Monthly Archives: March 2009

09ASTANA560, KAZAKHSTAN: AMBASSADOR ACCOMPANIES NASA DELEGATION TO

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Reference ID Created Released Classification Origin
09ASTANA560 2009-03-31 12:18 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5069
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0560/01 0901218
ZNR UUUUU ZZH
O 311218Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5063
INFO RUCNCIS/CIS COLLECTIVE 1430
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0808
RUEHKO/AMEMBASSY TOKYO 1511
RUEHUL/AMEMBASSY SEOUL 0495
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0993
RUEKJCS/SECDEF WASHDC 0906
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEANAT/NASA WASHDC
RUCHNVM/NASA JOHNSON SPACE CEN HOUSTON TX
RUEHAST/USOFFICE ALMATY 1366

UNCLAS SECTION 01 OF 03 ASTANA 000560 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, OES/PCI (PHUDAK, NFITE) 
MOSCOW FOR NASA (DMCSWEENEY) 
 
E.O. 12958: N/A 
TAGS: PGOV PREL TSPA SENV RS KZ
SUBJECT:  KAZAKHSTAN:  AMBASSADOR ACCOMPANIES NASA DELEGATION TO 
BAIKONUR FOR SOYUZ LAUNCH 
 
ASTANA 00000560  001.2 OF 003 
 
 
1. (SBU) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY:  During March 25-27, the Ambassador accompanied a 
NASA delegation to the Baikonur cosmodrome in south-central 
Kazakhstan to observe the launch of a Russian Soyuz space capsule 
destined for the International Space Station.  All Soviet and 
Russian human spaceflight missions have originated from Baikonur. 
Kazakhstan currently leases Baikonur to Russia for $115 million per 
year through 2050.  On launch day, May 26, the Ambassador and the 
NASA Delegation headed for Site 254 where the group witnessed the 
crew suit up and then toured the Baikonur Space Museum.  Finally, 
after arriving at the launch site's viewing stands, the delegation 
observed the successful launch of the Soyuz TMA-14 space capsule. 
U.S-Russian cooperation and partnership in space exploration has 
endured in spite of political ups and downs in the overall bilateral 
relationship and may become even more fruitful and productive in the 
future.  END SUMMARY. 
 
AMBASSADOR ACCOMPANIES NASA DELEGATION 
 
3. (SBU) The Ambassador, together with the Regional Environmental 
Officer (REO), accompanied a NASA delegation to the Baikonur 
cosmodrome in south-central Kazakhstan to observe the May 26 launch 
of a Russian Soyuz TMA-14 space capsule destined for the 
International Space Station (ISS Flight 18S).  The Soyuz crew 
members were Commander Gennady Padalka (Russia), Flight Engineer 
Michael Barrett (U.S.), and Space Flight Participant Charles 
Simonyi, a former Microsoft executive from the United States who was 
making his second trip into space.  Senior NASA delegation members 
who attended the launch included Associate Administrator for Program 
Analysis and Evaluation Michael Hawes, Associate Administrator for 
Space Operations Bill Gerstenmaier, Kennedy Space Center Director 
Bob Cabana, and Johnson Space Center Deputy Director Ellen Ochoa. 
Anatoliy Perminov, head of Roskosmos, Russia's federal space agency, 
also attended the event, as did Russian Ambassador to Kazakhstan 
Mikhail Bocharnikov and representatives of the Japan Aerospace 
Exploration Agency. 
 
BAIKONUR BACKGROUND 
 
4. (SBU) The Soviet Union originally constructed the Baikonur 
cosmodrome as a site for the testing and development of its first 
ICBM and later expanded the site in the late 1950s to accommodate 
space flight activities.  All Soviet and Russian human spaceflight 
missions have originated from Baikonur.  After the collapse of the 
Soviet Union, Baikonur fell under Kazakhstan's control, and Russia 
and Kazakhstan now have an agreement under which Kazakhstan leases 
Baikonur to Russia for $115 million per year through 2050.  Located 
in semi-arid south-central Kazakhstan, the Baikonur cosmodrome 
covers approximately 4000 square miles of territory (80 by 50 miles) 
and contains 52 launch pads.  The nearby city of Baikonur, built to 
support the cosmodrome, had been a secret town with various names 
over the years in an attempt to hide the cosmodrome's actual 
location.  Down from a high of 100,000, the city's population now 
numbers approximately 60,000.  It sits on the north bank of the 
Syr-Darya river, one of the two major rivers in Central Asia that 
flow into the Aral Sea.  In addition, the Moscow-Tashkent railroad 
runs through Baikonur. 
 
VISIT TO BURAN AND SOYUZ LAUNCH SITES 
 
5. (SBU) After their arrival at Baikonur, the NASA delegation drove 
from the cosmodrome's Yubileyniy airport -- where the Buran Space 
Shuttle landed after its one and only orbital flight -- across bleak 
empty steppes to visit the Energia launch site, where the heavy-lift 
Energia rocket was launched for the first time.  Since 1993, this 
launch site has not been used, and signs of its sad decay led one 
observer to comment that it resembled a "Mad Max" movie set.   The 
delegation then traveled to the Soyuz launch site to see the rocket 
that would be launched the next day.  The Soyuz launch site contains 
 
ASTANA 00000560  002.2 OF 003 
 
 
a moving memorial to the historic first Sputnik satellite launched 
into space in 1957 from this site -- an event which profoundly shook 
the U.S. scientific establishment and helped spur the establishment 
of NASA.  The monument'
s inscription says simply: "It is here that 
the genius of the Soviet people began their audacious assault on 
space." 
 
6. (SBU) One could feel the imprint of history and the ebb and flow 
of Soviet and Russian endeavors over time.  Observing the rocket 
that would be launched the next day, one NASA scientist commented 
admiringly that this Russian rocket's design is basic and simple but 
durable, robust, and reliable, and it can be launched in any 
weather.   He noted that U.S. rockets are high-tech, sophisticated, 
and very capable, but they are more dependent on the weather 
conditions being optimal before they can be launched. 
 
BAIKONUR THE CITY 
 
7. (SBU) After visiting the launch sites, the delegation arrived for 
its stay at the Sputnik Hotel.  The Sputnik is a reasonably good 
quality hotel, but it is far from being a luxury establishment.  The 
hotel restaurant, enjoying a de facto monopoly because of its 
somewhat isolated location on the outskirts of Baikonur city, 
required delegation members to order meals off a special menu that 
cost 35 euros per person, even though the menu also had cheaper 
alternatives, which the delegation was told were "unavailable."  REO 
learned from a NASA official that this had not been the case the day 
before, but the hotel would not budge, because it claimed that it 
always moves to a fixed-price meal the day immediately prior to a 
launch.  A number of delegation members (REO included) walked 40 
minutes into town to a pizzeria, crowded with young Kazakhstani 
enjoying the evening out.  The prices were all in Russian rubles 
(reflecting the "leased" nature of the city), but one could also pay 
in tenge, the Kazakhstani currency -- unlike at the Sputnik Hotel, 
which refused tenge and would only accept dollars, euros, or rubles. 
 A NASA photographer, who had been to Baikonur some fifteen times 
since 1993, said when the pizzeria first opened, it was the first 
western-style restaurant in Baikonur, and competitors started a 
smear campaign, pasting leaflets on trees all over town warning 
citizens that they would become deathly sick if they went to eat 
there.  Judging from the crowded tables at the pizzeria the night we 
visited, it appears the campaign has failed to dissuade Baikonur's 
youth from frequenting the establishment. 
 
SUIT UP AND SPACE MUSEUM 
 
8. (SBU) On March 26, Launch Day, the NASA delegation departed the 
Sputnik Hotel in a heavy rain and headed for Site 254, where the 
group witnessed the crew suit up and report to the Roskosmos State 
Commission on its readiness for launch.  While the crew went to the 
capsule, the group toured the Baikonur Space Museum, which is filled 
with historical memorabilia of the Soviet and Russian space programs 
and their achievements, saw one of the Buran Space Shuttle orbiter 
test models up close, and visited the cottages of cosmonaut Yuriy 
Gagarin (the first man launched into space on April 12, 1961), where 
he spent the night prior to launch, and Sergey Korolev, who is 
considered the founder of the Soviet space program. 
 
SUCCESSFUL LAUNCH 
 
9. (SBU) The delegation then arrived at the viewing site, an 
open-air covered viewing stand one mile from the actual launch site. 
  Shivering and cold, the group watched the rocket carrying the 
Soyuz space capsule successfully lift off the pad and disappear into 
the clouds, leaving behind a fiery tail in its wake.  We could not 
help but feel, at that moment, that we had witnessed something 
special that few people actually have a chance to see.  We also saw 
a clear instance of the continuing close U.S-Russian cooperation and 
partnership in space exploration that has endured in spite of 
political ups and downs in our overall bilateral relationship and 
 
ASTANA 00000560  003.2 OF 003 
 
 
may become even more fruitful and productive in the future. 
 
HOAGLAND

Wikileaks

09ASTANA559, KAZAKHSTAN: MINISTRY OF INTERNAL AFFAIRS SEEKS ASSISTANCE

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Reference ID Created Released Classification Origin
09ASTANA559 2009-03-31 11:53 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5035
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0559/01 0901153
ZNR UUUUU ZZH
O 311153Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5061
INFO RUCNCIS/CIS COLLECTIVE 1428
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0806
RUEHKO/AMEMBASSY TOKYO 1509
RUEHUL/AMEMBASSY SEOUL 0493
RUCNDT/USMISSION USUN NEW YORK 2241
RUEHNO/USMISSION USNATO 2571
RUEAWJA/DEPT OF JUSTICE WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0991
RHMCSUU/FBI WASHDC
RUEKJCS/SECDEF WASHDC 0904
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 000559 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL, INL/AAE 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM SOCI KDEM KCRM KZ
SUBJECT:  KAZAKHSTAN:  MINISTRY OF INTERNAL AFFAIRS SEEKS ASSISTANCE 
ON "DEMOCRATIC" MEANS OF UPHOLDING PUBLIC ORDER 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) The Ministry of Interior (MVD) sent a letter to the 
Embassy seeking guidance on how police in the United States handle 
large public gatherings and uphold public order while ensuring that 
the civil rights of participants in such gatherings are protected. 
A translation of the full text of the letter can be found in 
paragraph 5.  The letter says the MVD is studying foreign best 
practices in ensuring public security based on "democratic 
principles" and, in particular, is interested in learning about 
regulations that guide the use of force by U.S. police, tactics for 
the peaceful settlement of conflicts and crowd management, 
non-lethal equipment employed by U.S. police, and companies that 
produce such equipment and regulations governing their delivery 
overseas.  The MVD proposes holding a meeting with Embassy 
representatives to discuss potential cooperation in this area. 
 
3.  (SBU) COMMENT:  The MVD sent a similar letter to the OSCE center 
in Astana, but, as far as we know, did not send their request to 
other Western missions.  We see two somewhat interrelated concerns 
that might have lead the MVD to reach out for assistance on these 
issues.  The first is an increased awareness within the government 
that Kazakhstan's upcoming OSCE chairmanship will bring heightened 
scrutiny to the country's adherence to OSCE human rights commitments 
and standards.  The second is that the economic crisis could, in 
fact, translate into more public protests in Kazakhstan, especially 
as the weather gets warmer.  Whatever the specific motivation, we 
see the initiative as an opportunity to engage and strengthen our 
ties with the MVD and promote adherence to Western standards in 
upholding public order.  At post, the LegAtt office is taking the 
lead on coordinating a response to the MVD from Washington agencies. 
 END COMMENT. 
 
4.  (SBU) BEGIN TEXT OF LETTER: 
 
The Ministry of Internal Affairs (MVD) presents its compliments to 
the U.S. Embassy in the Republic of Kazakhstan and has the honor to 
relay the following information. 
 
During recent years, the MVD of Kazakhstan and the U.S. Embassy have 
developed constructive relations on a wide range of issues in 
counteracting international crime.  With the support of the Embassy, 
a number of joint projects have been implemented; the system of 
training police staff has been consolidated; and the material, 
technical and methodological bases of the MVD training centers have 
improved. 
 
As a part of the further improvement of police operations, MVD is 
currently studying foreign best practices in ensuring public order 
and security based on democratic principles.  We are paying 
particular attention to the actions of police first and foremost in 
large cities during various mass social, political, cultural and 
sports events.  We are interested in the methods of preventing 
various destructive incidents and mass disorder, the methods that 
would allow us to ensure a balance between observation of 
participants' civil rights and freedoms and the effectiveness of 
police operations. 
 
Unfortunately, recent events in a number of countries have shown 
that tactics used by police to localize and prevent disorders often 
prove to be ineffective.  In some incidents, harsh physical methods 
and dangerous trauma-causing implements were used against initiators 
and participants of various events. 
 
In this regard, we believe that the most effective means and methods 
for prevention of mass disorders and so-called "soft" control of 
aggressive participants of such disorders have been developed by 
U.S. police.  In this regard, the Ministry of Internal Affairs would 
appreciate the Embassy's assistance in obtaining the following 
information about the activities of U.S. police: 
 
ASTANA 00000559  002 OF 002 
 
 
 
-- Legislative regulation of the use of force, firearms and police 
tools; standards of behavior; 
-- Tactics of peaceful settlement of conflicts, crowd management, 
conduct of negotiations and mediation; 
-- Methods and special equipment for finding, seizing and detaining 
organizers and active participants of mass disorders; 
-- Conditions and practical application, as well as technical 
specificati
ons, of "soft" tools employed by police against 
aggressive participants of protest actions and mass disorders 
(including hand weapons, special bullets and charges, chemical 
substances, acoustic and electrical devices, etc.); 
-- Information about companies producing crowd management tools used 
by U.S. police for active and passive defense, as well as 
legislative and other conditions (possible restrictions) for their 
oversea deliveries. 
 
To discuss potential cooperation in this area, the Ministry of 
Internal Affairs is prepared to hold a working meeting with 
representatives of the U.S. Embassy at any time convenient to the 
American side. 
 
The Ministry of Internal Affairs avails itself of this occasion to 
renew to the Embassy of the United States of America the assurances 
of its highest consideration. 
 
Vice Minister O. Fedorov 
 
END TEXT OF LETTER 
 
HOAGLAND

Wikileaks

09ASTANA558, KAZAKHSTAN: MEDIA REACTION, MARCH 21-27

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Reference ID Created Released Classification Origin
09ASTANA558 2009-03-31 11:36 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5022
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0558/01 0901136
ZNR UUUUU ZZH
O 311136Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5059
INFO RUCNCIS/CIS COLLECTIVE 1426
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0989
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RHMFIUU/CDR USCENTCOM MACDILL AFB FL
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RHEBAAA/DEPT OF ENERGY WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNDT/USMISSION USUN NEW YORK 2239
RUEHNO/USMISSION USNATO 2569

UNCLAS SECTION 01 OF 02 ASTANA 000558 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EFIN MARR SOCI KPAO KMDR AF RS KZ
SUBJECT:  KAZAKHSTAN:  MEDIA REACTION, MARCH 21-27 
 
1.  SUMMARY: During the week of March 21-27, the Kazakhstani media 
focused on economic issues, ranging from the U.S. government's 
stimulus plans to the effect the economy is having on pushing young 
people out of villages and into the cities.  A lengthy analysis was 
devoted to what Presidents Obama and Medvedev will discuss at the 
G-20 Summit and how Russia and the United States are trying to work 
out new rules of the game in Central Asia.  END SUMMARY. 
 
DOUBTS ABOUT U.S. ANTI-CRISIS MEASURES 
 
2.  The pro-government daily "Liter" said the U.S. administration's 
decision to pass a large stimulus package without waiting for the 
results of the G-20 summit will benefit the United States but not 
the rest of the world.  Russian politicians reportedly welcomed the 
news of the stimulus, saying that the end of the American economy 
was near.  "Liter" added that economists were "very pessimistic," 
noting that "big problems were awaiting the Russian economy as 
well," and that many countries, including Russia and Kazakhstan, 
depend on the dollar in exporting hydrocarbons and importing 
foreign-made equipment--and also repay foreign loans in U.S. 
currency.  According to Olzhas Khudaybergenov, head of the 
Macroeconomic Projects Group, an increase in the money supply is 
neither good nor bad in and of itself, but rather everything depends 
on how the stimulus will be used.  Khudaybergenov said the United 
States "would avoid problems if it directs its money towards 
production and development projects," but that it was "doing quite 
the opposite--spending the money covering bank deficits and paying 
off bad debts, and saving a financial sector that does not produce 
anything."  He predicted that these circumstances would lead to 
serious inflation in the U.S. economy. 
 
RURAL YOUTH SCORNED IN THE CITIES 
 
3.  An article in the "Central Asia Monitor," a pro-government 
weekly, says that young people from villages find themselves in a 
humiliating position because of the scorn they receive from the 
government and from urban youth.  During the ongoing era of 
urbanization, young people from villages have started moving to 
cities in large numbers for better jobs.  The waves of migrants from 
villages have shocked native Almaty residents for some time, though 
an adjustment stage between the two cultures has already occurred. 
Yet "disdain toward young men and women from the villages hasn't 
disappeared," according to the "Monitor."  "Many of these 
Kazakhstanis find themselves in the same humiliating position as 
migrant workers from Kyrgyzstan and Uzbekistan, doing dirty and hard 
work at construction sites and markets.  In the meantime, villages 
are dying, along with employment prospects for young people there 
and belief in government."  The urban jobs that draw youth have led 
to social stratification, according to the "Monitor," and, "worse, 
young people couldn't go back to their villages even if they wanted 
to: almost everything in advanced villages is in private hands, and 
young people could count only on low-paying jobs.  Hopes for the 
benefits of capitalism and democracy are being replaced by grief for 
the now distant era of socialism.  This generation may not remember 
those times, but they do know that back then, the government took 
care of its young people." 
 
NEW RULES OF THE GAME IN CENTRAL ASIA? 
 
4.  "Liter" also reported that when President Obama meets President 
Medvedev in London in April 1 on the eve of the G-20 Summit, the 
main topics of discussion, according to Medvedev, will be 
non-proliferation, the current economic crisis, and international 
terrorism.  The presidents will also discuss Central Asia, a region 
which for a long time has given rise to discord among the big 
geopolitical players, particularly the struggle over energy 
resources and oil transportation routes.  "The decline in oil prices 
from $140 to $40 per barrel, however, has significantly decreased 
the energy ambitions of the players.  Now, security issues have 
taken center stage as the Pentagon plans to increase the number of 
troops in Afghanistan up to 60,000," "Liter" reported.  Instability 
in Pakistan and hazy prospects for its "southern corridor" for 
supplies have forced the Americans to look for alternative routes of 
supply for its military.  Russian politicians always expressed 
support
for the U.S. campaign in Afghanistan, "Liter" said, because 
after the Taliban there fell in 2001, financial support for 
 
ASTANA 00000558  002 OF 002 
 
 
separatists dried up, stabilizing the northern Caucasus and leaving 
only small terrorist groups for Russia to confront.  Central Asia 
also benefited from the U.S. war on the Taliban, "Liter" reported, 
"as Takhir Yuldashev, the leader of the Islamic Movement of 
Turkestan, a most odious terrorist organization, left for Pakistan. 
The longer he stays there, the rarer Central Asian shootings and 
bombings are." 
 
5.  "Liter" wrote that there were no disagreements between Russia 
and the United States in general on the anti-terrorism issue--but 
Russia does fear that the war on terrorism will lead to expansion of 
the American military presence in Central Asia on a permanent basis. 
 In February, President Medvedev said, "The base at Manas existed 
for eight years.  It doesn't seem like anyone agreed on that." 
Still, Russia is willing to support NATO forces in Afghanistan by 
providing transit for NATO's non-lethal goods through its territory, 
even though the issue of transportation of lethal goods remains 
open.  "It looks like Russia is trying to work out new 'rules of the 
game' in Central Asia that will not infringe on its own interests 
and will not lead to a strengthening of NATO's role in the region," 
"Liter" wrote.  "The Americans were given 180 days to leave 
Kyrgyzstan, which means that the White House has some time for 
negotiations--and Russia is ready for such negotiations.  As 
President Medvedev noted today, 'There is every opportunity for 
opening a new page' in relations between Russia and the United 
States." 
 
HOAGLAND

Wikileaks

09ASTANA557, KAZAKHSTAN: NAZARBAYEV ON AFGHANISTAN, IRAN,

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
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If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09ASTANA557.
Reference ID Created Released Classification Origin
09ASTANA557 2009-03-31 11:36 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO5018
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O 311136Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5055
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
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RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
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RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
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RUEKJCS/SECDEF WASHDC PRIORITY 0898
RUEHNO/USMISSION USNATO PRIORITY 2565
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2235
RHEHAAA/WHITE HOUSE WASHDC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 04 ASTANA 000557 
 
SIPDIS 
 
STATE FOR P, S/SRAP, SCA/CEN, SCA/A, EUR/RUS, NEA/IR 
 
E.O. 12958: DECL: 03/31/2024 
TAGS: PGOV PREL PARM START RS IR AF KZ
SUBJECT:  KAZAKHSTAN:  NAZARBAYEV ON AFGHANISTAN, IRAN, 
RUSSIA, RELATIONS WITH UNITED STATES 
 
REF: A. SECSTATE 29482 
     B. SECSTATE 30048 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  President Nazarbayev said on March 30: 
 
he wants to be a strong, non-ideological partner with the 
United States to help on Afghanistan; 
 
he continues to advise Tehran to give up their nuclear 
ambitions, and will do so once again on April 6 when 
President Ahmadinejad visits Astana; 
 
he has advised Russian President Medvedev to trust President 
Obama, and asked that the United States try better to 
understand Russia's peculiar psychology; 
 
he welcomes Washington and Moscow's commitment to negotiate a 
new START agreement; and 
 
he is eager for a stronger, more visible relationship with 
the United States and would welcome in the near-term a visit 
by Secretary Clinton and, in the longer term, would be 
delighted to host President Obama. 
 
Although Washington has many white-hot irons in the fire, we 
judge it would be useful for U.S. national interests to pay 
attention to President Nazarbayev's evident and, we believe, 
sincere opening to the Obama Administration in its early 
days.  It might well be possible that we have the opportunity 
to build a strong partner on Afghanistan, Iran, and Russia. 
END SUMMARY. 
 
2.  (C) The Ambassador met with President Nursultan 
Nazarbayev for 55 minutes in his private dining room adjacent 
to his office on March 30.  Presidential Foreign Policy 
Adviser Khairat Sarybay took notes for the President. 
 
AFGHANISTAN:  "LET US BE YOUR NON-IDEOLOGICAL PARTNER" 
 
3.  (C) The Ambassador passed to President Nazarbayev a 
summary of U.S. objectives in Afghanistan (reftel A) and said 
President Obama and his Administration would welcome 
Nazarbayev's advice about how to proceed in Afghanistan.  The 
President initially responded, "Everyone has given you 
advice, but are you listening?"  The Ambassador assured him, 
"Yes, President Obama and his team are listening closely to 
our international partners, and we value your expertise.  You 
know that is true from your November telephone conversation 
with President Obama."  Nazarbayev relaxed and said, "Yes, 
that was an important moment in U.S.-Kazakhstan relations," 
and he referred to it repeatedly during the rest of the 
meeting. 
 
4.  (C) About Afghanistan, Nazarbayev said, "The urgent 
question is how will the elections go?  Who will be the next 
president of Afghanistan?  The problem is that there is now 
no real authority in Afghanistan.  We (Kazakhstan) helped 
with humanitarian reconstruction assistance, but the schools 
we built are already abandoned and windowless.  The students 
are forbidden to attend.  No one now can guarantee the safety 
of our aid workers and the facilities they built.  Why should 
we continue this assistance in the face of such chaos that 
negates our best intentions?  From the beginning, your 
(former Secretary of Defense Donald) Rumsfeld thought that 
you could provide minimal military assistance, and 
Afghanistan would carry on, would muddle through.  But the 
history of Afghanistan is a long Asian story.  Tamerlaine 
tried.  The Moghuls tried.  The British tried.  The Soviets 
tried.  Every empire has failed in Afghanistan.  But the 
worst-case scenario now would be for the United States and 
NATO to give up and leave, because the Taliban would return 
triumphantly to power, civil war would reignite, and 
 
ASTANA 00000557  002 OF 004 
 
 
Afghanistan would become a 'paradise for terrorists.'  You 
cannot leave!  You must win!  But you must do it 
intelligently." 
 
