, and insisted on showing poloff 
which facilities the Institute "lost" after the USSR's 
collapse.  Ushakov pointed out that the remaining, smaller 
facilities were being thoroughly remodeled.  (NOTE:  While 
the Institute's facilities appeared to be adequate, they 
paled in comparison with the much more modern administrative 
buildings of Ust-Kamenogorsk's Ulba Metallurgical Plant, 
reported septel.  END NOTE.)  Ushakov said that he 
nevertheless welcomed the broadening of opportunities for 
research that the post-Soviet period provided.  He was 
bullish about the future, noting that Eastern Mining had 
successfully established a large variety of remunerative 
international joint ventures. 
 
GLOBALIZATION OPENS UP NEW HORIZONS 
 
5.  (SBU)  Ushakov reminded poloff that Kazakhstan has 
particularly rich deposits of aluminum, cadmium, gold, lead, 
nickel, and zinc.  Eastern Mining has been at the forefront 
of research in extraction techniques for these metals, for 
instance, in developing a technology for treating low-grade 
zinc.  Ushakov said that Eastern Mining is currently working 
intensively on hydrometry-related research, and is interested 
in U.S. experience in this field.  He noted that Deputy 
Director Shumsky's research has been translated into English. 
 Deputy Director Ananin mentioned that the institute was 
involved in successful projects in Bolivia, Canada, Germany, 
and Italy.  Ushakov explained that Eastern Mining has also 
cooperated with Kyrgyzstan on gold-extraction projects. 
 
LOOKING EAST TOWARD JAPAN ... 
 
6. (SBU) Despite good cooperation with countries throughout 
 
ASTANA 00002124  002 OF 002 
 
 
Europe and the Americas, Ushakov believes that Eastern Mining 
Institute's future lies primarily with Russia, Japan, and 
China.  Ushakov pointed out that many potential Russian 
partners had once been part of the same Soviet mining network 
as the Institute.  "Eastern Mining has a broad network of 
contacts with Russian firms and Russian partners pay 
attention to us," Ushakov explained.  Ushakov also discussed 
a very successful pilot program with Japan.  The Japanese, 
Ushakov related, had come to him with a proposal to cooperate 
on a "very specific technical issue," after having discovered 
that only two such projects had been carried out successfully 
before, one in Peru and the other in Kazakhstan.  Ushakov 
reported that the project yielded excellent results and 
"solid money," although he expressed some disappointment that 
it had not been larger.  He nevertheless hoped
 that project 
would lead to more cooperation with Japan. 
 
... AS WELL AS CHINA 
 
7. (SBU) Ushakov was particularly enthusiastic about the 
prospects for cooperation with China.  He explained that 
countries such as Canada, Germany, and the United States 
already have mature mining industries, and are not as 
interested as China is in expanding their mining operations. 
Consumption of mineral resources in China is currently much 
greater than production.  For example, China is one of the 
world's largest lead producers, but still needs to import 
lead because of high domestic demand.   Zinc, which is used 
extensively in construction, is another metal in great demand 
in China.  Ushakov said that last year he had met with 
Chinese officials and entrepreneurs who were preparing to 
build a new zinc factory.  Eastern Mining expects to sign a 
cooperative agreement with them by the end of 2008.  He noted 
that Eastern Mining has previously carried out successful 
joint projects with the Chinese University of Mining and 
Technology, the China Mining Institute, and the Chinese 
mining concern China Metallurgical Group. (NOTE:  China 
Metallurgical Group was part of a consortium with Jiangxi 
Copper that recently won an $808 million tender for 
Afghanistan's Aynak copper mine, beating out Kazakhstani 
copper giant KazakhMys.  END NOTE.) 
 
LOOKING FOR MORE U.S. PARTNERS 
 
8.  (SBU)  Eastern Mining is also interested in greater 
cooperation with the United States.  Ushakov mentioned that 
representatives of Canada-based Ivanhoe Mines, which is 
headed by American billionaire Robert Friedland, had visited 
Eastern Mining in conjunction with the development of gold 
deposits approximately 80 kilometers from Ust-Kamenogorsk. 
Ushakov recounted that on his last trip to the United States, 
he had met with representatives of U.S.-based FFE Minerals 
and successfully confirmed for them the results of a test 
Eastern Mining Institute had conducted.  Ushakov said he had 
made a presentation on a cutting-edge Eastern Mining project 
at an exhibition in Las Vegas, but the presentation failed to 
secure any new work.  Ushakov lamented that the Institute's 
location in Kazakhstan's remote far-eastern corner limits 
accessibility for visitors.  He complained that U.S. trade 
delegations visit Astana and Almaty, but not Ust-Kamenogorsk, 
and requested U.S. government assistance in finding 
additional American partners interested in cooperating with 
Eastern Mining Institute. 
HOAGLAND

Wikileaks

08ASTANA2123, KAZAKHSTAN: KAZAKH-AMERICAN FREE UNIVERSITY

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Reference ID Created Released Classification Origin
08ASTANA2123 2008-10-28 08:29 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6377
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2123/01 3020829
ZNR UUUUU ZZH
O 280829Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3664
INFO RUCNCIS/CIS COLLECTIVE 0734
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0134
RUEHKO/AMEMBASSY TOKYO 0844
RUEHIT/AMCONSUL ISTANBUL 0061
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0292
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0212
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 2018
RUCNDT/USMISSION USUN NEW YORK 1967
RUEHNO/USMISSION USNATO 2303
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 02 ASTANA 002123 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD 
 
E.O. 12958: N/A 
TAGS: SOCI SCUL KZ
SUBJECT: KAZAKHSTAN:  KAZAKH-AMERICAN FREE UNIVERSITY 
PROMOTES AMERICAN VALUES IN UST-KAMENOGORSK 
 
1.  SUMMARY.  Poloff met in Ust-Kamenogorsk on September 10 
with administrators, faculty, and students from the 
Kazakh-American Free University (KAFU).  KAFU President 
Yerezhep Mambetkaziyev gave thanks for the U.S. government's 
support for his university.  KAFU students expressed 
satisfaction with the high quality of education at KAFU and 
the opportunities the university provides for internships and 
study in the United States.  KAFU promotes civic leadership 
and volunteerism through required community projects.  END 
SUMMARY. 
 
KAZAKH-AMERICAN FREE UNIVERSITY THANKFUL FOR U.S. SUPPORT 
 
2.  Poloff met on September 10 in Ust-Kamenogorsk with 
administrators, faculty, and students from the 
Kazakh-American Free University (KAFU).  KAFU is fully 
privately-funded, and offers degrees in business, law, and 
information systems.  The university, which has approximately 
3000 students, is located in a new building.  KAFU President 
Yerezhep Mambetkaziyev is a former Minister of Education and 
reportedly a close friend of President Nazarabyev. 
Nazarbayev is an honorary professor at KAFU and presented 
diplomas to its first graduating class.  Mambetkaziyev 
enthusiastically described to poloff the history of the 
school and his dream of providing an educational bridge for 
Kazakhstani students to study in America.   He thanked former 
U.S. Ambassador to Kazakhstan John Ordway, the U.S. Embassy 
in Astana, and the American Corner in Ust-Kamenogorsk for 
their assistance to KAFU and expressed a wish that the 
Ambassador visit the university on his first trip to 
Ust-Kamenogorsk. 
 
STUDENTS OPTIMISTIC ABOUT JOB MARKET 
 
3.  Poloff met with four KAFU students who had been selected 
by the university to attend Mambetkaziyev's briefing, 
interacting informally with them without university officials 
present.  The students all spoke excellent English, and had 
resided in the United States on short exchanges programs 
arranged by the school and its primary American partner 
institutions, the Marshall Christensen Foundation and 
Northwest Nazarene College of Idaho.  One student received a 
scholarship to KAFU, while the others are funded by their 
families.  One is studying business and had done a U.S. 
internship at Intel, another is studying law and had done a 
U.S. internship at a center for juvenile law, and the 
remaining two are studying business, and have done 
internships in U.S. banks.  All the students told poloff that 
they were confident that their KAFU education would enable 
them to find good jobs.   The students said that through the 
university they have met KAFU alumni who had found good 
positions.  (NOTE: In his briefing, Mambetkaziyev emphasized 
that KAFU alumni work in many leading private companies and 
in various Kazakhstani government agencies, as well as in 
foreign embassies in Astana as locally-employed staff.  He 
particularly noted that one alumna had worked at the U.S. 
Embassy in Astana.  END NOTE.) 
 
STUDENTS PRAISE UNIVERSITY FOR ITS STRONG PROGRAMS 
 
4.  The KAFU students highlighted the university's intensive 
English-language education, exchange opportunities, and the 
KAFU leadership program as the fundamentals of KAFU's 
high-quality education.  KAFU students that choose to 
participate in its rigorous "American program" typically 
spend one year in English preparatory classes and 
subsequently take most of their required classes in English. 
The school employs several foreign faculty members to teach 
year-round, including four American teachers that poloff met 
during Mambetkaziyev's briefing.  As many as 40 foreign 
 
ASTANA 00002123  002 OF 002 
 
 
faculty members also teach at the school every year on 
rotational exchanges from partner institutions abroad, though 
many stay only for brief periods of just one month.   The 
KAFU students also praised the fact that the intensive 
English-language coursework is typically followed by 
opportunities to participate in academic exchanges and 
internships in the United States.  Scholarships are available 
for students who do not have access to sufficient independent 
funding. 
 
5.  KAFU claims to represent the best of American values, 
particularly the concepts of civic leadership and 
volunteerism that contribute to a strong civil society.  Each 
student is required to design his own community project -- 
for example, engaging fellow students to help build houses 
for the poor or organizi
ng fellow students to teach English 
in rural villages.  One of the four American teachers, who 
had been a Peace Corps volunteer in rural East Kazakhstan 
oblast before becoming a KAFU faculty member, talked about 
the positive impression KAFU students had made by coming to a 
village to help teach.  Similarly, all of the KAFU students 
said that the project requirement was one of the most 
empowering experiences of their education. 
 
