Monthly Archives: November 2008

08ASTANA2375, KAZAKHSTAN: CHANGES IN THE MINISTRY OF INTERIOR

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Reference ID Created Released Classification Origin
08ASTANA2375 2008-12-01 02:32 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2559
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RUEHSR RUEHVK RUEHYG
DE RUEHTA #2375/01 3360232
ZNR UUUUU ZZH
P 010232Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 4001
INFO RUCNCIS/CIS COLLECTIVE 0876
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0281
RUEHKO/AMEMBASSY TOKYO 0983
RUEAWJL/DEPT OF JUSTICE WASHINGTON DC
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RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
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RUEKJCS/SECDEF WASHDC 0358
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002375 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE, SCA/CEN, SCA/RA 
 
TAGS: PGOV PREL PINR SNAR KCRM KZ
SUBJECT:  KAZAKHSTAN:  CHANGES IN THE MINISTRY OF INTERIOR 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Vice-Minister of Internal Affairs Alik 
Shpekbayev has been appointed to a position in the presidential 
administration.  Shpekbayev was one of post's closest interlocutors 
in the Ministry of Internal Affairs (MVD) and the only Vice-Minister 
to have risen through the ranks of the MVD.  Though not officially a 
promotion, this appointment bodes well for Shpekbayev's future in 
the Kazakhstani law enforcement system.  END SUMMARY. 
 
3.  (U) According to press reports, President Nazarbayev appointed 
Vice-Minister of Interior Alik Shpekbayev Head of the Law 
Enforcement System Department of the Presidential Administration, 
making Shpekbayev one of the lead presidential advisors on law 
enforcement issues.  Although they are separate divisions of the 
Presidential Administration, the head of the Secretariat of the 
Security Council also has oversight of the Law Enforcement System 
Department. 
 
4.  (U) Shpekbayev was formerly Vice-Minister for Internal Affairs 
and was responsible for some of the most difficult and complex 
sections of the MVD:  the Committee of Administrative Police, the 
Committee of Road Police, the Legal Department, and Interpol. 
Shpekbayev was also the only Vice-Minister in the MVD who rose 
through the ranks and was not a political appointee, which not only 
made him the most experienced Vice-Minister, but also the most 
respected by career employees of the MVD. 
 
BACKGROUND ON THE SECURITY COUNCIL 
 
5.  (U) The Security Council is a consultative and advisory body 
established by President Nazarbayev.  The Council advises the 
president on all areas and includes the chairmen of both the upper 
and lower houses of Parliament, Prime Minister, Chairman of the 
Committee on National Security (KNB), and the Ministers of Foreign 
Affairs and Defense.  The Secretary of the Security Council is 
appointed by the president and manages the Secretariat of the 
Security Council and the Law Enforcement System Section of the 
Presidential Administration.  The current Secretary, Kairbek 
Suleimenov, also rose through the ranks of the MVD.  From 1972 
through 1987, he was an investigator in several prosecutor generals' 
offices and police departments.  After Kazakhstan's independence, 
Suleimenov was First Vice-Minister of Internal Affairs for one year 
before becoming State Councilor on Law Enforcement and Judicial 
Issues.  Suleimenov served twice as Minister of Internal Affairs. 
 
BIO NOTES 
 
6.  (U) Alik Shpekbayev was born on July 4, 1957, in the Alma-Ata 
(Almaty) Oblast of Kazakhstan.  He graduated from the Karaganda 
Higher School of the Ministry of Internal Affairs (MVD) in 1987 and 
the MVD Academy of the USSR in 1992. He has a Master's degree in 
jurisprudence.  From 1980 to 1984, Shpekbayev served in the Alma-Ata 
Oblast as a detachment commander at a prison camp and later of a 
jail.  He later became Chief of the Balkash Regional Department of 
Internal Affairs and Chief of Administration of the Department of 
State Investigative Committee of the Alma-Ata Oblast.  In 1997, he 
was transferred to the Central MVD and was appointed head of the 
City Administration of the Internal Affairs of the Almaty Oblast. 
Since November 2003, he has served as Vice Minister of the MVD.  He 
has been the recipient of numerous awards and medals. 
 
7.  (SBU) COMMENT:  Though this appointment is not officially a 
promotion because Shpekbayev is moving from the Ministry to the 
Presidential Administration, his career is clearly advancing 
rapidly.  As the Vice-Minister in charge of many of the most 
important areas within the MVD and much of the interaction with the 
international community, he brings a great deal of experience to the 
Presidential Administration.  With this appointment, Shpekbayev is 
likely being groomed to be the next Minister of Internal Affairs. 
It is a very common procedure for future ministers to be moved to 
the Presidential Administration in preparation for their future 
appointment.  Though rumors often abound about changes in the MVD, 
President Nazarbayev has consistently denied such rumors.  It is not 
yet clear that Shpekbayev is next in line to become Minister of 
Internal Affairs or, if he is, how long he would serve in the 
Presidential Administration before he would be considered ready to 
take the helm at the MVD.  END COMMENT. 
 
ASTANA 00002375  002 OF 002 
 
 
 &#x00
0A;MILAS

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08ASTANA2374, KAZAKHSTANI BORDER GUARDS EAGER FOR INL-SUPPORTED OSCE

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Reference ID Created Released Classification Origin
08ASTANA2374 2008-12-01 02:21 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2544
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ
RUEHNEH RUEHPW RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHTA #2374/01 3360221
ZNR UUUUU ZZH
O 010221Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3999
INFO RUCNCLS/SCA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 0874
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0441
RUEKJCS/SECDEF WASHDC 0356
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002374 
 
SIPDIS 
SENSITIVE 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KPAO KZ
 
SUBJECT:  KAZAKHSTANI BORDER GUARDS EAGER FOR INL-SUPPORTED OSCE 
TRAINING 
 
1. Sensitive but unclassified.  Not for internet distribution. 
 
2. (SBU) SUMMARY:  DCM, INL chief and Legatt visited Uralsk, the 
capital of the Western Kazakhstan oblast (region).  While in Uralsk, 
the DCM and INL chief dedicated an INL-funded Border Guard training 
facility.  Following Soviet tradition, the Border Guards are a 
military wing of the Committee for National Security (KNB), the 
direct descendent of the KGB.  At the facility, the OSCE, UNHCR and 
other international organizations were conducting well-received 
training in basic border management, which includes international 
standards for the treatment of border crossers, including refugees. 
In general, the Border Guards have been eager to cooperate with 
Western organizations.  END SUMMARY. 
 
3. (SBU) Uralsk is an old city by Kazakhstani standards, with a 
history dating to the 18th century, when it was a Cossack trading 
post on the border with Central Asia.  The city still has a strong 
Russian colonial flavor with numerous small wooden houses painted 
bright blue, green or left natural, with contrasting painted 
shutters.  A persistent Russian cultural influence was evident at a 
local Orthodox church, where DCM observed an elderly woman praying 
to and kissing an icon of the murdered Tsar Nicholas II and his 
family.  Local residents also proudly related their link to Russian 
history and highlighted visits to Uralsk by Pushkin and Tolstoy. 
Kazkahs are from the lesser (Western) juz but rarely is the Kazakh 
language heard on the streets.  In other ways, however, Uralsk is a 
typical modern Kazakhstani city.  The city square has 
newly-constructed office buildings of equal size for the city 
administration (Mazlihat), the Western Kazakhstan governor's office 
(Akimat), and Nur Otan (President Nazarbayev's political party). 
The latter two are separate buildings connected by a breezeway for 
convenience of access. 
 
4.  (SBU) A review of the border history of Uralsk was particularly 
appropriate, since the primary purpose of the visit was to 
inaugurate an INL-renovated training center for the Border Guards. 
This is the second INL-funded training center at a Border Guard 
base.  The Border Guards are part of the Committee for National 
Security (KNB), the Kazakhstani direct descendent of the soviet KGB. 
 The Border Guards are enthusiastic about cooperation with the 
United States and other Western partners.  The first training 
course, which launched the opening of the center, featured training 
by the OSCE, EU, International Organization for Migration (IOM), and 
UNHCR.  The goal of the course was to increase the professionalism 
of the Border Guards, by getting them to focus on protecting the 
rights of individuals while preventing the transit of contraband 
(drugs, trafficked persons, materials that could be used for 
creating weapons of mass destruction). 
 
5.  (SBU) Durman Yelmesov, a young major in command of the Uralsk 
border post, is enthusiastic about cooperation with Western 
partners.  He and Colonel Akmetov, who is in charge of the anti-drug 
office in Astana, joked how wherever Yelmesov went he established 
training centers.  They both asked for additional training in all 
aspects of detecting contraband and convicting smugglers. 
Conversations with the OSCE, UNHCR, EU, and IOM confirmed the Border 
Guards' enthusiasm for training, including courses on the rights of 
citizens and refugees.  Kazakhstan's record of protecting refugees 
has been impressive on most of its borders.  However, there are 
still political issues with China that prevent Kazakhstan from 
admitting Uyghurs. 
 
6. (SBU) The apparent liberalism of the Border Guards officers, 
however, was not unlimited.  IOM had encouraged the Border Guards to 
have the press at the opening of the training course.  After 
initially indicating support, the base commander subsequently 
decided to issue a press release and not have reporters present at 
the event.  He explained that he could not allow the press into the 
training site since it was a "sensitive military zone."  The DCM 
later explained to the commander that only by opening to the media 
could the Border Guards improve its image of service to the public. 
Neither officer objected to this point. 
 
7.  (SBU)  In addition, during this visit the Legatt conducted an 
interview with an officer from the Kazakhstani Agency for Combating 
Economic Crimes and Corruption (aka Financial Police) to attend 
training at the FBI National Academy.  Post anticipates that this 
 
ASTANA 00002374  002 OF 002 
 
 
January, the first Kazakhstani law enforcement official will begin 
long-term training in the United States.  This
 will add to the 
approximately 175 Kazakhstani officers already trained at the 
International Law Enforcement Academy in Hungary. 
 
8.  (SBU) Just before departure, the DCM, INL officer and Legatt 
attended a standing-room only discussion of the U.S. presidential 
elections at the Uralsk American Corner.  The questions from the 
largely student crowd were well-informed and positive.  One student 
asked why the Peace Corps had withdrawn its volunteers from Uralsk 
and said that the Peace Corps was missed.  The answer was that due 
to the distance from Peace Corps headquarters in Almaty, resource 
limitations prevented the Peace Corps from supporting volunteers in 
Western Kazakhstan and the Caspian region.  It was clear that the 
students present had a strong desire for western and specifically 
American contacts. 
 
9.  (SBU) COMMENT:  Embassy cooperation with the Border Guards has 
been excellent and is well-documented (septel).  It was surprising, 
however, to find the Border Guards also eager to cooperate with 
OSCE, UNHCR and other international organizations.  In general, the 
citizens of western Kazakhstan, an area visited less frequently than 
the Caspian region, seemed eager to meet Americans and were positive 
in their outlook toward the United States.  One problem for the 
population seemed to be access to the world from their isolated 
location on Russia's southern border.  Internet access is rare and 
slow.  The sites where public internet stations were available were 
very heavily used.  The presence of the American Corner offered one 
of the few windows on the world outside of Kazakhstan and Russia. 
END COMMENT. 
 
MILAS

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08ASTANA2372, KAZAKHSTAN: MFA SEEKS HIGH PROFILE VISIT TO SIGNAL

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Reference ID Created Released Classification Origin
08ASTANA2372 2008-11-28 11:00 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1527
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
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RUEHSR RUEHVK RUEHYG
DE RUEHTA #2372/01 3331100
ZNR UUUUU ZZH
O 281100Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3996
INFO RUCNCLS/SCA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 0872
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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RUEHKO/AMEMBASSY TOKYO 0981
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0439
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RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002372 
 
SIPDIS 
SENSITIVE 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ
 
SUBJECT:  KAZAKHSTAN:  MFA SEEKS HIGH PROFILE VISIT TO SIGNAL 
CONTINUED U.S. COMMITMENT 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On November 25, 2008, Econoff met with the Head 
of the Americas Department at the MFA, Talgat Kaliyev, to deliver a 
demarche on the proposed development of a Global Partnership for 
Agriculture and Food (GPAF).  After the demarche and its points were 
discussed, eliciting a generally positive response as to the likely 
participation of Kazakhstan in such a partnership (septel), the 
topic of conversation shifted to the broader U.S.-Kazakhstan 
strategic partnership, Kazakhstan's growing desire for a highly 
visible show of U.S. support, and additional insights on the merger 
of Samruk and Kazyna into a mega-holding company. END SUMMARY. 
 
SAMRUK-KAZYNA TO HOLD KEYS TO THE KINGDOM 
 
3.  (SBU) According to Kaliyev, the newly-created Samruk-Kazyna 
National Welfare Fund is the "president's baby," formed to give 
needed muscle to the economic and development policy initiatives of 
the government.  In his words, it was born of the need to achieve 
"concrete results" in an environment dominated by ineffective 
government ministries.  He added that future international business 
partnerships, particularly involving tenders or concessions, would 
need to involve Samruk-Kazyna.  He also shared his concern that 
existing initiatives such as the Public Private Economic 
Partnerships Initiative (PPEPI) run the risk of being buried in the 
bureaucracy of ministries such as the Ministry of Industry and 
Trade.  (NOTE: Kaliyev was our primary conduit in the run up the 
launch of the PPEPI in June 2008. END NOTE).  In his view, involving 
Samruk-Kazyna will be key to moving any economic or business 
development initiative forward. 
 
KAZAKHSTAN SEEKS REASSURANCE OF U.S. COMMITMENT 
 
4.  (SBU) Regarding the broader relationship with the United States, 
Kaliyev emphasized that Astana was not entirely convinced of U.S. 
commitment to the "strategic partnership."  Kaliyev said that 
Kazakhstan has long done the bidding of the U.S government -- 
particularly regarding nuclear disarmament, counter-terrorism, and 
participation in Iraq -- and warned of a growing consensus that the 
United States should reciprocate and make a more serious, visible 
commitment to the development of Kazakhstan.  For example, he 
suggested U.S. corporate investment in an industry outside the 
extractive sector and specifically mentioned that the president was 
very interested in cutting-edge technologies, such as power 
generating wind turbines.  He also said that Kazakhstan continues to 
feel that it is being punished by the Jackson-Vanik legislation, and 
the "stalled WTO negotiations" over agriculture and genetically 
modified organisms.  Kaliyev said that the Kazakhstani government 
has been led to believe that WTO accession and the lifting of 
Jackson-Vanik are somehow related, although he admitted, "we do not 
understand the connection." 
 
OBAMA SHOULD VISIT KAZAKHSTAN 
 
5.  (SBU) Kaliyev said his opinion of the relationship of Washington 
to Astana had changed since he returned from his assignment as DCM 
at the Embassy of Kazakhstan to the United States.  He feels that, 
given the strategic importance of Kazakhstan, it is time for the 
United States to make a highly-visible commitment to the bilateral 
relationship in the near future.  Kaliyev expressed his support for 
the results of the recent presidential election and his belief that 
"America once again demonstrated its greatness" and specifically 
mentioned Astana's strong desire for a future visit from 
president-elect Obama.  He said that such a public and prominent 
visit would help to solidify Kazakhstan's commitment to the 
strategic partnership.  Nazarbayev, he said, is committed to the 
Path to Europe, and wants very much for Kazakhstan to serve as a 
model for the region -- a place where European ways of thinking 
co-exist peacefully and productively with Central Asian culture and 
tradition. 
 
CRITISISM POSSIBLY LIMITED TO WORKING LEVEL 
 
6.  (SBU) COMMENT:  Kaliyev is the Chief of the MFA's Americas 
 
ASTANA 00002372  002 OF 002 
 
 
section (United States, Canada, Cuba, Brazil have resident 
embassies).  His position is roughly equivalent to that of a DAS. 
One can take his statements as reflecting thought within the MFA but 
not necessarily the government as a whole.  On November 26, 
Ambassador Hoagland hosted Kaliev, his boss Deputy Foreign Minister 
(Europe and the
Americas) Saribay and the chief of staff to State 
Minister Saudabayev (the former Kazakhstani ambassador to the United 
States and close personal advisor to President Nazarbayev) for 
Thanksgiving dinner.  Over dinner, Kaliyev voiced the same 
statements about a desired Presidential visit, but Saribay was 
extremely warm in his statements about the bilateral relationship. 
Kaliev's statements may express some frustration at the working 
level, but there are no indications that this frustration extends to 
the very top.  END COMMENT. 
 
MILAS

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08ASTANA2365, KAZAKHSTAN: SENATE CHAIRMAN OFFERS TO CONSULT WITH THE

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Reference ID Created Released Classification Origin
08ASTANA2365 2008-11-26 12:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0318
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2365/01 3311226
ZNR UUUUU ZZH
O 261226Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3989
INFO RUCNCIS/CIS COLLECTIVE 0870
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0277
RUEHKO/AMEMBASSY TOKYO 0979
RUCNDT/USMISSION USUN NEW YORK 2083
RUEHNO/USMISSION USNATO 2415
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RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0437
RUEKJCS/SECDEF WASHDC 0352
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002365 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM ECON SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN: SENATE CHAIRMAN OFFERS TO CONSULT WITH THE 
AMBASSADOR ON MADRID-COMMITMENT LEGISLATION 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY: On November 26, Ambassador Hoagland met with 
Senate Chairman Kasym-Zhomart Tokayev.  Tokayev told the Ambassador 
that the Senate's priorities are to pass a package of "Madrid" 
amendments now making their way through the Mazhelis (lower house of 
Parliament) and to assist the government in mitigating the impact of 
the economic downturn.  He said his goal is to improve ties between 
the Kazakhstani Senate and the U.S. Congress and asked for our 
assistance in setting up meetings for his trip to the United States 
sometime next year.  Regarding the recently passed religion law, 
Tokayev lamented that "the OSCE and Europe" criticized the law 
without realizing that it is far more liberal than similar laws in 
the region, and even in Europe.  He contended that the legislation 
was guided by public pressure from the Muslim and Orthodox 
communities to fight against sects.  Tokayev promised to get the 
Cooperative Threat Reduction legislation ratified quickly.  In 
response to the Ambassador's question on elections, Tokayev said 
early elections were unlikely but "no one can be 100 percent sure." 
END SUMMARY. 
 
TOP PRIORITIES:  MADRID, THE ECONOMY, IMPROVED TIES WITH THE UNITED 
STATES 
 
3.  (SBU) On November 26, the Ambassador met with Senate Chairman 
Kasym-Zhomart Tokayev to discuss the Senate's broad legislative 
goals.  Tokayev congratulated the Ambassador on the "successful 
beginning" of his tenure in Kazakhstan, especially based on his 
interviews in the Kazakhstani press, which he said he followed 
closely.  He noted that he has been following the U.S. election and 
is eagerly anticipating the naming of the new Secretary of State. 
 
4.  (SBU)  Tokayev said his number-one focus is on the draft laws on 
the media, elections, and political parties that are making their 
way through the Mazhelis (the lower house of Parliament).  He 
expressed hope that this meeting was the beginning of a "close and 
personal" relationship with the Ambassador that would allow for 
"close consultation on all pieces of legislation."  "Please do not 
hesitate to voice your concerns," he underlined, stressing that he 
would appreciate hearing our view on all OSCE-related legislation. 
The Ambassador thanked Tokayev and suggested that the government 
should allow civil society to review the laws in the Mazhelis' 
Public Chamber.  Tokayev agreed with the suggestion, but he noted 
that this package of laws is a "big step forward" and added that he 
doesn't expect to hear many concerns from civil society.  (COMMENT: 
Some civil society leaders are already expressing concern.  END 
COMMENT.) 
 
5.  (SBU) The Senate's second top priority, according to Tokayev, is 
the economy.  "These are tough times," he noted, reminding the 
Ambassador that Parliament had to renegotiate Kazakhstan's budget to 
adjust for falling oil prices.  The Senate is determined to give the 
government necessary "freedom of movement," stressed Tokayev, "much 
like the Congress in the United States." 
 
6.  (SBU) Looking more long-term, Tokayev said his goal is to 
strengthen inter-Parliamentary ties between Kazakhstan and the 
United States.  He shared his plans to organize several trips for 
Kazakhstani Senators to the United States "to explain Kazakhstan." 
He also expressed hope that more Congressional delegations would 
come to Kazakhstan.  Tokayev told the Ambassador he plans to visit 
the United States next year and asked for our help scheduling 
appropriate meetings.   The Ambassador asked him to keep us updated 
on his travel plans so we can fully assist him. 
 
RELIGION LAW "LIBERAL" COMPARED TO OTHERS 
 
7.  (SBU) Tokayev brought up Kazakhstan's religion legislation, 
which the Parliament passed on November 26 (septel).  He lamented 
that "many in Europe and the OSCE" are criticizing Kazakhstan 
without fully understanding the legislation.  The law is "much more 
liberal" than similar legislation in Russia and Kyrgyzstan, he 
maintained, and many of the new provisions are more liberal than 
even those found in some European religion laws.  Tokayev told the 
Ambassador that he plans to attend OSCE's Parliamentary Assembly 
session in February in part to publicize Kazakhstan's Path to Europe 
program, and to "assuage the concerns and confusion" about the 
 
ASTANA 00002365  002 OF 002 


 
religion legislation. 
 
8.  (SBU) The Ambassador noted that civil society and OSCE's Office 
of Democratic Institutions and Human Rights were concerned about how 
the new law would treat small, "non-traditional" faiths.  Tokayev 
countered by saying the government "is under pressure from public 
opinion to counter the influence of sects."  (NOTE: While Tokayev is 
correct that most people want the government to do something about 
"sects," civil society leaders maintain that this view is fueled 
largely by the broad media campaign that paints many non-traditional 
faiths as "dangerous sects."  END NOTE.)  He maintained that "there 
are those" in the Russian Orthodox establishment who believe that 
only Islam and Russian Orthodoxy should be allowed in Kazakhstan and 
even oppose Catholicism and Judaism.  He confided to the Ambassador 
that, in his view, the government should "provide more liberties for 
non-traditional faiths," but repeated that the legislation is more 
liberal than those in other countries.  Kazakhstan's legislation 
requires only 50 members to register as a religious organization, he 
underlined, while Spain requires 1,000 and Kyrgyzstan is considering 
imposing a minimum of 200.  In answer to the Ambassador's question 
on whether the President might send the law to the Constitutional 
Court before signing, Tokayev said it would be a "good idea" but he 
did not know whether there were any plans to do so and made no 
commitments. 
 
CTR WILL MOVE THROUGH THE SENATE QUICKLY 
 
9.  (SBU) Tokayev said the Cooperative Threat Reduction (CTR) 
Amendment was still undergoing intergovernmental review and had not 
yet arrived at the Parliament.  He promised to expedite it once it 
passes the Mazhelis and comes to the Senate.  The Ambassador 
encouraged final ratification before the 15th anniversary of the CTR 
on December 13. 
 
"NO REASON" FOR EARLY ELECTIONS 
 
10.  (SBU) The Ambassador asked Tokayev about persistent rumors that 
the President will call early elections after the new political 
party and election laws are passed.  Tokayev denied the possibility, 
saying the President "sees no reason" to have them before 2012, but 
added the caveat that "no one can be 100 percent sure, of course." 
 