5.  (C) Nazarbayev said, "Afghans themselves must find the 
power to unite behind a real and legitimate indigenous 
leader.  You cannot again impose a 'shopkeeper from Chicago.' 
 I fully understand that there was a moment for Karzai 'with 
your cannons behind him,' and I supported you.  But his time 
has passed.  He has failed to unite his nation.  I have no 
candidate for president of Afghanistan, but I can tell you 
that the next president must be an Afghan from Afghanistan 
who has the ability to unite at least 50% of the Afghan 
people.  If you or Mo
scow impose another puppet, no matter 
how charming he might be to either of you, he will fail.  The 
next president of Afghanistan absolutely must be the choice 
of the Afghan people, without any outside manipulation or 
interference.  I want the next Afghan elections to be as free 
as possible."  (NOTE:  Nazarbayev said this without any hint 
of irony.  END NOTE.) 
 
6.  (C) "Further," Nazarbayev said, "you must carefully 
involve Russia, Pakistan, India, and even Iran.  If they are 
not on board, the destructive chaos will only continue.  You 
are 'the concert master.'  You must create the symphony.  The 
future of Afghanistan needs fullest international consensus. 
Even better if the United Nations can guarantee it.  You 
cannot allow the Taliban to gain a foothold in the next 
Afghan government.  If they get one Talib in, they will take 
over again, and we will be pre-2001.  The Taliban are 
irreconcilable.  Do not trust extremists to be reasonable!" 
 
7.  (C) Nazarbayev said, "Listen to me closely.  We can play 
a most helpful role for you and for the interests of regional 
security and stability.  We can be a base for logistical 
support for Afghanistan (NFI).  We can be the base for the 
broadest training of Afghans, both military and civilian.  We 
are ready to do this and will do so to the maximum.  This 
will save you a lot of money.  We can be the honest broker 
without any ideological agenda.  We have repeatedly said we 
are willing to do this, but it seems to me no one is 
listening to us.  Please tell your President that we are 
willing to play the fullest and most responsible role.  I 
personally will guarantee that we are non-ideological in the 
greater interests of regional stability." 
 
IRAN:  "I AM WILLING TO HELP" 
 
8.  (C) Nazarbayev said that Iranian President Ahmadinejad 
will be in Astana on April 6 and added, "I am most willing to 
be helpful to you.  I will remind Ahmadinejad that I am 
willing to play the role of statesman.  Listen to me:  Iran 
is dangerous!  We all know this.  No one can sleep safely 
with Iran's desire for missiles and nuclear weapons.  I 
always tell Russia that Iran is 'threat number-one.'  Early 
in 2008, I spent three hours with Ahmadinejad in Tehran, and 
then I went to meet with the 'Supreme Mullah.'  I explained 
to them Kazakhstan's non-proliferation history.  I told them, 
'Give up your nuclear ambitions and you will gain 
international respect, as we did.'  I told them this would 
greatly benefit their economy.  I told them to tell their 
people that they had succeeded internationally and gained 
fullest international respect, and then all doors would be 
open to them.  But they responded that no matter what they 
might do, the United States would always find a reason to 
demonize them as part of the 'Axis of Evil' and would try to 
destroy them.  You must understand you have made them 
paranoid.  And paranoid states are extremely dangerous 
because they are irrational.  In 2008, I asked Germany and 
France, 'What can I do to help?'  But I never got any answer. 
 They ignored my offer.  I am still willing to help, but you 
need to make me a partner." 
 
RUSSIA:  "HELP THEM BY EMBRACING THEM" 
 
ASTANA 00000557  003 OF 004 
 
 
 
9.  (C) The Ambassador passed to Nazarbayev the reftel B 
statement on the U.S.-Russia START negotiations.  Nazarbayev 
took time to read it and commented, "This is excellent.  We 
fully support it.  Please continue to keep us informed.  If 
we can be helpful in any way, we will do so." 
 
10.  (C) Nazarbayev said, "I very, very much hope that your 
new Administration will find ways to bring back good 
relations with Russia.  Just a few days ago, I reminded 
President Medvedev by telephone of my November conversation 
with President Obama.  I told him to trust the new American 
President.  I told him I fully believe 'the unpleasant 
period' is over.  Medvedev responded that he looks forward to 
serious talks with Obama in London (during the G-20 Summit)." 
 
 
11.  (C) Nazarbayev added, "Your relations with Russia can 
influence the entire world.  Look, we all know that Russia is 
not as developed as the United States and Europe.  We know 
Russia has outdated equipment and infrastructure.  But you 
must understand Russia's psychology.  Russia will not 
tolerate being pushed aside.  Because they are insecure, they 
are difficult and can even be dangerous.  Russia is brittle 
and demanding, but you must look past that.  Even in its 
weakest moments, Russia has always come back.  After the 
Soviet Revolution, Russia industrialized.  After the Great 
Patriotic War (World War II), Russia rebuilt faster than 
anyone could have imagined.  It is very dangerous to insult 
Russia.  Please understand this.  When they are at their 
weakest, they can do the greatest mischief.  This is simply 
history.  As a former member of the Politburo of the Soviet 
Union, I ask you to trust my judgment.  You can only help 
them move to a better future by embracing them.  My friend 
(former Vice President Richard) Cheney used to pound the 
table and tell me forcefully that Russia was finished as a 
great power.  He never listened to me, but I always asked him 
to consider history.  He never did." 
 
12.  (C) Nazarbayev said, "Based on my excellent November 
conversation with your President Obama, I truly believe he 
understands what's at stake.  Please tell him the U.S. 
missile defense plan for Central Europe is a horrible 
mistake.  If the United States is truly concerned about the 
potential threat from Iran, as we all must be, please tell 
your President that the best recourse is to find a way to 
place missile defenses in Russia, not in Central Europe, 
where they appear to be against Russia.  I remind you, Russia 
is at heart a paranoid nation, and paranoid nations are 
dangerous.  If necessary, even work with Russia to put joint 
missile defenses in Turkey.  Please tell President Obama to 
listen to his best instincts and give reasonable respect to 
Russia, even if it seems irrational to you.  If there is any 
way I can help, I gladly will do so." 
 
13.  (C) Nazarbayed added, "I want to make something very 
clear.  We do indeed have a special relationship with Russia, 
but it is solely, in my view, economic and cultural. 
Kazakhstan is totally independent politically.  We are your 
partner, too, if you allow us to be your partner.  But you 
need to make more of an effort." 
 
"WAIT, ONE MORE MESSAGE FOR PRESIDENT OBAMA" 
 
14.  (C) The meeting then devolved into pleasantries, and the 
Ambassador started to stand up as the President pushed back 
his chair.  Then President Nazarbayev said, "Wait, sit down. 
I have one more message for President Obama.  We want to have 
better, warmer relations with your great country.  I believe 
we deserve trust in many fields.  I want to put on the table 
new economic initiatives.
I deeply appreciate your historic 
investments in our oil and gas sectors, especially at the 
beginning when you took enormous risks when we were weak.  I 
would like to ask that you consider a new partnership not 
 
ASTANA 00000557  004 OF 004 
 
 
just for oil and gas, but also for industrial innovation and 
technological training.  Further, I would ask from my 
respected interlocutor President Obama fullest political 
support by regular high-level visits, including Congressional 
delegations.  I very much need this on a regular basis 
because Moscow is always breathing down my neck.  I will 
always be fully respectful to Moscow, but I very much want 
you to be a bigger and more equal player, too.  I would be 
delighted to host President Obama in Astana, but I fully 
understand he has other priorities.  However, if Secretary of 
State Clinton could visit relatively soon, that would make a 
most powerful regional statement that would not, I assure 
you, be ignored in other capitals -- I mean Moscow and 
Beijing.  I want you to understand that I consider the United 
States a trustworthy partner." 
 
THE REST OF CENTRAL ASIA - PROBLEMATIC 
 
15.  (C) Nazarbayev then trailed off into thumbnail sketches 
of the other Central Asian states.  He said that Kyrgyzstan 
and Tajikistan are desperately poor, weak, and extremely 
unstable, and worry him greatly, but he does not know what he 
can do.  He said he worries about their potential to 
destabilize the region, especially when the "great powers" 
seem predisposed to find new stability for the region, 
including in Afghanistan, but seem to ignore the "weak 
brothers of lower Central Asia."  Nazarbayev judged that 
Uzbekistan is "not doing well" because President Karimov is 
"odd" and overly susceptible to Russian influence.  About 
Turkmenistan, he simply said two words, "permanent 
neutrality," and rolled his eyes. 
 
"I HAVE LEARNED TO BE CALM" 
 
16.  (C) In concluding, President Nazarbayev said, "I have 
been around for a long time, and I know that some say it has 
been much too long.  But in my long experience through many 
difficult times, I have learned, after all these years, to be 
calm.  I really do want stronger, more visible relations with 
the United States.  My door is fully open to you -- please 
tell President Obama.  But if you judge you are not ready, I 
can wait.  I will not ever harm you.  I sincerely want to 
help you.  Anything I do will be in Kazakhstan's best 
interests, but I want to help you, if you will let me." 
 
17.  (C) The Ambassador thanked President Nazarbayev for his 
candor and trust.  He told the President that he would pass 
in detail his views to President Obama and his 
Administration.  Nazarbayev gently chided the Ambassador, "It 
took you a long time to have a first private meeting with 
me."  When the Ambassador replied he is always ready, day or 
night, the President joked, "Don't you have anything better 
to do at night?" 
 
18.  (C) COMMENT:  What was scheduled to have been a 
perfunctory meeting on a difficult bilateral issue (septel, 
NOTAL) became a fascinating tour d'horizon of the region and 
the potential for U.S.-Kazakhstan relations.  Although 
Washington has many white-hot irons in the fire, we judge it 
would be useful for U.S. national interests to pay attention 
to President Nazarbayev's evident and, we believe, sincere 
opening to the Obama Administration in its early days.  It 
might well be possible that we have the opportunity to build 
a strong partner on Afghanistan, Iran, and Russia.  END 
COMMENT. 
HOAGLAND

Wikileaks

09ASTANA556, KAZAKHSTAN: ALMATY NOTES, MARCH 14-27

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Reference ID Created Released Classification Origin
09ASTANA556 2009-03-31 11:22 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO4998
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEKJCS/SECDEF WASHDC 0897
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS ASTANA 000556 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN:  ALMATY NOTES, MARCH 14-27 
 
1. The "Almaty Notes" series from U.S Office Almaty focuses on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital." 
 
OPPOSITIONISTS RESERVE THE OPTION TO PROTEST 
 
2.  On March 17, the leaders of the opposition parties Azat, the 
National Social Democratic Party (OSDP), and the Communist Party 
issued a statement rejecting the ruling Nur Otan party's "memorandum 
on stability" -- a proposal that all parties refrain from public 
protest actions until the economic situation stabilizes.  The three 
opposition parties called the proposal "impractical."  Alikhan 
Baimenov's Ak Zhol party -- which the other opposition parties 
consider to be the government's "pocket opposition" -- previously 
signed on to the memorandum. 
 
COMMUNISTS AND ALGA FORM A BLOCK 
 
3.  The Communist Party and the unregistered Alga party announced on 
March 20 their intention to establish a political block called 
"Narodovlastiye" (People's Power).  In a statement, they said that 
the goal of the block is to unite the resources of both parties and 
to raise awareness of urgent problems the nation is facing.  The 
parties claim that at a time when there is a clear crisis in the 
governance of the state, society needs a constructive opponent of 
the ruling authorities to protect people from arbitrariness and 
lawlessness. 
 
UNITED OPPOSITION? 
 
4.  In an interview with the opposition newspaper "Taszhargan," 
Asylbek Kozhakhmetov, the leader of the Shanyrak movement, outlined 
his vision for uniting all opposition parties into a single union. 
In his view, opposition parties should learn from the ruling Nur 
Otan party, which united many pro-government forces, and form their 
own block in advance of the country's parliamentary and presidential 
elections (which are both scheduled to take place in 2012). 
Kozhakhmetov said that he passed a detailed proposal for such a 
union to the leaders of Azat, OSDP, and the Communist Party.  Asked 
for his predictions on whether the proposal will be adopted, 
Kozhakhmetov admitted that while "negotiations are underway, it is 
difficult to presume that they will lead to an agreement." 
 
AFGHAN WAR VETERANS DEMAND RESTITUTION 
 
5.  On March 20, 60 members of the Afghanistan War Veterans Union 
picketed the building of an Almaty district court demanding a fair 
review of the sale of their organization's property.   The 
protesters allege that several years ago, the chairman of the 
Afghanistan War Veterans Union illegally sold the organization's 
property, including a land plot and office buildings.  Members of 
the Union challenged the deal in the courts, but hearings on the 
matter have been continuously postponed. 
 
HOAGLAND

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09ASTANA555, KAZAKHSTAN: AES AGREES TO EARLY BUY-OUT OF EKIBASTUZ

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09ASTANA555 2009-03-31 10:54 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4969
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
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RUEKJCS/SECDEF WASHDC 0894
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1363

UNCLAS SECTION 01 OF 03 ASTANA 000555 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON ENRG EINV KZ
SUBJECT:  KAZAKHSTAN:  AES AGREES TO EARLY BUY-OUT OF EKIBASTUZ 
MANAGEMENT CONTRACT 
 
REF:  (A) 08 ASTANA 2177 (B) 08 ASTANA 2086 
 
ASTANA 00000555  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On March 20, Kazakhstan's largest private mining 
company, Kazakhmys, terminated after just 15 months a three-year 
management agreement for U.S. power company AES to run the Ekibastuz 
coal-fired power plant.  The contract, which was scheduled to end on 
December 31, 2010, would have paid AES $381 million if the company 
had met certain revenue targets.  Instead, AES will receive $80 
million in April 2009 and $102 million in January 2010.  AES 
Kazakhstan publicly called the early termination a "mutual decision 
that will benefit both AES and Kazakhmys."  In private conversations 
with us, company officials blamed the economic crisis for the 
termination, and also suggested that state-owned company 
Samruk-Energo played a role in the decision.  An industry analyst 
argued that AES no longer has anything of value to contribute to the 
development of Kazakhstan's energy sector.  END SUMMARY. 
 
AES'S EARLY DISMISSAL 
 
3.  (U) On March 20, Kazakhstan's mining giant Kazakhmys announced 
the early termination of a management contract with AES for the 
latter to run the Ekibastuz GRES-1 coal-fired power plant as well as 
the Maikuben coal mine.  In May 2008, Kazakhmys acquired Ekibastuz 
and Maikuben from AES for $1.5 billion.  Under the terms of that 
agreement, AES was to operate Ekibastuz on behalf of Kazakhmys until 
December 31, 2010.  The three-year management contract was to pay 
AES up to $381 million if the company met targets for revenue, 
profitability, and capital improvements.  Under the terms of the 
buy-out, however, Kazakhmys will pay AES $80 million in April based 
on 2008 results and $102 million in January 2010.  Kazakhmys's CEO 
thanked AES for facilitating the management transition and said, 
"This agreement reduces our cash commitments, which is welcome in 
the current environment.  It should also allow us to create a more 
integrated approach to all of our power facilities, which together 
represent over 20 percent of Kazakhstan's power output."  Since 
1996, AES has invested over $200 million in modernization programs 
bringing into operation more than 2,000 megawatts of generation 
capacity at Ekibastuz. 
 
ECONOMIC CONDITIONS BLAMED FOR EARLY TERMINATION 
 
4.  (SBU) On March 24, AES Vice President Mike Jonagan told Energy 
Officer that the early buy-out of the management contract was the 
inevitable result of the economic crisis and the government's 
decision to fix electricity tariffs for the next seven years. 
Jonagan confirmed that under the terms of the original management 
contract, AES would have been paid $381 million in total if 
financial performance targets were met.  According to Jonagan, in 
2008, the Ekibastuz power station delivered strong financial 
results, which guaranteed a significant payout to AES for that 
period.  In 2009, however, Jonagan said the deepening crisis "made 
it very unlikely" that the company would achieve the minimum 
financial threshold for AES to receive payment.  Therefore, he said, 
both parties understood that it was just a matter of time before AES 
itself terminated the agreement to ensure that it received at least 
the minimum payout possible.  Interestingly, Jonagan did not blame 
the government's pending anti-trust ruling against AES  -- a matter 
which the company may still take to international arbitration -- for 
the early dismissal (reftel A).  Indeed, he sounded positively 
upbeat about the announcement, saying, "We are parting ways under 
fairly good terms and with minimal hard feelings.  The economic 
crisis really killed the business, which means they are postponing 
the capital expansion program.  We basically became redundant in the 
economic environment that evolved -- something no one predicted when 
we signed the contract in December 2007." 
 
5.  (SBU) During a March 26 meeting with the DCM, AES Country 
Manager Doug Herron speculated that Kazakhmys was eager to exit the 
agreement due to its own cash flow constraints.  Kazakhmys has lost 
 
ASTANA 00000555  002.2 OF 003 
 
 
nearly 90 percent of its market value in the last year and, 
according to Herron, the company reported no earnout at all from 
Ekibastuz in 2008.  Herron said that some AES corporate official
s 
are concerned that Kazakhmys will not meet its next scheduled 
payment to AES, although he himself was not worried, because AES has 
a letter of credit guaranteeing payment.  Herron also said the 
government's regulation of electricity tariffs will adversely affect 
the profitability of the power plant and AES's other power companies 
in Kazakhstan.  However, he added that the tariff regulation does 
not unfairly discriminate against AES by setting a lower rate for 
their hydropower assets, as did an initial draft.  Herron also noted 
that the central government's decision to fix electricity tariffs 
nationwide means that local governors will no longer be able to 
request preferential treatment for power consumers in their oblasts. 
 "That used to be a terrible problem," said Herron.  "Now, with the 
regulation setting capped rates by fuel type, there's much less 
local interference." 
 
GOVERNMENT PLANS TO TAKE BACK ENERGY ASSETS 
 
6. (SBU) Herron noted that state-owned Samruk-Energo, which is a 
wholly-owned subsidiary of the Samruk-Kazyna National Welfare Fund, 
plans to acquire 40 percent of Ekibastuz from Kazakhmys.  He 
suggested that as a result, Samruk-Energo may also have played a 
role in pressing Kazakhmys to terminate AES's management contract 
early.  (NOTE:  In February 2008, when AES announced the sale of its 
interest in the Ekibastuz power plant and the Maikuben coal mine to 
Kazakhmys, Prime Minister Karim Massimov ordered Samruk-Energo to 
negotiate with Kazakhmys for an ownership stake in Ekibastuz.  In 
October 2008, Kazakhmys and Samruk-Energo signed a memorandum of 
understanding agreeing to joint ownership of Ekibastuz and Maikuben. 
Samruk-Energo Managing Director Alexander Li said at the time that 
the company would need six more months to complete the necessary due 
diligence and report its findings to the government, and 
approximately one year to complete the deal.  In November 2008, 
Kazakhmys asked the government to expedite its acquisition of 
Ekibastuz and the Maikuben, warning that it did not have sufficient 
funds to repay the loan it took to finance the acquisition from AES. 
 END NOTE.) 
 
AES HAD "NOTHING OF VALUE" TO CONTRIBUTE 
 
7.  (SBU) On March 24, Moscow-based energy consultant Paul Boyne 
told Energy Officer that AES was being "run out of the country" 
because they no longer had anything of value to contribute to the 
development of Kazakhstan's power sector.  Boyne, who has worked as 
an advisor to Samruk-Energo, said, "All the equipment at Ekibastuz 
is Russian.  All the expertise is with the local staff, not the AES 
management team.  And AES can't arrange any capital investments for 
the plant, so they are totally useless."  Boyne said AES knew it 
could not fulfill the goals in the management contract and should 
consider itself fortunate to walk away with such a large payout.  "I 
wasn't surprised that AES left," he said.  "The only surprise to me 
is how fast it happened." 
 
SOUTH KOREANS INVEST IN POWER SECTOR 
 
8.  (U) On a separate but related note, the Korea Electric Power 
Corporation announced on March 25 that a consortium involving 
Samsung C and T Corporation was selected as the prime bidder for 
construction of a $2.5 billion thermal power plant in Balkhash, in 
eastern Kazakhstan.  The consortium plans to finalize a formal deal 
with Samruk-Energo in 2010, with the aim of completing a plant with 
a capacity of 1,200-1,500 megawatts by 2014.  The consortium will 
own 75 percent of the new venture and operate the plant once it is 
built in Balkhash. 
 
9.  (SBU) COMMENT:  Unlike previous government decisions affecting 
AES, in this case, the company has not asked for sympathy or support 
from the U.S. government.  AES seems genuinely satisfied to exit its 
Ekibastuz management contract at the half-way point, with 
 
ASTANA 00000555  003.2 OF 003 
 
 
approximately half of the revenue it had planned to collect.  AES's 
country manager even called the early buy-out "the cream on top" of 
the billion-dollar sale of the power plant to Kazakhmys in 2007. 
However, the transaction does make one wonder where AES will go from 
here.  The company's anti-trust dispute looks headed for 
international arbitration, Samruk-Energo has replaced AES at 
Ekibastuz, and Korean rival Samsung is grabbing headlines and 
winning billion-dollar contracts to build new power plants.  AES now 
has only two hydropower concessions until 2019, and two combined 
heat-and-power plants that even they admit no one wants, as their 
strategic presence in the region.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA545, KAZAKHSTAN: ADVOCACY GROUP ADDRESSES LETTER TO THE

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Reference ID Created Released Classification Origin
09ASTANA545 2009-03-30 09:12 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3689
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0545/01 0890912
ZNR UUUUU ZZH
O 300912Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5041
INFO RUCNCIS/CIS COLLECTIVE 1416
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0796
RUEHKO/AMEMBASSY TOKYO 1499
RUEHUL/AMEMBASSY SEOUL 0483
RUCNDT/USMISSION USUN NEW YORK 2232
RUEHNO/USMISSION USNATO 2562
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0979
RUEKJCS/SECDEF WASHDC 0892
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 000545 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM SOCI KDEM KPAO KZ
SUBJECT:  KAZAKHSTAN:  ADVOCACY GROUP ADDRESSES LETTER TO THE 
SECRETARY REGARDING "TASZHARGAN" LIBEL CASE 
 
REF:  (A) ASTANA-ALMATY OFFICIAL-INFORMAL EMAIL, MARCH 25 
 (B) ASTANA-ALMATY OFFICIAL-INFORMAL EMAIL, MARCH 24 
 (C) ASTANA 0479 
 (D) ASTANA 0431 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (U) This is an action request.  Please see paragraph 4. 
 
3.  (SBU) An ad-hoc advocacy group of journalists and NGO activists 
sent a letter via public mail received at Embassy Astana to the 
Secretary, expressing concerns about a libel suit filed by Roman 
Madinov, a member of the Mazhilis (the lower house of parliament), 
against the opposition newspaper "Taszhargan."  Para 5 contains an 
English-language translation of the full text of the letter, which 
also requests that we deny Madinov entry to the United States.  As 
reported in refs C and D, Madinov filed a libel suit against 
"Taszhargan" for an op-ed article that described him as a "land 
baron" and claimed that he had become a parliamentarian solely to 
advance his private business interests.  On February 26, an Almaty 
appellate court ordered "Taszhargan" to pay Madinov 30 million tenge 
(approximately $200,000) in damages, increasing ten-fold the 
original fine imposed by a lower-level court in January.  The 
letter, which eight journalists and NGO activists signed, asserts 
that libel suits like Madinov's "threaten independent journalists 
and the freedom of the press in Kazakhstan." 
 
4.  (SBU) ACTION REQUEST:  Post requests Department concurrence for 
the Ambassador to respond to the letter on the Secretary's behalf. 
None of the letter's signatories are prominent media or civil 
society figures, and none are known to post.  The Ambassador's 
response would stress that we are closely watching the "Taszhargan" 
case, and underline that in our ongoing dialogue with the 
government, we have urged Kazakhstan to continue its cooperation 
with the OSCE and ODIHR in bringing its laws, including its media 
legislation, fully in line with OSCE standards.  Since the group 
also asks us to deny Madinov entry to the United States, the 
Ambassador's response would explain that the U.S. visa regime is set 
by legislation which clearly lays out the permitted grounds for visa 
refusals.  END ACTION REQUEST. 
 
5.  (SBU) Begin text of letter: 
 
To Secretary of State Hillary Rodham Clinton 
 
Dear Madame Secretary: 
 
Romin Rizovich Madinov, a member of the Mazhilis of the Parliament 
of the Republic of Kazakhstan, filed a lawsuit against an 
independent reporter from the "Taszhargan" newspaper regarding an 
article from April 24, 2008 entitled "Poor 'Latifundist'" with a 
claim of compensation for moral damages in the amount of 300 million 
tenge.  R.R. Madinov resolutely turned down a proposal for a 
peaceful settlement of the case.  On January 16, 2009, a court ruled 
that the newspaper and the author of the article should pay 
compensation in the amount of 3 million tenge.  The court ignored 
the motion from the defense attorney, Ganna Krasilnikova of the Adil 
Soz Foundation, to submit the text of the article for review by a 
commission of experts. 
 
