08ASTANA2179, KAZAKHSTAN: ECONOMIC CRISIS AND AFGHANISTAN

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Reference ID Created Released Classification Origin
08ASTANA2179 2008-11-04 11:46 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO2610
OO RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHPW RUEHROV RUEHSR
DE RUEHTA #2179/01 3091146
ZNY CCCCC ZZH
O 041146Z NOV 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3736
INFO RUCNCIS/CIS COLLECTIVE 0774
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0173
RUEHKO/AMEMBASSY TOKYO 0883
RUEHIT/AMCONSUL ISTANBUL 0087
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RHEHNSC/NSC WASHDC 0336
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0253
RUEAIIA/CIA WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RHEFAAA/DIA WASHDC
RUCNDT/USMISSION USUN NEW YORK 2007
RUEHNO/USMISSION USNATO 2341

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002179 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, EAP/CM 
 
E.O. 12958: DECL: 11/04/2018 
TAGS: PREL ECON EPET AF KZ
SUBJECT: KAZAKHSTAN:  ECONOMIC CRISIS AND AFGHANISTAN 
DOMINATE SCO HEADS-OF-GOVERNMENT MEETING 
 
Classified By: Ambassador Richard Hoagland, Reasons 1.4 (b) and (d) 
 
1. (C) SUMMARY:  The Shanghai Cooperation Organization (SCO) 
held a meeting of SCO heads of government in Astana on 
October 30.  All four SCO observer states, as well as 
Afghanistan, also sent high-level representatives to the 
event.  The SCO heads of government called for greater 
coordination in dealing with the effects of the global 
financial crisis, increased cooperation on energy, stronger 
transportation and communication links, and effective water 
management.  In remarks to the attendees after the session 
ended, President Nazarbayev stressed the need for greater 
economic cooperation and praised the "Shanghai spirit." 
Kazakhstani MFA SCO Department Counselor Nadezhda Kim told us 
on November 3 that the global economic slowdown and 
Afghanistan were "burning questions" at the meeting.  She 
also predicted that energy will become an increasingly 
important priority for the SCO.  END SUMMARY. 
 
CALL FOR GREATER COOPERATION 
 
2. (U)  The Shanghai Cooperation Organization (SCO) held a 
regular meeting of SCO heads of government in Astana on 
October 30.  The five SCO member states were represented by 
Russian PM Putin, Chinese Premier Wen, Kazakhstani PM 
Masimov, Kyrgyz PM Chudinov, Tajik PM Oqilov, and Uzbek 
Deputy Prime Minister Azimov.  The four SCO observer states 
were represented Indian Energy Minister Shinde, Mongolian PM 
Bayar, Pakistani Defense Minister Mukhtar, and Iranian Vice 
President Davoodi.  Afghanistan was also invited to attend, 
sending Vice President Masood. 
 
3.  (U) The Kazakhstani press reported that the heads of 
government discussed several priorities for the SCO, 
including ways to combat the effects of the global financial 
crisis, increased cooperation on energy, stronger 
transportation and communication links, effective water 
resource management, and cooperation in disaster response. 
The session's final communique touched on many of these 
points.  Kazakhstani PM Masimov proposed that SCO finance 
ministers gather for a meeting in Almaty in the near future 
to come up with a joint strategy for dealing with the global 
financial crisis.  He also suggested that the SCO create a 
permanent economic forum in order to give SCO government 
officials, businessmen, bankers, and international economic 
institutions a platform for an exchange of views.  On energy, 
Masimov reiterated Kazakhstan's long-held position on the 
need to create a single energy market, stressing that "the 
SCO has all the necessary components to set up an energy 
community" and urging members to take this issue up in the 
upcoming meeting of SCO energy ministers. 
 
4.  (U) Other member states seconded the call for greater 
cooperation and integration.  Chinese Premier Wen made a 
four-point proposal for increased cooperation which included 
creating special economic zones in border areas; increasing 
joint projects in the energy, transport and telecommunication 
spheres; coordination of financial policies; and increasing 
agricultural cooperation.  Kyrgyz PM Chudinov called for a 
joint strategy on food security, infrastructure, and water 
use.  Tajik PM Oqilov focused on poverty issues and the 
environment, while Uzbek Deputy PM Azimov raised the issue of 
cross-border rivers and transport. 
 