 
HOAGLAND

Wikileaks

08ASTANA2364, CHINESE AMBASSADOR DISCUSSES CHINA’S WIDE-RANGING

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Reference ID Created Released Classification Origin
08ASTANA2364 2008-11-26 11:51 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO0258
RR RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW RUEHROV
RUEHSR
DE RUEHTA #2364/01 3311151
ZNY CCCCC ZZH
R 261151Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3987
INFO RUCNCIS/CIS COLLECTIVE 0868
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0275
RUEHKO/AMEMBASSY TOKYO 0977
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0350
RHEHNSC/NSC WASHDC 0435
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 002364 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, EAP/CM 
 
E.O. 12958: DECL: 11/26/2018 
TAGS: PGOV PREL ECON EINV CH RS TX UZ KZ
SUBJECT: CHINESE AMBASSADOR DISCUSSES CHINA'S WIDE-RANGING 
INTEREST IN CENTRAL ASIA 
 
Classified By: CLASSIFIED BY: AMBASSADOR RICHARD E. HOAGLAND, REASONS 1 
.4 (B) AND (D) 
 
1.  (C) SUMMARY:  On November 25, China's Ambassador to 
Kazakhstan Guoping Cheng called on the Ambassador to brief 
him on Chinese Prime Minister Wen Jiabao's visit to 
Kazakhstan for the October 29 Shanghai Cooperation 
Organization (SCO) ministerial meeting in Astana, and Cheng's 
views on the role of the SCO in the region.  Cheng 
characterized Russia as "aggressive" in seeking to protect 
its flanks in its "near abroad."  END SUMMARY. 
 
SCO MINISTERIAL MEETING 
 
2.  (C) Cheng said the SCO ministerial meeting consisted of 
two stages: a small-scale meeting between the six member 
states of the SCO and a larger meeting between the six 
members and representatives of the United States, Mongolia, 
India, and Afghanistan.  (COMMENT:  He misspoke because the 
United States is not an SCO observer.  END COMMENT.)  The 
main outcome of the ministerial was a unanimous decision to 
enhance regional economic cooperation to combat the global 
financial crisis.  Member states also agreed to provide $1.2 
billion assistance to Central Asian countries hit hard by the 
crisis. 
 
THE SCO'S PLANS IN AFGHANISTAN 
 
3.  (C) Cheng said that Russia appeared the most eager to 
engage the SCO on Afghanistan.  Russian representatives 
suggested the SCO hold an international conference in Russia 
specifically to discuss Afghanistan prior to the next 
ministerial meeting.  Representatives from Tajikistan won 
support from Russia, China, and Kazakhstan for its proposal 
to set up a permanent international organization in Dushanbe 
to counter narcotics trafficking, but Uzbekistan strongly 
opposed.  Cheng said that China has a keen interest in 
stabilizing the Afghan economy, defeating the Taliban, and 
fighting the illegal narcotics trade. 
 
UZBEKISTAN AN "OBSTRUCTIONIST" 
 
4.  (C) Cheng said that Uzbekistan had taken an 
"obstructionist position" in the SCO discussions about 
Afghanistan.  Most notably, the Uzbek representative, Deputy 
Prime Minister Rustam Azimov, intensely opposed the Russian 
proposal for an Afghanistan conference in Russia.  Uzbekistan 
also opposed Russia,s longstanding proposal to start an 
energy club in the SCO.  Cheng suggested that Uzbekistan 
deliberately sent a Deputy Prime Minister as a political 
statement to other member states.  Cheng interpreted 
Uzbekistan,s actions as part of Uzbekistan's turning, once 
again, away from Russia toward the West. 
 
CHENG'S VIEW OF RUSSIA 
 
5.  (C) Cheng told the Ambassador that Russia has 
traditionally considered Central Asia to be within its sphere 
of influence.  He elaborated the point by describing the 
three Russian strategic "buffers" of Ukraine/Belarus, the 
Caucasus, and Central Asia.  Cheng suggested that as a result 
of recent moves by Ukraine and Georgia to join NATO, Russia 
will continue to place the highest priority on ensuring that 
the countries of Central Asia remain close to Russia. 
According to Cheng, of all the Central Asian states, 
Kazakhstan is the most important due to the strategic role it 
plays as a source of raw materials.  Cheng said that Russia 
will use its two main weapons, energy and military might, to 
hinder European, Chinese, and U.S. engagement with Central 
Asia.  He suggested that this is the primary reason why 
Russia places so much importance on the SCO, which it 
considers a tool to resist the U.S. presence in Central Asia. 
 Cheng added that China will continue to direct its foreign 
policy in Central Asia through peaceful, non-aggressive 
means, while Russia will not hesitate to turn aggressive in 
 
ASTANA 00002364  002 OF 002 
 
 
the region. 
 
CHINESE PRIME MINISTER OFFERS FINANCIAL ASSISTANCE 
 
6.  (C) The primary purpose of Chinese Prime Minister Wen 
Jiabao's October 29 visit to Kazakhstan was to attend the SCO 
ministerial meeting.  Wen also used the opportunity to have 
his first formal meeting with President Nazarbayev.  During 
one-on-one meetings, Wen offered Nazarbayev Chinese 
assistance to cope with the global financial crisis. 
According to Cheng, Wen offered to provide an unspecified 
amount of guaranteed investment by Chinese entrepreneurs for 
industrial projects in Kazakhstan's private sector.  Cheng 
stated that t
his financial assistance would be in addition to 
China,s $1.2 billion commitment to help SCO member nations 
combat the financial crisis.  At the conclusion of their 
meeting, according to Cheng, Wen and Nazarbayev signed 
separate energy and financial cooperation agreements.  Cheng 
noted that China attaches great importance to Kazakhstan due 
to its leadership role in Central Asia and said that "China 
will not stand aside" while Kazakhstan has problems. 
 
7.  (C) At the end of the meeting, Ambassador Cheng asked if 
future meetings could also be held in the Ambassador's office 
(or Residence).  He explained he can speak more freely at the 
U.S. Embassy because the Chinese Embassy is still in 
commercial office space.  Cheng expressed clear frustration 
that Kazakhstan has still not approved the agreement for 
China to acquire for its new Embassy the plot of land across 
the street from the U.S. Embassy. 
HOAGLAND

Wikileaks

08ASTANA2361, KAZAKHSTAN: ALMATY NOTES, NOVEMBER 10 – NOVEMBER 21, 2008

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Reference ID Created Released Classification Origin
08ASTANA2361 2008-11-26 09:15 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0092
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2361 3310915
ZNR UUUUU ZZH
O 260915Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3985
INFO RUCNCIS/CIS COLLECTIVE 0867
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0274
RUEHKO/AMEMBASSY TOKYO 0976
RUCNDT/USMISSION USUN NEW YORK 2082
RUEHNO/USMISSION USNATO 2414
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0434
RUEKJCS/SECDEF WASHDC 0349
RUEKJCS/JOINT STAFF WASHDC

UNCLAS ASTANA 002361 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, EUR/CARC 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SOCI KDEM KZ
SUBJECT: KAZAKHSTAN: ALMATY NOTES, NOVEMBER 10 - NOVEMBER 21, 2008 
 
1.  (U) NOTE:  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.  END NOTE. 
 
NUR OTAN REACHES OUT TO NGOS 
 
2.  (U) On November 12, the new deputy chairman of the presidential 
Nur Otan party, Darkhan Kaletayev, met with NGO Shanyrak President 
Asylbek Kozhakhmetov.  Kozhakhmetov told Kaletayev about Shanyrak's 
work with internal immigrants who come to Almaty from other parts of 
the country and frequently face housing and social issues.  The two 
agreed to maintain contact and to cooperate in solving housing and 
internal migration problems in Almaty.  At a separate meeting of the 
AytPARK discussion club, Kaletayev expressed Nur Otan's readiness to 
cooperate on these issues with opposition parties.  In January, 
President Nazarbayev specifically called on the Nur Otan leadership 
to increase dialogue with NGOs and opposition political parties. 
 
GOVERNMENT LAUNCHES CIVIL SOCIETY PROGRAM 
 
3.  (U) At a November 19 meeting, members of Parliament's Public 
Council, which includes representatives of NGOs and state agencies, 
discussed the so-called "Concept on Civic Society Development". 
According to the Vice Minister of Culture and Information, the 
government has allocated 709 million tenge ($5.9 million) for NGO 
grants this year and plans to increase the allocation to 721 million 
tenge ($6.0 million) next year.  NGO representative pointed out 
several problems with the program and alleged that only 2,000 of the 
10,000 registered NGOs are active, while the rest were created 
solely to receive government grants. 
 
COURTS WARN RETIRED OFFICER ABOUT UNSANCTIONED RALLY 
 
4.  (U) On November 20, the Almaty Mezhrayonniy Economic Court 
issued a warning to the leader of the "BOMZh" (Vagrant) retired army 
servicemen union, Daulet Zhumanbekov, for organizing an unsanctioned 
rally.  Union activists picketed the city garrison office on 
November 18 to demand apartments in Almaty for retired military 
officers.  Under Kazakhstani legislation, retired officers with 25 
years of service are entitled to free apartments.  Several officers 
won a suit against the Ministry of Defense (MOD) for its failure to 
fulfill this obligation.  To date, the MOD has been unable to adhere 
to the court ruling and provide the officers with apartments in 
Almaty. 
 
FOREIGN LABORERS A SECURITY THREAT TO ALMATY 
 
5.  (U) Foreign migrant laborers down on their luck pose a real 
threat to Almaty, according to Almaty city officials.  During a 
November 10 meeting of city administration, Almaty's Chief of Police 
Yerlan Turgumbayev maintained that more than half of the crimes in 
Almaty were committed by immigrants and migrant laborers from other 
Central Asian countries.  Many of these foreign workers are not paid 
wages due and so cannot return to their homes.  The Almaty city 
administration decided to set up a working group to research the 
city's migration problems and to prepare recommendations for the 
government on amendments to the Law on Migration. 
 
CAMPAIGN AGAINST ILLEGAL HOMES CONTINUES 
 
6.  (U) The Almaty City administration continued its campaign to 
demolish illegally-built houses.  Eighteen administrative cases have 
been launched against owners of illegal dwellings built in the 
newly-redistricted district of Alatau.  The Administrative Court has 
already ruled to demolish 53 illegal houses in the district and will 
review 27 similar cases in the near future.  (Argumenty I Facty, 
November 11) 
 
MORTGAGE CRISIS AFFECTS RESIDENTS' MENTAL HEALTH 
 
7.  (U) According to the Almaty Psychiatric Center, more than 1,000 
Almaty residents who have sought the Center's help over the past 
three months named the mortgage crisis as the primary reason for 
their mental and emotional problems. 
 
HOAGLAND

Wikileaks

08ASTANA2353, KAZAKHSTAN: TWO FRONTS IN “THE WAR OF IDEAS”

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Reference ID Created Released Classification Origin
08ASTANA2353 2008-11-26 02:17 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9789
RR RUEHAST RUEHBI RUEHCI RUEHLH RUEHLN RUEHNEH RUEHPW RUEHVK RUEHYG
DE RUEHTA #2353/01 3310217
ZNR UUUUU ZZH
R 260217Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3973
INFO RUCNCIS/CIS COLLECTIVE 0864
RUCNCLS/SCA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0271
RUEHKO/AMEMBASSY TOKYO 0973
RUCNDT/USMISSION USUN NEW YORK 2079
RUEHNO/USMISSION USNATO 2411
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0431
RUEKJCS/SECDEF WASHDC 0346
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 002353 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SOCI KISL KPAO ZK RS KZ
SUBJECT:  KAZAKHSTAN:  TWO FRONTS IN "THE WAR OF IDEAS" 
 
REF: (A) JAKARTA 2048, (B) SECSTATE 114917 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY: Embassy Kazakhstan is facing a "War of Ideas" on 
two separate fronts.  As a Muslim-majority country, Kazakhstan is 
susceptible to religious extremism from its neighbors to the south. 
As a former Soviet and largely Russian-speaking nation, Kazakhstan 
receives much of its news and forms its public opinion of the 
outside world, and especially the United States, through Russian 
media, especially television.  Public diplomacy tools to counter the 
Russian-dominated media have largely been decimated over the years. 
We should consider paying new attention to this "second front of the 
War of Ideas."  END SUMMARY. 
 
3. (SBU) The United States faces a two-front public diplomacy 
challenge in Kazakhstan, yet a current U.S. government poll asking 
average Kazakhstanis their opinion of other nations shows that a 
respectable 64 percent of the population views the United States 
either very or somewhat favorably.  This number is down from 2002 
(73 percent).  Still, the United States has a solid base to work 
from in promoting its policy and values to a Kazakhstani audience. 
To use our political capital, however, we must create the right 
tools to engage in the "War of Ideas" in two very different areas - 
potential extremism in the south and Russian media and 
disinformation from the north. 
 
POTENTIAL EXTREMISM IN SOUTHERN KAZAKHSTAN 
 
4. (SBU) Kazakhstan is a slightly-Muslim-majority country (Sunni), 
but still mainly secular due to its Soviet heritage.  The government 
openly preaches religious and ethnic tolerance, often touting its 
support for the small Kazakhstani Jewish community, for example; but 
like other governments in Central Asia, it keeps a tight rein on 
religious groups, in part because of the legacy of post-Soviet 
Afghanistan. 
 
5. (SBU) Outside of its former capital, Almaty, southern Kazakhstan 
is among the country's most economically depressed areas and is 
composed of regional centers Shymkent (population 2.5 million), 
Taraz (population 700,000), and Kyzylorda (population 600,000).  The 
region has high rates of poverty and unemployment, a comparatively 
young and poorly educated population, high teen crime rates and drug 
addiction, and rampant corruption among municipal and 
law-enforcement officials.  The major population centers of southern 
Kazakhstan, like Almaty and Shymkent, are more heavily Muslim and 
ethnic Kazakh than the rest of the country and are, therefore, more 
vulnerable to the spread of extremist ideology.  These factors, plus 
the region's proximity to the Ferghana Valley in Uzbekistan, 
Tajikistan, and Kyrgyzstan, create an area ripe for extremist 
recruitment. 
 
6. (SBU) Groups like the Islamic Movement of Uzbekistan, the Islamic 
Jihad Union, and the Hizb ut-Tahrir are known to operate in this 
region, and their activities have already spilled into southern 
Kazakhstan.  In late December 2007, 30 Kazakhstani members of Hizb 
ut-Tahrir were convicted of recruiting and promoting terrorist 
ideology within Kazakhstan.  All those convicted were between the 
ages of 25 and 30 and were born in Shymkent. 
 
EFFECTIVE PD TOOLS AMID NEW TRADITIONS 
 
7. (SBU) Mission Kazakhstan has made it a priority to reach out to 
Kazakhstani Muslims, many of whom have only recently re-embraced a 
faith that was discouraged during 70 years of Soviet domination, and 
these programs have demonstrated positive results.  For example, 
using Department Youth Enrichment Program funds, the Embassy 
sponsored a summer-long camp near Taraz for 180 disadvantaged Muslim 
youngsters.  The program fostered leadership, confidence, and 
independent thinking, and post augmented the camp using the Sports 
Envoy Program.  Olympic basketball stars Sam Perkins and Becky 
Bonner visited the remote, Soviet-era Pioneer camp to run basketball 
clinics with the assistance of Peace Corps volunteers.  Many of the 
young Kazakhstanis had never met someone from outside the region, or 
played basketball for that matter.  Their reaction to the extremely 
tall envoys was a startling and tears-inducing welcome, with some 
100 loudly cheering and clapping children lining each side of a path 
on which the Olympians walked into the camp. 
 
ASTANA 00002353  002 OF 003 
 
 
 
8. (SBU) Embassy Astana has also worked closely with the imam at the 
National Mosque in Astana, bri
nging distinguished visitors to meet 
him and tour his impressive mosque, the largest in Central Asia, of 
which he is justifiably proud.  The DCM hosted him and some of his 
madrassa students at an iftaar dinner in September, also attended by 
the Ambassador.  The imam was floored to learn of the extent to 
which Islam is practiced in America, and he noted that the U.S. 
Embassy was the only foreign mission to reach out to the madrassa to 
host an iftaar. 
 
9. (SBU) USAID's Muslim outreach includes its Community Connections 
Program, which sent a group of clerics on a "Religion in Secular 
Society" program.  One of its alumni, Nurmukhamed Akhmediyanov, an 
imam from the Abai city mosque, has since founded a new NGO called 
Zhas Urpak, or "Young Generation" in Kazakh.  Zhas Urpak, which 
supports at-risk youth in Abai, is the first local NGO founded and 
led by a religious leader in Kazakhstan. 
 
10. (SBU) USAID's Internews satellite television program provides 
grants to local media outlets that produce Islam-focused programs, 
which are uploaded to the satellite for downloading at local 
stations in the region.  Programming by the production group 
Sairam-Akashami in Aksykent includes three programs in Kazakh and 
Uzbek highlighting the peaceful coexistence of various religious 
groups. 
 
11. (SBU) Re-emerging Islam in post-Soviet Kazakhstan is a 
fascinating mlange of cultures and heritages.  At a Kazakhstan 
wedding or funeral, it is not unusual to see an imam, who has just 
led the party in a solemn moment of Arabic prayer, swiftly raise his 
head and offer an appropriate vodka toast in a blend of Russian and 
Kazakh.  The government and community are still trying to find the 
perfect mix for this cocktail of traditions.  The government is 
providing a narrative of tolerance, yet there is still potential for 
extremists to gain a foothold.  The United States has an excellent 
opportunity to work as a partner with the government to promote a 
form of Islam that embraces tolerance. 
 
THE SECOND FRONT 
 
12. (SBU) While the front in the "War of Ideas" continues to play 
out along the southern border of Kazakhstan, a second and, 
unfortunately, familiar one has opened from the north.  Central 
Asians get their news and information -- and form worldviews -- 
predominantly through Russian-language mass media, including 
newspapers, television (90 percent of the population watches Russian 
television), and web sites. 
 
13. (SBU) Undersecretary Glassman noted that during the Cold War, 
the United States "became good at public diplomacy," but in the 
1990s, it began a "process of unilateral disarmament in the weapons 
of advocacy," which is certainly evident in Central Asia.  Since at 
least 2004, Russia has sought to undermine progress toward democracy 
with barely-countered, neo-Soviet disinformation, including 
characterizations of so-called "color revolutions" that equate 
democratic change with instability and castigate those who work for 
it as traitors.  There is no major Russian-language, neutral, 
news-oriented commercial TV other than Euronews dubbed into 
Russian. 
 
14. (SBU) Russian-media inspired messages are widespread, such as 
the notion that the United States wants a weak Russia and is working 
to surround it to bring it to its knees, and that the United States 
military is actually promoting narcotics exports from Afghanistan to 
the north.  Leaders across the region will less likely have to face 
hard questions about their own policies as long as they have 
American windmills to tilt at. 
 
A PD APPARATUS UNPREPARED FOR CURRENT CHALLENGES 
 
15. (SBU) The process of "unilateral disarmament" described by U/S 
Glassman left the PD cupboard without some key resources, and the 
much-needed replenishments that have arrived during the past few 
years are designed more for the southern front than the northern 
one.  The resources that Washington has made available for the Youth 
Enrichment Program, for example, led to a resoundingly successful 
camp experience for nearly 200 children who will remember it for the 
 
ASTANA 00002353  003 OF 003 
 
 
rest of their lives.  But a smaller and less substantive 
Russian-language Washington File and the lack of Russian-language 
translation services make it difficult to counter the disinformation 
Kazakhstanis absorb on a daily basis.  Even a rejuvenated, 
objective, Cold War-era "Radio Free Europe/Radio Liberty" would find 
it a challenge to hold its own in this Russian-dominated media 
environment, but today's RFE/RL is so strangled for resources it has 
drifted from content to comment, its website and Kazakh-language 
Radio Azzytyk becoming perceived by governments in the region as 
"Radio Oppo."  Using freelancers who often provoke more than 
enlighten, RFE/RL at times is barely distinguishable from some of 
the more strident opposition media outlets. 
 
16. (SBU) The distancing of the Broadcasting Board of Governors and 
the Voice of America (VOA) from the traditional public diplomacy 
context after USIA's 1999 consolidation with the State Department 
has created a serious information deficit in the region that must be 
re-bridged, especially in an age of electronic journalism, when 
radio has emerged, to the surprise of many, as a vibrant 
communicator.  Although USAID funds the Internews satellite TV 
project, it is not designed to project U.S policy and values, as 
RFE/RL once did. 
 
17. (SBU) Incredibly, VOA, suffering severe budget cutbacks, no 
longer broadcasts in Russian, except through internet streaming. 
Even more incredible, VOA's Russian-language broadcasts were killed 
shortly before Russia's incursion into Georgia.  Now, all that is 
left of VOA on radio is in English.  And although RFE/RL's 
Kazakh-language Radio Azzytyk is a strong presence in Kazakhstan and 
breaks some very important stories, we need to consider whether its 
move away from traditional journalistic objectivity serves U.S. 
interests. 
 
18. (SBU) COMMENT:  The United States needs its full arsenal of 
Russian-language tools updated and expanded. Our ability to get out 
a lot of information in the appropriate languages as quickly as 
possible is critical.  A reinvigorated Russian-language Washington 
File that would add, at a minimum, many more transcripts, would be a 
huge help, especially considering foreign interest in the new U.S. 
presidential administration.  In the field, we need to start 
communicating with VOA, giving input on programming and determining 
how best to use its materials, and we need Washington to facilitate 
these contacts and restore Russian-language broadcasting.  Right 
now, the only real VOA contact we have is a technician who comes 
around once every few years to check our satellite dish.  END 
COMMENT. 
 
TWO THINGS THAT CAN MAKE A DIFFERENCE NOW 
 
19. (SBU) There are
two tools the Department can deliver right away 
that could make a huge difference: first, a 21st century Internet 
system with high bandwidth.  More bandwidth provides more 
opportunities for streaming video, doing web casts, and 
disseminating Department content more widely.  It also requires 
money. 
 
20. (SBU) The second tool is the English language itself.  It is 
something we have and the rest of the world wants.  In Kazakhstan, 
President Nazarbayev has declared English a third priority language, 
after Kazakh and Russian.  We need more and still more funding for 
English-language programs.  Not only would English-language programs 
bring people into our Information Resource Centers and American 
Corners, where they would be exposed to more American materials and 
ideas, but it would also create educated viewers who could flip the 
channel from Russian Channel One to CNN or BBC to see the West more 
objectively. 
 
21. COMMENT:  We must have tools that demonstrate we are as 
passionate about democracy's marketplace of ideas as extremists are 
devoted to its destruction and Russian media addicted to skewing the 
debate.  In counteracting disinformation, perhaps we should 
reexamine whether it is really helpful to characterize an open and 
spirited exchange of ideas as any kind of "war" at all, while we get 
on with breathing life into more programs that can change minds. 
END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2352, KAZAKHSTAN: BORDER SECURITY ASSISTANCE

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2352 2008-11-26 02:13 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXYZ0024
OO RUEHWEB

DE RUEHTA #2352/01 3310213
ZNR UUUUU ZZH
O 260213Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3965
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RULSJGA/COMDT COGARD WASHINGTON DC
RUEKJCS/SECDEF WASHINGTON DC
RUEHRL/AMEMBASSY BERLIN 0491
RUEHEK/AMEMBASSY BISHKEK 8338
RUEHNT/AMEMBASSY TASHKENT 0001
RUEHKB/AMEMBASSY BAKU 0059
RUEHDBU/AMEMBASSY DUSHANBE 2406
RUEHAH/AMEMBASSY ASHGABAT 7361
RUEHMO/AMEMBASSY MOSCOW 1560
RUEHBJ/AMEMBASSY BEIJING 0263

UNCLAS ASTANA 002352 
 
SIPDIS 
 
DEPT FOR ISN/ECC, ISN/ECC-AMT, EUR/ACE, SCA/RA, SCA/CEN, CBP FOR 
INA; ENERGY FOR NNSA; COMMERCE FOR DCREED; COAST GUARD FOR 
SHABETIMICHAEL; BERLIN FOR CUSTOMS ATTACHE; 
TASHKENT, BISHKEK, BAKU, DUSHANBE AND ASHGABAT FOR EXBS ADVISORS 
 
E.O. 12958: N/A 
TAGS: PARM PREL ETTC MNUC SNAR KSTC KNNP KZ
SUBJECT: KAZAKHSTAN: BORDER SECURITY ASSISTANCE 
 
REF: STATE 107424 
 
1.  (U) SUMMARY.  The fundamental strategic aim of the U.S. Mission 
is a stable, secure, democratic and prosperous Kazakhstan.  The 
strategic partnership between the United States and Kazakhstan for 
border security is based on our common security interests including 
bolstering Central Asian sovereignty and independence; fighting 
terrorism and the proliferation of weapons of mass destruction; and 
stemming the flow of illegal narcotics. 
 