On February 26, 2009, an Almaty city court reviewed the appeal (of 
the defense) and ruled that a total of 30 million tenge should be 
paid by the newspaper and the author.  This ruling, which 
immediately entered into legal force, will be appealed in a 
higher-level court.  After the case goes through all judicial stages 
in the Republic of Kazakhstan, an appeal will be filed with 
international judicial institutions.  We express our joint support 
to the author of the article. 
 
We would like to draw your attention to the fact that lawsuits 
against newspapers and journalists have become instruments of 
persecution and infringement on freedom of speech in Kazakhstan. 
Seven lawsuits have been filed against the "Taszhargan" newspaper. 
Their satisfaction will paralyze operation of this independent media 
 
ASTANA 00000545  002 OF 002 
 
 
outlet.  R.R. Madinov's lawsuit sets a precedent for large-scale 
persecution of independent journalists and media.  It is a threat to 
freedom of speech and the development of democracy in the Republic 
of Kazakhstan. 
 
We ask you to consider a possibility of banning entry visas to the 
U.S. for R.R. Madinov. 
 
Signatories: 
 
Bakhytzhan Toregozhina, organization Ar.Ruh.Hak 
Nurgul Malik, organization Ar.Ruh.Hak 
Alikhan Ramazanov, org
anization Shanyrak 
Sapura Zhusupova, organization Shanyrak 
Zhanar Kasymbekova, organization Ar.Ruh.Hak 
Eduard Nazarov 
Zhazira Abdeldaeva 
Korlan Dzhumasheva 
 
End text of letter. 
 
HOAGLAND

Wikileaks

09ASTANA541, KAZAKHSTAN: LIFE ON THE STEPPE, MARCH 21 – 27, 2009

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Reference ID Created Released Classification Origin
09ASTANA541 2009-03-27 09:07 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO2061
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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INFO RUCNCIS/CIS COLLECTIVE 1414
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RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1360

UNCLAS SECTION 01 OF 02 ASTANA 000541 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON SOCI SENV KZ
SUBJECT:  KAZAKHSTAN:  LIFE ON THE STEPPE, MARCH 21 - 27, 2009 
 
ASTANA 00000541  001.2 OF 002 
 
 
1.  (U) This is another in a series of weekly cables drawn mostly 
from public media, as well as think-tank, NGO, and opposition 
web-sites, selected to show the diversity of life in Kazakhstan, and 
information about it available to citizens of Kazakhstan.  Our goal 
is to choose what might interest and be of use to various end-users 
in Washington and -- especially -- to provide a more complex view 
from the other side of the world, illustrating the vitality (and 
sometimes the quirkiness) of discourse available to citizens of 
Kazakhstan. 
 
DISQUALIFIED CANDIDATES FOR LOCAL ELECTION CRY FOUL 
 
2.  (U) The Almaty Election Committee found 18 candidates ineligible 
to run for office in the upcoming Maslikhat (regional legislative 
body) election.  In January, the Committee announced elections, 
scheduled for March 29, to fill empty seats in three districts. 
Initially, 33 candidates registered to compete for the seats but the 
Committee's recent decision has left the field sharply reduced. 
Furthermore, questions have arisen whether the decision was 
politically motivated.  According to one ineligible candidate, the 
reasons why they have been denied participation in the elections 
were "ridiculous." 
 
3.  (U) Most of the disqualified candidates were declared ineligible 
because of alleged inconsistencies in property and income 
disclosures.  One candidate was disqualified for not disclosing that 
he owned a car, which was stolen from him 16 years ago.  Another was 
found to have "hidden" 361 tenge (a little over two dollars) in a 
"secret" bank account.  Yet another was found ineligible because he 
did not disclose his share in a non-governmental organization, even 
though by law it is a not-for-profit entity and does not have 
shareholders. 
 
4.  (U) Denis Alimbekov, deputy head of the NGO Talmas and one of 
the ineligible candidates, has his own opinion about the decisions 
of the election committee:  "The authorities simply decided not to 
allow 'inconvenient' candidates to run:  human rights advocates, 
civil society leaders -- those of us who really defend civil 
rights."  Asylbek Kozhakhmetov, chairman of the NGO Shanyrak, was 
also suspicious of the real intentions of the authorities.  "I think 
that if the people at the top decide that some candidates should not 
have a seat on the city council," he said, then those candidates 
"will not get there, no matter what." 
 
5.  (U) Adil Dzhunusov, chairman of the Almaty election committee, 
categorically denied that the decision to exclude certain candidates 
was politically motivated.  "The idea that the committee want to 
'shut down' some inconvenient candidates is absolutely untrue," he 
said.  "We gave them all an opportunity to appeal the decision and 
dispute the findings of the Tax Committee." 
 
BAZAAR VENDORS STRIKE TO SAVE LIVELIHOODS 
 
6.  (U) Hundreds of vendors held a strike in front of the Zhana 
market in Almaty last week.  The vendors said they worry about their 
livelihood, particularly because of plans to build a mall where 
their market is currently located.  They fear that the new building 
will leave them without jobs and with little hope of finding new 
ones.  The market is scheduled to close on April 1, when 
construction of the mall is scheduled to begin.  The 400 vendors 
currently selling fruits, vegetables, and other items are required 
to leave by that date.  "We have already tried to rent stalls in 
other markets, but nobody wants us there.  Besides that, everyone 
here already has steady clients whom they will lose when the market 
shuts down.  To throw us out on the street like this is merciless. 
Everyone has families and now, with the [economic] crisis, we are 
already on the verge of poverty." 
 
WELL-CONNECTED CON ARTIST 
 
7.  (U) Perhaps inspired by the inventive Ostap Bender from the Ilf 
and Petrov novels, a 37-year old resident of Pavlodar swindled 
dozens of people of at least 800,000 tenge ($5,300).  As "a person 
close to the emperor", the swindler promised to use her personal 
connections with the inner circle of Kazakhstan's power structure to 
make problems disappear and find solutions to any predicament.  For 
a fee, of course.  However, like Ilf and Petrov's infamous "great 
combinator," those valuable connections existed only in the creative 
 
ASTANA 00000541  002.2 OF 002 
 
 
mind of the Pavlodar con artist and the hopes and dreams of her

gullible victims.  It is impossible to determine how many people 
fell for the Pavlodar "power broker" and how much money she stashed 
away before she was finally apprehended.  Nevertheless, since her 
victims may have had good reason not to complain to the police, it 
is safe to assume that the amount is some multiple of the 800,000 
tenge reported. 
 
MAN LIFTS BULL, MAN WINS BULL 
 
8.  (U) The highlight of the Nauryz festivities in Taraz was a truly 
manly contest.   How many squats can a man do -- with a bull on his 
shoulders?  As it turned out, eleven of the twelve competitors were 
unable to do even a single squat; they could not even manage to lift 
the bull on their shoulders.  Granted, the bull weighted about 110 
kilograms (242 pounds).  The winner, however, was not only able to 
hoist up the young bull but also squatted down and stood up three 
times in a row.  In recognition of his feat of strength, he left the 
festivities showered with admiration -- and with the heavy beast 
itself. 
 
MILAS

Wikileaks

09ASTANA540, ALMATY AND ASTANA FRAUD SUMMARY SEPTEMBER 2008 – FEBRUARY

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Reference ID Created Released Classification Origin
09ASTANA540 2009-03-26 04:56 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO0235
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DE RUEHTA #0540/01 0850456
ZNR UUUUU ZZH
R 260456Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 5027
RUEHPNH/NVC PORTSMOUTH 0375
INFO RUEHAST/USOFFICE ALMATY 1356

UNCLAS SECTION 01 OF 04 ASTANA 000540 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: KFRD CVIS CPAS CMGT ASEC KZ
SUBJECT: ALMATY AND ASTANA FRAUD SUMMARY SEPTEMBER 2008 - FEBRUARY 
2009 
 
DEPT FOR CA/FPP, POSTS FOR FRAUD PREVENTION MANAGERS 
 
REF: A) 08 STATE 74840 B) 08 ASTANA 1698 C) 07 BISHKEK 823 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (U) The following sections correspond to questions in Ref A. 
 
--------------------- 
COUNTRY CONDITIONS 
--------------------- 
 
3. (U) Kazakhstan is a single consular district with two consular 
offices, Embassy Astana and Embassy Branch Office (EBO) Almaty. The 
Astana consular section processes only NIVs and is staffed by one 
officer and two Foreign Service Nationals (FSNs). EBO Almaty 
maintains a consular section with two American officers, one 
Consular Assistant and five FSNs.  The Branch Office processes 
nonimmigrant visas (NIVs) for residents of Kazakhstan and handles 
Kazakhstani, Kyrgyz and Tajik immigrant visas (IVs) and adoptions. 
The American Citizen Services workload is shared by both sections. 
The Chief of the two Consular Sections is in Almaty. 
 
4. (SBU) Kazakhstan is a very low fraud country.  A B1/B2 validation 
study conducted by post in August 2008 (Ref. B) found a non-return 
rate of 0.9% for Astana issuances and 1.6% for Almaty issuances. The 
total non-return numbers were too low to draw any meaningful 
conclusions as to NIV fraud trends. 
 
5. (SBU) Since independence in 1991, the economic situation in most 
of Kazakhstan has improved.  In the larger cities, such as Almaty, 
Astana, and Atyrau, the oil and gas industry has provided an 
economic boom.  However, the improvement in living conditions is 
uneven and in many rural areas there are still pockets of extreme 
poverty and economic hardship.  The worldwide economic slowdown has 
reached Kazakhstan, however there is no evidence to date that visa 
fraud has increased as a result. The overall economic situation is 
aggravated by corruption, which motivates much of the visa fraud 
encountered at post.  The most significant factor in both visa 
issuance and fraud rates is the economic situation in the 
applicant's home region. 
 
6. (SBU) Most pleasure (B2) visa applicants desire to travel to 
Brooklyn, NY or the suburban Seattle, WA area to visit relatives. 
Manhattan and Las Vegas are also becoming popular tourist 
destinations as incomes rise.  Houston, TX is the number one 
destination for business (B1) travelers thanks to strong energy 
industry ties.  Students also like Houston; the University of 
Houston Downtown and the Houston community college system are by far 
the most popular starting points for Kazakhstani students, though 
many transfer to other institutions after a few semesters.  F1 
applicants for post-secondary study tend to be very well qualified, 
however applicants hoping to study English as a Second Language are 
less consistent.  The number of Kazakhstani immigrants to the United 
States is relatively low. 
 
7. (SBU) Fraudulent documents, especially invitation letters, 
employment letters and other bona fides are available and easy to 
come by.  However, it is unusual to see fraudulent official 
Kazakhstani documents such as passports and birth certificates.  On 
the other hand, fraudulent official documents from neighboring 
countries are a concern. 
 
------------ 
NIV FRAUD 
------------ 
 
8. (SBU) Most consular fraud in Kazakhstan relates to B1/B2 NIV 
applications.   Document packs featuring false job and invitation 
letters make up the vast majority of these cases.  To combat this 
problem, post maintains a list of suspicious notaries to help us 
spot less-than-legitimate invitation letters.  Most of the falsified 
employment letters are also easy to spot: they almost all feature a 
laser or ink-jet printed company stamp (an almost mandatory feature 
for an employment letter in the region) instead of the real thing. 
 
 
9. (SBU) Standard document pack cases are relatively easy to 
identify.  However, post often sees a more refined version of the 
document pack which includes interview coaching and even a 
'legitimate' group leader.  In this case, the leader is usually an 
established small business owner with several previous visits to the 
U.S.  Using these credentials, the leader will apply with two or 
three previously unseen applicants, claiming a joint purpose of 
travel in line with the leader's previous trips. 
 
10. (SBU) Careful interviewing has proven the best way to spot and 
hinder this type of NIV fraud.  The applicants in the above and 
similar cases all have 'legitimate' supporting documents and have 
 
ASTANA 00000540  002 OF 004 
 
 
received coaching for the interview.  Asking detailed professional 
questions helps identify cases for further investigation. 
Entry/exit data for previous applicants related to a suspected 
facilitator establishes patterns.  Since the application documents 
are designed to pass a basic fraud check,
 local investigations are 
time consuming and have involved visits to suspect businesses and 
residential addresses.  We believe, however, that aggressively 
pursuing this type of fraud is the most effective deterrent. 
 
 
11. (SBU) The Summer Work and Travel (SWT) J1 program continues to 
grow in popularity, from about 200 participants in 2000 to over 4000 
in 2008.  While not directly influencing visa eligibility, fake job 
offer letters are a problem for SWT participants.  Students purchase 
job offers from local brokers or through the Internet for $50 - 
$200. Many of these jobs do not exist at all.  Of the rest, most are 
sold to dozens or hundreds more students than the employer is 
expecting. To better protect program participants, post would 
welcome changes to the SWT program to better monitor the legitimacy 
of job offers. In particular, we would support a requirement that 
all first-time SWT participants travel with confirmed job offers 
obtained directly from their American sponsoring organization. 
 
12. (SBU) Post does not see significant fraud trends in 
employment-based, student, or religious NIVs. A 100% validation 
study of the 60 visa referral program cases processed in 2008 
confirmed that all referral beneficiaries returned to Kazakhstan on 
time. 
 
----------- 
IV FRAUD 
----------- 
 
13. (SBU) EBO Almaty processes immigrant visas (IVs) for Kazakhstan, 
Tajikistan and Kyrgyzstan.  Approximately 60% of post's IV cases, 
not including adoptions, are from Kyrgyzstan.  The level of IV fraud 
is low but there is concern about the legitimacy of Kyrgyz and, in 
particular, Tajik civil documents.  Most can be bought inexpensively 
and the potential for identity fraud is high, as is the potential 
for an applicant to mask potential 212(a) ineligibilities. 
 
----------- 
DV FRAUD 
----------- 
 
14. (SBU) Diversity Visa (DV) visa fraud is low, but the same 
concerns as above apply to our DV applicants, the majority of whom 
are also from Kyrgyzstan.  The number-one reason for refusing DV 
applications is the failure of an applicant to include a 
pre-existing spouse or child in their initial entry.  This appears 
to be mainly due to DV entry facilitators in the region which either 
do not know program rules or do not care, rather than any deceptive 
or willful action on the applicant's part. 
 
------------------------- 
ACS AND PASSPORT FRAUD 
------------------------- 
 
15. (SBU) ACS fraud is extremely low in Kazakhstan.  To date, post 
has not had a pattern of mala fide applicants trying to obtain U.S. 
passports or other benefits from the consular section. 
 
----------------- 
ADOPTION FRAUD 
----------------- 
 
16. (SBU) Almaty processes over 400 adoptions per year.  Most of 
these cases are IR3 visa class adoptions from Kazakhstan, where 
international adoption is a high-profile issue.  Kazakhstan has a 
working system of checks-and-balances between the three government 
agencies (Ministry of Foreign Affairs, Ministry of Education and 
Ministry of Justice) that makes international adoption fraud or 
wrongdoing difficult.  Furthermore, the attention the Kazakhstani 
adoption system receives from the local media and legislators helps 
to limit possibilities for abuse of the system.  We have not seen 
any Kazakhstani adoption cases that we suspect are fraudulent. 
 
17. (SBU) EBO Almaty continues to work closely with Embassy Bishkek 
to monitor the adoption situation in Kyrgyzstan.  While Kyrgyz 
adoptions have been on hold since late 2008, Almaty anticipates a 
resumption of adoption processing in the future, including many IR4 
cases.  We are concerned about the potential for fraud and weak 
controls in the Kyrgyz adoption system expressed by Bishkek in Ref 
C. 
 
------------------------------------- 
USE OF DNA TESTING 
------------------------------------- 
 
18. (SBU) Post has had one case involving DNA testing in the last 
 
ASTANA 00000540  003 OF 004 
 
 
six months; fraud was not confirmed in that case.  There are no 
special issues or concerns with using DNA testing in Kazakhstan. 
 
------------------------------------- 
ASYLUM AND DHS BENEFIT FRAUD 
------------------------------------- 
 
19. (SBU) Embassy Astana and EBO Almaty assist DHS Moscow, the 
Department and the BCIS district offices in the United States with 
verifying documents for refugee and asylum cases.  In most 
instances, these documents turn out to be fraudulent.  Post has 
processed no Visas 92/93 cases nor have any lost or stolen I-551s 
been reported to us. 
 
--------------------------------------------- --- 
ALIEN SMUGGLING, TRAFFICKING, ORGANIZED CRIME 
AND TERRORIST TRAVEL 
--------------------------------------------- --- 
 
20. (SBU) Kazakhstan's geographic location makes it a transit point 
for alien and drug smuggling, particularly from South Asia to 
Western Europe. Known 'black' border crossings permit travel into 
and out of Kazakhstan without inspection.  Falsified Kazakhstani 
travel documents are a minor problem. Tajik, Kyrgyz and Uzbek 
documents are of greater concern.  Contacts at other Western 
missions report fraud patterns and concerns similar to those 
detailed in paragraphs 5 to 8.  Post is not aware of any cases in 
which a fraudulent U.S. visa has been used to assist an EU visa 
application. 
 
----------------------------------- 
DS CRIMINAL FRAUD INVESTIGATIONS 
----------------------------------- 
 
21.  (SBU) In the last six months, Astana and Almaty have not 
referred any cases to Diplomatic Security for investigation. 
 
--------------------------------------------- 
HOST COUNTRY PASSPORT, IDENTITY DOCUMENTS, 
AND CIVIL REGISTRY 
--------------------------------------------- 
 
22. (SBU) The Kazakhstani Ministry of Justice processes passport 
applications at regional offices throughout the country, issuing a 
machine-readable laminate passport.  Passport validity can be up to 
twenty years, but all passports must be replaced on the bearer's 
25th and 45th birthday regardless of when they were issued. 
Kazakhstan issues a national ID card which can be used for travel 
within the Commonwealth of Independent States.  Post has not 
encountered any known cases of falsified Kazakhstani travel or 
identity documents.  Kazakhstani media reports have alleged that 
well-connected Kazakhstanis have obtained passports issued with a 
false identity. Birth certificates and other lower-level civil 
documents, particularly those issued outside of major cities, are 
not secure.  A determined and resourceful person could obtain a 
government-issued Kazakhstani passport with a false identity using 
these documents. 
 
----
----------------------------------------- -- 
COOPERATION WITH HOST GOVERNMENT AUTHORITIES 
--------------------------------------------- -- 
 
23. (SBU) Cooperation with the Kazakhstani government authorities is 
mixed.  There is a noted lack of cooperation or organization among 
Kazakhstan's ministries and regional departments.  Despite this, 
post is usually able to receive immediate assistance with unofficial 
verification of documents.  If an official, written answer is 
necessary it can take several months, however. 
 
24. (SBU) Post has developed strong relationships with adoption 
processing authorities, including the Ministry of Education -- the 
government agency that oversees the processing of dossiers.  When 
addressing adoption-related concerns, cooperation is generally very 
good. 
 
------------------------------ 
AREAS OF PARTICULAR CONCERN 
------------------------------ 
 
25. (SBU) Post is paying close attention to the rapid growth of the 
Summer Work and Travel Program (para. 9) and Kazakhstan's status as 
a drug- and alien- smuggling thoroughfare (para. 18). 
 
------------------------ 
STAFFING AND TRAINING 
------------------------ 
 
26. (SBU) Almaty Vice Consul James Waterman serves as Fraud 
Prevention Manager, supervised by Consular Section Chief Chris 
Beard.  FSN Rustam Ushurov is the Fraud Prevention Assistant. 
 
ASTANA 00000540  004 OF 004 
 
 
Christopher Beard attended the Fraud Prevention for Consular 
Managers course at FSI in October 2005.  Rustam Ushurov attended the 
FSN Fraud Prevention course at FSI in November 2008 and James 
Waterman will attend the FPM course at the soonest available 
opportunity.  Post hosted FPP's Eliana Holmes for onsite 
consultations in October 2008. 
 
 
MILAS

Wikileaks

09ASTANA538, KAZAKHSTAN: ECONOMIC AND ENERGY UPDATE, MARCH 1-14, 2009

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Reference ID Created Released Classification Origin
09ASTANA538 2009-03-26 04:50 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0226
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0538/01 0850450
ZNR UUUUU ZZH
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FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5024
INFO RUCNCIS/CIS COLLECTIVE 1411
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0791
RUEHKO/AMEMBASSY TOKYO 1494
RUEHUL/AMEMBASSY SEOUL 0478
RUEHDI/AMCONSUL DUBAI 0140
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0974
RUEKJCS/SECDEF WASHDC 0887
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1353

UNCLAS SECTION 01 OF 03 ASTANA 000538 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
PLEASE PASS TO USTDA DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EPET EINV KZ
 
SUBJECT:  KAZAKHSTAN:  ECONOMIC AND ENERGY UPDATE, MARCH 1-14, 2009 
 
ASTANA 00000538  001.2 OF 003 
 
 
1.  SUMMARY:  This information is drawn primarily from the 
Kazakhstani local press and has not been verified for accuracy. 
 
-- News from the Banking Sector 
-- Samruk-Kazyna Updates 
-- Unemployment: a Growing Challenge 
-- 2009 Harvest Projection 
-- Economic Statistics 
-- Kazakhstan Seeks Controlling Stake in Trans-Caspian Project 
-- Status of Kazakhstan-China Gas Pipeline Project 
-- Kazakhstan Returns to Central Asian Power Grid 
-- The Atyrau Petrochemical Plant Project 
-- New KazMunaiGas Strategy to Sign Contracts 
-- Speculation Continues Around MangistauMunaiGas 
 
END SUMMARY. 
NEWS FROM THE BANKING SECTOR 
 
2.  According to the Deputy Prosecutor General of Kazakhstan, 
Rakhimbek  Mamyrbaev, former chairman of BTA Bank Mukhtar Ablyazov 
and his deputy Zhaksylyk Zharimbetov have been charged with misuse 
of funds and embezzlement.  They are accused of orchestrating a 
money laundering scheme using fake offshore companies.  Kazakhstan's 
KazTAG news agency reported that both Ablyazov and Zherimbetov were 
put on an international wanted list. 
 
3.  On March 2, Margulan Seisembayev, Chairman of the Board of 
Alliance Bank, said he expected National Welfare Fund Samruk-Kazyna 
to complete its takeover of the bank after Alliance secures waivers 
from its creditors.  He did not specify the timing of the deal.  On 
March 12, Kazakhstani Stock Exchange (KASE) suspended trading in the 
bank's common shares after they declined by more than 50 percent. 
 
4.  Kazkommertsbank must repay approximately $1.3 billion in 
external debt in 2009, the bank's press office reported.  This 
includes $250 million due in June, $500 million due in November, and 
$300 to be repaid in December 2009. 
 
5.  Nurbank named Marat Zairov, former deputy chairman of Halyk 
Bank, its new Chairman of the Management Board.  Zairov outlined the 
new priorities of the bank, which will include expanding its small 
and medium enterprise and retail operations.  Nurbank is owned by 
the oldest daughter of President Nazarbaev, Dariga Nazarbaeva; her 
son, 23-year-old Nurali Aliev, is the Chairman of the Board of 
Directors of Nurbank. 
 
SAMRUK-KAZYNA UPDATES 
 
6.  Bonds issued by National Welfare Fund Samruk-Kazyna with a total 
value of 405 billion tenge (approximately $2.7 billion) were listed 
on KASE on March 13.  They are the first release of Samruk-Kazyna's 
bond issue program, totaling 750 billion tenge (about $5 billion). 
Local experts say that pension funds and the National Fund could be 
the main buyers of the bonds. 
 
7.  Samruk-Kazyna plans to obtain export credit lines from Russia's 
VneshEconomBank and China's Export-Import Bank.  According to 
Samruk-Kazyna's CEO Kayrat Kelimbetov, these funds will be used to 
implement investment projects in Kazakhstan, such as the 
construction of a bitumen plant, a sodium hydroxide production plant 
and a petrochemical complex. 
 
UNEMPLOYMENT:  A GROWING CHALLENGE 
 
8.  According to Deputy Minister of Labor and Social Protection 
Serik Abdenov, about 1,049 jobs will be cut in "the nearest future" 
in Kazakhstan.  He said that in January 2009 unemployment grew by 
0.3 percent, and the total number of jobless people was 580,000. 
According to official information provided by the State Statistics 
Agency, the unemployment rate was 6.9 percent in January 2009. 
 
 
ASTANA 00000538  002.2 OF 003 
 
 
9.  In his annual address, President Nazarbayev issued an order to 
allocate 8.6 billion tenge (approximately $57 million) from the 
state budget to create jobs in social services and support 
employment of youth. 
 
