Monthly Archives: December 2008

08ASTANA2583, KAZAKHSTAN: DEMARCHE DELIVERED ON THE FIFTH

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Reference ID Created Released Classification Origin
08ASTANA2583 2008-12-31 09:04 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7781
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2583/01 3660904
ZNR UUUUU ZZH
R 310904Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 4256
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCIS/CIS COLLECTIVE 0999
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0398
RUEHKO/AMEMBASSY TOKYO 1104
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEKJCS/SECDEF WASHDC 0473
RHEHNSC/NSC WASHDC 0570
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 03 ASTANA 002583 
 
SENSITIVE 
SIPDIS 
 
STATE FOR ISN/WMDT (SARAH PRESCOTT AND MEGGEN WATT), 
SCA/CEN, EUR/RUS AND EUR/WE 
 
E.O. 12958: N/A 
TAGS: PARM PINR PINS PREL PTER KGIC KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON THE FIFTH 
GLOBAL INITIATIVE MEETING TO BE HOSTED BY THE NETHERLANDS 
IN JUNE 2009 
 
REF: A. STATE 133442 
     B. ASTANA 01867 
     C. ASTANA 02566 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  In conjunction with the Ambassador from 
the Netherlands and a representative from the Embassy of the 
Russian Federation, PolOff delivered reftel A points on the 
Global Initiative to Combat Nuclear Terrorism's upcoming 
meeting, to be held in the Netherlands on June 16-17, 2009, 
on December 30 to Sergey Savelyev, Deputy Director of the 
Ministry of Foreign Affairs' Department of Multilateral 
Cooperation.  Savelyev said Kazakhstan would "almost 
certainly" send a high-level delegation and promised to 
inform the governments of the United States, Russia and the 
Netherlands promptly once the MFA made a decision on 
representation.  Savelyev also deliberately reiterated 
Kazakhstan's commitments to host two Global Initiative 
exercises in 2009, although he did not provide any concrete 
information.  Despite the shuffling of several senior MFA 
positions, the MFA has not notified post of any significant 
staffing changes in the offices under the direction of Deputy 
Foreign Minister Danenov that would affect Kazakhstan's 
choice of representation at the upcoming June Global 
Initiative meeting in the Netherlands.  Savelyev's 
enthusiastic support in the December 30 meeting for Global 
Initiative activities reflects the government of Kazakhstan's 
interest in being recognized for its involvement in 
international organizations, particularly when events involve 
high-level officials.  On the working-level, however, 
Kazakhstan,s commitments may be stretching its resourcesAQW, 
particularly in terms of personnel.  END SUMMARY. 
 
3.  (SBU) In conjunction with the Ambassador from the 
Netherlands and a representative from the Embassy of the 
Russian Federation, PolOff delivered reftel A points on the 
Global Initiative to Combat Nuclear Terrorism's upcoming 
meeting, to be held in the Netherlands on June 16-17, 2009, 
on December 30 to Sergey Savelyev, Deputy Director of the 
Ministry of Foreign Affairs' Department of Multilateral 
Cooperation. 
 
4.  (SBU) Savelyev stated that the government of Kazakhstan 
considers the Global Initiative to be a very important 
element in its counter-proliferation strategy.  He noted that 
Kazakhstan was one of the first nations to join the Global 
Initiative, and that it has recently hosted three events, 
including the third high-level plenary in June 2007 and two 
exercises in 2008.  Savelyev also emphasized that Kazakhstan 
is a member of many major international counter-proliferation 
organizations in addition to the Global Initiative, such as 
the Nuclear Suppliers Group and the Proliferation Security 
Initiative, and that Kazakhstan is a signatory to the 
Comprehensive Test Ban Treaty. 
 
5.  (SBU) Savelyev noted that Deputy Foreign Minister Danenov 
participated in the 2008 Madrid meeting of the Global 
Initiative.  He stated that although it was too early to say 
for certain, he hoped that Danenov would lead a delegation to 
attend the June 16-17 event in the Netherlands.  Savelyev 
also remarked that regardless of who led the delegation, 
Kazakhstan would "almost certainly" send a high-level 
delegation.  Savelyev said he would report any specific 
information on Kazakhstan,s intended representation for the 
Global Initiative,s June meeting as soon as higher-level MFA 
officials made a decision. 
 
6.  (SBU) Whether due to the approaching New Year holidays or 
pleasure at having an invitation to the Netherlands to convey 
to Deputy Foreign Minister Danenov, Savelyev appeared to be 
in unusually good spirits during the demarche.  (COMMENT: 
 
ASTANA 00002583  002 OF 003 
 
 
Savelyev, whose educational background is in chemistry, has 
commented on previous occasions that he has over 15 years 
experience in non-proliferation.  Perhaps because of his 
extensive experience, as Deputy Chief of the Multilateral 
Cooperation Department, Savelyev oversees a broad portfolio. 
Savelyev is the first point of contact for most of post's 
non-proliferation demarches, including demarches related to 
the Nuclear Suppliers Group,
 the Proliferation Security 
Initiative, the Global Initiative to Counter Nuclear 
Terrorism, the Prevention of Nuclear Smuggling Program and 
demarches related to Iran, Syria and North Korea.  Savelyev 
is also involved in matters relating to Kazakhstan's 
cooperation with the United States in Afghanistan.  Savelyev 
often comments that his department is extremely busy, and 
Savelyev's former assistant frequently complained to PolOff 
that the Multilateral Cooperation Department was 
"overwhelmed" by assignments.  During the December 30 
meeting, however, a relatively relaxed Savelyev deliberately 
raised the topic of Kazakhstan's commitments to host two 
Global Initiative exercises in 2009.) 
 
7.  (SBU) COMMENT CONTINUED:  Savelyev's comments on 
Kazakhstan's plans to host two Global Initiative exercises in 
2009, though welcome, were a bit surprising, because in 
September and October, Savelyev had repeatedly avoided 
providing specific information about Kazakhstan,s plans for 
Global Initiative events in 2009.  In the December 30 
meeting, Savelyev still expressed uncertainty about the 
details, declaring that the events "might be held in Astana, 
or perhaps in Ust-Kamenogorsk" and "might be hosted by the 
Kazakhstani Atomic Energy Committee (KAEC), or possibly by 
the National Security Committee (KNB)."  PolOff was further 
surprised to hear either of these two entities mentioned as 
possible event planners.  PolOff has worked closely with 
representatives of KAEC to plan a Department of State-led 
Prevention of Nuclear Smuggling Exercise to be held in 
February 2009, and KAEC has not mentioned potentially hosting 
a Global Initiative exercise.  In fact, KAEC has repeatedly 
underscored its busy schedule for the next year and its 
commitments to prepare for International Atomic Energy Agency 
(IAEA) activities in March.  The KNB did not play a 
noticeable role in the September Global Initiative Exercise 
in Ust-Kamenogorsk and did not participate in December 
planning meetings for the proposed February 2009 Prevention 
of Nuclear Smuggling Exercise.  Nevertheless, Savelyev,s 
statement in the December 30 meeting reflects the government 
of Kazakhstan's interest in being recognized for its 
involvement in international organizations, particularly when 
events involve high-level officials.  On the working-level 
and in practical terms, however, Kazakhstan,s commitments 
sometimes tend to stretch its resources, particularly in 
terms of personnel, as was illustrated when Kazakhstan hosted 
a Global Initiative exercise in Ust Kamenogorsk in September 
(reftel B). 
 
8.  (SBU) COMMENT CONTINUED:  The MFA has not notified post 
of any significant staffing changes in the offices under the 
direction of Deputy Foreign Minister Danenov following Deputy 
Foreign Minister Sarybay's reassignment to be presidential 
foreign-policy adviser, therefore, post has no information 
that would suggest anyone other than Danenov would attend the 
June Global Initiative meeting.  Within the Kazakhstani MFA, 
most departments fall within parallel reporting channels 
being directed to two Deputy Foreign Ministers.  Deputy 
Foreign Minister Danenov supervises the Multilateral 
Cooperation Department, whereas the Americas Department 
reports to Deputy Foreign Minister Sarybay.  Deputy Foreign 
Minister Sarybay was assigned on December 26 to the 
prestigious position of Senior Foreign Policy Advisor to 
President Nazarbayev.  Although technically reporting through 
different channels, Savelyev works closely with the Chief of 
the Americans Department, Talgat Kaliyev, who is close to 
 
ASTANA 00002583  003 OF 003 
 
 
Sarybay.  Savelyev sometimes almost defers to Kaliyev, 
particularly on issues related to the Cooperative Threat 
Reduction Agreement. 
 
9.  (SBU) COMMENT CONTINUED:  Although the December 
reshuffling at the MFA may not have any direct and immediate 
impact on Kazakhstan's participation in the Global 
Initiative, PolOff has observed that the Multilateral 
Cooperation Department and its mid-level MFA staff are being 
tasked simultaneously with supporting multiple initiatives. 
Over the last four months, Savelyev has asked Post to 
coordinate with four young, talented assistants, each of whom 
seems bright, capable and has had various "international" 
experience, but none of whom seems to have extensive 
background in non-proliferation.  Kazakhstan's desire to play 
a leading role in international organizations may be taxing 
not only a thin bench of experienced diplomats, but also many 
mid-level diplomats, like Savelyev and his assistants (reftel 
C).  END COMMENT. 
HOAGLAND

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08ASTANA2577, KAZAKHSTAN: ASTANA-BASED AMBASSADORS AGREE: “DEMOCRACY

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Reference ID Created Released Classification Origin
08ASTANA2577 2008-12-31 08:05 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7743
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2577/01 3660805
ZNR UUUUU ZZH
O 310805Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4248
INFO RUCNCIS/CIS COLLECTIVE 0996
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0395
RUEHKO/AMEMBASSY TOKYO 1101
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0567
RUEKJCS/SECDEF WASHDC 0470
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 002577 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM OSCE KDEM KZ
SUBJECT:  KAZAKHSTAN:  ASTANA-BASED AMBASSADORS AGREE: "DEMOCRACY 
MUST BE HOMEGROWN" 
 
REFS: 
A) ASTANA 2399 
B) ASTANA 2398 
C) ASTANA 2256 
D) USOSCE 0304 (NOTAL) 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) This is the third in a series of cables analyzing 
reactions to Kazakhstan's OSCE Madrid-commitment legislation 
(reftels A and B). 
 
3.  (SBU) SUMMARY:  On December 30, the Ambassador hosted a working 
lunch for ambassadors from established democracies to exchange views 
on Kazakhstan's progress on its Madrid commitments and its political 
trajectory as a whole.  All agreed that the three amended laws, 
currently under consideration in the lower house of parliament (the 
Mazhilis), are short of ideal, but are nevertheless a step forward. 
Further progress will only be achieved with continued engagement, 
plenty of patience, and a steady view of the long-term goal. 
Democracy must be homegrown, and Kazakhstan's democratic 
institutions are beginning to take root.  The country's progress may 
be slow, but it is nevertheless far ahead of its neighbors, and 
moving in the right direction.  Harsh public criticism is unlikely 
to bring positive results.  We should continue to pursue a patient 
and balanced policy of engagement.  END SUMMARY. 
 
4.  (SBU) Guests at the Ambassador's working lunch were the UK's 
Ambassador Paul Brummell (who previously served as ambassador to 
Turkmenistan), South Korea's Ambassador Il-Soo Kim, Belgium's 
Ambassador Christian Meerschman, Switzerland's newly-appointed 
Ambassador Stephan Nellen, Canada's Ambassador Margaret Skok, 
Israel's Ambassador Israel Mei-Ami, Ambassador of The Netherlands 
Klaas van der Tempel, and Turkey's Charg Alattin Temur. 
 
MADRID LAWS "SHORT OF IDEAL," BUT SIGN OF PROGRESS 
 
5.  (SBU) The Ambassador asked for the participants' assessment of 
the pending laws on political parties, elections, the media - the 
so-called Madrid-commitment laws - as well as the newly amended 
religion law.  He also  encouraged them to express candidly their 
own and their governments' general views of Kazakhstan's democratic 
development.  UK's Brummell noted that his embassy sponsored the 
assessment of the legislation by several leading NGOs, including 
Freedom House.  Overall, he said, the laws are "short of ideal."  In 
his view, however, the Kazakhstanis are taking the Madrid 
commitments seriously -- "They produced the drafts!" -- and should 
be urged to consider the legislation carefully and not to pass the 
laws "just for the sake of it."  Brummell pointed to the pending 
religion law as a good example: thanks in part to concerted 
international pressure, President Nazarbayev opted not to sign it 
into law, choosing instead to send it to the Constitutional Council 
for consideration.  (NOTE:  Senate Chairman Tokayev told the 
Ambassador privately on December 23 that the President intended to 
send the law to the Council, but no official announcement has been 
made.  END NOTE.) 
 
6.  (SBU) Canada's Skok noted that sharp public criticism of 
Kazakhstan's progress on the Madrid commitments, like Freedom 
House's recent report, "are not helpful" for the broader discussions 
on political development.  The report did not provide a thorough 
analysis of the legislation, in her view, and failed to provide a 
constructive way forward. 
 
NEED FOR CONTINUED ENGAGEMENT... 
 
7.  (SBU) Israel's Mei-Ami averred that "no drastic change" will 
take place while President Nazarbayev is still in power. 
Kazakhstan's political order revolves around the President, he 
stressed, and the ruling elite fear any sudden jolts that "would 
make the whole system collapse."  Dutch Ambassador van der Tempel 
agreed, but added that many mid-level officials "are smart and 
understand the issues" and should be "prodded and encouraged" 
towards "gentle" political liberalization.  "Kazakhstan needs to 
realize that it does not need to follow Russia" in its political 
development, he said.  Belgium's Meerschman stressed that such 
encouragement requires serious commitment from both sides.  He 
lamented the fact that Brussels drafted a road map for engagement 
 
ASTANA 00002577  002 OF 003 
 
 
with Central Asia, but "has done nothing" since. 
 
...PATIENCE... 
 
8.  (SBU) South Korea's Kim offered a "special perspective from a 
recent democracy."  Each country has its own idea, "and ideal," of 
democracy.  "Democracy can't be transplanted; it must be homegrown," 
he said.
  He related that as a diplomat posted in Washington, he 
frequently had to defend his own country's "slow" political 
progress.  Demanding a full-blown democracy in Kazakhstan is 
"premature."  The country is doing "quite well" in comparison to its 
neighbors, especially considering its short history since 
independence and the still-powerful influence of Russia.  Kim 
pointed out that Kazakhstan supported the United Nations resolution 
on North Korea's human rights record, something he sees as evidence 
of the country's changing world view.  He noted that the leadership 
is still shying away from supporting a similar resolution against 
Uzbekistan, to which the Ambassador pointed out that "North Korea 
does not share Kazakhstan's border." 
 
9.  (SBU) Turkey's Temur agreed with Ambassador Kim that Kazakhstan 
is moving in the right direction.  He noted that Turkey was one of 
the first to support Kazakhstan's bid for the OSCE chairmanship, but 
it also supported the EU in its criticism of the pending religion 
law.  "Progress is evident," he said, but "change has to be 
incremental." 
 
...AND A LONG-TERM VIEW 
 
10.  (SBU) Switzerland's Nellen raised the question of 
"conditionality versus finality," what he explained to be the 
difference between the policy of imposing strict bench-marks versus 
a policy of concentrating on the broader end goals.  Kazakhstan's 
short-term outlook is "unlikely to satisfy," he said, but taking a 
broader look at the country's overall political progression "offers 
a very positive view."  "There are certain things that the ruling 
elite cannot yet accept, but at least it has allowed their 
introduction," he stressed.  "The government could see your grants 
to Freedom House as support for the 'color revolution,'" he quipped 
to the UK ambassador, "and yet it tolerates it." 
 
11.  (SBU) The Ambassador noted that while the United States has 
also funded Freedom House, he has occasionally disagreed with its 
assessments.  He pointed out that Freedom House recently ranked 
Kazakhstan as "not free" and lumped it with Uzbekistan, 
Turkmenistan, and Belarus, where openness to independent press and 
public discussion falls far below that in Kazakhstan.  Such "public 
diplomacy" from government-supported NGOs can sometimes work against 
the "private diplomacy" we engage in with Central Asian governments, 
he said.  UK's Brummell countered that organizations like Freedom 
House play an important role by "tenaciously highlighting the 
issues," but agreed that it was important "not to preach and to 
exercise humility." 
 
THE WEST'S MIXED SIGNALS? 
 
12.  (SBU) Switzerland's Nellen ventured that "sometimes the West 
sends mixed signals" to Kazakhstan.  "We promise them the OSCE 
chairmanship, but then criticize the Madrid legislation; we promote 
our economic interests, but then hammer them on human rights," he 
said.  The Ambassador countered that, on the whole, all the 
represented countries pursued a policy that balanced energy, 
security, and political interests.  All is in the eye of the 
beholder, he stressed:  NGOs can always find evidence that business 
trumps human rights, and companies can always accuse us of putting 
ideals over economic interests.  In the end, we should continue with 
the balanced approach, he stressed. 
 
13.  (SBU) The Dutch ambassador suggested that "human rights policy" 
will gain greater traction if Kazakhstanis see it as in their own 
best interest.  Human rights is just part of the broader context of 
rule of law, he explained, something Kazakhstan needs in order to 
attract investment and foster economic growth.  South Korea's Kim 
said a similar approach could be taken with the religion law: 
Kazakhstan should see that passing the restrictive legislation would 
not bode well for its international image as a tolerant multi-ethnic 
state.  Canada's Skok agreed, but again stressed the need to be 
patient.  She reminded the participants that many democratic ideals 
 
ASTANA 00002577  003 OF 003 
 
 
they hold dear, for example gender equality, only very recently took 
root in Western democracies and had initially to be legislated and 
then followed by a long process of public "re-education." 
 
14.  (SBU) COMMENT:  Somewhat to our surprise, the lunch produced a 
consensus:  while not ideal, the current Madrid-commitment 
legislation is, nevertheless, a step forward on Kazakhstan's long 
path toward democracy.  Further, there was agreement that Kazakhstan 
out-paces its neighbors in day-to-day democratic freedoms.  Finally, 
all agreed that patient engagement, rather than harsh criticism, 
will better lead to our long-term democratic goals for Kazakhstan. 
END COMMENT.

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08ASTANA2576, KAZAKHSTAN: DINNER WITH STATE SECRETARY

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Reference ID Created Released Classification Origin
08ASTANA2576 2008-12-31 05:53 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO7805
PP RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW RUEHROV
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DE RUEHTA #2576/01 3660553
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P 310553Z DEC 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 4245
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0993
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0392
RUEHKO/AMEMBASSY TOKYO PRIORITY 1098
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
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RHMCSUU/FBI WASHDC PRIORITY
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RHEHNSC/NSC WASHDC PRIORITY 0564
RUEKJCS/SECDEF WASHDC PRIORITY 0467
RUEHNO/USMISSION USNATO PRIORITY 2447
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2115

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002576 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
PLEASE PASS TO USTR 
 
E.O. 12958: DECL: 12/31/2018 
TAGS: PGOV PREL PINR ECON MARR RS KZ
SUBJECT:  KAZAKHSTAN:  DINNER WITH STATE SECRETARY 
SAUDABAYEV 
 
REF: A. ASTANA 2553 
     B. ASTANA 2570 
     C. ASTANA 2410 
     D. ASTANA 2551 
     E. ASTANA 2372 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (A), (B), (D) 
 
1.  (C) SUMMARY:  Kazakhstan's self-described Number Two and 
President Nazarbayev's confidante, State Secretary Kanat 
Saudabayev, told the Ambassador on December 29: 
 
-- Kazakhstan would give TRANSCOM a positive reply to the 
U.S. request to include Kazakhstan as an essential link in 
the Northern Distribution Network (NDN) to commercially 
supply and provision U.S. troops in Afghanistan;  in fact, he 
called the Ambassador on December 30 to report President 
Nazarbayev's "green light" for the NDN; 
 
-- Kazakhstan wants to accelerate its negotiations with the 
United States for WTO accession, but is facing increased 
skepticism within the government; 
 
-- he was unaware of the investigation against a Peace Corps 
Volunteer for allegedly violating national security, but 
would work to ensure an outcome to remove this irritant in 
the bilateral relationship; 
 
-- Nazarbayev's exiled former son-in-law remains a 
front-burner issue (however, he did not press for further 
U.S. involvement); 
 
-- he will travel to Washington for the February 5 National 
Prayer Breakfast and would like to meet the new Secretary of 
State, but conceded a slightly later visit might be more 
productive; 
 
-- Kazakhstan wants an early U.S. presidential visit; and 
 
-- recounted at length his humble origins and how he first 
caught President Nazarbayev's attention. 
 
Saudabayev is a curious character, likely somewhat 
self-serving (as most tend to be in similar circumstances), 
but we have little doubt he has President Nazarbayev's ear. 
His request for an early U.S. presidential visit to 
Kazakhstan (see para 8 below), even if brief, should not be 
dismissed out of hand because there could be significant 
dividends for U.S. national interests.  END SUMMARY. 
 
2.  (C) On December 29, the Ambassador had a nearly 
three-hour one-on-one dinner in a private room of a popular 
Uzbek restaurant in Astana with President Nursultan 
Nazarbayev's reputed closest adviser, State Secretary Kanat 
Saudabayev.  Not unusual for senior Kazakhstani officials, 
Saudabayev drank abstemiously and only sipped at the 
occasional toasts.  Although Saudabayev's Chief of Staff 
Roman Vassilenko was to have joined the dinner, Saudabayev 
sent him away to "go mind the store."  Key bilateral issues 
are in paras 3-6 below. 
 
NORTHERN DISTRIBUTION NETWORK 
 
3.  (C) Having met only three days earlier with Secretary of 
the Security Council Kairbek Suleymenov to once again clarify 
the U.S. goal for a Northern Distribution Network (NDN) for 
Afghanistan (reftel A), the Ambassador emphasized the 
increasing urgency of Kazakhstan signing on to TRANSCOM's 
NDN.  Saudabayev responded, "We'll have a positive answer as 
soon as possible.  Thanks for answering our questions. 
Thanks for all the clarifications you made in recent weeks. 
The President trusts your word." 
 
ASTANA 00002576  002 OF 003 
 
 
 
WTO ACCESSION 
 
4.  (C) The Ambassador recounted he had met on December 24 
with Kazakhstan's WTO negotiator Zhana Aitzhanova and had 
pressed for accelerated bilateral negotiations with the 
United States for Kazakhstan's WTO accession (reftel B). 
Saudabayev responded, "We want to work fast on this for our 
own interests.  We understand you have your own interests. 
We hope for compromise on both sides.  Can we come together 
on this?  We need a quick positive outcome.  We are not 
playing you against Russia, but there are 'strong special 
interests' here against WTO.  We understand this is a 
question of our own sovereignty, but I emphasize there are 
strong special interests within our own government." 
 