2.  (U) The U.S. Mission supports Kazakhstan in defense, law 
enforcement, and security sector reform.  The objective is to 
support Kazakhstan as a reliable partner with whom we share a common 
vision and who has a positive regional and international impact in 
these sectors.  Our approach is three-fold: 
 
-- Ensure Kazakhstan continues on its current path of reform of 
defense, law enforcement, and security structures which reflect 
democratic values and adequately defend national sovereignty and 
maintain domestic peace and stability; 
 
-- Assist Kazakhstan to integrate defense, law enforcement, and 
security structures; 
 
-- Support the development of Kazakhstan's national-level 
capabilities to influence regional defense and the regional fight 
against narcotics, crime and illegal exports. 
 
3.  (U) To achieve these goals, the U.S. Mission will continue to 
execute a multi-discipline, inter-agency security cooperation 
program.  The program focuses on transforming security and law 
enforcement equipment and doctrine at police, border guard and 
customs agencies; providing assistance to Kazakhstan as it 
establishes centers of command and control; and raising Kazakhstan's 
interoperability level so that it can integrate with global security 
institutions such as the Central Asian Regional Information and 
Coordination Center (CARICC) for anti-narcotics.  Kazakhstan acts 
internationally and regionally as a reliable partner in the fight 
against terrorism, narcotics, money laundering, proliferation, and 
other global threats.  END SUMMARY. 
 
TOPOGRAPHY 
 
4.  (U) Kazakhstan is located in Central Asia, in the heart of the 
Eurasian continent.  In terms of total land mass, Kazakhstan is the 
ninth largest country in the world and the second largest country to 
emerge from the former Soviet Union.  With an area of about 
2,717,300 square kilometers, Kazakhstan is more than twice the size 
of the other four Central Asian states combined.  In fact, the 
territory of Kazakhstan exceeds that occupied by the original twelve 
countries of the European Union. 
 
5.  (U) There is considerable topographical variation within 
Kazakhstan.  Although high mountain ranges fringe Kazakhstan's 
eastern and southeastern boarders, the terrain of Kazakhstan 
consists mostly of deserts, steppes (vast, semiarid grassy plains), 
and hilly upland areas.  Deserts and semi deserts cover more than 
two-thirds of Kazakhstan's surface area.  Only 12.4% of Kazakhstan 
is mountainous, with most of the mountains located in the Altay and 
Tian Shan ranges of the east and southeast, although the Ural 
Mountains extend southward from Russia into the northern part of 
west-central Kazakhstan.  Many of the peaks of the Altay and Tian 
Shan ranges are snow covered year-round, and their run-off is the 
source for most of Kazakhstan's rivers and streams.  The highest 
elevation, Khan Tengri Mountain, on the Kyrgyzstan border in the 
Tian Shan range, is 6,995 meters; the lowest point, at Karagiye, in 
the Caspian Depression in the west, is 132 meters below sea level. 
 
 
6.  (U) Except for the Tobol, Ishim, and Irtysh rivers, portions of 
which flow through Kazakhstan, all of Kazakhstan's rivers and 
streams are part of landlocked systems.  They either flow into 
isolated bodies of water such as the Caspian Sea or simply disappear 
into the steppes and deserts of central and southern Kazakhstan. 
Many rivers, streams, and lakes are seasonal, evaporating in summer. 
 The three largest bodies of water are Lake Balkhash, a partially 
fresh, partially saline lake in the east, near Almaty, and the 
Caspian and Aral seas, both of which lie partially within 
Kazakhstan. 
 
7.  (U) Turkmenistan, Uzbekistan, and Kyrgyzstan border Kazakhstan 
to the south; Russia borders Kazakhstan to the north; Russia and the 
Caspian Sea border Kazakhstan to the west; and Chin
a borders 
Kazakhstan to the east. 
 
OVERVIEW OF BORDER SECURITY ASSISTANCE 
 
8. (U) The Mission's border security goal is to enhance our 
relationship with Kazakhstan as partners in regional and strategic 
security.  Our border security assistance programs improve the 
Government of Kazakhstan's capacity to secure its borders, intercept 
contraband, narcotics, and articles of proliferation interest, while 
facilitating trade and commerce. 
 
9.  (U) The U.S. and Kazakhstan have a record of extensive and 
effective cooperation in fighting terrorist and narco-trafficking 
groups in Central Asia. Moreover, the Government of Kazakhstan 
ensures that its banking system does not permit financing of 
terrorism and drug trafficking. 
 
10.  (U) The objective of our border security assistance programs is 
to enhance our relationship with Kazakhstan as partners in regional 
and strategic security.  Support for the War on Terror and Homeland 
Security is closely linked to our goal to prevent and curtail 
proliferation and narcotics trafficking.  Kazakhstan's cooperation 
on proliferation and counter narcotic issues has been a cornerstone 
of the bilateral relationship, creating trust and showing the 
benefits of cooperation with the U.S. that, in turn, have helped the 
United States make progress toward several other goals, including 
democratic reform and a welcoming investment climate.  Future 
Kazakhstani progress on combating proliferation of transiting 
Weapons of Mass Destruction (WMD), narcotics, and other malicious 
substances contributes directly to U.S. homeland security.  The 
support for the War on Terror, combating proliferation, and counter 
narcotics performance goals reinforce each other and together form 
the main components of the U.S. Mission's efforts to protect U.S. 
national security. 
 
11.  (U) The U.S. Mission supports and encourages Kazakhstan's 
efforts to fully eliminate its Weapons of Mass Destruction (WMD) 
infrastructure; secure its WMD materials; enact and effectively 
enforce sound export controls; and actively engage in counter 
narcotics trafficking activities.  Prevention and curtailment of 
proliferation and narcotics trafficking support Mission goals of 
preventing terrorism and enhancing regional security.  To achieve 
these goals, the U.S. Mission will strive to ensure the effective 
implementation of the nonproliferation efforts of the Cooperative 
Threat Reduction (CTR) program, the Export Control and Related 
Border Security (EXBS) program, the Second Line of Defense (SLD) 
project, Department of Defense counter-narcotics programs under the 
Office of Military Cooperation (OMC), and projects to fight 
transnational crime overseen by the International Narcotic and Law 
Enforcement section (INL). 
 
12.  (U) Since fiscal year 2007, OMC has upgraded three Border 
Service Mi-8MT helicopters, provided night operations training for 
their pilots and provided training in container inspection. 
Additionally, OMC is coordinating procurement of ground surveillance 
radar, vehicles, and Saber-4000 trace detectors to enhance Border 
Service control capabilities along Kazakhstani borders. 
 
13.  (U) Under the CTR, six patrol boats and related training were 
provided in the 1990s.  From 2005-2007, CTR efforts were focused on 
providing the Maritime Border Guard Service and Navy with a capacity 
to interdict WMD on the Caspian.  To that end, training and 
classroom upgrades, as well as equipment to support Maritime 
boarding operations (keel blocks, boarding equipment), were 
provided. 
 
14.  (U) INL works with the Border Guard Service through programs to 
secure borders against transnational crime, particularly 
counter-narcotics capacity.  The program has enhanced capacity on 
the land border through the provision of specialized equipment, 
improvement of checkpoint infrastructure and personnel training, 
establishment of new training centers and improvement of existing 
centers, and curriculum reform. 
 
15.  (U) The ultimate goal is to provide Kazakhstan with the 
capacity to effectively secure its borders in a manner consistent 
with the World Customs Organization's Framework of Standards to 
Secure and Facilitate Global Trade and provide the opportunity for 
Kazakhstan to adhere to all international agreements and commitments 
to WMD proliferation and narcotics trafficking prevention. 
 
COORDINATION OF ACTIVITIES AT POST 
 
16. (U) The responsibility for coordination of all U.S. Mission 
activities in Kazakhstan rests with the Chief of Mission.  In order 
to coordinate the activities of the various sections with border 
security programs, a Security Assistance Working Group (SAWG) was 
created and is chaired by the Deputy Chief of Mission.  All section 
chiefs with programs that impact security programs in Kazakhstan are 
members of the working group, which has regularly scheduled meetings 
in a secure environment in order to discuss and plan future security 
assistance projects.  This arrangement ensures that the front office 
exercises command and control over all security assistance programs 
sponsored by the U.S. government in Kazakhstan. The SAWG also 
provides a forum for section chiefs to coordinated activities, 
eliminates redundancy of effort, and promotes synergy. 
 
COORDINATION WITH OTHER COUNTRIES 
 
17. (U) The U.S. Mission is the primary donor assisting the 
Government of Kazakhstan to establish strategic trade control 
systems, including border control capabilities, in order to prevent 
WMD proliferation and narcotics trafficking.  The U.S. Mission works 
to create international cooperation in these fields through outreach 
to international organizations such as the United Nations Office on 
Drugs and Crime (UNODC), the International Organization for 
Migration (IOM), the Organization for Security and Cooperation in 
Europe (OSCE), the Border Management and Drug Action Programs in 
Central Asia (BONCA/CADAP), as well as other diplomatic missions. 
 
18.  (U) U.S. Mission section chiefs with programs that impact 
border security maintain contact with representatives of these 
assistance programs and attend semiannual Border Security Donor 
Coordination meetings in order to coordinate and insure that there 
is no duplication of effort among the various international 
programs.  The European Union and a number of other diplomatic 
missions to Kazakhstan have expressed a desire to assist Kazakhstan 
in securing it borders.  Recently, post was successful in assisting 
the Nuclear Smuggling Outreach Initiative program to procure three 
modular shelters and smuggling documentation equipment worth 
$750,000 from money donated by a foreign government. 
 
BORDER PORTS OF ENTRY 
 
19. (U) After the collapse of the Soviet Union and the emergence of 
Kazakhstan as an independent country, Kazakhst
an faced the problem 
of controlling a border stretching some 14,000 kilometers. 
Initially, the border control system was based on the former Soviet 
border control system, which has gradually been replaced by a new 
system that meets most international standards, with customs and 
border guards sharing responsibilities. 
 
20.  (U) There are approximately 22 airports of significant size in 
Kazakhstan, but only 14 are designated as international airports. 
Of those airports designated as international airports only four may 
be considered significant enough to merit the attention of this 
report.      These airports are located in the cities of Astana, 
Almaty, Atyrau, and Aktau.  The Department of Energy is currently 
installing Radiation Portal Monitors at the Airport in Atyrau and 
will do the same to Aktau once the airport modernization project 
there is completed. 
 
21.  (U) There are two main sea ports in Kazakhstan, Aktau and 
Bautino, both of which are located on the Caspian Sea.  There are 
112 international border crossings points declared open by Decree of 
the Government of Kazakhstan. 
The Border Guard Service only operates at 98 of these crossings and 
only 80 of these international border crossings are equipped with a 
passport control system. 
Of those international border crossings with a passport control 
system, six are located on the border with China, 38 are located on 
the border with Russia, 10 are located on the border with 
Kyrgyzstan, 10 are located on the border with Uzbekistan, and one is 
located on the border with Turkmenistan.  Weak infrastructure, lack 
of facilities, inadequate equipment and under-trained personnel at 
these border locations are all factors being addressed by the U.S. 
Mission. 
 
CHINESE BORDER 
 
22.  (U) There are six border crossing points with China (Dostyk, 
Bakhty, Korgos, Maikapchagai, Narynol,and Kalzhat), but only two are 
significant enough to mention in this report:  Bakhty is the 
Kazakhstani border crossing near the Chinese city of Tacheng.  This 
post is a 13-hour drive from Almaty.  The roads leading to this 
crossing are in very poor condition due to potholes, bumps, and lack 
of any lighting.  This border crossing processes commercial trucks 
and buses, but no private vehicles or pedestrians.  The facility 
itself was built in 2003 and is in relatively good condition.  The 
Bakhty border check point is a border crossing that incorporates an 
integrated control system based on the "single window principle." 
This port has two radiation portal monitors, one for commercial 
trucks and the other for bus passengers. 
 
23.  (U) Dostyk (in Kazakh) or Druzhba (in Russian) is a small town 
in the Almaty Province, near the country's border with China.  It is 
the only point of entry for rail traffic from China.  The port is 
listed as an international border crossing because it processes 
privately owned vehicles, commercial vehicles and pedestrians but, 
in reality, there are no pedestrians.      The main border crossing 
terminal facility was built in 2005 and is an efficient facility 
modeled on international standards for passenger processing.  It is 
well-designed with an integrated control system where customs, 
border guard, veterinary-phytosanitary, and sanitary-quarantine 
controls are collocated. 
 
RUSSIAN BORDER 
 
24.  (U) There are only 46 border crossing points on the Kazakhstani 
border with Russia, but only 38 are significant enough to have a 
passport control system.  The port of Zhana-Zhol lies in the 
northern part of Kazakhstan, about 80 kilometers northwest of 
Petropavlovsk.  It is one of the main "international" crossings 
between Russia and Kazakhstan.  The road entering and leaving the 
port is a two-lane highway, but at the port it splits into three 
lanes inbound and three lanes outbound.  The port utilizes a 
two-stop process with border guards first processing and searching 
inbound and outbound vehicles, followed by customs officials who 
process inbound and outbound commercial traffic. 
 
25.  (U) The Sharbakty border crossing is located in a remote area 
about 25 miles northeast of the city of Sharbakty.  The Sharbakty 
checkpoint incorporates an integrated control system based on the 
so-called "one-stop principle".  Here customs, border guard, vehicle 
control, veterinary-phytosanitary control and sanitary-quarantine 
control officers all conduct required control procedures in a single 
building.  This crossing is used for vehicles, trucks, buses, and 
rail traffic. 
 
26.  (U) The regional capital city of Pavlodar is a five hour drive 
northeast from Kazakhstan's capital city of Astana.  There are eight 
customs border crossings along the Kazakhstani-Russian border in the 
Pavlodar Region.  These customs border crossings are Amankeldi, 
Kosak, Maraldy, Naiza, Sharbakty, Sulu-agash, Urlutobe and Yestir. 
 
KYRGYZSTAN BORDER 
 
27.  (U) Kazakhstan's southern border with Kyrgyzstan stretches 657 
miles from Shakpakata in the west to Kegen in the east.  Along this 
border are 11 border crossings, staffed by the Kazakhstan Customs 
Control Committee (CCC) and Border Guard Service, but only 10 are 
significant enough to have a passport control system.  Balasagun is 
the largest and busiest border crossing and is located approximately 
one mile from Kordai.  Karasu is the second busiest border crossing 
and is located about eight miles from Kordai.  Balasagun and Karasu 
are designated as "international" border crossings and process 
privately owned vehicles (POVs), buses and commercial trucks. 
 
28.  (U) Both Karasu and Balasagun lie on a major trade route that 
connects southern Asia with Kazakhstan, Russia and Europe.  This 
trade route is referred to as the "Silk Highway".  Today, the chief 
product crossing the border into Kazakhstan is fresh produce.  Much 
like the Mexican border in the United States, the greatest 
enforcement threat that customs officials in this region face is 
that of narcotics and dangerous drugs being smuggled from 
Afghanistan and transiting through Tajikistan and Kyrgyzstan.  These 
drugs are generally en-route to the larger and wealthier 
metropolitan areas in Russia and Europe. 
 
UZBEKISTAN BORDER 
 
29.  (U) Kazakhstan's southern border with Uzbekistan stretches 
1,376 miles from Akzhigit in the west to Shakpakata in the east. 
Along this border are only 10 border crossings staffed by the 
Kazakhstan Customs Control Committee and Border Guard Service. 
Kazakhstan's Southern Region is located approximately 700 miles 
southwest of Kazakhstan's capital city of Astana.  The largest 
Kazakhstan city along the Uzbek border in the Southern Region is 
Shymkent, home to the regional customhouse.  The CCC in Shymkent 
manages eight customs border crossings along Kazakhstan's border 
with Uzbekistan.  These are the Jibek Joli, Kazgurt, Kaplanbek, Tole 
Bi, Abai, Baurzhana Konysbayeva
(Gani Muratbayeva), Maktaral, and 
Sariagash Rail Way Station border crossings.  Jibek Joli is the 
largest and busiest border crossing and is located about 63 miles 
from Shymkent and about 2 miles from Uzbekistan's capital city of 
Tashkent. 
 
TURKMENISTAN BORDER 
 
30.  (U) There is only one border crossing point with Turkmenistan 
and it can hardly be called a major port.  The Temirbaba border 
crossing is miles away from the nearest significant city and process 
mostly vehicles with the occasional commercial truck. 
 
U.S. EQUIPMENT DONATIONS 
 
31.  (U) The U.S. Mission has donated equipment and provided 
training to numerous border ports in Kazakhstan.  Donated equipment 
includes communications equipment; inspection, surveillance and 
detection equipment; protective and medical equipment; radiation 
control and detection equipment; drug detection equipment; x-ray 
machines and mobile x-ray vans; and vessels, vehicles, helicopters, 
and canines. 
 
GREEN BORDER PROJECT 
 
32. (U) The U.S. Mission has made significant progress in assisting 
the Government of Kazakhstan to secure ports of entry, but as 
security at these crossings increases, smugglers will be more likely 
to use the vast, unguarded green borders between the fixed border 
crossings.  The U.S. Mission has determined that a key deficiency in 
green border security in Kazakhstan is the lack of infrastructure 
and equipment needed for the Border Guard Service to provide an 
effective deterrent to smugglers by conducting border monitoring and 
patrols. 
 
33.  (U) The Border Guards Service is responsible for all green 
borders between the ports.  On the green border, the Border Guards 
often work and live in primitive structures that offer little 
protection against the elements.  The U.S. Mission has provided 
communication equipment, surveillance equipment, vehicles, vessels, 
and portable shelters to assist in this effort but much more is 
needed.      More than 50 additional modular shelters are 
desperately needed, as well as dozens of ground monitoring 
surveillance stations and related equipment, communication 
equipment, and hundreds of all terrain vehicles and trucks. 
34.  (U) Post encourages the Nuclear Smuggling Outreach Initiative 
to continue seeking donations from other nations so that the Border 
Guard Service can fulfill it mission of securing the green border. 
 
BORDER OPERATIONS AND LEGAL AUTHORITY 
 
35. (U) The border enforcement system in Kazakhstan consists of 
several government agencies, including the Border Guard Service, the 
Committee on Customs Control, the Ministry of Internal Affairs, the 
Prosecutor's Office, and the Committee on National Security.  There 
are a number of laws and governmental decrees that govern border 
operations, but the two most significant are "The Law on the State 
Border" and the Customs Code. 
 
36.  (U) The Law on the State Border provides the legal basis for 
interagency collaboration with respect to border enforcement.  It 
empowers the State Committee of the Republic of Kazakhstan on State 
Border Guarding to coordinate interagency communication and 
cooperation between the Customs Committee, the Committee on National 
Security, the Ministry of Internal Affairs, the State Investigation 
Committee, and the Ministry of Defense. 
The Law on the State Border provides enforcement personnel with the 
authority to patrol and police the green and blue borders of 
Kazakhstan.  It further empowers the Border Guard Service to ensure 
the protection of the interests of the individual and society.  It 
also charges the State Committee on Border Guarding with 
coordinating international efforts with other members of the CIS. 
Under the law, the Ministry of Internal Affairs (MVD) is required to 
support border staff by informing them of intelligence regarding 
possible violations, providing assistance in actions on the border, 
and conducting training for the general population regarding the 
laws on border security. 
 
37.  (U) The Committee for National Security (KNB) is responsible 
for national security, intelligence, and counterintelligence.  The 
KNB also plays a law enforcement role in border security, internal 
security, and antiterrorism efforts and oversees the external 
intelligence service.  The chairman of the KNB reports directly to 
the President.  The Border Guard Service, subordinate to the KNB, is 
responsible for passport control and security at the border 
crossings and for the controlling the green and blue Borders. 
 
38.  (U) The Customs Code specifies the duties and responsibilities 
of the customs agencies and delineates procedures for searching 
cargo and detaining suspected offenders for initial inquiry.  The 
Customs Control Committee is responsible for monitoring the movement 
of people, cargo, transportation carriers, and other cargo across 
borders at the designated Ports of Entry (including international 
airports).  The law empowers customs officials to search, detain, 
and seize goods without a warrant and enforce trade in controlled 
items at all borders for outbound, inbound, and in-transit cargo. 
However, a number of disincentives discourage enforcement.  The 
Ministry of Defense is responsible for guarding the air-space of 
Kazakhstan.  The issue of nuclear smuggling is the responsibility of 
the MVD (specifically, a new investigative body within the Ministry) 
and the KNB. 
 
BORDER SECURITY TRAINING INSTITUTIONS 
 
39.  (U) The U.S. Mission has contributed to the improvement of 
border security training institutions run by the Committee of 
National Security, the Ministry of Finance, the Ministry of Internal 
Affairs, the Ministry of Emergency Response, the Ministry of 
Defense, and the Ministry of Industry and Trade.  The Mission 
encourages these training institutions to incorporate U.S. training 
courses into their curriculum.  To date, the Commodity 
Identifications Training workshop taught by the Department of Energy 
has been successfully incorporated into Kazakhstan Customs training 
classes.  Members of the Border Guard Service are trained at the 
Military Institute of the Committee for National Security, which was 
moved to Almaty more than 50 years ago.  The Military Institute was 
founded shortly after the Soviet Union was established and is the 
oldest military training facility in Kazakhstan. 
 
40.  (U) In response to the problem of training border guards 
stationed along such an extremely vast area, INL renovated and 
equipped regional training centers in the north-west and south.  INL 
is preparing to conduct assessments of sites to for an additional 
training center in the north-east.  INL has also initiated a joint 
project to develop canine training capabilities.  The first canine 
training was conducted by a U.S. police trainer at the Military 
Institute.  Following that, a professional r
elationship was 
established between the Austrian Ministry of Interior's Canine 
Center and law enforcement agencies in Kazakhstan.  Three canine 
instructors representing the Border Guard Service, Military 
Institute, and the Ministry of Interior took part in a two-month 
canine training course at the Austrian Canine Center.  As part of 
the training, INL funded the purchase of three dogs for the officers 
taking part in training.  INL received requests after the Austrian 
training to conduct additional train-the-trainer courses in 
Kazakhstan and there is interest in creating a new Kazakhstani 
methodology similar to the Austrian methods. 
 