2009 HARVEST PROJECTION 
 
10.  The Ministry of Agriculture forecasts the 2009 grain harvest to 
be at least 10 percent higher than last year.  In 2008, Kazakhstan 
harvested 17.2 million tons of grain. 
 
ECONOMIC STATISTICS 
 
11.  In 2008, JSC Food Corporation reported a net profit of 1,516 
million tenge (about $10.1 million), a 150% growth compared to 2007, 
when it earned 595 million tenge (approximately $3.96 million) in 
&#18
2;2007.  Food Corporation is a subsidiary of National Holding Company 
"KazAgro" and specializes in grain trading and storage. 
 
12.  According to the State Statistics Agency, Kazakhstan's trade 
surplus declined 3.6 times over last year, from $2.9 billion in 
January 2008 to $0.8 billion in January 2009.  Total foreign trade 
was $4.4 billion, a decline of 41.6 percent compared to January 
2008.  Exports fell to $2.6 billion, or 50.5 percent less than in 
January 2008; imports decreased 21.4 percent compared to January 
2008 to $1.8 billion.  In January 2009, the main destinations for 
Kazakhstan's exports were Italy, China, Russia; its largest import 
partners were Russia, China, and Ukraine. 
 
KAZAKHSTAN SEEKS CONTROLING STAKE IN TRANS-CASPIAN PROJECT 
 
13.  Commenting on the Kazakhstan Caspian Transportation System 
(KCTS) on March 10, Minister of Energy and Mineral Resources Sauat 
Mynbayev said that Kazakhstan "will not approach this pipeline, 
formally or informally, unless we own at least 51 percent."  He 
added that the Kashagan consortium and Chevron, representing 
Tengizchevroil, "put up a united front," but "we will not give up a 
controlling stake."  In an interview with Russian Nezavisimaya 
Gazeta on March 11, Alexander Shtock, Director of Due Diligence for 
the business consulting firm 2K Audit, speculated that "as long as 
Kazakhstan has other transportation options, Astana can impose tough 
requirements on its KCTS partners.  If Chevron does not compromise, 
then the Trans-Caspian project might be put on hold.  Russia, on the 
other hand, would also have to hurry up, as the Trans-Caspian 
project might slow down the expansion of the Caspian Pipeline 
Consortium (CPC) pipeline." 
 
14.  On March 5, Russian media reported that Kazakhstan's national 
oil and gas company KazMunayGas (KMG) established a subsidiary 
called KMG-TransCaspiy, which will manage the KCTS project.  Mukhit 
Mazhenov, former Deputy General Director of KazTransOil, KMG's oil 
transportation subsidiary, was appointed General Director of 
KMG-TransCaspiy.  Another former Deputy, Bulat Zakirov, was named 
Deputy General Director of the new company. 
 
STATUS OF KAZAKHSTAN-CHINA GAS PIPELINE PROJECT 
 
15.  On March 5, Beimbet Shayakhmetov, General Director of the Asian 
Gas Pipeline Company (which is owned by KMG's gas transportation 
subsidiary KazTransGas and Trans-Asia Gas Pipeline Ltd, an affiliate 
of the China National Petroleum Corporation), said that $2.5 billion 
of a projected total of $7.5 billion has already been invested in 
the construction of the 1,300-km Kazakhstan-China gas pipeline.  The 
gas pipeline is part of the Turkmenistan-Uzbekistan-Kazakhstan-China 
pipeline project.  The first segment of the pipeline, which will 
begin at Turkmenistan's gas deposits developed by CNPC, is expected 
to be built by 2010 and will carry 3.5 billion cubic meters (bcm) of 
Turkmen gas.  After the Chinese contractor builds the first of five 
gas compressors in the Kulan village of the Zhambyl oblast, the 
throughput capacity of the gas pipeline will reach 7.5 bcm a year. 
The construction of four additional gas compressors by 2012 will 
 
ASTANA 00000538  003.2 OF 003 
 
 
bring total annual capacity to 30 bcm. 
 
KAZAKHSTAN RETURNS TO CENTRAL ASIAN POWER GRID 
 
16.  The Kazakhstan Electric Grid Operating Company (KEGOC) resumed 
its operations in parallel with the United Power System of Central 
Asia (UPS) on March 13.  The power company withdrew from the grid on 
February 26 due to an imbalance between electricity generation and 
consumption among participating Central Asian countries. 
 
THE ATYRAU PETROCHEMICAL PLANT PROJECT 
 
17.  On February 27, Visor Capital, a local investment company, 
announced that it had acted as a broker on behalf of an unnamed 
third party to acquire a 50 percent stake in Kazakhstan 
Petrochemical Industries (KPI), the project operator of the planned 
Atyrau Petrochemical Plant.  Visor Capital and KMG Exploration 
Production, a KMG subsidiary which owns 51 percent of KPI, declined 
comment on the change in KPI's ownership structure.  (NOTE:  Prior 
to the transaction, the remaining 49 percent was owned by Sat&Co and 
Lyondell Basell Industries.  END NOTE.)  At a March 3 Cabinet 
meeting, Minister of Energy and Mineral Resources Sauat Mynbayev 
said Indian or other investors would participate in the project 
instead of Lyondell, which allegedly withdrew from the project. 
However, in a March 10 press release, Lyondell's president Just 
Jansz confirmed the company's "continued commitment and ongoing 
support to the KPI project."  (NOTE:  On March 20, Managing Director 
for Oil and Gas at Samruk-Kazyna Bolat Akchulakov confirmed that 
Lyondell will participate in the Atyrau Petrochemical Plant project, 
which is to be funded with equity (40 percent), and a syndicated 
loan (60 percent).  END NOTE.) 
 
NEW KAZMUNAYGAS STRATEGY FOR OFFSHORE CONTRACTS 
 
18.  Sunkar newspaper speculated on the new strategy of "official 
Astana" and KMG when choosing foreign partners.  According to the 
newspaper, the new strategy will limit the number of offshore blocks 
offered to foreign partners to only one (blocks would no longer be 
combined under one exploration license).  The government will sign 
contracts for the exploration of blocks located near the Kalamkas 
Sea oil deposit (e.g. Abay and Satpayev blocks).  Moreover, the 
newspaper claimed that under the new strategy, Kazakhstan sought 
Central and Eastern European assets from StatoilHydro in exchange 
for the Abai offshore block.  Kazakhstan also reportedly stipulated 
in new contracts with ConocoPhillips (N Block), the Korean National 
Oil Corporation (Zhambyl block), and India's Oil and Natural Gas 
Corporation (Satpayev block) that these companies must participate 
in Kazakhstan's petrochemical projects. 
 
SPECULATION CONTINUES AROUND MANGISTAUMUNAYGAS 
 
19.  A RusEnergy article predicted that by the end of March, India's 
Oil and Natural Gas Corporation (ONGC) would acquire the remaining 
stake in MangistauMunayGas (MMG).  The article claimed that Indian 
participation "would secure a balance within Kazakhstan's oil 
sector, currently dominated by U.S. and Chinese companies." 
Referring to an unknown source, RusEnergy suggests that MMG would be 
bought under a payment scheme similar to that used by CNPC to 
acquire the Shymkent oil refinery.  The author speculated that ONGC 
would buy 100 percent of MMG and transfer a controlling stake back 
to KMG, which, in turn, would reimburse ONGC out of future revenues. 
 ONGC reportedly agreed, provided it gets a stake in the Satpayev 
block.  (NOTE:  During the January 23-26 visit of President 
Nursultan Nazarbayev to India, KMG and ONGC signed an agreement to 
explore the Satpayev block.  END NOTE.) 
 
MILAS

Wikileaks

09ASTANA535, KAZAKHSTAN: CHARGES FILED AGAINST FORMER CHAIRMAN OF

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Reference ID Created Released Classification Origin
09ASTANA535 2009-03-25 09:24 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9367
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0535/01 0840924
ZNR UUUUU ZZH
P 250924Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 5019
INFO RUCNCIS/CIS COLLECTIVE 1408
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0788
RUEHKO/AMEMBASSY TOKYO 1491
RUEHUL/AMEMBASSY SEOUL 0475
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0971
RUEKJCS/SECDEF WASHDC 0884
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1350

UNCLAS SECTION 01 OF 03 ASTANA 000535 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE, INL/C, SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV PINR EFIN KCRM KZ
SUBJECT:  KAZAKHSTAN:  CHARGES FILED AGAINST FORMER CHAIRMAN OF 
LARGEST PRIVATE BANK 
 
REF:  (A) ASTANA 0386 (B) LONDON 0712 
 
ASTANA 00000535  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet.  This 
cable is based on open source material and local press reports in 
Kazakhstan.  It should be read in conduction with reftel B. 
 
2. (SBU) SUMMARY:  On February 2, the Government of Kazakhstan, 
represented by Samruk-Kazyna National Welfare Fund, acquired control 
of BTA Bank, the largest commercial bank in Kazakhstan, through the 
purchase of 78.14 percent of shares (reftel A).  BTA Bank Chairman 
Muktar Ablyazov was fired the same day and, on March 2, charged with 
embezzlement for laundering funds illegally obtained through loans 
to bogus firms.  END SUMMARY 
 
GOVERNMENT TAKEOVER OF BTA BANK 
 
3. (SBU) As reported in reftel A, Chairman of the National Bank 
Gregoriy Marchenko and the State Financial Supervision Agency (FSA) 
made a joint statement that BTA Bank had failed to fulfill liquidity 
ratio and equity capital adequacy ratio requirements under the Banks 
and Banking Activities Laws.  They further noted that BTA Bank's 
operations had been supported by short-term loans from the National 
Bank for the previous several months. They explained that if the 
National Bank had not provided support, specifically had not given a 
loan in the last week of January, BTA Bank would have been in 
default.  Despite a government commitment to buy a 25 percent 
interest in BTA Bank, it instead acquired a controlling share. 
Prime Minister Karim Masimov fired Ablyazov and First Deputy Chair 
Zhaksylyk Zharimbetov, telling them that they were relieved of their 
duties because their actions were against the law and in conflict 
with the interests of BTA Bank's clients and creditors. 
 
ABLYAZOV RESPONDS AND FLEES KAZAKHSTAN 
 
4. (SBU) In written statements to the Kazakhstani press, Ablyazov 
has claimed that the government's actions constitute an abuse of 
power and that the takeover was illegal.  He has said that the 
present situation is a result of ongoing efforts by governmental 
agencies to take control of BTA Bank through any means necessary. 
Ablyazov alleges that the government has made withdrawals from 
accounts by national and state holding companies, forced other 
clients to do business with other financial institutions, and 
excluded BTA Bank from participating in state programs.  Ablyazov 
said "the purpose was to get control over the banks by any means, 
and it has been achieved."  He predicted that the officials who 
seized private property "may use their usual methods, such as 
slander and criminal prosecution to justify their actions." 
 
5.  (SBU) On February 10, Ablyazov published an open letter to the 
President of Kazakhstan, rejecting accusations that the bank was 
only able to stay in business with short-term loans from the 
National Bank.  He claimed that BTA Bank only borrowed small amounts 
from the National Bank, using securities as collateral. He also 
warned of the negative consequences of the change in management. 
Local media in Kazakhstan have speculated that Ablyazov, having 
achieved independent financial security and knowing of the 
government's plan to arrest him, has fled to London, although there 
has been no official confirmation of this (reftel B).  Police have 
been unable to locate him in Kazakhstan and the Procurator General's 
Office (PGO) plans to file a warrant with Interpol. 
 
ACCUSTIONS AND CHARGES AGAINST ABLYAZOV 
 
6. (SBU) Director of the National Bank Gregoriy Marchenko accused 
Ablyazov of holding no shares in BTA Bank and borrowing money to be 
transferred to unknown offshore accounts.  Marchenko also claimed 
that surveillance cameras recorded two vans removing documents from 
BTA Bank on January 31.  He further stated that this was done by 
people loyal to Ablyazov in order to hide Ablyazov's activities in 
Russia and that Marchenko has an official letter from the Central 
Bank of Russia proving that approximately $600 million was 
transferred by BTA Bank in Russia with fake shipping declarations 
from April though October 2008.  Ablyazov categorically denied these 
allegations. 
 
7.  (SBU) On February 10, presidential advisor Yermukhamet 
 
ASTANA 00000535  002.2 OF 003 
 
 
Yertysbayev stated that Ablyazov's removal was not politically 
motivated.  On March 2, the PGO filed charges against Ablyazov and 
first deputy Zhaksylyk Zharimbetov at the request of the bank's &#x000A
;management.  Charges were brought under Article 176 of the Criminal 
Code for illegal acquisition and embezzlement of property.  The 
PGO's case alleges that the embezzled property was laundered through 
multiple loans to fake companies, secured by the same piece of land. 
 An order was sought seizing all assets owned by individuals and 
companies alleged to have been involved in illegal transactions with 
BTA Bank.  Yertysbayev also recommended that entities involved in 
business relations with Ablyazov immediately verify transactions and 
report to the financial police.  At the same time, Sholpan 
Ablyazova, Ablyazov's cousin, said that her son, Tair Dyusembekov, 
was arrested on the basis of his relationship to Ablyazov.  On March 
2, Dyusembekov, Director of Agento-S LLP, was arrested and held in a 
detention facility by the Committee for National Security (KNB) for 
allegedly overestimating the value of properties owned by Ablayzov's 
affiliated companies.  KNB investigators in Almaty believe that, 
using overestimated appraisals, BTA Bank was financing companies, 
including offshore companies, that were transferring funds to 
Ablyazov's personal accounts and his affiliated companies. 
 
OFFICIAL STATEMENT BY PROSECUTOR GENERAL'S OFFICE 
 
8. (U) On March 20, the PGO issued a press release on the case.  A 
special prosecutor was appointed to lead an interagency group 
investigating Ablyazov and Zharimbetov. The PGO announced that it 
was "a proven fact that Ablyazov and his vicarious agents were 
giving credits illegally to multiple local and offshore companies 
intentionally created for that purpose, thus providing the outflow 
of the capital of BTA Bank for the period of 2005 to 2008."  The 
investigative group initiated several criminal cases, which are 
currently in the pre-trial investigation stage.  The PGO provided 
evidence of Ablyzov's knowledge that charges would be filed and his 
preparations to flee the country.  They also explained some of his 
schemes.  In one deal, for example, Ablyazov transferred $200 
million from BTA Bank to Tortuga Limited, which he allegedly owned 
and registered in the Seychelles Islands, for the purchase of land 
in Moscow for construction of an apartment complex.  Tortuga Limited 
then bought the land from a subsidiary company.  In another scheme, 
Ablyazov purchased a small amount of shares in companies that would 
take loans from BTA Bank to buy out his shares at an inflated 
price. 
 
ABLYAZOV BIO NOTES 
 
9.  (SBU) Ablyazov was one of the founders of the Democratic Choice 
of Kazakhstan movement in 2001.  In 2002, he was imprisoned after 
being convicted of abuse of authority, allegedly while Minister of 
Environment from 1998 through 1999.  The president pardoned him in 
2003.  Though he went into private business after his release, he is 
rumored to be the primary source of financial support for the 
unregistered opposition party Alga. 
 
FUTURE OF BTA BANK UNCERTAIN 
 
10.  (SBU) The assets of BTA Bank increased in value by 10 percent 
in 2008, from 2.649 trillion tenge (current exchange rate 
approximately 150 tenge to the dollar) to 2.915 trillion tenge. 
However, its profits decreased to 12.687 billion tenge, from 48.683 
billion tenge the previous year.  According to the Interfax Center 
of Economic Analysis, BTA Bank had the seventh highest asset base 
among CIS banks and the first among Kazakhstani commercial banks. 
Since the government's takeover, local media have speculated that 
Bulat Utemuratov, former head of Management of the Presidential 
Administration, or Russia's Sberbank may bid for the bank, but no 
such offers have been made. 
 
MANAGEMENT CHANGES AND CHALLENGES 
 
11.  The bank's management faces many difficult challenges.  For 
example, customers withdrew $700 million in the weeks following the 
government's takeover on February 2, and on February 13, shares of 
BTA Bank were down to 1,202 tenge from 14,000 tenge on January 29. 
In an effort to save the bank, on February 2, the government 
appointed Anvar Saidenov, former director of the National Bank, as 
 
ASTANA 00000535  003.2 OF 003 
 
 
Chairman of the Managing Board and Arman Dynaev, current co-chairman 
of the Managing Board of Samruk-Kazyna, as Chairman of the Board of 
Directors. 
 
MILAS

Wikileaks

09ASTANA531, KAZAKHSTAN: WILL KAZTRANSGAS LEAVE GEORGIA?

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Reference ID Created Released Classification Origin
09ASTANA531 2009-03-25 08:57 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9290
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0531/01 0840857
ZNR UUUUU ZZH
O 250857Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5012
INFO RUCNCIS/CIS COLLECTIVE 1406
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0786
RUEHKO/AMEMBASSY TOKYO 1489
RUEHUL/AMEMBASSY SEOUL 0473
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0969
RUEKJCS/SECDEF WASHDC 0882
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1343

UNCLAS SECTION 01 OF 02 ASTANA 000531 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EPET EINV KZ
 
SUBJECT:  KAZAKHSTAN:  WILL KAZTRANSGAS LEAVE GEORGIA? 
 
REF:  (A) TBILISI 0529 (B) ASTANA 2081 
 
ASTANA 00000531  001.2 OF 002 
 
1.  SUMMARY:  This report provides a Kazakhstani perspective on the 
management changes to KazTransGas-Tbilisi (KTG-Tbilisi) reported in 
reftel A.  It is derived entirely from open source material.  On 
March 16, the Georgian National Energy and Water Supply Regulatory 
Commission appointed the Chief of Security Department of the 
Georgian Oil and Gas Corporation (GOGC) to serve as interim manager 
in KazTransGas-Tbilisi (KTG-Tbilisi), which allegedly incurred a 
$47.9-million debt to GOGC.  KTG-Tbilisi, which is wholly owned by 
national oil company KazMunaiGas (KMG), in turn complained that 
residents of Tbilisi have not paid for more than $30 million of 
natural gas already delivered.  GOGC's interim manager will remain 
in charge until KTG-Tbilisi clears its debts.  In the meantime, 
KTG-Tbilisi will retain ownership of its assets in Georgia.  END 
SUMMARY. 
 
GEORGIA TAKES OVER MANAGEMENT OF THE COMPANY 
 
2.  The Director General of KTG-Tbilisi, Sanzhar Shokatayev, 
promised to cooperate with the new Georgian management, ensuring 
that "this decision has nothing to do with politics, and there can 
be no talks about seizure of property."  Nevertheless, he was 
skeptical of the decision, saying, "I doubt that a new management 
can change the situation."  According to the Georgian National 
Energy and Water Supply Regulatory Commission (GNERC), KTG-Tbilisi 
has debts of $47.9 million, of which $40.7 million is owed to GOGC. 
 
 
A DISTRESSED ASSET 
 
3.  In May 2006, KazTransGas bought the natural gas distribution 
company Tbilgas for $12.5 million, including 2,400 kilometers of gas 
pipeline and associated transportation and distribution 
infrastructure.  Although Tbilgas had no debt when KazTransGas made 
its acquisition, its distribution network was built during the 
Soviet era and was rapidly deteriorating.  During its first year of 
operation, the company incurred significant losses of natural gas 
due to leaky gas pipelines and outright theft.  In 2006, losses 
totaled 42 percent of total gas consumed, but this was reduced to 13 
percent by August 2008, partly due to a new partnership with 
U.S.-based Climate Capital Change. 
 
KAZTRANSGAS INSISTS INVESTMENT WILL PAY DIVIDENDS 
 
4.  KazTransGas said on March 25 that it has invested more than $100 
million in KTG-Tbilisi to buy new meters, construct new gas 
distributing stations, purchase equipment for the technical 
diagnosis of gas pipes, and develop technical staff.  In its first 
year of operation, KTG-Tbilisi revenue totaled $26.5 million; two 
years later, revenue tripled to $75 million.  KTG-Tbilisi annually 
sells more than 300 million cubic meters of gas to 300,000 Tbilisi 
residents and 5,000 companies, which comprise 37% of the Georgian 
gas market. 
 
KAZTRANSGAS CONSIDERING INTERNATIONAL ARBITRATION 
 
5.  On March 25, KazTransGas announced that it is reviewing a 
Georgian court decision to replace the company's management and may 
go to international arbitration to appeal the ruling.  On March 16, 
a city court in Kutaisi endorsed GNERC's decision that day to 
appoint a special administrator to run KazTransGas-Tbilisi.  The 
court ruling was made without company representatives present.  In a 
press statement, KazTransGas said it "finds the decision of the 
regulator invalid and the steps it took premature and unjustified." 
KazTransGas said it had not violated its licensing agreement and 
announced that it will review the court decision to determine 
whether it constitutes a breach of contract.  KTG said it may 
ultimately file an appeal with an international arbitration court, 
although KMG President Kairgeldy Kabyldin said on March 25 that 
Kazakhstan would prefer to settle the dispute out of court.  "We 
have no desire to initiate litigation," he said at a press 
conference.  "We have a well-grounded position and we acknowledge 
 
ASTANA 00000531  002.2 OF 002 
 
 
the mutual obligations."  Kabyldin claimed that KMG's Georgian 
partners failed to fulfill their obligations.  "They first cited the 
elections, then the war, as reasons not to raise gas rates.  As a 
result, (KTG-Tbilisi) began experiencing financial problems and 
accumulated debt that we acknowledge, although it cannot be settled 
immediately, as Georgia wants," he said. 
 
KAZTRANSGAS READY TO LEAVE GEORGIA 
 &#x000
A;6.  Despite early optimism about the company's prospects, 
Shokatayev, speaking in October 2008, did not rule out the 
possibility that parent company KMG might sell KTG-Tbilisi if it 
needed "quick money."  On March 25, KMG President Kabyldin confirmed 
that intention.  He told local press in Astana, "We are ready to 
sell Tbilgas, if our investment contributions, including debt 
financing and financial support, are paid back." Kabyldin also 
promised that KTG-Tbilisi would repay its debts to Georgian 
companies according to "a certain time-schedule."  He said 
KTG-Tbilisi will use funds from Tbilisi clients to settle its debt 
for $30 million for gas supplied to the company.  According to 
Kabyldin, the remaining $10 million is owed to a Georgian bank, 
which has demanded expedited payment, which Kabyldin said "runs 
counter to our bilateral agreement with the bank." 
 
A SOCAR SQUEEZE PLAY? 
 
7.  Kabyldin ruled out the possibility that there may be a political 
motive behind the dispute, such as plans by the State Oil Company of 
the Azerbaijan Republic (SOCAR) to squeeze KMG out of the Georgian 
market.  "I don't believe that someone intends to drive a wedge 
between KazMunayGas and SOCAR," he said, noting that cooperation 
between the two national oil companies is increasing.  "We have 
agreed with SOCAR on Baku-Ceyhan and we have a plan to boost transit 
shipment via Baku-Batumi," he added.  However, he noted somewhat 
ruefully that KazTransGas' losses increased sharply due to the price 
increase for gas from SOCAR.  "If they really want to help Georgia, 
why sell gas to Georgia at such a horrendously high price?  SOCAR 
sells gas to Russia and Ukraine at $280 per thousand cubic meters, 
while it offers gas to Georgia at $400 per thousand cubic meters. 
This is ridiculous," he said, "such a price does not exist." 
Kabyldin emphasized that both Azerbaijan and Georgia are interested 
in the transit of Kazakhstani oil.  "Georgia, Kazakhstan, and SOCAR 
are all interested in the transportation of Kazakhstani oil though 
their pipelines.  This will yield bigger returns than a one-time 
profit from reselling KazTransGas-Tbilisi and ousting KazMunaiGas 
from Georgia," he said. 
 
8.  KTG-Tbilisi has struggled with nonpayment from corporate and 
residential customers.  In addition, the company has had tense 
relations with political parties and non-governmental organizations 
in Tbilisi, particularly when it forced customers to settle their 
debts and raised gas tariffs.  On December 9, 2008, the leader of 
the Georgian Labor Party, Paata Jibladze, accused KTG-Tbilisi of 
forcing Tbilisi residents to replace old meters with new ones at 
their own expense.  At a press conference, he said, "We demand that 
the actual owner of KazTransGas, Nursultan Nazarbayev, withdraw his 
company from Georgia, so that the residents of Tbilisi can manage 
this strategic object on their own." 
 