PEACE CORPS VOLUNTEER UNDER INVESTIGATION 
 
5.  (C) Saudabayev credibly responded he was unaware of the 
case of Peace Corps Volunteer Anthony Sharp who is currently 
under investigation for having trespassed at a restricted 
site and for having
 been apprehended with a bag allegedly 
containing industrial explosives (reftel C).  He asked, "Is 
this the KNB (Committe for National Security, the pro-Moscow 
ex-KGB intelligence service) or MVD (Ministry of Internal 
Affairs)?"  The Ambassador responded, "MVD is investigating, 
but we strongly suspect the KNB is at the root of this.  We 
consider the case, based on concrete evidence, a clear 
provocation and totally incompatible with our positive 
relationship.  We are outraged, but we want this to continue 
to be kept quiet, out of the media.  I insist to all American 
citizens in Kazakhstan that they must follow Kazakhstan's 
laws.  In this case, as soon as the investigation is 
concluded, no matter the outcome, we want you to deport Sharp 
-- get this off the bilateral agenda.  This is an irritant 
you do not want for the new U.S. administration."  Saudabayev 
picked up his cell phone, dialed a number, but received no 
answer.  He said, "We'll take care of this." 
 
RAKHAT ALIYEV 
 
6.  (C) Saudabayev asked if the Ambassador had passed to 
Washington, including to the FBI, the non-paper and records 
of court cases the Presidential Administration via the 
Foreign Ministry had provided on December 23 against 
Nazarbayev's exiled former son-in-law, Rakhat Aliyev.  The 
Ambassador assured Saudabayev he had indeed passed the text 
of the non-paper to Washington, including to the FBI (reftel 
D).  The Ambassador reiterated the U.S. position:  we have 
had no contact with Aliyev; we want to contact with him; we 
consider this strictly an internal Kazakhstani affair. 
Saudabayev did not press further. 
 
NATIONAL PRAYER BREAKFAST 
 
7.  (C) Saudabayev told the Ambassador he intends to travel 
to Washington for the National Prayer Breakfast on February 5 
and asked if it would be possible to meet then with the new 
Secretary of State.  The Ambassador told him this might well 
be too early in the new administration, simply because of the 
initial logistics of organizing new personnel in the State 
Department, but said he would certainly make the 
recommendation.  The Ambassador urged Saudabayev to travel 
later for better access, and asked him to make a special 
effort on Capitol Hill because of Kazakhstan's frequently 
stated frustration with the annual human-rights certification 
and the Jackson-Vanik Amendment.  Saudabayev responded he has 
already, with Nazarbayev's blessing, planned an April trip to 
Washington. 
 
REQUEST FOR AN EARLY OBAMA VISIT 
 
 
ASTANA 00002576  003 OF 003 
 
 
8.  (C) Saudabayev added, "The President very much wants an 
Obama visit to Astana as soon as possible, even if only a 
brief stop-over to-from China.  He was totally delighted with 
Obama's post-election phone call.  This made a very deep and 
very positive impression.  I want to help keep this momentum 
alive.  We need this visit to keep us from being 'swallowed 
up' by our 'best friend' to the north.  We fully understand 
your new president will want to repair the U.S. relationship 
with Russia, but please don't sell us short just to please 
Moscow.  Keep the balance.  Let us play a positive role for 
you in this region.  This is what President Nazarbayev wants. 
 I assure you I am speaking for him personally."  (NOTE: 
After the U.S. presidential election, the Foreign Ministry 
also made a case for an early Obama visit to Kazakhstan 
(reftel E).  END NOTE.) 
 
PLUCKED FROM THE STICKS 
 
9.  (C) During the course of the evening's conversation, 
Saudabayev asserted he is Number Two in President 
Nazarbayev's inner circle, and Security Council Secretary 
Suleymenov is Number Three.  The Ambassador asked Saudabayev 
about his history, noting that he himself was a "little kid 
from the small-town Midwest."  Clearly pleased, Saudabayev 
recounted that he, too, was a "boy from the glubinka (the 
sticks)."  Somehow, despite his humble village origins, he 
had been plucked to study at an art institute in the 
then-Leningrad.  He recounted how he had been thrown in with 
arrogant Muscovites and Leningraders and that he would "never 
forget the insults."  He said he had endured endless 
practical jokes against him, because of his provincial 
Central Asian origin, and that he had frequently been called 
behind his back a "chornaya zhopa" (a strong, racist insult). 
 He said he initially had been miserable in Leningrad and 
frequently begged his father to let him return to the village 
and be "a simple boy."  But his father had always told him, 
"Never!  Study, study, study.  Beat them and make me proud. 
Be a Kazakh!"  At the end of the first-year exams, he came 
out at the top of his class -- the only Central Asian to do 
so.  Nazarbayev, "then a big man in the Soviet Communist 
Party," heard about his success and took a personal interest 
in him, treated him like a younger brother.  They have been 
intensely loyal to each other ever since.  When President 
Nazarbayev told him to go to the United States as 
Kazakhstan's ambassador, Saudabayev said he told the 
President, "I don't want to go.  Let me stay in (the 
then-capital) Almaty with you.  But the President told me I 
must obey him.  And so I went."  Saudabayev concluded, 
"Please listen to Nazarbayev.  He wants to trust you.  Return 
his trust, and you will not be disappointed." 
 
10.  (C) COMMENT:  Saudabayev is a curious character, both an 
international player and a throwback to an earlier age of 
confidante courtiers.  It could be that Nazarbayev especially 
trusts him because Saudabayev is never mentioned as a 
possible successor to Nazarbayev.  We have little doubt that 
many of Saudabayev's accounts are somewhat self-serving, but, 
at the same time, we believe that his whispers into 
Nazarbayev's ear carry some weight -- viz., his call to the 
Ambassador on December 30 that Nazarbayev had just approved 
Kazakhstan's participation in NDN.  We support his request 
for an early visit to Kazakhstan, even if brief, by President 
Obama, and generally concur with Saudabayev that it could pay 
important dividends for U.S. national interests.  END COMMENT. 
HOAGLAND

Wikileaks

08ASTANA2574, KAZAKHSTAN: DEMARCHE DELIVERED ON END-USE,

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Reference ID Created Released Classification Origin
08ASTANA2574 2008-12-30 11:52 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0012
RR RUEHWEB

DE RUEHTA #2574 3651152
ZNR UUUUU ZZH
R 301152Z DEC 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 4243

UNCLAS ASTANA 002574 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR PM/PPA (SCOTT KWAK AND RACHEL FEATHERSTONE 
SCHAAB), L/T (DAPHNE COOK) AND L/PM (MICHAEL COFFEE) 
 
E.O. 12958: N/A 
TAGS: PREL MARR MASS KTIA KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON END-USE, 
RETRANSFER AND SECURITY ASSURANCES APPLICABLE TO ARTICLES 
AND SERVICES PROVIDED PURSUANT TO SECTION 1206 OF THE 
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2006 AND 
THE GLOBAL PEACE OPERATIONS INITIATIVE 
 
REF: SECSTATE 133198 
 
1.  (SBU) We delivered reftel points and non-paper on the 
end-use, retransfer and security assurances applicable to 
articles and services provided pursuant to section 1206 of 
the National Defense Authorization Act (NDAA) for Fiscal Year 
2006, as modified and extended, and pursuant to the Global 
Peace Operations Initiative (GPOI) on December 29 to Sergey 
Savelyev, Deputy Director of the MFA,s Department of 
Multilateral Cooperation.  Savelyev said he would report back 
to us any comments. 
HOAGLAND

Wikileaks

08ASTANA2573, KAZAKHSTAN: DEMARCHE DELIVERED ON DESIGNATION OF

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Reference ID Created Released Classification Origin
08ASTANA2573 2008-12-30 11:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXYZ0015
RR RUEHWEB

DE RUEHTA #2573 3651126
ZNR UUUUU ZZH
R 301126Z DEC 08
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC 4242

UNCLAS ASTANA 002573 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR ISN, T, TREASURY AND NEA/IR 
 
E.O. 12958: N/A 
TAGS: PARM EFIN KNNP IR KZ
SUBJECT: KAZAKHSTAN:  DEMARCHE DELIVERED ON DESIGNATION OF 
ADDITIONAL IRANIAN ENTITIES UNDER E.O. 13382 
 
REF: SECSTATE 133198 
 
1. (SBU) We delivered reftel points and non-paper on 
designating additional Iranian entities and individuals under 
Executive Order 13382 on December 30 to Sergey Savelyev, 
Deputy Director of the MFA,s Department of Multilateral 
Cooperation.  Savelyev promised to pass our non-paper to 
appropriate agencies in the Kazakhstani government.  Savelyev 
said he would report any comments back to us. 
HOAGLAND

Wikileaks

08ASTANA2572, KAZAKHSTAN: PRESIDENT NAZARBAYEV CONVENES FOREIGN

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Reference ID Created Released Classification Origin
08ASTANA2572 2008-12-30 11:05 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7006
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2572/01 3651105
ZNR UUUUU ZZH
O 301105Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4239
INFO RUCNCIS/CIS COLLECTIVE 0990
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0389
RUEHKO/AMEMBASSY TOKYO 1095
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0561
RUEKJCS/SECDEF WASHDC 0464
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1059

UNCLAS SECTION 01 OF 03 ASTANA 002572 
 
SIPDIS 
SENSITIVE 
 
STATE FOR SCA/CEN, EEB/IFD/OMA, EEB/EPPD 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV BEXP ECON EFIN EINV ELAB EPET KZ
SUBJECT:  KAZAKHSTAN:  PRESIDENT NAZARBAYEV CONVENES FOREIGN 
INVESTORS COUNCIL 
 
REF:  (A) ASTANA 1868 (B) SECSTATE 134459 
 
ASTANA 00002572  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On December 5, President Nazarbayev chaired the 
biannual Foreign Investors Council in Almaty, which was attended by 
the entire Cabinet and the top 15 foreign investors in Kazakhstan. 
The meeting was notable for its exclusive focus on local-content, 
concern about the global financial crisis, and Nazarbayev's sharp, 
public criticism of both foreign and domestic companies, including 
national oil company KazMunaiGaz.  Several Western company attendees 
said they had never before seen Nazarbayev so determined to take 
action to solve a problem.  He ordered that an independent committee 
be established immediately to increase local-content and warned that 
even existing contracts could be revised to increase local-content 
requirements.  END SUMMARY. 
 
THE FOREIGN INVESTORS COUNCIL 
 
3.  (SBU) The Foreign Investors Council (FIC) meets twice annually 
in different cities of Kazakhstan and provides an open forum for the 
country's largest foreign investors, as well as international 
financial institutions such as the European Bank for Reconstruction 
and Development (EBRD), to discuss the investment climate with the 
President and his Cabinet.  Usually, 15 foreign investors and 15 
government officials attend the FIC forum. 
 
4.  (SBU) U.S. companies Philip Morris, Chevron, ExxonMobil, 
ConocoPhillips, AES, and General Electric regularly attend, as do 
other major foreign investors, primarily from the oil and gas, 
mining, and transportation sectors.  President Nazarbayev chairs the 
meeting, which is dedicated to a single topic of general interest. 
On December 5, the government delegation read like a Who's Who of 
Kazakhstan's political elite:  Prime Minister Masimov, Minister of 
Finance Korzhova, Minister of Energy Mynbayev, Central Bank Chairman 
Saidenov, Samruk-Kazyna Chairman Kelimbetov and Deputy Chairmen 
Kulibayev and Dunayev, and KazMunaiGas (KMG) President Kabyldin, 
among others. 
 
5.  (SBU) According to Stephen Wermert, Kazakhstan Country Director 
for the Asian Development Bank, which co-chairs the FIC together 
with the EBRD, some companies simply use the FIC to brag about their 
latest accomplishments.  "They spend the whole time banging their 
chests, talking about how good their programs are," he said. 
Wermert attended the December 5 meeting and said the foreign 
investors missed an opportunity to build trust with the government. 
"They would have made a more favorable impression on the 
government," he said, "if they had talked about Kazakhstan's needs 
and future development, rather than their own company's parochial 
plans." 
 
THE LOCAL-CONTENT ISSUE 
 
6.  (SBU) The issue before the Foreign Investors Council on December 
5 was local content, i.e., the percentage and value of Kazakhstani 
participation in foreign investment projects, including staffing and 
subcontracts for goods and services.  All ma${d6FH{el A).  Nevertheless, the December 5 FIC meeting 
made it clear that the government expects more to be done to promote 
local companies, build local capacity, and develop local expertise. 
 
PRESIDENT LASHES OUT 
 
7.  (SBU) According to ConocoPhillips's Nick Olds, who attended the 
FIC on December 5 with ConocoPhillips CEO Jim Mulva, President 
Nazarbayev was more active, directive, and critical than during any 
of the previous six meetings.  Olds said that Nazarbayev lamented 
the low level of local content in Kazakhstan's mega-projects, then 
he went around the table, looked his ministers in the eye, and 
 
ASTANA 00002572  002.2 OF 003 
 
 
pointed his finger in turn, saying, "This is what I want you to do: 
boom, boom, boom." 
 
8.  (SBU) President Nazarbayev claimed that from January through 
September, Kazakhstani content in foreign purchases of goods and 
service did not exceed 15% of the total procurement value.  Nick 
Olds and Shell's Country Director Campbell Keir, who also attended 
the meeting, said Nazarbayev was outraged and called the situation &#x00
0A;unacceptable:  "Obviously," he said, "this state of affairs does not 
satisfy the state, the oil companies, or Kazakhstani producers." 
(NOTE:  Unfortunately, the data provided to President Nazarbayev 
were incomplete and therefore inaccurate.  For example, the three 
largest investors in Kazakhstan -- Tengizchevroil, Agip KCO 
(Kashagan), and Karachaganak KPO -- were not included in the list of 
companies that use local subcontractors and employ local staff, 
despite the fact that, combined, they purchase 43% of all goods and 
services in Kazakhstan.  END NOTE). 
 
9.  (SBU) According to Olds and Keir, Nazarbayev pointedly reminded 
the foreign investors present that they have a contractual 
obligation to hire Kazakhstanis, invest in social projects, and 
promote the development of new industries, such as petrochemicals. 
Nazarbayev said that increasing Kazakhstan's share in foreign 
investment projects should become the government's number one 
priority, although he did acknowledge that Kazakhstani producers 
must provide competitive, quality services and products to meet the 
demand of foreign companies. 
 
10.  (SBU) Nazarbayev said that oil and mining companies in 
Kazakhstan purchase $18 billion in goods and services annually, 
including $10 billion in services.  He complained, however, that 
Kazakhstani companies are often unable to participate in the bidding 
processes.  "Kazakhstani producers do not have information about the 
dates, terms, and conditions of tenders for the purchase of goods 
and services," said Nazarbayev.  "If we knew what a foreign investor 
plans for the next year, or second or third year, we could prepare 
our companies for it.  Besides," he added, "some tenders are 
conducted, say, in London. It's an absolute disgrace!" 
 
KMG SINGLED OUT FOR CRITICISM 
 
11.  (SBU) Foreign investors were not surprised to find themselves 
criticized for not meeting the government's local content 
expectations, but they were surprised to see national oil company 
KazMunayGas singled out by Nazarbayev for "poor promotion of local 
interests in joint ventures with foreign investors."  Every year, 
the government reviews and approves KMG's plans for procurement, 
capital expenditures, and exploration and production, to ensure that 
they meet local content requirements.  According to Nazarbayev, 
however, "KazMunayGas has done nothing, or has just worked very 
poorly, and does not do enough to increase Kazakhstani interests in 
joint projects."  He ended emphatically, "The situation must be 
rectified immediately." 
 
FOREIGN INVESTORS RESPOND 
 
12.  (SBU) The reaction of foreign investors to the government's 
criticism was muted, partly because the data cited by the president 
were incomplete and partly because the companies themselves agree 
with the president on the need to increase investment in local staff 
and subcontracts.  Shell's Keir said, "Increasing local content in 
the purchasing of goods and services is a priority for us."  He 
added that local suppliers often know the domestic market better and 
can offer more beneficial contract terms and supply deals.  "It's 
just good business," he said.  Keir noted, however, that it is not 
always easy to meet the government's local content requirements, 
simply because there is no single, uniformly-applied formula for 
calculating the value and percentage of local content in a given 
procurement. 
 
13.  (SBU) Alexander Mashkevich of the Eurasian Natural Resources 
Corporation noted that domestic suppliers must be competitive and 
 
ASTANA 00002572  003.2 OF 003 
 
 
able to meet international standards on quality and timeliness if 
they expect to provide goods and services to Kazakhstan's major 
investment projects.  Mashkevich called for a new government program 
to coordinate the quality, quantity, cost, and diversity of local 
suppliers, a proposal that was not immediately endorsed by other 
foreign investors. 
 
IMPLICATIONS AND NEXT STEPS 
 
14.  (SBU) Nazarbayev ordered that an independent committee be 
established immediately to increase the local content of products 
and services in Kazakhstan.  He signaled the government's 
determination to enforce local content provisions, saying, "The 
government should monitor the fulfillment of obligations on local 
content, increase responsibility for noncompliance with contract 
terms, and set up a system of government control over the subsoil 
users' activities on this issue." 
 
15.  (SBU) Ominously, Nazarbayev also ordered the government's new 
committee to review all existing subsoil contracts in order to 
establish or increase local-content quotas and identify local 
Kazakhstani producers and suppliers.  According to press reports, 
Nazarbayev instructed the Ministry of Labor and Social Protection to 
arrange a system of assigning and distributing quotas to regions 
(oblasts) in order to monitor the extent that regions meet their 
quotas. 
 
16.  (SBU) The next meeting of the Foreign Investors Council will be 
held on June 12, 2009, in the city of Kostanai.  The theme will be 
"Alternative Sources of Financing for the Continued Economic 
Development of Kazakhstan in the Context of Global Changes." 
 
17.  (SBU) COMMENT:  American investors who attended the December 5 
meeting were pleasantly surprised by Nazarbayev's balanced, 
businesslike approach to promoting local content and his direct, 
personal engagement with the companies and his Cabinet.  Many 
observers commented that Nazarbayev was much more active and 
involved in this meeting than in previous sessions of the Foreign 
Investors Council.  In particular, investors who attended the 
meeting appreciated Nazarbayev's statement that Kazakhstani 
suppliers must become more competitive and produce quality products 
that meet international standards.  The president's passion for 
local content is partly a result of the financial crisis, which has 
hit local suppliers hard and forced even large, diverse, 
state-supported companies such as KMG to lay off as much as 10% of 
their workforce.  Although he criticized foreign companies for their 
allegedly low local content, Nazarbayev also appealed for their 
support during these troubling times:  "I do hope that your 
companies will support Kazakhstan's economy during this difficult 
period," he said.  "I have asked you before and I am asking you 
again to provide social protection for the people during this period 
and preserve and create jobs." 
 
18.  (SBU) COMMENT CONTINUED:  American investors were not alarmed 
by Nazarbayev's call to review and revise the local content 
provisions of existing contracts, mainly because the companies can 
in fact demonstrate a high level of local content, the president's 
claims notwithstanding.  They do, however, expect increased 
government scrutiny and closer monitoring of future procurement and 
hiring decisions.  Ultimately, gover
nment poking and prodding will 
not be necessary or even useful.  The companies themselves 
understand the economic and political business case for increased 
local content, but they believe the best way to achieve that is 
through improving the competitiveness of local suppliers, not 
through government mandates and quotas.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2570, KAZAKHSTAN: CUSTOMS UNION WITH RUSSIA AND BELARUS

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Reference ID Created Released Classification Origin
08ASTANA2570 2008-12-30 10:44 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6997
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2570/01 3651044
ZNR UUUUU ZZH
O 301044Z DEC 08 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4236
INFO RUCNCIS/CIS COLLECTIVE 0987
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0387
RUEHKO/AMEMBASSY TOKYO 1093
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0462
RHEHNSC/NSC WASHDC 0559
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 002570 
 
DEPT FOR SCA/CEN, EEB 
PLEASE PASS TO USTR 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN RS KZ
SUBJECT:  KAZAKHSTAN:  CUSTOMS UNION WITH RUSSIA AND BELARUS 
THREATENS WTO ACCESSION BID 
 
REF:  ASTANA 2445 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Kazakhstan's WTO negotiator told the Ambassador 
on December 24 Kazakhstan is ready to accelerate WTO accession 
negotiations with the United States.  However, the international 
financial crisis is making some Kazahstani officials more hesitant 
about the theoretical benefits of globalization.  Instead, they see 
immediate and tangible benefits from a possible near-term customs 
union with Russia and Belarus.  Aitzhanova acknowledged joining the 
customs union could dramatically slow - or derail - Kazakhstan's WTO 
accession.  We know Russia has long opposed Kazakhstan's WTO 
membership before its own accession.  The new customs union, if 
Kazakhstan follows through, as it currently seems likely to do, 
would be a convenient way for Moscow to limit Astana's sovereignty. 
To sell a WTO agreement to the president and prime minister, 
Aitzhanova said she will need concessions from the United States, 
especially on banking and financial services.  She expressed 
exasperation that USTR has not yet provided working-party report 
comments from the June meeting in Switzerland.  She added she also 
needs a full agricultural package and a description of services. 
END SUMMARY 
 
3.  (SBU) During a two-hour working lunch on December 24, the 
Ambassador told Vice Minister of Industry and Trade and WTO 
negotiator Zhanar Aitzhanova he had heard in September USTR is ready 
to accelerate work on Kazakhstan's WTO accession and then heard in 
early December from Kazakhstan's Ambassador to the United States 
Erlan Idrisov that Kazakhstan is eager to move forward on WTO.  He 
passed Aitzhanova an edited version of the talking points USTR had 
provided for this meeting. 
 
4.  (SBU) Aitzhanova responded that there is indeed political will 
on both sides to move ahead, but, as a negotiator, she knows that 
political will doesn't always translate into action.  Because of the 
world financial crisis, "the terms are more important to us than the 
speed - what matters is the substance of the deal."  She said Prime 
Minister Masimov and President Nazarbayev continue to insist on the 
best deal possible with clear evidence of concrete benefits for 
Kazakhstan.  Without adequate concessions from the U.S. side, she 
said, she will not be able to sell them the deal.  Further, the 
financial crisis is increasing political opinion in Kazakhstan to 
avoid more international economic integration.  "Not everyone is 
convinced we should go global," she said, noting that Kazakhstan's 
banking sector is dangerously exposed to the international financial 
crisis because of large-scale foreign borrowing. 
 
WILL CUSTOMS UNION WITH RUSSIA TRUMP WTO? 
 