41.  (U) Despite its interest in Austrian methods, the Military 
Institute also continues to express interest in learning more from 
U.S. experts.  The next step will be for instructors to attend 
counter-narcotics canine training at a CBP canine academy.  INL is 
also funding renovations of the Canine Center at the Military 
Institute.  Officials at the Military Institute are interested in 
broadening their curriculum to include canine training for other law 
enforcement agencies in Kazakhstan and throughout the region. 
 
U.S. BORDER SECURITY TRAINING ASSISTANCE 
 
42.  (U) The U.S. Mission has provided significant training 
assistance to Kazakhstan in the area of border security.  Training 
has been provided in coordination with the Department of Homeland 
Security, the Department of Energy, the Commerce Department, the 
Department of Justice, the Department of State, and the Department 
of Transportation.  Classes have covered all customs, coast guard, 
drug enforcement, law enforcement and investigative related 
activities.  Additional training has been given in nuclear and 
hazardous material, weapons of mass destruction, contraband 
detection, emergency response and a wide variety of other topics. 
OMC recently organized a border security seminar provided by the 
Arizona National Guard for instructors and cadets from the Military 
Institute.  The seminar included such topics as personal and vehicle 
search, profiling, and force protection systems and equipment used 
on the U.S.-Mexican border. 
 
43.  (U) A significant amount of INL programs also provide training. 
 Recently, two instructors from the Military Institute attended 
basic training at the U.S. Border Patrol Academy in Artesia, New 
Mexico.  This was the first time foreign border guards were admitted 
to basic training at the Academy.  In Kazakhstan, INL provides 
training in a vast array of subjects, including use of equipment, 
border management, vehicle interdiction, and risk analysis.  Much of 
the training has been provided through IOM, which has been INL's 
implementing partner in many of the border security projects.  INL 
has also provided samples of all equipment provided to the Border 
Guard Service to the Military Institute, which allows cadets to get 
hands-on experience with equipment before they arrive at a border 
post. 
 
44.  (U) In the long-term, INL is working to build on the 
professional relationship established between the U.S. Border Patrol 
Academy and the Military Institute.  INL will continue supporting 
participation of the Military Institute staff and cadets in exchange 
programs.  To allow more staff to participate in courses in the 
United States, INL continues its efforts to increase the capacity of 
English language instructors at the Military Institute.  INL 
provided the Military Institute a digital language laboratory and 
will provide software and train-the-trainer courses for the English 
language instructors. 
 
NON-U.S. BORDER SECURITY TRAINING ASSISTANCE 
 
45.  (U) The U.S. Mission is aware that other missions and 
international organizations are proving Kazakhstani border security 
agencies with training assistance.  The United States closely 
coordinates activities with the international community through 
semiannual coordination meetings.  These meetings are attended by 
all interested embassies, international organizations, and 
Kazakhstani officials.  Border security coordination meetings are 
chaired by BOMCA/CADAP and, traditionally, the U.S. chairs a 
counter-narcotics coordination meeting the same day.  INL is working 
with a range of international organizations to provide training at 
the newly-renovated regional training centers.  Recent training 
sessions were supported and conducted jointly by IOM, OSCE, UNHCR 
and BOMCA.  In addition, UNHCR provides a program on assistance to 
asylum seekers during the joint training programs. 
 
HOAGLAND

Wikileaks

08ASTANA2351, KAZAKHSTAN: GOVERNMENT MOVES SWIFTLY TO STABILIZE BANKING

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Reference ID Created Released Classification Origin
08ASTANA2351 2008-11-26 02:12 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9781
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2351/01 3310212
ZNR UUUUU ZZH
O 260212Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3963
INFO RUCNCLS/SCA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 0862
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0261
RUEHKO/AMEMBASSY TOKYO 0971
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0429
RUEKJCS/SECDEF WASHDC 0344
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002351 
 
SIPDIS 
SENSITIVE 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ
 
SUBJECT:  KAZAKHSTAN:  GOVERNMENT MOVES SWIFTLY TO STABILIZE BANKING 
SECTOR (PART 3 OF 3) 
 
REF:  A)  08 ASTANA 2320  B) 08 ASTANA  2338 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On October 13, 2008, President Nazarbayev 
announced a series of sweeping measures to be enacted by the 
Government of Kazakhstan in response to the global financial crisis. 
 Established to ensure the stability of Kazakhstani financial 
markets, these measures include the accelerated establishment and 
implementation of the Asset Stabilization Fund (ASF), the merger of 
the two largest asset generating and wealth distributing state 
holding companies Samruk and Kazyna, the Law on Financial Stability 
(since adopted), and the government's intention to purchase 25% 
equity stakes of the leading four banks sometime in the coming 
months.  Created in response to the deteriorating quality of bank 
credit portfolios, the ASF (formerly known as the distressed asset 
fund) is likely to be used to purchase collateralized distressed 
mortgages at a 10 percent discount, while shunning assets classified 
as "hopeless" by the national financial regulator.  The total share 
of non-performing loans (NPL) in the banking sector is unclear, with 
estimates ranging from the low single digits to as high as 20 
percent.  As a result of the crisis, local banks have begun to 
revamp their lending practices and bolster their risk management 
strategies.  END SUMMARY. 
 
ASSET STABILIZATION FUND LAUNCH EXPECTED EARLY 2009 
 
3.  (SBU) The government's purchase of shares in major local banks 
follows the creation of the Asset Stabilization Fund in October. 
First announced in July 2007 as a possible Stressed Asset Fund, the 
program was subsequently renamed the Asset Stabilization Fund (ASF). 
 While the injection of capital and acquisition of bank shares 
remain the top priority at this time, the government recognizes a 
growing need to launch this fund in conjunction with broader 
economic stabilization measures.  Both Citibank and the World Bank 
are advising the government on the creation of the fund. 
Unfortunately, official details have yet to be released and could 
not be solicited from Citibank because of confidentiality 
agreements.  However, it is widely expected that the fund will 
purchase distressed assets in the form of loans and bad mortgages, 
including complete construction projects. 
 
RAPID STEPS TOWARD IMPLEMENTATION 
 
4.  (SBU) According to Citibank-Kazakhstan CEO Dan Connelly, the 
government is under considerable pressure to move forward quickly. 
During a November 7 meeting with Prime Minister Masimov, Finance 
Minister Bolat Zhamishev, Samruk-Kazyna Director Kairat Kelimbetov, 
Connelly noted that Zhamishev had a "lot of good questions and 
clearly understood the seriousness of the current crisis."  Most 
expect the Fund to be launched in early 2009, which in the words of 
the Head of Risk Management at ATF/Uni Credit, Nurlan Akshanov, will 
by then "already be necessary." 
 
ONLY PROFITABLE ASSETS TO BE PURCHASED 
 
5.  (SBU) The government is expected to purchase distressed assets 
at a 10 percent discount.  The government is also expected to limit 
its purchases to collateral-based assets from categories 3 and 4 (of 
the 5 categories designated by the Financial Supervision Agency or 
FSA) -- 5 being "hopeless" -- in an effort to ensure that losses 
will be recouped through a later sale of the assets.  Truly "toxic" 
assets (category 5) will not be purchased.  The most recent public 
announcements estimate the fund's capitalization at 52 billion Tenge 
(or approximately $430 million), which Citibank representatives 
assure us is a fluid figure used primarily for planning purposes. 
As with other planned financial measures, the fund will be managed 
by Samruk-Kazyna.  National Bank Deputy Governor Sartbayev expects 
money to be transferred to the fund by the end of the year. 
Overall, the fund is expected to remain in existence for five to 
seven years. 
 
 
ASTANA 00002351  002 OF 002 
 
 
ASSET QUALITY UNCLEAR 
 
6.  (SBU) One of the greatest unknowns within the Kazakhstani 
financial industry remains the true scale of the crisis facing the 
credit market.  This is largely the result of different definitions 
and categories used by banks, regulatory, and monitoring agencies to 
classify and report varying degrees of bad debt.  Without a clear 
picture, it is difficult to assess the efficacy of the government's 
st
abilization efforts.  The numbers and percentages of bad debt 
(also known as impaired assets or non-performing loans) remain 
widely disputed across the industry.  Individually, the top four 
banks each report very small percentages of their loan asset 
portfolios to be non-performing loans (NPL).  This reporting does 
not reflect the severity of the situation as evidenced by the 
government's response. 
 
NON-PERFORMING LOANS EXPECTED TO INCREASE 
 
7.  (SBU) Industry analysts agree that the most rapid growth in NPL 
occurred in the retail sector, or consumer credit accounts, but more 
recently NPL growth has been detected in a wider range of 
investments, including corporate loans and mortgages.  Several top 
Kazakhstani banks shared their percentage of non-performing loans 
with Econoff, including BTA (1.8%, but expected to grow as high as 
3.0%), KazKommertsBank (5.0%), Halyk Bank (7.0%), ATF/UniCredit 
(4.6%), and BCC (2.3%, with expectations that it will rise as high 
as 4.0%).  (NOTE: BTA is slated to receive by far the largest 
injection of capital, yet reports the smallest percentage of NPL. 
END NOTE).  Kazakhstani government officials report somewhat higher 
calculations for the industry as a whole.  According to the FSA, 
approximately 6-7% of the total loan portfolio should be classified 
as NPL.  However, Kazyna General Manager Marat Aitenov reports that 
FSA category 5 ("hopeless") loans are 10% of the banking industry's 
total portfolio.  Regardless of these discrepancies, EBRD Senior 
Banker Ulf Hindstrom is confident that the Kazakhstani government, 
including the FSA, has "significantly underestimated the percentage 
of bad loans," a belief corroborated by Standard and Poor's November 
18 estimate that "loans under stress" comprise 20% of the 
Kazakhstani banking portfolio. 
 
BANKS BRACING FOR CRISIS 
 
8.  (SBU) Local banks have taken urgent measures to recalibrate 
lending practices, shore up risk management strategies, and 
provision existing stressed assets.  Their efforts have been 
facilitated by recent decisions made by the FSA and National Bank of 
Kazakhstan to reduce reserve requirements, which will in turn raise 
available liquidity levels and enable banks to continue lending. 
According to the EBRD, risk management is a relatively new concept 
for most of these banks, where previous levels of economic growth 
across Kazakhstan permitted aggressive growth strategies.  ATF/Uni 
Credit, for example, recently created a 34-member security 
department headed by a former official from the Ministry of Internal 
Affairs to manage bad credit.  Kazakhstani banks are also working to 
shift their loan portfolios away from the more volatile construction 
and real estate industries toward corporate lending and support for 
SMEs.  Representatives at KazKommertsBank (KKB) said that their 
primary challenges in the near term will be to identify credit 
risks, categorize loans, and evaluate survivability. 
 
9.  (SBU) COMMENT:  The government's quick steps to capitalize and 
activate the ASF underscore the growing sense of urgency for action 
felt throughout the Kazakhstani financial sector.  As with crisis 
relief efforts elsewhere, the greatest unknown remains the 
undetermined scope of the crisis.  Only time will tell if the 
government's rapid and direct involvement in the economy will be 
enough to avert disaster.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2350, KAZAKHSTAN: OPPORTUNITY IN MANGYSTAU OBLAST

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Reference ID Created Released Classification Origin
08ASTANA2350 2008-11-25 15:13 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0012
RR RUEHWEB

DE RUEHTA #2350/01 3301513
ZNR UUUUU ZZH
R 251513Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3959
INFO RUCNCIS/CIS COLLECTIVE 0858
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0257
RUEHKO/AMEMBASSY TOKYO 0967
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0340
RHEHNSC/NSC WASHDC 0425
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ASTANA 002350 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, EEB, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL ECON EINV EPET KPAO KDEM AE
AJ, IR, RS, TX, UZ, KZ 
SUBJECT: KAZAKHSTAN:  OPPORTUNITY IN MANGYSTAU OBLAST 
 
REF: A. ASTANA 02298 
     B. ASTANA 02317 
     C. ASTANA 02321 
     D. ASTANA 02345 
     E. ASTANA 02349 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Deputy Chief of Mission and poloff 
visited the port-city of Aktau, the capital of Mangystau 
oblast, during November 5-6.  In addition to attending the 
construction completion ceremony of the U.S.-funded Sodium 
Processing Facility on the territory of the BN-350 fast 
breeder reactor (reftel A), DCM and poloff also attended the 
Mangystau Oil and Gas Exhibition and conducted a series of 
meetings with representatives of industry, educational 
institutions, and non-governmental organizations (reftels 
B-E).  Mangystau oblast has already begun to develop several 
oil deposits, while also competing with neighboring Atyrau 
oblast to serve as the main base for oil and gas support 
services in Kazakhstan.  Interlocutors looked forward to 
increased U.S. involvement in the region, especially in the 
oil services sector.  Per capital income in Mangystau is 
significantly above the national average, and poloff,s 
interlocutors expressed satisfaction with local economic 
conditions.  A local NGO representative described good recent 
cooperation with local authorities on ecological issues.  The 
oblast shares a land-border with Turkmenistan, as well as 
Caspian Sea maritime borders with Russia, Azerbaijan, 
Turkmenistan and Iran.  Trade with Russia and Azerbaijan was 
viewed positively by the local business community, although 
they acknowledged obstacles in trade with Turkmenistan and 
Iran, and there was no evidence of a significant Iranian or 
Turkmen presence in Aktau, Mangystau,s capital city.  END 
SUMMARY. 
 
MANGYSTAU EAGER TO ESTABLISH ITSELF AS KAZAKHSTAN,S OIL 
SERVICE CENTER 
 
3.  (SBU) Mangystau oblast is located in Kazakhstan,s 
southwestern corner, more than 1,000 miles from Astana.  The 
arid desert oblast, which shares a land-border with 
Turkmenistan, as well as Caspian Sea maritime borders with 
Russia, Azerbaijan, Turkmenistan and Iran, is Kazakhstan,s 
seventh largest in territory, but smallest in population.  It 
is also Kazakhstan,s second least densely populated 
province.  Next to its northern neighbor, Atyrau, Mangystau 
has Kazakhstan,s most significant hydrocarbon deposits and 
an excellent natural port.  The mining sector (which includes 
oil) dominates the oblast,s economy, accounting for 8.14% of 
its GDP. 
 
4.  (SBU) As part of the region,s goal of establishing 
itself as a competitor to oil-rich Atyrau, Mangystau has 
created a tax-free special economic zone centered on Aktau 
port.  The port, noted Mangystau Deputy Akim (governor) 
Nurgaliyev with pride, is already the largest on the Caspian 
and currently handles one third of all traffic across the 
Caspian.  It is expected to grow to twice its size within the 
next few years, and the Development Bank of Kazakhstan has 
already committed to several port development projects. 
 
MANGYSTAU HOSTS OIL AND GAS EXHIBITION TO ATTRACT INVESTMENT 
 
5.  (SBU) To advance their goal of becoming the off-shore oil 
services center of Kazakhstan, regional administrators hosted 
the third annual Mangystau Oil and Gas Exhibition during 
November 4-7, 2008, at the Mangystau Exhibition Center, 
located next door to Mangystau Nur Otan Party Headquarters. 
(COMMENT:  The proximity of the exhibition, Nur Otan 
Headquarters and the Mangystau Regional Administration,s 
offices are not coincidental.  During the last Presidential 
election, Mangystau had the highest rate of votes for Nur 
Otan, despite the fact that one of the most prominent 
opposition politicians is originally from the region.  END 
COMMENT.)  During poloff,s visit to the exhibition, United 
States Commercial Service Representative Azhar Kadrzhanova 
stated that the event had grown dramatically to its current 
size of 46 participating companies.  The exhibition, however, 
was dominated by Kazakhstani and Russian companies, with only 
one U.S. company, FMC Technologies, represented.  The FMC 
representative, Material Supervisor Tanat Ishangali, stated 
that Aktau is FMC,s service base for the entire Commonwealth 
of Independent States.  Ishangali noted with satisfaction 
that FMC,s business in Aktau exc
eeded its commerce in Atyrau 
this year.  Ishangali also praised the Mangystau government 
for being &very cooperative,8 particularly noting that they 
have had no problems processing work permits for their 
foreign workers. 
 
AKTAU:  THE NEW ORLEANS OF KAZAKHSTAN? 
 
6.  (SBU) Deputy Akim Nurgaliyev, who just returned from the 
October 29-November 1 World Cultural and Economic Forum in 
New Orleans, acknowledged that his goal is to turn Aktau into 
&the New Orleans of Kazakhstan.8  Nurgaliyev pointed out 
that Aktau is already the largest port on the Caspian and 
that the northern portion of the Caspian Sea, where its 
competitor, Atyrau, is located, is too shallow for a port. 
Nurgaliyev firmly stated that he &would welcome Aktau 
becoming the next Dubai, Aberdeen, or New Orleans, but not 
Las Vegas.8  (COMMENT:  Nurgaliyev made clear that his 
vision for &the New Orleans of Kazakhstan8 was centered on 
attracting economic investments, especially oil services. 
Although Nurgaliyev himself mentioned the beauty of the 
French Quarter in New Orleans, he did not discuss any details 
of plans to develop tourist areas or ecological parks, 
despite press reports that Mangystau has attracted $2.3 
billion in investments into the Kenderli resort zone.  END 
COMMENT.)  Nurgaliyev returned from his October visit to 
Louisiana with a signed agreement of cooperation between 
Mangystau oblast and the port of Louisiana, which he hopes 
will help Mangystau develop into a base for off-shore oil 
service providers. 
 
MANGYSTAU WELCOMES COOPERATION WITH THE UNITED STATES 
 
7.  (SBU) Deputy Akim Nurgaliyev strongly encouraged the 
United States to open an American Presence Post in Aktau, 
pointing out that the Mangystau region has the second highest 
population growth rate in Kazakhstan after Astana. 
Nurgaliyev called DCM and poloff,s attention to the fact 
that Aktau airport had recently been remodeled, and that 
Mangystau has been participating in an &earth-sea-sky8 
development program.  According to Nurgaliyev, Mangystau 
secured Kazakhstani central government funding to bring in 
UAE investors to develop the region,s infrastructure. 
Nurgaliyev expressed hope that such growth for Mangystau 
would also bring opportunities for U.S. businesses, and 
mentioned having met recently with McDermott and 
Schlumberger.  Nurgaliyev also stated that an agreement has 
already been signed between with Conoco-Philips on the N 
block, which is located directly across from Mangystau,s new 
port of Kuryk.  Finally, Nurgaliyev reminded DCM and poloff 
that it is very expensive and inconvenient for Aktau 
residents to travel to Astana or Almaty to secure U.S. visas, 
and expressed the hope that if the American business 
community continued to grow with the port and oil sectors, 
the United States might establish a branch office of the 
Embassy in Aktau.  Deputy Rector of the Caspian State 
University of Technology and Engineering (CSUTE), Bekzhan 
Saurbayev, also noted that CSUTE signed an agreement with the 
Louisiana State,s university system on October 30, 2008. 
Saurbayev proudly highlighted the various exchanges taking 
place between his university and U.S. universities, and 
expressed his hope that such mutually beneficial cooperation 
would continue. 
TOO LATE FOR U.S. COMPANIES TO BID ON PORT PROJECTS 
 
8.  (SBU) Representatives from Caspiy Meruerty company, SEC 
Caspiy company, the Mangystau Akimat (regional 
administration) and Kazakhstan,s national shipping company, 
Kazmortransflot (KMTF), all discussed KazMunaiGaz,s 
proposal, approved by the government in 2005, to expand the 
small sea-port at Kuryk. (NOTE:  Aktau port is operating at 
maximum capacity and due to its location, is not able to 
receive tankers with 60,000 ton displacements, whereas Kuryk 
provides a better natural shelter where uninterrupted 
operations can be carried out throughout the winter and 
during storms.  END NOTE.)  KMTF played a leading role in 
constructing and operating the Kuryk port, and plans to ship 
7.5 million tons of crude from Kuryk in its first year of 
operations.  Deputy Akim Nurgaliyev indicated that since port 
development is almost complete, it would be difficult for 
U.S. businesses to find opportunities to work on port 
projects at such a late stage.  KMTF officials also indicated 
that shipbuilding contracts have already been awarded to 
Russian firms. 
 
STRONG OPTIMISM ABOUT ECONOMIC OPPORTUNITIES 
 
9.  (SBU) According to Kazakhstani government statistics, per 
capital GDP in Mangystau oblast is $15,451, significantly 
above the national average of $6,870 (although below 
Atyrau,s average of $21,640).  Poloff,s various 
interlocutors in Aktau without exception expressed 
satisfaction with the current economic situation ) and 
confidence that the future was even brighter. 
Representatives from MAEK-Kazatomprom, FMC Technologies, 
Caspiy Meruerty, SEC Caspiy, and CSUTE all said they were 
optimistic about opportunities for economic development and 
employment in Mangystau (reftels B-E). 
 
10.  (SBU) Caspian State University of Technology and 
Engineering particularly seems poised to benefit from the 
region,s increasing prosperity.  The university, which 
currently owns property throughout the city, including 
significant waterfront holdings, is planning to open its new 
campus near the airport on September 1, 2009.  The university 
is also developing a beach-front restaurant and shopping 
complex less than 100 yards from the luxurious $200 per night 
Renaissance Marriott Hotel. 
 
LOCAL NGO REPORTS GOOD COOPERATION WITH LOCAL AUTHORITIES 
 
11.  (SBU) Kirill Osin, Director of a local NGO, 
Eco-Mangystau, explained to poloff that his organization 
recently established good cooperation with local authorities. 
 Osin,s NGO runs an information resource center, organizes 
environmental clean-up campaigns and lobbies media and 
government on environmental issues.  Currently Eco-Mangystau 
is working on a project called &Transparency in Local 
Administration,8 by creating a database of information about 
local leaders and their decisions. At the 2005 Extractive 
Industry Transparency Initiative (EITI) conference, the 
Akimat (regional administration) accepted Osin,s proposal to 
establish a four-party council, including representatives 
from the regional administration, NGOs, mass media and 
extractive industry companies. 
 
ENTHUSIASM ON AZERBAIJAN, CAUTIOUS ON IRAN AND TURKMENISTAN 
 
12.  (SBU) Deputy Akim Nurgaliyev told DCM and poloff that 
Mangystau hopes to be the center of several trade routes:  1) 
a revitalized &New Silk Road,8 2) a new north-south route, 
and 3) a regional Caspian route.  Despite the fact that 
Mangystau oblast has maritime access to Azerbaijan, 
Turkmenistan, and Iran, poloff saw surprisingly few visible 
signs of their influence in Aktau.  Nevertheless, Nurgaliyev 
emphasized that Azerbaijan already has a consulate in Aktau, 
and that the the
Russian Federation, Iran and Uzbekistan plan 
to open consulates. If relations between the United States 
and Iran improve, noted Nurgaliyev, there would be many 
opportunities in the Mangystau region for both Kazakhstan and 
the United States, in particular, sending oil to the Iranian 
port of Neka.  Nurgaliyev specifically mentioned 
opportunities for increased oil swaps with Iran. 
 
13.  (SBU) Kazakhstan,s national shipping company, 
Kazmortransflot (KMTF) has been working very closely with 
Azerbaijan, especially Kaspar (Azerbaijan,s National 
Shipping Company) and hopes to sign an agreement on 
principles with another leading Azerbaijani company.  KMTF 
officials confirmed that the volume of trade with Russia and 
Azerbaijan is anticipated to remain significant, but 
downplayed the extent of their cooperation with Iran, 
pointing out that occasional shipments of oil south to Iran 
are complicated by political issues and infrastructure 
limitations.  KMTF officials also mentioned unsuccessful 
Kazakhstani efforts at closer cooperation with Turkmenistan. 
Interlocutors from KMTF were interested in working with all 
Caspian states to simplify paperwork procedures and develop 
emergency response plans. 
 