MILAS

Wikileaks

09ASTANA530, KAZAKHSTAN: THE POLITICS OF PIPELINES

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Reference ID Created Released Classification Origin
09ASTANA530 2009-03-24 09:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8103
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0530/01 0830946
ZNR UUUUU ZZH
O 240946Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5008
INFO RUCNCIS/CIS COLLECTIVE 1402
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0782
RUEHKO/AMEMBASSY TOKYO 1485
RUEHUL/AMEMBASSY SEOUL 0469
RUEHDI/AMCONSUL DUBAI 0136
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0965
RUEKJCS/SECDEF WASHDC 0878
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1339

UNCLAS SECTION 01 OF 04 ASTANA 000530 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV PINR ECON EPET EINV KZ
SUBJECT:  KAZAKHSTAN:  THE POLITICS OF PIPELINES 
 
REF:  (A) ASTANA 0283 (B) ASTANA 0131 
 
ASTANA 00000530  001.2 OF 004 
 
 
1.  (SBU) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On March 17-18, Energy Officer spoke with 
representatives from Kazakhstan's national oil company KazMunaiGas 
(KMG) and international oil companies about planned oil and gas 
export projects, particularly the Caspian Pipeline Consortium (CPC) 
pipeline and the Kazakhstan Caspian Transportation System (KCTS). 
The general consensus is that these export projects will be 
necessary by 2013 if oil production in Kazakhstan increases as 
expected.  Furthermore, the projects have continued to move forward, 
despite the impact of the financial crisis and lower oil prices on 
the cash position of the business partners.  Several representatives 
said they do not expect Russia to openly oppose or obstruct any of 
the projects, even KCTS, which will give Kazakhstan an export route 
that circumvents Russian territory.  Nevertheless, negotiations are 
expected to be difficult, particularly with Azerbaijan and the 
international oil companies on KCTS.  Both KMG and international 
company officials expressed a keen interest in the status of 
U.S.-Iranian relations and said normalization of ties with Iran 
would be a "game changer" for crude exports from Kazakhstan.  END 
SUMMARY. 
 
CPC EXPANSION UPDATE 
 
3.  (SBU) On March 17, Energy Officer met with Timur Rakhanov, 
Director of KMG's Department for New Transportation Projects and 
also a member of the Board of Directors of CPC.  Rakhanov is an 
impressive, articulate individual and one of KMG's rising stars.  He 
is young (early 30s), speaks fluent English, studied in London, has 
represented KMG's interest in CPC for more than five years, and 
prides himself on developing, mentoring, and delegating to junior 
staff.  He said that CPC expansion is likely to be approved by all 
consortium members, although a final decision (sanction) is not 
expected until December.  At this point, he said, the consortium is 
discussing "ship or pay" terms and is still seeking a legally 
binding volume commitment from suppliers.  He confirmed that the 
plan is to expand capacity from 32 million tons/year to 67 million 
tons/year, by installing 10 new pump stations throughout the 
pipeline and replacing 700 mm pipe with larger 1000 mm pipe. 
Rakhanov also confirmed that CPC will expand the off-loading 
terminal at Novorossisyk and construct storage tanks with a capacity 
of 100,000 tons. 
 
LUKOIL AND BP IN A STALEMATE 
 
4.  (SBU) According to Rakhanov, CPC expansion will take three years 
to complete.  He added that this is a "perfect time" to carry out 
expansion work, since the price of steel and other inputs is low and 
the consortium has a fixed tariff of $38/ton.  Rakhanov also 
confirmed that BP and Lukoil were still in talks about the sale of 
BP's stake in LukArco and implied that negotiations had reached a 
stalemate.  "BP says, 'Everything's OK, talks are continuing' but 
Lukoil says, 'We can't see the light at the end of the tunnel.'" 
He confided that within the next two weeks, KMG expects to complete 
the purchase of BP's share of Kazakhstan Pipeline Ventures' 1.75 
percent stake in CPC, which carries with it the right to ship 10.5 
million tons of crude per year via the pipeline.  However, he 
dismissed the idea that KMG would acquire a portion of the 7 percent 
stake in CPC that Russia purchased from Oman last year.  "True, we 
have the right to acquire 3.5 percent of Oman's stake, but why 
should we?  That 3 percent gives us nothing in terms of control or 
capacity rights," he said. 
 
CHEVRON CAUTIOUSLY OPTIMISTIC ABOUT CPC EXPANSION 
 
5.  (SBU) On March 18, Jay Johnson, Managing Director for Chevron's 
Eurasia Business Unit, told Energy Officer that CPC expansion could 
be sanctioned by the end of the year, but "it all depends on how 
difficult BP wants to be."    Zamira Kanapianova, Chevron's Country 
 
ASTANA 00000530  002.2 OF 004 
 
 
Manager for Kazakhstan, added that Lukoil is "more cautious" now 
than in the past, partly for financial reasons and partly out of 
deference to the Russian government.  She suggested that Lukoil will 
be careful not to make any moves without the approval of the 
Kremlin.  "Look what happened to Yukos," she said
.  Johnson echoed 
Rakhanov's comments that the time is right for CPC capacity 
expansion given the low price of steel, and he confirmed that the 
necessary engineering work and feasibility studies are already 
underway.  Kanapianova added that the 0-116 kilometer segment of CPC 
pipeline is now being replaced.  Johnson said CPC expansion alone 
would not be sufficient to accommodate all of the increased crude 
volumes Kazakhstan expects to export beginning in 2013.  "Once you 
have Tengizchevroil's second generation plant fully operational, 
plus Karachaganak's Phase III, and Kashagan production, you're going 
to need all the pipelines you can get," he said. 
 
IS KCTS A REAL PROJECT, OR JUST A PLOY? 
 
6.  (SBU) KMG's Rakhanov said some progress has been made on the 
Kazakhstan Caspian Transportation System (KCTS), but he expressed 
doubts about the ability to secure volume commitments for both 
projects in the near term, suggesting that KCTS could actually 
compete with CPC for crude supplies once it is completed in 
approximately 2015.  (NOTE:  There are currently no crude volume 
commitments to KCTS.  END NOTE).  Nevertheless, Rakhanov supports 
the project, not least because the concept alone has given 
Kazakhstan useful leverage in negotiations with Russia over CPC 
expansion.  Rakhanov said KCTS was "fifty percent responsible for 
changing Russia's attitude" toward CPC expansion. 
 
WHO WILL BUILD THE TANKERS? 
 
7.  (SBU) Chevron's Johnson supports the development of KCTS, but 
considers the project incredibly complex and risky, particularly 
from a maritime safety perspective.  "Building a pipeline to Kuryk 
doesn't do you any good," he said. "You still need to get the crude 
across the Caspian.  And there's a real issue around ships."  He 
noted that neither Kazakhstan nor Azerbaijan currently has the 
capacity to build the 60,000 deadweight-ton tankers that would make 
the project viable, and he suggested that Russia would oppose 
efforts by either country to develop the infrastructure and 
expertise to build ships that large.  Johnson said that, ironically, 
KCTS, which would circumvent Russian territory, might need the 
support from Russia, which could build the ships in Astrakhan or 
allow manufactured parts to travel down the Volga-Don for assembly 
in the Caspian. 
 
TENDER CONDUCTED FOR SMALLER TANKERS 
 
8.  (SBU) On February 25, the newspaper Vremya reported that 
KazMorTransFlot (KMTF) conducted a tender to build three new 12,000 
deadweight ton oil tankers.  According to the article, KMTF received 
seven bids:  four from Russia, one from Ukraine, one from Bulgaria, 
and one from Korea.  The lowest price came from the Bulgarian 
company MTG Dolphin, at 15.3 million euros per tanker, but the 
article claimed that the company began building tankers just two 
years ago and the terms of the tender require a minimum of five 
years' experience.  The Ukrainian company Okean, owned by German 
shareholders, offered to build the ships for $21.7 million each. 
Russia's Zelenodolsk bid $23.5 million, but the article notes that 
KMTF previously ordered barges from this company and they missed the 
delivery deadline.  Russia's Krasnoe Sormovo bid $22.3 million, but 
according to the article, one of their previous clients, a Turkish 
firm, complained that the company was two years late and kept trying 
to increase the cost per unit from $18 million to $26 million.  The 
Korean company Hyundai was willing to offer a price of $23.5 
million, although a company spokesman said they have built similar 
tankers for $30 million.  Russia's Astrakhan shipyard offered a bid 
of $24.8 million and Russia's Vyborg offered 28.7 million euros. 
(NOTE:  The Korean Ambassador to Kazakhstan told the DCM in 
mid-February that Hyuandai has made a strategic decision to enter 
 
ASTANA 00000530  003.2 OF 004 
 
 
the Caspian region, despite the lack of a suitable shipyard in 
Kazakhstan.  On March 18, KMG's Arman Darbayev, Executive Director 
for Oil Transportation and Service Projects, told Energy Officer 
that Astrakhan's bid was accepted, although the winner of the tender 
has not yet been publicly announced.  END NOTE). 
 
AZERIS WANT "MONEY FOR NOTHING" 
 
9.  (SBU) KMG's Arman Darbayev, Executive Director for Oil 
Transportation and Service Projects, argued that the number one 
question for KCTS -- an issue even more important than the tanker 
fleet -- is whether or not international oil companies will be 
allowed to take an equity stake in the project.  He said the tanker 
issue is a technical and commercial problem:  "If you have enough 
money, you can solve this."  According to Darbayev, however, the 
ownership issue is a "political problem" and therefore more 
intractable.  Darbayev said that Azerbaijan has asked for volume 
commitments from the suppliers before work can begin on KCTS, but 
the suppliers will not commit volumes without a minority equity 
share that will give them greater control over project risk, cost, 
schedule, and safety.  Regarding the proposed pipeline from Eskene 
to Kuryk, Darbayev said the government of Kazakhstan has agreed in 
principle to 49 percent ownership by private sector partners and the 
companies representing Tengiz and Kashagan have agreed to provide 
expertise to develop the terms of reference for the necessary 
feasibility studies.  "I believe we are very close to signing an 
agreement" with the companies to build the pipeline, he said. 
However, Darbayev was clearly frustrated by the negotiating position 
of Azerbaijan's SOCAR, which is firmly opposed to international oil 
companies taking an equity stake, particularly if SOCAR must reduce 
its 50 percent share in the new venture.  He complained that the 
lead negotiator for SOCAR, Vitaliy Bairlibayev, confessed he is not 
authorized or empowered to compromise with the government of 
Kazakhstan.  "Azerbaijan is just a transit country, holding up KCTS 
so they can maximize their tariffs.  They're getting money for 
nothing." 
 
IRAN OPTION GIVES KAZAKHSTAN LEVERAGE 
 
10.  (SBU) Darbayev said the only leverage Kazakhsktan has over 
Azerbaijan on the KCTS project is the threat to ship its crude to 
"other directions," meaning Iran.  He noted that the Heads of 
Agreement negotiated with SOCAR includes a provision allowing 
shipment to "other directions," but only by mutual consent, which 
Darbayev said "means never.  The Azeris are very worried about us 
going to Iran instead." 
 
RUSSIAN INFLUENCE OVER KAZAKHSTAN'S CRUDE EXPORTS 
 
11.  (SBU) When asked about Russia's attitude toward Kazakhstan's 
multi-vector oil export policy, Chevron's Kanapianova argued that 
Russia would prefer crude to travel through Russian territory, which 
would naturally give Russia greater leverage over Kazakhstan.  She 
said that ten years ago, Russia "used to turn off the Atyrau-Samara 
oil pipeline, citing 'technical reasons,' whenever President 
Nazarbayev said something they didn't like.  But they don't do that 
anymore. Their methods are more sophisticated and more subtle." When &#x
000A;pressed to elaborate, Johnson suggested that Russia could introduce 
a pipeline tariff tax and simply raise the rate to increase the 
pressure on Kazakhstan.  This would be particularly effective, 
Johnson said, if Kazakhstan were limited to exporting all of its 
crude via Russia. 
 
12.  (SBU) KMG's Darbayev acknowledged that Russia was not in favor 
of KCTS:  "Their intention is to block the project," he said. 
However, he did not believe that Russia would take the extreme step 
of blocking transit shipments of tanker components through the 
Volga-Don, if the tankers were built outside the region and 
assembled in the Caspian.  "That would be too much," he said, 
"especially considering the good relations we have with Russia." 
 
 
ASTANA 00000530  004.2 OF 004 
 
 
13.  (SBU) Bolat Akchulakov, former Vice Minister of Energy, now 
Managing Director for Oil and Gas at national welfare fund 
Samruk-Kazyna, echoed Darbayev's remarks.  On March 20, he told 
Energy Officer that Russia might try to discourage oil exports that 
circumvented Russia, but would ultimately respect Kazakhstan's 
sovereignty.  "They know that we will continue to ship most of our 
crude through Russia and in fact have maximized the capacity of 
Atyrau-Samara and CPC," he said, suggesting that Kazakhstan simply 
needs other export options in order to accommodate increased 
production volumes. 
 
OPENING UP IRAN WOULD BE A GAME-CHANGER 
 
14.  (SBU) Johnson told Energy Officer that Iran is now building 
ships of suitable size for KCTS at its northern port of Neka and he 
suggested that normalization of relations with Iran would remove the 
threat of a Russian veto over KCTS and help ensure the 
diversification of crude export routes from Kazakhstan.  "If we 
could work with Iran," he said, "that would change the equation 
entirely."  Johnson added that both Total and ENI, partners in the 
Kashagan consortium, intend to ship Kazakhstani crude to Iran once 
full production begins in 2015.  KMG's Darbayev said very much the 
same thing:  "If KCTS does not go forward as anticipated, the 
European oil companies will ship their crude to Iran," he said. 
 
MILAS

Wikileaks

09ASTANA529, KAZAKHSTAN: CONOCO’S CEO ON THE N BLOCK NEGOTIATIONS

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA529 2009-03-24 09:46 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8098
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0529/01 0830946
ZNR UUUUU ZZH
O 240946Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5006
INFO RUCNCIS/CIS COLLECTIVE 1400
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0780
RUEHKO/AMEMBASSY TOKYO 1483
RUEHUL/AMEMBASSY SEOUL 0467
RUEHDI/AMCONSUL DUBAI 0134
RUEHAD/AMEMBASSY ABU DHABI 0114
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0963
RUEKJCS/SECDEF WASHDC 0876
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1337

UNCLAS SECTION 01 OF 02 ASTANA 000529 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
STATE PLEASE PASS TO USTDA FOR DAN STEIN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EPET EINV KZ
SUBJECT:  KAZAKHSTAN:  CONOCO'S CEO ON THE N BLOCK NEGOTIATIONS 
 
REF:  (A) ASTANA 0352 (B) 08 ASTANA 2465 
 
ASTANA 00000529  001.2 OF 002 
 
 
1.  (SBU) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On March 20, ConocoPhillips (Conoco) CEO Jim 
Mulva briefed the Ambassador on the status of negotiations with 
national oil company KazMunaiGas (KMG) to explore and develop the 
offshore N Block.  Mulva expressed frustration with the pace of 
negotiations and said that Minister of Energy and Mineral Resources 
Sauat Mynbayev "has been pushing us harder and harder."  Mulva was 
scheduled to meet with Prime Minister Masimov later that day, but as 
he explained to the Ambassador, "Mynbayev has the call" on the 
details of the deal.  Conoco representatives also commented on 
Russia's influence over trans-Caspian crude exports, negotiations 
with Azerbaijan's national oil company, the possibility that 
European producers would ship crude to Iran, and prospects for 
onshore oil and gas exploration in Turkmenistan.  END SUMMARY. 
 
JUST ONE-HALF OF ONE PERCENT AWAY FROM A DEAL 
 
3.  (SBU) On March 19, the Ambassador met briefly with KMG First 
Vice President Maksat Idenov, who said the parties are close to 
agreement, with the only remaining obstacle the internal rate of 
return on the project (reftel A).  Idenov said that Conoco has 
requested 12.8 percent, or 0.5 percent more than the government is 
willing to offer, but he did not believe that the issue was a 
deal-breaker.  Idenov told the Ambassador that he expects to sign 
the contract with Conoco during the first two weeks of April, at 
which point he will turn his attention to a proposal from ExxonMobil 
to develop onshore resources in the north Caspian and will attempt 
to jumpstart negotiations on the Kazakhstan Caspian Transportation 
System (KCTS). 
 
NO GUARANTEED TAX STABILITY 
 
4.  (SBU) Conoco's Nick Olds, company president for the Caspian 
region, confirmed to Energy Officer on March 18 that he expects 
negotiations on the N Block to conclude by mid-April.  He said that 
Conoco will commit to drilling three wells, the first in 2010, and 
expects early oil by 2019.  Ultimately, Olds said, the field will 
produce up to 500,000 barrels per day.  He said that the new 
contract will comply with the new Tax Code and will not be 
tax-stabilized.  "That means there are a lot of levers they can 
pull," he said. 
 
CITIGROUP EXPECTS KAZAKHSTAN'S ECONOMY TO RECOVER 
 
5.  (SBU) When asked how the financial crisis has affected the 
business climate in Kazakhstan, Mulva said companies negotiating for 
new opportunities "have to give the government financial support." 
(NOTE:  As part of the Kashagan negotiations, ExxonMobil provided 
the government a long-term, low-interest loan that KMG used to 
increase its shareholding in the consortium.  END NOTE). 
Nevertheless, Mulva said that the head of Citigroup's Moscow office 
recently told him that "of the big three -- Russia, Kazakhstan, and 
Ukraine -- Kazakhstan has the best prospects for a quick economic 
recovery." 
 
KASHAGAN PROGRESS "SLOW" 
 
6.  (SBU) Commenting on Kashagan, Mulva said it has taken some time 
for the management of the project to transition from Italy's Agip to 
France's Total.  "It's been slow," he said.  Don Wallett, president 
of ConocoPhillips Russia Inc., added that it has been difficult to 
recruit and place talented, experienced Kazakhstani and expatriate 
staff, although he said that has changed in recent months, as the 
economic crisis has continued.  "People used to tell us they had no 
interest in going to Atyrau," he said, "but now they're calling us 
back, saying, 'I'd love to work in Atyrau.'"  Wallett also indicated 
that the recession has helped free up drilling rigs in the Caspian. 
 
ASTANA 00000529  002.2 OF 002 
 
 
"There's not an oversupply," he said, "but we think they'll be there 
when we need them.  We've got some good leads on a couple of rigs 
right now." 
 
KAZAKHSTAN ABLE TO WITHSTAND RUSSIAN PRESSURE 
 
7.  (SBU) When asked about Russia's influence over KCTS, Wallett 
said he did not think Russia would attempt to block or undermine the 
project.  "As long as it's just a tanker shuttle program and not a 
trans-Caspian pipeline," Russia will not
 oppose it, he said.  He 
added that Kazakhstan has been able to act independently toward 
Russia in the past.  "Kazakhstan seems to be able to make its own 
decisions," he said. 
 
EUROPEAN THREAT TO SHIP TO IRAN INCREASES NEGOTIATING LEVERAGE 
 
8.  (SBU) Wallett added that it has been "very tough" negotiating 
with the Azeris on KCTS and he said that having the option to ship 
Kashagan crude to Iran would give European companies in the Kashagan 
consortium leverage in negotiations with Azerbaijan.  "It's good to 
have the Europeans talking about shipping to Iran -- representing 
themselves, of course.  That puts pressure on the Azeris to conclude 
a deal for trans-Caspian shipments." 
 
CONOCO STRENGTHENS BID FOR EXPLORATION IN TURKMENISTAN 
 
9.  (SBU) Turning to Turkmenistan, Mulva disclosed that two weeks 
ago, ConocoPhillips invited Abu Dhabi's Mubadala, their partners on 
the N Block consortium, to join their bid with Lukoil to develop 
three offshore blocks in Turkmenisan.  He told the Ambassador that 
Conoco would be the lead operator of all three blocks.  Mulva said 
he hopes that the close relationship between President 
Berdimukhamedov and Sheikh Muhammad will help the consortium's bid. 
"[Oil and Gas Chairman Tachberdy] Tagiyev has been a firm gatekeeper 
to the president," according to Mulva.  "Berdimukhamedov's not 
seeing anybody at the moment." 
 
MILAS

Wikileaks

09ASTANA523, KAZAKHSTAN: LIFE ON THE STEPPE, MARCH 14-20

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09ASTANA523.
Reference ID Created Released Classification Origin
09ASTANA523 2009-03-20 10:50 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5436
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0523/01 0791050
ZNR UUUUU ZZH
O 201050Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4996
INFO RUCNCIS/CIS COLLECTIVE 1398
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0778
RUEHKO/AMEMBASSY TOKYO 1481
RUEHUL/AMEMBASSY SEOUL 0465
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0961
RUEKJCS/SECDEF WASHDC 0874
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1335

UNCLAS SECTION 01 OF 02 ASTANA 000523 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON SOCI SENV KZ
SUBJECT:  KAZAKHSTAN:  LIFE ON THE STEPPE, MARCH 14-20 
 
ASTANA 00000523  001.2 OF 002 
 
 
1.  (U) This is another in a series of weekly cables drawn mostly 
from public media, as well as think-tank, NGO, and opposition 
web-sites, selected to show the diversity of life in Kazakhstan, and 
information about it available to citizens of Kazakhstan.  Our goal 
is to choose what might interest and be of use to various end-users 
in Washington and -- especially -- to provide a more complex view 
from the other side of the world, illustrating the vitality (and 
sometimes the quirkiness) of discourse available to citizens of 
Kazakhstan. 
 
MODERN, TWO-STORY YURT TO BE BUILT IN ALMATY 
 
2. (U) The yurt, the traditional dwelling structure used by nomadic 
tribes in the steppes of Central Asia, is getting an upgrade for a 
new generation of urban nomads.  Thus, Almaty will soon see a new 
type of yurt, not in the form of a portable tent but rather as a 
fully-functioning multi-bedroom, two-story house.  This yurt will 
have all modern amenities but will also keep its traditional 
elements including the "shanyrak," the traditional opening for 
ventilation at the top of a yurt -- which is also a symbol of 
family, peace, and tranquility.  The project is the brainchild of 
Askhat Bakirov, a young architect from Semey.  His idea of 
incorporating the traditional Kazakh yurt into the design of a 
contemporary home already won him the first prize for "best 
residential project" at a design competition in Astana last year. 
 
3. (U) A request to use Bakirov's design to actually build such a 
modern yurt came soon afterwards.  The young architect gladly 
provided all charts and blueprints and in return only requested to 
be invited to the house-warming party when the yurt is finished. 
"An idea that becomes reality is the greatest reward a creative 
person could ask for."  Bakirov is proud of his deep patriotism and 
says: "Every summer a yurt was my home.  And even then, I pondered 
the idea of building a contemporary yurt with the beloved 'shanyrak' 
instead of a regular family house.  What could be closer, more 
familiar, more vibrant?" 
 
"HONEST" CORRUPT OFFICIAL DETAINED RETURNING BRIBE 
 
4. (U) An official from the Department of Migration and Demographics 
in Kostanai oblast (region) promised to register a local family as 
"oralman" returnees. (COMMENT:  Oralman are ethnic Kazakh immigrants 
from other countries.  They are often eligible for special 
government-provided resettlement benefits.  END COMMENT.)  Since it 
is apparently not easy to do such a fraudulent registration, the 
official received $2,000 from the family for his services.  As it 
turned out, the official was unable to fulfill his promise and 
decided to return the bribe.  That, however, was not the turn of 
events envisaged by the "oralman" family, and thus they sent a 
letter to the local office of the Committee for National Security 
(KNB).  Several days later, the "honest" official was detained after 
being caught red-handed returning the bribe. 
 
DANGEROUS WORK AGAINST WILDLIFE POACHERS 
 
5. (U) Combating poaching of the saiga antelope is a very difficult 
task.  In fact, the vast territory of the Kazakhstani steppe and the 
minimal resources available to patrolling rangers makes it nearly 
impossible.  Additionally, recreational "hunters" have increasingly 
joined poor villagers in hunting the antelope for its valuable 
horns.  Protecting the saiga has also become more dangerous because 
poachers have been turning their guns against the rangers. 
 
6. (U) In an incident reported by the daily newspaper "Vremya," 
several rangers monitoring the steppe in Mangistau oblast by 
helicopter came under fire from a well-armed group of local 
poachers.  Initially, the rangers thought they were conducting a 
routine check of a suspicious convoy of two SUVs and two motorcycles 
driving on the empty steppe, far from any inhabited area.  Yet, as 
the rangers approached, the suspects opened fire against their 
descending helicopter.  Clearly intending to chase the patrol away, 
a passenger in one of the SUVs fired several times, only stopping 
when the helicopter crew retaliated and hit the driver and passenger 
of the SUV. 
 