5.  (SBU) The Ambassador cited press reports that Kazakhstan is 
preparing documents for April 1 to become a member of a 
Russia-Belarus-Kazakhstan customs union, and asked if this could 
derail Kazakhstan's WTO negotiations.  At first, Aitzhanova 
cautioned the United States not to see this as a threat but as a 
political signal that the concept of enhanced regional economic 
integration for protection against international economic shocks 
might supersede calls for increased global collaboration. 
Eventually, she acknowledged that formation of the customs union 
would have a real impact on Kazakhstan's WTO bid and would force 
renegotiation on multiple levels.  She remarked that the customs 
union presents tangible and immediately recognizable benefits that 
appeal to decision makers, whereas WTO accession's benefits are 
future and potential. 
 
6.  (SBU) Aitzhanova suggested that if U.S. WTO negotiators offered 
no further concessions by April 1, 2009 - the date that a common 
tariff agreement is due for the proposed customs union - it might be 
hard to argue for WTO accession's precedence over the formation of 
the customs union.  "I am constantly asked by our leadership why 
U.S. political support for our WTO accession is not translating into 
actual progress.  When I show them the costs of the agreements, they 
say 'no.'  To them, the benefits of the customs union are clear, 
 
ASTANA 00002570  002 OF 002 
 
 
while the benefits of WTO membership remain theoretical." 
 
"THE BALL IS IN YOUR COURT, NOT OURS" 
 
7.  (SBU) Aitzhanova refuted USTR's view that "the ball is in 
Kazakhstan's court," and said she is still
 waiting for USTR's 
comments on the working-party report from their last meeting in June 
in Switzerland.  "The sooner we get it, the sooner we can start," 
she added.  She lamented that the United States is slower in its 
responses than her other negotiating partners like Australia, the 
European Union, and Saudi Arabia.  She said she is eager to 
accelerate WTO negotiations with the United States, but will be 
unavailable the first three weeks of January because she will be in 
New Delhi finishing bilateral work in preparation for President 
Nazarbayev's official visit to India at the beginning of the third 
week of January. 
 
8.  (SBU) When asked what the United States can do concretely to 
prepare for renewed negotiations, she said Kazakhstan needs the 
working-party report comments from June, a full agricultural 
package, and a description of services to be negotiated.  Most 
important, regarding the banking and financial services sector, 
"Kazakhstan does not want anything that will further jeopardize us 
at home - flexibility on your part is essential.  This is our 
political reality." 
 
9.  (SBU) COMMENT:  In early December, Kazakhstan's ambassador in 
Washington, Erlan Idrisov, told the Ambassador some in Kazakhstan 
fear Russia is trying to lock CIS countries into the customs union 
to control their WTO accession (reftel).  We know Russia has long 
opposed Kazakhstan's WTO membership before its own accession.  The 
new customs union, if Kazakhstan follows through, as it currently 
seems likely to do, would be a convenient way for Moscow to take 
advantage of the international economic crisis to limit Astana's 
sovereignty.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2567, KAZAKHSTAN: WATER RESOURCE COMMITTEE DEPUTY CHAIRMAN

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Reference ID Created Released Classification Origin
08ASTANA2567 2008-12-30 10:16 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6848
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2567/01 3651016
ZNR UUUUU ZZH
O 301016Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4234
INFO RUCNCIS/CIS COLLECTIVE 0985
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0385
RUEHKO/AMEMBASSY TOKYO 1091
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0557
RUEKJCS/SECDEF WASHDC 0460
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1054

UNCLAS SECTION 01 OF 02 ASTANA 002567 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC, OES/PCI 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ENRG SENV KZ
SUBJECT:  KAZAKHSTAN: WATER RESOURCE COMMITTEE DEPUTY CHAIRMAN 
DISCUSSES WATER SITUATION 
 
REF: ASTANA 02156 
 
ASTANA 00002567  001.2 OF 002 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  Ministry of Agriculture Water Resource Committee 
Deputy Chairman Amirkhan Kenshimov highlighted the recent political 
agreement by the five Central Asian presidents on water use and 
energy delivery for the winter of 2008 and the first quarter of 
2009.  The related water-use protocol included provisions to 
increase the water level of the Toktogul water reservoir in 
Kyrgyzstan and agreement between Uzbekistan and Kazakhstan to 
provide Kyrgyzstan with coal, fuel oil, and gas to permit Kyrgyzstan 
to produce electricity at its thermal power plants.  Kazakhstan 
President Nazarbayev's interstate Water Energy Consortium 
Initiative, designed to manage the combined issues of energy and 
water, is slowly "making progress," According to Kenshimov.  The 
government launched the construction of the Koksaray Water Reservoir 
in southern Kazakhstan on June 25 with the goal to prevent winter 
flooding and increase control over crop irrigation in the dry summer 
seasons.  END SUMMARY. 
 
THE PRESIDENTS' AGREEMENT ON WATER 
 
3. (SBU) Regional Environmental Officer (REO) and Environmental 
Assistant met recently with Ministry of Agriculture Water Resource 
Committee Deputy Chairman Amirkhan Kenshimov, who wanted to 
highlight the October 10 meeting in Bishkek, Kyrgyzstan (see reftel) 
of the five Central Asian presidents, who reached a political 
agreement on water use and related energy source delivery.  In a 
follow-on meeting in Almaty, Kazakhstan, on October 18-19, the 
deputy prime ministers of the five Central Asian countries signed a 
detailed protocol on the efficient use of common water and energy 
resources in the region for the winter of 2008 and the first quarter 
of 2009.  This particular agreement is unique for Central Asia, 
Kenshimov said, because Turkmenistan had never joined similar 
agreements.  In addition, since 2004, strong disagreements among the 
parties prevented them from signing multilateral water-use 
agreements.  Kenshimov refused to speculate whether Russia used its 
leverage this time to help the parties reach an agreement, but he 
did not deny the possibility. 
 
SUPPORT FOR TOKTOGUL RESERVOIR 
 
4. (SBU) Kenshimov said the water-use protocol included provisions 
to increase the water level of the Toktogul water reservoir in 
Kyrgyzstan, which is the largest water reservoir on the Narin River 
that feeds into the Syr-Darya River through the Toktogul hydropower 
plant, Kyrgyzstan's largest power plant.  The Toktogul Reservoir is 
now dangerously low, he said, estimated at less than eight billion 
cubic meters.  The plan is to raise the water level to 12.5 billion 
cubic meters before spring 2009 so that there would be sufficient 
water for irrigation.  (NOTE:  Toktogul's "dead level" -- the level 
at which the water is so low the turbines must be shut down to 
prevent damage -- is 5.4 billion cubic meters.  Toktogul's maximum 
capacity is 19.5 billion cubic meters.  END NOTE.) 
 
5. (SBU) To increase the water level, Kenshimov said the Toktogul 
hydropower plant will have to significantly reduce its power 
generation this winter.  In the past, Kyrgyzstan would have faced 
acute power shortages.  Under this new protocol, Uzbekistan and 
Kazakhstan have agreed to provide Kyrgyzstan with 300,000 tons of 
coal and 40,000 tons of fuel oil (Kazakhstan) and gas (Uzbekistan) 
so that Kyrgyzstan can produce electricity at its thermal power 
plants to compensate for the loss of power from Toktogul. 
 
NAZARBAYEV'S WATER ENERGY CONSORTIUM INITIATIVE 
 
6. (SBU) Kenshimov said Kazakhstan President Nazarbayev's water 
energy consortium idea was "making progress," albeit slowly.  If 
eventually implemented, he said, the water energy consortium would 
be a comprehensive agency combining responsibilities for water and 
energy resource supply and management in Central Asia.  At present, 
the Interstate Commission for Water Coordination (ICWC) is the 
 
ASTANA 00002567  002.2 OF 002 
 
 
highest water decision-making body in the region and the main 
institutional organization for the rational utilization and 
protection of trans-boundary water resources.  However, the ICWC has 
no legal or enforcement powers, and it is not empowered to treat the 
join
tly-linked problems of water and energy.  For instance, 
Kenshimov said the ICWC was not able to address the delivery of 
cheap coal and gas this winter to Kyrgyzstan and Tajikistan from 
Kazakhstan and Uzbekistan to compensate for reduced power generation 
at the Kyrgyzstan and Tajikistan hydropower plants.  (COMMENT:  This 
water energy consortium is one of Nazarbayev's pet projects, but 
Uzbekistan's President Karimov refuses to cooperate, in part because 
of personal enmity between the two men, and in part because there is 
a rivalry for regional leadership between Kazakhstan and Uzbekistan. 
 Karimov allegedly sees this consortium as a power play to seize 
regional leadership away from Uzbekistan, which has been the 
traditional and historical leader in Central Asia.  END COMMENT.) 
 
KAZAKHSTAN'S KOKSARAY WATER RESERVOIR 
 
7. (SBU) Kenshimov said that the government of Kazakhstan continues 
to work on the Koksaray Water Reservoir Project in southern 
Kazakshan, launched on June 25.  According to Kenshimov, this 
project has been pending for 10 years and the government finally 
approved it this spring.  Its goal is two-fold:  prevent winter 
flooding in the southern regions and increase control over crop 
irrigation in the dry summer seasons.  (NOTE:  In the absence of the 
Soviet-era management quotas, the energy-poor upstream states of 
Kyrgyzstan and Tajikistan now commonly release water in the winter 
to generate electricity.  The downstream countries of Kazakhstan and 
Uzbekistan cannot use this winter water for irrigation, which is 
needed in the spring and summer.  As a result, the downstream 
countries endure considerable flooding.  This year alone, floods 
threatened 70 villages in two southern regions of Kazakhstan.  On 
February 20, a huge flood left 13,000 people homeless.  END NOTE.) 
The recent flooding in South Kazakhstan gave a renewed impetus to 
this initiative, Kenshimov said, and the government of Kazakhstan 
finally decided to start construction of the Koksaray water 
reservoir this year. 
 
8.  (SBU) NOTE:  According to some environmentalists, the Koksaray 
Water Reservoir Project is controversial because of its possible 
environmental impact. The reservoir, in southern Kazakhstan, will be 
able to control the flow of the Syr-Darya River.  While reservoir 
construction appears to be a good solution to the problem of 
flooding, some fear it might significantly reduce water flow in the 
Syr-Darya River, resulting in a further reduced flow of water to the 
Aral Sea area and irreversibly harming the climate.  In addition, 
some in Uzbekistan are objecting to this project because it will 
reduce the flow to the Uzbekistan part of the Aidar-Arnasai lake 
system, making Uzbekistan dependent on Kazakhstan's timely releases 
of water to preserve the system's overall natural ecological 
balance.  END NOTE. 
 
HOAGLAND

Wikileaks

08ASTANA2566, KAZAKHSTAN: MFA RESHUFFLES SENIOR DIPLOMATS

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Reference ID Created Released Classification Origin
08ASTANA2566 2008-12-30 10:16 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO6842
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2566/01 3651016
ZNR UUUUU ZZH
O 301016Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4232
INFO RUCNCIS/CIS COLLECTIVE 0983
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0383
RUEHKO/AMEMBASSY TOKYO 1089
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
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RUEKJCS/SECDEF WASHDC 0458
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1052

UNCLAS SECTION 01 OF 02 ASTANA 002566 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/ERA, EUR/WE 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINR OFDP KZ
SUBJECT:  KAZAKHSTAN:  MFA RESHUFFLES SENIOR DIPLOMATS 
 
REF:  ASTANA 2457 
 
ASTANA 00002566  001.2 OF 002 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
MFA RESHUFFLE 
 
2.  (SBU) On December 29, Kairat Sarybay, until December 26 the 
Deputy Foreign Minister, was appointed senior foreign policy advisor 
to President Nazarbayev, succeeding Yerzhan Kazykhanov, who was 
named Kazakhstan's new Ambassador to Austria.   According to the 
Ministry of Foreign Affairs (MFA), Kazakhstan will now have two 
diplomatic missions in Vienna:  the Embassy to Austria, headed by 
Kazykhanov, which will also cover Kazakhstan's cooperation with 
international organizations based in Vienna; and the Permanent 
Mission to the OSCE, headed by Kairat Abdrakhmanov, who was 
previously Kazakhstan's Ambassador to Austria. 
 
KAZYKHANOV BIO NOTES 
 
3.  (SBU) Yerzhan Kazykhanov was born on August 21, 1964, in Almaty. 
 He received an undergraduate degree in Asian Studies in 1987 from 
Leningrad State University.  After graduation, he completed 
compulsory military service as a translator from 1987 to 1989.  He 
subsequently graduated from the Diplomatic Academy of the Soviet 
Union and joined Kazakhstan's Ministry of Foreign Affairs, where he 
served as Deputy Chief of State Protocol (1992-95), Counselor to the 
Permanent Mission of Kazakhstan to the United Nations in New York 
(1995-2000), Director of the Department of Multilateral Cooperation 
(2000-03), Permanent Representative to the United Nations and 
non-resident Ambassador to the Republic of Cuba (2003-07), Deputy 
Minister of Foreign Affairs (2007-08), and Senior Foreign Policy 
Advisor to the President (2008).  Kazykhanov has the rank of Envoy 
Extraordinary and Plenipotentiary First Class and speaks fluent 
English and Arabic.  Kazykhanov is the author of the book, 
"Cooperation of the Republic of Kazakhstan with the United Nations" 
(Almaty, 2002), as well as numerous articles on multilateral 
diplomacy and the United Nations.  He is married with two children. 
 
NEW PERMANENT REPRESENTATIVE TO THE OSCE 
 
4.  (SBU) Kairat Abdrakhmanov, formerly in charge of relations with 
international organizations, will be Kazakhstan's new Permanent 
Representative to the OSCE.  Shortly after he was named Ambassador 
to Austria, Abdrakhmanov was asked about the OSCE Chairmanship.  In 
reply, Abdrakhmanov said, "This gives Kazakhstan an excellent 
opportunity to contribute to strengthening the potential and 
efficiency of the Organization.  The leadership and the people of 
our country made real progress in building democracy and civil 
society.  We are determined to be a genuine democratic country where 
the basic values and the standards reflected in the documents of the 
OSCE will be undoubtedly prevailing.  Naturally, chairing the OSCE 
would further promote the development of our political system, which 
in fact corresponds to our own inner intentions aimed at the 
systemic reforms of social and political life in the direction of 
further democratization.  For Kazakhstan, Chairmanship of the 
Organization has already become a powerful catalyst for reform, an 
additional confirmation of the rightly chosen path of further 
liberalization and openness.  We think that the positive outcome of 
our bid might have a multiplicative effect for the complex 
modernization of our country and the region as a whole." 
 
NEW PRESIDENTIAL FOREIGN AFFAIRS ADVISOR 
 
5.  (SBU) The new Presidential Foreign Affairs advisor, the 42-year 
old Kairat Sarybay has had a meteoric career in the diplomatic 
service, much of it close to President Nazarbayev.  After studying 
oriental languages in the Soviet Union and Kazakhstan, Sarybay 
entered the newly-formed Kazakhstan Foreign Ministry in 1992 as a 
second secretary in the Consular division, followed by an assignment 
in Ankara.  He returned to Kazkahstan in 1996 as the President's 
Chief of Protocol and then Press Secretary.  He was rewarded with 
the Ambassadorship to Turkey in 1999 and subsequently went on to 
Berlin as Ambassador.  In 2007, Sarybay returned to Astana to 
replace Kazykhanov as the Deputy Foreign Minister for Europe and the 
Americas.  Saribay's wife, Leila, is an artist who has a gallery in 
Astana.  She is currently working on possible collaboration with 
several New York museums.  Sarybay speaks fluent English, German and 
Turkish as well as native Kazakh and Russian.  He is very 
 
ASTANA 00002566  002.2 OF 002 
 
 
sophisticated and comfortable in his dealings with foreigners. 
 
 
6.  (SBU) COMMENT:  Moving Kazykhanov
to Vienna and Abdrakhmanov to 
the OSCE reflects the President's continued intense interest in the 
activities of former son-in-law Rakhat Aliyev, reportedly still in 
exile in Austria, as well as the government's intention to pay 
full-time attention to multilateral affairs.  Abdrakhmanov, 
Kazykhanov, and Sarybay represent the first generation of 
Kazakhstani diplomats; they are fluent in Kazakh, Russian, and 
English and, despite their relative youth, experienced in dealing 
with the West.  All three have served as Deputy Foreign Minister for 
Europe and the Americas in the last three years, and two of them 
have also worked in presidential protocol.  Clearly they represent 
the MFA's "A" team. 
 
7.  (SBU)  COMMENT CONTINUED:  For some time the MFA has planned to 
open a new embassy in Vienna to deal exclusively with the OSCE.  The 
MFA is increasingly recognizing the importance of other 
international agencies, for instance the International Atomic Energy 
Agency (IAEA).  Kazakhstan remains interested in seeking a seat on 
the IAEA Board of Governors in 2010.  Moreover Kazakhstan will be 
the chair of the Organization of the Islamic Conference in 2011. 
While we understand and support Kazakhstan's desire to play a 
leading role in international organizations, there is a risk that 
these moves will severely tax a thin bench of experienced diplomats. 
 END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2561, KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, December 7 –

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Reference ID Created Released Classification Origin
08ASTANA2561 2008-12-30 06:09 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO6575
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2561/01 3650609
ZNR UUUUU ZZH
O 300609Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4225
INFO RUCNCIS/CIS COLLECTIVE 0980
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0380
RUEHKO/AMEMBASSY TOKYO 1086
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0455
RHEHNSC/NSC WASHDC 0552
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHAST/USOFFICE ALMATY 1049

UNCLAS SECTION 01 OF 03 ASTANA 002561 
 
DEPT FOR SCA/CEN, EEB 
PLEASE PASS TO USTDA DAN STEIN 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN EIND ENRG EPET KTDB KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, December 7 - 
December 20 
 
ASTANA 00002561  001.2 OF 003 
 
 
1.  (U) SUMMARY:  This information is drawn primarily from the 
Kazakhstani local press and has not been verified for accuracy. 
 
-- Kazakhstan Ready to Negotiate Debt Restructuring 
-- Banks to Receive Government Assistance by March 
-- Conservative Scenario for 2009 National Budget 
--   Economic Statistics 
-- National Nuclear Center Plans 
-- Government Proposes Tax Benefits for Oil Companies 
-- News from Ulba Metallurgical Plant 
-- Inter RAO Wants to Buy Kazakh Gas 
-- KazMunayGas Signs Agreements 
-- Energy Statistics 
END SUMMARY. 
 
KAZAKHSTAN READY TO NEGOTIATE DEBT RESTRUCTURING 
 
2.  On December 9, Kairat Kelimbetov, former head of the 
Presidential Administration and current Chairman of the National 
Welfare Fund Samruk-Kazyna, said that the state is prepared to 
negotiate with foreign investors on the restructuring of Kazakhstani 
commercial banks' debt.  "If the Government will task us to do so, 
we would begin a negotiation process with foreign investment banks 
and investors to work out a mechanism for restructuring."  According 
to Kelimbetov, the total amount of external borrowing of domestic 
banks exceeds $40 billion, a significant portion of which must be 
repaid within the next two to three years.  Kelimbetov explained 
that the government would like to discuss discounts and possible 
extensions in the repayment schedule with creditors. 
 
3.  Commenting on Kelimbetov's statements, the Chairman of the 
National Bank, Anvar Saidenov, emphasized that there is no 
possibility of default.  "We are not talking about someone refusing 
to repay debts.  This is not a constructive position, " he said 
during a December 10 press-conference in Almaty.  In his opinion, 
there will be more opportunities to re-negotiate directly with 
investors, as opposed to working through syndicated loans and 
Eurobonds.  According to Saidenov, of the $40 billion in total 
external debt, about $21 billion is Eurobond debt. 
 
4.  According to Oraz Zhandossov, former Minister of Finance, former 
Chairman of the National Bank, and now independent economic analyst, 
recent government statements about the possibility of restructuring 
foreign debt indicate partial acknowledgement of the eventual 
likelihood of default.  He said that restructuring is indeed 
necessary to prevent default, and that it would be in the creditors' 
interests to enter into negotiations. 
 
BANKS TO RECEIVE GOVERNMENT ASSISTANCE BY MARCH 
 
5.  According to Samruk-Kazyna Chairman Kelimbetov, the Kazakhstani 
government plans to complete the transfer of funds (as part of 
Kazakhstan's financial crisis program) to Kazakhstan's four primary 
private banks by the middle of March 2009.  He noted that 
KazKommertzBank, BTA bank, Alliance Bank and Khalyk Bank have each 
signed memorandums of understanding that specify the government's 
ownership share to be purchased according to the assistance package. 
 Kelimbetov added that final decisions regarding possible additional 
funding for each bank will be announced following the results of 
independent audits to be completed by KPMG and 
PricewaterhouseCoopers. 
 
CONSERVATIVE SCENARIO FOR 2009 NATIONAL BUDGET 
 
 
 
 
 
6.  The Minister of Economy and Budget Planning Bakhyt Sultanov 
announced on December 18 that the Government of Kazakhstan may 
reconsider the national budget for 2009 based on a price of oil of 
$25 per barrel.  Under that scenario, budget revenue would be 
reduced by approximately $1.25 billion and the Prime Minister has 
 
ASTANA 00002561  002.2 OF 003 
 
 
subsequently tasked ministries to identify programs for which 
funding can be postponed for the first half of 2009.  The Prime 
Minister noted that "we should plan our expenditures based on the 
most conservative scenario." 
ECONOMIC STATISTICS 
7.  According to the Financial Supervision Agency (FSA), in 
January-November 2008, Kazakhstan's commercial banks earned a net 
profit of 33.8 billion tenge (approximately $280.2 million), or a 
83.7% decrease year-on-year in profit.  At the same time, loans 
since January 2008 have increased by 496.8 billion tenge (about $4.1 
billion) indicating 7.6% g
rowth.  Kazakhstani commercial bank loans 
now total 7,015.8 billion tenge (approximately $58.15 billion).  As 
of December 1, commercial bank loan portfolios include 42.8% 
standard loans (39.7% as of January 1, 2008), 53.3% doubtful loans 
(58.8% as of January 1, 2008) and 3.9% bad loans (up from 1.5% on 
January 1, 2008.) 
 
PLANS OF NATIONAL NUCLEAR CENTER 
 
8.  During a December 12 press conference, Kairat Kadyrzhanov, 
Director General of the National Nuclear Center (NCC), announced 
plans to conduct a feasibility study together with Japanese 
scientists to build a fourth-generation, 50-megawatt, experimental 
nuclear reactor in Kurchatov (eastern Kazakhstan), and open a Center 
for Nuclear Medicine and Biophysics in 2011, which will be equipped 
to diagnose and treat cardiovascular and oncological diseases. 
Kadyrzhanov also proposed creating a national atomic energy company, 
which would build and operate nuclear power plants, and a National 
Agency for Atomic Energy, which would supervise the Committee for 
Atomic Energy (now under the Ministry of Energy and Mineral 
Resources), the national atomic company Kazatomprom, and the NCC. 
 