ENCOURAGEMENT TO ADOPT AMERICAN-STYLE PROGRAMS 
 
6.  Mambetkaziyev told poloff that KAFU's Vice President for 
International Programs, U.S. citizen Daniel Ballast, has been 
a key to KAFU's success.  Ballast explained to poloff that 
international partners contribute approximately $300,000 to 
KAFU programs every year.  He noted that Kazakhstan's 
Ministry of Education is encouraging institutions of higher 
education to adopt American-style educational programs and 
establish partnerships with foreign universities.   KAFU, of 
course, has been doing just that. 
HOAGLAND

Wikileaks

08ASTANA2122, KAZAKHSTAN ESTH UPDATE, SEPTEMBER 2008

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2122 2008-10-28 08:20 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6351
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2122/01 3020820
ZNR UUUUU ZZH
O 280820Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3662
INFO RUCNCIS/CIS COLLECTIVE 0732
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0132
RUEHKO/AMEMBASSY TOKYO 0842
RUEHIT/AMCONSUL ISTANBUL 0059
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2016
RUCNDT/USMISSION USUN NEW YORK 1965
RUEHNO/USMISSION USNATO 2301
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0290
RUEKJCS/SECDEF WASHDC 0210
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002122 
 
SIPDIS 
 
STATE FOR SCA/CEN, OES 
 
E.O. 12958: N/A 
TAGS: ECON SENV SOCI KCRM KZ
SUBJECT: KAZAKHSTAN ESTH UPDATE, SEPTEMBER 2008 
 
1.  The information for this cable on environment, science, 
technology, and health issues in Kazakhstan is drawn solely from the 
Kazakhstani press. 
 
-- Unlicensed Pharmaceutical Production Facility 
-- One in Three Pregnancies Ends in an Abortion 
-- Mass Food Poisoning at a Karaganda High School 
-- New Pet Ownership Regulations Raise Concerns 
-- Criticism of East Kazakhstan Environmental Program 
 
UNLICENSED PHARMACEUTICAL PRODUCTION FACILITY 
 
2.  The newspaper "Express-K" reported on September 25 that the 
Almaty oblast office of the National Security Committee had 
discovered an unlicensed facility manufacturing a wide range of 
pharmaceuticals in the town of Akzhar.  The pharmaceuticals were 
being produced in unsanitary conditions and sold to government and 
private medical establishments in the city of Almaty and in other 
locales.  The government is undertaking measures to ensure that 
these counterfeit pharmaceuticals are withdrawn from sale, 
"Express-K" explained. 
 
ONE IN THREE PREGNANCIES ENDS IN ABORTION 
 
3.  The press reported on September 26 that every third pregnancy in 
Kazakhstan is terminated through an induced abortion.  There are 
approximately 125,000 abortions in Kazakhstan annually.  In the city 
of Almaty, the abortion rate is particularly high:  there are 
20,000-25,000 abortions per year, compared to approximately 32,000 
live births.  Physicians are very concerned about high pregnancy and 
abortion rates for teenagers. 
 
MASS FOOD POISONING AT A KARAGANDA HIGH SCHOOL 
 
4.  The newspaper "Kazakhstan Today" reported on September 9 that 
the Karaganda oblast prosecutor's office was investigating a case of 
food poisoning that affected 65 students from a Karaganda high 
school who became ill after they had lunch in the school's 
cafeteria.  Seven students were hospitalized.   Two cafeteria 
employees who were infected with dysentery bacillus appear to have 
been the vectors for the outbreak.  Local law enforcement 
authorities opened a criminal case against the cafeteria's 
management, and the chief sanitary inspector of Karaganda oblast 
issued a decree requiring random inspections of all school 
cafeterias. 
 
NEW PET OWNERSHIP REGULATIONS RAISE CONCERN 
 
5.  New regulations on pet ownership were issued by Almaty city 
authorities on August 30.  Under the new rules, Almaty residents 
will no longer be able to own more than two cats and two dogs per 
household, and all cats and dogs will have to be registered with the 
authorities.  On September 29, the newspaper "Vremya" published 
comments from animal rights NGOs, who maintained that these 
regulations run contrary to Kazakhstan's constitution.  The "Vremya" 
article contended that the new regulations will lead to a 
significant increase in the number of abandoned pets. 
 
CRITICISM OF EAST KAZAKHSTAN ENVIROMENTAL PROGRAM 
 
6.  The newspaper "Megapolis" reported on September 30 that deputies 
from the maslikhat (legislature) of East Kazakhstan oblast had 
criticized the region's 2008-10 environmental protection program, 
under which 2008 was declared to be the "Year of Environmental 
Protection" in East Kazakhstan.  Following these criticisms, East 
Kazakhstan's governor convened a coordination council to discuss the 
program's implementation.  According to "Megapolis," some members of 
the coordination council believe the program, which was based on 
recommendations from the national-level Ministry of Environmental 
Protection, does not meet the needs of the oblast and will not 
improve the environmental situation there. 
 
ASTANA 00002122  002 OF 002 
 
 
 
HOAGLAND

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08ASTANA2121, KAZAKHSTAN: BUILDING DEMOCRACY FROM THE

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Reference ID Created Released Classification Origin
08ASTANA2121 2008-10-28 08:14 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6347
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2121/01 3020814
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P 280814Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3660
INFO RUCNCIS/CIS COLLECTIVE 0730
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2207
RUEHBJ/AMEMBASSY BEIJING 0130
RUEHKO/AMEMBASSY TOKYO 0840
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
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RHEHNSC/NSC WASHDC 0288
RUEKJCS/SECDEF WASHDC 0208
RUEHBS/USEU BRUSSELS
RUEHNO/USMISSION USNATO 2299
RUEHVEN/USMISSION USOSCE 2014
RUCNDT/USMISSION USUN NEW YORK 1963
RUEHAST/USOFFICE ALMATY 0855

UNCLAS SECTION 01 OF 02 ASTANA 002121 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EUR/RUS, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV SOCI KDEM GG KZ
SUBJECT:  KAZAKHSTAN:  BUILDING DEMOCRACY FROM THE 
GRASSROOTS UP 
 
ASTANA 00002121  001.2 OF 002 
 
 
1.  (U) SUMMARY:  At the 14th annual meeting of the Assembly 
of the Peoples of Kazakhstan, a multi-ethnic presidential 
advisory commission, President Nazarbayev emphasized his 
fundamental goal to build a peaceful, tolerant, multi-ethnic 
country that would move slowly and responsibly toward making 
Kazakh the national language.  It seemed to be no accident 
that the many hyphenated Kazakhstani speakers included a 
Georgian and an Ossetian.  We should recognize that the 
Assembly, although an appointed commission, is an example of 
grassroots democracy with its 350 members having elicited 
ideas and opinions from their communities all over the 
country to make recommendations to the government. 
Kazakhstan is building the institutions of democracy on its 
own terms -- and that is all to the good.  END SUMMARY. 
 
2.  (U) President Nursultan Nazarbayev invited the Chiefs of 
Mission of the diplomatic corps to attend the plenary session 
of the 14th annual meeting of the Assembly of the Peoples of 
Kazakhstan at the Palace of Peace and Accord ("The Pyramid") 
in Astana on October 23.  The Assembly, established in 1995 
as an advisory council to the president, has 350 appointed 
members representing each of Kazakhstan's 130 ethnic groups. 
The Assembly Secretariat is part of the Presidential 
Administration, and, thus, roughly corresponds to a U.S. 
White House advisory commission.  The Assembly selects nine 
of its members to fill reserved seats in the 107-member lower 
house of parliament, and the president introduced the most 
recent member of parliament selected by the Assembly -- an 
ethnic Bulgarian.  President Nazarbayev's chairmanship is not 
remote and ceremonial.  During the two-hour session with his 
40-minute keynote speech and 10 other speakers, he took 
careful notes, intervened repeatedly to ask questions and 
make comments and even gentle jokes, and himself summed up 
all the recommendations proposed by the various speakers. 
Nazarbayev spoke predominantly in mellifluous Russian, but 
occasionally summed up his points in very slightly stilted 
Kazakh. 
 
3.  (U) The president's speech emphasized the need to clarify 
the current Law on the Languages of the Republic of 
Kazakhstan within the framework of the constitution.  His 
goal, he made clear, was to move the nation slowly and 
responsibly toward the goal of using Kazakh as the common 
national language while fully respecting the rights of the 
national minorities to maintain and teach their own languages 
in the multitude of national-ethnic cultural centers 
throughout the country.  At one point, he recommended that 
artistically talented young people consider forming a private 
company to create animated cartoons in Kazakh that could be 
broadcast on national television to help children all over 
the country learn Kazakh from an earliest age.  Nazarbayev 
said the central government would give highest priority in 
education to three languages:  Kazakh, Russian, and English. 
The president strongly emphasized that all children of 
Kazakhstan, regardless of ethnic origin, should be brought up 
as tolerant Kazakhstani patriots who love their country and 
respect differences in their communities. 
 
4.  (U) Besides the president, the ten other speakers 
included an ethnic Russian, an Armenian, a Georgian, an 
Ossetian, two Ukrainians (one a woman with a charming Odessa 
accent), an Uzbek, a Cossack, and others chosen for various 
achievements but not necessarily based on ehtnicity. 
 
-- The Armenian said his parents had been exiled to 
Kazakhstan in 1937 during the Stalinist purges and had 
arrived in the dead of winter with only the clothes on their 
backs.  A Sarybay-Kazakh family took them in, thus saving 
their lives, and treated them like brothers and sisters until 
they eventually stood on their own feet.  He presented the 
president with volumes in Kazakh and Russian of scholarly 
studies based on documents in the national archive of 
 
ASTANA 00002121  002.2 OF 002 
 
 
multiple Soviet nationalities whom Kazakh families had saved 
from Stalin's purges and helped, later, once they were 
released from the Gulag. 
 
-- The Georgian said he had returned home in September to 
visit his parents in a remote mountainous area of Georgia, 
where he had been surprised to hear his isolated rural 
relatives praise the peace and tranquility of multi-ethnic 
Kazakhstan.  He said, "They repeatedly commented, 'How
 happy 
you must be to live in a peaceful nation.'"  At this point, 
President Nazarbayev interved to comment extemporaneously, 
"Listen to him carefully, my fellow citizens of Kazakhstan. 
You don't know you are happy until you lose your happiness. 
Only when you've lost it can you understand what is everyday 
happiness." 
 
-- The Ossetian woman told a charming story of coming to a 
resort in Kazakhstan on the Caspian for summer vacation in 
the 1970s where she fell in love with a Kazakh boy, married 
him, became a citizen of Kazakhstan, and has raised her 
children to be good citizens of Kazakhstan. 
 
-- A slightly bashful, young medalist from the Beijing 
Olympics (Kazakhstan won 13 medals), clearly a crowd favorite 
whose presence elicited extended applause, cheers, and 
whistles, said he was from a common family without any ties 
to power.  He said, "We all know the American Dream; I'm here 
to tell you we now have the Kazakhstani Dream.  If I can do 
it, every other child in this country can do it, too.  No 
matter who your parents are, you can achieve what you want." 
 
-- A young ethnic-Russian journalist from Astana TV, clearly 
a celebrity recognized by the audience, told in perfect 
Kazakh how he had grown up playing with Kazakh boys in his 
apartment-house courtyard.  When he asked his parents why 
they used different words, they told him he must learn Kazakh 
perfectly "because that is the wave of the future." 
 