7. (U) To the surprise of the rangers after they finally landed, one 
of the suspected poachers ran towards the helicopter holding a 
police ID in his hand.  Needless to say, the check was officially 
 
ASTANA 00000523  002.2 OF 002 
 
 
over, and the rangers were not a
llowed to conduct a search or 
confiscate the suspects' weapons.  Local police, informed of the 
incident, did not prove helpful and announced that they could not 
find the suspects.  However, not long after, the attackers came to 
the surface.  A police official whom the rangers suspected of 
illegally hunting the enQered saiga blamed the rangers with 
staging the whole attack and sued them for 10 million tenge 
($67,000) in damages.  While the last word has probably not been 
spoken on this case, it appears that the effort to protect the saiga 
will not become any easier. 
 
HOAGLAND

Wikileaks

09ASTANA521, KAZAKHSTAN: PREVENTION OF NUCLEAR SMUGGLING

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Reference ID Created Released Classification Origin
09ASTANA521 2009-03-20 08:41 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO5297
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW
RUEHROV RUEHSR
DE RUEHTA #0521/01 0790841
ZNY CCCCC ZZH
R 200841Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 4992
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0775
RUEHUL/AMEMBASSY SEOUL 0462
RUEHKO/AMEMBASSY TOKYO 1478
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 0871
RHEHNSC/NSC WASHDC 0958
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 000521 
 
SIPDIS 
 
STATE FOR SCA/CEN, ISN/WMDT, AND ISN/ECC 
 
E.O. 12958: DECL: 03/20/2019 
TAGS: PGOV PINR PREL PTER MARR MNUC KNNP CH KZ
SUBJECT: KAZAKHSTAN:  PREVENTION OF NUCLEAR SMUGGLING 
EXERCISE HIGHLIGHTS NEED FOR CONTINUED ENGAGEMENT 
 
REF: STATE 05431 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b/d) 
 
1.  (C) SUMMARY:  The State Department's Preventing Nuclear 
Smuggling Program conducted a table-top nuclear smuggling 
exercise in Astana February 24-25.  Almost 20 Kazakshtani 
officials from eight government agencies attended the event. 
Kazakhstan is currently finalizing a national nuclear 
smuggling response plan, and the participants thanked the 
U.S. government for its assistance in enhancing Kazakhstan,s 
capabilities.  However, the Kazakhstanis admitted that many 
of their agencies lack the resources to effectively handle 
nuclear and radiological materials.  Securing orphan sources 
within Kazakhstan,s territory poses a particularly serious 
challenge.  Moreover, the Kazakhstani government is focused 
on keeping nuclear and radiological materials from entering 
Kazakhstan, rather than on domestic seizures and 
investigations.  The Committee for National Security (KNB) 
rejected the U.S. model of simultaneous national and local 
responses, and expressed little interest in expanding 
cooperation in prosecution and nuclear forensics.  Post 
recommends engaging working-level contacts on the importance 
of countering nuclear smuggling and pursuing short-term 
training opportunities for an expanded spectrum of 
recipients, to be followed next year by another table-top 
exercise.  END SUMMARY. 
 
EXERCISE EXCEEDS EXPECTATIONS 
 
2.  (SBU) On February 24-25, the State Department's 
Preventing Nuclear Smuggling Program conducted a table-top 
nuclear smuggling exercise in Astana.  Almost 20 Kazakhstani 
officials from eight government agencies, including the 
Committee for National Security (KNB), Ministry of Energy and 
Mineral Resources (MEMR), Kazakhstan Atomic Energy Committee 
(KAEC), Ministry of the Interior (MVD), Ministry of Emergency 
Situations (MES), Kazakhstan Customs Control Committee 
(KCCC), the Ministry of Health (MOH), and Committee of State 
Sanitary and Epidemiological Control (SEC) attended.  The 
Kazakhstani participants actively described the roles, 
responsibilities, and capabilities of their agencies. 
 
IT TAKES THE UNITED STATES TO BRING KAZAKHSTANIS TOGETHER 
 
3.  (C) The atmosphere of the event was very positive and 
constructive.  The Kazakhstanis said they had taken steps to 
strengthen their ability to prevent nuclear smuggling, 
including cataloging Kazakhstani radioactive sources, 
implementing IAEA guidelines, and establishing inter-agency 
protocols for dealing with nuclear smuggling.  Various 
agencies expressed appreciation for U.S. training programs, 
technical assistance, and equipment provided through EXBS, 
DOE, and the joint DOD/FBI International 
Counter-proliferation Program (ICP).  KAEC,s representatives 
were particularly active participants and said they hoped to 
incorporate lessons from the exercise into their national 
nuclear smuggling response plan, which KAEC intends to 
present to the Kazakhstani government for review and approval 
within the next several months.  The senior KAEC 
representative, Tleu Dairbekov, thanked the U.S. government 
"for bringing us together )- as we could not have done this 
ourselves." 
 
KNB UNWILLING TO SHARE INFORMATION 
 
4.  (C) The KNB officials attending the workshop acknowledged 
that some of their KNB colleagues had received training 
through the ICP Program, but they had not participated 
themselves.  (COMMENT:  The KNB officials attending the 
exercise appeared to be relatively junior within their 
organizations.  END COMMENT.)  Although the KNB 
representatives sometimes appeared uncomfortable with the 
frank comments of Kazakhstani representatives from other 
 
ASTANA 00000521  002 OF 003 
 
 
agencies, they intervened only when discussions turned to law 
enforcement issues, asserting "we would take care of that." 
The KNB representatives did not provide any information on 
nuclear forensics techniques or information-sharing with 
other governments.  The most active KNB participant, Yerbol 
Talapov, privately complained to PolOff that, "sometimes 
other agencies resent us, but we do operate according to the 
laws of Kazakhstan and the guidelines of our organization." 
 
OTHER AGENCIES DISCUSS RESOURCE AND FUNDING CONSTRAINTS 
 
&#18
2;5.  (C) Some Kazakhstani participants expressed frustration 
when describing the difficulties their organizations face in 
dealing with radioactive and nuclear material, especially 
orphan sources.  Vyacheslav Klingenberg, a medical doctor and 
Chief of the Radiological Laboratory for the Astana Center of 
Sanitary-Epidemiological Examination, said he has worked for 
30 years in radiation safety.  He called his invitation to 
the exercise "a fortunate accident," since he had never 
participated in such an event before.  Klingenberg gave a 
short presentation using photos of nuclear and radiological 
materials that his team had been called in to secure.  He 
said that although most local SEC officials have no 
protective gear and no radiation pagers, they are often 
called in to investigate canisters with nuclear symbols that 
may contain hazardous substances.  Klingenberg and MVD 
representative Targyn Smagulov were particularly interested 
in the radiation pagers that U.S. local police carry.  The 
MOH's Zaure Akhmetova, a medical doctor who previously worked 
in the Karaganda region, said that Soviet orphan source 
materials are frequently found throughout Kazakhstan,s 
territory, but few agencies possess the funding and equipment 
to dispose of them properly. 
 
6.  (C) Participants raised concerns about poor public 
awareness and lack of nuclear and radiological specialists. 
Klingenberg maintained that many people confuse the nuclear 
symbol with the Mitsubishi logo.  Several participants 
explained that after the collapse of the Soviet Union, 
Kazakhstan tried to create special academic programs and 
institutions to train nuclear scientists, but such efforts 
failed.  (COMMENT:  PolOff has not met any nuclear 
specialists under 30 years old, and all of PolOff's 
interlocutors from MEMR, KAEC, the National Nuclear Center, 
SEC and Kazatomprom were trained under the Soviet system. 
The absence of a new generation of specialists is of 
particular concern in a country in which Soviet-era orphan 
sources of radiation are prevalent.  END COMMENT.) 
 
PRIORITY NUMBER ONE:  PREVENT SMUGGLING INTO KAZAKHSTAN 
 
7.  (C) Some Kazakhstani participants alleged that China has 
attempted to ship radioactive and nuclear waste to 
Kazakhstan, and indicated that preventing such shipments is a 
top priority for them.  However, they expressed doubt that 
Kazakhstan itself would be the target of a nuclear terrorist 
incident.  As KAEC's Tleu Dairbekov put it, "I am not aware 
of any threats of nuclear terrorism directed against 
Kazakhstan."  The Kazakhstanis acknowledged, however, the 
need for the country to be ready to counter nuclear terrorism 
directed at foreigners in Kazakhstan, especially during such 
events as the upcoming 2011 Asian Winter Games in Kazakhstan. 
 The Kazakhstanis said that if Customs uncovers an attempt to 
smuggle nuclear materials into Kazakhstan, they would simply 
send the shipment back, rather than taking steps to secure 
the materials and investigate the incident.  Representatives 
of most of the Kazakhstani agencies said that they would be 
criminally liable if they allowed nuclear or radiological 
materials into Kazakhstan, and claimed they do not have 
enough resources to secure and store such hazardous material. 
 
KNB REJECTS U.S. MODEL OF EARLY NATIONAL INVOLVEMENT 
 
8.  (C) The KNB representatives told the U.S. participants 
 
ASTANA 00000521  003.2 OF 003 
 
 
that in all matters relating to the national security and law 
enforcement aspects of nuclear smuggling, the KNB is the lead 
agency, and their organization "prefers to handle all 
incidents at the local level" by convening a regional 
taskforce, nominally led by a deputy akim (governor). 
Representatives from the KNB declined to comment on which 
state agencies would participate in a taskforce and how 
responsibilities would be divided.  When KAEC's Dairbekov 
asked detailed questions about how the U.S. handles national 
and local coordination, the KNB cut off the discussion.  The 
KNB also refused to discuss when they would refer incidents 
to central authorities or other agencies for help. 
 
9.  (C) Although we had invited the Procurator General's 
Office to participate in the event, they did not send a 
representative.  Moreover, although the Kazakhstani 
participants had specifically requested FBI participation and 
directed a number of detailed questions towards FBI 
specialists during the exercise, the Kazakhstani 
representatives admitted they do not prosecute individuals 
that they cannot explicitly link to smuggling.  The driver of 
a truck bringing nuclear or radioactive materials into 
Kazakhstan, for example, would not necessarily be prosecuted; 
the first target of investigation would be the shipping 
company. 
 
10.  (C) COMMENT:  Kazakhstan's overall national system for 
preventing nuclear smuggling remains one of the most advanced 
in the region.  The Kazakhstani participants in the exercise 
expressed hope that they would receive more training from 
U.S. experts and have the U.S. conduct similar events in 
Kazakhstan again in the future.  Post strongly encourages 
supporting these requests with a three part-strategy.  First, 
U.S. specialists should enhance engagement with their 
Kazakhstani counterparts.  Specific goals could include 
expanding Kazakhstani participation in the International 
Technical Working Group, promoting the ICP program, and 
providing training opportunities for MOH, MES, MVD, and 
Customs.  Second, Post suggests conducting a second table-top 
exercise in 2010 to test the Kazakhstan,s national nuclear 
smuggling response plan -) which should have been approved 
by then -- and strengthen the interagency relationships 
created through the February 2009 exercise.  Post also 
recommends greater engagement with the Kazakhstani government 
on the importance of preventing and investigating nuclear 
smuggling. 
 
11.  (C) COMMENT CONTINUED:  If a second table-top exercise 
is successful, Kazakhstan could hold a third exercise with 
real materials.  Post also recommends diversifying the target 
audiences of its programs, to include not only the KNB, the 
Ministry of Defense, MVD, and Customs, but also a full range 
of Kazakhstani partners, including MES, MOH, and KAEC.  In 
the long-run Kazakhstan itself may be willing to use the 
expertise it acquires to provide much needed assistance to 
other Central Asian states, which would also further promote 
its image as a leader in non-proliferation.  END COMMENT. 
HOAGLAND

Wikileaks

09ASTANA498, KAZAKHSTAN: FRENCH AMBASSADOR TO OSCE ENGAGES,

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Reference ID Created Released Classification Origin
09ASTANA498 2009-03-20 05:20 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO5136
PP RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW
RUEHROV RUEHSR
DE RUEHTA #0498/01 0790520
ZNY CCCCC ZZH
P 200520Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 4968
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1396
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 0773
RUEHUL/AMEMBASSY SEOUL PRIORITY 0460
RUEHKO/AMEMBASSY TOKYO PRIORITY 1476
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 0956
RUEKJCS/SECDEF WASHDC PRIORITY 0869
RUEHNO/USMISSION USNATO PRIORITY 2560
RUEHVEN/USMISSION USOSCE PRIORITY 2048
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2230

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 000498 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RPM, EUR/RUS, DRL 
 
E.O. 12958: DECL: 02/20/2019 
TAGS: PGOV PREL PHUM SENV OSCE KZ
SUBJECT:  KAZAKHSTAN:  FRENCH AMBASSADOR TO OSCE ENGAGES, 
WITH A SOUPCON OF SKEPTICISM 
 
REF: ASTANA 0450 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  French Ambassador to the OSCE Eric Lebedel 
briefed a select group of Western Ambassadors on March 19 
that he was in Astana to promote the European Union's 
perspective on the OSCE and to emphasize Kazakhstan's need to 
take seriously its responsibilities on democracy, human 
rights, and rule of law.  After extended debate about to what 
degree Kazakhstan is committed to these ideals, and after 
lively but not always optimally informed discussion of 
"environmental security" as an appropriate goal for 
Kazakhstan's 2010 OSCE Chairmanship, the group reached 
consensus that it is important to understand Kazakhstan's 
complicated ground realities as it seeks to move along a 
trajectory toward international principles of democracy and 
human rights.  END SUMMARY. 
 
2.  (SBU) OSCE Head of Mission to Kazakhstan Alexandre 
Keltchewsky hosted a working lunch on March 19 in Astana for 
French PermRep to the OSCE Ambassador Eric Lebedel. 
Ambassadors of the UK, the United States, Canada, Germany, 
Italy, and the Czech Republic attended. 
 
THE EU FACTOR IN THE OSCE 
 
3.  (SBU) Ambassador Lebedel explained he was in Astana for a 
dual purpose:  1) to deliver a four-day series of lectures at 
the Kazakhstani Diplomatic Academy on the OSCE and the 
central role of the European Union (EU) in the OSCE, and 2) 
to engage with Kazakhstani officials on the importance of the 
EU view within the OSCE.  The Czech Ambassador whispered an 
aside that he thought his country currently represented the 
EU.  Lebedel said he came to Astana with four concrete 
messages:  1) to emphasize the EU factor in the OSCE, which 
Kazakhstan "does not seem to appreciate"; 2) to urge 
Kazakhstan to be vigilant in the field of human rights and to 
emphasize the importance of Kazakhstan implementing its 
human-dimension commitments before assuming the 2010 OSCE 
Chairmanship; 3) to impress on Kazakhstan the importance of 
the OSCE second dimension on environmental security and the 
role Kazakhstan should play in the OSCE to promote 
preventative diplomacy on environmental issues; and 4) to 
promote the future of European security and the "enduring 
European desire for a broader global view of security." 
 
NEW EURASIAN SECURITY ARCHITECTURE 
 
4.  (C) Lebedel's interlocutors around the table noted that 
Russia has made clear that it intends to promote a new view 
of Eurasian security within the OSCE but that, so far, 
Moscow's concept of the new security architecture remains 
ill-defined.  Lebedel said that the EU wants to ensure that 
any new Eurasian security architecture includes "fundamental 
principles" and enshrines human rights as the sine-qua-non of 
any new understanding of "security" in Eurasia.  He worried 
that Russia, within the OSCE, will promote a "hard view" of 
security, rather than a "soft role," that will seek to 
incorporate an "emerging emphasis" on the role of the 
Commonwealth Security Treaty Organization (CSTO) and its 
recently announced Rapid Reaction Force, as well as the 
Shanghai Cooperation Organization.  Lebedel briefed that the 
EU, as a bloc within the OSCE, will probably resist any 
"legally binding" decisions promoted by Kazakhstan that would 
lead to a "charter." 
 
5.  (C) During the ensuing discussion, UK Ambassador Paul 
Brummell offered that Kazakhstan might have initially seen 
its 2010 OSCE Chairmanship as a "grand honor to add to its 
achievement column," but that it's slowly dawning on Astana 
that the OSCE is not just one more post-Soviet talk shop.  In 
fact, Kazakhstan's 2010 Chairmanship will require serious 
international responsibility.  Brummell said that his 
 
ASTANA 00000498  002 OF 002 
 
 
government has invited Deputy Foreign Minister Konstantin 
Zhigalov (responsible for Europe and the Americas) to London 
in April for a day of consultations on "international 
responsibility."  (NOTE:  Until early this year, Zhigalov was 
Kazakhstan's Ambassador in Brussels to the EU, NATO, and 
bilaterally to Belgium.  END NOTE.) 
 
GUILE OR LACK OF CAPACITY? 
 
6.  (C) Ambassador of the Czech Republic Bedrich Kopecky 
offered that Kazakhstan's Senate Chairman Kasymzhomart 
Tokayev wrote on February 20 and
spoke on March 13 about 
Kazakhstan's firm commitment to the OSCE's three baskets, and 
stated clearly that Kazakhstan is unwaveringly committed to 
democracy, human rights, and the rule of law.  Ambassador 
Lebedel commented, "Rhetoric is one thing; full 
implementation is another."  He asked, "Is this guile or lack 
of capacity?" 
 
MAYBE ENVIRONMENTAL SECURITY IS A WORTHY GOAL? 
 
7.  (C) Canadian Ambassador Margaret Skok commented that 
Ottawa and the West in general see a contradiction between 
Kazakhstan's good words and its real-world lack of 
transparency, between its rhetorical goals and its current 
checkered reality.  She chalked this up to a "lack of 
capacity" within the bureaucracy to enforce top-level policy. 
 She further used her intervention to advocate fervently that 
Kazakhstan should use its OSCE Chairmanship to promote 
"environmental security," especially for nuclear and 
biological non-proliferation. 
 
8.  (C) Italian Ambassador Bruno Pasquino recommended that 
Kazakhstan should focus its 2010 OSCE Chairmanship on global 
environmental issues, including "sustainable development 
within the context of climate change."  He asserted that 
Kazakhstan is facing epic catastrophe because "within five 
years, the sulfur produced by hydrocarbon extraction will 
poison out of existence all of Western Kazakhstan."  He 
recommended that Kazakhstan should focus its OSCE 
Chairmanship on "environmental poisoning."  The Canadian, UK, 
and U.S. Ambassadors refuted Pasquino's view that open-air 
storage of sulfur is a "catastrophe waiting to happen." 
(NOTE:  The sulfur issue is current because Kazakhstan just 
slipped a line in a law defining Sulfur as "waste," rather 
than "product," and the regional government is attempting to 
levy massive fines against TengizChevrOil, which has 
considerable tons of solidified sulfur in open-air storage 
until it can sell it off.  Sulfur stored like this is not 
considered an environmental or health threat.  For fuller 
background on this issue, see reftel.  END NOTE.) 
 
9.  (C) The Czech, German, and U.S. Ambassadors drew the 
conversation back to fundamental reality and achieved 
consenus that Kazakhstan has emerged as the pivot between 
Western principles and Russia's neo-Soviet chest thumping and 
eye-spitting.  In the end, all agreed that it is essential to 
engage early and consistently with Kazakhstan's President 
Nazarbayev to encourage his better instincts during 
Kazakhstan's 2010 OSCE Chairmanship.  All commended French 
OSCE PermRep Ambassador Lebedel for talking significant time 
to travel to Astana to learn the complicated ground realities 
of Kazakhstan as it seeks to move along a trajectory toward 
international principles of democracy and human rights. 
HOAGLAND

Wikileaks

09ASTANA497, KAZAKHSTAN: LEAD WTO NEGOTIATIOR REQUESTS FLEXIBILITY

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Reference ID Created Released Classification Origin
09ASTANA497 2009-03-20 02:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5039
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INFO RUCNCIS/CIS COLLECTIVE 1394
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RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0771
RUEHKO/AMEMBASSY TOKYO 1474
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RHEHNSC/NSC WASHDC 0954
RUEKJCS/SECDEF WASHDC 0867
RUEKJCS/JOINT STAFF WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 000497 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, S/SRAP, EUR/RUS, EEB 
STATE PLEASE PASS TO USTR 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EINV EFIN EAID RS KZ
SUBJECT:  KAZAKHSTAN:  LEAD WTO NEGOTIATIOR REQUESTS FLEXIBILITY 
 
REF:  (A) 08 ASTANA 2445; (B) 08 Astana 2570 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On February 18, the Ambassador met with Vice 
Minister of Industry and Trade Zhanar Aitzhanova to discuss the 
status of Kazakhstan's WTO accession negotiations with the United 
States.  Aitzhanova expressed frustration with the negotiations, 
claiming that the United States is asking for more concessions from 
Kazakhstan than it has from other countries.  She noted, "We started 
this [WTO negotiation] process [with the United States] before the 
global economic crisis.  It's a very different world now."  She said 
that she is currently focusing on WTO negotiations with other 
countries, and at the same time working intensely on the proposed 
customs Union with Russia and Belarus because of the "real immediate 
benefits" of the latter.  END SUMMARY. 
 
KAZAKHSTAN TO CONTINUE WTO NEGOTIATIONS 
 
3.  (SBU) During a February 18 meeting with the Ambassador, 
Kazakhstan's lead WTO accession negotiator, Vice Minister of 
Industry and Trade Zhanar Aitzhanova, explained that despite 
frustrations with the accession process, Kazakhstan remains 
committed ultimately to entering the WTO.  Aitzhanova had just 
returned from a trip to Saudi Arabia, and said that Kazakhstan is 
currently working to intensify its WTO negotiations with the Saudis, 
who are seeking challenging commitments from Kazakhstan in energy. 
 
 
CUSTOMS UNION FORMATION ADVANCING RAPIDLY 
 
4.  (SBU)  Aitzhanova detailed advancements made in the formation of 
the Russia-Belarus-Kazakhstan customs union (ref A), though admitted 
that it is highly unlikely Russia and Kazakhstan will meet the 
proposed April 1 deadline for the establishment of unified customs 
tariffs.  According to Aitzhanova, the Kazakhstani government is 
currently "making its case" at political and technical levels in 
Moscow, with negotiations expected to resume in Kazakhstan after the 
March 22 Nauryz holiday. "It is not easy," she argued, "but the 
customs union is a two-sided process.  Unlike WTO negotiations where 
there is little flexibility, with Russia, everything is open to 
negotiation and political intervention." 
 
NEGOTIATIONS ON SERVICES STALLED 
 
5.  (SBU) Aitzhanova insisted that both she and her team are and 
will remain responsive to U.S. WTO negotiators.  Aitzhanova noted 
that there is still significant work to be done on agricultural 
issues, specifically about livestock and poultry, where U.S. firms 
directly compete with Kazakhstani ones.  She expressed frustration 
at the status of negotiations with the United States on services. 
As she described it, there continue to be three primary areas of 
contention in the service negotiations:  telecommunications, 
personnel, and financial services.   Aitzhanova claimed that on 
services, both U.S. and the EU negotiators continue to demand far 
more from the Kazakhstanis than they have from other countries.  For 
example, in telecommunications, Kazakhstan is willing to grant 
European satellite service providers access to existing, 
domestically-licensed telecommunication companies, but not general 
access to the greater market, as the Europeans are demanding. 
Kazakhstan is also being asked to give "open access" to the mass 
media, including broadcasting -- but this goes too far the 
Government of Kazakhstan. 
 
6.  (SBU) Regarding personnel services, including the hiring of 
qualified specialists, Aitzhanova explained that while this issue 
has been largely resolved with the EU, U.S. negotiators remain 
committed to removing any Kazakhstani local-content provisions from 
an accession agreement.  "This issue is extremely important for 
President Nazarbayev, and would be too large a concession for us" 
said Aitzhanova, explaining that because almost 90% of the work in 
Kazakhstan's extractive sector is performed by foreign companies, 
 
ASTANA 00000497  002 OF 002 
 
 
the government must protect and develop domestic industry and human 
resources. 
 
7.  (SBU) In Aitzhanova's opinion, the United States is asking 
Kazakhstan to sign more a more concessionary agreement that is has &#x
000A;asked of other countries, and singled out Vietnam as an example of a 
country getting a better deal from us.  Feeling perhaps that 
Kazakhstan is becoming the victim of its own previous economic 
successes, Aitzhanova said "Every time we point this out, we are 
told that because the Kazakhstani government is so liberal, access 
should be liberal."  Over the course of the meeting, Aitzhanova 
became increasingly frank in criticizing the WTO negotiation process 
with the United States.  "If this continues to be the case, we will 
go to the customs union and get real immediate benefits," she 
maintained.   As for services, "We have nothing left to offer," she 
said.  "Washington recommends future digital video conferences, and 
we are ready for them.  But we will only repeat what we have said," 
Aitzhanova explained. 
 