GOVERNMENT PROPOSES TAX BENEFITS FOR OIL COMPANIES 
 
9.  On December 12, Finance Minister Bolat Zhamishev told reporters 
that according to the new tax code effective January 1, 2009, 
companies paying the rent tax and mineral extraction tax will cease 
paying the crude export duty.  At a December 18 meeting of 
parliament, Zhamishev said that in January 2009, the Government of 
Kazakhstan plans to revise mineral extraction tax rates for 
low-profit oil fields on a case-by-case basis. 
 
NEWS FROM ULBA METALLURGICAL PLANT 
 
10.  On December 12, Kazatomprom president Mukhtar Dzhakishev told 
reporters that Russia declined to place an order for fuel pellets 
from Kazatomprom subsidiary, Ulba Metallurgical Plant, as expected. 
"If we lose the Russian market, Ulba will obtain more orders from 
China and Japan," he commented. 
 
11.  On December 11, "Khabar" television reported that the Ulba 
Metallurgical Plant launched a new facility to produce 72.9 tons of 
tantalum powder a year.  This breakthrough project is a part of the 
state's "30 Corporate Leaders" economic development program. 
 
INTER RAO WANTS TO BUY KAZAKH GAS 
 
12.  The December 11 "Kursiv" newspaper reported that Inter RAO EES, 
a subsidiary of Russia's power generating company, signed a one-year 
memorandum of understanding with Canada's Tethys Petroleum Limited. 
According to the memorandum, Tethys will sell gas produced by its 
Kazakhstani subsidiaries to Inter RAO EES and consider other joint 
projects for the acquisition, exploration, and development of oil 
and gas fields in Kazakhstan.  Inter RAO EES needs gas to supply its 
gas-fired power plants. 
 
KAZMUNAYGAS SIGNS AGREEMENTS 
 
13.  On December 5, the national oil and gas company KazMunayGas 
(KMG) signed an Agreement on Principles with ConocoPhillips and 
Mubadala Development Company from UAE to develop the Caspian 
offshore "N block," which contains 1.97 billion barrels of oil in 
recoverable reserves.  KMG also signed an agreement with the 
 
ASTANA 00002561  003.2 OF 003 
 
 
Kazakhstani investor group "Caspian Tristar" to develop the Caspian 
offshore field "Myortviy Kultuk," which has 1.2 billion barrels of 
oil in recoverable reserves, a Cooperation Agreement with BG Group 
to explore hydrocarbons, and a 30-year contract with the Ministry of 
Energy and Mineral Resources to explore and develop Urikhtau gas 
field in Aktobe oblast, with anticipated annual production of 1.5-2 
billion cubic meters of gas. 
 
ENERGY STATISTICS 
 
14.  According to the National Statistics Agency, from January to 
November, Kazakhstan produced 54.4 million tons of crude oil and 
30.24 billion cubic meters of natural gas, an increase of 5.9% and 
11.6%, respectively, over the same period in 2007.  From January to 
October, Kazakhstan exported 50.51 million tons of crude oil and gas 
condensate, valued at $38.32 billion, which represented a 0.5% 
decrease in export volume, but (because of higher prices) a 71.7% 
increase in export value over the same period in 2007.  From January 
to November, Kazakhstan produced 101.14 million metric tons of coal, 
a 15% increase year-on-year, and generated 72.60 billion 
kilowatt-hours, an increase of 5.7%. 
 
HOAGLAND

Wikileaks

08ASTANA2555, KAZAKHSTAN: NSA HADLEY LETTER TO SECURITY

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Reference ID Created Released Classification Origin
08ASTANA2555 2008-12-29 04:53 2011-08-30 01:44 SECRET//NOFORN Embassy Astana

VZCZCXYZ0001
OO RUEHWEB

DE RUEHTA #2555 3640453
ZNY SSSSS ZZH
O 290453Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4219
INFO RHEHNSC/NSC WASHDC IMMEDIATE 0551
RUEKJCS/SECDEF WASHDC IMMEDIATE 0454

S E C R E T ASTANA 002555 
 
NOFORN 
SIPDIS 
 
STATE FOR S/ES-CR 
 
E.O. 12958: DECL: 12/29/2033 
TAGS: OPDC KZ
SUBJECT:  KAZAKHSTAN:  NSA HADLEY LETTER TO SECURITY 
COUNCIL SECRETARY SULEYMENOV DELIVERED 
 
REF: SES# 200819887 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (D), (F) 
 
1.  (S/NF) Ambassador hand-delivered to Kazakhstan's Security 
Council Secretary Kairbek Suleymenov on December 26 
referenced letter from Assistant to the President for 
National Security Affairs Stephen J. Hadley.  The Ambassador 
emphasized the U.S. desire to accelerate the pace of activity. 
 
2.  (S/NF) Suleymenov expressed his thanks for the letter, 
commenting "we have to coordinate our efforts."  He noted, 
"You will receive our specific reply within a month because 
this is a priority concern."  He added obliquely he had just 
met the day before with the "third party" on Semipalitinsk. 
HOAGLA ND

Wikileaks

08ASTANA2553, KAZAKHSTAN LIKELY TO APPROVE TRANSCOM’S NORTHERN

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Reference ID Created Released Classification Origin
08ASTANA2553 2008-12-29 04:27 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO5704
OO RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW RUEHROV
RUEHSR
DE RUEHTA #2553/01 3640427
ZNY CCCCC ZZH
O 290427Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4216
RHMFISS/CDR USCENTCOM MACDILL AFB FL IMMEDIATE
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0977
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0378
RUEHKO/AMEMBASSY TOKYO PRIORITY 1084
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 0549
RUEKJCS/SECDEF WASHDC PRIORITY 0452
RUEHNO/USMISSION USNATO PRIORITY 2445

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 002553 
 
SIPDIS 
 
STATE FOR SCA/CEN 
CENTCOM FOR TRANSCOM 
 
E.O. 12958: DECL: 12/29/2023 
TAGS: PGOV PREL MARR KZ
SUBJECT:  KAZAKHSTAN LIKELY TO APPROVE TRANSCOM'S NORTHERN 
DISTRIBUTION NETWORK IN JANUARY 
 
REF: A. ASTANA 2457 
     B. ASTANA 2384 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (A), (B), (D) 
 
1.  (C) SUMMARY:  Kazahkstan is close to making a positive 
decision to participate in TRANSCOM'S Northern Distribution 
Network.  On December 26, Security Council Secretary Kairbek 
Suleymenov said he would instruct his staff immediately to 
draft a decision memo for President Nursultan Nazarbayev. 
Given the winter holidays, we probably cannot expect this 
decision until early in January.  END SUMMARY. 
 
2.  (C) The Ambassador and DATT met with Security Council 
Secretary Kairbek Suleymenov and Deputy Secretary Nurlan 
Abdirov on December 26 for over an hour to press for a 
soonest possible decision to allow TRANSCOM's Northern 
Distribution Network (NDN) to pass through Kazakhstan.  As 
Abdirov had requested previously, the Ambassador provided 
TRANSCOM's lists of the 50 most common building supplies and 
50 most common provisions that TRANSCOM ships to troops, 
noting, as previously mentioned, TRANSCOM would be willing to 
consider purchasing some of these supplies in Kazakhstan, and 
could send an experts' team to Kazakhstan after the turn of 
the year for this purpose.  He emphasized the urgency of 
Kazakhstan's "green light" by explaining that a significant 
number of additional U.S. troops will arrive in Afghanistan 
during the first quarter of 2009 and will have to be supplied 
and provisioned; preparation for this increase must begin 
immediately.  He added that Kazakhstan is the last piece of 
the NDN puzzle, since Azerbaijan, Uzbekistan, and Russia are 
already on board -- all we need is "yes," and the logistical 
flow can start. 
 
3.  (C) Thanking the Ambassador for the lists, Suleymenov 
quipped that purchasing goods in Kazakhstan would not solve 
the current economic crisis but is politically important in 
Kazakhstan's decision-making process.  In fact, Suleymenov 
appeared not especially well briefed on NDN, and at one point 
confused the NATO military transit agreement with NDN.  He 
wanted to know what kind of formal, legal agreements the 
United States had entered into with other transit agreement 
partners.  The Ambassador responded there are no formal 
agreements; in Azerbaijan, for example, the word of President 
Ilhom Aliyev had been sufficient.  At times, Suleymenov 
seemed inordinately interested in details, wanting to know 
how the roughly 10,000 residential containers waiting to be 
shipped to Afghanistan had arrived in Baku and what was their 
point of origin.  He also worried whether Kazakhstan would 
have enough rail cars to handle the flow of goods.  When he 
continued to evidence confusion exactly what the U.S. 
government means by a commercial arrangement, the Ambassador 
assured him that the only role of the U.S. government will be 
to pay commercial contractors for their goods and services -- 
"no boots on the ground."  In answer to another question, the 
Ambassador emphasized that the commercial logistical 
companies TRANSCOM would employ would indeed pay all tariffs, 
taxes, and follow all local laws. 
 
4.  (C) In the end, Suleymenov was positive, noting that 
every element of the government of Kazakhstan sees NDN as a 
political decision and not an opportunity to profit 
commercially.  He said clearly Astana understands the 
political importance of NDN and implied Kazakhstan does not 
want to be "odd man out."  He said he would instruct his 
staff to draft immediately a recommendation to President 
Nazarbayev.  He said clearly the decision would not depend on 
pre-agreement to purchase goods in Kazakhstan, since "that 
could take 10 years and the war would then be long over." 
 
5.  (C) COMMENT:  Given that half the government is on 
vacation for the winter holidays, we do not expect a final 
decision until sometime early in January; but when the 
decision comes, we expect it to be positive.  While we have 
briefed Deputy Secretary Abdirov and many other senior 
officials repeatedly on the details of NDN since TRANSCOM CDR 
General McNabb's November 21 visit to Astana, and while we 
 
ASTANA 00002553  002 OF 002 
 
 
would think a purely commercial arrangement should be the 
simplest of all decisions, this entire long-drawn-out process 
illustrates how ponderous Kazakhstan's presidential 
decision-making can be.  END COMMENT. 
HOAGLA ND

Wikileaks

08ASTANA2551, KAZAKHSTAN HANDS OVER NON-PAPER AND COURT DOSSIER

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Reference ID Created Released Classification Origin
08ASTANA2551 2008-12-24 10:29 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO4567
PP RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW RUEHROV
RUEHSR
DE RUEHTA #2551/01 3591029
ZNY CCCCC ZZH
P 241029Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 4213
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 0975
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0376
RUEHKO/AMEMBASSY TOKYO PRIORITY 1082
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RHMCSUU/FBI WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 0547
RUEKJCS/SECDEF WASHDC PRIORITY 0450
RUEHNO/USMISSION USNATO PRIORITY 2443
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2113

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 002551 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL, H 
 
E.O. 12958: DECL: 12/24/2028 
TAGS: PGOV PREL PROP KCRM KZ
SUBJECT:  KAZAKHSTAN HANDS OVER NON-PAPER AND COURT DOSSIER 
ON RAKHAT ALIYEV 
 
REF: A. ASTANA 2457 
     B. ASTANA 2450 
     C. ASTANA 2445 
     D. ASTANA 2362 (NODIS 
     E. NOTAL) 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  A government of Kazakhstan non-paper 
alleges that President Nursultan Nazarbayev's exiled 
ex-son-in-law Rakhat Aliyev has hired U.S. public relations 
firms to build the case that he is a political dissident 
standing up to a tyrannical and corrupt Nazarbayev, with the 
ultimate goal of gaining political asylum in the United 
States.  We caution against seeing Aliyev as a "democratic 
golden boy."  Likely as corrupt as anyone else in the 
inner-circle of the ruling elite, he is involved in a 
monumental power struggle with his ex-father-in-law.  END 
SUMMARY. 
 
2.  (C) As follow-up to the Ambassador's December 10 meeting 
with Presidential Chief of Staff Aslan Musin (reftel B), 
Deputy Foreign Minister Khairat Sarybay called in the 
Ambassador on December 23 to present the "further 
information" on President Nazarbayev's exiled ex-son-in-law 
Rakhat Aliyev Musin had promised to provide.  Sarybay handed 
over a non-paper in English and Russian and copies in Russian 
of the proceedings of the two trials that convicted Aliyev in 
absentia.  The Ambassador confirmed the government of 
Kazakhstan does not expect an official response to the 
non-paper, although Sarybay said any response from the U.S. 
side, including further information on Aliyev's activities, 
would be welcome.  Ambassador thanked Sarybay for the 
non-paper and dossier, and reiterated the United States has 
no contact, and wants no contact, with Aliyev; we want the 
widest space possible between us and him.  Lightly edited 
text of the non-paper follows. 
 
3.  (SBU) BEGIN TEXT: 
 
Non-paper 
 
December 23, 2008 
 
The aim of this document is to expose the activity of Rakhat 
Aliyev who is hiding abroad from Kazakhstan's justice.  He 
was sentenced to 20 years imprisonment in Kazakhstan for 
grave crimes.  The details of the charges against him can be 
found in the attached copies of the courts' verdicts. 
 
Rakhat Aliyev has been actively involved in discrediting 
Kazakhstan's internal and external policies.  In order to 
achieve his goals, he uses a number of U.S. legal and 
consulting companies, such as Baker and Hostetler LLC, The 
Ashcroft Group, and Kroll Inc. 
 
With the help of the above-mentioned companies, Rakhat Aliyev 
tries to undermine Kazakhstan's reputation in the eyes of the 
U.S. executive and legislative authorities and the American 
public through spreading falsified documents.  However, 
Rakhat Aliyev's criminal records, and the fact that he is 
wanted by Kazakh and international law-enforcement agencies, 
is carefully hidden.  In contrast, he is portrayed as a 
"political dissident," which contradicts the truth. 
 
A number of materials, concerning Kazakhstan's leadership 
have been sent by Rakhat Aliyev with the help of Baker and 
Hostetler LLC to various U.S. law-enforcement agencies -- in 
particular, to the District Prosecutor of New York City 
Robert Morgenthau and to the FBI. 
 
These (public relations) companies have also helped Rakhat 
Aliyev to spread false information about Kazakhstan's 
political and economic situations among the leading U.S. 
 
ASTANA 00002551  002 OF 002 
 
 
media, such as "The Wall Street Journal" and "The Washington 
Times."  Besides that, some attempts were noted to establish 
contacts with "The New York Times," "The Los Angeles Times," 
and TV channels like CNBC and CBS, as well as others. 
 
Rakhat Aliyev is also trying to obtain support from the U.S. 
Administration and from officials of Congress in order to 
convince them to take a negative stance on Kazakhstan's 
Chairmanship in the OSCE in 2010, to doubt Kazakhstan's 
democratic and human rights records, and to question the 
Kazakhstan-U.S. strategic partnership. 
 
All of these steps taken by Rakhat Aliyev are aimed to help 
him to escape justice, portray himself as a "victim" of 
political persecution, and, if possible, to get U.S. 
protection (political asylum). 
 
This information will allow the U.S. government to understand 
the real motives of Rakhat Aliyev, whose reputation is well 
known by the public in Kazakhstan, and who is trying hard to &#x00
0A;escape from inevitable justice with the help of some American 
companies that he hired with illegally obtained money. 
 
END TEXT. 
 
4.  (C) COMMENT:  That Aliyev might have hired Western PR 
companies rings true to us, especially because articles in 
"The Washington Times" and, especially, "The Wall Street 
Journal" have been decidedly pro-Aliyev and anti-Nazarbayev. 
We caution against seeing Aliyev as a "democratic golden 
boy."  Likely as corrupt as anyone else in the inner-circle 
of the ruling elite, he is involved in a monumental power 
struggle with his ex-father-in-law.  To the government of 
Kazakhstan, we will continue to maintain the position that we 
have no contact with Aliyev and want no contact with him. 
END COMMENT. 
HOAGLA ND

Wikileaks

08ASTANA2547, KAZAKHSTAN: GOVERNMMENT INTERESTED IN EXTENDING PROGRAM

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Reference ID Created Released Classification Origin
08ASTANA2547 2008-12-24 07:43 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4372
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2547/01 3590743
ZNR UUUUU ZZH
O 240743Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4210
INFO RUCNCIS/CIS COLLECTIVE 0973
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0374
RUEHKO/AMEMBASSY TOKYO 1080
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0448
RHEHNSC/NSC WASHDC 0545
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHAST/USOFFICE ALMATY 1043

UNCLAS SECTION 01 OF 02 ASTANA 002547 
 
DEPT FOR SCA/CEN, EUR/ACE, EEB 
PLEASE PASS TO USTDA DAN STEIN 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN EIND ENRG EPET KTDB KZ
SUBJECT:  KAZAKHSTAN: GOVERNMMENT INTERESTED IN EXTENDING PROGRAM 
FOR ECONOMIC DECELOPMENT (PED) 
 
ASTANA 00002547  001.2 OF 002 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  The primary Kazakhstani government counterpart 
for the Program for Economic Development (PED), Deputy Minister of 
Economy Marat Kussainov, informally requested USAID to prepare a 
concept paper which would outline the parameters under which the PED 
could be extended.  In FY 2009, the last fiscal year under which the 
PED will receive funding, the Governments of Kazakhstan and the 
United States will each contribute $5 million to the program.  In 
principle, the Deputy Minister agreed that the Government of 
Kazakhstan would cover 80% of program costs if the program is 
extended.  Post supports this offer and requests preliminary 
commitment of funds required for an extension of the successful PED 
program.  END SUMMARY. 
 
KAZAKZHSTAN-U.S. PROGRAM FOR ECONOMIC DEVELOPMENT 
 
3.  (SBU) Originally envisioned as a Public Private Partnership 
under the Houston Initiative -- a joint program launched in October 
2002 following the summit with President Nazarbayev and President 
Bush -- the Kazakhstan-United States Program for Economic 
Development evolved into a four-year bilateral agreement to promote 
Kazakhstan's broad-based economic development and diversification. 
 
 
4.  (SBU) The four-year, $40 million PED is co-financed by the two 
governments, with the Government of Kazakhstan's contribution rising 
over a four year period from 25% in 2005 to 50% in 2009, the final 
year of the agreement.  PED was formally inaugurated on May 5, 2006, 
by then-Minister of Economy Masimov (now Prime Minister) and 
Ambassador Ordway and is implemented under the auspices of the U.S. 
Agency for International Development (USAID).  Each year, the PED 
Annual Work Plan is jointly developed and approved by both 
governments and the Kazakhstani government contribution is 
transferred to USAID.  The program is coordinated by the Ministry of 
Economy and Budget Planning (MEBP) on behalf of the Government of 
Kazakhstan, and by USAID on behalf of the U.S. Government. 
 
HIGH-PROFILE PROGRAM WITH DEMONSTRABLE IMPACT 
 
5.  (SBU) PED currently comprises a set of strategically important 
activities covering regional energy market development, Kazakhstan's 
accession to the WTO, customs reform, economic diversification 
through small and medium enterprise (SME) development, business 
environment improvement and corruption reduction, trade capacity 
building, and tax and budget reform.  PED activities provide 
critical support which is recognized at the highest levels of the 
Government of Kazakhstan.  PED activities have also achieved 
consistently positive coverage in private and public media including 
television interviews, magazine articles, specialized publications, 
and numerous websites. 
 
CAVEATS TO PHASE-OUT OF U.S. ECONOMIC GROWTH ASSISTANCE 
 
6.  (SBU) The August 30, 2007, Sub-PCC meeting concluded that there 
is no reason to obligate Freedom Support Act funds for economic 
assistance programs in Kazakhstan beyond FY 2009.  However, given 
the strategic importance of the energy sector, the Coordinator 
determined that funding, not to exceed $1 million per year, shall, 
if necessary, be budgeted beyond FY 2009 to support regional energy 
and electricity integration programs.  In addition, the United 
States should explore continued Kazakhstani funding of economic 
growth assistance building on the successful PED partnership 
agreement.  The Coordinator will continue to monitor the economic 
environment in Kazakhstan and reserves the right to re-start funding 
for economic growth programming at any later date if conditions 
warrant. 
 
NEED FOR CONTINUED ECONOMIC GROWTH SUPPORT 
 
7.  (SBU) Except for the area of energy, where $1 million has been 
requested in FY 2010, there is currently no USAID Economic Growth 
 
ASTANA 00002547  002.2 OF 002 
 
 
funding budgeted for Kazakhstan.  Under the current scenario, all 
economic growth activities, except for the Regional Electricity 
Market Assistance Project (REMAP), which would be implemented as a 
stand-alone contract, would be closed in FY 20
10. 
 
8.  (SBU) Kazakhstan currently meets or exceeds only seven of the 16 
Monitoring Country Progress (MCP) indicators.  Large gaps still 
exist in the area of external debt as a percentage of GDP, trade and 
foreign exchange, and the share of employment in small- and 
medium-sized enterprises.  Poor indicators for trade and trade 
regulations reflect Kazakhstan's non-member status in the World 
Trade Organization and associated non-compliant legal policies and 
practices.  With the current financial crisis, fall in commodity 
prices, and slow-down in economic growth, it is likely that these 
indicators will further deteriorate over the next few years. 
 
PROPOSED APPROACH 
 
9.  (SBU) Building on the Sub-PCC recommendations outlined above, 
Post recommends that in addition to the current $1 million annual 
request for REMAP, an additional $1 million a year be made available 
for a three-year extension of PED through FY 2012.  With $6 million 
over the three-year period ($1.5 of which would be used for program 
support costs), USAID would be able to leverage an additional $18 
million from the Government of Kazakhstan and maintain the viability 
of a very significant instrument for policy reform. 
 
CONCURRENCE REQUESTED 
 
10.  (SBU) Post requests EUR/ACE support for an extension of the 
Program for Economic Development.  With the support of the 
Coordinator's office, the Embassy and USAID will work quickly to 
explore funding options.  The Kazakhstani budget cycle for 2010 
begins in January 2009 and it is important to be able to formally 
convey our ability to provide funding for a program extension early 
in their budget process.  Once we receive approval from the 
Coordinator, Embassy Astana and USAID will develop a concept paper 
and draft appropriate amendments to the PED MOU. 
 
11.  (SBU) COMMENT:  There is a clear and convincing need for 
continued external assistance in the area of economic policy reform. 
 The Government of Kazakhstan recognizes this need and is 
appreciative of U.S. Government assistance in this area. 
Kazakhstan, with its vast natural wealth, is nevertheless poor in 
human capacity.  The United States has a clear role to play in 
helping to ensure that this country's vast wealth is used in a 
manner that supports broad-based economic growth, human development 
and democracy.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2546, KAZAKHSTAN: ALMATY NOTES, DECEMBER 9 – 19

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Reference ID Created Released Classification Origin
08ASTANA2546 2008-12-24 05:12 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO4176
OO RUEHLN RUEHSK RUEHVK RUEHYG
DE RUEHTA #2546 3590512
ZNR UUUUU ZZH
O 240512Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4209
INFO RUCNCIS/CIS COLLECTIVE 0972
RUEHAST/USOFFICE ALMATY 1042

UNCLAS ASTANA 002546 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN: ALMATY NOTES, DECEMBER 9 - 19 
 
1.  The "Almaty Notes" series is intended to maintain focus on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital" following the move of the Embassy to 
Astana. 
 