-- Perhaps the only jarring note, at least to our ears, was 
an older, clearly old-guard editor of the newspaper, "South 
Kazakhstan," in Shymkent, who urged the government to 
establish many more Internet web sites in Kazakh to promote 
Kazakhstan's ideology -- and to censor rigorously all other 
web sites to "prevent incitements to inter-ethnic violence." 
 
5.  (U) COMMENT:  To understand Kazakhstan better, we need to 
recognize two key points from this event.  First, the 
leadership of Kazakhstan is seized with the concept of 
building a modern, tolerant, multi-ethnic nation from a 
multitude of minorities -- and, so far, has been successful. 
During his keynote speech, Nazarbayev listed not only the 
most well-known post-Soviet frozen conflicts but also other 
sites of ethnic violence, some well-known to the West, some 
obscure.  He emphasized that such conflicts have not occurred 
in independent Kazakhstan.  Second, we should recognize that 
the Assembly, even though an appointed commission, is an 
example of grassroots representative democracy with its 350 
members having elicited ideas and opinions from their 
communities all over Kazakhstan to make recommendations to 
the government.  Kazakhstan is building the institutions of 
democracy on its own terms -- and that is all to the good. 
END COMMENT. 
HOAGLAND

Wikileaks

08ASTANA2119, KAZAKHSTAN: CHIEF OF FINANCIAL INTELLIGENCE UNIT LAYS OUT

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Reference ID Created Released Classification Origin
08ASTANA2119 2008-10-24 12:56 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3430
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2119/01 2981256
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P 241256Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3656
INFO RUCNCIS/CIS COLLECTIVE 0728
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0128
RUEHKO/AMEMBASSY TOKYO 0838
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2012
RUCNDT/USMISSION USUN NEW YORK 1961
RUEHNO/USMISSION USNATO 2297
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0284
RUEKJCS/SECDEF WASHDC 0206
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEANQT/FINCEN VIENNA VA
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002119 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE, SCA/CEN, SCA/RA 
 
TAGS: PGOV PREL PINR EFIN SNAR KCRM KZ
SUBJECT: KAZAKHSTAN:  CHIEF OF FINANCIAL INTELLIGENCE UNIT LAYS OUT 
HIS VISION FOR COOPERATION 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (U) SUMMARY:  On October 1, the Minister of Finance appointed 
Mussiraly Utebayev to head the Committee on Financial Monitoring, 
which is Kazakhstan's Financial Intelligence Unit (FIU). 
Representatives of the Embassy's Office of International Narcotics 
and Law Enforcement (INL) met with him briefly during an anti-money 
laundering coordination meeting on October 8 and had a longer 
meeting with him on October 15 to discuss the needs of his committee 
and future cooperation with the United States.  END SUMMARY. 
 
HITTING THE GROUND RUNNING 
 
3.  (SBU) One of Utebayev's first multilateral meetings was with the 
anti-money laundering coordination group chaired by the World Bank. 
During that meeting, Utebayev laid out his goals and stated that he 
was beginning to staff his office and working with the Parliament to 
get anti-money laundering legislation passed.  He assured the group 
that he was not going to wait for passage before creating a system 
for reporting suspicious financial transactions and fully standing 
up his Committee.  The World Bank advised Utebayev that the draft 
law still did not meet international standards and said that 
Kazakhstan could face serious repercussions if it was not passed 
soon. 
 
4.  (SBU) INL representatives met with Utebayev on October 15 to 
discuss assistance to the Committee.  Utebayev said he welcomes 
cooperation with the United States and is deeply interested in 
learning more about the operations of the U.S. FIU, FinCEN (the 
Financial Crimes Enforcement Network).  INL agreed to arrange and 
fund a study tour for Utebayev and his staff and will discuss the 
possibility of an assessment trip by officials from FinCEN. 
Utebayev also reiterated a request made at the coordination group 
meeting for technical and analytical training.  Utebayev 
specifically asked for Committee staff to be included in training 
offered to the financial police and customs service.  Utebayev 
expressed an interest in holding training programs at the Academy of 
State Service in Astana. 
 
BACKGROUND OF THE FIU 
 
5.  (U) The Committee on Financial Monitoring was established by an 
April 24, 2008 decree.  After lengthy debates about the appropriate 
ministry to oversee the Committee, it was placed under the Ministry 
of Finance.  Its charter, staffing pattern, and structure are to be 
determined in the near future.  In accordance with provisions of the 
draft money-laundering and terrorist-financing law, the Committee 
will be responsible for the collection and analysis of data on 
transactions subject to financial monitoring and transmission of 
information on potentially illegal transactions to law enforcement 
agencies. 
 
BIO NOTES 
 
6.  (U) Mussiraly Utebayev was appointed Chairman of the 
newly-created Committee on Financial Monitoring on October 1 by 
Minister of Finance Zhamishev.  Utebayev was born in 1950 in South 
Kazakhstan oblast and graduated from the Shymkent Pedagogical 
Institute in 1971.  He started his career as a teacher of 
mathematics and later worked in a government computer center in 
Shymkent.  In 1991, he graduated from the prestigious Academy of 
National Economy of the Soviet Union's Council of Ministries. 
(NOTE:  The Academy specialized in preparing students to become 
senior government officials; among the graduates of the Academy are 
former Russian Prime Minister Viktor Chernomyrdin and former 
Ukrainian Prime Minister Leonid Kuchma.  END NOTE.) In 1991, 
Utebayev became Deputy Regional Administrator of Shymkent and 
remained in the position following the independence of Kazakhstan. 
From 1994 to 2002, he held several economic-related jobs in the 
government, including as an economic policy advisor to President 
 
ASTANA 00002119  002 OF 002 
 
 
Nazarbayev and Chairman of the National Budget Committee.  In 2002, 
he was elected to the Senate, where he remained until his current 
appointment.  In 2007, he was one of six Kazkahstani Senators to 
receive a medal from UNICEF in recognition of legislative activities 
related to children's rights and maternity.   Senate Chairman 
Tokayev honored Utebayev before he left the Senate and s
aid that 
Utebayev may be considered one of the founders of Kazakhstan's 
financial system. 
 
7.  (SBU) COMMENT:  Utebayev appears to be committed to the creation 
of an FIU that meets international standards.  His experience and 
reputation in the Senate should be invaluable in getting the draft 
anti-money laundering law adopted and getting sufficient funding for 
his Committee.  We are pleased not only that the FIU was created 
within the Ministry of Finance, but also that such an experienced 
official was appointed to be its chairman.  Not only does he have a 
solid economic background, but he also has the necessary experience 
working with international organizations and other governments. 
During the INL meeting, Utebayev mentioned previous travel to the 
United States during which he studied tax institutions.  He seemed 
pleased with his experience in the United States and looks forward 
to continued cooperation.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2118, KAZAKHSTAN: BRITISH FCO,S CASPIAN ENERGY ADVISOR

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Reference ID Created Released Classification Origin
08ASTANA2118 2008-10-24 11:34 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO3365
OO RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHPW RUEHROV RUEHSR
DE RUEHTA #2118 2981134
ZNY CCCCC ZZH
O 241134Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3655
INFO RUCNCIS/CIS COLLECTIVE 0727
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
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RHMFISS/CDR USCENTCOM MACDILL AFB FL
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RUEHVEN/USMISSION USOSCE 2011
RUCNDT/USMISSION USUN NEW YORK 1960
RUEHNO/USMISSION USNATO 2296
RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L ASTANA 002118 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: DECL: 10/24/2018 
TAGS: PGOV EPET EWWT AJ KZ
SUBJECT: KAZAKHSTAN:  BRITISH FCO,S CASPIAN ENERGY ADVISOR 
EXPRESSES CONCERNS ON CROSS-CASPIAN MARITIME CAPACITY 
 
REF: ASTANA 2101 
 
Classified By: Ambassador Richard Hoagland, Reasons 1.4 (b) and (d) 
 
1. (C) During an October 15 meeting with the Ambassador, 
Angus Miller, Caspian Region Energy Advisor to Britain's 
Foreign and Commonwealth Office, expressed his concerns that 
Kazakhstan will not be able to expand its maritime capacity 
quickly enough to handle the expected volumes of Kazakhstani 
crude requiring transport across the Caspian to Baku. 
 
2. (C) Miller noted that Deputy Energy Minister Lyazzat 
Kiinov had said publicly at the KIOGE conference that crude 
transported via the Kazakhstan Caspian Transportation System 
(KCTS) will be shipped only by Kazakhstani and Azerbaijani 
tankers, with international shippers excluded from the action 
(see reftel).  The Kazakhstanis also expect that their 
vessels will be manned solely by Kazakhstani crews.  Miller 
told the Ambassador it will be challenging enough for 
Kazakhstan to build in time the necessary tankers (six to 
eight, if they are large tankers of 60,000 dwt), while 
training such a sizable contingent of new Kazakhstani seamen 
presents even greater hurdles.  He believes that this will 
put pressure on the Kazakhstanis to lower standards for both 
vessels and crews.  Miller also maintained that if Kazakhstan 
is unable to increase its maritime capacity to handle all the 
crude, there will be an opening for the Iranians to get 
involved in shipping it, as the Iranians already have the 
largest fleet on the Caspian. 
 
3. (C)  Miller said that he had just come from a meeting with 
Kiinov, who rebuked Miller for Miller's address at KIOGE in 
which he had argued that Kazakhstan's lack of preparedness 
for cross-Caspian crude shipment is creating economic and 
political vulnerabilities for the country.  Miller said that 
in the end, Kiinov admitted to him that there are serious 
problems in building up Kazakhstan's maritime capacity for 
KCTS.  Miller told the Ambassador that he had also met with 
the international oil companies operating in Kazakhstan 
together with Kazakhstani port authorities.  The companies 
expressed concerns in line with Miller's on Kazakhstan's 
maritime capacity and maritime standards.  An Aktau port 
official explained that Kazakhstan had installed a maritime 
radar system for the Aktau area, but does not have the 
personnel to run it properly.  As a result, the radar can not 
be used for active maritime management and collision 
avoidance; rather, it is just a passive system for now. 
 