NEXT STEPS UNCERTAIN 
 
8.  (SBU) "Frankly, we feel frustrated," Aitzhanova continued, "I 
know what you want, and frankly I do not have much to offer." 
Aitzhanova also repeated several times her belief that she feels the 
continued demands of the U.S. negotiators do not reflect the current 
economic realities facing Kazakhstan.  "My experience is that 
negotiators are not always following what is going on in the world. 
We need reality to be reflected.  We started this [WTO negotiation] 
process [with the United States] before the global economic crisis. 
It's a very different world now."  Aitzhanova intends to focus on 
finalizing accession agreements 
with Ecuador, Saudi Arabia, and El Salvador, but at the same time 
will be responsive to USTR.  (NOTE:  With negotiations moving 
forward with the EU on export duties, Aitzhanova claimed she might 
be able sign an agreement on that specific issue during a planned 
trip to Brussels later in March.  END NOTE.) 
 
CUSTOMS UNION LIKELY TO TRUMP WTO 
 
9.  (SBU) According to Aitzhanova, prolonged negotiations with USTR 
on sensitive issues related to financial services, done in the light 
of the deteriorating global financial situation, are very likely to 
give the customs union with Russia and Belarus a particularly 
attractive gloss.  "There has been much talk, but little progress, 
and now this is being overlapped by the customs union," said 
Aitzhanova.  "If we don't get something that reflects reality, we 
will need to postpone the WTO decision.  "Without more flexibility 
from the United States, the customs union will take precedence." 
Aitzhanova acknowledged that Kazakhstan ultimately will seek entry 
into the WTO, and concluded that the Kazakhstanis know they must 
participate in the global market place. 
 
10.  (SBU) Aitzhanova noted that Prime Minister Karim Masimov 
continues to work flat-out on the economy, travelling in the regions 
to address growing unemployment and "very concerned about what will 
happen to the banks tomorrow."  She confirmed that Masimov would 
welcome a call from a senior Obama Administration official. 
 
HOAGLAND

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09ASTANA495, KAZAKHSTAN: ASTANA HOSTS INTERNATIONAL CONFERENCE ON

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Reference ID Created Released Classification Origin
09ASTANA495 2009-03-19 10:02 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3780
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DE RUEHTA #0495/01 0781002
ZNR UUUUU ZZH
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INFO RUCNCIS/CIS COLLECTIVE 1391
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RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0951
RUEKJCS/SECDEF WASHDC 0864
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1331

UNCLAS SECTION 01 OF 03 ASTANA 000495 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB, OES/PCI (PHUDAK, NFITE) 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EPET ECON SENV ZK KZ
SUBJECT:  KAZAKHSTAN:  ASTANA HOSTS INTERNATIONAL CONFERENCE ON 
SUSTAINABLE DEVELOPMENT AND ENVIRONMENTAL INTEGRATION 
 
ASTANA 00000495  001.2 OF 003 
 
 
1. (U) SUMMARY:  During the International Conference on Sustainable 
Development and Environmental Integration in Central Asia held in 
Astana on March 13, newly appointed Kazakhstani Minister of 
Environmental Protection Nurgali Ashimov said that Kazakhstan's 
Environmental Code is the first in the CIS and is in "complete 
harmony" with the environmental laws of developed countries. 
European Commission head of mission Norbert Jousten noted that the 
environment is linked to the economy and thus the current financial 
crisis should not divert our attention from environmental concerns. 
World Bank official Peter Thompson highlighted the serious 
environmental challenges in Central Asia but also noted several 
successes, including the northern Aral Sea.  UNECE representative 
Bulat Yesekin argued that Central Asian governments are not willing 
to follow through on agreements they have signed on environmental 
cooperation.  Kazakhstani Business Association for Sustainable 
Development representative Gulsara Edilbayeva said that 
environmental standards must meet international norms and should not 
be arbitrary.  END SUMMARY. 
 
ENVIRONMENT MINISTER'S OPENING REMARKS 
 
2. (U) In his opening remarks at the International Conference on 
Sustainable Development and Environmental Integration in Central 
Asia, which was held in Astana on March 13 and sponsored by the 
European Commission and the Government of Kazakhstan, newly 
appointed Kazakhstani Minister of Environmental Protection Nurgali 
Ashimov said that President Nazarbayev has always focused on the 
importance of the sustainable development in the Eurasia region as a 
whole, which is a formula critical for the survival of the 
Kazakhstani people.  Kazakhstan has signed a Framework Convention on 
Sustainable Development with Kyrgyzstan, Tajikistan, and 
Turkmenistan.  Sustainable development needs to be considered in 
context of the world's other problems, including the current 
financial crisis.  Ashimov said Kazakhstan's Environmental Code is 
the first in the CIS and is in complete harmony with the 
environmental laws of developed countries. 
 
ENVIRONMENT LINKED TO ECONOMY 
 
3. (U) European Commission Ambassador to Kazakhstan, Kyrgyzstan, and 
Tajikistan Norbert Jousten congratulated Kazakhstan on its recent 
signing of the Kyoto Protocol and agreed that Kazakhstan's 
Environmental Code meets the highest standards.  He noted that the 
global financial crisis might cause people to think the economy is 
much more important than the environment, but the two are tightly 
linked.  He said the EU's main areas of environmental focus are 
climate change, health, biodiversity, and the sustainable use of 
natural resources. 
 
4. (U) Jousten said the EU's Central Asian strategy contains a 
strategy for water management, climate change, fighting 
desertification, and providing support for the development of 
renewable energy.  EU-Central Asian cooperation is increasing, and 
the environment is a key aspect.  He mentioned several projects that 
are underway, including a 1.8 million euro project on integrated 
water resource management involving Kazakhstan, Kyrgyzstan, 
Turkmenistan, and Tajikistan; 1.5 million euros for an environmental 
center; and support for the Central Asian countries to sign the 
Aarhus Convention.   (NOTE: The United Nations Economic Commission 
for Europe (UNECE) Convention on Access to Information, Public 
Participation in Decision-Making, and Access to Justice in 
Environmental Matters, is better known as the Aarhus Convention. 
END NOTE.) 
 
SOME PROGRESS ON NORTHERN ARAL SEA 
 
5. (U) World Bank Sustainable Development Department Director Peter 
Thompson said that water, energy, and agriculture pose serious 
challenges in Central Asia.  He noted the conflicting interests of 
upstream countries using water for energy, verses downstream 
countries that need it for irrigation.  To make matters worse, up to 
50 percent of water is lost due to the poor irrigation system 
 
ASTANA 00000495  002.2 OF 003 
 
 
inherited from the Soviet era.  He argued that water pricing and 
management is very inefficient, leading to an increase in land 
degradation, with serious implications for long-term food
security. 
He noted that the Aral Sea, once the world's fourth largest lake, 
has shrunk 70 percent since 1960, its water level has dropped almost 
20 meters, and it has now split into northern and southern portions. 
 The World Bank and Kazakhstan have managed to restore part of the 
northern Aral Sea by means of the Kok-Aral Dike, constructed to 
separate the two seas and maintain the integrity of the northern 
sea, which lies entirely within Kazakhstan.  As a result, water 
levels have risen, salinity levels have declined, fish production 
has increased, and the ecosystem has been partially restored. 
Unfortunately, the Soviet legacy still remains in most of Central 
Asia, with aging and limited infrastructure for waste management 
treatment, limited cooperation at the local level, and severe 
pollution of water supplies, Thompson maintained. 
 
GOVERNMENTS UNWILLING TO COOPERATE IN KEY AREAS 
 
6. (U) Bulat Yesekin, a representative of the Environmental Policy 
Committee of the United Nations Economic Commission for Europe 
(UNECE), said Central Asia's three main sustainable development 
problems are the destruction of the region's water ecosystems, 
inefficient water management, and an inadequate potable water 
supply.   The unwillingness of governments to cooperate leads to a 
range of environmental problems such as poverty and migration, 
ecosystem degradation, poor health, pollution, and inefficient 
management of water and energy.  The five Central Asian countries 
signed a memorandum on cooperation during a 2003 Kiev ministerial 
conference on the environment, committing to saving water basin 
ecosystems, rational use of water, access to potable water, and 
regional cooperation.  Unfortunately, much of this commitment has 
not been realized, and now there are only fragmented water 
management programs in Central Asia.  Yesekin said that some goals 
to achieve by 2012 are a regional water management agreement, 
analysis of tax policies and the extent to which they stimulate 
environmental destruction, trans-boundary projects to save the 
Eurasian ecosystem, and targeted assistance for the Aral Sea, 
Caspian Sea, and Lake Balkhash (which is Central Asia's second 
largest lake, located in southeastern Kazakhstan). 
 
CONFLICTING IDEAS ON WATER IMPEDE INTEGRATION 
 
7. (U) Central Asia Regional Environmental Center (CAREC) Executive 
Director Talaybek Makeyev said his organization's mission is to 
support regional environmental integration and cooperation in 
Central Asia.  CAREC seeks to mobilize civil society, including the 
private sector, to improve the environment and promote sustainable 
development.  Kyrgyz-Russian Slavic University department head Dr. 
Elena Rodina said she wants Kyrgyzstan to regard environmental 
security as the basis of sustainable development.  Unfortunately, it 
is difficult to overcome the institutional problems of integration 
of water resources.  There is no existing mechanism at present that 
can regulate trans-boundary water resources, and there are 
conflicting notions of how to treat water.  She recommended that all 
parties either collectively sign and ratify the U.N. conventions on 
water resource management, or have a panel of objective 
international experts help draft laws in each country that can help 
them eventually move toward cooperation. 
 
BUSINESS WANTS TO PARTICIPATE IN SETTING STANDARDS 
 
8. (U) Kazakhstan Business Association for Sustainable Development 
representative Gulsara Edilbayeva wants to increase the role of 
business and the private sector in achieving the economic goals of 
sustainable development.  She said that business needs sustainable 
development and environmental protection policies which follow 
international standards and are not arbitrary.  Emission standards 
and associated fines need to have concrete criteria that are 
internationally accepted.  It is thus important to improve the 
environmental indicators used to regulate industry.  She said 
businesses want to see greater cooperation and discussion among the 
 
ASTANA 00000495  003.2 OF 003 
 
 
government, NGOs, international organizations, and business 
associations. 
 
9. (SBU) NOTE:  The government of Kazakhstan has levied heavy 
environmental fines against companies in the extractive industries 
sector, particularly those developing oil and gas fields. 
Tengizchevroil (TCO), for example, was ordered by a court in Atyrau 
oblast to pay a $342 million fine in 2007, for alleged violations of 
environmental regulations related to TCO's open-air storage of 
sulfur.  In addition, in 2008, oil companies operating in Kazakhstan 
paid more than 14 billion tenge ($93 million) in fines for excessive 
gas flaring, including 1.8 billion tenge ($12 million) paid by 
Karachaganak Petroleum Operating Company, in which Chevron has a 20 
percent stake.  The Chinese National Petroleum Company (CNPC), which 
owns 60 percent of AktobeMunaiGas, paid a fine of 300 million tenge 
(approximately $2 million) in March 2009, for dumping 2,300 tons of 
drilling waste near residential sites and flaring 1,200 million 
cubic meters of natural gas, well above its permitted quota.  END 
NOTE. 
 
HOAGLAND

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09ASTANA494, KAZAKHSTAN: NATO REP FOR CENTRAL ASIA BRIEFS ON

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09ASTANA494 2009-03-19 09:43 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO3759
OO RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNP RUEHPW
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DE RUEHTA #0494/01 0780943
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FM AMEMBASSY ASTANA
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INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1388
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
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RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
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RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 0948
RUEKJCS/SECDEF WASHDC PRIORITY 0861
RUEHNO/USMISSION USNATO PRIORITY 2557
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2227

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 000494 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RPM, EUR/RUS 
 
E.O. 12958: DECL: 03/19/2029 
TAGS: PGOV PREL MARR NATO OSCE RS KZ
SUBJECT:  KAZAKHSTAN:  NATO REP FOR CENTRAL ASIA BRIEFS ON 
HIS ASTANA VISIT 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  NATO Special Representative for the 
Caucasus and Central Asia Robert Simmons told NATO 
Ambassadors in Astana on March 18 that the Euro-Atlantic 
Partnership Council (EAPC) Security Forum is administratively 
on track for June 24-25 in Astana, even though Kazakhstani 
officials made an effort to limit the agenda.  He estimated 
that Kazakhstan's commitment to its Individual Partnership 
Action Plan with NATO is "way down," and suggested this might 
be the fault of Minister of Defense Danial Akhmetov under 
Russian influence.  Simmons reported that Security Council 
Chairman Kairbek Suleymenov said Kazakhstan will be prepared 
to sign the NATO Transit Agreement at the EAPC in June, "now 
that NATO has restored its relations with Russia."  Following 
Simmons' briefing, NATO Ambassadors discussed whether his 
experience during this visit portends Kazakhstani attitudes 
during its 2010 OSCE Chairmanship.  Most agreed on the need 
for early and sustained highest-level engagement with 
President Nazarbayev in the run-up to the 2010 Chairmanship 
to ensure he receives the West's unvarnished views without 
any intermediation.  END SUMMARY. 
 
2.  (C) NATO Special Representative for the Caucasus and 
Central Asia Robert Simmons briefed NATO Ambassadors in 
Astana on March 18 on his two-day visit to Kazakhstan.  He 
said his agenda included introducing the new NATO Information 
Officer for Central Asia, AmCit Evan Tracz (who might 
eventually be based in Tashkent or Bishkek); preparing for 
the Euro-Atlantic Partnership Council (EAPC) Security Forum 
in Astana on June 24-25; reviewing next steps for 
Kazakhstan's Individual Partnership Action Plan (IPAP) with 
NATO; pressing for conclusion of the NATO Transit Agreement 
with Kazakhstan; and assessing Kazakhstan's interest in 
future NATO cooperation, especially in Afghanistan. 
 
JUNE 24-25 EAPC IN ASTANA ON TRACK 
 
3.  (C) Simmons reported that the EAPC, planned to take place 
in Astana June 24-25, is administratively on track and will 
be held in the Palace of Independence.  The NATO 
Secretary-General will arrive on June 23 for bilateral 
NATO-Kazakhstan meetings.  Simmons said NATO had already 
presented Kazakhstan the agenda for the EAPC that includes 
discussions on Central Asia and Afghanistan, the situation in 
the Caucasus, and energy infrastructure security.  He said 
Minister of Defense Danial Akhmetov and other senior 
officials pressed to have the Caucasus and energy 
infrastructure security removed from the agenda.  Simmons 
noted that NATO sets the agenda, not Kazakhstan.  In the 
ensuing discussion, Simmons and a few others conjectured that 
Kazakhstan was carrying Russia's water on the agenda.  Others 
speculated that Kazakhstan might feel the need to tell Moscow 
with a straight face that it had made a good-faith effort, 
but in the end would not seriously oppose the proposed agenda. 
 
INDIVIDUAL PARTNERSHIP ACTION PLAN 
 
4.  (C) Simmons reported "with some disappointment" that 
Kazakhstan's cooperation with NATO is "way down" since Danial 
Akhmetov became Minister of Defense.  Simmons acknowledged 
that Deputy Minister of Defense General Bulat Sembinov had 
recently visited both Kabul and Washington to discuss 
enhanced Kazakhstani military cooperation with NATO and the 
International Security Assistance Force in Afghanistan, but 
he questioned whether Akhmetov is "simply allowing Sembinov 
to do this."  The Ambassador suggested that the final arbiter 
is President Nazarbayev, who appears to want to keep his 
options open, and has allowed the unusual situation where the 
Deputy Minister of Defense at least appears to operate 
independently from the Minister of Defense.  Simmons noted 
that the Ministry of Defense has blocked him for two years 
from meeting with General Sembinov, even though both 
established a good working relationship before Akhmetov 
became Minister of Defense.  Simmons judged that the Ministry 
 
ASTANA 00000494  002 OF 003 
 
 
of Defense seems to have dropped interoperability with NATO 
as a goal.  (NOTE:  We have not seen any concrete evidence of 
this.  END NOTE.) 
 
5.  (C) According to Simmons, Akhmetov characterized 
Kazakhstani military officers travelling to NATO-sponsored 
information and training events
 as "military tourists" and 
reportedly said he "will not permit it."  Simmons said that 
all of this seems to him to be "the negative influence of 
Russia."  However, the Kazakhstani Peace-keeping Brigade 
(KazBrig), designated for international peace-keeping 
operations, seems to be moving forward.  Simmons also 
reported that the best cooperation between NATO and 
Kazakhstan is on Civil Emergency Planning (CEP) with Minister 
of Emergency Situations Sergey Bozhko.  NATO will conduct a 
CEP exercise in Kazakhstan in September. 
 
NATO TRANSIT AGREEMENT 
 
6.  (C) Simmons said that Security Council Chairman Kairbek 
Suleymenov told him, "Now that you (NATO) have restored your 
relations with Russia, we can sign the NATO Transit Agreement 
at the EAPC in June."  Simmons said NATO had provided 
Kazakhstan the draft text of the agreement in September 2008, 
but until now had not had "the courtesy of a reply."  Simmons 
said that during this visit he had a meeting at the Ministry 
of Transport, but found it less than useful because the 
ministry focused only on technocratic details.  (NOTE:  When 
we were negotiating the Northern Distribution Network for the 
commercial transit of non-lethal supplies for U.S. troops in 
Afghanistan, which we concluded successfully in January, we 
found the same situation at the Ministry of Transport, which 
is not a policy decision-making ministry.  The real 
decision-maker, giving his recommendation to President 
Nazarbayev, is Security Council Chairman Suleymenov.  END 
NOTE.)  Simmons said that NATO wants a clause in the NATO 
Transit Agreement that will provide "interim entry into force 
upon signature," because experience shows that formal 
Kazakhstani ratification can take "months, if not years."  He 
clarified that the agreement allows for the transit of 
non-lethal military supplies (including trucks, jeeps, etc.) 
but not troops. 
 
7.  (C) Simmons said he was struck by Suleymenov's "oblique 
warning" that NATO should not get too close to Uzbekistan or 
Tajikistan "because 'recent events' have shown there could be 
big changes coming in those countries."  Simmons said that 
Suleymenov neither explained the sources of this judgment nor 
elaborated on it. 
 
QUO VADIS? 
 
8.  (C) During the lively discussion that followed Simmons' 
briefing, Italian Ambassador Bruno Pasquino commented, "It 
seems your visits follow a pattern -- one is upbeat, the next 
is downbeat.  Is that an accurate observation?"  Simmons 
responded that the Russia factor plays a role.  He recounted 
a recent discussion in Brussels with the DCM of Russia's 
Mission to NATO, who had asked him, "How can you meet with 
our colonies without Russia at the table?"  Pasquino noted 
that Russian Ambassador in Astana Mikhail Borcharnikov seems 
to have latched onto him for detailed NATO information, 
having told him, "You must understand our intense interest in 
every single move NATO makes in our region of interest." 
 
9.  (C) Several Ambassadors wondered if Simmons' mixed 
experience during this visit portends what the West can 
expect during Kazakhstan's 2010 OSCE Chairmanship.  One 
asserted we can expect Kazakhstan "to shill for the Kremlin." 
 Others judged that Kazakhstan will be a tough but honest 
broker between Russia and the West.  Those who advocated this 
latter view emphasized the importance of early and sustained 
highest-level engagement with Nazarbayev in the coming months 
to ensure that he receives the West's unvarnished views 
without any intermediation. 
 
ASTANA 00000494  003 OF 003 
 
 
 
10.  (C) COMMENT:  We would observe that the current NATO 
Contact Embassy in Astana is the United Kingdom, which is 
small and, necessarily, has relatively limited opportunities 
for sustained contacts at high levels in the Government of 
Kazakhstan -- not the least because the UK Ambassador is also 
accredited to Kyrgyzstan and is frequently on the road.  We 
would note that the previous NATO Information Officer left 
Kazakhstan late in 2008; and so, NATO and Simmons might not 
have been as extensively briefed on the complicated, 
multi-layer current realities of Kazakhstan's multi-vector 
foreign policy as would have been desired.  Further, at least 
at this point, NATO seems to be a more hair-on-fire issue for 
Russia than the OSCE.  In our judgment, until we have 
real-world proof otherwise, Kazakhstan is likely to continue 
to play a hard-nosed but, in the end, honest broker between 
the West and Russia in international fora.  END COMMENT. 
HOAGLAND

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09ASTANA490, KAZAKHSTAN: PUBLIC-PRIVATE ALLIANCES EXPAND BUSINESS

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Reference ID Created Released Classification Origin
09ASTANA490 2009-03-18 09:45 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO2634
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0490 0770945
ZNR UUUUU ZZH
O 180945Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4957
INFO RUCNCIS/CIS COLLECTIVE 1387
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0764
RUEHKO/AMEMBASSY TOKYO 1467
RUEHUL/AMEMBASSY SEOUL 0451
RUCNDT/USMISSION USUN NEW YORK 2226
RUEHNO/USMISSION USNATO 2556
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0947
RUEKJCS/SECDEF WASHDC 0860
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1330

UNCLAS ASTANA 000490 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/ACE, F 
STATE PLEASE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EAID SOCI KZ
SUBJECT:  KAZAKHSTAN:  PUBLIC-PRIVATE ALLIANCES EXPAND BUSINESS 
SERVICES, PROMOTING ECONOMIC DIVERSIFICATION 
1.  SUMMARY:  On February 25, USAID established separate 
public-private alliances with Baker Hughes ($1,250,000 over five 
years), an American drilling company active in Kazakhstan, and with 
 