CITY AKIM RECEIVES OPPOSITION LEADER ABILOV 
 
2.  The Almaty akim (mayor) Akhmetzhan Yesimov met on December 19 
with Bulat Abilov, leader of the opposition party Azat, who asked 
that the city's central square -- the site of Kazakhstan's first 
anti-Soviet demonstrations -- be renovated and renamed from 
Republican Square to Independence Square.  In 2007, the city 
administration began constructing a huge entertainment center on the 
square, a project that was heavily criticized by many public 
organizations and opposition parties.  The recent economic crisis 
has stalled the construction.  The akim told Abilov that the square 
would be renovated in the near future.  This was the first time the 
Almaty akim received a representative from an opposition party. 
 
RESIDENTS OF ILLEGAL HOUSING STORM CITY HALL 
 
3.  On December 10, approximately 40 protesters picketed the Almaty 
municipal administration building after the akim refused to meet 
with them.  The protesters own houses in the Almaty suburbs that are 
scheduled for demolition.  The Almaty administration contends that 
the houses were built illegally and must be demolished to make room 
for city expansion plans.  The protesters were forcefully removed by 
the police and several leaders were arrested. 
 
MORTGAGE HOLDERS STAGE RALLY ON INDEPENDENCE DAY 
 
4.  On December 16, Kazakhstan's Independence Day, approximately 400 
Almaty residents took part in an unsanctioned rally on the city's 
main square to protest high mortgage payments and construction 
delays on their unfinished apartments.  Representatives of the akim 
and the city's architect attempted to negotiate with the angry 
crowd, but police eventually forcibly dispersed the crowd.  Talmas 
leader Aynur Kurmanov was arrested and sentenced to 15 days in jail 
for organizing the unsanctioned rally. 
 
HOAGLAND

Wikileaks

08ASTANA2545, KAZAKHSTAN’S DUVANOV: “YOU’RE LOSING THE INFORMATION WAR

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Reference ID Created Released Classification Origin
08ASTANA2545 2008-12-24 02:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4539
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2545/01 3590246
ZNR UUUUU ZZH
O 240246Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4207
INFO RUCNCIS/CIS COLLECTIVE 0970
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0372
RUEHKO/AMEMBASSY TOKYO 1078
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0543
RUEKJCS/SECDEF WASHDC 0446
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUCNDT/USMISSION USUN NEW YORK 2111

UNCLAS SECTION 01 OF 02 ASTANA 002545 
 
SENSITIVE 
SIPDIS 
 
STATE FOR R, SCA/CEN, EUR/ACE, EUR/RUS, IIP, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PROP SOCI KDEM RS KZ
SUBJECT:  KAZAKHSTAN'S DUVANOV:  "YOU'RE LOSING THE INFORMATION WAR 
WITH RUSSIA" 
 
REF:  A) ASTANA 2249 
B) ASTANA 2469 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Independent journalist Sergei Duvanov judges: 
 
-- the United States is losing the information war with Russia in 
Kazakhstan because we are doing little effective to provide an 
alternative to Russia's massive domination of the information space 
in Central Asia; 
 
-- RFE/RL has little, if any, influence; 
 
-- the ideal would be a non-U.S.-government source like a CNN or BBC 
Russian-language service, or a major Soros-funded effort; and 
 
-- many U.S. "democracy grants" go to recipients with little 
influence. 
 
Duvanov has his own self-interest, but his analysis of the United 
States missing in action in providing Russian-language information 
in Central Asia is wholly accurate.  While we might quibble with 
some of his detailed recommendations, for our own national interests 
we would do well to pay attention to his general views.  END 
SUMMARY. 
 
RUSSIA DOMINATES THE MASS MEDIA 
 
3.  (SBU) The Ambassador met December 19 in Almaty with Sergei 
Duvanov, a leading independent opposition journalist, to discuss the 
state of mass media in Kazakhstan.  Duvanov judged the Internet was 
not yet widespread enough to be a serious source of information in 
Kazakhstan, but its influence has grown significantly in the past 
two years, a trend he expects to continue.  With the Internet's 
reach still low, Russian television remains the dominant source of 
information for Kazakhstanis.  Kazakh state television has very 
little influence in the information sphere, and in Duvanov's 
estimation, Russian-language media dominate 90% of Kazakhstan's 
television market and control the most popular Internet news sites. 
Of the local sites, Duvanov named www.kub.info, Eurasia.org.ru, and 
zonakz.net as the most popular, but asserted that none was free of 
its own political spin. 
 
LOSING THE INFORMATON WAR 
 
4.  (SBU) Duvanov does not stake much on Radio Liberty's influence 
in Kazakhstan -- it simply cannot compete with the Russian media in 
popularity.  "There is no counterweight to the false information 
coming from Russia," said Duvanov, giving the example of how the 
majority of Kazakhstanis believe the claims of some Russian channels 
that the United States took over Iraq for oil.  "The information war 
between the United States and Russia has begun again, and the United 
States is losing," he stressed. (NOTE: Similar arguments that lack 
of alternative media sources doomed Kazakhstan to the "information 
periphery" were made at the recent media conference hosted by 
Kazakhstan's Press Club.  See ref. B.) 
 
5.  (SBU) Duvanov outlined several ways in which the United States 
could attempt to level the media playing field.  One would be to 
create something similar to the Voice of America for Central Asia. 
(COMMENT:  The head of opposition party Azat, Bulat Abilov, made the 
same suggestions during his November meeting with the Ambassador 
(reftel A).  Many who remember the Soviet period fondly recall VOA 
in Russian for its high-quality entertainment and objective 
international news.  END COMMENT.)   Another would be to invest in a 
satellite television channel that would provide an alternative to 
the existing Russian channels.  (NOTE:  Duvanov said "no one 
watches" the U.S.-funded InterNews satellite TV effort because it is 
boring.  END NOTE.)  A third would be to create Internet sites that 
would provide objective political coverage and also include 
entertainment.  Duvanov noted that an official U.S. government site 
might be limited in its ability to provide fully objective 
information and suggested it would be better to distance the site 
from the government to allow "more room to maneuver."  For any major 
Russian-language media effort, Duvanov suggested Soros or similar 
funding.  He agreed CNN-Russian would be effective and important in 
 
ASTANA 00002545  002 OF 002 
 
 
providing alternate sources of information on the West.  The 
EuroNews Russian-language channel is currently the best source of 
independent news in Kazakhstan, said Duvanov, and is widely watched 
by the intelligentsia who can afford to subscribe to it.  He added 
BBC in Russian could be the ideal counterbalance to Russian media. 
 
"YOUR DEMOCRACY GRANTS DON'T WORK" 
 
6.  (SBU) Duvano
v judged that many U.S. "democracy grants are not 
working," commenting that a number of recipients rely 90% on the 
U.S. grants to live but have little to show for it.  He suggested 
the U.S. government could more effectively use its grant money to 
support the development of the information sector in Kazakhstan.  He 
suggested the following activities:  build an independent mass 
media, develop a Central Asia satellite channel or Internet site in 
the Russian language, support regional independent newspapers 
(Duvanov commented regional papers outside Almaty and Astana have a 
difficulty finding support, apart from special-interest sources), 
fund "democracy schools" where students and young people can listen 
to lectures by prominent public figures and politicians, and support 
political discussion clubs. 
 
7.  (SBU) COMMENT:  Duvanov is somewhat of a controversial figure in 
Kazakhstan, in large part because of a sordid court case against him 
about six years ago in which he was set up and entrapped; but he is 
fully in the mainstream of civil society activists who understand 
the fundamentals of democracy.  His analysis of the United States 
missing in action in providing Russian-language information in 
Central Asia is wholly accurate.  While we might quibble with some 
of his detailed recommendations - especially those that retrograde 
forces in Kazakhstan could easily counter - for our own national 
interests we would do well to pay attention to his general views. 
END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2540, GOVERNMENT OF KAZAKHSTAN REQUEST TO OPEN CONSULATE GENERAL

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Reference ID Created Released Classification Origin
08ASTANA2540 2008-12-23 10:07 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3381
OO RUEHAST
DE RUEHTA #2540 3581007
ZNR UUUUU ZZH
O 231007Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4204
RUEHAST/USOFFICE ALMATY 1038

UNCLAS ASTANA 002540 
 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: ABLD CMGT ODIP OFDP KZ
SUBJECT: GOVERNMENT OF KAZAKHSTAN REQUEST TO OPEN CONSULATE GENERAL 
IN NEW YORK CITY 
 
1.  (SBU) On December 12, the Ministry of Foreign Affairs 
transmitted via Diplomatic Note a request to open a Consulate 
General in New York City and appoint Mrs. Raushan Kakimseitkyzy 
Esbolatova to the position of Consul General.  The full text of the 
Diplomatic Note follows: 
 
2.  (SBU) BEGIN TEXT.  The Ministry of Foreign Affairs of the 
Republic of Kazakhstan presents its compliments to the Department of 
State of the United States of America and has the honor to request 
its consent to open a Consulate General of the Republic of 
Kazakhstan in New York City and appoint Mrs. Raushan Kakimseitkyzy 
Esbolatova to the position of Consul General of the Republic of 
Kazakhstan in New York City.  END TEXT. 
 
3.  (SBU) Post supports this request and notes that the Government 
of Kazakhstan has provided its consent for the U.S. Embassy to 
establish an Embassy Branch Office in Almaty, which the USG might, 
in the future, request become a Consulate General. 
 
HOAGLAND

Wikileaks

08ASTANA2538, KAZAKHSTAN: 2008 COUNTRY REPORTS ON TERRORISM

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Reference ID Created Released Classification Origin
08ASTANA2538 2008-12-23 09:33 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3344 
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW 
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV 
RUEHSK RUEHSR RUEHVK RUEHYG 
DE RUEHTA #2538/01 3580933 
ZNR UUUUU ZZH 
O 230933Z DEC 08 
FM AMEMBASSY ASTANA 
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4201 
INFO RUCNCIS/CIS COLLECTIVE 0968 
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE 
RUEHZL/EUROPEAN POLITICAL COLLECTIVE 
RUEHBJ/AMEMBASSY BEIJING 0370 
RUEHKO/AMEMBASSY TOKYO 1076 
RHEBAAA/DEPT OF ENERGY WASHDC 
RUCPDOC/DEPT OF COMMERCE WASHDC 
RUEATRS/DEPT OF TREASURY WASHDC 
RUEAIIA/CIA WASHDC 
RHEFAAA/DIA WASHDC 
RHEHNSC/NSC WASHDC 0541 
RUEKJCS/SECDEF WASHDC 0444 
RUEKJCS/JOINT STAFF WASHDC 
RHMFIUU/CDR USCENTCOM MACDILL AFB FL 
RUEILB/NCTC WASHINGTON DC

UNCLAS SECTION 01 OF 02 ASTANA 002538 
 
SENSITIVE 
SIPDIS 
 
STATE FOR S/CT (RHONDA SHORE), SCA/CEN, SCA/PPD, AND NCTC 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PTER EFIN KCRM KHLS AEMR ASEC KZ
SUBJECT: KAZAKHSTAN: 2008 COUNTRY REPORTS ON TERRORISM 
 
REF: STATE 120019 
 
 
1. (U) Sensitive but unclassified. Not for public Internet. 
 
2. (SBU) SUMMARY: Kazakhstan continued to combat domestic 
terrorism and extremism aggressively and took tangible steps to 
continue cooperation and information-sharing with the United States 
and international organizations. Kazakhstan also continued to 
strengthen its engagement in international counterterrorism 
activities. Kazakhstan has continued to detain and prosecute 
suspected terrorists, as well as to promote domestic 
counterterrorism activities. With the addition of one international 
organization, the Islamic Party of Turkistan, to the list of banned 
terrorist organizations of 2007, the Government of Kazakhstan now 
designates 16 groups as banned terrorist and extremist 
organizations. The full text of post's 2008 Country Report on 
Terrorism is attached in paragraphs 3-7. END SUMMARY. 
 
3. (SBU) Kazakhstan continued to combat domestic terrorism and 
extremism aggressively and took tangible steps to improve 
cooperation and information-sharing related to counterterrorism 
activities with the United States and other international partners. 
In April, the Kazakhstani Committee for National Security (KNB) 
announced plans to submit a strict new law, "On Counteracting 
Terrorism," to parliament that would replace the current law, 
adopted in 1999. At the time, the KNB stated the bill was included 
in the government's legislative plan and would be submitted to 
Parliament in 2008. However, as of December 23, parliament had not 
yet approved the new law. Kazakhstan's Prime Minister instructed 
the Minister of Finance to speed up drafting a bill on combating 
financing of terrorism in June, however, the draft law on terrorism 
finance remained stalled in Parliament, as previously reported in 
2007. 
 
4. (SBU) Kazakhstan continued to strengthen its engagement in 
international counterterrorism activities. In March, the Government 
of Kazakhstan approved a treaty with the Government of the Slovak 
Republic on cooperation in fighting terrorism. In April, President 
Nursultan Nazarbayev signed two draft laws on counterterrorism 
activities within the framework of the Shanghai Cooperation 
Organization (SCO). In May, President Nazarbayev also ratified the 
"International Convention for the Suppression of Acts of Nuclear 
Terrorism," which was previously adopted by the United Nations in 
2005. In June, Kazakhstan hosted a Global Initiative to Combat 
Nuclear Terrorism "Anti-Atom Terror" exercise attended by more than 
15 member nations. In August, the Government of Kazakhstan approved 
the signing of a treaty with the Government of the United Arab 
Emirates on cooperation in fighting against terrorism. In 
September, Kazakhstan hosted a "Design-Basis Threat" exercise 
attended by seven partners from the Global Initiative to Combat 
Nuclear Terrorism. Kazakhstan also hosted the Common World Forum in 
October to promote intercultural and inter-religious dialogues. 
 
5. (SBU) Kazakhstan has continued to detain and prosecute suspected 
terrorists. In February, a court in Stepnorgorsk sentenced two 
members of an extremist group to 12 years of imprisonment and six 
others to nine years of imprisonment for planning to commit 
terrorist attacks in the fall of 2006. In March, a court in 
Shymkent sentenced 15 members of a terrorist group, detained in 
April 2007 on charges of organizing terrorist acts against the local 
office of the Kazakhstani Committee for National Security (KNB), to 
prison terms ranging from 11-19 years. House searches of the 
convicts revealed hidden explosives, guns, ammunition and religious 
literature, along with a detailed plan of the local KNB building and 
a list with KNB officers' and their family members' home phone 
numbers and addresses. In March, the KNB also detained a resident 
from the town of Rudnyy. After a search of the accused's home 
revealed discs containing films of an extremist nature, a Kostanay 
court sentenced him to two years in prison for promoting terrorism. 
On October 31, the U.S. Department of Defense released the last 
Kazakhstani national detained in the Guantanamo Bay detention 
facility into the
custody of the Government of Kazakhstan. The 
Government of Kazakhstan did not institute any legal proceedings 
against him and allowed him to return freely to his home village, 
accompanied by his uncle. In November, police in the southern 
Zhambyl District of Almaty detained an Uzbek citizen, allegedly 
wanted for membership in religious extremist, separatist and 
fundamentalist organizations. According to the Almaty Region's 
prosecutor, police placed the detainee under arrest, pending a 
decision on his extradition to Uzbekistan. 
 
6. (SBU) Kazakhstan has promoted intercultural and religious 
dialogues designed to prevent radicalization and supported other 
domestic counterterrorism initiatives. In August, the Ministry of 
Interior and the People's Assembly of Kazakhstan signed a memorandum 
on cooperation in strengthening interethnic and interfaith relations 
within Kazakhstani society. In December, the Ministry of Justice 
opened an International Center of Culture and Religions to study the 
positive experience of interfaith and interethnic cooperation in 
Kazakhstan. In 2008, Kazakhstan also enacted five interagency 
regulatory legal acts regulating the counterterrorism activities of 
public bodies and conducted 149 interagency counterterrorism 
exercises and training programs. 
 
7. (SBU) In Kazakhstan, organizations which are typically referred 
to as "terrorist" groups are divided into extremist organizations 
and terrorist organizations. The Islamic extremist group Hizb 
ut-Tahrir (HT) remains the only organization designated and outlawed 
as "extremist" under the "Law on Extremism." As described in 2007, 
the list of 14 terrorist organizations had remained unchanged since 
2006. However, in March, the Astana City Court added the Islamic 
Party of Turkistan to the list, increasing the list to 15 banned 
terrorist organizations. The Government of Kazakhstan now 
designates 16 groups as banned terrorist and extremist 
organizations. 
 
HOAGLAND

Wikileaks

08ASTANA2535, KAZAKHSTAN: CIVIL NUCLEAR ENERGY SECTOR OVERVIEW

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Reference ID Created Released Classification Origin
08ASTANA2535 2008-12-23 06:11 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3130
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2535/01 3580611
ZNR UUUUU ZZH
O 230611Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4192
INFO RUCNCIS/CIS COLLECTIVE 0963
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0365
RUEHKO/AMEMBASSY TOKYO 1071
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0536
RUEKJCS/SECDEF WASHDC 0439
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1033

UNCLAS SECTION 01 OF 05 ASTANA 002535 
 
SIPDIS 
 
STATE FOR SCA/CEN, T, ISN 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV KGIC KNNP EINV ENRG KZ
SUBJECT:  KAZAKHSTAN:  CIVIL NUCLEAR ENERGY SECTOR OVERVIEW 
 
REF:  (A) SECSTATE 127423 (B) 2006 ALMATY 2673 (C) ASTANA 2232 (D) 
ASTANA 2126 
 
ASTANA 00002535  001.2 OF 005 
 
 
1.  SUMMARY:  In response to reftel A, this report summarizes the 
structure, plans, projects, and players of Kazakhstan's civilian 
nuclear energy sector.  Kazakhstan has the world's second largest 
uranium reserves after Australia and is currently the world's third 
largest uranium producer after Canada and Australia.  Once the owner 
of the world's fourth largest nuclear arsenal, Kazakhstan 
voluntarily decommissioned its own weapons and continues excellent 
cooperation on cooperative threat reduction (CTR).  Facing a 
255-megawatt power deficit due to a poorly integrated power network, 
Kazakhstan wants to develop a domestic nuclear energy industry to 
help meet its power needs.  Kazakhstan's nuclear power industry 
comprises the Ministry of Energy and Mineral Resources (MEMR) which 
sets energy policy, the state-owned nuclear power company 
Kazatomprom, and the National Nuclear Center, which conducts 
research and development.  END SUMMARY. 
 
PLANS TO DEVELOP NUCLEAR POWER IN KAZAKHSTAN 
 
2.  Kazakhstan is currently the world's third largest uranium 
producer after Canada and Australia.  In response to reduced market 
demand due to the global economic crisis, on November 6, Kazatomprom 
lowered uranium production plans from 9,000 tons to 8,700 tons in 
2008, and from 12,000 tons to 11,000 tons in 2009.  Kazakhstan 
produced 6,637 tons of uranium in 2007.  On December 15, Energy 
Officer met with Yevgheniy Ryaskov, Acting Director of the 
Department for Nuclear Industry and Atomic Energy at the Ministry of 
Energy and Mineral Resources (MEMR).  He said that Kazakhstan 
currently exports all of the uranium it produces.  However, from 
1973 to 1998, the BN-350 plutonium breeder reactor owned by 
Kazatomprom generated approximately 1% of all electrical power in 
Kazakhstan.  On April 22, 1999, the Government of Kazakhstan decided 
to shut down and decommission the BN-350 reactor.  By the end of 
2008, Russia's Afrikantov Research and Development Bureau plans to 
complete a feasibility study for the construction of a nuclear power 
plant in the vicinity of the decommissioned BN-350 reactor in Aktau, 
which would be equipped with Russian-made VBER-300 reactors that 
have been used on board Russian nuclear submarines. 
 
KAZATOMPROM TO INCREASE PRODUCTION AND EXPORT OF URANIUM 
 
3.  As described in reftel C, Kazatomprom has ambitious plans to 
become a vertically integrated transnational corporation managing 
the full nuclear fuel cycle, including uranium mining, gas 
processing, isotopic enrichment, fuel pellet and fuel assembly 
production, and construction of nuclear power plants.  The Northern 
mining group has uranium reserves of 750,000 tons; the Western 
mining group has 180,000 tons of uranium reserves in its North and 
South Karamurun mines; the Eastern mining group has 140,000 tons of 
uranium reserves; and the Southern mining group owns 70,000 tons of 
uranium reserves. 
 
4.  The Ulba Metallurgical Plant processes waste materials 
containing uranium (scraps and ashes), including 27% U-235, supplied 
to the United States as uranium dioxide powder, and 5% U-235 fuel 
pellets, supplied to Russia.  On December 12, Ulba announced that 
Russia refused to place an order for fuel pellets from Kazakhstan as 
expected.  Kazatomprom president Mukhtar Dzhakishev was nonplussed, 
saying, "If we lose the Russian market, Ulba will obtain more orders 
from China and Japan." 
 
5.  Ulba is the world's largest processor of uranium products, the 
second largest processor of beryllium products, and the third 
largest processor of tantalum and niobium products.  In July, 
Kazatomprom abandoned earlier plans to participate in a tantalum 
mining project in Brazil due to the high asking price.  On December 
11, Ulba launched a tantalum powder shop.  The production of powder 
for tantalum condensers is considered a breakthrough project for 
KazAtomProm and will be carried out under a national program called 
"30 Corporate Leaders," which makes Ulba eligible for federal 
financial aid. 
 
NATIONAL NUCLEAR CENTER CONDUCTS RESEARCH AND DEVELOPMENT 
 
ASTANA 00002535  002.2 OF 005 
 
 
 
6.  Established in 1993, the National Nuclear Center has an 
extensive research and production infrastructure, including three 
pilot reactors, an isochronal cyc
lotron, a particle accelerator, and 
a range of facilities for conducting experiments.  The Center 
employs highly-qualified specialists in a number of affiliated 
institutes, such as the Nuclear Physics Institute in Almaty, 
Kurchatov, and Aksai; the Atomic Energy Institute in Kurchatov; the 
Geophysical Research Institute in Kurchatov, Borovoye, Almaty, 
Kaskelen, Aktobe, and Makanchi; the Institute of Radiation Safety 
and Environment; the Baikal production facility in Kurchatov; the 
State Research and Production Center for Blasting Operations in 
Almaty; among others.  In 2011, the National Nuclear Center plans to 
open a Center for Nuclear Medicine and Biophysics, which will be 
equipped to diagnose and treat cardiovascular and oncological 
diseases. 
 