4. (C) Miller stressed to the Ambassador that in his view, 
the international companies need to provide assistance to 
KazMorTransFlot (KMTF) -- Kazakhstan's national maritime 
shipping company, which is owned 50 percent by KazMunaiGas 
(KMG) and 50 percent by Samruk-Kazyna -- to build up its crew 
capacity and to ensure that crews are trained to 
international standards. 
HOAGLAND

Wikileaks

08ASTANA2116, KAZAKHSTAN: CITIBANK EXECUTIVES DISCUSS THEIR LOCAL

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Reference ID Created Released Classification Origin
08ASTANA2116 2008-10-24 11:21 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3352
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
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DE RUEHTA #2116/01 2981121
ZNR UUUUU ZZH
O 241121Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3652
INFO RUCNCIS/CIS COLLECTIVE 0725
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0125
RUEHKO/AMEMBASSY TOKYO 0835
RUEHIT/AMCONSUL ISTANBUL 0056
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2009
RUCNDT/USMISSION USUN NEW YORK 1958
RUEHNO/USMISSION USNATO 2294
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0281
RUEKJCS/SECDEF WASHDC 0203
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 0853

UNCLAS SECTION 01 OF 02 ASTANA 002116 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN KZ
SUBJECT:  KAZAKHSTAN:  CITIBANK EXECUTIVES DISCUSS THEIR LOCAL 
OPERATIONS AND PLANS 
 
ASTANA 00002116  001.2 OF 002 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  During an October 22 meeting with the 
Ambassador, Shirish Apte, CEO of Citibank Central and Eastern 
Europe, and Dan Connelly, CEO of Citibank Kazakhstan, described 
Citibank as doing very well in Kazakhstan.  They disclosed a recent 
agreement for Citibank to serve as the banking institution for the 
Kashagan consortium.  The two also offered a somewhat pessimistic 
prognosis for the Kazakhstani banking sector over the coming year. 
END SUMMARY. 
 
ONGOING SUPPORT FOR WESTERN OIL COMPANIES 
 
3.  (SBU) Citibank established a representational office in 
Kazakhstan in 1994, in Almaty, and opened its first bank branch in 
the country in 1998.  Many of the larger western companies operating 
in Kazakhstan are Citibank clients, including those in the oil and 
gas sector.  Apte said that Citibank has avoided consumer banking 
for fear of possible money laundering, but that business overall is 
very good.  He disclosed that Citibank had recently signed a custody 
agent agreement to provide banking services for the six partners in 
the Kashagan consortium.  Generally enthusiastic about the 
arrangement, Apte nevertheless expressed concern about the 
possibility of being caught in the middle of a financial conflict 
between the Kazakhstani government and the other consortium members. 
 
 
BANKING SECTOR COULD FACE SEVER DIFFICULTIES 
 
4.  (SBU) Apte and Connelly offered a somewhat pessimistic take on 
the Kazakhstani banking sector for the coming period.  Pointing to 
"challenging markets and times for many economies," Apte argued that 
Kazakhstan can do little wrong because of its energy riches, wealth 
of mineral resources, and strong agricultural base.  He said that, 
nevertheless, Kazakhstan will be facing some special challenges in 
the coming year.   According to Apte, the banking system is "very 
stretched."  Explaining that as bankers they are not particularly 
fond of regulation, Apte and Connelly nonetheless admitted that 
there is a serious lack of financial regulation in Kazakhstan.  Apte 
said that unlike the banking crisis in the United States, which is 
more or less contained among domestic lenders, banks here are very 
exposed to the global market. 
 
5.  (SBU) Apte noted that one-fourth of the foreign debts of 
Kazakhstan's banking sector are set to mature next year.  When the 
markets open up next year, Kazakhstani banks will thus need to 
borrow more money.  However, it is increasingly likely that overseas 
banks will not roll over their existing credit to Kazakhstani banks. 
 According to Apte, if oil prices continue to drop, this will also 
increase the likelihood that the banks will be denied the necessary 
rollover.  In Apte's opinion, the discontinued lending of overseas 
banks combined with a possible run on deposits by consumers could 
set into motion a banking sector crisis, requiring a Kazakhstani 
government bailout.   When asked if he was "cautiously optimistic," 
Apte said he would prefer to "wait and see" before sharing any 
optimism.  According to Apte, there is already a 30-40% probability 
that there will be no rollover for the loans. 
 
CITIBANK LOOKING FOR WORK WITH THE GOVERNMENT 
 
6.  (SBU) Following the meeting with the Ambassador, Apte and 
Connelly were scheduled to meet with Finance Minister Zhamishev. 
According to Apte, Citibank would like to officially offer its 
consulting services to the Kazakhstani government.  He noted that 
they have had "some experience in these situations."  Citibank would 
also be willing to offer financing for government bond issues in the 
future, if needed. 
 
ASTANA 00002116  002.2 OF 002 
 
 
 
HOAGLAND

Wikileaks

08ASTANA2115, ASIAN DEVELOPMENT BANK DIRECTOR LAYS OUT HIS PRIORITIES IN

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Reference ID Created Released Classification Origin
08ASTANA2115 2008-10-24 11:18 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3344
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2115/01 2981118
ZNR UUUUU ZZH
O 241118Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3650
INFO RUCNCIS/CIS COLLECTIVE 0723
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0123
RUEHKO/AMEMBASSY TOKYO 0833
RUEHIT/AMCONSUL ISTANBUL 0054
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2007
RUCNDT/USMISSION USUN NEW YORK 1956
RUEHNO/USMISSION USNATO 2292
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0279
RUEKJCS/SECDEF WASHDC 0201
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 0851

UNCLAS SECTION 01 OF 02 ASTANA 002115 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN EINV KZ
SUBJECT:  ASIAN DEVELOPMENT BANK DIRECTOR LAYS OUT HIS PRIORITIES IN 
KAZAKHSTAN 
 
REF:  (A) ASTANA 2086 (B) ASTANA 2095 
 
ASTANA 00002115  001.2 OF 002 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY.  On October 24, Asian Development Bank (ADB) 
Country Director Stephen Wermert briefed the Ambassador on ADB's 
current priorities in Kazakhstan, touted the Central Asia Regional 
Economic Cooperation Program and the Foreign Investment Council, 
commented on the management and strategy of AES corporation, and 
assessed the government's response to the current financial crisis. 
END SUMMARY. 
 
ADB FOCUS IS ON BANKING AND INFRASTRUCTURE 
 
3.  (SBU) During an introductory call with the Ambassador on October 
24, ADB's Wermert, who has been in Kazakhstan for two and a half 
years and also serves on the Regional Management Team of ADB's 
Central and West Asia Department, informed the Ambassador that 
Kazakhstan's level of GDP per capita excludes the country from 
receiving low-margin loans from ADB.  "Loans will not be a big 
business for ADB in Kazakhstan," he said.  Nevertheless, Wermert 
disclosed that ADB is prepared to make its first loan to Kazakhstan 
in five years for a major highway project that would reach to 
western China.   According to Wermert, the ADB's focus in Kazakhstan 
will be on private-sector development in two main areas:  support to 
the banking industry, and private infrastructure projects in areas 
such as water, electricity, and transportation, based on the 
"Build-Own-Operate-Transfer" model.  In banking, Wermert confided 
that ADB's largest exposure to banks worldwide is in Kazakhstan, 
"even greater than in China or India."  In infrastructure, he 
mentioned that the Government of Kazakhstan plans to conduct a 
competition to build a new coal-fired power plant in the Balkhash 
region.  According to Wermert, Kepco (Korea), Datan (China), and 
Matsui (Japan) will submit competing bids for a 75% stake in the 
power plant.  ADB considers that project its number one priority. 
(NOTE:  On October 13, President Nazarbayev was reported as saying, 
"We have talked much about the construction of electric power 
stations in Balkhash and in Kostanay, about the expansion of 
Ekibastuz GRES (hydroelectric distribution station), hydro power 
stations, and power transmission lines.  The problem of power 
engineering should be tackled.  It is time to move from words to 
action.  This problem could slow down the entire country's economic 
development."  END NOTE). 
 
CENTRAL ASIA REGIONAL ECONOMIC COOPERATION 
 
4.  (U) Wermert touted the Central Asia Regional Economic 
Cooperation (CAREC) Program, initiated in 1997.  (NOTE: The CAREC 
Program operates in eight countries:  Afghanistan, Azerbaijan, the 
People's Republic of China (with a focus on the Xinjiang Uygur 
Autonomous Region), Kazakhstan, the Kyrgyz Republic, Mongolia, 
Tajikistan, and Uzbekistan.  END NOTE.)   To date, CAREC has focused 
on financing infrastructure projects and improving the policy 
environment in four areas:  transport, energy, customs, and trade. 
For Kazakhstan, the World Bank has the lead on energy issues (mostly 
in the power sector), the Islamic Development Bank (IDB) has the 
lead on trade, and the European Bank for Reconstruction and 
Development (EBRD) has the lead on transportation.  ADB's CAREC Unit 
(CARECU) has served as the CAREC Program Secretariat since March 
2000. 
 
THE FOREIGN INVESTMENT COUNCIL 
 
5.  (SBU) Wermert briefed the Ambassador on the Foreign Investment 
Council, a high-level body comprising 24 international companies in 
Kazakhstan that meets twice annually and is chaired by President 
Nazarbayev.  He said that the EBRD President flies in from London to 
attend and co-chair the meetings, along with CEOs or executive vice 
 
ASTANA 00002115  002.2 OF 002 
 
 
presidents from the companies.  A major topic of discussion at the 
June meeting was the investment climate in the power sector, while 
the next meeting in December is expected to focus on Kazakhstan's 
local-content requirements.  The Ambassador suggested that there was 
a natural synergy between the Foreign Investment Council and the new 
Public-Private Economic Partnership Initiative (PPEPI), since many 
of the issues and key players are likely to be the same. Wermert 
agreed th
at the PPEPI could help to identify issues that could be 
raised with the President at the Foreign Investment Council. 
 
AES COULD USE AN IMAGE UPGRADE 
 
6.  (SBU) To support the development of Kazakhstan's power sector, 
ADB considered making a loan to AES before it sold the GRES-1 
coal-fired power plant in Ekibastuz to Kazakhmys (see ref A). 
Wermert was directly involved in the negotiations and shared his 
opinions about AES's management and conduct with the Ambassador.  He 
said, "An image upgrade for them would be useful" because they have 
not been very successful in the region overall, noting AES's forced 
withdrawal from the Georgia market and inability to enter the 
Russian market.  Wermert was surprised that AES did not distance 
itself more forcefully from a negative June 2 Forbes article and 
opined that AES's "Kazakhstani entity appears to operate 
independently of the home office."  He speculated that this was due 
to the fact that AES's Kazakhstan operations do not require regular 
infusions of cash payments.  Wermert also suggested that AES "take a 
more pro-active approach" to investing in Kazakhstan's 
infrastructure and long-term development.  He said that the public 
impression of AES is similar to that of Western extractive 
companies:  they utilize Kazakhstan's natural resources to turn a 
profit, which they use to pay internal dividends, and do not invest 
in Kazakhstan's future growth.  Noting that AES's corporate strategy 
includes a strong emphasis on alternative energy, Wermert chided 
their Kazakhstan office for not doing more in this area. 
"Renewables are very popular in Kazakhstan," he noted.  "AES should 
be out in front on this issue, even if it won't be commercially 
viable for several years." 
 