14.  (SBU) Educational institutions are also actively 
pursuing cooperation in the Caspian region.  CSUTE has 
students from all five Caspian republics.  Deputy Rector 
Saurbayev told DCM and Poloff that authorities changed the 
name of the university in May to emphasize its role in 
preparing regional specialists.  Saurbayev also noted that 
the university recently created special programs to help 
Turkmen and Iranian students.  Saurbayev told the DCM and 
poloff that although the majority of CSUTE,s &foreign8 
students come from former Soviet states, many former 
Kazakhstani citizens living in Iran have also sent their 
children to study at Caspian State University. 
 
AKTAU CITY:  A CITY OF CONTRASTS 
 
15.  (SBU) COMMENT:  The view from the two sides of the 
Marriott Renaissance Hotel, where standard single rooms 
without breakfast are $200 per night and business suites run 
$1000 per night, clearly demonstrates the contrast between 
Aktau,s past and future.  On one side, a large television 
screen displays advertisements (above streets with very 
little traffic) showcasing the city,s modernity; on the 
other side is a Soviet MiG fighter jet.  The beachfront near 
the hotel is lined with posh clubs, yet the beach is littered 
with debris and broken bottles.  Nevertheless, as reftels A-E 
indicate, local interlocutors are optimistic that Mangystau 
and Aktau have tremendous potential for economic growth. 
Regional administrators are working hard to partner with 
NGOs, encourage international cooperation, and welcome 
private business.  END COMMENT. 
HOAGLAND

Wikileaks

08ASTANA2349, MANGYSTAU – KAZAKHSTAN’S OTHER OIL CENTER

WikiLeaks Link

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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. #08ASTANA2349.
Reference ID Created Released Classification Origin
08ASTANA2349 2008-11-25 14:17 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0005
RR RUEHWEB

DE RUEHTA #2349/01 3301417
ZNR UUUUU ZZH
R 251417Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3957
INFO RUCNCIS/CIS COLLECTIVE 0856
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0255
RUEHKO/AMEMBASSY TOKYO 0965
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0338
RHEHNSC/NSC WASHDC 0423
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS ASTANA 002349 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EINV EPET CH IR KZ
SUBJECT: MANGYSTAU - KAZAKHSTAN'S OTHER OIL CENTER 
 
REF: ASTANA 01865 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On November 6, DCM and poloff met with 
several oil companies to discuss the state of the energy 
industry in Kazakhstan,s Mangystau oblast.  Oil companies in 
Mangystau noted the region,s untapped potential, good 
infrastructure, a supportive local government, and 
well-qualified work force as reasons for their success. 
Companies also reiterated the need to develop the region,s 
environment and social services.  END SUMMARY. 
 
REGIONAL COMPARATIVE ADVANTAGES:  MODERN INFRASTRUCTURE AND 
SUPPORTIVE LOCAL GOVERNMENT 
 
3.  (SBU) On November 5, Poloff and DCM met with the General 
Director of Caspiy Meruerty Operating Company BV, a 50-person 
operating company and subsidiary of Shell and Oman Pearls. 
The company made a strategic decision to establish itself in 
Mangystau province, rather than Atyrau, where most Western 
companies are based.  Caspiy Meruerty,s General Director, 
Marcus Antonini, told DCM and poloff that the decision has 
worked out well for the company, due to its access to 
Mangystau,s relatively untapped reserves.  (NOTE:  Caspiy 
Meruerty struck oil last month on two test wells.  END NOTE.) 
 Caspiy officials also said that Mangystau has better 
infrastructure than Atyrau, in particular, better port 
facilities and a very accommodating local government. 
Antonini noted that &joint ventures are very important to 
the region, and the Akim (governor) is ambitious, and, in a 
good sense, nationalistic.8  Caspiy has had no problems 
getting work permits or other paperwork approved.  Antonini 
also stated that the capital city of Mangystau, Aktau, is 
also a more attractive city than Atyrau, an important factor 
in attracting foreign investment. 
 
4.  (SBU) FMC Technologies representative Tanat Ishangali 
echoed Antonini,s comments and said that the business 
climate in Mangystau is excellent.  FMC has two major 
customers in the oblast, Agip and Myers, and competes on 
quality, not price.  Ishangali, whose brother works in a 
Chinese firm, claims that FMC,s Chinese competitors 
manufacture oil pumping equipment that is five times less 
expensive, but made of soft metal and prone to leaks.  To 
meet local content requirements, FMC purchases parts from 
Kazakhstan, then makes the casing spool bodies at a factory 
in France and completes welding in Almaty.  Ishangali 
declared that FMC, which employs 51 people in Aktau, also has 
had no problems processing work permits in Mangystau. 
 
MANGYSTAU HAS PLENTY OF WELL-QUALIFIED WORKERS 
 
5.  (SBU) Caspiy Meruerty,s Antonini also said that the 
Mangystau region has plenty of well-qualified workers, noting 
that he has hired 40 people over the last year.  Many of 
Caspiy Meruerty,s new employees have previous experience in 
the oil service industry and oil well work, having worked at 
other international oil companies such as Schlumberger, 
Baker-Hughes and Agip.  Antonini commented that Shell has 
also noticed a trend of Kazakhstani citizens overseas 
returning to Kazakhstan to work, despite the fact that many 
will lose the tax-free status they enjoyed when employed 
outside their home country. 
 
REGION HAS POTENTIAL UNDER VARIOUS TRANSPORTATION SYSTEMS 
 
6.  (SBU) Antonini told poloff that there is huge growth 
potential in Mangystau, particularly in the four fields 
located 20 kilometers offshore.  Antonini reminded DCM and 
poloff that, as an operator, he is less concerned with 
transportation issues.  Whether oil is exported via the 
Kazakhstan Caspian Transportation System (KCTS) or the 
Caspian Pipeline Consortium (CPC) pipeline, Antonini sees 
significant growth opportunities.  In particular, Antonini 
noted that domestic refining capacity in Kazakhstan is 
limited and therefore Kazakhstan imports the majority of its 
refined products.  If Kazakhstan had increased refining 
capacity, this would present domestic business opportunities 
for a number of companies.  (COMMENT:  Kazakhstan has been 
considering how to address its under-investment in refining 
capacity, per reftel.  END COMMENT.)  In Antonini,s view, 
future cooperation with Iran remains difficult due to the 
political situation.  Nevertheless, Antonini said that Total 
has studied plans to build a pipeline from Kazakhstan to Iran 
and called this potentially &a brilliant investment8 that 
could have a big pay-off someday.  (COMMENT:  Poloff could 
not independently confirm this report, which goes beyond 
statements made by internationa
l oil companies operating in 
Kazakhstan.  END COMMENT.)  A pipeline south to India and 
Pakistan would be ideal, too, he said, if the situation in 
Afghanistan were secure enough to make it worthwhile. 
Antonini also commented that the most interesting aspect of 
the Kazakhstan International Oil and Gas Exhibition in Almaty 
this year was the lack of a Chinese presence, considering the 
joint project to build an oil pipeline from the Caspian Sea 
to China. 
 
ENVIRONMENTAL PROTECTION AND SOCIAL INFRASTRUCTURE NOT YET 
ADEQUATE 
 
7.  (SBU) As part of their Production Sharing Agreements, oil 
companies are required to invest in projects to develop the 
local social infrastructure, and investing in Astana or 
Almaty is forbidden.  Antonini notes that initially, Caspiy 
Meruerty invested primarily in small projects, such as public 
lavatories and playgrounds.  This year, however, several 
companies combined their investments to construct a 
kindergarten and a water pipeline to a nearby town.  Although 
Antonini stated that environmental restrictions, such as the 
zero discharge policy, are strict and discourage testing of 
wells, his company was able to work successfully within such 
environmental protection constraints.  Caspiy Meruerty used 
special equipment, including burners from Venezuela, to run 
an emission-free test.  Waste disposal and processing, and 
other quality-of-life issues, however, are critical to 
Mangystau,s future.  According to Antonini, the region could 
do more to clean up the beaches and develop its recreational 
potential.  Antonini also noted his concern that regional 
education and health-care systems have been placed too much 
&on the back burner.8  Antonini commented that from the 
very large number of border guards patrolling the Caspian 
Sea, illegal fishing is clearly a large problem, and he said 
the illegal nets create a hassle for off-shore oil companies 
such as Caspiy Meruerty. 
 
LOCAL PARTNERSHIPS ARE KEY 
 
8.  (SBU) Antonini told DCM and poloff that he believes that 
Caspiy Meruerty has succeeded because the company carefully 
studied every other foreign company in Kazakhstan to see what 
difficulties they encountered and tried to avoid these 
challenges.  Noting that many foreign enterprises were caught 
off guard by subsoil legislation changes, Antonini commented 
that companies have to be realistic and proactively engage 
government partners.  For instance, in its second round of 
tenders, Caspiy Meruerty leveraged the local government,s 
extensive experience to help select good candidates. 
Antonini remarked that he looks for long-term partnership 
with local Kazakhstani enterprises, particularly with 
companies that have decent equipment, sufficient capital, and 
a broad, flexible outlook.  (COMMENT:  Currently, Aktau is 
clearly number two behind Atyrau as a Caspian oil center. 
However, many of the offshore fields are equidistant between 
Aktau and Atyrau, and a number of Western companies feel that 
the local administration (oblast) in Atyrau has become 
difficult and greedy.  Aktau, on the other hand, seems more 
business-friendly and is certainly trying harder to welcome 
investment at this point.  END COMMENT.) 
HOAGLAND

Wikileaks

08ASTANA2348, KAZAKHSTAN: DEMARCHE DELIVERED ON DISCOURAGING

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Reference ID Created Released Classification Origin
08ASTANA2348 2008-11-25 13:59 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0002
RR RUEHWEB

DE RUEHTA #2348 3301359
ZNR UUUUU ZZH
R 251359Z NOV 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 3956

UNCLAS ASTANA 002348 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR ISN/RA: RICHARD NEPHEW AND RISA MONGIELLO 
 
E.O. 12958: N/A 
TAGS: PARM MNUC TRGY KNNP IR KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON DISCOURAGING 
ATTENDANCE AT IRAN,S NOVEMBER 30 NUCLEAR CONFERENCE 
 
REF: SECSTATE 122401 
 
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.  On November 24, Talgat Kaliyev, 
Head of the MFA,s Americas Department confirmed that no 
representative from Kazakhstan is planning to attend Iran,s 
November 30 nuclear conference. 
HOAGLAND

Wikileaks

08ASTANA2346, KAZAKHSTAN: PRESIDENTIAL ADMINISTRATION HEAD MUSIN

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Reference ID Created Released Classification Origin
08ASTANA2346 2008-11-25 10:58 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9060
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2346/01 3301058
ZNR UUUUU ZZH
O 251058Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3953
INFO RUCNCIS/CIS COLLECTIVE 0854
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0253
RUEHKO/AMEMBASSY TOKYO 0963
RUCNDT/USMISSION USUN NEW YORK 2077
RUEHNO/USMISSION USNATO 2409
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0421
RUEKJCS/SECDEF WASHDC 0336
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002346 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC, SCA/PPD, EUR/CARC, DRL 
STATE PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PARM ECON EFIN EINV SOCI KNNP KDEM KPAO
KZ 
SUBJECT:  KAZAKHSTAN:  PRESIDENTIAL ADMINISTRATION HEAD MUSIN 
DISCUSSES GOALS FOR OSCE CHAIRMANSHIP, MADRID COMMITMENTS 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On November 24, the Ambassador met Aslan Musin, 
Head of the Presidential Administration, to discuss Kazakhstan's 
broad goals as Chairman-in-Office of the OSCE and the package of 
legislative amendments currently being reviewed by parliament. 
Other participants included Yerzhan Kazykhanov, Foreign Policy 
Advisor to the President, Murat Smagulov, U.S. Foreign Policy 
Analyst with the Presidential Administration's Foreign Policy 
Center, and Talgat Kaliyev, Director of the Ministry of Foreign 
Affairs' Department of the Americas.  Musin said the government 
would be willing to share final drafts of amendments to legislation 
on political parties, election reform, and the media with the OSCE 
Advisory Commission, but it was unclear whether or not the 
government would allow the OSCE to review the documents before 
President Nazarbayev signs them into law.  Musin acknowledged that 
there was no funding in this year's budget to contribute to the cost 
of transporting and storing spent nuclear fuel from the BN-350 
breeder reactor, but he called this a high priority for the 
government and expects funds to be available in next year's budget. 
Overall, Musin stressed that Kazakhstan has always had a "dynamic, 
positive" bilateral relationship with the United States, but he 
pointedly requested U.S. government support for Kazakhstan's OSCE 
Chairmanship, assistance with WTO accession, and removal of 
Jackson-Vanik restrictions, which he labeled an "unnecessary 
anachronism."  END SUMMARY. 
 
CONGRATULATIONS ON THE U.S. PRESIDENTIAL ELECTIONS 
 
3.  (SBU) Throughout his formal yet cordial meeting with the 
Ambassador, Musin impressed one as a thoughtful observer and careful 
listener.  His comments on the U.S. presidential election and global 
financial crisis were particularly noteworthy.  He sincerely 
congratulated the Ambassador on the November 4 elections, saying, 
"the whole world was watching this dramatic campaign in the leading 
country of the world."  Although Musin noted that Kazakhstan is a 
relatively young republic compared to the United States, he said 
with discernable pride that his country has accomplished a great 
deal during the past 17 years in the areas of social, economic, and 
political development. 
 
A CRISIS UNLIKE ANYTHING EVER EXPERIENCED 
 
4. (SBU) Turning to the global financial crisis, Musin said that the 
Kazakhstani people "have never experienced anything like this 
before."  He noted that the mentality and the memories of people in 
Kazakhstan are still strongly linked to their Soviet past.  Although 
he acknowledged that times were tough under socialism, he said this 
is the first sustained economic crisis Kazakhstan has experienced as 
a capitalist country.  Musin noted that Kazakhstan first felt 
financial tremors in August 2007, when the domestic banking sector 
overextended its external borrowing, and suggested that this 
experience helped prepare the country for the current crisis.  "We 
had time to prepare and take action," he said.  Musin was hopeful 
that Kazakhstan's quick and forceful response to the current 
financial crisis would prove effective, but he noted that the 
government of Kazakhstan alone could not manage the global crisis. 
"The solution must come from the place where the crisis started - in 
the United States."  According to Musin, the lesson of the current 
crisis is that a free and open market cannot solve all possible 
problems.  "The economy still needs the government's direction and 
involvement," he said. 
 
GOALS FOR THE OSCE CHAIRMANSHIP 
 
5.  (SBU) When asked to define Kazakhstan's goals when it assumes 
the Chairman-in-Office of the OSCE in 2010, Musin said first how 
proud he and all Kazakhstanis are that they were awarded this honor, 
calling it a milestone event for the new nation.  Musin said 
Kazakhstan hoped to "show the world" that the country has met 
 
ASTANA 00002346  002 OF 002 
 
 
international standards and is willing and able to join -- and
 even 
lead -- important international organizations like the OSCE.  He 
also said that Kazakhstan's chairmanship would introduce a new voice 
to the world stage and implied that Western countries could learn 
from the experience of Kazakhstan, an emerging, developing country 
that has deftly transformed its economy and society and is 
well-adapted to a rapidly changing world. 
 
6.  (SBU) Musin said that on November 24, parliament began 
discussing a package of legislative amendments submitted by the 
government to meet Kazakhstan's OSCE Madrid commitments, including 
proposed changes to laws governing political party registration, 
election procedures, religion, and the media.  He acknowledged that 
it is "maybe a little uncomfortable" that there is just one party 
currently represented in parliament, but attributed that to a 
procedural flaw that the new legislation would address.  When asked 
if the government would allow the OSCE's Advisory Commission to 
review the final amendments before President Nazarbayev signs them 
into law, Musin was non-committal, although he did say that, "if the 
OSCE thinks it is critical to issue an opinion, we will hear them 
out." 
 
FUNDING "WILL BE FOUND" FOR SAFE STORAGE OF SPENT NUCLEAR FUEL 
 
7.  (SBU) When asked how the economic crisis has affected 
Kazakhstan's budget planning -- particularly funding for the 
transportation and storage of spent fuel from the BN-350 breeder 
reactor -- Musin acknowledged that the government unfortunately 
could not find the funds in this year's budget to cover its share of 
the costs of the program.  He did, however, say that this is a high 
priority for the government and he has high hopes that funds will be 
available in next year's budget.  "We will absolutely revisit this 
question," he said, adding, "I am certain this crisis will be 
solved.  It is, after all, in our own national interest." 
 
8.  (SBU) Before adjourning, the Ambassador noted that he would soon 
travel to Washington for consultations and asked Musin if there was 
a message he wished to convey.  Musin did not hesitate.  He noted 
that Kazakhstan has always had "dynamic, positive" bilateral 
relations with the United States and said there are no current 
disagreements or misunderstandings between the two countries. 
However, he said, we need your help with three things.  In quick 
succession, he asked for U.S. government support for Kazakhstan's 
accession to the World Trade Organization, the elimination of the 
Jackson-Vanik requirements, which he dismissed as an "unnecessary 
anachronism," and onigoing support to Kazakhstan as it prepares to 
assume the role of Chairman-in-Office of the OSCE. 
 
HOAGLAND

Wikileaks

08ASTANA2345, KAZAKHSTAN’S MAEC-KAZATOMPROM FACES FUNDING

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Reference ID Created Released Classification Origin
08ASTANA2345 2008-11-25 10:58 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9059
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2345/01 3301058
ZNR UUUUU ZZH
R 251058Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3951
INFO RUCNCIS/CIS COLLECTIVE 0852
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0251
RUEHKO/AMEMBASSY TOKYO 0961
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0334
RHEHNSC/NSC WASHDC 0419
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002345 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV ENRG KNNP TX KZ
SUBJECT: KAZAKHSTAN'S MAEC-KAZATOMPROM FACES FUNDING 
CHALLENGES AND POTENTIAL OWNERSHIP CHANGES 
 
REF: ASTANA 02086 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On November 5, DCM and poloff visited 
Mangystau Atomic Energy Complex (MAEC), a subsidiary of 
Kazatomprom, to attend the construction completion ceremony 
of the U.S.-funded Sodium Processing Facility on the 
territory of the BN-350 fast breeder reactor.  The BN-350 
facility was well-maintained and ready for spent fuel cask 
transport operations.  Morale among MAEC employees was high, 
but senior company officials admitted the company is 
operating under intense financial pressure due to high oil 
prices and that possible ownership changes could 
significantly affect MAEC,s structure.  Senior officials at 
MAEC and within the Akimat (regional administration) expect a 
nuclear power plant to be built on MAEC territory within the 
next few years.  END SUMMARY. 
 
FORMER CROWN JEWEL OF THE NUCLEAR EMPIRE SAFELY SHUT-DOWN 
 
3.  (SBU) The once top-secret BN-350 fast-breeder nuclear 
reactor provided electricity and heating for Aktau city and 
the surrounding region.  The BN-350 reactor also formerly 
operated a desalinization plant, critical for the desert 
Mangystau region, which has no potable water supplies.  After 
the Soviet Union,s collapse, MAEC rapidly lost prestige and 
influence.  U.S. scientists recall that 15 years ago the 
doors of the BN-350 facility were &hanging off the hinges.8 
 During a November 5 tour of reactor premises, however, DCM 
and poloff observed that plant facilities, which included an 
administrative complex featuring a large museum and a 
billboard of &employees of the year,8 were well-maintained. 
 MAEC security workers were using an electronic badge system 
to admit authorized employees through several checkpoints, 
and those working or visiting the reactor were garbed in 
protective gear before they were allowed to visit the cesium 
traps and spent fuel reservoir.  Embassy officials viewed the 
480 small fuel casks awaiting placement into 60 TUK-123 casks 
for the BN-350 spent fuel transport operation, funded jointly 
by the U.S. Department of Energy and the government of 
Kazakhstan.  The control room, which used to operate at the 
highest levels of security and maintain a four 
person-security shift, now has only one person on duty, in 
case of fire or emergency.  The control room contained old 
manual controls and rotary dial telephones, but MAEC 
officials pointed out the computer-monitoring system that was 
installed under the Nunn-Lugar program. 
 
WAITING FOR A GREEN LIGHT ON TRANSPORT OPERATIONS 
 
4.  (SBU) U.S. officials also toured the specialized crane 
and loading area designed for lifting the large spent fuel 
cement casks onto trains for transfer to long-term storage at 
Baikal-1.  According to Yuriy Shirobokov, MAEC,s Head of the 
BN-350 Decommissioning Department, the crane was completed 
ahead of schedule by a crew of 14 Chinese laborers who worked 
around the clock, and &everything at MAEC,s BN-350 site is 
prepared.  We are only waiting for authorization from 
headquarters.8 
 
MORALE REMAINS HIGH AT MAEC 
 
5.  (SBU) Morale among the 250 MAEC employees at BN-350 
seemed high, since many expect a nuclear power plant will be 
built onsite.  Many workers have been employed at BN-350 for 
15 to 30 years.  Alexander Kim, Deputy Director of the 
Kazakhstan Atomic Energy Commission, confirmed that during 
the inspection he completed on November 5-6, he found no 
safety violations, noting that workers at BN-350 were &very 
experienced professionals in nuclear security.8 
 
MAEC REMAINS UNDER INTENSE FINANCIAL PRESSURE 
 
 
ASTANA 00002345  002 OF 002 
 
 
6.  (SBU) After the decommissioning of the BN-350 nuclear 
reactor, MAEC,s generators and boilers were converted to run 
on oil instead of nuclear power.  However, Acting Deputy 
Director Andrey Kozelkov explained that MAEC, which remains 
the sole electrical and heating provider for the entire 
Mangystau and Atyrau regions, faces serious maintenance and 
funding challenges.  MAEC currently sells its excess power to 
neighboring oblasts.  Aktau,s electricity consumption is 
only 20% of what MAEC exports to Atyrau, for example, and 
demand for energy in both regions is rising.  Seventy to 
e
ighty percent of the company,s electricity costs are for 
purchasing imported oil, keeping profit margins narrow.  MAEC 
cannot freely increase prices because of the five-year 
moratorium on residential electricity price increases, 
declared in 2006, and an annual price-hike limit on 
commercial customers.  (NOTE:  This complaint rings true when 
compared with the experience of AES, the U.S. power company 
active in northern and eastern Kazakhstan (reftel).  END 
NOTE.)  Meanwhile, inflation is also rising rapidly and MAEC 
must continue to raise salaries to retain qualified staff. 
Despite support from local antimonopoly committee officials, 
MAEC faces financial constraints.  Kozelkov commented that if 
Kazakhstan could buy natural gas from Turkmenistan and sell 
electricity in exchange, both sides could realize tremendous 
profits, but money to construct the necessary electricity, 
gas and rail lines is lacking.  The company is considering 
laying off up to one-third of its 4,000 workers, if it can 
contract with an outside company to provide maintenance 
activities and automate services.  In Kozelkov,s view, a 
smaller, more efficient MAEC is likely to emerge if ownership 
of the company is transferred from Kazatomprom to 
KazMunaiGas, an idea currently under serious consideration. 
 