KAZAKHSTAN'S MOTIVATIONS FOR PURSUING NUCLEAR POWER 
 
7.  On August 20, 2002, Kazakhstan adopted the Development Concept 
for the Uranium Industry and Atomic Energy from 2002 to 2030, which 
described the status of the atomic energy and uranium mining 
industry, described development trends, indicated future strategic 
priorities for the industry, and defined the official state policy 
for civil nuclear power.  According to the Concept, it is in 
Kazakhstan's strategic national interest to increase uranium 
production, construct new uranium mines, increase the percentage of 
energy demand met by nuclear power, and eliminate the import of 
electricity. 
 
8.  The Concept identifies the following motivations for developing 
a civil nuclear power program: 
 
-- Perennial power shortages in the south, expected to reach 1.9 to 
2.0 billion kilowatt hours a year by 2030, even if Kazakhstan builds 
a new 2,000-megawatt power plant; 
 
-- Kazakhstan's large deposits of uranium, which can be mined using 
a more environmentally-friendly in-situ leaching method; 
 
-- Dependence on inefficient and environmentally-harmful coal-fired 
power plants that supply 84% of Kazakhstan's electrical power; and 
 
-- An existing world-class nuclear training system. 
 
9.  In a December 15 meeting with Energy Officer, MEMR's Ryaskov 
stressed that Kazakhstan favors the development of nuclear energy 
over oil, gas, and coal as a future source of energy because its 
in-situ leaching uranium mining is much more environmentally 
friendly than the extraction of fossil fuels.  Moreover, the cost of 
electricity generated by nuclear power plants is lower than that of 
coal- or gas-fired plants, while the lifespan of a nuclear plant is 
60 years, compared to 25 for a coal-fired plant.  Finally, Ryaskov 
noted that Kazakhstan would generate more revenue if it exported the 
majority of its oil, gas, and coal reserves and leveraged its 
uranium resources to supply domestic power. 
 
GOVERNMENT ROLE IN THE CIVIL NUCLEAR SECTOR 
 
10.  On October 13, MEMR transferred its 100 percent ownership in 
Kazatomprom to the Samruk-Kazyna Sovereign Wealth Fund. 
Samruk-Kazyna will finance development and production projects if 
Kazatomprom itself does not have sufficient revenue.  As 
Kazatomprom's Dzhakishev said on November 6, "If, for example, we 
are unable to raise capital for a new ore mill, we may turn to 
Samruk-Kazyna and borrow $1.5 billion from the state fund to build 
the mill." 
 
11.  Kazatomprom's strong financial position, steady uranium 
production, and long-term contracts make Kazatomprom a low-risk and 
solvent borrower.  In July, Kazatomprom announced plans to raise a 
two-year, $300-million syndicated loan with the assistance of 
Citigroup.  On November 27, Japan's Nippon Export and Investment 
Insurance increased its coverage for Kazakhstan-Japan joint uranium 
production projects from $47.94 million to $114.37 million. 
 
ASTANA 00002535  003.2 OF 005 
 
 
 
KEY NUCLEAR DECISION MAKERS 
 
12.  Policy for Kazakhstan's nuclear power industry is set by a 
number of influential decision makers, including Minister of Energy 
and Mineral Resources Sauat Mynbayev, Kazatomprom president Mukhtar 
Dzhakishev, Kairat Kadyrzhanov, director of the National Nuclear 
Center, and Kairat Kelimbetov, chairman of the Samruk-Kazyna 
Sovereign Wealth Fund. 
 
13.  In addition, two offices in MEMR are directly involved in 
decisions regarding the nuclear power industry.  The Department for 
Nuclear Industry and Atomic Energy, currently supervised by Deputy 
Director Ryaskov, defines Kazakhstan's development strategy for the 
industry, while the Committee for Atomic Energy, chaired by Timur 
Zhantikin, issues licenses and carries out supervisory and 
monitoring functions. 
 
14.  The recent appointment of President Nazarbayev's close 
associates to senior management positions in Samruk-Kazyna and 
Kazatomprom indicate the strategic importance the political 
leadership attaches to the development of Kazakhstan's civil nuclear 
sector.  On October 13, the Government of Kazakhstan named 
Nazarbayev's son-in-law Timur Kulibayev Deputy Chairman of 
Samruk-Kazyna and recommended he also chair Kazatomprom's Board of 
Directors.  In addition, Nartay Dutbayev, a former advisor to the 
president and chairman of the National Security Committee (KNB), was 
appointed a vice president of Kazatomprom. 
 
GOVERNMENT TO CREATE NUCLEAR REGULATING AUTHORITY 
 
15.  On September 16, Prime Minister Karim Massimov announced a plan 
to establish the State Nuclear Industry Supervision Agency under the 
Ministry of Energy and Mineral Resources.  The new agency would have 
the authority to draft laws and regulations for the nuclear 
industry.  At the time, Energy Minister Mynbayev said that "the 
International Atomic Energy Agency has made it a formal requirement 
for all countries with a civil nuclear power sector to set up an 
independent nuclear energy committee or agency."  The National 
Nuclear Center offered to host the new regulatory agency, but it is 
likely that MEMR's Committee for Atomic Energy will be merged with 
the new agency instead. 
 
LEGAL FRAMEWORK FOR NUCLEAR POWER OPERATIONS 
 
16.  Kazakhstan's legal framework for nuclear power operations 
includes the Law on the Use of Atomic Energy; the Law on Export 
Controls for Arms, Military Technology, and Double-Use Products; the 
Decree on the Export and Import of Uranium and Uranium Products, 
Nuclear Fuel for Nuclear Power Plants, Special Equipment and 
Technologies and Dual-Purpose Materials; the Development Concept for 
the Uranium Industry and Atomic Energy Sector from 2002 to 2030, 
among others. 
 
17.  The Law on the Use of Atomic Energy empowers the Committee to 
develop rules and instructions to implement existing laws, issue 
nuclear-related licenses, monitor atomic energy use, conduct 
inspections, monitor radiation in Kazakhstan, inventory nuclear 
materials, and cooperate with relevant authorities from other 
countries and international organi
zations to ensure the safe use of 
atomic energy and the non-proliferation of nuclear arms and secure 
control of nuclear materials. 
 
18.  To ensure the efficient development of its nuclear power 
sector, in 2007, the National Nuclear Center developed a special 
national program currently under review by the Government of 
Kazakhstan.  The program focuses on legal and regulatory issues, 
environmental and radiation safety, fundamental and applied 
research, non-proliferation support, uranium and nuclear material 
production, electricity generation by nuclear power plants, and 
staff training.  According to Director General Kairat Kadyrzhanov, 
the most important element of this program is to enhance the legal 
framework, as Kazakhstan does not yet have any laws regulating the 
construction, organization, and operation of nuclear power plants. 
 
 
ASTANA 00002535  004.2 OF 005 
 
 
19.  When asked whether Kazakhstan is party to an international 
liability regime, MEMR's Ryaskov responded that Kazakhstan has been 
a member of the International Atomic Energy Agency (IAEA) since 
February 14, 1994.  According to Ryaskov, Kazakhstan signed an 
Agreement on the Application of Safeguards, under which all nuclear 
installations in Kazakhstan operate under IAEA supervision.  Ryaskov 
added that all nuclear activities are carried out in compliance with 
IAEA rules and standards.  On February 19, 2007, Kazakhstan also 
ratified the Additional Protocol to the Safeguards Agreement, which 
expands the IAEA's ability to verify the country's nuclear 
activities. 
 
KAZAKHSTAN'S NUCLEAR WORKFORCE 
 
20.  The personnel for the atomic industry are trained at the 
special nuclear power and chemical metallurgy departments of four 
public schools in the south and east of Kazakhstan such as the 
Al-Farabi Kazakh State University (Almaty), Kazakh State Technical 
University (Almaty), East-Kazakhstan State University 
(Ust-Kamenogorsk), and the Shakarim Semipalatinsk State University 
(Semei).  Kazakhstan also has quite a few technical universities, 
which train future engineers, technicians, and constructors. 
 
21.  According to Ryaskov, Kazakhstan's use of in-situ leaching 
methods means that its uranium production is not labor intensive. 
For example, he said that just 104 workers are used to develop the 
Karatau uranium field, whereas thousands would have been needed if 
they used an open mining approach.  Highly qualified nuclear 
scientists and workers are employed at the BN-350 plutonium breeder 
reactor site, the National Nuclear Center in Kurchatov, and other 
nuclear energy facilities.  Many of Kazakhstan's nuclear specialists 
received training at the Tomsk Technical Institute in Russia. 
 
22.  Ryaskov insists that Kazakhstan has enough highly-trained 
specialists to meet current obligations, "but to achieve our future 
goals, the trained workforce is not sufficient."  MEMR plans to meet 
future staffing needs by developing a special training program.  In 
addition, the National Nuclear University of Kazatomprom, 
established in 2004, organizes advanced training and continuous 
professional education of technical staff.  Kazatomprom subsidiary 
Geotechnology trains Kazatomprom employees on its in-situ leaching 
method as well as maintenance and radiological protection. 
 
CURRENT COOPERATION WITH U.S. COMPANIES 
 
23.  Kazatomprom has existing partnerships with the following U.S. 
companies:  Brush Wellman Inc., Exelon Corp., Freedom Alloys Inc., 
General Electric, and New York Nuclear Corporation.  In addition, 
Kazatomprom subsidiary Ulba Metallurgical Plant supplies uranium 
dioxide powder to the United States.  On October 18, 2007, 
Kazatomprom purchased 10% of Westinghouse Electric Company from 
Toshiba for $540 million.  In November 2007, Kazatomprom president 
Dzhakishev attended the Westinghouse shareholders meeting and 
announced that the company would supply fuel for Westinghouse 
nuclear reactors. 
 
24.  Kazatomprom uranium production is somewhat constrained by a 
deficit of sulfuric acid for on-site uranium processing, which the 
company plans to address by using up to 400,000 tons of sulfur 
stored by the Tengiz oil production consortium Tengizchevroil (TCO), 
in which Chevron has a 50% share and ExxonMobil a 25% stake. 
Kazatomprom buys sulfur from TCO and processes it at the Stepnogorsk 
Chemical Plant. 
 
FUTURE OPPORTUNITIES FOR U.S. INDUSTRY 
 
25.  MEMR's Ryaskov was surprised that U.S. companies -- unlike 
companies from Japan, France, and Canada -- have not entered 
Kazakhstan's uranium mining market.  He hypothesized that U.S. 
companies are not interested in Kazakhstan's uranium fields since 
the United States has large uranium deposits of its own.  According 
to Ryaskov, Kazakhstan does not anticipate conducting any 
nuclear-related tenders in the near future.  Nevertheless, post 
believes that Kazakhstan's nuclear institutions would welcome U.S. 
technology and expertise in existing projects. 
 
ASTANA 00002535  005.2 OF 005 
 
 
 
26.  Kazakhstan is interested in acquiring or building small and 
medium-size nuclear reactors such as Russia's VBER-300.  Ryaskov 
said that Kazatomprom considered acquiring AR-600 reactors from 
Westinghouse, but Westinghouse subsequently shifted to production of 
AR-1000 reactors, which do not fit Kazatomprom's needs.  Ryaskov 
believes that U.S. companies cannot realistically compete to build 
nuclear power plants in Kazakhstan, since Kazakhstan plans to build 
small- and medium-sized nuclear reactors, while U.S. companies can 
offer only high-capacity reactors. 
 
FOREIGN COMPETITORS 
 
27.  Reftel C describes in detail joint ventures between KazAtomProm 
and companies from Canada, France, Japan, China, Russia, and 
Ukraine.  In addition, 
 
-- In May, during the visit to Kazakhstan of South Korea's Prime 
Minister Han Seung Soo, Kazatomprom and Korea Hydro and Nuclear 
Power signed a long-term contract under which Kazatomprom will 
deliver 3,410 tons of uranium a year until 2017, which would 
represent 11% of South Korea's annual uranium consumption. 
 
-- On October 24, Energy Officer met with D.C. Manjunath, Political 
and Commercial Counselor at the Embassy of India to discuss press 
reports of India's interest in uranium from Kazakhstan.  Manjunath 
was unable to provide specific details on the timing, amount, or 
players in a possible transaction, but he did confirm India's 
increased interest in a deal with Kazakhstan and said that the 
signing of the U.S.-India Civil Nuclear Accord vastly expands 
India's options and possibilities.  He noted that India's Department 
of Atomic Energy would be the lead agent on any uranium purchase. 
He also acknowledged that both governments plan to arrange state 
visits in 2009. 
 
-- On November 27, the Government of Ukraine approved an agreement &#x00
0A;to join the International Uranium Enrichment Center.  The stake to 
be acquired by Ukraine will come from Russia's 90% share.  On 
November 26, the Afrikantov Research and Development Bureau pledged 
to complete by the end of 2008 a feasibility study for a nuclear 
power plant in Aktau to be equipped with Russian-made VBER-300 
reactors, which have a good record of operation onboard of Russian 
navy ships. 
 
-- On December 15, National Nuclear Center Director Kadyrzhanov 
announced that in 2009-2010, the Center would conduct a feasibility 
study together with Japanese scientists to build a 50-megawatt 
experimental nuclear reactor in Kurchatov and bring it to design 
capacity in 2011-2018. 
 
POLITICAL CONSIDERATIONS FOR NUCLEAR POWER COOPERATION 
 
28.  Kazakhstan is cautious in its choice of potential partners. 
For example, according to Ryaskov, since India did not have a waiver 
until recently from the Nuclear Suppliers Group, Kazakhstan did not 
consider India a potential customer, regardless of India's high 
demand for uranium.  After India obtained the relevant waiver, 
Kazakhstan acknowledged its willingness to supply uranium to India 
for all types of civilian nuclear reactors. 
 
29.  Kazakhstan plans to pursue nuclear power development in order 
to meet domestic power shortages, minimize environmental impact, and 
take advantage of its extensive uranium reserves, processing 
facilities, and nuclear expertise.  Kazakhstan does not anticipate 
any tenders for available uranium fields, but would welcome 
nuclear-related joint ventures with U.S. companies in exchange for 
their technology and expertise.  To meet its ambitious plans of 
becoming the world's largest uranium producer and operating a full 
fuel cycle, Kazakhstan will strengthen state supervision of 
nuclear-related operations. 
 
HOAGLAND

Wikileaks

08ASTANA2534, KAZAKHSTAN: NSDP LEADER TUYAKBAY – AN HONORABLE

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Reference ID Created Released Classification Origin
08ASTANA2534 2008-12-23 03:56 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3053
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2534/01 3580356
ZNR UUUUU ZZH
O 230356Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4189
INFO RUCNCIS/CIS COLLECTIVE 0960
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0362
RUEHKO/AMEMBASSY TOKYO 1068
RUCNDT/USMISSION USUN NEW YORK 2108
RUEHNO/USMISSION USNATO 2440
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0533
RUEKJCS/SECDEF WASHDC 0436
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1030

UNCLAS SECTION 01 OF 03 ASTANA 002534 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN:  NSDP LEADER TUYAKBAY - AN HONORABLE 
MAVERICK? 
 
REF:  ASTANA 2522 
 
ASTANA 00002534  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  During a December 18 meeting with the Ambassador 
in Almaty, the chair of the National Social Democratic Party (NSDP) 
Zharmakhan Tuyakbay argued that Kazakhstan's democratic hopes were 
dashed in mid-1990s when President Nazarbayev suspended the 
parliament and concentrated power in his office.  He averred 
Nazarbayev trusts no one in his inner circle, fostering competition 
among his advisors to make sure no one becomes too powerful.  He 
speculated on several candidates who might succeed Nazarbayev, but 
warned the list can always change.  Tuyakbay wondered if the growing 
economic crisis might conceivably lead to ethnic conflict, 
especially between the "Slavic cities" and the Kazakh countryside. 
On opposition politics, Tuyakbay argued that an open constructive 
dialogue with the ruling elite will go further toward effecting real 
change than radical demands.  Tuyakbay is an impressive and 
seemingly honorable maverick, once part of the Soviet establishment 
who now finds himself in opposition to the government.  END SUMMARY. 
 
 
PLURALISM "DASHED" IN MID-1990S 
 
3.  (SBU) Tuyakbay told the Ambassador that Kazakhstan is unique 
among Central Asian states in its closer cultural alignment with 
Western values.  The country's multi-ethnic nature and lack of 
religious extremism presented a positive platform for 
democratization after independence, but that hope was quickly dashed 
in 1995 when President Nazarbayev dissolved the parliament and 
"seized" the executive, legislative, and judicial powers.  No law 
comes into being without the President's approval, which means that 
in reality, all branches of the government report to the President. 
[COMMENT:  While this is true, we should also note the veto power of 
the U.S. presidency.  END COMMENT.]  Such political control is 
unnecessary, in Tuyakbay's opinion, since Kazakhstan is a peaceful 
and politically stable country, rich in natural resources.  The only 
reason "for the President to govern this way," maintained Tuyakbay, 
"is to protect his wealth and personal security" (reftel). 
 
PRESIDENT'S CIRCLE OF DISTRUST 
 
4.  (SBU) Tuyakbay asserted that the President is "more afraid of 
his own people than of the opposition."  He knows the psyche of 
those around him and "trusts no one, not even his children and 
sons-in-law."  Nazarbayev fosters competition within his inner 
circle to make sure no one becomes too powerful.  Tuyakbay would not 
speculate on the reasons behind the December 15 dismissal of 
billionaire oligarch and inner-circle political operative Bulat 
Utemuratov from the post of Chief Manager of Presidential 
Facilities, but wondered whether it had something to do with 
Utemoratov's ties to the opposition:  he was close to the President 
and often tried to mediate between Nazarbayev and the opposition. 
However, Utemuratov will not fall far, maintained the NSDP leader, 
because he "knows too much about the President's personal business." 
 
 
5.  (SBU) Asked who might eventually succeed Nazarbayev, Tuyakbay 
said it was hard to say with certainty but doubted it would be a 
family member.  The current likely candidates, Tuyakbay speculated, 
might be Senate Chairman Kasym-Zhomart Tokayev, Prime Minister Karim 
Masimov, the President's billionaire son-in-law Timur Kulibayev, and 
Astana mayor Imangali Tasmagambetov.  All could assure the 
President's security upon leaving office. 
 
FUTURE PREDICTIONS 
 
6.  (SBU) Tuyakbay laid out several predictions for Kazakhstan's 
political future.  First, the President will hold power until the 
end of his life, although Tuyakbay hinted that there might be some 
"radical" insider elements who could move to unseat him.  Second, 
the growing gap between the rich and poor could lead to a social 
crisis.  Unemployment is increasing, and the situation for 
pensioners and rural residents is growing worse.  The financial 
 
ASTANA 00002534  002.2 OF 003 
 
 
crisis is exacerbating the situation:  unskilled migrant workers who 
come from the villages to the cities can no longer count on 
lucrative construction jobs and are returning to their villages to 
"drink all day."  The economic crisis has disproportionately 
affected ethnic Kazakhs, not because they lack education and skills, 
but
because most live in rural areas, where the economic downturn is 
felt the most.  The main cities tend to have larger Slavic 
populations.  This situation, alleged Tuyakbay, could lead to 
inter-ethnic discord and light the fires of ethnic Kazakh 
nationalism. 
 
7.  (SBU) Tuyakbay commented that "at least with President 
Nazarbeyev in place there is no instability."  He noted Narzarbayev 
was lucky to rule during an oil boom, and at a time when the United 
States was "too preoccupied by Iraq and Afghanistan."  When asked 
what role Russia plays in Kazakhstan's political equations, Tuyakbay 
said, "Kazakhstan is like a mirror - it does whatever Russia is 
doing."  Many of Nazarbayev's political ideas come from Russia, 
alleged the NSDP leader, although simply by affinity, not through 
direct pressure from the Kremlin.  He related Putin's alleged 
comment to Nazarbayev in 2003 that there is "no need for many 
political parties:  one is sufficient." 
 
ANOTHER RUN FOR OFFICE? 
 
8.  (SBU) Asked if he will run in the next election, Tuyakbay 
demurred and said, "We'll see."  He said he had not expected to win 
in 2005, when he ran as the opposition's joint candidate for 
President, but said it was important to run "to set an example and 
show an alternate way to develop the country."  He lamented the high 
levels of corruption and "moral degradation" in Kazakhstan.  Many 
young people, the future generation of Kazakhstan, are "growing up 
in a moral darkness," and this corrupted mentality will be hard to 
fix, he said. 
 
9.  (SBU) In Tuyakbay's view, the people's political awareness is 
growing, albeit slowly.  He said that while on the campaign trail in 
2005, he heard many critical comments against President Nazarbayev, 
both from ethnic Russians and ethnic Kazakhs, with people asking 
questions that had typically never been raised "outside the 
kitchen."   While political awareness is growing, there is still no 
civil society to verbalize the concerns and "take people to the 
streets."  Kazakhstanis are too afraid to express their political 
sentiments, in part because of the passivity of their Soviet past, 
but also because "fear is in their blood" - meaning they fear losing 
their jobs and social positions. 
 
WHAT IS THE OPPOSITION TO DO? 
 
10.  (SBU) There are two possible tactics for the opposition, said 
Tuyakbay.  The first is to criticize harshly the ruling elite and 
push for radical change.  This approach will certainly educate the 
population on the issues; however, in Tuyakbay's opinion, it would 
not be very effective.  In his view, persistent engagement with the 
ruling elite is the better approach - i.e., working for change from 
within.  He stressed the importance of keeping dialogue open and 
proposing concrete measures rather than launching fiery criticisms. 
Most importantly, parliament should be used as a vehicle for change, 
and this change must come from within.  Tuyakbay noted that 
Kazakhstan has a one-party parliament, despite much international 
criticism.  International criticism can only go so far if democratic 
instruments are not in place in the country, asserted Tuyakbay, 
adding that only by limiting the powers of the President can real 
political change take place.  Asked whether parliament would be 
willing to tackle this question, Tuyakbay admitted that currently 
only the President has the authority to limit his own power.  He 
ruminated that perhaps a radical social movement or an uprising 
could lead to some changes, but quickly added that he could never 
support a violent solution for Kazakhstan's current political 
problems. 
 
11.  (SBU) AMBASSADOR'S COMMENT:  Of the "political opposition 
leaders," Tuyakbay is the most impressive:  he seems rather 
Senator-McCain-like - an amalgam of patriot, insider, and maverick. 
 