KAZAKHSTAN'S RESPONSE TO THE FINANCIAL CRISIS 
 
7.  (SBU) When asked how he thought Kazakhstan had responded to the 
current financial crisis, Wermert said, "Their performance has been 
quite good."  He noted, for example, that the government acted 
quickly to provide liquidity to banks that suffered when the 
Eurobond markets closed.  Wermert did, however, raise two concerns 
about Kazakhstan's response to the crisis:  (1) whether Kazakhstan's 
banks are properly and transparently disclosing the quality of their 
assets; and (2) whether the new Samruk-Kazyna National Welfare Fund 
has the management expertise and financial practices necessary to 
make sound, long-term decisions.  He suggested the government was 
slow to set up Samruk-Kazyna and recommended that they recruit a 
"mature, professional candidate" from the United States to manage 
it.  According to Wermert, Samruk-Kazyna's newly-appointed 
Management Board Chairman, Kairat Kelimbetov, is trusted by 
President Nazarbayev, but "he doesn't know how to run this kind of 
an organization."  Wermert had a higher opinion of Kelimbetov's new 
deputy, Arman Dunayev, former head of the Kazyna Sustainable 
Development Fund, which was merged with the state-owned Samruk 
holding company to form Samrum-Kazyna.  "Dunayev well understands 
the financial industry," said Wermert, "and we can channel our 
advice through him."  (See ref B for the World Bank's more 
pessimistic view of Samruk-Kazyna.) 
 
HOAGLAND

Wikileaks

08ASTANA2101, KAZAKHSTAN: HIGHLIGHTS FROM THE 2008 KAZAKHSTAN

08ASTANA2098, KAZAKHSTAN: EXXONMOBIL EXCITED ABOUT NEW NORTH CASPIAN

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Reference ID Created Released Classification Origin
08ASTANA2098 2008-10-23 06:09 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2090
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2098 2970609
ZNR UUUUU ZZH
O 230609Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3630
INFO RUCNCIS/CIS COLLECTIVE 0716
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0116
RUEHKO/AMEMBASSY TOKYO 0826
RUEHIT/AMCONSUL ISTANBUL 0047
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 2000
RUCNDT/USMISSION USUN NEW YORK 1949
RUEHNO/USMISSION USNATO 2285
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0272
RUEKJCS/SECDEF WASHDC 0194
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS ASTANA 002098 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV EPET EINV KZ
SUBJECT:  KAZAKHSTAN:  EXXONMOBIL EXCITED ABOUT NEW NORTH CASPIAN 
EXPLORATION OPPORTUNITY 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY.  On October 21, ExxonMobil Kazakhstan's New 
Business Development Manager Peter Claypool (protect) described to 
Energy Officer a promising onshore North Caspian development 
opportunity that ExxonMobil has pursued quietly but persistently for 
more than three years.  ExxonMobil is hopeful that the Government of 
Kazakhstan will conduct a tender in 2009 for exploration of the 
site.  END SUMMARY. 
 
PALEOZOIC ARCH INTRIGUES EXXONMOBIL 
 
3.  (SBU) Claypool told Energy Officer that the North Caspian 
Paleozoic Arch is an "intriguing geological structure" located 
approximately 6000 meters below the surface in Mangistau oblast, 
south of the Tengiz field.  Claypool believes there is a strong 
likelihood that the structure contains significant reserves of oil 
and gas in deep limestone strata, although appraising the field 
would be complicated by its depth and pressure, as well as by the 
presence of impermeable salt barriers that distort seismic testing 
(but which, conversely, can serve as useful hydrocarbon traps). 
According to Claypool, an assessment would require use of drilling 
technology, equipment, and expertise that national oil and gas 
company KazMunaiGas (KMG) currently does not possess.  "They can 
drill shallow subsurface wells," he said, "but not these deeper, 
more technically challenging wells." 
 
4.  (SBU) Claypool said that ExxonMobil has tried assiduously for 
three years to secure a technical services agreement with KMG that 
would enable them to carry out seismic and other diagnostic tests, 
but the Government of Kazakhstan has been slow to move forward, with 
its focus increasingly devoted to the complex and time-consuming 
Kashagan negotiations.  However, the government announced that the 
Kashagan negotiations will conclude by October 25, and recently 
awarded ConocoPhillips rights to negotiate a contract to explore the 
N Block, which signaled an end to the government's moratorium on new 
deals and raised hopes at ExxonMobil that the government will now 
move forward with other new exploration projects. 
 
5.  (SBU) Claypool told Energy Officer that KMG Exploration and 
Production signed a two-year agreement in May 2006 with ExxonMobil, 
designating the North Caspian Paleozoic Arch as an "area of mutual 
interest" (AMI) and agreeing in principle to cooperate on the 
exploration and production of oil and gas from the site.  The AMI 
agreement lapsed in April 2008, however, without a tender or 
contract award.  Nevertheless, in January 2008, Minister of Energy 
and Mineral Resources Sauat Mynbayev and KMG First Vice President 
Maksat Idenov sent a letter to ExxonMobil reiterating their interest 
in a partnership to explore the Paleozoic Arch together.  ExxonMobil 
is well aware that Kazakhstan's Subsoil Law gives KMG priority 
ownership rights to 51 percent of any new exploration and production 
project.  Nevertheless, the company remains eager to work with KMG 
on exploration of the site. 
 
6. (SBU) Claypool also informed Energy Officer that KMG has been 
pushing hard to work with ExxonMobil on an oilfield production 
project outside Kazakhstan in order to acquire greater technical 
expertise and project management experience, but ExxonMobil has 
demurred.  "We very rarely do joint production with another 
company," explained Claypool, "and even then, only if the partner is 
very experienced and has technology or expertise that complements 
our own.  KMG is just not there yet." 
 
HOAGLAND

Wikileaks

08ASTANA2095, KAZAKHSTAN: WORLD BANK COUNTRY MANAGER DISCUSSES

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Reference ID Created Released Classification Origin
08ASTANA2095 2008-10-22 12:49 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1429
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2095/01 2961249
ZNR UUUUU ZZH
O 221249Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3626
INFO RUCNCIS/CIS COLLECTIVE 0713
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2203
RUEHBJ/AMEMBASSY BEIJING 0113
RUEHKO/AMEMBASSY TOKYO 0823
RUEHIT/AMCONSUL ISTANBUL 0044
RUEAWJA/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0269
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RUEKJCS/SECDEF WASHDC 0191
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 1997
RUCNDT/USMISSION USUN NEW YORK 1946
RUEHNO/USMISSION USNATO 2282
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 03 ASTANA 002095 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
JUSTICE FOR DANIEL CLAMAN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EINV EFIN EAID KZ
SUBJECT: KAZAKHSTAN:  WORLD BANK COUNTRY MANAGER DISCUSSES 
ECONOMIC SITUATION, BOTA FOUNDATION 
 
REF: ASTANA 2070 
 
1. (U) Sensitive but unclassified.  Not for Internet 
distribution. 
 
2.  (SBU) SUMMARY.  During an October 15 introductory meeting 
with the Ambassador, World Bank Country Manager for 
Kazakhstan Sergei Shatalov provided his views on the state of 
the Kazakhstani economy, discussed the government's efforts 
to deal with the global financial crisis, and gave an update 
on the activities of the Bota Foundation.  END SUMMARY. 
 
ECONOMIC OVERVIEW 
 
3.  (SBU)  Shatalov told the Ambassador that economic growth 
in Kazakhstan has been down for the last three quarters. 
With the exceptions of the Atyrau and Aktau regions -- the 
heart of Kazakhstan's hydrocarbons sector -- growth has 
actually been flat in the country as a whole.  According to 
Shatalov, Chinese demand for raw materials is shrinking as 
China switches to domestic producers, which is having a 
significant impact on steel production in Kazakhstan.  (NOTE: 
 This was evidenced by the October 3 layoffs of over 4000 
steel workers from the Temirtau steelworks owned by 
ArcelorMittal.  END NOTE.) 
 
4.  (SBU) Shatalov explained that the grain harvest is down 
significantly this year, and maintained that grain exports 
will not exceed 3 million tons, as a result of which 
Kazakhstan will not reach the ranks of one of the world's top 
five wheat exporters.  (NOTE:  The government maintains that 
overall grain exports will be between 5.5 and 6 million tons. 
 END NOTE.)  The construction sector has visibly declined 
throughout Kazakhstan, particularly in Astana, where most of 
what is currently under development is driven by government 
spending.  There remains almost no foreign direct investment 
in the construction sector.   On a more positive note, 
Shatalov said that Shymkent appears to be benefiting from 
significant private sector investments in various sectors of 
its economy. 
 
BANKING SECTOR NOT YET IN THE CLEAR 
 
5.  (SBU) Shatalov painted a picture of the banking sector 
not nearly as rosy as that presented to the public by 
Kazakhstani financial authorities.  According to Shatalov, 
the credit crisis in the construction sector has been 
accompanied by a significant drop in real estate values -- by 
up to 50% in Almaty -- leaving many banks with a very 
significant burden of debt, and very little collateral. 
Forty percent of the balance sheet of the Kazakhstani banking 
sector is comprised of debt and mortgages.  This ratio holds 
true for Kazakhstan's two largest banks, Bank Turan Alem and 
KazKommertsBank. 
 
RECOVERY EFFORTS QUESTIONABLE 
 
6.  (SBU)  When asked about the prospects for Kazakhstan's 
recovery from the global financial crisis, Shatalov noted 
that the government had allocated $10 billion from the 
National (Oil) Fund on October 13 as part of a stabilization 
package.  This allocation is in addition to the $4 billion 
made available last year from other reserves to support the 
construction sector, of which $2 billion has been transferred 
to banks under very strict lending conditions.  Shatalov 
questioned the government's decision to merge the Samruk 
 
ASTANA 00002095  002 OF 003 
 
 
state assets holding company and the Kazyna Sustainable 
Development Fund into the Samruk-Kazyna National Welfare 
Fund.  He termed Samruk-Kazyna a "super monster" and said the 
relevance of the merger to dealing with the financial crisis 
was unclear (see reftel).  He did, however, praise the recent 
creation of a stressed assets fund to buy up bad loans from 
banks, noting that after consultations with the World Bank, 
Kazakhstani financial authorities seem to be closely studying 
the case of the Resolution Trust Corporation (RTC), which 
liquidated the assets of failed savings and loan institutions 
in the United States in the late 1980s and early 1990s. 
Shatalov maintained that overall, there needs to be greater 
transparency with respect to the assets of Kazakhstan's 
banking sector -- which are estimated to be $120 billion, 
roughly the equivalent of the country's Gross Domestic 
Product. 
 