CONSTRUCTION OF A NUCLEAR POWER PLANT AT BN-350 LIKELY 
 
7.  (SBU) Kozelkov also informed DCM and poloff that he was 
&98 percent certain8 that a nuclear power plant would be 
built at BN-350.  Deputy Akim Nuragliyev also mentioned the 
idea as &almost certain,& attributing the plan to Vladimir 
Shkolnik, Minister of Trade and Industry, whom Nurgaliyev 
described as &a very charming person with a big following 
who has great authority and interest in the nuclear sector.8 
 (COMMENT:  Shkolnik worked at the BN-350 reactor for 
approximately 20 years, eventually becoming the plant,s 
Deputy Director before becoming Minister of Science and 
playing a key role in Kazakhstan,s counter-proliferation 
efforts, including decommissioning of the BN-350 nuclear 
reactor.  Shkolnik is an avid proponent of the advantages of 
nuclear power, and is likely to support Kazakhstan,s rumored 
plans to build four nuclear power plants.  Given Shkolnik,s 
connections to BN-350, it would not be surprising that he 
would be encouraging its selection as one of the four future 
nuclear power plant sites.  END COMMENT.)  Nuragliyev also 
stated that since Kazakhstan has the second largest uranium 
resources in the world and is determined to become the top 
uranium producer in the world, Kazakhstan should develop its 
nuclear resources for the safe production of energy. 
HOAGLAND

Wikileaks

08ASTANA2338, KAZAKHSTAN: GOVERNMENT MOVES SWIFTLY TO STABILIZE BANKING

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2338 2008-11-25 10:56 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9057
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2338/01 3301056
ZNR UUUUU ZZH
O 251056Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3943
INFO RUCNCLS/SCA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 0850
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0249
RUEHKO/AMEMBASSY TOKYO 0959
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0417
RUEKJCS/SECDEF WASHDC 0332
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002338 
 
SIPDIS 
SENSITIVE 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ
 
SUBJECT:  KAZAKHSTAN:  GOVERNMENT MOVES SWIFTLY TO STABILIZE BANKING 
SECTOR (PART 2 of 3) 
 
REF:  A) 08 ASTANA 2320 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (U) This is the second in a three-part series analyzing 
Kazakhstan's response to the global financial crisis. 
 
3.  (SBU) SUMMARY:  On October 13, President Nazarbayev announced a 
series of sweeping measures to be enacted by the Government of 
Kazakhstan in response to the global financial crisis.  Established 
to ensure the stability of Kazakhstani financial markets, these 
measures include the accelerated establishment and implementation of 
the Asset Stabilization Fund (ASF), the merger of the two largest 
asset-generating and wealth-distributing state holding companies 
Samruk and Kazyna, the Law on Financial Stability (since adopted), 
and the government's intention to purchase 25% equity stakes in the 
four key banks sometime in the coming months.  As the merger of 
Samruk and Kazyna moves forward, officials inside the previously 
distinct agencies are working to create a unified vision for the 
future.  Meanwhile, international groups are guardedly optimistic 
there will be increased transparency, competent leadership, and 
minimized disruption in commercial operations.  END SUMMARY. 
 
MERGER OF SAMRUK-KAZYNA UNDERWAY 
 
4.  (SBU) Government economic assistance plans name the newly 
combined National Welfare Fund Samruk-Kazyna as the primary 
implementer of its stabilization programs.  Meanwhile, the merger of 
these two distinct institutions continues, with behind-the-scenes 
negotiations ongoing.  The clear heavyweight of the two, Samruk, 
owns 91% of Kazakhstan's asset base according to Peter Howe, Deputy 
Chair of the Samruk Managing Board.  Kazyna has been home to the 
country's financial development institutions since it was created in 
2006, but its operations have notably lacked transparency. 
Initially led by Kairat Kelimbetov, and tasked primarily with the 
diversification of the Kazakhstani economy, there is little tangible 
progress for which it can claim credit.  Critics inside and outside 
the government argue that it has been a tool for the distribution of 
wealth within the upper political echelons of the government with 
little accountability.  Kazyna has little clout with legitimate 
western development institutions. 
 
MERGER MORE CONSOLIDATION THAN CRISIS MEASURE 
 
5.  (SBU) The reasoning behind the merger remains somewhat murky. 
On October 13, Nazarbayev said that the new, combined institution 
would strengthen Kazakhstan's ability to respond uniformly to the 
developing financial crisis.  With the expected consolidation of 
government shares of ownership in Eurasian Natural Resources Group 
(ENRC), KazAtomProm, Kazakhmys (mining), the Kazakhstan Mortgage 
Company and seven regional holding companies (also known as Social 
Entrepreneurial Corporations) under the Samruk-Kazyna umbrella, the 
new National Welfare Fund will be the largest institution of its 
kind in the CIS.  Its capitalization will be greater than $40 
billion and it will represent more than 50% of the Kazakhstani GDP. 
The CEO of Citibank-Kazakhstan Dan Connelly believes the move is 
more likely to concentrate oversight of the country's greatest 
assets with someone the president trusts. 
 
CONCERNS THAT SAMRUK-KAZYNA WILL BE FURTHER POLITICIZED 
 
6.  (SBU) Outsiders and insiders alike hope the merger will not 
divert the larger goals of these previously distinct organizations. 
According to Howe, the overarching long-term priorities of 
Samruk-Kazyna will remain the same, including a focus on 
infrastructure development, solicitation of foreign investment, and 
priority programs such as the expansion of the electricity grid. 
Kazyna Managing Director Marat Aitenov also believes that the 
overall strategy and goals of Kazyna will not change as it is 
incorporated into the larger fund.  Connelly said he hoped it would 
be "business as usual" and praised the decision to appoint 
Kelimbetov to lead the fund.  However, Senior Banker and Acting Head 
of the EBRD Representative Office in Astana Ulf Hidstrom said that 
 
ASTANA 00002338  002 OF 002 
 
 
"the jury is still out" as to how well it and other western 
financial institutions will be able to work with the named 
leadership, noting that Kelimbetov is clearly a "political animal" 
and that Timur Kulibayev [President Nazarbayev's son-in-law] is "a 
good businessman, but extremely politically exposed."  According to 
Hindstrom,
 the greatest challenge for the new fund will be to keep 
political considerations separate from commercially driven 
decision-making processes, noting that the merger is "obviously 
increasing political influence over the economy." 
 
7.  (SBU) Both Howe and Aitenov separately stated that the two 
organizations are now working to develop their organization as an 
integrated whole with a combined vision for the future.  The process 
is expected to take at least two months.  A new organizational chart 
should be released by the end of the year. 
 
8.  (SBU) COMMENT:  The newly formed Samruk-Kazyna will play a major 
role in managing the government's participation and oversight of the 
Kazakhstani banking sector's response to the financial crisis.  It 
is hoped that neither an expanded bureaucratic structure, nor a 
politically visible leadership will negatively impact the 
government's ability to weather these turbulent financial times. 
END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2336, KAZAKHSTAN: DEMARCHE DELIVERED ON PROPOSED GLOBAL

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Reference ID Created Released Classification Origin
08ASTANA2336 2008-11-25 10:55 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0010
OO RUEHWEB

DE RUEHTA #2336 3301055
ZNR UUUUU ZZH
O 251055Z NOV 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC IMMEDIATE 3941

UNCLAS ASTANA 002336 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR EEB (MIKAEL LURIE AND JANET SPECK) 
STATE PLEASE PASS USDA FOR KIRK MILLER 
STATE PLEASE PASS USAID FOR BILL HAMMINK 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EAGR EAID TBIO PGOV KZ
 
SUBJECT:  KAZAKHSTAN:  DEMARCHE DELIVERED ON PROPOSED GLOBAL 
PARTNERSHIP FOR AGRICULTURE AND FOOD (GPAF) 
 
REF: SECSTATE 123480 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) In response to the GPAF demarche request, Econoff delivered 
reftel points and non-paper to Talgat Kaliyev, Head of the America's 
Department at the Ministry of Foreign Affairs (MFA).  Kaliyev 
expressed his support, agreeing that as a major global grain 
producer and exporter, Kazakhstan could play a significant role.  He 
did, however, request further clarification regarding the possible 
organizational structure, specifically by whose initiative the 
organization would be created.  Finally, Kaliyev said that for 
Kazakhstan to consider membership in this and other organizations, 
it would need to receive an official invitation.  Kaliyev promised 
to pass our non-paper to the MFA Director of Multilateral 
Cooperation Barlybay Sadykov. He said he would report back to 
Econoff any comments offered by Sadikov. 
 
HOAGLAND

Wikileaks

08ASTANA2321, KAZAKHSTAN PURSUES ECONOMIC DIVERSIFICATION IN

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Reference ID Created Released Classification Origin
08ASTANA2321 2008-11-24 11:36 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7914
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2321/01 3291136
ZNR UUUUU ZZH
R 241136Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3931
INFO RUCNCIS/CIS COLLECTIVE 0848
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0247
RUEHKO/AMEMBASSY TOKYO 0957
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0330
RHEHNSC/NSC WASHDC 0415
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002321 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN AND EEB 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV KZ
SUBJECT: KAZAKHSTAN PURSUES ECONOMIC DIVERSIFICATION IN 
MANGYSTAU 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On November 6, DCM and poloff met with a 
newly created national corporation to discuss business 
promotion and public-private partnerships in Kazakhstan,s 
Mangystau oblast.  The Chairman of the Mangystau and Atyrau 
branch, SEC Caspiy, described current projects and 
opportunities for U.S. investment.  Regional officials 
acknowledged that problems with poaching and over-fishing 
contributed to a decline in Caspian Sea sturgeon, and asked 
for U.S. investments in fisheries and oil services.  END 
SUMMARY. 
 
A LOCOMOTIVE FOR BUSINESS? 
 
2.  (SBU) Last year, under direct guidance from President 
Nazarbayev, the government of Kazakhstan created a national 
company with seven branch companies distributed throughout 
Kazakhstan,s 14 oblasts and two administrative districts. 
This &social entrepreneurial corporation (SEC)8 was tasked 
to promote business by setting up joint ventures and 
reinvesting 50 percent of the profits for social purposes. 
SEC Caspiy, which promotes business in Atyrau and Mangystau, 
is chaired by the highly influential former Akim (governor) 
of Mangystau, Bolat Palymbetov. 
 
3.  (SBU) Palymbetov outlined the 10 projects SEC Caspiy is 
currently implementing.  The company,s offices, located one 
block from the Nur Otan and Mangystau Akimat buildings, were 
ultra-modern and the staff efficient.  According to 
Palymbetov, SEC Caspiy should become a &locomotive for 
business,8 creating public-private partnerships and saving 
entrepreneurs the time and hassle of navigating local 
bureaucracy to acquire land and permits.  Palymbetov pointed 
out that none of the seven SEC branches fall under the 
authority of any one regional governor to assure their 
independence from pressure by local governments. 
 
SUPPORTING ALL BUSINESSES GREAT AND SMALL 
 
4.  (SBU) Palymbetov acknowledged that the SEC branch 
companies tend to reflect the economic characteristics of 
their regions, but stressed SEC Caspiy supports Prime 
Minister Masimov,s policy of economic diversification. 
Palymbetov told DCM and poloff that current projects in 
Atyrau include a $60 million German gypsum mining project, a 
national sulfur storage facility, a sturgeon farm, a salt 
plant, and a cement plant.  In Mangystau, Palymbetov 
described projects including the establishment of a technical 
support base for a dredging fleet, a flour-milling plant, a 
factory for biological products, and an institute of 
oil-field chemistry. 
 
FORMER AKIM OFFERS TAX BREAKS FOR U.S. INVESTORS 
 
5.  (SBU) Palymbetov emphasized SEC Caspiy could offer 
tax-exemptions and other advantages to &get a company on its 
feet quickly.8  Palymbetov requested U.S. assistance in 
encouraging submission of any proposals, highlighting 
opportunities for investment in oil services, construction, 
and sturgeon farming. 
 
WHERE HAVE ALL THE STURGEON GONE? 
 
6. (SBU) Mangystau,s most famous local product is sturgeon 
and black caviar.  However, interlocutors from Caspiy 
Meruerty and MAEC-Kazatomprom described problems with 
overfishing, and statistics show a 40% decline in the 
sturgeon population in the Caspian Sea over the last 15 
years.  More than 300 cases of poaching occurred in 2007, and 
over 10 tons of illegally caught sturgeon were confiscated. 
National quotas have been imposed on sturgeon fishing and 
black caviar exports.  A local Kazakhstani official told 
poloff that the state had instituted a system of regulating 
 
ASTANA 00002321  002 OF 002 
 
 
stores selling &government-approved8 sturgeon.  Visitors to 
Aktau who attempt to bring back packages of sturgeon or 
caviar without proof of purchase from government-approved 
stores risk confiscation of the product at the airport,s 
internal customs check-points. 
 
7.  (SBU) Poloff did not see any evidence of advertisements 
for recreational sturgeon fishing in Aktau, and most local 
shops and restaurants were not advertising sturgeon, although 
the Marriott Renaissance hotel was serving sturgeon kebabs 
for $20.  As Palymbetov stated, the price of Caspian Sea 
sturgeon caviar remains high; in Astana, 116 grams sells for 
$167.  If a sturgeon farming enterprise were successful, it 
could be highly profitable.  In the meantime, poaching and 
overfishing of wild sturgeon in the Caspian are taking
their 
toll on fish stocks.  One beluga sturgeon in a Caspian Sea 
museum weighed 1.8 tons, but today most sturgeon weigh only 
150 kilograms. 
 
SEC TO ADMINISTER TAX-FREE ZONES 
 
8.  (SBU) Palymbetov also told the DCM and poloff that he 
convinced President Nazarbayev to create a special economic 
zone (SEZ) for Aktau port.  Palymbetov noted that subsequent 
expansions of the SEZ proved the idea had merit, but 
criticized the slow pace of SEZ development under the current 
Akimat.  (COMMENT:  The SEZ already hosts seven enterprises, 
with four more under consideration, but Palymbetov pointed 
out that in one year, he had set up 10 enterprises.  END 
COMMENT.)  He stated that a pending amendment would charge 
the seven SEC companies to administer all tax-free zones. 
 
PALYMBETOV HAS CLOSE TIES TO THE UNITED STATES 
 
9.  (SBU) COMMENT:  The influential Palymbetov, Mangystau 
Akim from 2002-2006, emphasized his close relations with the 
United States, mentioning that in 1994 he had visited the 
United States on a very productive USAID sponsored-trip.  He 
also thanked former Ambassador Ordway for his last visit, and 
noted they had a very long and productive discussion. 
Palymbetov also stated he had spent the last year studying at 
Boulder University in Denver, and that his son, a graduate of 
Holden University, will pursue a Master,s degree at 
Columbia.  Based on his comments about &persuading8 
Nazarbayev to accept free-trade zones and his critiques of 
the current Akim, Palymbetov clearly sees himself as 
influential, and intends to remain a powerful figure in 
Mangystau business and politics, but also appears to have a 
very positive attitude towards the United States.  END 
COMMENT. 
HOAGLAND

Wikileaks

08ASTANA2320, KAZAKHSTAN: GOVERNMENT MOVES SWIFTLY TO STABILIZE BANKING

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Reference ID Created Released Classification Origin
08ASTANA2320 2008-11-24 11:13 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7892
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2320/01 3291113
ZNR UUUUU ZZH
O 241113Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3927
INFO RUCNCLS/SCA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 0844
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0243
RUEHKO/AMEMBASSY TOKYO 0953
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0411
RUEKJCS/SECDEF WASHDC 0326
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2073
RUEHNO/USMISSION USNATO 2405

UNCLAS SECTION 01 OF 04 ASTANA 002320 
 
SIPDIS 
SENSITIVE 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ
 
SUBJECT:  KAZAKHSTAN:  GOVERNMENT MOVES SWIFTLY TO STABILIZE BANKING 
SECTOR (PART 1 OF 3) 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (U) This is the first in a three-part series analyzing 
Kazakhstan's response to the global financial crisis. 
 
3. (SBU) SUMMARY:  On October 13, President Nazarbayev announced a 
series of sweeping measures to be enacted by the Government of 
Kazakhstan in response to the global financial crisis.  To ensure 
the stability of Kazakhstani financial markets, these measures 
include the accelerated establishment and implementation of the 
Asset Stabilization Fund (ASF), the merger of the two largest asset 
generating and wealth distributing state holding companies Samruk 
and Kazyna, the Law on Financial Stability (since adopted), and the 
government's intention to purchase 25% equity stakes of the leading 
four banks sometime in the coming months.  Across the board, 
expectations are that the coming year will be more difficult than 
the current one.  Some officials remain hopeful that 2010 will mark 
the beginning of the recovery of the banking sector, while others 
believe it may take significantly longer.  On average, government 
officials expect a full recovery to take four to five years.  For 
now, with moderate pressure from the government's regulatory 
agencies, Kazakhstan's largest banks prepare to enter into a more 
intimate relationship with the state via Samruk-Kazyna in a unified 
fiscal front for reasons of self preservation and economic 
stability.  END SUMMARY. 
 
KAZAKHSTAN WELL-PREPARED FOR CRISIS MANAGEMENT 
 
4.  (SBU) In comparison to the scale and severity of the financial 
crisis in other parts of the globe, the situation in Kazakhstan does 
not appear as bleak.  While European Bank for Reconstruction and 
Development (EBRD) Principal Banker in Almaty Mehmet Ilkin echoed 
the industry consensus that Kazakhstan's financial institutions will 
not regain access to international credit markets soon, the 
government has repeatedly pledged not to allow any of its major 
banks to fail and is taking a notably robust course of action. 
According to Citibank-Kazakhstan CEO Dan Connelly, who noted that 
Kazakhstan's banking crisis began in August 2007, "Kazakhstan got a 
head start on this, and did everything everyone hoped they would 
do."  He added that as with other impacted industries and markets, 
some consolidation can be expected in the banking sector, but not to 
a degree that will cause any negative or long-lasting systemic 
impact. 
 
LOCAL BANKS FORECAST MODEST GROWTH 
 
5.  (SBU) True to form, Bank Turan Alem (BTA) Board Member George 
Iosifyan's outlook was largely positive, noting that trade relations 
would continue to develop, and that growth potential still existed, 
given that Kazakhstan, with vast oil and gas deposits, still has 
"what the world needs."  BTA grew 16% in the first quarter of 2008, 
and despite increasing threats of global stagnation, the Kazakhstani 
economy is still expected to experience 3-5% annual economic growth 
(4% GDP).  Iosifyan expects modest but continued growth in the 
Kazakhstani banking sector in 2009 of approximately 7-9%.  Officials 
at KazKommertsBank (KKB), BTA and Halyk Bank shared a positive 
outlook for recovery in the construction and real estate sectors as 
early as 2010, because of delayed demand for residential property. 
 
INTERNATIONAL BANKS AND RATINGS AGENCIES LESS OPTIMISTIC 
 
6.  (SBU) Independent financial institutions such as Citibank and 
the EBRD are not as optimistic as local banks, but do believe there 
is significant room for growth and investment in the Kazakhstani 
agricultural sector and related industries such as food processing 
and fertilizer production.  However, recovery and growth in 
Kazakhstani markets remain largely connected to U.S. market 
recovery, and the price for commodities such as oil, which at 
current prices below $50 is already creating havoc for Kazakhstani 
budgeting agencies.  Despite the government's actions, ratings 
 
ASTANA 00002320  002 OF 004 
 
 
agencies such as Fitch maintain a more pessimistic outlook.  On 
November 10, Fitch downgraded Kazakhstan's sovereign rating to BBB- 
and is keeping the securities on its watchlist.  Standard and Poors 
reported "no tangible signs of banking sector recovery" and believe 
that the resolution of the problems will be "a lengthy process." 
 
 
GOVERNMENT EAGER TO PUCHASE
SHARES OF MAJOR BANKS 
 
7.  (SBU) The primary thrust of the government's stabilization 
efforts will be the infusion of approximately $5 billion in funds 
into the banking sector.  Funds derived from the National (Oil) Fund 
will be used to purchase equity stakes in the country's four largest 
banks.  The government has been actively soliciting input into this 
program from representatives of the World Bank, the IMF, and EBRD 
and is now taking concrete steps to put the plan in motion. 
Specific details, including limitations on the use of funds, are 
still being negotiated between the governmental regulatory agencies 
and the individual banks.  An announcement detailing specific facets 
of the government stabilization efforts will be made on November 25 
in accordance with a presidential decree.  This may or may not 
include details on specific arrangements made between the banks and 
the government. 
 
PURCHASE WILL AFFORD VOTING RIGHTS 
 
8.  (SBU) According to the Ministry of Finance, funds will be 
allocated from the National (Oil) Fund to Samruk-Kazyna, which will 
in turn purchase up to a 25% equity stake in four of the nation's 
top banks:  Alliance Bank, Halyk Bank, BTA (formerly known as Bank 
Turan Alem), and KKB.  This equity may be in the form of common 
shares, preferred shares (subject to preemptive rights held by 
majority shareholders) and possibly additional subordinated debt. 
The specific terms of the purchases remain to be determined, but it 
is clear that 25% ownership will afford the government voting rights 
in the corporate governance of the banks. (NOTE: Sources at 
EBRD-Almaty indicate ownership could exceed 30% depending on 
arrangements.  END NOTE.)  Critics, such as EBRD Senior Banker and 
Acting Head of the Representative office in Astana Ulf Hindstrom 
question the motivation of the government, asking whether or not it 
is moving to consolidate control over the financial sector by 
nationalizing a portion of the banking industry.  But most 
Kazakhstani banking representatives, including Chairman of the Board 
at BCC Vladislav Lee and Deputy Chairman of Astana Finance Yerzhan 
Tumabekov expressed optimism regarding the government's new role in 
the industry.  According to Citibank's Connelly, participation may 
or may not necessarily be in the shareholders' interests for certain 
banks, and some banks may have been pressured into participation. 
However, he is convinced that the government does not want to become 
a long-term player in the banking industry and cautioned, "Don't 
consider this a land grab to nationalize the banking sector." 
Kazyna General Manager Marat Aitenov said that Kazyna does not want 
to control the banks, but rather wants to participate in the 
strategic decision-making process to ensure the well-being of the 
institutions and the greater economy. 
 
BTA TO GET LION'S SHARE 
 
9.  (SBU) Early indications are that Alliance Bank will receive $370 
million, Halyk Bank $300 million, KKB $500 million, and BTA the 
lion's share of $2.3 billion.  Senior bank officials expect equity 
transfers to begin at any time.  BTA is slated to receive by far the 
largest portion of the stabilization package, a fact BTA Board 
Member Iosifyan justified by noting that it is the largest bank in 
Kazakhstan with a net value of over $3.9 billion.  He also said that 
BTA is significantly over-extended in international markets, with 
over $2.5 billion due in repayments in 2009 including Eurobonds and 
syndicated loans.  BTA is confident that it would be able to make 
these payments, but not without cutting back on domestic lending 
practices.  According to Iosifyan, the Government of Kazakhstan 
 
ASTANA 00002320  003 OF 004 
 
 
wants to support BTA's bid to become one of the world's top 10 
financial institutions and take advantage of its 30% share of the 
Kazakhstani credit market to serve as a platform for credit 
distribution of to small and medium enterprises.  Iosifyan sees the 
developing strategic partnership as "more pro than con" noting that 
he does not expect the Financial Supervision Agency (FSA) to get 
involved in daily management as long as BTA does "not add more debt 
to our balance sheets."  The government will now be BTA's largest 
single shareholder, but Iosifyan does not expect any changes to the 
leadership structure. He half-jokingly added, "If the government 
representative is professional, there should not be many changes." 
 