ASTANA 00002534  003.2 OF 003 
 
 
However, the other "opposition leaders" tend to tar him as a stooge 
because he maintains ties among the ruling elite.  He appears to 
take principled positions that confound both sides.  On December 17, 
at a rally commemorating the 1986 student demonstrations in Almaty 
in which a number of young Kazakhstanis were killed and injured, he 
apologized for having been "on the wrong side of the barricades" - 
he was the Soviet Deputy Prosecutor General at that time.  He called 
for full access to archival documents about that event, which are 
are kept in Moscow.  As Tuyakbay left our meeting, he commented to 
his local escort, "Why did I tell him so much?  I don't even know 
him!"  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2530, KAZAKHSTAN: FIRST INTERNATIONAL BIOTECH CONFERENCE HELD

WikiLeaks Link

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Reference ID Created Released Classification Origin
08ASTANA2530 2008-12-22 10:42 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2292
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2530/01 3571042
ZNR UUUUU ZZH
O 221042Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4181
INFO RUCNCIS/CIS COLLECTIVE 0957
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0359
RUEHKO/AMEMBASSY TOKYO 1065
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/DEPT OF AGRICULTURE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0527
RUEKJCS/SECDEF WASHDC 0433
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1027

UNCLAS SECTION 01 OF 03 ASTANA 002530 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC, OES/PCI 
ANKARA FOR FAS/BIOTECHNOLOGY 
 
E.O. 12958: N/A 
TAGS: PGOV PREL SENV EIND TBIO KZ
SUBJECT:  KAZAKHSTAN:  FIRST INTERNATIONAL BIOTECH CONFERENCE HELD 
IN ASTANA DECEMBER 12-13 
 
ASTANA 00002530  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  The First International Conference "Astana 
Biotech 2008" took place on December 12-13, at the National Center 
for Biotechnology in Astana, Kazakhstan.  Its stated goal was to 
develop further Kazakhstan's overall scientific potential.  Speakers 
represented a range of laboratories and research institutes, 
including several from the United States.  Among the presenters was 
a representative from Russia's Vector, a state-supported research 
center that the Centers for Disease Control called "one of Russia's 
largest and most sophisticated former bioweapons facilities." 
According to Global Security.org, Vector has been involved in the 
development of virus weapons such as smallpox, bubonic plague, and 
anthrax since the late 1980s.  The adjacent exhibition hall had 
numerous displays from local and international companies.  Research 
laboratories also displayed billboards highlighting their work on 
genetic modification in cotton, wheat, corn, and rice.  The 
genetically modified organism (GMO) situation in Kazakhstan is still 
quite fluid.  Currently there is no ban on GMO food products in 
Kazakhstan, although all GMO goods must be labeled, and all imported 
goods must first be analyzed to certify their safety.  END SUMMARY. 
 
FIRST INTERNATIONAL BIOTECHNOLOGY CONFERENCE IN ASTANA 
 
3. (SBU) REO attended the First International Conference "Astana 
Biotech 2008" in Astana, December 12-13, at the National Center for 
Biotechnology.  A biotech exhibition filled with numerous stalls was 
adjacent to the conference hall, and attendees could easily view the 
many diverse products and equipment available, as well as see the 
latest research developments from a wide variety of scientific 
organizations. 
 
4. (SBU) National Center for Biotechnology General Director Erlan 
Ramankulov said that the overall goal of the conference was to 
develop further Kazakhstan's overall scientific potential.  It was 
also important to learn more about the diversity of biotechnological 
research that colleagues are conducting, he said.  Indeed, this 
observer was quite impressed with the depth of knowledge and 
experience that the conference brought together, with participants 
representing laboratories and research institutes from Russia, 
Belarus, Kazakhstan, as well as Kazakhstani scientists working 
overseas at the University of California Davis, Rutgers University, 
Auburn University, Texas A&M, Institute Gustave Roussy (France), 
Nagasaki University (Japan), and Hebrew University. 
 
BIOTECH LABORATORY RESEARCH ON VIRUSES 
 
5. (SBU) There were many speeches outlining the research and 
development (R&D) progress at the various laboratories and 
institutes in biotechnology, and REO selected two as representative. 
 Belarus Ministry of Health Institute of Epidemiology and 
Microbiology Director of R&D Dr. Leonid Titov outlined some of his 
institute's work, such as research on the formation of resistance to 
antibiotics used to fight human viruses, the development of 
innovative methods and technologies for the manufacture of vaccine 
test systems and reagents (e.g., a chemical substance used to 
produce a chemical reaction to detect, measure, and produce other 
substances), the localization of tuberculosis strains, and research 
on various diphtheria ribotypes that are prevalent in Belarus and 
Russia. 
 
6. (SBU) Russian (Novosibirsk) State Research Center of Virology and 
Biotechnology "Vector" Deputy General Director Elena Nechaeva said 
her laboratory was researching countermeasures to global biological 
threats, virus research (including Ebola), and biological security. 
She said Vector had many years of experience working with dangerous 
viruses.  She said Vector is one of Russia's largest R&D 
laboratories and actively collaborates with research centers around 
the world, such as the Centers for Disease Control, National 
Institutes of Health, U.S. Department of Energy national 
laboratories, and the U.S. Department of Agriculture (NOTE: 
According to Global Security.org, since the late 1980s, Vector has 
 
ASTANA 00002530  002.2 OF 003 
 
 
contributed to the development of virus weapons such as smallpox, 
bubonic plague, and anthrax.  It has a high le
vel of bio-containment 
capacity that enables it to work safely with viral pathogens and 
contains a special Laboratory Animal Farm that raises laboratory 
animals for experiments.  They have had several contracts with The 
International Science and Technology Center, an intergovernmental 
organization that facilitates international science projects and 
assists the global scientific and business community to source and 
engage with Russian and CIS institutes that develop or possess 
scientific know-how, which helps keep Russian Cold War-era 
scientists gainfully employed.  END NOTE.) 
 
BIOTECH EXHIBITS ARE VARIED, MODERN, AND COMMERCIAL 
 
7. (SBU) Several companies and institutes had displays in the 
adjacent exhibition hall, and the exhibits showed the depth and 
variety of biotech products available in Kazakhstan today.  Some 
were local Kazakhstani companies, such as Medilend, displaying 
testing equipment for clinical immunology, biochemistry, and 
microbiology; Vel'd, selling laboratory and medical equipment to 
various labs in Central Asia; and Yumgiskor Holding, a laboratory 
equipment distributor for Radiometer Copenhagen, Sysmex (Japan), and 
Nihon Kohden (Japan).  Others were international, such as Olympus 
(Russia), producing diagnostic laboratory equipment; Sartorius 
(Germany), with control systems for sterilization of pharmaceutical 
preparations and centrifuges for their preparation; Techniplast 
(Italy), specializing in laboratory cages for mice and other lab 
animals; and Bio-Rad (U.S.), displaying computer systems for 
bio-molecular analysis and testing, and an automated electrophoresis 
system (e.g., movement of charged particles in a colloid or 
suspension when an electric field is applied). 
 
GMO RESEARCH IS ACTIVE IN KAZAKHSTAN 
 
8. (SBU) Various research institutes also had billboard displays 
explaining their latest research developments and achievements.  REO 
noticed that several were doing considerable work in genetic 
modification of cotton, wheat, rice, and corn, the core agricultural 
products here in Central Asia, either to make them more resistant to 
pests and diseases and more adaptable to arid climates, or to 
increase their yield per hectare.  (COMMENT:  In September, Dr. L. 
Giddings, President of PrometheusAB, Inc, a biotechnology company, 
visited Astana to meet with counterparts in agricultural 
biotechnology.  He characterized the Kazakhstani scientists as open 
and adaptable, "not hostile or prejudiced."  Giddings said the 
Ministry of Environment "seemed eager to cooperate" and the National 
Biotechnology Center was interested in pursuing collaborative 
projects.  According to Giddings, "the most formidable potential 
allies are in the Academy of Nutrition, who have a strong focus on 
science as the basis for decision-making and firmly believe that the 
use of biotechnology in agriculture is a solution, not a problem." 
END COMMENT).  The Institute of Biology and Biotechnology, a 
subsidiary of the National Center for Biotechnology (hosting this 
conference), does research in cell engineering and genetic 
engineering -- e.g., they conduct research in genetic modified 
organisms (GMO). 
 
9. (SBU) The GMO situation in Kazakhstan is still quite fluid. 
There is a Law on Food Safety (2007) and related Rules on 
Distribution of GMO in Kazakshtan that stipulate that genetically 
modified food must first be analyzed in laboratories to certify its 
safety before it is imported to Kazakhstan.  Currently, the Kazakh 
Academy of Nutrition in Almaty has the only laboratory in Kazakhstan 
that can do GMO tests. 
 
10. (SBU) According to Lyutsia Kalamkarova, head of this Quality 
Control and Food Safety Laboratory, currently there is no ban on GMO 
food products in Kazakhstan.  All GMO products and food containing 
GMO ingredients must be labeled accordingly.  The Ministry of Health 
is developing technical regulations and rules that will tighten 
control over food for children.  Kalamkarova said the weak point in 
quality and safety control for children's food is that agencies that 
 
ASTANA 00002530  003.2 OF 003 
 
 
have no capacity for detailed analysis of children's food are 
nevertheless issuing food safety certificates. 
 
HOAGLAND

Wikileaks

08ASTANA2523, KAZAKHSTAN: ARTICLES ACCUSE OIL COMPANIES OF CAUSING

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Reference ID Created Released Classification Origin
08ASTANA2523 2008-12-22 10:05 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2239
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2523/01 3571005
ZNR UUUUU ZZH
O 221005Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4178
INFO RUCNCIS/CIS COLLECTIVE 0954
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0356
RUEHKO/AMEMBASSY TOKYO 1062
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0524
RUEKJCS/SECDEF WASHDC 0430
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1018

UNCLAS SECTION 01 OF 03 ASTANA 002523 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, IIP, EEB/ESC, OES/PCI 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV EPET EINV SENV KPAO KZ
SUBJECT:  KAZAKHSTAN:  ARTICLES ACCUSE OIL COMPANIES OF CAUSING 
ENVIRONMENTAL DAMAGE TO CASPIAN REGION 
 
ASTANA 00002523  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On October 30, the Russian-language, independent 
weekly newspaper "Svoboda Slova" launched a series of inflammatory 
articles written by journalist Igor Larra called, "Defending the 
Caspian."  The paper has published three full-page articles to date, 
each one accompanied by sensational headlines (e.g., "Caspian Sea - 
or Dead Sea?" and "Dress Rehearsal for the Apocalypse") and 
disturbing photographs (e.g., babies with deformities, a mushroom 
cloud).  Despite a low circulation of 85,000, "Svoboda Slova" is 
popular among a politically-active segment of the population in 
Kazakhstan and exerts some influence over public opinion.  Linsi 
Crain, Deputy Manager for Government and Public Affairs of 
TengizChevrOil (TCO), and Richard Fritz, Public Relations Manager of 
Agip Kazakhstan North Caspian Operating Company (KCO) provided post 
with their reactions to the series of articles.  END SUMMARY. 
 
OCTOBER 30 ARTICLE LAUNCHES SENSATIONAL SERIES 
 
3.  (U) The October 30 article notes that Kazakhstan is "entirely 
dependent" on oil and gas revenue and claims that international oil 
consortia Tengizchevroil (TCO) and Agip Kazakhstan North Caspian 
Operating Company (KCO) will produce 100 million tons of oil from 
the Caspian shelf by 2015 and as a result produce 520,000 tons of 
"dangerous waste," such as sulfur and hydrogen sulfide.  The article 
claims that extensive drilling has damaged the soil and water 
resources of the Caspian region and alleges that there is 
"practically not a single well" that meets environmental standards. 
 
4.  (U) Citing 2006 data from the Atyrau oblast Department for 
Environmental Protection, the article claims the amount of 
pollutants in the Ural River, including sulfates, iron, zinc, and 
copper, has reached critical levels.  "Everyone in the region is 
sick without exception:  people, livestock, fish, and plant life." 
The article asserts that locals in the area are two to three times 
more likely to suffer from liver, heart, and lung disease, citing a 
report from the Institute for Social Health.  According to the 
article, from 1993 to 1994, the average life expectancy in the 
village of Sarykamys -- located 15 kilometers from Tengiz -- has 
dropped from 56 to 46 years and asks rhetorically, "Will TCO 
relocate these villagers as well?  How far will they have to go?" 
 
5.  (U) Under the heading, "Monster Ball," the article describes 
cases of babies born with birth defects such as Down syndrome and 
Hutchinson-Gilford Progeria (a rare rapid ageing disease) and claims 
that an employee of TCO recently gave birth to stillborn Siamese 
twins.  The article directly blames "the intensive oil production" 
in Atyrau oblast for these birth defects and declares that oil 
production in the Caspian has had an "extremely negative influence 
on the environment." 
 
NOVEMBER 6 ARTICLE CONTINUES DIATRIBE 
 
6.  (U) "Svoboda Slova" continued its "Defending the Caspian" series 
with a second installment in the November 6 issue.  This article, 
co-authored by Vitaliy Smirnov of the private enterprise Best 
Business Asia and Makhambet Khakimov of the non-governmental 
organization Caspian Defense, features a large drawing of a mushroom 
cloud over the Caspian Sea, headlined with the phrase, "Tengiz and 
Kashagan:  A Disaster from God -- or from the Oil Business?"  The 
article says that more than 1,000 wells have been drilled in the 
Caspian region and claims that some have been leaking oil into the 
Caspian Sea and regional water table.  The article expresses 
particular concern about leaks from abandoned wells and cites 
"official data" (no specific source is provided) that only 20 wells 
of the 1,000 have been sealed and abandoned.  Although the majority 
of the wells were drilled during the Soviet era, the authors single 
out the new wells drilled by TCO and KCO as the "most ,pMhIQ the 
 
ASTANA 00002523  002.2 OF 003 
 
 
authors claim that intensive oil exploration is slowly killing the 
Caspian Sea and that drilling expansion will signal its death knell. 
 It claims that the 1986 explosion at well number 37 of the Tengiz 
field killed hundreds of thousands of birds, had a dramatic, adverse 
impact on the health of the population
, and was no less a natural 
disaster than the Chernobyl nuclear accident that happened that same 
year.  Another heading shouts, "Life Threatening!" and claims that 
oil exploration is "killing every living thing in the region at this 
very moment."  Citing Dr. Muftakh Diarov, a member of Kazakhstan's 
National Academy of Science and Director of the Atyrau Center for 
Environmental Studies, the authors claim that Tengizchevroil 
produces two to four kilograms of sulfur and other "dangerous waste" 
for every ton of oil produced.  They blame TCO's open-air sulfur 
storage for irreparably damaging the environment and endangering the 
lives of local citizens and wildlife. 
 
DEFENSE RESTS WITH NOVEMBER 20 ARTICLE 
 
8.  (U) On November 20, "Svoboda Slova" published the third and 
final installment of its project, "Defending the Caspian."  The 
article is the transcript of an interview with Dr. Diarov, who says 
he fears that ongoing exploration for oil in the Caspian Sea will 
release a "fire genie in a bottle that, sooner or later, will 
explode and kill the entire north Caspian."  Diarov claims that the 
north Caspian region is prone to earthquakes and notes that much of 
the drilling taking place occurs at very deep levels and under very 
high pressure. In support, he cites Seismology Institute data 
forecasting major earthquakes at 7.0 on the Richter scale in Atyrau 
oblast, where both Kashagan and Tengiz are located.  He warns that 
"incompetent drilling at Kashagan could trigger a massive earthquake 
and terrible fire."  Diarov claims that none of the participants in 
the "project of the century" have experience working under similar 
environmental and geological conditions. 
 
9.  (U) Diarov despairs that the government of Kazakhstan will 
support drilling and exploration until disaster strikes, blinded to 
the danger by the revenue it receives from the rich subsoil 
resources.  However, he stops short of accusing the president of 
complicity in this crime:  "I have the distinct impression," he 
said, "that President Nazarbayev simply is not aware of the true 
danger of the coming ecological crisis.  Someone must be keeping the 
facts from him, because he reminded a group of foreign investors in 
June that they should first and foremost take care of the Caspian 
and guarantee its ecological health and stability."  Diarov comes to 
the conclusion that the citizens of Kazakhstan must take matters 
into their own hands and rely on their own strength by raising 
awareness of the environmental damage done to the Caspian region and 
turning public opinion against further drilling. 
 
10. (U) Under the headline, "Caspian Sea - or Dead Sea?," Diarov 
predicts that the Caspian will experience a "complete degradation of 
its ecosystem in 30 or 40 years."  He claims that tens of millions 
of birds will perish, entire species of fish will disappear, life 
expectancy in the region will fall to 35 to 40 years, and the 
psychological health of local residents will be at risk.  Diarov 
claims that his environmental research shows that as a direct result 
of drilling for oil over the past 10 years, the frequency of blood 
disease and related illnesses among those living in the Caspian 
region is four times higher than the average levels for those in the 
rest of Kazakhstan.  Diarov is particularly distressed that oil 
companies have conducted "disinformation campaigns" to sway public 
opinion in their favor and convince them that their exploration 
activities are not harmful to the Caspian environment.  He dismisses 
the companies' environmental monitoring as "unprofessional" and 
claims that people do not have the real facts and therefore do not 
know the real danger they are in.  Ending on a cynical note, he 
repeats an old Soviet proverb, "Whoever pays the piper, picks the 
tune." 
 
INTERNATIONAL OIL COMPANIES RESPOND TO ALLEGATIONS 
 
11.  (SBU) Linsi Crain, Deputy Manager for Government and Public 
Affairs of TengizChevrOil (TCO), said TCO strongly disputes the 
 
ASTANA 00002523  003.2 OF 003 
 
 
"unfounded accusations" made by "Svoboda Slova" and offered a number 
of facts and figures to rebut the charges.  For example, according 
to Crain, TCO has spent $1.8 billion on environmental projects over 
the past nine years, including $680 million as a part of its 
three-year Environmental Protection Plan adopted in 2007.  TCO plans 
to spend an additional $900 million on environmental protection 
projects over the next three years. 
 
12.  (SBU) As a result of this investment, according to Crain, TCO 
has reduced emissions by more than 50% from 2003 levels and has 
reduced natural gas flaring by 12% per year over the past four 
years.  By the end of 2009, according to Crain, TCO will eliminate 
all routine gas flaring.  Crain also disputed the charge that TCO 
accounts for more than two-thirds of all emissions for all 
industries in Atyrau oblast.  According to Crain, "Svoboda Slova" 
based this figure on the seven largest stationary installations and 
did not take into account emissions from hundreds of smaller 
stationary sources or mobile sources within the oblast, which 
produce more than 40,000 tons of waste each year. 
 
13.  (SBU) Crain also cited several ongoing studies by the World 
Health Organization in partnership with Kazakhstani research 
institutes on the state of public health in the Kulsary district of 
Atyrau oblast.  According to Crain, none of these studies 
demonstrated any relationship between TCO emissions and the overall 
health of the local population.  Moreover, Crain told Energy Officer 
that the Ministry of Environmental Protection endorsed the findings 
of the Sulfur Coordination Council that sulfur produced and stored 
by TCO has had "no significant impact" on the health of local 
residents. 
 
14.  (SBU) Richard Fritz, Public Relations Manager of Agip KCO, the 
consortium that operates the Kashagan oil field, also strongly 
denied the allegations raised in the "Svoboda Slova" series.  Fritz 
said that Agip KCO has gone to great lengths to protect the Caspian 
ecosystem and follows a strict, "zero discharge policy," under which 
no waste water or runoff water is returned untreated to the Caspian 
Sea.  Fritz furthermore told Energy Officer that Agip KCO also 
removes and safely disposes of the cuttings and drilling mud, in 
accordance with Kazakhstan's environmental regulations.  Fritz 
admitted that Agip KCO has only spent 6% (approximately $3.25 
million) of the funds budgeted for environmental protection, but he 
explained that this was due to the local government's delayed 
approval of the company's Environmental Protection Plan.  Fritz said 
once the plan is approved, Agip KCO will spend 100% of the funds 
allocated for environmental protection. 
 
15.  (SBU) COMMENT:  The "Svoboda Slova" series shows that 
Kazakhstan's print media can be just as controversial, if not as 
scandalous, as the tabloids sold in grocery-store checkout lines in 
the United States.  Indeed, it i
s not uncommon for 
small-circulation, local newspapers to make populist accusations 
against international companies in Kazakhstan.  Regional governments 
in Kazakhstan, which collect all of the revenue from environmental 
fines of companies operating in their oblast, have been known to 
pressure local newspapers to write investigative articles accusing 
companies of violating environmental laws.  However, it is unusual 
for a well-established, national publication such as "Svoboda Slova" 
to publish a multi-part series this inflammatory.  Post has not 
found any evidence that this series of articles was sponsored or 
encouraged by other foreign government agencies.  Nevertheless, the 
stories continue and companies remain under attack, unfairly charged 
and prosecuted in the court of public opinion.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2522, KAZAKHSTAN: CIVIL SOCIETY LEADER ZHOVTIS: “I’D RATHER

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Reference ID Created Released Classification Origin
08ASTANA2522 2008-12-22 08:48 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2168
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2522/01 3570848
ZNR UUUUU ZZH
O 220848Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4175
INFO RUCNCIS/CIS COLLECTIVE 0951
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0353
RUEHKO/AMEMBASSY TOKYO 1059
RUCNDT/USMISSION USUN NEW YORK 2105
RUEHNO/USMISSION USNATO 2437
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0521
RUEKJCS/SECDEF WASHDC 0427
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1015

UNCLAS SECTION 01 OF 03 ASTANA 002522 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL, DRL/IRF 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM SOCI KDEM OSCE KZ
SUBJECT:  KAZAKHSTAN:  CIVIL SOCIETY LEADER ZHOVTIS:  "I'D RATHER 
ASSIST THAN RESIST, BUT..." 
 
ASTANA 00002522  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  During a December 18 meeting in Almaty with the 
Ambassador, Kazakhstan International Human Rights Bureau Director 
Yevgeniy Zhovtis offered his views on democracy, human rights, and 
the political situation in Kazakhstan.  Zhovtis argued that 
Kazakhstan's ruling elite are motivated to hold on to political 
power to protect their wealth, which has neither been legalized nor 
legitimized in the public's eye.  Until the elite feel their wealth 
is secure, they will impede democratization.  Zhovtis was not 
optimistic about the impact of the new Bolashak generation, arguing 
that they are cynical and focused on their careers, and have a 
narrower perspective than earlier generations.  He said the United 
States can help by consistently promoting American values and 
continuing to be involved in specific human rights cases.  Zhovtis 
dismissed sanctions as a way to promote democracy in Kazakhstan. 
END SUMMARY. 
 