OBSERVER STATES WANT TO EXPAND TIES 
 
5.  (U) Observer countries called for expanding ties with the 
SCO and asked for inclusion at working-level meetings of SCO 
members, rather than just at high-level meetings.  Iranian 
Vice President Davoodi told the participants that expanding 
cooperation with regional and Asian countries is a top 
priority for his government.  He stressed Iran's 
 
ASTANA 00002179  002 OF 003 
 
 
"geographical and historical closeness" to SCO members and 
highlighted the benefits members could derive from its oil 
and gas resources and technological knowledge.   Mongolian PM 
Bayar expressed a readiness to join the SCO Business Council 
and offered to host its next session.  Both Bayar and Davoodi 
expressed strong support for setting up a single energy and 
transport space. 
 
NAZARBAYEV PRAISES "SHANGHAI SPIRIT" 
 
6.  (U) President Nazarbayev met with the attendees after the 
session had concluded.  In his comments to them, Nazarbayev 
noted the adverse effects of the global financial crisis and 
called for greater economic, financial, and s
ecurity 
cooperation.  The SCO has what it takes "to make the 
organization a powerful economic force," he said, "but 
economic development cannot proceed without assuring security 
in the region."  He said that "serious threats to stability" 
continue to exist and stressed the SCO's "important role as 
the engine of cooperation in Eurasia."  "Kazakhstan is 
committed to the Shanghai spirit," he maintained, "and will 
continue to work for deeper cooperation within the SCO." 
 
"BURNING ISSUES":  ECONOMIC CRISIS, AFGHANISTAN 
 
7. (C) Kazakhstani MFA SCO Department Counselor Nadezhda Kim 
gave us her assessment of the heads of government meeting on 
November 3.  In the course of an informal and frank 
conversation, Kim told us that the global financial crisis 
and Afghanistan dominated the closed-door discussions.  The 
global financial crisis has affected all SCO members, she 
said, and member states "are determined to find a joint 
solution."  She ventured that one such solution is 
Kazakhstan's initiative to host a meeting of SCO finance 
ministers and central bank heads.  Masimov's offer to host 
this event in Almaty at the beginning of next year was 
"wholeheartedly supported" by the participants, but getting 
members to follow through will "take lots of work," said Kim. 
 On the question of a common economic zone, in particular 
China's proposal to create special economic zones in border 
areas, Kim said that "such proposals have been put forward 
before," by both China and Kazakhstan, but "it's unlikely 
that they'll gain momentum any time soon." "Our economies are 
far too disparate, and the smaller economies are not yet 
ready to open up to the giants," she assessed. 
 
8.  (C) Afghanistan was the second "burning question" for the 
heads of government meeting, said Kim.  She reminded us that 
President Nazarbayev has frequently highlighted the dangers 
that extremism and narco-trafficking from Afghanistan pose to 
the region, and this meeting was no exception.  She said 
Kazakhstan plans to hold an international conference on 
Afghanistan sometime next year, and will invite participation 
from the Central Asian states, the European Union, and the 
United States.  Kim promised to keep us updated as plans for 
the conference develop. 
 
RUSSIANS NOT ON BOARD ON COMMON ENERGY MARKET 
 
9.  (C) On energy, Kim said that Kazakhstan's idea of a 
common energy market "hasn't gained everybody's support." 
"The Russians have different ideas," she remarked without 
further elaboration.  She repeated Masimov's words that "the 
SCO has all the necessary components for a common energy 
market -- suppliers, buyers, and transport corridors."  She 
added that "certain supplier countries" are reluctant to give 
up their "independence of decision-making, especially when 
prices are as high as they are."  The Kazakhstanis plan to 
raise the issue of a common energy market at the SCO energy 
ministers meeting, which will take place at the beginning of 
2009.  She predicted that energy will soon emerge as the top 
priority for the organization. 
 
ASTANA 00002179  003 OF 003 
 
 
HOAGLAND

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