BOTA FOUNDATION OPEN FOR BUSINESS 
 &#x000
A;7.  (SBU) Shatalov gave the Ambassador a detailed update on 
the Bota Foundation, which was established by the United 
States, Kazakhstan, and Switzerland to disburse for 
humanitarian purposes $84 million in frozen bank funds linked 
to the James Giffen bribery case.  He described Bota as "at a 
turning point."   After three months of intensive work, 
Kazakhstan's Ministry of Justice (MOJ) and the U.S. 
Department of Justice (DOJ) finally reached agreement on 
changes to several of Bota's statutory documents.  The Bota 
MOU between the three country partners was also renegotiated. 
 Shatalov called the MOJ's work exemplary, specifically 
praising Deputy Justice Minister Marat Beketayev, who managed 
to get the foundation registered in just one day.  He 
half-jokingly noted that making such speedy registration 
routine would do "worlds of good" for Kazakhstan's ranking in 
the World Bank's annual "Doing Business" report. 
 
8.  (SBU) Shatalov explained that at an October 7 meeting, 
Bota's Board of Trustees selected IREX/Save the Children as 
the winning bidder to be the foundation's program manager. 
This decision is subject to approval by the three 
governments, as well as the successful conclusion of contract 
negotiations with IREX/Save the Children by October 31. 
Shatalov praised the work to date of the Board (of which 
former U.S. Ambassador to Kazakhstan John Ordway is a 
member).  He said that the Kazakhstani trustees have been 
diligent, independent, and proactive, and "dead set" on the 
efficient use of Bota's funds. 
 
9.  (SBU)  Shatalov said that Bota anticipates launching its 
programmatic activities in November.  Assistance will be 
targeted to specific regions, which will be selected based on 
rural poverty rates.  Shatalov noted, however, that existing 
Kazakhstani data on poverty has proven unreliable.  To better 
address this issue, the Kazakhstani government recently 
commissioned the World Bank to conduct a standardized poverty 
study that will greatly assist in the identification of the 
regions most in need of assistance, as well as provide a 
basis for the comparison of poverty statistics across the 
Central Asia region.  In the meantime, a World Bank 
specialist is "roving the countryside" to identify at risk 
groups in need of Bota Foundation attention. 
 
10.  (SBU) Shatalov emphasized that the World Bank's primary 
work on Bota is to define an efficient delivery mechanism for 
the assistance.   The role of the Kazakhstani government 
will, of course, be limited to the provision of material 
 
ASTANA 00002095  003 OF 003 
 
 
support, such as office space, not to exceed the mandated 
5-year program period.  The World Bank hopes, however, that 
many of the expected Bota Foundation regional offices will 
remain open after the 5-year period via private and corporate 
contributions, thereby fulfilling the second mandate of the 
foundation:  to nurture a philanthropic culture in 
Kazakhstan.  According to Shatalov, the Bota Foundation will 
serve as a model for similar opportunities identified in Chad 
and Cameroon. 
HOAGLAND

Wikileaks

08ASTANA2092, KAZAKHSTAN: COMMON WORLD FORUM MINISTERIAL BRINGS

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Reference ID Created Released Classification Origin
08ASTANA2092 2008-10-22 10:49 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1333
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2092/01 2961049
ZNR UUUUU ZZH
O 221049Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3623
INFO RUCNCIS/CIS COLLECTIVE 0710
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 2200
RUEHBJ/AMEMBASSY BEIJING 0110
RUEHKO/AMEMBASSY TOKYO 0820
RUEHIT/AMCONSUL ISTANBUL 0041
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0266
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0188
RUEAIIA/CIA WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUEHVEN/USMISSION USOSCE 1994
RUCNDT/USMISSION USUN NEW YORK 1943
RUEHNO/USMISSION USNATO 2279
RUEHBS/USEU BRUSSELS

UNCLAS SECTION 01 OF 03 ASTANA 002092 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL/IRF 
 
E.O. 12958: N/A 
TAGS: PREL PGOV KISL KIRF KZ
SUBJECT: KAZAKHSTAN:  COMMON WORLD FORUM MINISTERIAL BRINGS 
TOGETHER THE MUSLIM WORLD AND THE WEST 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  U.S. Ambassador to the United Nations 
Zalmay Khalilzad led the U.S. delegation to the October 17 
Common World Forum ministerial meeting in Astana.  Aimed at 
promoting understanding between the Muslim world and the 
West, the Forum brought together foreign ministers and 
high-level representatives from over 50 countries and several 
international organizations.  In his speech opening the 
event, President Nazarbayev said the idea for the Forum came 
from Kazakhstan's own experiences as a multi-ethnic state. 
The speeches of most of the participants were 
non-controversial.  Russian Foreign Minister Lavrov, however, 
used his remarks to sharply criticize Georgia.  Iranian 
Foreign Minister Mottaki argued that the West's secularism 
and liberal democracy breeds extremism and called for 
alternatives to Western approaches.   Ambassador Khalilzad 
stressed the need for success in Iraq, Afghanistan, and 
Pakistan.  The Forum's final communique, the Astana 
Declaration, remained unsettled until the end, as delegations 
sought to amend the text while the ministerial was ongoing. 
The uncertainty was cut short by Foreign Minister Tazhin, who 
simply declared the Astana Declaration unanimously adopted. 
END SUMMARY. 
 
HIGH-LEVEL ATTENDANCE 
 
3.  (SBU)  U.S. Ambassador to the United Nations Zalmay 
Khalilzad led the U.S. delegation at the October 17 
ministerial meeting of the Common World Forum, an initiative 
of President Nazarbayev aimed at promoting understanding 
between the Muslim world and the West.  Over 50 countries 
were represented at the event, as well as several 
international organizations.  Notable attendees included 
Russia Foreign Minister Lavrov, Iranian Foreign Minister 
Mottaki, and Organization of Islamic States (OIC) Secretary 
General Ihsanoglu.  A number of Asian and Middle Eastern 
countries were represented by foreign ministers, in large 
part because on the preceding day, Astana hosted the 
ministerial meeting of the Asian Cooperation Dialogue. 
High-level foreign ministry representatives from such Western 
countries as Estonia, Norway, Hungary, Greece, Poland, and 
the Netherlands also attended.  A number of other Western 
countries, including Great Britain, Austria, Canada, Germany, 
and Italy, were represented by their ambassadors to 
Kazakhstan.  The overall impressive turnout was to an extent 
the result of a persistent lobbying campaign on the part of 
the Kazakhstani government. 
 
SPEECHES PAY TRIBUTE TO DIVERSITY 
 
4.  (SBU) President Nazarbayev delivered opening remarks at 
the event.  He told the participants that the idea for the 
Common World Forum came from Kazakhstan's own experience as a 
multi-ethnic and multi-confessional state.  Highlighting that 
Kazakhstan is home to over 130 ethnic groups and over 40 
religious denominations, he said that the "desire to 
strengthen global dialogues is driven by Kazakhstan's 
domestic reality."  "We've developed our own successful model 
of tolerance." he said.  He reminded the participants about 
Kazakhstan's other achievements in promoting dialogue among 
different "civilizations," including through the Conference 
on Interaction and Confidence-Building in Asia (CICA) and the 
Congress of Leaders of World and Traditional Religions.  He 
also made reference to Kazakhstan's "Way to Europe" program 
aimed at increasing cooperation with Europe across a number 
of spheres. 
 
 
ASTANA 00002092  002 OF 003 
 
 
RUSSIA BRINGS IN UNIPOLARITY, GEORGIA 
 
5.  (SBU)  Most of the ministerial was taken up by three 
sessions, ostensibly on the topics of deepening ties between 
the Muslim World and the West, dealing with global hotbeds of 
instability, and addressing Islamophobia and Westernophobia. 
With a number of speakers scheduled for each session, there 
was little time remaining for discussion.  The majority of 
the speakers delivered remarks that were non-controversial, 
with most welcoming Kazakhstan's initiative and highlighting 
the work of their own countries in increasing inter-religious 
and inter-cultural understanding. 
 
6. (U) Russian Foreign Lavrov, however, departed from the 
generally collegial mo
od of the Forum to emphatically push 
points on unipolarity and Georgia.  The first to speak after 
all the opening remarks, Lavrov warned the participants of 
the dangers a "unipolar world" brings to stability and 
diversity.  "The world is divided into civilizations, where 
one civilization dominates the others," he asserted.  He 
pointed to "recent ideological rhetoric" that was creating 
"discord rather than dialogue" and forcing countries into 
"opposing blocs of so-called 'liberal democracies' and 
'authoritarian capitalism.'"  Lavrov went on to sharply 
criticize Georgia, arguing that during the South Ossetia 
conflict, Georgia not only killed innocent civilians, but 
destroyed numerous cultural sites, including numerous UNESCO 
world heritage structures, erasing a part of the region's 
multicultural history.  He asserted that Georgia's threat to 
multiculturalism was one of the reasons behind Russia's 
recognition of South Ossetia and Abkhazia:  Russia had to 
protect both to assure that the "multicultural nature of the 
Caucasus is not destroyed."  He closed by saying that Russia 
"will continue to strive to protect human rights and fight 
against unipolarity." 
 
MOTTAKI CALLS FOR ALTERNATIVE TO WESTERN "UNILATERALISM" 
 
7. (U)  In remarks that appeared somewhat disjointed, perhaps 
because of poor simultaneous interpretation, Iranian Foreign 
Minister Mottaki was less sharp than Lavrov, but nevertheless 
criticized the West for pushing a particular "unilateral" 
ideology onto the rest of the world.  "Dialogue is the very 
spirit of our culture," he asserted, "and the Universal 
Declaration on Human Rights leaves no room for 
unilateralism."  The roots of Islamaphobia lie in the 
artificial polarity created by "Western liberal democracy and 
secularism," he maintained, and "the West and its liberal 
democratic model are a certain threat to the rest of the 
world."  "Why should humanity be subject to a split between 
material and spiritual needs?" he asked.  Liberal democracies 
do not understand Islam, Mottaki asserted, but some are 
continuing to negotiate with extremists in the Middle East. 
"We need to review our methods, need to understand the 
underlying pathologies in order to better deal with 
Islamophobia," he went on. "Western thought is not the only 
way to resolve issues," asserted Mottaki in closing, rather 
"we need new national and international laws to combat racism 
and protect religion." 
 