RULING ELITE FOCUSED ON WEALTH PRESERVATION 
 
3. (SBU) The Ambassador asked Zhovtis how Kazakhstan's history has 
affected the country's development and the development of civil 
society.  In response, Zhovtis said that Central Asia can not be 
described as part of Asia proper and would more accurately be called 
"Soviet Asia," since the Soviet Union destroyed Central Asia's 
traditional Asian way of life and introduced communism, a foreign 
ideology.  During the Soviet period, Kazakhs held to two levels of 
morality:  the public, communist ideology -- which no one actually 
believed in -- and private beliefs in Kazakh family traditions.  The 
latter allowed Kazakhs to maintain a sense of right and wrong in 
their personal lives.  After the collapse of the Soviet Union, the 
public communist ideology disappeared, but nothing took its place. 
The new post-communist, ruling elite are focused on money -- a focus 
that has destroyed the system of private Kazakh values and morals. 
The new ruling elite's view of the public is the same as in Soviet 
times:  the public is to be controlled and managed, not allowed to 
think and act independently. 
 
4. (SBU) The ruling elite, Zhovtis argued, maintain political power 
to preserve their wealth.  They are now struggling with how to 
legalize their wealth, as well as how to legitimize it in the eyes 
of the public.   Zhovtis descrQed a vicious circle at play:  if the 
ruling elite cannot find a way to legalize and legitimize -- and 
thus protect -- their wealth, they will not build up legal and 
judicial institutions that could in turn threaten their wealth.  The 
ruling elite will not allow a fundamental change of political power, 
since such a change could put their wealth and security at risk. 
Thus, he concluded, genuine democratization is not possible. 
 
5. (SBU) Zhovtis said he did not agree with the argument, often put 
forward by the government, that developing democracy and civil 
society has to take a long time in Kazakhstan.  Rather, he 
maintained, a country needs to make a fundamental choice upfront 
about which path it will follow.  Then, step by step, the country 
should follow that path.  Zhovtis noted that Kazakhstan's transition 
from a centrally planned economy to a market economy was completed 
in less than 15 years.  Thus, he asked rhetorically, why has there 
not been more success in the areas of political, judicial, and 
democratic development?  The answer is the nexus of ill-gotten 
wealth and political power.  Pointing again to the fact that there 
was rapid development and acceptance of private enterprise, Zhovtis 
also disagreed with the notion that Kazakhstan's "national 
mentality" prevents a quicker transition to democracy. 
 
PESSIMISM ABOUT THE FUTURE GENERATION 
 
6. (SBU) The Ambassador asked Zhovtis about his hopes for the future 
generation, especially the Bolashak scholars who are sent to study 
abroad at government expense.  Zhovtis was less than optimistic.  He 
said that in his experience, he has found it easier to deal with the 
older Soviet generation working in the government than the Bolashak 
generation.  The Bolashaks receive good higher education abroad, but 
they tend to have a less global perspective than the older 
generations, he maintained, because of the weakness of Kazakhstan's 
 &
#x000A;ASTANA 00002522  002.2 OF 003 
 
 
post-Soviet education.  Zhovtis argued that putting the issue of 
ideology aside, the Soviet education system was better than 
Kazakhstan's current educational system.  In Soviet times, the 
educational system offered a strong historical and global 
perspective, as well as good specialty training, and people were 
taught to think logically and analyze cause and effect.  Today's 
young generation is not being taught the basics of logic and 
analytical thinking, he averred.  The Bolashaks, Zhovtis maintained, 
tend to be stronger in concrete fields, like finance and business, 
than in more theoretical areas, like law.  In general, Zhovtis said 
many Bolashaks are cynical and are more focused on having a career 
and making money than on learning.  He suggested that perhaps it is 
wrong to expect to put the burden on the Bolashak generation to lead 
the country to a better future. 
 
7. (SBU) Zhovtis stressed he was not trying to insinuate that 
everything is wrong in the country, but the Kazakhstani state 
remains based on the personality of President Nazarbayev, and there 
is an inherent lack of trust in the system, which is built on 
self-protection.  The Ambassador asked if anyone in the government 
understands this problem.  Zhovtis responded that Foreign Minister 
Tazhin, Presidential Administration Deputy Head Maulen Ashimbayev, 
and perhaps a few others understand, but said there is not much they 
can do. 
 
RELIGION LAW:  MEANS TO RESTRICT FREEDOM OF ASSOCIATION? 
 
8. (SBU) Zhovtis told the Ambassador that the human rights situation 
in Kazakhstan is linked to three factors: legislation, institutions, 
and procedures and practices.  Legislation, he contended, is getting 
worse each year.  Each new law affords less protection and is open 
to broader interpretation.  The government assumes that control is 
the best way to ensure security.  Despite the government's claims to 
the contrary, the new religion law (which the President has not yet 
signed) has nothing to do with fighting extremism and offers no new 
tools with which to fight extremist elements, Zhovtis argued. 
Instead, he suspects the law could be a means for the government to 
restrict freedom of association in general. 
 
UNITED STATES SHOULD PROMOTE AMERICAN VALUES 
 
9. (SBU) The Ambassador asked Zhovtis how the United States could 
better promote human rights in Kazakhstan.  Zhovtis suggested three 
approaches.  First, the United States should clearly articulate and 
promote American values.  This does not necessarily mean criticizing 
the Kazakhstani ruling elite, but it does mean not allowing them to 
twist American values.  Second, the United States must ensure that 
international organizations such as the OSCE and the United Nations 
promote an international definition of human rights for member 
states and not allow states to "self-define" human rights.  Third, 
the United States should continue to follow closely and get involved 
in specific cases related to human rights.  He referred to several 
pending cases, including the criminal cases against opposition 
figures Bulat Abilov, Asylbek Kozhakhmetov, and Tolen Tokhtasynov; 
recent attempts by government authorities to try to tax grant money 
disbursed to NGOs by the National Endowment for Democracy; and the 
situation of the nearly 350 Kazakhstani refugees in the Czech 
Republic.  [NOTE:  According to Zhovtis, about 80 Kazakh families 
associated with unregistered mosques have sought refuge in the Czech 
Republic, where the courts are beginning to deny most of their 
requests for political asylum.  END NOTE.] 
 
SANCTIONS WOULD BE INEFFECTIVE 
 
10. (SBU) Zhovtis argued that sanctions against Kazakhstan would be 
an ineffective lever to promote democracy.  He again reiterated that 
democratization would put the power  -- and thus the wealth and 
property -- of the ruling elite at risk.  Thus, the ruling elite 
would rather defy sanctions than yield to them and allow progress on 
democracy.  Although Russia does not exert day-to-day influence on 
the views of the Kazakhstani ruling elite, and elites are not 
particularly enamored of Putin's system, Zhovtis said, they 
nevertheless see Russia's growing authoritarianism as an example of 
how to preserve their own power and wealth.  "They look in the 
 
ASTANA 00002522  003.2 OF 003 
 
 
Russian mirror and see themselves."  It would be better for the 
United States to try to persuade the ruling elite that the current 
political system is unstable and will be even harder to fix in the 
future if no action is taken now, Zhovtis argued. 
 
PREFER TO ASSIST THE ELITE, RATHER THAN RESIST THEM 
 
11. (SBU) Zhovtis said it was difficult to predict which political 
trends will prevail in Kazakhstan.  If the ruling elite can engage 
the public and try to build institutions, the result will be a more 
stable system.  However, if Nazarbayev remains "the gatekeeper," it 
is very difficult to predict what will happen.  The system is 
already less efficient and capable than previously.  Failure to 
create democratic institutions threatens to undermine the economy 
and exacerbate the lack of true rule of law.  In his parting remarks 
to the Ambassador, Zhovtis stressed that he personally would prefer 
to "assist than resist" the ruling elite in building democratic 
institutions in Kazakhstan but, in fact, spends 90% of his time 
"resisting." 
 
12.  (SBU) COMMENT:  Zhovtis is an impressive and articulate 
analyst.  We agree that building truly democratic institutions would 
threaten the unregulated fortunes that the elite built during the 
initial phases of privatization following the collapse of the Soviet 
Union.  We are not, however, quite as pessimistic as Zhovtis about 
the Bolashak generation.  Certainly, they will be tempered by the 
system as they work to rise in their careers, but we believe some 
will indeed eventually make a difference.  END COMMENT. 
 
HOAGLAND

Wikileaks

08ASTANA2492, KAZAKHSTAN: FOREIGN MINISTER TAZHIN

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Reference ID Created Released Classification Origin
08ASTANA2492 2008-12-19 09:04 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO0646
OO RUEHBI RUEHCI RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW RUEHROV
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DE RUEHTA #2492/01 3540904
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O 190904Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4143
INFO RUCNCIS/CIS COLLECTIVE 0949
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0351
RUEHKO/AMEMBASSY TOKYO 1057
RUEAIIA/CIA WASHDC
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RUEKJCS/SECDEF WASHDC 0425
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RUEHNO/USMISSION USNATO 2435
RUCNDT/USMISSION USUN NEW YORK 2103

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 002492 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL/IRF 
 
E.O. 12958: DECL: 12/19/2018 
TAGS: PGOV PHUM KDEM KIRF KZ
SUBJECT: KAZAKHSTAN:  FOREIGN MINISTER TAZHIN 
URGED PUTTING OFF RELIGION LAW IN INTERNAL MEMO 
 
REF: A. ASTANA 767 
     B. ASTANA 1107 
     C. ASTANA 2365 
     D. ASTANA 2388 
 
Classified By: Ambassador Richard E. Hoagland, 
Reasons 1.4 (b) and (d) 
 
1.  (C)  In an alleged internal government memo, a copy of 
which we received from a contact at the NGO Freedom House, 
Foreign Minister Marat Tazhin wrote to Prime Minister Karim 
Masimov that the government should postpone adopting 
amendments to Kazakhstan's religion legislation until after 
its 2010 OSCE chairmanship.  Tazhin contended that the 
"sharp criticism" continuously levied against the 
legislation from OSCE member-states could easily turn the 
subject of religious tolerance from an "advantage to a 
disadvantage" for Kazakhstan, especially as the country 
readies itself to join the OSCE Troika.  The memo was dated 
November 19, one week before the Senate passed the 
amendments (ref. D), which are currently awaiting action by 
President Nazarbayev. 
 
2.  (C)  In the memo, Tazhin outlined several "critical 
comments" made by OSCE member-states and NGOs during the 
OSCE's recent Human Dimension Meeting in Warsaw.  He noted 
that U.S. delegation head Ambassador Pearson had said that 
"adopting the legislation as it stands now would invoke 
sharp criticism from the United States."  Tazhin also 
referenced Freedom House's September 29 report on 
Kazakhstan's Madrid commitments -- which discussed the 
religion law along with the draft laws on political 
parties, election, and the media, and claimed that 
Kazakhstan's "freedom of religion has decreased since the 
Madrid Ministerial."  Leading members of the OSCE, "first 
and foremost the United States," closely listen to the 
opinions of organizations like Freedom House, Tazhin wrote 
Masimov, and the views of civil society "have a significant 
influence on how Kazakhstan is perceived in the political 
circles" of OSCE member-states. 
 
3.  (C)  Postponing the adoption of the law "until a later 
time" would assuage some the criticisms and be welcomed by 
the international community, argued Tazhin.  As evidence, 
he offered the statements made at the OSCE's October 23 
session, where the U.S. PermRep called on Kazakhstan "to 
demonstrate leadership in the sphere of pluralism and 
tolerance by correcting the pending law," and the French 
PermRep expressed hope that "the Senate will carefully 
review the draft."  According to the memo, the OSCE 
Chairman-in-Office's Personal Representative on Combating 
Intolerance and Discrimination Against Muslims Omur Orhun 
suggested to Tazhin that passing the law on the eve of 
Kazakhstan's OSCE chairmanship "would attract unnecessary 
political pressure" from many sides, "including the OSCE." 
In view of this negative feedback, concluded Tazhin, "it 
seems prudent to postpone the consideration of the text 
until a later time (after the OSCE chairmanship)." 
 
4.  (C)  COMMENT:  While passed to us unofficially by an 
NGO, the memo is on government letterhead and bears seals 
and markings that appear to testify to its authenticity. 
Tazhin's views are not surprising.  As the country's top 
diplomat, he has heard much criticism on the pending 
religion legislation, including from the U.S. Ambassador. 
The memo is a well-crafted document that accurately 
reflects the views of the international community on the 
religion law.  It may have come too late to convince 
Masimov to pull the legislation from parliament before it 
was adopted; however, Tazhin has put forward an argument 
that can be considered by President Nazarbayev as he 
decides what course of action to take:  sign the 
legislation, veto it, or send it to the Constitutional 
Council for review.   He has until January 5 -- thirty days 
after he received the legislation from the Senate -- to 
act.  END COMMENT. 
 
 
ASTANA 00002492  002 OF 002 
 
 
HOAGLAND

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08ASTANA2481, KAZAKHSTAN: SMALL BORDER TOWN BALANCES RUSSIAN INFLUENCE,

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Reference ID Created Released Classification Origin
08ASTANA2481 2008-12-19 02:48 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0284
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW
RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV
RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #2481/01 3540248
ZNR UUUUU ZZH
O 190248Z DEC 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4127
INFO RUCNCIS/CIS COLLECTIVE 0946
RUCNCLS/SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0348
RUEHKO/AMEMBASSY TOKYO 1053
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0513
RUEKJCS/SECDEF WASHDC 0422
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1002

UNCLAS SECTION 01 OF 03 ASTANA 002481 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC, EUR/RUS 
 
E.O. 12958: N/A 
TAGS: PGOV EPET EINV SOCI PBTS RS KZ
SUBJECT:  KAZAKHSTAN:  SMALL BORDER TOWN BALANCES RUSSIAN INFLUENCE, 
KAZAKH IDENTITY, AND WESTERN INVESTMENT 
 
REF:  ASTANA 1646 
 
ASTANA 00002481  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Aksai is a small, provincial border town in 
northern Kazakhstan much like many others -- with the notable 
exception that it has billions of dollars worth of oil and gas 
buried in its backyard.  Unfortunately, it was clear during a 
December visit that little of this subsoil wealth has reached the 
city's 35,000 residents.  Aksai is located 165 kilometers from 
Uralsk, the capital of West Kazakhstan oblast, and about the same 
distance from Orenburg, a major Russian city just a two-hour drive 
from the Kazakhstan-Russia border, which is itself only 45 
kilometers away from Aksai and not heavily patrolled.  It is not 
surprising, therefore, that the people of Aksai have a strong and 
lasting affinity for Russia, particularly its language, culture, 
history, and consumer goods.  A tour of the town -- including a 
visit to the city museum and monuments to local victims of Chernobyl 
and veterans of World War II and the Soviet war in Afghanistan -- 
vividly showed how a small town in modern Kazakhstan successfully 
balances its Soviet past with present ties to Russia and the West. 
END SUMMARY. 
 
RECONCILING KAZAKHSTAN'S SOVIET PAST, NOMADIC TRADITIONS, AND 
WESTERN INVESTMENT 
 
3.  (SBU) History museums can reveal as much about a society's 
present -- its priorities, values and identity -- as its past, 
particularly small city museums like the one in Aksai.  The 
building, which opened in 1998, is bright, well maintained, and 
cleverly designed.  It neatly and effectively balances artifacts of 
Soviet history, Kazakh independence, and Western investment.  The 
first room on the left is dedicated to President Nazarbayev and 
prominently displays a portrait of Russian Prime Minister Putin with 
Nazarbayev, commissioned when both visited Aksai in October 2006.  A 
banner in the portrait announces the leaders' "declaration of 
eternal friendship." 
 
4.  (SBU) The next hall honors Kazakhstan's sacrifices during World 
War II and features a small bust of Stalin.  When asked how people 
in Aksai feel about Stalin today, the museum tour guide -- an ethnic 
Kazakh woman named Marina -- said, "People still respect his 
leadership.  The country needed a strong leader like him at that 
time.  We should give him his due."  Judging from Marina's somber 
tone and the size and location of the exhibition, powerful emotions 
of pain and loss still linger, more than sixty years after the end 
of the "Great Patriotic War." 
 
5.  (SBU) Moving effortlessly from Kazakhstan's storied Soviet past 
to its earlier nomadic customs, Marina escorted us into the next 
room, dominated by a large Kazakh yurt.  She discussed the many 
traditional objects on display, including weapons, clothing, tools, 
instruments, carpets, and jewelry.  Many of the artifacts were 
authentic, some even local.  Without missing a beat -- or giving a 
guest time to reconcile Stalin with the Great Horde -- Marina moved 
to a room with an early Soviet schoolroom.  On the teacher's desk 
was an obligatory bust of Lenin, as well as educational primers, 
uniforms, and banners.  As we left the schoolroom, Marina noted, 
without a hint of irony, a souvenir Statue of Liberty presented to 
Aksai athletes who visited New York City on an exchange program in 
2002.  The timewarp did not faze our host, for whom it seemed 
perfectly normal to cover Putin's visit, Stalin's rule, Kazakh 
nomads, and the Communist Revolution, all during a thirty-minute 
tour. 
 
KAZAKH-LANGUAGE INSTRUCTION ON THE RISE 
 
6.  (SBU) Marina said there are five secondary schools in Aksai now, 
three that deliver instruction entirely in Russian and two that 
operate in Kazakh.  Parents may educate their children in the 
language of their choice.  She enrolled her older child in a Russian 
school and her younger one in a Kazakh school, "to give him an edge 
later in life, because it's becoming more important to learn 
Kazakh," she said.  Despite Aksai's proximity to Russia and the 
 
ASTANA 00002481  002.3 OF 003 
 
 
predominance of Russian, many residents said there has been a recent 
trend toward greater use of Kazakh, particularly by the local and 
re
gional governments. 
 
EAST EUROPEAN SETTLERS REMEMBERED AND HONORED 
 
7.  (SBU) Acknowledging the role of other nations in settling the 
"virgin lands" of northern Kazakhstan, the Aksai museum displays a 
series of striking portraits of settlers from Ukraine, Belarus, 
Moldova.  The exhibition also features articles and photographs of 
Pasha Angelina, who was glorified by the Soviet Union as one of the 
first female tractor-operators and a symbol of the technically 
educated female Soviet worker.  She led a tractor brigade in 
Kazakhstan at the end of World War II and is apparently still fondly 
remembered in this provincial town.  An antique icon hangs in the 
corner of the room, honoring the tradition and religion of these 
east European settlers. 
 
NEW KPO WING TOUTS ENVIRONMENTAL AND SOCIAL PROJECTS 
 
8.  (SBU) The largest display in the museum is dedicated to the 
exploration of the Karachaganak oil and gas field.  Sponsored by 
Karachaganak Petroleum Operating B.V. (KPO), this wing includes 
exhibitions on the Caspian Sea's geology and ecology, the basics of 
the oil business, the relocation of hundreds of Tungush villagers to 
Uralsk, and KPO's social investments in West Kazakhstan, including 
projects in Aksai to build a new water tower, kindergarten, and 
hospital.  There is also a children's corner with plush chairs where 
visiting students can hear a lecture or watch a movie about 
Karachaganak, including a film highlighting KPO's efforts to 
preserve and protect the flora and fauna of Karachaganak.  When 
asked about KPO's environmental programs, Marina said, "They are 
very responsible and have done a tremendous job by reclaiming 
affected areas, replacing topsoil, and replanting trees."  (NOTE: 
Although KPO has a good reputation among local residents for 
environmental stewardship, it was fined 1.8 billion KZT 
(approximately $15 million) by the regional government for alleged 
environmental violations, which the company continues to dispute 
(see reftel).  END NOTE.) 
 
9.  (SBU) KPO's Corporate Affairs manager Trina Fahey told us that 
the company has invested more than $137.4 million in social projects 
over the last decade and plans to invest more than $500 million over 
the life of the 40-year production sharing agreement.  Yet, despite 
that sizeable investment, the roads and other infrastructure of 
Aksai are run down and poorly maintained.  The streets are narrow 
and potted with holes, gas lines and water pipes leak and lack 
insulation, and local residents and KPO officials agree that the 
water is not safe to drink.  KPO's Business Governance Controller 
Chris Circuit explained that KPO's payments go to the oblast 
(regional) government, not to the local government, and the governor 
of West Kazakhstan oblast has chosen to invest the majority of funds 
in Uralsk, rather than Aksai. 
 
NEW BUSINESS DEVELOPMENT IN AKSAI 
 
10.  (SBU) Most residents live in apartment blocks built twenty 
years ago by East Germans and Czechs, who were enticed to the area 
by Soviet promises of oil and gas shipments.  There is a row of 
large new private homes in the center of the city estimated to cost 
approximately $200,000, including one that serves as the mayor's 
mansion.  Our driver was quick to point out that the mayor does not 
own the house and when he leaves office, the new mayor will move in. 
 New construction included private hotels, small businesses, a 
bowling alley, and an AIDS clinic.  KPO expatriate workers often 
frequent an ostentatious restaurant/night club called "Disco Arman," 
owned by a local resident and a Korean investor.  The nightclub 
hosts 1,000-1,500 people every Friday and Saturday night and 
collects a cover charge of 1,000 KZT (approximately $8) from male 
patrons only. 
 
MONUMENTS TO CHERNOBYL AND AFGHANISTAN 
 
11.  (SBU) In the grassy median of Aksai's main street stand two 
 
ASTANA 00002481  003.3 OF 003 
 
 
monuments to the city's modern sacrifices to Soviet history.  One 
memorializes the heroic efforts of Kazakhstani first responders to 
contain and control the intense fires that burned after the 
Chernobyl disaster in 1986; the other honors the service of those 
who died in Afghanistan during the Soviet-Afghan war.  Both 
memorials are well maintained and frequently visited, judging by the 
fresh bouquets around them. 
 
A QUICK PEEK AT THE RUSSIAN BORDER 
 
12.  (SBU) From the oil field of Karachaganak, we drove 
approximately thirty minutes to the Russian border.  When we 
arrived, our KPO guide asked permission to tour the border 
checkpoint.  (NOTE:  KPO financed the construction of the guard post 
and a barbed-wire fence surrounding the facility.  In return, KPO 
vehicles enjoyed expedited customs and immigration processing for 
two years, although this practice has since ended.  END NOTE.)  A 
Kazakhstani border guard checked with his supervisor, then politely 
obliged.  As we walked, he pointed out a new dog trained to detect 
narcotics and said the most time-consuming aspect of a border 
crossing is the paperwork required to export and re-import vehicles. 
 He then showed us how passports and visas are inspected and said 
most visitors are citizens of Tajikistan and Uzbekistan going to 
Russia looking for work.  A box on the counter near the passport 
control window encouraged customers to make suggestions and 
comments. 
 
13.  (SBU) On the Russian side, we could see a new building that may 
ultimately serve as a single, combined checkpoint for Russian and 
Kazakhstani border guards, customs officials, and immigration 
authorities.  Our border guard guide told us, however, that the 
building is still two or three years from opening. 
 
HOAGLAND

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