10.  (SBU) In addition to the four banks scheduled to participate in 
the government purchase program, two partially foreign-owned banks 
have been selected as potential participants.  On November 3, the 
head of the Kazakhstani Financial Supervision Agency Yelena 
Bakhmutova publicly called for both the 5th and 6th ranked banks, 
ATF-Uni Credit Bank and Bank Center Credit (partly owned by the 
South Korean Kookmin Bank), to accept the government's offer.  ATF 
has not committed to participating in the stabilization program, 
although International Department Director Maxim Utepov did admit to 
Econoff that the bank was receiving some pressure directly from the 
Prime Minister's Office to accept, which would he said would 
ultimately be up to the shareholders to decide.  According to 
Vladislav Lee, Chairman of the Board of BCC, which appears intent on 
accepting the offer, should all six banks participate in the 
program, they would collectively represent approximately 95% of the 
Kazakhstani banking sector. 
 
MOVE SEEN AS TEMPORARY - POSSIBLY TO PROTECT PRIVATE INTERESTS 
 
11.  (SBU) Most industry representatives see these steps as only 
temporary measures.  According to current plans, the government will 
most likely keep its shares for a minimum of three years, with an 
option to extend for an additional two years.  Deputy Governor of 
the National Bank of Kazakhstan Medet Sartbayev confirmed that this 
is "not done to control the banks" and emphasized that "the 
government will sell back the shares."  Despite growing confidence 
in the government's program to shore up the banking sector in 
response to worsening global markets, some experts wonder if the 
underlying sense of urgency is not being driven by the private 
interests of politically exposed individuals.  (NOTE:  Timur 
Kulibayev is the largest shareholder of Halyk Bank and according to 
EBRD officials, it is highly likely the interests of the president 
himself are represented in BTA.  END NOTE).  Regarding BTA, 
Principle Banker at EBRD-Almaty Mehmet Ilkin remarked that current 
bank president "Ablyazov himself is not that powerful."  EBRD's 
primary concern, according to Ulf Hindstrom, is that ultimately the 
government may want to influence where banks are making their 
investments. (NOTE: The EBRD will not work with either Nurbank or 
Halyk Bank because of their political exposure.  END NOTE). 
 
LAW STRONGLY ENCOURAGES PARTICIPATION 
 
12.  (SBU) The government's support to the banking sector is being 
carried out in the larger context of a newly adopted set of 
amendments to ten laws which govern the banking system, pensio
ns, 
insurance, joint stock companies and the stock exchange, and 
portions of the criminal code.  Signed into law by the president on 
October 23, the collective package of amendments is now referred to 
as the Law on the Sustainability of the Financial System.  The Law 
enables increased regulatory oversight over the financial sector, as 
well as emergency powers to be assumed by the government in the 
event of a perceived financial crisis.  It also increases the 
maximum level of deposit insurance from 700,000 to 5 million KZT, 
significantly increasing the government's role in guaranteeing the 
savings of Kazakhstani citizens. 
 
LAW EMPOWERS FSA TO INTERVENE AS DESIRED 
 
 
ASTANA 00002320  004 OF 004 
 
 
13.  (SBU) To prevent the failure of banks and other financial 
institutions, representatives of the FSA now have the right to 
observe the executive and management boards of banks, but without 
interference in their operation.  Indeed, many banks now have 
designated work space for rotating representatives of the FSA.  In 
the event that deterioration, such as an encroaching violation of 
capital adequacy ratio, is detected, the FSA can demand an emergency 
action plan from the bank to ensure its stability.  If this plan is 
not deemed satisfactory, the FSA may assume sweeping authority, 
including the right to make changes to the organizational structure, 
limiting work with deposits, ceasing distribution of dividends, and 
suspension of any or all necessary banking operations as required. 
(NOTE: Previous laws required violations of established ratios prior 
to intervention.  Now the FSA need only detect a "deterioration" to 
intervene.  END NOTE.) 
 
14.  (SBU) Should preventative measures fail, or should the FSA not 
detect deteriorations in time to take action, provisions are now 
made for the prosecution of management and direct take-over of 
institutions. These measures include criminal proceedings against 
the heads of financial institutions who either deliberately or 
through inactivity allow bankruptcy or the forced liquidation of a 
bank.  In other words, bank presidents could be held criminally 
liable for bank failure.  The law also allows the government to buy 
out the stocks of a bank, thereby taking control of the institution 
for one-year increments, in the event of a single violation of 
regulations governing capital adequacy ratios and/or liquidity 
ratios. 
 
15.  (SBU)  Officially, there is no connection between the adoption 
of the amendments and the rumored agreement of the nation's top six 
banks to the stabilization program.  According to EBRD's Ulf 
Hindstrom, the banks "become offended if you even suggest they are 
being forced into this arrangement." 
 
16.  (SBU) COMMENT:  The government is clearly anxious to solidify 
its participation in the strategic management of the country's six 
largest banks through the purchase of 25% equity stakes.  While the 
measure is marketed officially as a temporary intervention, some 
concerns remain about the government's long-term aspirations as it 
makes concrete moves to partially nationalize the private financial 
sector, and perhaps in the future direct their resources towards 
politically motivated causes.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2318, PRESIDENT NAZARBAYEV CALLS FOR GREATER INTERNATIONAL ROLE,

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2318 2008-11-24 10:54 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7869
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2318/01 3291054
ZNR UUUUU ZZH
O 241054Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3923
INFO RUCNCIS/CIS COLLECTIVE 0841
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0240
RUEHKO/AMEMBASSY TOKYO 0950
RUCNDT/USMISSION USUN NEW YORK 2070
RUEHNO/USMISSION USNATO 2402
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0408
RUEKJCS/SECDEF WASHDC 0323
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 002318 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/PRA, DRL 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM ECON KDEM OSCE KZ
SUBJECT: PRESIDENT NAZARBAYEV CALLS FOR GREATER INTERNATIONAL ROLE, 
CRITICIZES OSCE 
 
1.  (U)  Sensitive but unclassified.  Not for Internet distribution. 
 
 
2.  (SBU)  SUMMARY: In his speech to Kazakhstan's top diplomats on 
November 19, President Nazarbayev asked the MFA to develop a new 
foreign policy concept that underscores Kazakhstan's growing role on 
the global scene.  He noted that Kazakhstan's steady and careful 
political development helped assure its sovereignty and territorial 
integrity, allowed it to become a regional player, and made it a 
"worthy partner" of major geopolitical players.  He reiterated 
Kazakhstan's commitment to good relations with Russia and China, and 
stressed his intention to increase ties with the new U.S. 
Administration.  Nazarbayev outlined his priorities for relations 
with Central Asian states, the European Union, and the Persian Gulf. 
 In a separate interview, Kazakhstan's President expressed 
frustration with the OSCE and European Union for concentrating too 
much on Kazakhstan's democratic development and ignoring the 
country's political environment.  Kazakhstan will become a 
democracy, asserted the President, but it cannot do so overnight. 
END SUMMARY. 
 
"NEW CONCEPT" FOR FOREIGN POLICY 
 
3.  (SBU)  On November 19, at the MFA's annual Chiefs of Missions 
gathering, President Nazarbayev laid out his vision for the future 
of Kazakhstan's foreign policy.  He asked the MFA to develop a "new 
concept" of Kazakhstan's foreign policy "that underscores the 
increasing role of Kazakhstan on the world scene."  The concept 
should encompass Kazakhstan's approach "to the most important 
international issues, foreign policy interests, and [Kazakhstan's] 
role in global and regional affairs," stressed Nazarbayev.  The 
President went on to outline his future foreign policy priorities: 
 
-- securing Kazakhstan's regional borders, 
-- promoting the country's economic development, 
-- furthering Eurasian and Central Asian integration, 
-- carrying out a successful 2010 OSCE chairmanship, 
-- implementing the Path to Europe program, 
-- preparing for the 2011 Organization of the Islamic Conference 
(OIC) chairmanship, 
-- continuing to support inter-faith dialogue, including the 
third-annual World Religious Leaders Conference in Astana in 2009, 
and 
-- developing further a regional security mechanism, including the 
2010 summit of the Conference on Interaction and Confidence-Building 
in Asia (CICA). 
 
"A WORTHY PARTNER OF GEOPOLITICAL PLAYERS" 
 
4.  (SBU)  Nazarbayev told the gathered diplomats that Kazakhstan's 
growing role on the international scene is due in large part to its 
steady political development.  "Despite a difficult situation in the 
world, Kazakhstan is able to handle all outside challenges with 
confidence and dignity," he said.  "We have not made dramatic 
mistakes in our political development," stressed the President, "and 
we have managed to strengthen our sovereignty and territorial 
integrity."  Kazakhstan is now ready for a "more active foreign 
policy" based on "clear goals and strategies on how to reach them." 
The country has joined the ranks of "significant players in world 
politics," as proven by its 2008-2009 CICA chairmanship, its 2010 
OSCE chairmanship, the 2011 OIC chairmanship, and its leadership 
roles in CICA and the Shanghai Cooperation Organization (SCO).  "We 
can say confidently that Kazakhstan has emerged as a regional power 
and a worthy partner of global geopolitical players," underlined 
Nazarbayev. 
 
ECONOMIC SLOWDOWN IS A NATURAL CYCLE 
 
5.  (SBU)  Nazarbayev noted that the current global economic 
slowdown is a serious reminder "of what happens when people live 
beyond their budget."  He reminded the audience, however, that the 
slowdown is a "natural change in the global economic cycles.  The 
crisis will sober up many people who engaged in blunt speculation, 
including those in this country."  He noted that the fact that 
Kazakhstan was affected by the crisis means that the country "has 
become an inseparable part of the global economy."   Nazarbayev 
 
ASTANA 00002318  002 OF 003 
 
 
praised the government for quickly developing and implementing a 
plan for economic stabilization and development. 
 
THE MULTIVECTOR POLICY, WITH A STRESS ON UNITED STATES 
 
6.  (SBU)  Nazarbayev reiterated Kazakhstan's multi-vector foreign 
policy, saying that "Russia has always been and rema
ins Kazakhstan's 
reliable ally, economic partner, and good neighbor" and that ties 
with China, Kazakhstan's "strategic partner" and a country with 
growing "global significance," must continue to grow.  Turning to 
the United States, Nazarbayev said that he "intends to strengthen 
cooperation with the new U.S. administration."  "The United States 
is a driving force of many world policies," stressed the President. 
He shared the details of his November 18 telephone conversation with 
President-elect Obama, in which they discussed regional security, 
Iran, Iraq, Afghanistan, Russia, and bilateral cooperation in the 
energy sphere, nuclear disarmament, non-proliferation, and 
counter-terrorism.  "Mr. Obama said he is a friend to Kazakhstan," 
noted President Nazarbayev, "and promised to increase the 
cooperation with Kazakhstan."  "This is a good sign," concluded 
Nazarbayev, "and the Ministry should work on increasing ties with 
the new Administration." 
 
7.  (SBU)  Nazarbayev stressed the need for greater regional 
cooperation in addressing common security challenges.  "Interaction 
with Central Asian countries will remain one of Kazakhstan's top 
priorities," he emphasized.  On relations with the European Union, 
Nazarbayev called for expeditious implementation of the Path to 
Europe, a program to increase economic, technological, and transport 
links with European countries.  He noted that he will visit India in 
January and told the Ministry to adequately prepare for the visit 
"so that it serves as impetus for further development."  He closed 
his remarks by saying that Kazakhstan, as a country that is part of 
the Islamic world, "assigns serious importance to relations with 
countries in the Persian Gulf" and will continue to improve 
relations with United Arab Emirates, Saudi Arabia, Egypt and Jordan. 
 
 
OSCE TOO FOCUSED ON THE HUMAN DIMENSION 
 
8.  (SBU)  While President Nazarbayev did not touch on Kazakhstan's 
Madrid commitments during his speech to the country's top diplomats, 
he did express frustration in an interview the next day that the 
OSCE and the European Union are too focused on Kazakhstan's 
democratic development and ignore the country's political realities. 
 Kazakhstan will continue to build a democratic society, he 
maintained, but it can't happen at the pace the OSCE wants. 
"Democracy is a culture.  This is the beginning, and not the end, of 
our way.  We are moving in that direction," he stressed. 
Kazakhstan's priorities are securing independence, ensuring 
stability as a multiethnic state, and the gradual building of the 
democratic system.  "We are approaching the goal at a steady pace," 
maintained the President, "but we can't skip steps, otherwise we'll 
overturn the whole wagon." 
 
9.  (SBU)  Nazarbayev asserted that the OSCE makes disproportionate 
demands of post-Soviet states on democracy and doesn't pay enough 
attention to other priorities.  The OSCE has four dimensions: 
security, economic cooperation, environmental protection, and the 
human dimension, he explained.  "With regard to security, we did not 
see the OSCE when the Taliban were threatening to move through 
Kyrgyzstan and Uzbekistan.  On economic cooperation, the European 
Union has not had a decisive economic effect on Central Asia.  And 
environment cooperation has only been discussed in general terms." 
In all these years, maintained the President, the European Union and 
OSCE have focused exclusively on the fourth dimension, the human 
dimension.  OSCE and EU officials come to post-Soviet states only to 
"observe elections and point out some flaws."  "This would be 
constructive criticism, if it had not been blown out of proportion," 
maintained Nazarbayev.  The push of some European states to turn 
post-Soviet countries into "the same democracies they are now is a 
laudable aspiration," he asserted.  "We want the same thing, but we 
need to walk a long way to achieve it," he continued.  (COMMENT:  It 
is somewhat ironic that Nazarbayev was so openly critical of the EU, 
many of whose members supported Kazakhstan's desire to become 
Chairman-in-Office of the OSCE, while he did not direct any such 
 
ASTANA 00002318  003 OF 003 
 
 
comments toward the United States, which did not initially endorse 
Kazakhstan.  END COMMENT). 
 
10.  (SBU)  COMMENT: Nazarbayev clearly laid out Kazakhstan's 
priorities - a greater role on the international scene, a careful 
but steady process of democratization, and continuation of 
Kazakhstan's multi-vector policy -- with an added emphasis on 
relations with the United States.  With a new administration pending 
in Washington, we have a unique opportunity to further bilateral 
ties and increase our influence in Kazakhstan.  Nazarbayev's 
criticism of the OSCE also sends a clear message:  pushing too hard 
for reform will only harden resistance and may not produce results 
the OSCE, and we, would like.  In the end, persistent, quiet 
diplomacy based on a realistic assessment of shared interests, 
coupled with a good deal of patience, will be the most effective way 
to achieve our goals.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2317, KAZAKHSTAN’S NATIONAL SHIPPING COMPANY OPTIMISTIC

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Reference ID Created Released Classification Origin
08ASTANA2317 2008-11-24 10:36 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7855
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2317/01 3291036
ZNR UUUUU ZZH
R 241036Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3921
INFO RUCNCIS/CIS COLLECTIVE 0839
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0238
RUEHKO/AMEMBASSY TOKYO 0948
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0321
RHEHNSC/NSC WASHDC 0406
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002317 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EINV EPET EWWT AJ KZ
SUBJECT: KAZAKHSTAN'S NATIONAL SHIPPING COMPANY OPTIMISTIC 
ABOUT THE KAZAKHSTAN CASPIAN TRANSPORTATION SYSTEM 
 
REF: A. ASTANA 2266 
     B. ASTANA 2276 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On November 6, DCM and poloff met with 
Kazakhstan,s National Shipping company, Kazmortransflot 
(KMTF), to discuss its business structure and operations. 
KMTF identified the Kazakhstan Caspian Transportation System 
(KCTS) as its top priority and is leading the development of 
Kuryk port, but faces problems acquiring enough ships and 
qualified personnel.  KMTF is actively participating in 
international maritime cooperation activities.  END SUMMARY. 
 
FULL STEAM AHEAD ON THE KCTS 
 
3.  (SBU) On November 6, DCM and poloff met with Managing 
Director Serik Ishmanov, Managing Director of Economics and 
Finance Aslan Mynbayev, and Deputy General Director Sherkhan 
Sugurbekov to discuss KMTF,s business outlook.  KMTF 
officials emphasized that KCTS is their company,s major 
near-term project.  According to Mynbayev, KMTF started 
transporting Tengiz oil to Baku in October in close 
cooperation with Tengizchevroil (reftels).  KMTF anticipates 
that large amounts of oil will be transported over the 
Caspian from Kuryk and the Eskene-Kuryk pipeline.  The most 
challenging aspect of KCTS, according to Mynbayev, will be 
resolving the legal and regulatory basis for the project, 
since each party to the agreement will be liable for its own 
operators.  The specific liabilities of shippers also need to 
be clearly stipulated, he said. 
 
KMTF PLAYING AN ACTIVE ROLE IN KURYK PORT 
 
4.  (SBU) KMTF officials acknowledged their company,s active 
role in KCTS, as well as in constructing and operating the 
Kuryk port, located 47 miles from Aktau.  The Kazakhstan 
national rail company, Temir Zholy, and the Ministry of 
Transport are constructing a rail link between Aktau and 
Kuryk, while road and water pipelines are also under 
construction.  The port has a cargo terminal, primarily to 
serve the needs of Caspian offshore oil fields. 
Transshipments through Aktau port for 2008 (year to date 
through September) amounted to 7.7 million tons of cargo, 
including 6.1 million tons of oil and petrochemicals.  By 
2010 transshipments through Aktau seaport are expected to 
increase to 23 million tons.  KMTF also expects to ship 7.5 
million tons of oil from Kuryk in its first year of 
operation, with exports of oil from Kuryk expected to 
increase to 20 million tons between 2010 and 2015. 
 
EQUIPMENT AND PERSONNEL ARE MOST SEVERE CONSTRAINTS 
 
5.  (SBU) KMTF, however, faces challenges recruiting enough 
qualified personnel and acquiring enough ships to meet 
demand.  KMTF said it owns smaller tankers with a capacity of 
12,000 deadweight tons, but decided it will be more efficient 
to use larger tankers with a capacity of 55,000-60,000 
deadweight tons.  KMTF,s top priority will be the quality 
and safety of these ships, but because KMTF is a national 
company, the ships must be built in Kazakhstan.  KMTF expect 
Russian companies to build the ships at Kuryk, if government 
financing for a planned factory materializes.  KMTF will soon 
begin negotiations on how other KCTS-related facilities will 
be built and maintained.  KMTF officials emphasized that the 
Samruk-Kazyna merger has not affected their business in any 
way. 
 
6.  (SBU) To address the problem of hiring qualified 
personnel, KMTF started sending young cadets to the Russian 
Federation for maritime-related training last year.  There is 
also one Kazakhstani student at the U.S. Naval Academy in 
Annapolis.  Mynbayev has an MBA degree from Boston College. 
All three KMTF officials at the November 6 meeting pursued 
 
ASTANA 00002317  002 OF 002 
 
 
higher education abroad and appeared to be in their early 
thirties.  They noted that since Kazakhstan &is not a sea 
empire,8 the majority of qualified employees are relatively 
young. 
 
KMTF PURSUING INTERNATIONAL COOPERATION ACTIVITIES 
 
7.  (SBU) KMTF is actively involved in various international 
negotiations on maritime issues with multinational companies, 
and is also participating in a series of U.K. maritime safety 
conferences.  At the October conference in Astana, Sugurbekov 
said that Kazakhstan and KMT
F are committed to meeting all 
International Maritime Organization standards.  KMTF is 
particularly interested in cooperation with border services. 
Reducing the time for documentation validation and processing 
through ports could save millions of dollars, according to 
Sugurbekov.  KMTF is also concerned about the potential for 
oil spills, and wants to work on prevention and emergency 
response operations.  KMTF officials indicated interest in 
participating in study-group activities in the United States 
and were eager to exchange ideas and opinions with 
international and domestic shipping companies, port 
officials, and maritime border guards. 
HOAGLAND

Wikileaks

08ASTANA2316, ENCOURAGING KAZAKHSTAN TO MEET ITS BN-350 SPENT

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2316 2008-11-24 10:18 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7834
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2316/01 3291018
ZNR UUUUU ZZH
R 241018Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3919
INFO RUCNCIS/CIS COLLECTIVE 0837
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0236
RUEHKO/AMEMBASSY TOKYO 0946
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0319
RHEHNSC/NSC WASHDC 0404
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002316 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PARM PGOV PREL ENRG MNUC KNNP TRGY UK KZ
SUBJECT: ENCOURAGING KAZAKHSTAN TO MEET ITS BN-350 SPENT 
FUEL TRANSFER FUNDING REQUIREMENTS 
 
REF: A. STATE 89507 
     B. ASTANA 02298 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (U) This is an action request.  Please see paragraph 
nine. 
 
3.  (SBU) SUMMARY:  In the 1997 agreement, &Implementing 
Arrangements between the Department of Energy of the United 
States of America and the Ministry of Sciences ) Academy of 
Sciences of the Republic of Kazakhstan Concerning Long-term 
Disposition of BN-350 Nuclear Material,8 the government of 
Kazakhstan committed to funding the transfer of BN-350 spent 
fuel.  On November 12, the U.S. Department of Energy/National 
Nuclear Security Administration (DOE/NNSA) stated that the 
fiscal year 2009 budget request for DOE,s contractor in 
Kazakhstan was denied by the government of Kazakhstan. 
DOE/NNSA requested assistance in urging the Kazakshtani 
government to meet its 1997 commitments by funding this 
budget request.  In September, per the instructions in reftel 
A, post delivered letters from then-Ambassador Ordway to the 
Minister of Energy and Mineral Resources and to Prime 
Minister Masimov urging the government of Kazakhstan to 
provide extra-budgetary funding to transport BN-350 spent 
fuel.  The Kazakhstani government has stated they will not 
contribute additional funds for this project.  The U.S. 
Department of Energy,s contractor for the U.S. 
government-funded sodium processing facility, which processes 
contaminated sodium from the BN-350 reactor, also requested 
assistance in seeking budgetary support from the government 
of Kazakhstan (reftel B).  Post requests detailed guidance on 
encouraging the government of Kazakhstan to meet its various 
BN-350 funding commitments.  END SUMMARY. 
 
REGULAR BUDGETARY FUNDING REQUEST FOR BN-350 SPENT FUEL 
TRANSFER DENIED 
 
4.  (SBU) In article two, paragraph three of the 
&Implementing Arrangement Between the Department of Energy 
of the United States of America and the Ministry of Science 
) Academy of Sciences of the Republic of Kazakhstan 
Concerning Long-Term Disposition of BN-350 Nuclear 
Material,8 signed on November 18, 1997, the government of 
Kazakhstan agreed to provide financial and logistical support 
for the transfer of spent fuel from the site of the BN-350 
reactor in Aktau to the designated fuel storage site of 
Baikal I in Semipalatinsk.  Kazakhstan,s Ministry of Energy 
and Mineral Resources (MEMR) has subsequently taken 
responsibility for implementation of the BN-350 Spent Fuel 
Program.  DOE/NNSA,s current contractor in Kazakhstan is the 
Kazakhstan Atomic Energy Company (KATEP).  On November 12, 
DOE/NNSA reported that KATEP,s fiscal year 2009 budget 
request for the BN-350 Spent Fuel Project was denied by the 
government of Kazakhstan.  KATEP,s Vice President, Alexander 
Baldov, stated that KATEP and Kazatomprom are working 
together to prepare a proposal for funding from an 
alternative source, and DOE/NNSA requested assistance in 
urging the government of Kazakhstan to follow through on its 
funding commitments. 
 