AMBASSADOR KHALILZAD STRESSES U.S. SUPPORT FOR MUSLIMS 
 
8. (U) In his remarks, Ambassador Khalilzad stressed the 
importance of fighting Al-Qaeda, which lost ground in Iraq, 
but still has global reach.  He emphasized the need for 
success in Iraq, Afghanistan, and Pakistan.  Ambassador 
Khalilzad pointed out the sacrifices Americans have made in 
both "lives and treasure" to support and protect Muslims in 
 
ASTANA 00002092  003 OF 003 
 
 
other countries, such as Bosnia, Kosovo, and Kuwait.   From 
his perspective as an American Muslim, he underscored that 
U.S. society is not anti-Muslim:  while there are some 
elements of anti-Islamic prejudice, there is equality before 
the law and a commitment to equal opportunity. 
 
TAZHIN DECLARES UNANIMOUS ADOPTION OF ASTANA DECLARATION 
 
9. (SBU)  The final text of the Astana Declaration, the 
non-binding final communique of the Forum, remained uncertain 
up until the last minute.   The MFA organized an 
eleventh-hour meeting the night before the ministerial to 
"consolidate and finalize" proposed amendments to the text. 
Discussions, however, continued on the sidelines during the 
ministerial itself, with the EU dissatisfied with the 
Declaration's language on freedom of expression (the text 
called for "responsible use of the freedom of expression") 
and the Dutch, standing on their own, opposed to a reference 
to Saudi King Adbullah's interfaith conference (on the 
grounds that it brought together only Muslims, Christians, 
and Jews, not all religions).  At the end of the Forum, 
Foreign Minister Tazhin, to the surprise of a number of 
delegations given the outstanding issues, simply announced 
that the Astana Declaration had been adopted by consensus. 
(NOTE:  The final text, to which the United States had no 
objections, has been emailed to the Depart 
ment.  END NOTE.) 
 
10. (U) Ambassador Khalilzad did not/not clear this cable. 
HOAGLAND

Wikileaks

08ASTANA2087, KAZAKHSTAN: JUDICIARY EXPRESSES FURTHER INTEREST IN

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2087 2008-10-22 04:23 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0964
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2087/01 2960423
ZNR UUUUU ZZH
P 220423Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3616
INFO RUCNCIS/CIS COLLECTIVE 0706
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0107
RUEHKO/AMEMBASSY TOKYO 0817
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 1991
RUCNDT/USMISSION USUN NEW YORK 1940
RUEHNO/USMISSION USNATO 2276
RUEHAST/USOFFICE ALMATY 0833
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0263
RUEKJCS/SECDEF WASHDC 0185
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 002087 
 
DEPARTMENT FOR SCA/CEN, DRL/PHD 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM EAID KZ
SUBJECT: KAZAKHSTAN:  JUDICIARY EXPRESSES FURTHER INTEREST IN 
DEMOCRACY AND GOOD GOVERNANCE 
 
REF: ASTANA 1220 (NOTAL) 
 
ASTANA 00002087  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY: On October 8, USAID led an emergency meeting to 
resolve issues related to the Memorandum of Understanding with the 
Supreme Court of Kazakhstan's Administration Committee.  USAID met 
with the Chairman of the Committee to successfully resolve the 
problem and to discuss future areas for Rule of Law cooperation. 
END SUMMARY. 
 
MEMORANDUM OF UNDERSTANDING BACKGROUND 
 
3. (U) The Memorandum of Understanding between USAID and the Supreme 
Court of Kazakhstan's Administration Committee was signed in 
December 2007 to delineate each party's expectations and commitments 
for modernizing the judiciary through the installation of video 
court recording software and equipment.  Beginning in October 2007, 
USAID's Kazakhstan Judicial Assistance Project (Judicial Project) 
was based on a highly successful pilot program that installed video 
court-recording equipment in the Bostyndyk District Court in Almaty. 
 The Judicial Project is now working with the Supreme Court to 
expand the use of courtroom video recording systems to every oblast 
(province) in Kazakhstan.  The expansion will continue increasing 
the judiciary's transparency, accountability, and effectiveness; it 
also has the goal of creating a stronger and more independent 
judiciary as well as increasing citizen demand for a fair and 
transparent judicial system that responds to their needs. 
 
4. (U) In accordance with the Memorandum of Understanding, over the 
next year, the Judicial Project and the Administration Committee 
will install video recording systems into at least 27 courts, train 
court staff in their usage, and oversee their usage and operation. 
As per the Memorandum of Understanding, the Administration Committee 
will purchase all of the video and computer hardware except for the 
six purchased by USAID in the first year of the program, while USAID 
will provide the software for all of the courts.  These 27 courts 
will include 14 oblast courts, the city courts of Almaty and Astana, 
and several rayon (district) courts.  The systems will include 
voice-disguising features to protect the identity of witnesses. 
This expansion includes a considerable cost-share from the Supreme 
Court and represents a nascent political will for judicial reform. 
 
 
TECHNOLOGY ISSUES 
 
5. (SBU) During the last several months, the USAID implementer, 
Chemonics, had begun having problems with the deputy head of the 
Administration Committee, Mr. Ispanov.  Ispanov wanted to purchase 
Kazakhstani-produced video recording hardware that is incompatible 
with the previously agreed to Ukrainian-produced video recording 
software to be purchased by USAID. (NOTE:  The Ukrainian court 
recording software is used throughout Russia and much of the former 
Soviet Union. This software was also previously installed in six 
Kazakh courts as part of the Judicial Project.  END NOTE.)  While 
trying to keep to the Memorandum of Understanding's established 
timeline, Chemonics was working with the Ukrainian software company 
to resolve incompatibility issues with the Kazakhstani produced 
hardware. 
 
6. (SBU) In the midst of trying to resolve the hardware software 
incompatibility problems, Ispanov notified Chemonics on October 6 
that he would "rip up the Memorandum of Understanding."  Chemonics 
explained this threat to USAID, and USAID immediately set up a 
meeting to resolve the issue. 
 
THE MEETINGS AND SOLUTION 
 
7. (SBU) The meeting was attended by Mr. Shamshiyev, the head of the 
 
ASTANA 00002087  002.2 OF 003 
 
 
Apparatus of the Supreme Court of Kazakhstan rather than Ispanov or 
any senior member from the Administration Committee -- although they 
had a note-taker present. (NOTE:  The head of the Apparatus of the 
Supreme Court overseas the Court Administration Committee and 
reports directly to the Chief Justice of the Supreme Court.  NOTE.) 
Several other senior members of the Apparatus were in attendance, 
including the head of International Development for the Supreme 
Court.   Shamshiyev apologized for Ispanov and noted that Ispanov 
did not have the power to decide the fate of the Memorandum of 
Understanding.  He stressed, however, tha
t the Supreme Court was no 
longer interested in the Ukrainian software. 
 
8. (SBU) The USAID representative accepted Shamshiyev's decision, 
noting that the United States has a similar policy of purchasing 
products made in the United States when possible.  He argued that 
since the goal of the project was to cooperate in the rollout of a 
country-wide recording system, it did not matter which software was 
used -- as long as the Government of Kazakhstan continued with the 
rollout.  He then proposed that since the Government of Kazakhstan 
was interested in purchasing more software than originally specified 
in the Memorandum of Understanding, perhaps USAID could use its 
money to provide additional training rather than to purchase 
software.  He further proposed that some of the training could 
include capacity-building training that helps the Kazakhstani 
software company as well. (NOTE:  The Kazakhstani software is meant 
to be fully operational by the end of the year -- thus no delay in 
the installation will occur.  END NOTE) 
 
9. (SBU) Shamshiyev was quite happy with this suggestion and 
immediately agreed.  It was then agreed that an amendment would be 
drawn up to formalize the changes discussed.  The main change is 
that USAID will not purchase the remaining 21 sets of video 
recording software; rather, USAID will use its money to provide 
additional regional training programs to the courts using the to-be 
installed video recording systems.  The Administration Committee 
will purchase the new hardware as well as the new Kazakhstani 
software, leaving only the original six courts with the Ukrainian 
software and older equipment.  The result is better than the 
previous Memorandum of Understanding since it allows USAID and its 
implementer to spend more resources on their strength -- capacity 
building -- rather than on commodities, something that the 
Government of Kazakhstan can easily provide. 
 
10. (SBU) The USAID representative then met with Ms. Khuanova, the 
head of International Development of the Supreme Court of 
Kazakhstan, and Ms. Duganova, the sector head of International 
Development of the Supreme Court of Kazakhstan, to discuss future 
cooperation in the Rule of Law sector.  USAID recapped the meeting 
in which the former U.S. Ambassador to Kazakhstan and the Regional 
USAID Mission Director had offered a new partnership with the 
Supreme Court of Kazakhstan after the expiration of the current 
Judicial Project in October 2009.  The Chief Justice was extremely 
interested in the idea and specifically asked for project ideas 
related to World Trade Organization accession (see reftel).  USAID 
then offered ideas related to training judges in preparation for 
World Trade Organization accession. 
 
11. (SBU) Khuanova reconfirmed they would like to pursue a 
partnership in this area, but they were in the process of putting 
their budget together for next year.  As a result, they did not know 
how much they could contribute to a Rule of Law Project at this 
time, but noted that it was important to get the idea in place.  The 
USAID representative noted that the U.S. Government was going 
through the same budget planning process.  (COMMENT:  The Rule of 
Law and Human Rights money for Governing Justly and Democratically 
in Kazakhstan is currently too low to fully fund programs in both 
the Rule of Law and Human Rights sectors in FY 2009.  USAID has 
raised this as an issue with the Bureau for European and Eurasian 
Affairs.  END COMMENT.)  The meeting concluded with both parties 
 
ASTANA 00002087  003.2 OF 003 
 
 
agreeing to exchange further plans after budgets could be confirmed. 
 
 
COMMENT 
 
12. (SBU) The first meeting helped resolve an issue related to 
technology and strengthened our Memorandum of Understanding.  The 
second meeting highlighted the need for USAID to receive additional 
money for Rule of Law programming.  It is important that the U.S. 
Government finds additional money for a new Rule of Law program 
because cooperating with the Supreme Court also presents an 
opportunity to advance United States-Kazakhstan relations in 
addition to supporting Rule of Law development in Kazakhstan.  In 
Central Asia, it is very rare that the U.S. Government has an 
opportunity to partner with a host government on a development 
project.  It is even rarer that they partner together on something 
related to democracy and governance.  In addition to providing 
assistance at a critical juncture, a positive and significant U.S. 
Government response for further cooperation could go a long way to 
furthering relations with Kazakhstan and the region.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2086, KAZAKHSTAN: AES SUCCESS TEMPERED BY CONCERNS OVER PRICE

WikiLeaks Link

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. #08ASTANA2086.
Reference ID Created Released Classification Origin
08ASTANA2086 2008-10-22 04:22 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0961
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2086/01 2960422
ZNR UUUUU ZZH
O 220422Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3614
INFO RUCNCIS/CIS COLLECTIVE 0704
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0105
RUEHKO/AMEMBASSY TOKYO 0815
RUEHIT/AMCONSUL ISTANBUL 0039
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 1989
RUCNDT/USMISSION USUN NEW YORK 1938
RUEHNO/USMISSION USNATO 2274
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0261
RUEKJCS/SECDEF WASHDC 0183
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002086 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV EPET EINV ENRG KG KZ
SUBJECT:  KAZAKHSTAN:  AES SUCCESS TEMPERED BY CONCERNS OVER PRICE 
REGULATION 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On October 9, AES Country Manager Mike Jonagan 
briefed the Ambassador on the history of AES's investments in 
Kazakhstan's power sector, outlined a proposed solution to pending 
anti-monopoly charges, and expressed concern about a new draft 
decree that would impose strict price controls on retail power 
companies.  END SUMMARY. 
 