5.  (SBU) During NNSA,s last project meeting in Almaty in 
October, Baldov indicated that KATEP, working together with 
MAEC Kazatomprom and Kazakhstan,s National Nuclear Center 
(NNC) had developed the extensive documentation package that 
was needed by the government of Kazakhstan for funding 
consideration.  Baldov said meetings had been held with MEMR 
on GOK funding. KATEP originally requested approximately $25 
million in regular budgetary funding.  This amount included 
the $15 million necessary for the entire transport project, 
as well as $5 million for infrastructure upgrades, and $5 
million for physical protection services.  The minimum 
necessary to adhere to the current schedule for 2009 would be 
$5 million to provide physical protection support services 
 
ASTANA 00002316  002 OF 002 
 
 
and pave the road from the Kurchatov transfer station to the 
Baikal I storage facility to ensure a safe &dry-run8 and 
the first several &hot-fuel8 cask shipments.  To date, the 
U.S. government has spent over $150 million on the BN-350 
Spent Fuel Program, and every year the Kazakhstani government 
assured DOE/NNSA of its intention to honor its commitments to 
fund the BN-350 Spent Fuel transfer. &#x000
A; 
6.  (SBU) The U.S. and Kazakhstan held their most recent 
high-level meeting on the BN-350 Spent Fuel Program on 
September 24 in Astana and on September 25 and 26 in Almaty. 
The September 24 meeting primarily discussed the reactor 
conversion project at the Institute of Nuclear Physics. 
Regarding the logistics of the BN-350 spent fuel transfer, 
Kazakhstani officials affirmed that all equipment necessary 
for transfer operations had been received and that the 
National Nuclear Center expected to complete the storage site 
at Baikal I on time.  The issue of regular budgetary funding 
for the BN-350 spent fuel program was not specifically 
discussed at the September 24 meeting. 
 
U.S. REQUESTS FOR SUPPLEMENTAL FUNDS TO SUPPORT TRANSFER OF 
BN-350 SPENT FUEL ALSO REPEATEDLY DENIED 
 
7.  (SBU) In September, per the instructions in reftel A, 
post delivered letters from then-Ambassador Ordway to the 
Minister of Energy and Mineral Resources and to Prime 
Minister Masimov urging the government of Kazakhstan to 
provide extra-budgetary funding to transport BN-350 spent 
fuel.  The Senior MEMR representative at the September 24 
meeting, Almaz Tulebayev, Director of the Department of 
Nuclear Power and Industry, confirmed that the letters had 
been received, and that MEMR was carefully considering the 
request.  However, Tulebayev also stated that MEMR,s budget 
had already been sent to Parliament, and it was unlikely that 
the funding requested in the letters could be obtained. 
Mynbayev made a similar response during his discussion with 
then-Ambassador Ordway on September 8. 
 
NORMAL BUDGETARY FUNDING FOR SODIUM PROCESSING FACILITY 
MAINTENANCE AT BN-350 ALSO DENIED 
 
8.  (SBU) Funding for all projects related to BN-350 appears 
to be limited for fiscal year 2009.  On November 5, U.S. and 
Kazakhstani officials met in Aktau to celebrate the 
completion of the $3.35 million U.S. government-funded sodium 
processing facility.  The Kazakhstani government committed to 
fund maintenance of the facility after construction was 
completed.  However, on November 5, representatives from 
Kazakhstan,s MEMR, Kazatomprom, and MAEC-Kazatomprom 
informed U.S. officials that MAEC,s budget request had been 
denied.  Instead MAEC received limited &plan of priority 
measures8 funding.  The contractor in charge of building the 
facility, Kazakhstan,s National Nuclear Technology Safety 
Center (NTSC), requested U.S. government assistance to lobby 
seem more budgetary assistance for long-term maintenance 
requirements (reftel B). 
 
ASSISTANCE REQUESTED TO SECURE FUNDING FOR BN-350 SPENT FUEL 
TRANSFER 
 
9.  (SBU) ACTION REQUEST:  DOE/NNSA, KATEP AND NTSC have made 
three separate requests for U.S. assistance in encouraging 
the government of Kazakhstan to fund BN-350 projects.  Post 
requests detailed instructions from Washington, concerning 
all funding commitments by the Government of Kazakhstan which 
have been documented in writing, and requests specific 
instructions on how much, and for what purposes, funding is 
to be requested from the government of Kazakhstan.  END 
ACTION REQUEST. 
HOAGLAND

Wikileaks

08ASTANA2298, KAZAKHSTAN APPROVES LIMITED FUNDING TO MAINTAIN

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
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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. #08ASTANA2298.
Reference ID Created Released Classification Origin
08ASTANA2298 2008-11-24 08:30 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7725
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSR RUEHVK RUEHYG
DE RUEHTA #2298/01 3290830
ZNR UUUUU ZZH
R 240830Z NOV 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3900
INFO RUCNCIS/CIS COLLECTIVE 0835
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0234
RUEHKO/AMEMBASSY TOKYO 0944
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0317
RHEHNSC/NSC WASHDC 0402
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 ASTANA 002298 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PARM PGOV ENRG MNUC KNNP TRGY UK KZ
SUBJECT: KAZAKHSTAN APPROVES LIMITED FUNDING TO MAINTAIN 
U.S.-FUNDED SODIUM PROCESSING FACILITY 
 
REF: STATE 89507 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (U) This is an action request.  Please see paragraph 
nine. 
 
3.  (SBU) SUMMARY:  On November 5, U.S. and Kazakhstani 
officials met in Aktau to celebrate the construction of the 
$3.35 million U.S. government-funded sodium processing 
facility (SPF).  Completing the SPF was the U.S. 
government,s final step in the irreversible decommissioning 
of the BN-350 plutonium breeder reactor.  The SPF was 
designed to assist in disposing of the remaining radioactive 
sodium from the reactor in an ecologically safe way.  The 
Kazakhstani government committed to funding the SPF,s 
maintenance after its construction, but on November 5, 
representatives of the government of Kazakhstan said they had 
received enough funding only to maintain the facility for one 
or two years.  The contractor that had overseen efforts to 
build and fund the facility, the National Nuclear Technology 
Safety Center (NTSC), requested U.S. assistance in lobbying 
the government of Kazakhstan for more budgetary assistance in 
the long-term.  If the government of Kazakhstan does not 
properly maintain the SPF, the sodium could pose a future 
environmental hazard.  END SUMMARY. 
 
CONSTRUCTION COMPLETED AT U.S.-FUNDED FACILITY 
 
4.  (SBU) On November 5, U.S., UK, and Kazakhstani officials 
celebrated the construction of the $3.35 million U.S. 
government-funded sodium processing facility (SPF) in Aktau. 
Completing the SPF was the U.S. government,s final step in 
the irreversible decommissioning of the BN-350 plutonium 
breeder reactor.  The SPF, modeled on technology used at 
Idaho National Laboratory,s Experimental Breeder Reactor, is 
designed to process an estimated 56 liters of solidified 
residual sodium from the BN-350 reactor into sodium 
hydroxide.  The material can then be stored in a safe 
condition for long-term storage.  The Kazakhstani government 
previously committed to building a Kazakhstani-funded 
geo-cement stone facility (GSF) in which the sodium hydroxide 
solution generated by the SPF would be combined with 
blast-furnace slag and solidified in steel drums for 
long-term storage.  The initial development of geo-cement 
stone technology was a collaborative project between the 
United States and Kazakhstan.  In the second &plant-design8 
phase, the United Kingdom has been providing technical 
assistance. 
 
SUB-CONTRACTOR MAEC CAUSED NUMEROUS DELAYS 
 
5.  (SBU) Construction of the U.S. project, which began in 
March 2004, was completed by the target date of November 
2008.  During construction, however, MAEC-Kazatomprom often 
balked at implementing orders from the U.S. government,s 
Kazakhstani primary contractor, NTSC, causing project delays. 
 Since the BN-350 reactor and SPF are located on its 
territory, MAEC is responsible for assisting NTSC to procure 
funds to maintain the SPF.  However, given MAEC,s resistance 
to NTSC guidance in the past, Executive Director Irina 
Tazhibayeva expressed concern about being able to secure 
funding resources to maintain the SPF until the GSF is 
complete. 
 
LONG-TERM PROSPECTS FOR SPF MAINTENANCE FUNDING UNCLEAR 
 
6.  (SBU) Tazhibayeva told U.S. officials that NTSC worked 
carefully with MAEC to put together a detailed funding 
request for MEMR.  MEMR, in turn, passed this proposal to the 
Ministry of Budget and Planning, which reportedly denied the 
proposal due to the effects of the financial crisis, but gave 
MAEC &plan of priority measures8 (PPM) funding, sufficient 
to maintain the facility for one or two years.  Marat 
Nurgaziyev, Kazatomprom,s Deputy Director of Labor and 
Safety, stated that &any funding, other than PPM funding, 
 
ASTANA 00002298  002 OF 002 
 
 
would be difficult to obtain, even in 2010.8  The current 
reality is in stark contrast to previous expectations. 
NTSC,s Tazhibayeva told U.S. officials that Kazakhstan,s 
former Minister of Energy and Mineral Resources, Baktykozha 
Izmukhambetov, made commitments to use Kazakhstani government 
funds to maintain the sodium processing facility. 
 
FUNDING OUTLOOK FOR THE GEO-CEMENT STONE FACILITY BLEAK 
 
7.  (SBU) The most serious impact will be on constructi
on of 
the Geo-cement Stone Facility.  Although Alexandr 
Onichshenko, Director of the primary contractor for the GSF, 
stated PPM funding was adequate for completing the GSF,s 
design, it is not enough to build the facility.  Under 
Izmukhambetov, Tazhibayeva indicated MEMR had given 
assurances that Kazakhstan would definitely build the 
Geo-cement Stone Facility by 2012, but at the November 5 
meeting, one Kazakhstani official called the project 
&tentative.8  Nurgaziyev stated that &as for actual work 
on the Geo-cement Stone Facility, we will have to develop 
plans for 2009-2010, and when the PPM budget is approved next 
year, we will see if it is possible.8  Tazhibayeva requested 
that the U.S. and U.K. assist NTSC, MAEC-Kazatomprom and MEMR 
to request adequate funding for the SPF and GSF facilities 
from the Ministry of Budget and Planning.  In an indication 
of the relative lack of importance of these projects to the 
Kazakhstani government, the highest ranking attendees were 
MEMR Representative and Deputy Chairman of the Kazakhstan 
Atomic Energy Agency Alexander Kim, Deputy Director of 
MAEC-Kazatomprom Andrey Mogilin and Kazatomprom,s Deputy 
Director of Labor and Safety Marat Nurgaziyev. 
 
UK CONCERNED ABOUT LACK OF KAZAKHSTANI FUNDING 
 
8.  (SBU) The UK Embassy,s Deputy Head of Mission, Michael 
Welch, agreed that it is in the best interests of all three 
countries (the United States, the United Kingdom and 
Kazakhstan) to complete the SPF and GSF facilities as soon as 
possible.  In his remarks at the November 5 meeting and the 
press ceremony, Welch emphasized the significant investments 
the UK government had made in these projects, and stressed 
that the UK government hopes to see the projects brought to 
completion with Kazakhstani funding as soon as possible. 
Tazhibayeva intends to make an additional request for funding 
in early December 2008, and asked for assistance in 
encouraging Kazakhstani government support. 
 
9.  (SBU) ACTION REQUEST:  Post requests guidance from 
Washington on seeking additional funding from the government 
of Kazakhstan on the Sodium Processing and Geo-cement Stone 
Facilities, especially given existing unfulfilled requests to 
fund other BN-350 projects, in particular, the $25 million 
dollars that the Government of Kazakhstan has already 
committed to spend for the transfer of spent fuel in fiscal 
year 2009.  In particular, post requests that the Department 
consider coordinating with London before directing the U.S. 
and British Ambassadors in Astana to make a joint demarche on 
this subject.  Per reftel, the U.S. government already made a 
supplemental request, submitted in letters sent in September 
2008 from then-Ambassador Ordway to the Minister of Energy 
and Mineral Resources Sauat Mynbayev and Prime Minister Karim 
Masimov, for $15 million dollars to purchase casks for the 
transfer of BN-350 spent fuel.  END ACTION REQUEST. 
HOAGLAND

Wikileaks

08ASTANA2297, KAZAKHSTAN: MINISTRY OF DEFENSE REQUESTS

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Reference ID Created Released Classification Origin
08ASTANA2297 2008-11-24 08:19 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO7712
PP RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW RUEHROV
RUEHSR
DE RUEHTA #2297/01 3290819
ZNY CCCCC ZZH
P 240819Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 3897
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0832
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0231
RUEHKO/AMEMBASSY TOKYO PRIORITY 0941
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 0399
RUEKJCS/SECDEF WASHDC PRIORITY 0314
RUEHNO/USMISSION USNATO PRIORITY 2399
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2067

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002297 
 
SIPDIS 
 
STATE FOR SCA/CEN, PM 
 
E.O. 12958: DECL: 11/24/2018 
TAGS: PGOV PREL MARR AF KZ
SUBJECT:  KAZAKHSTAN:  MINISTRY OF DEFENSE REQUESTS 
ENHANCED HIGH-LEVEL TRAINING 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (SBU) SUMMARY:  The Ambassador called on Minister of 
Defense Akhmetov and, separately, Deputy Minister of Defense 
General Sembinov on November 19.  The two meetings illustrate 
the generally sound U.S.-Kazakhstan military relationship, 
but they also illustrate Kazakhstan's multi-vector foreign 
policy that balances its interests among the major powers. 
Although the Minister himself is said to be strongly 
pro-Russian, so far Deputy Minister Sembinov has often been 
able to go around him through influential contacts in the 
Presidential Administration (including the Security Council) 
and the Parliament.  A masterful infighter like Sembinov is 
vital to Western interests.  Our goal should be to meet fully 
our existing commitments and to continue to seek new 
openings.  We should respond with enhanced budgets to the 
high-level military training that Minister Akhmetov says he 
seeks and that Deputy Minister Sembinov supports.  END 
SUMMARY. 
 
MINISTER OF DEFENSE DANIAL AKHMETOV 
 
2.  (C) The Ambassador, accompanied by the Defense Attache, 
called on the sometimes elusive and allegedly pro-Russian 
Minister of Defense, Daniyal Akhmetov, on November 19.  The 
Minister welcomed the Ambassador and accentuated our 
strategic partnership, especially in the military assistance 
that, since Kazakhstan's independence, has totaled about $80 
million in military equipment and training.  He described the 
bilateral military relationship as positive and vowed it 
would continue to grow.  The Ambassador thanked Akhmetov for 
his positive evaluation and predicted the bilateral 
relationship would indeed continue to grow in positive 
directions as we strengthen our strategic partnership.  He 
thanked the Minister for Kazakhstan's five-year participation 
in Iraq and congratulated him for the positive Steppe Eagle 
NATO evaluation.  He told the Minister that part of his role 
is to help Washington better understand Kazakhstan and, thus, 
would welcome hearing the Minister's priorities for enhancing 
the U.S.-Kazakhstan military-to-military relationship. 
 
BILATERAL COOPERATION PRIORITIES 
 
3.  (C) Minister Akhmetov listed three priorities: 
 
-- He said he seeks military education for higher-ranking 
officers, since Kazakhstan's new military doctrine requires a 
new type of officer with higher-level training, at least at 
the level of the U.S. National Defense University.  He noted 
Kazakhstan is introducing a new C4I system (command, control, 
communications, computers, intelligence) but lacks trained 
personnel and would like to look to the United States for 
this training. 
 
-- He requested continued assistance for Peace Support 
Operation capabilities, especially for a second KAZBRIG 
battalion within 1.5 years, rather than the five years it 
took for the first battalion. 
 
-- He asked for higher-level training at the strategic, 
operational, and even tactical planning levels, especially 
for General Officers and other high-level MOD personnel, with 
a focus on best practices learned from the best armies in the 
world. 
 
4.  (C) The Ambassador praised Minister Akhmetov's priorities 
and suggested that training should also include Kazakhstan's 
participation in CHOD conferences and Kazakhstan hosting 
joint expercises, which, although the Ambassador did not 
dwell on the point, Kazakhstan this year had failed to 
accept.  He said when militaries train together, their men 
and women become comrades-in-arms; politics falls by the 
wayside. 
 
NORTHERN DISTRIBUTION NETWORK FOR AFGHANISTAN 
 
5.  (SBU) The Ambassador also briefly touched on the 
 
ASTANA 00002297  002 OF 003 
 
 
possiblity of a greater role for Kazakhstan in Afghanistan, 
and previewed the November 21 visit by TRANSCOM CDR General 
Duncan McNabb, and the role Kazakhstan could play for 
stability in Afghanistan and the region by agreeing to the 
U.S. request to transit lon-lethal supplies to Afghanistan 
through Kazakhstan's existing commercial structures.  The 
Minister replied negotiations with NATO for this purpose are 
already well advanced, and he would foresee no problem for 
the United States to establish a northern distribution 
network through Kazakhstan. 
 
6.  (C) COMMENT:  Though restrained, Minister Akhmetov was 
professional throughout this meeting with the Ambassador and, 
at times, almost cordial.  His priorities for
 training would 
suggest the need for a significantly enhanced IMET budget. 
END COMMENT. 
 
DEPUTY MINISTER BULAT SEMBINOV 
 
7.  (SBU) The Ambassador then met separately with the 
pro-Western Deputy Minister of Defense, General Bulat 
Sembinov, who was the most senior Kazakhstani official to 
have attended, with his wife, the Embassy's Marine Corps Ball 
on November 1.  The Ambassador noted they had already met 
several times before but emphasized he wanted to show his 
respect with an initial formal meeting.  He briefly reviewed 
his meeting with Minister Akhmetov, noted with satisfaction 
President-elect Barak Obama's telephone conversation with 
President Nursultan Nazarbayev (which Kazakhstan's mass media 
had widely and positively reported), and asked for General 
Sembinov's analysis of our military-to-military relationship. 
 
8.  (C) Relaxed and loquacious, General Sembinov praised 
joint U.S.-Kazakhstan work in threat reduction and 
counterterrorism.  He judged Kazakhstan's experience in Iraq 
"had been an education, and we passed the exam.  Our 
experience there will soon be needed in Afghanistan."  Noting 
his longstanding progressive positions, he emphasized 
Kazakhstan's priorities are to continue cooperation with NATO 
(including the Individual Partnership Action Plan), with 
OSCE, and to fulfill Kazakhstan's new policy of "The Path to 
Europe." 
 
9.  (C) As priorities for the bilateral military 
relationship, he listed Peace Support Operations (as did 
Minister Akhmetov), development of Kazakhstan's military 
aviation capabilities, military education, development of an 
NCO Corps ("not an easy task," he admitted), and security in 
the Caspian region.  General Sembinov urged further 
integration of our military-technical programs, with a focus 
on transitioning to high-quality new standards.  As 
military-technical priorities, he listed Huey IIs, C-130s, 
and naval vessels for the Caspian. 
 
10.  (C) Deputy Minister General Sembinov noted Kazakhstan 
drafted its military doctrine with U.S. assistance, the only 
military doctrine in the Former Soviet Union that states 
explicitly transition to NATO standards and the possibility 
of participation in NATO operations.  He stated firmly, "I am 
a firm believer in the axiom, 'if you say it, then you need 
to do it.'  Open discussions make cooperation possible." 
 
11.  (C) The Ambassador thanked the Deputy Minister for his 
comments and added "if you say it, you will do it" is U.S. 
foreign policy.  The United States might sometimes be 
frustratingly slow, but we are indeed a nation of our word. 
We are pragmatic and look for real solutions when we 
encounter problems.  He said he understood Kazakhstan needed 
to move cautiously on a larger role in Afghanistan but 
emphasized that such cooperation would be historic and fully 
in line with Kazakhstan's international leadership in the 
political realm, as evidenced by its planned chairmanship of 
the OSCE in 2010.  He noted with approval Sembinov's mention 
of building Kazakhstan's air capabilities because the AFCENT 
Commander would like to visit Kazakhstan for consultations 
early in the new year. 
 
 
ASTANA 00002297  003 OF 003 
 
 
12.  (SBU) The Ambassador quipped to General Sembinov that it 
looks as if we are going to keep the U.S. Embassy's Defense 
Attache busy in the coming years.  General Sembinov commented 
he had been surprised to learn (from the Ambassador's 
extended interview in "Liter") that he had never served in 
the military.  Sembinov mused, "You strike me as a former 
military officer." 
 
13.  (C) COMMENT:  These two meetings illustrate the 
generally sound U.S.-Kazakhstan military relationship, but 
they also illustrate Kazakhstan's multi-vector foreign policy 
that balances its interests among the major powers.  Although 
the Minister himself is said to be strongly pro-Russian, so 
far Deputy Minister Sembinov has often been able to go around 
him through influential contacts in the Presidential 
Administration (including the Security Council) and the 
Parliament.  A masterful infighter like Sembinov is vital to 
Western interests.  Our goal should be to meet fully our 
existing commitments and to continue to seek new openings. 
We should respond with enhanced budgets to the high-level 
military training that Minister Akhmetov says he seeks.  END 
COMMENT. 
HOAGLAND

Wikileaks

08ASTANA2295, KAZAKHSTAN: DEMARCHE DELIVERED ON PREVENTING

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Discussing cables
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Reference ID Created Released Classification Origin
08ASTANA2295 2008-11-24 06:36 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0009
RR RUEHWEB

DE RUEHTA #2295 3290636
ZNR UUUUU ZZH
R 240636Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 3892
INFO RUEHLO/AMEMBASSY LONDON 0524

UNCLAS ASTANA 002295 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR ISN/RA (RICHARD NEPHEW) AND RISA MONGIELLO 
 
E.O. 12958: N/A 
TAGS: PARM EMIN ENRG ETTC MNUC KNNP IR UK KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON PREVENTING 
IRAN'S ACQUISITION OF NEW SUPPLIES OF URANIUM 
 
REF: A. STATE 115454 
     B. ASTANA 001649 
 
1.  (SBU) In coordination with the UK Embassy in Astana, we 
delivered reftel A points and non-paper on preventing Iran's 
acquisition of new supplies of uranium on November 21 to 
Sergey Savelyev, Deputy Director of the MFA's Department of 
Multilateral Cooperation.  We had previously delivered the 
same non-paper on September 2 (reftel B).  Savelyev expressed 
the Government of Kazakhstan's continuing support for strong 
non-proliferation efforts towards Tehran.  He promised to 
pass our non-paper to the Ministry of Energy and Mineral 
Resources (MEMR), which he said has the lead on this issue. 
Savelyev said he would report back to us any comments from 
MEMR. 
HOAGLAND

Wikileaks

08ASTANA2294, KAZAKHSTAN: DEMARCHE DELIVERED ON PSI OPERATIONAL

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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. #08ASTANA2294.
Reference ID Created Released Classification Origin
08ASTANA2294 2008-11-24 05:51 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0003
RR RUEHWEB

DE RUEHTA #2294 3290551
ZNR UUUUU ZZH
R 240551Z NOV 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 3891

UNCLAS ASTANA 002294 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR STATE/ISN/CPI (CARLOS GUZMAN) AND OSD/GSA 
(BETH FLORES) 
 
E.O. 12958: N/A 
TAGS: PARM PREL MNUC KNNP KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON PSI OPERATIONAL 
EXPERTS GROUP (OEG) SEPTEMBER MEETING 
 
REF: SECSTATE 115935 
 
1.  (SBU) On November 21, we delivered reftel points and 
non-paper on the results of the proliferation security 
initiative,s operational experts group September 2008 
meeting to Sergey Savelyev, Deputy Director of the Ministry 
of Foreign Affairs, 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