A SOLID RETURN ON EKIBASTUZ 
 
3.  (SBU) Jonagan began the meeting on an upbeat note, explaining to 
the Ambassador that AES sold its ownership in Ekibastuz, a 4,000 MW 
thermal coal-fired power station in northeastern Kazakhstan, for 
$1.3 billion to Kazakhmys in May 2008, a significant return on their 
$3.5 million investment in 1997.  (NOTE:  Kazakhmys is a 
UK-registered copper mining company majority-owned by Kazakhstani 
billionaire Vladimir Kim.  END NOTE).  Jonagan characterized the 
transaction as straightforward, with relatively few complications: 
"We never asked them for anything else and they never asked us for 
anything."  He described how AES's investments over the years helped 
to modernize the plant's infrastructure, expand its generating 
capacity, and pay off all debt.  Jonagan also noted the importance 
of a 15-year contract to provide 300 MW of electricity to Russia off 
the Russian grid and described how AES and its customers and 
suppliers -- including the railroad, water canal, and coal mine -- 
made the transition from a barter system to cash payments. 
 
4.  (SBU) Jonagan told the Ambassador that, over time, "we got the 
message" that the Government of Kazakhstan wanted Ekibastuz in 
Kazakhstani hands.  He also confided that AES had reached a 
crossroads with Ekibastuz earlier this year:  they had to decide 
whether to invest an additional $1 billion to bring the plant up to 
full capacity, which would make the business worth approximately $3 
billion, or sell the company and realize a significant return on 
their initial investment.  AES does not typically disclose the 
relative value of individual assets, but Jonagan told the Ambassador 
that at $3 billion, Ekibastuz would have represented approximately 
25% of the company's total equity, which some company insiders felt 
would create an imbalance in their portfolio.  Jonagan said AES had 
no regrets about its decision to sell Ekibastuz and proudly noted 
that the Government retained AES to operate the plant under a 
management agreement until December 2010.  "They know that we can 
add value in terms of safety, environmental protection, 
transparency, and procurement," he said. 
 
5.  (SBU) Simultaneously, AES has developed what Jonagan called a 
"world-class power distribution business" in eastern Kazakhstan. 
During the past four years, AES has improved collection rates even 
as tariffs have risen and has steadily paid down the company's 
debts.  The biggest challenge with that business, according to 
Jonagan, is overcoming the old Soviet mentality and culture that 
encouraged customers to treat electric power as an entitlement. 
Jonagan recounted how an elderly woman, a veteran of World War II, 
scolded him for trying to collect money from her.  "I fought the 
fascists," she said.  "Stalin promised me free electricity and I'll 
never pay." 
 
ANTI-MONOPOLY ALLEGATIONS 
 
6.  (SBU) Turning to the ongoing dispute over a $200 million fine 
for alleged antimonopoly activities, Jonagan expressed optimism that 
a settlement was within reach.  (NOTE:  AES has already paid $29 
million of the fine and has had another $6.5 million in assets 
frozen.  END NOTE).  According to Jonagan, on September 5, the 
Ministry of Finance presented AES with 12 items that it said needed 
to be resolved or changed in its current contractual arrangement. 
AES has no objections to any of the items in principle, but each one 
has a commercial value that must be calculated and incorporated into 
 
ASTANA 00002086  002 OF 002 
 
 
a new "term sheet" (i.e., a new contract.)  Jonagan speculated that 
one way out of the impasse would be for a Ministry of Finance-led 
working group to develop a new term sheet that would address the 12 
items raised by the Government of Kazakhstan, followed by a Supreme 
Court decision that all previous lower court decisions against AES &
#x000A;are invalid due to "technical deficiencies," at which point the 
lower court would drop the case against AES.  Jonagan seemed 
confident this would work and said the head of the Supreme Court 
told him, "We've got to figure out how to get out of this 
situation." 
 
"NOW WE'RE REALLY STUMPED" 
 
7.  (SBU) On September 17, AES and other power companies were 
invited to a meeting chaired by Minister of Energy and Mineral 
Resources Sauat Mynbayev to discuss electricity tariff policy to 
2015.  At the meeting, Mynbayev distributed a draft decree from 
Prime Minister Masimov "to enhance the investment attractiveness of 
the electric power industry and ensure the development of power 
assets" in Kazakhstan.  The decree, which has not yet come into 
effect, calls upon the Ministry of Energy and Mineral Resources 
(MEMR), the Ministry of Economy, and the Agency for the Regulation 
of Natural Monopolies to set tariff ceilings by December 1, 2008 for 
electric, thermal, hydroelectric, and gas-turbine power generation 
up to 2015. 
 
8.  (SBU) The decree would fix hydroelectric power increases at 107% 
of current tariffs for the next seven years.  As Jonagan put it, 
"our assigned price is ridiculous."  Jonagan also confided that MEMR 
suggested the possibility of charging one set of clients a higher 
price than other clients (with poorer residential customers 
presumably getting the lower rates).  He called this a violation of 
the terms of the contract and asked rhetorically, "How do I decide 
who gets the cheap electricity?"  He informed the Ambassador that 
AES has retained legal counsel and is looking into the possibility 
of international arbitration to settle the matter.  Jonagan lamented 
the fact that, just as AES seemed about to resolve its anti-monopoly 
allegations, another new problem had appeared.  "Now we're really 
stumped," he said. 
 
AES INTERESTED IN KYRGYZ ASSETS 
 
9.  (SBU) Jonagan told the Ambassador that AES had previously been 
encouraged by the Government of Kyrgyzstan to submit a proposal to 
acquire state-owned power companies, but was told very recently by 
Kyrgyz officials that Russian President Medvedev has put pressure on 
the Government of Kyrgyzstan to sell its power assets to a Russian 
company, Inter RAO.  Jonagan said that AES would be willing to allow 
Inter RAO to buy the hydroelectric plants, but AES is keenly 
interested in Kyrgyzstan's combined heat and power assets.  The 
Ambassador urged Jonagan to provide this information to the Embassy 
in Bishkek and the U.S. Foreign Commercial Service. 
 
HOAGLAND

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08ASTANA2085, KAZAKHSTAN: ALMATY NOTES, SEPTEMBER 29 – OCTOBER 11,

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Reference ID Created Released Classification Origin
08ASTANA2085 2008-10-20 12:19 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9505
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHPOD RUEHPW RUEHROV RUEHSR RUEHVK
RUEHYG
DE RUEHTA #2085 2941219
ZNR UUUUU ZZH
R 201219Z OCT 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3613
INFO RUCNCIS/CIS COLLECTIVE 0703
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0104
RUEHKO/AMEMBASSY TOKYO 0814
RUEHBS/USEU BRUSSELS
RUEHVEN/USMISSION USOSCE 1988
RUCNDT/USMISSION USUN NEW YORK 1937
RUEHNO/USMISSION USNATO 2273
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0260
RUEKJCS/SECDEF WASHDC 0182
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS ASTANA 002085 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM SOCI KZ
SUBJECT:  KAZAKHSTAN:  ALMATY NOTES, SEPTEMBER 29 - OCTOBER 11, 
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. 
 
STUDENT ADVOCACY GROUP AGAINST HIGHER TUITION 
 
2.  Bakhytzhan Toregozhina, head of the Ar Rukh Hak Fund, a student 
advocacy group, reports that universities in Almaty increased 
tuition by an average of 30 percent this past year.  Ar Rukh Hak 
sent inquiries to 17 universities requesting information on how they 
set their tuition rates.  Eleven sent responses.  Ar Rukh Hak 
intends to file suit with the Almaty Economic Court to force the 
others to respond. 
 
PENSIONERS BRING APPEAL TO OSCE OFFICE 
 
3.  On September 29, a group of Almaty pensioners brought to the 
OSCE office in Almaty an appeal they had sent to President 
Nazarbayev complaining that their pensions do not cover the high 
costs of food and utilities.  The pensioners explained that numerous 
appeals they had sent directly to Nazarbayev, other senior 
officials, and the Nur Otan party have gone unanswered. 
 
PUBLIC COUNCIL'S MEETING ON ILLEGAL CONSTRUCTION 
 
4. "Vremya" reported on October 1 that Almaty's Public Council on 
Social Conflicts -- a newly-established body which includes 
representatives of the city government, the ruling Nur Otan party, 
opposition parties, and NGOs -- met on September 30 to discuss 
housing issues.  Shanyrak movement leader Asylbek Kozhakhmetov 
raised the issue of houses illegally constructed by migrants in 
Almaty's newly-formed Alatau district, which is located on the 
city's outskirts.  Bagdat Manzorov, head of the Alatau district 
administration, reported that a special commission on housing and 
land issues would review the situation and then make a decision 
regarding the legalization of such structures.  Following the 
meeting, however, Manzorov announced that houses constructed without 
any legal documentation would be demolished. 
 
FIRST SANCTIONED DEMONSTRATION OF "DOLSHIKI" 
 
5.  For the very first time, the Almaty mayor office's sanctioned a 
protest of Almaty's "dolshiki" -- city residents who invested their 
savings into the construction of apartments that have not been 
completed.  Approximately 1,000 people participated in the 
demonstration, which was held on October 11 and initiated by the 
Talmas movement.  Several opposition and NGO leaders -- including 
Petr Svoik of the Azat party, Amirbek Togusov of the National Social 
Democratic party, and Aynur Kurmanov of the Talmas movement -- gave 
speeches at the protest.  The demonstrators called for lowering the 
interest rates on their mortgages and for a three-year moratorium on 
mortgage repayments.  They announced their intention to hold similar 
protest actions across the country on a regular basis. 
 
CONSTRUCTION COMPANIES CHARGED WITH EMBEZZLEMENT 
 
6.  According to an October 6 report on TAN television, so far this 
year, the Financial Police in Almaty and Astana have filed 19 
criminal cases against construction companies.  The companies have 
all been charged with embezzling investors' money.  According to the 
Prosecutor General's office, seven individuals have thus far been 
convicted in connection with these cases. 
 
HOAGLAND

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