Chevron ($250,000).  The partnerships between these two companies 
and USAID will improve the supply of skilled labor in the country by 
establishing a "Know About Business" (KAB) entrepreneurship course 
in select vocational schools in Aktau, Atyrau, Astana, and Almaty. 
These recent agreements are but two of a number of public-private 
efforts that USAID is promoting to help diversify the Kazakhstani 
economy through improved productivity of small- and medium-sized 
enterprises (SME).  END SUMMARY. 
BACKGROUND 
2.  SMEs are important throughout the world as leaders in job 
creation and innovation, and motors for broad-based economic growth 
and development.  In Kazakhstan, SMEs are especially important for 
their potential to diversify the country's largely natural 
resource-based economy.  Unfortunately, global surveys, such as the 
World Economic Forum Global Competitiveness Index and the Global 
Entrepreneurship Monitoring (GEM) Report (which is sponsored by 
USAID in Kazakhstan) reveal that entrepreneurs and SMEs in 
Kazakhstan suffer from relatively weak knowledge and poor skills. 
3.  USAID designed the Kazakhstan Small Business Development (KSBD) 
project to establish sustainable business development services (BDS) 
-- which are non-financial services such as training, consulting, 
and information -- for SMEs.  Building a market for BDS means that 
both the supply and demand for BDS are fostered and expanded. 
Markets also need simple but effective regulation -- preferably 
self-regulation -- which promotes quality control, ethics, and 
continuing education. 
4.  KSBD facilitated important gains through introducing the best 
training and consulting tools to SME business service providers 
(BSP), and the best international SME development practices to the 
Government of Kazakhstan.  The project designed a set of 
standardized Business Essentials (BE) and Consulting Essentials (CE) 
training courses, which are complemented by a set of practical SME 
management tools and specialized training courses for consultants 
and trainers.  These training and consulting courses and tools have 
been well received, with 150 trainers/consultants and over 2900 
entrepreneurs trained.  KSBD also added the International Labor 
Organization (ILO) designed vocational curricula to complement KAB. 
5.  Despite these gains, development of the BDS market will only be 
successful if it is supported by the private sector and government, 
as well as by non-governmental players.  USAID has an important role 
to play in establishing alliances which share costs and risks, and 
which build upon the relative strengths of the three sectors. 
STRATEGIC ALLIANCE WITH DAMU ENTERPRISE DEVELOPMENT FUND 
6.  The Damu Enterprise Development Fund is a state-owned 
corporation tasked with implementing programs to improve SME access 
to credit, as well as financing other support for SMEs, such as 
training and consulting services.  Since late 2006, USAID support to 
Damu has included a comprehensive review of the challenges and 
opportunities to applying international best practices to assist 
SMEs.  Study tours, technical assistance, and training programs have 
emphasized the importance of outsourcing SME programs to private 
sector partner financial institutions and BSPs.  This outsourcing 
approach benefits from private sector efficiency and expertise and 
promotes commercial sustainability, while minimizing distortions to 
the emerging market economy.  The following are but some of the 
results of this partnership: 
-- Damu previously lent directly to SMEs, an approach that proved to 
be an inefficient method for the disbursement of credit.  Damu has 
now revised its credit program to work through commercial banks.  As 
a result of this new and more efficient approach, this year the 
Kazakhstani government provided Damu with an additional $1 billion 
for its lending program. 
-- Based partially upon two study tours to the U.S. Small Business 
Administration and other additional technical assistance, Damu 
advocated to its state holding company, Samruk-Kazyna, for the 
development of a network of Enterprise Development Centers (EDCs). 
These EDCs are designed to provide training and consu
lting services 
to SMEs through outsourcing to the private sector.  The first of 
four pilot EDCs will be established by the end of March in Almaty. 
These EDCs will outsource and carefully subsidize training and 
consulting to entrepreneurs and SMEs across the country and provide 
other services, such as government procurement assistance to 
complement Damu's access to credit programs. 
-- With USAID support, Damu is now in the final stages of completing 
a comprehensive SME Handbook of international best practices for 
promoting SME development.  This Handbook will be used to guide the 
government's strategy and program development at both the national 
and regional levels.  In addition, KSBD is working with the 
government to develop an Annual Entrepreneurship Report to provide 
an annual comprehensive overview of the status of SMEs in the 
country and priorities that will promote continued development. 
-- Responding to a request from Damu, in March, USAID will provide a 
workshop on its Development Credit Authority, a financing authority 
which partially guarantees loans from qualified financial 
institutions.  The workshop and follow-up technical assistance will 
enable Damu to revise its concept of a guarantee product and role 
out the product later this year. 
ALLIANCES WITH THE PRIVATE SECTOR BUILD CAPACITY 
7.  The USAID-Baker Hughes alliance will use the KAB course to 
improve employment opportunities for youth through developing 
entrepreneurship skills and knowledge, a key to creating a 
competitive, diversified, flexible, innovative, and growing market 
economy.  The emphasis on entrepreneurial skills will support, in 
particular, the development of a stronger SME sector.  Moreover, the 
introduction of interactive pedagogical methodologies and improved 
capacity for evaluation and monitoring will help start the process 
of modernizing vocational education in Kazakhstan.  The Ministry for 
Education and Science approved of the implementation of KAB in all 
vocational schools in Kazakhstan, which includes a total enrollment 
of over 610,000 students.  The alliance will establish KAB in up to 
10 pilot vocational schools in Atyrau and Aktau, the centers for 
Kazakhstan's oil production.  The program includes training programs 
for teachers, the provision of materials and equipment, and 
assistance in tracking the outcomes of the vocational training 
courses. 
8.  USAID has also completed negotiations with Chevron for a 
$250,000 contribution towards introducing a similar program in up to 
10 vocational schools, primarily in Almaty and Astana. 
9.  On November 1, 2008, in Aksai, West Kazakhstan Oblast, USAID and 
the Karachaganak Petroleum Operating Joint Venture (KPO), a natural 
gas consortium of four international companies, completed a 
training-of-trainers course entitled "Start Your Business."  The 
target group for the training program was rural entrepreneurs.  KPO 
requested and received a proposal from KSBD to expand this program 
under its Corporate Social Responsibility program.  In addition, one 
of KSBD's partners in the region submitted a proposal to KPO to 
provide KSBD courses and consulting to KPO's suppliers.  KPO has 
also worked with prior USAID projects in the areas of quality 
management and in accounting training programs. 
10.  USAID has a long-standing partnership with the ExxonMobil 
Foundation which helped establish the Astana Enterprise Development 
Center.  For the first two years of the Center's operation, USAID 
provided $300,000 and the ExxonMobil Foundation provided $921,000. 
The Center provided about 4,500 entrepreneurs (over 75% of whom were 
women) with training in strategic and business planning, financial 
management, marketing, human resources management, taxes, and law, 
all through outsourcing to local BSPs.  Over 130 SMEs (including 51 
women-owned or women-managed companies) received business consulting 
services.  ExxonMobil recently approached USAID regarding 
establishing a second EDC in Atyrau, while continuing to fund the 
Center in Astana.  Both centers will continue to focus support on 
women in business. 
LOCAL GOVERNMENT AND NGO PARTNERS ALSO INVOLVED 
11.  In South Kazakhstan, the city of Shymkent recently established 
a total of seven EDCs (these EDCs are distinct from Damu's planned 
network of EDCs).  These EDCs are to provide SMEs with information 
and consulting services, as well as refer clients to USAID's local 
BSP partner for more advanced training and consulting.  This 
USAID-supported BSP assists the EDCs to identify services in demand. 
 USAID has also financed the Start Your Business entrepreneurship 
training course to the staff of these EDCs. 
12.  As part of its program to build BSP capacity, USAID is 
supporting the establishment and development of the Kazakhstan 
Management Consultant Association (KAMC).  The KAMC can play a 
crucial role of identifying competent and credible management 
consultants, which will assist in the development of the consulting 
profession in Kazakhstan.  In addition to promoting the 
international Certified Management Consultant program, KAMC agreed 
to adopt a Certified Associate Member designation based on KSBD's 
BE/CE program, as well as other professional requirements such as 
experience, ethics, continuing professional development, and 
association membership.  USAID is working with the European Bank for 
Reconstruction and Development's Business Advisory Services program 
to assist the institutional development of KAMC. 
 
HOAGLAND

Wikileaks

09ASTANA484, KAZAKHSTAN: AMBASSADOR DELIVERS, PUBLISHES DEMOCRACY

WikiLeaks Link

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Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09ASTANA484.
Reference ID Created Released Classification Origin
09ASTANA484 2009-03-18 00:09 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2248
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0484/01 0770009
ZNR UUUUU ZZH
R 180009Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 4942
INFO RUCNCIS/CIS COLLECTIVE 1383
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0760
RUEHKO/AMEMBASSY TOKYO 1463
RUEHUL/AMEMBASSY SEOUL 0447
RUCNDT/USMISSION USUN NEW YORK 2222
RUEHNO/USMISSION USNATO 2552
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0943
RUEKJCS/SECDEF WASHDC 0856
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1326

UNCLAS SECTION 01 OF 04 ASTANA 000484 
 
SENSITIVE 
SIPDIS 
 
DEPARMENT FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM SOCI KDEM KPAO KZ
SUBJECT:  KAZAKHSTAN:  AMBASSADOR DELIVERS, PUBLISHES DEMOCRACY 
SPEECH 
 
ASTANA 00000484  001.2 OF 004 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On March 16, the Ambassador delivered a speech 
on democracy to approximately 100 students and professors at the 
Kazakh University of Humanities and Law in Astana.  The text of the 
speech was published in full on page three of the March 17 edition 
of "Express K", a daily Russian-language newspaper, and is expected 
to be run next week by "Turkestan," a weekly Kazakh-language paper. 
Following the speech, the Ambassador met with the university's 
president, Maksut Narikbayev, who is also a renowned jurist close to 
President Nazarbayev.  Narikbayev said that Kazakhstan's younger 
generation will advance the country's democratic development.  He 
frankly admitted that there have been problems with Kazakhstan's 
elections, and also expressed concerns about the concentration of 
power in the President's hands.  END SUMMARY. 
 
SPEECH DELIVERED TO STUDENTS, PUBLISHED IN LOCAL PRESS 
 
3.  (U) On March 16, the Ambassador delivered a speech on democracy 
to approximately 100 students and professors at the Kazakh 
University of Humanities and Law in Astana.  (NOTE:  The full text 
of the Ambassador's speech appears in para 9 below.  END NOTE.) 
Following his address, the Ambassador answered questions on topics 
ranging from whether U.S. law applies equally to visitors to the 
United States as well as U.S. citizens, to whether changing 
mentalities is as important as changing institutions.  The 
Ambassador underscored that rule of law is part of the U.S. 
democratic system, and thus the law applies equally to everyone.  On 
the need to change mentalities, he agreed that democracy is a long 
process, noting that President Obama's election would not have been 
possible 50 years ago. 
 
4.  (U) On March 17, pro-government, Russian-language "Express K" 
daily (circulation 21,000) ran the speech in its entirety on page 
three.  The Kazakh-language weekly newspaper "Turkestan" 
(circulation 10,500) is expected to run the speech next week. 
(NOTE:  "Turkestan" could not publish the speech this week because 
that issue is entirely dedicated to the celebration of Nauryz.  END 
NOTE.) 
 
UNIVERSITY PRESIDENT PLACES HOPES ON YOUNG GENERATION 
 
5.  (SBU) Following the lecture, the university's president, Maksut 
Narikbayev -- a former Procurator General and Chief Justice of 
Kazakhstan's Supreme Court, current head of the pro-government 
Adilet political party, and longtime friend of President Nazarbayev 
-- publicly thanked the Ambassador for his remarks, and commented 
that the United States and Kazakhstan agree "on all major principles 
of democracy."  He said that President Nazarbayev has chosen to 
undertake reforms step-by-step in order to "prevent developments 
similar to those that have taken place in Georgia, Ukraine, and 
Kyrgyzstan." 
 
6.  (SBU) Narikbayev told the Ambassador that Kazakhstan has a young 
generation of educated people capable of further advancing the 
country's democratic development.  He suggested that his generation 
had created the foundation, but young people "will have to complete 
construction of the roof."  Turning to the topic of elections, 
Narikbayev said was surprised at the "double standards" of U.S. 
policy such as "holding guns to people's heads in Afghanistan," but 
also admitted that Kazakhstan has problems holding fair elections, 
commenting that "Kazakhstani election law is good enough for holding 
elections, but the 'bureaucratic mafia' does not apply it 
properly." 
 
CONCERNS ABOUT CONCENTRATION OF POWER 
 
7.  (SBU) At a private meeting following the event, the Ambassador 
asked Narikbayev for his view of legal developments in Kazakhstan. 
Narikbayev responded that the last four years have been marked by an 
 
ASTANA 00000484  002.2 OF 004 
 
 
absence of responsibility.  He said the 1995 constitution is 
hindering Kazakhstan's legal development and that he had been a 
member of the Council on Legal Policy that had worked to put 
together a new legal framework.  Narikbayev noted that he had 
published a number of statements -- including an open appeal to the &
#x000A;President -- citing the necessity of constitutional change.  "The 
law does not spell out the responsibility of those who have been 
entrusted with different authorities," he claimed.  "The President 
is the arbiter of all three branches of government -- the executive, 
legislative, and judicial.  This system works only because 
Nazarbayev has a strong personality and the three branches look to 
him to tell them what to do next.  They only act when he notices 
that something is wrong."  Narikbayev opined that Kazakhstan needs 
something similar to the U.S. system, in which the President is 
responsible just for the executive branch and takes responsibility 
for his cabinet. 
 
8.  (SBU) The Ambassador agreed, noting that a dangerous situation 
is created when a strong leader, in charge of all three branches, 
leaves the scene without the institutions of succession well 
established.  He stressed the need to build independent, enduring 
institutions, explaining that these are the guarantee of stability. 
Narikbayev replied that he had shared his own vision of"radical 
reform" in a public statement.  He stressed the need for judges to 
be prepared and trained instead of relying on a chief justice and 
underscored that the current system creates an environment in which 
no politically-charged decision is made without checking with the 
chief justice.  Narikbayev said he thought the global financial 
crisis would help Kazakhstan to move ahead with "new concepts." 
 
TEXT OF THE AMBASSADOR'S SPEECH 
 
9.  (U) Begin text of speech: 
 
I would like to say a few words about democracy.  Specifically, I'd 
like to say what it is and what it is not. 
 
The root of the English word democracy is an ancient Greek word, 
demos, which means people - and it means all people, not just an 
individual class, not just the ruling elite, not just the powerful, 
not just the rich. 
 
In most simple terms, democracy is the voice of the people.  It 
means that all citizens of a nation, of any nation, have a voice in 
how they are governed.  It's not the voice of the mob.  It's not 
tyranny by a minority.  It's not limited to a certain class. 
 
Democracy is, rather, a system of consultation, cooperation, 
collaboration, and compromise among all citizens.  It is individual 
citizens working together to take responsibility for their own 
well-being, and for the well-being of the nation.  It is the farmer, 
school teachers and parents, the doctor, the business man and 
business woman, the local bureaucrat, and the most senior officials 
all listening to each other with respect and finding the fair 
compromise that best suits the majority.  Democracy is the ultimate 
expression of peace and concord in a society. 
 
In my diplomatic career in Central Asia, before I came to 
Kazakhstan, I have had some senior government officials tell me, 
"You have to understand we are Asian, and we have a different 
mind-set.  Your democracy is impossible for us.  We have to respect 
our history, our tradition, and our customs." 
 
My respectful reply has always been that democracy is not a rigid 
ideology that can be imposed on a nation and a people.  And, God 
forbid, anyone should ever think it can be imposed by force. 
Democracy always develops organically, and it always respects the 
history, tradition, and customs of the people. 
 
I like to point out that democracy is indeed possible in Asia.  We 
 
ASTANA 00000484  003.2 OF 004 
 
 
need only to look at examples like Japan, South Korea, Indonesia, 
the Philippines, and India, among others.  All are successful, 
functioning democracies.  And each one of these Asian democracies is 
an organic expression of its people's history, tradition, and 
customs. 
 
Sometimes people misunderstand and say that the U.S. view of 
democracy means Washington both openly and secretly supports 
opposition parties and personalities to overthrow existing 
governments.  In the most extreme propaganda from some sources, some 
say that the United States organizes so-called Color Revolutions 
against existing governments.  But that simply is not true.  It's 
not true now, and it has not ever been true in the past.  So-called 
Color Revolutions happened when corrupt governments manipulated 
election results to deny the voice of the people. 
 
Yes, we pay attention to and stay in contact with so-called 
opposition politicians.  That is simply the job of a diplomat.  But 
in the end, for opposition leaders to be successful, they and their 
parties must build their own constituencies and develop their own 
political platforms of policies that will appeal to citizens and 
will be of benefit to the majority.  If they cannot do that, they 
will not succeed - and no amount of U.S. open or secret support can 
ever guarantee their success, because democracy is the voice of the 
people. 
 
Does the United States continue to support democracy and democratic 
individuals and their democratic movements?  Bezuslovno, da!  Imeno 
po-tomy shto eto nash ideal!  But it is extremely important to 
distinguish between ideal and ideology.  We firmly support our 
ideals, but we do not conspire to impose our ideology.  At the same 
time, I assure you I will always speak out against unnecessary and 
egregious actions against individuals and against their political 
movements - when the facts are clear. 
 
Sometimes, people in Kazakhstan ask if I think Kazakhstan is a 
democracy.  That's a most difficult question to answer - because 
democracy is a process.   At the most fundamental level, when I 
observe and evaluate democracy in Kazakhstan, I want to do so from a 
perspective that is based on objective reality. 
 
Is Kazakhstan a fully mature democracy with all the institutions of 
democracy firmly in place?  Well, probably not yet.  But is it on a 
democratic path?  Yes, I really do think so. 
 
Why can I say that?  Because I am impressed by local citizens who 
work together to ask their akims to ensure that their apartments 
have heat and hot water, or to ensure that they receive apartments 
they have already paid for in advance.  I am impressed by those who 
challenge the high-handedness of government officials who do not 
work to support the rights of the people.  Citizens working together 
with their government to solve their common problems is democracy in 
action. 
 
I can say that Kazakhstan is on a democratic path because I am 
impressed by private-citizen social movements, independent 
non-governmental organizations, and government-approved 
organizations that include a broad range of public opinion where 
citizens generally can debate openly and express their views freely 
without fear of being dragged off to jail.  That, too, is democracy 
in action. 
 
I can say that Kazakhstan is on a democratic path when I see the 
Prime Minister encourage citizen dialog with the government on his 
Internet blog, and when he encourages other ministers to open blogs 
for the public.  I know some cynics dismiss this as clever PR, 
public relations.  But I think this, too, is democracy in action. 
 
If I could respectfully make one suggestion, I would say the n
ext 
steps would be for Kazakhstan to create the institutions that 
 
ASTANA 00000484  004.2 OF 004 
 
 
guarantee the long-term success of any democratic nation.  One of 
these institutions, for example, would be truly independent election 
commissions that guarantee full participation by all parties, NGOs, 
and social movements.  The other side of this coin, of course, is 
that these parties, NGOs, and social movements must participate in 
this process responsibly.  That, in fact, is another hallmark of 
democracy - that citizens play a responsible role:  not to a party, 
not to the government, but to the nation. 
 
Another goal should be to move toward a transparent and fully 
independent judicial system that guarantees the rule of law.  In my 
country, the independent judiciary is essential to the rule of law. 
When our politicians and bureaucrats violate the law, sooner or 
later our legal system usually will catch up with them, and neither 
the government nor their political parties can protect them from the 
consequences.  In our history, we have had mayors, governors, 
congressmen (members of parliament) and presidential advisers serve 
time in prison for violating the law.  In a mature democracy, no one 
is above the law. 
 
As the personal representative of the President of the United 
States, my highest responsibility is to work with the Government of 
Kazakhstan on all issues in which we have mutual national interests. 
 Certainly, democracy is one of them.  But it is only one issue.  My 
responsibility as the Ambassador of the United States is to keep all 
issues in balance.  I hope that I do so, at the same time that I 
never forget my nation's democratic ideals. 
 
End text of speech. 
 
HOAGLAND

Wikileaks

09ASTANA482, KAZAKHSTAN: INTERNATIONAL FUND TO SAVE THE ARAL SEA HEAD

WikiLeaks Link

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
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Reference ID Created Released Classification Origin
09ASTANA482 2009-03-17 10:14 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1558
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0482/01 0761014
ZNR UUUUU ZZH
O 171014Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4939
INFO RUCNCIS/CIS COLLECTIVE 1380
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0757
RUEHKO/AMEMBASSY TOKYO 1460
RUEHUL/AMEMBASSY SEOUL 0444
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0940
RUEKJCS/SECDEF WASHDC 0853
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1323

UNCLAS SECTION 01 OF 03 ASTANA 000482 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, OES/PCI 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON SENV AF ZK KZ
SUBJECT:  KAZAKHSTAN:  INTERNATIONAL FUND TO SAVE THE ARAL SEA HEAD 
DISCUSSES REGIONAL WATER COOPERATION 
 
ASTANA 00000482  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Almabek Nurushev, Executive Director of the 
International Fund to Save the Aral Sea (IFAS), told us on March 12 
that IFAS would like to fashion a bilateral Kazakhstan-Kyrgyzstan 
agreement on use of water resources.  He maintained that the 
Interstate Coordination Water Commission (ICWC), the highest water 
decision-making body in the region, is unable to make binding 
decisions concerning the management of water resources.  Uzbekistan 
is not likely soon to move away from cultivating cotton, wheat, and 
rice to other crops, Nurushev argued.  IFAS is not in principle 
opposed to including Afghanistan in regional water cooperation, 
because it is a neighbor and also part of Central Asia.  However, 
Nurushev contended that Afghanistan would have to agree with the 
other countries in Central Asia on how to use the water.  END 
SUMMARY. 
 
IFAS INTERESTED IN KAZAKHSTAN-KYRGYZSTAN WATER AGREEMENT 
 
3.  (SBU) During a March 12 meeting in Almaty, International Fund to 
Save the Aral Sea (IFAS) Executive Director Almabek Nurushev told 
Regional Environmental Officer (REO) and a visiting State Department 
official that he has been working with IFAS from the date of its 
founding 15 years ago, and said he knows all sides of the issues 
related to regional water resources and the Aral Sea.  He said the 
IFAS Executive Committee, rotating between the various Central Asian 
capitals, has been located in Almaty since November 2008. 
Previously, it was in Dushanbe during 2004-08. 
 
4. (SBU) Nurushev stressed that in Central Asia, "if there is no 
water, there is no life."  The city of Aktau in western Kazakhstan 
is essentially a desert, he said, and when it was founded, the 
Soviets put a soldier to guard each planted tree, illustrating how 
difficult it is to cultivate the desert and how scarce water is. 
Nurushev said desertification has become the order of the day in 
many regions, and this was one reason why so many water basins were 
created, including man-made basins.  Some served specific purposes, 
such as the Toktogul Basin in Kyrgyzstan, which was supposed to hold 
water in the winter to be released for spring irrigation.  Nurushev 
said that one of IFAS's goals is to craft an agreement between 
Kyrgyzstan and Kazakhstan that will resolve their bilateral water 
problems.  It would also like to develop general guidelines for 
managing Central Asian water resources, drawing upon experiences of 
cooperation in other parts of the world, such as cooperation in the 
utilization of Indochina's Mekong River. 
 
ICWC NOT ABLE TO MAKE BINDING DECISIONS 
 
5. (SBU) Nurushev noted that the Interstate Coordination Water 
Commission (ICWC) is the principal organization for the rational 
utilization and protection of trans-boundary water resources in 
Central Asia.   Despite the fact that it is the highest 
decision-making body on water, it currently has no legal or 
enforcement powers, he argued.  In 1992, the ICWC had five vice 
ministers on its executive committee, one from each of the Central 
Asian countries, and they were empowered to make major decisions 
that could be implemented.  But now only two countries (Tajikistan 
and Turkmenistan) have vice ministers on the committee. 
Kazakhstan's representative is the chairman of its Committee on 
Water Resources.  Kyrgyzstan has a representative from its Ministry 
of Agriculture's Department of Water Resources.  And Uzbekistan is 
represented by a deputy minister for water resources from its 
Ministry of Agriculture who does not have any decision-making 
authority.  According to Nurushev, these representatives have no 
power to make binding decisions concerning the management of water 
resources. 
 
ALTERNATIVE CROPS NOT LIKELY 
 
6. (SBU) Nurushev noted that Uzbekistan uses 80 percent of the water 
from the Amu-Darya and Syr-Darya rivers, mostly for agriculture. 
The Amu-Darya, the main source of water for the southern and eastern 
 
ASTANA 00000482  002.2 OF 003 
 
 
Aral Sea, is split 50-50 between Uzbekistan and Turkmenistan.  There 
is virtually no water from the Amu-Darya that reaches the Aral Sea. 
If this continues, he said, the sout
hern and eastern Aral Sea will 
soon disappear.  (COMMENT:  Last fall, during a trip to the 
Karakalpakstan region of Uzbekistan, REO personally witnessed a very 
low level of water flow in the furthest downstream part of the 
Amu-Darya.  END COMMENT.) 
 
7.  (SBU) NOTE:  In contrast to the plight of the southern-eastern 
portion of the Aral Sea, the World Bank and Kazakhstan have managed 
to restore part of the northern Aral Sea by means of the Kok-Aral 
Dike, constructed to separate the two seas and maintain the 
integrity of the northern sea, which lies entirely within 
Kazakhstan.  As a result, water levels have risen, salinity levels 
have reduced, fish production has increased, and the ecosystem has 
been partially restored.  END NOTE. 
 
8. (SBU) Nurushev said that Uzbekistan, traditionally a large cotton 
producer, has considered the question of introducing alternative 
crops since the 1960s.  However, for Uzbekistan, cotton is a 
strategic commodity. (NOTE:  The Soviets decided to develop 
large-scale cotton monoculture during the Cold War, when it feared 
that the West would cut it off from imported cotton supplies.  END 
NOTE.)  He did not think it likely that Uzbekistan would soon move 
away from cotton, wheat, and rice to other crops.  Instead, he said, 
all of the Central Asian countries continue to research methods to 
become more efficient and reduce the amount of water used in 
irrigation of existing crops. 
 
SOVIET UNION PLANNED TO DIVERT RIVERS TO SAVE ARAL SEA 
 
9. (SBU) Nurushev noted that the Soviet Union had initially made a 
decision to save the Aral Sea which involved diverting water from 
the Volga, Ob, and Irtysh rivers in Siberia.  However, that project 
never made much headway, and Gorbachev eventually cancelled it.  Now 
the five Central Asian countries are stuck with the Aral Sea 
problem.  (NOTE:  There is still occasional talk in Russia of 
diverting rivers to save the Aral Sea, with Moscow Mayor Luzhkov 
leading the charge.  It's extremely unlikely this will ever move 
beyond talk, and that might be for the better.  Some of those 
Russian rivers, such as the Tom River, an Ob tributary, are among 
the world's most polluted water sources.  END NOTE.) 
 
AFGHANS NEED CENTRAL ASIAN AGREEMENT TO USE PANJ RIVER 
 
10. (SBU) Nurushev said that IFAS is not in principle opposed to 
including Afghanistan in water regional cooperation, because it is a 
neighbor and also a part of greater Central Asia.  He noted that 
IFAS had invited Afghanistan to participate in the 2006 Water for 
Life conference in Dushanbe.  He agreed that Afghanistan should also 
share in Central Asian regional water resources.  Nurushev said that 
as Afghanistan begins to develop its economy and agriculture in its 
northern region along the Tajikistan border, it would inevitably 
draw off water from the Panj River -- a tributary of the Amu-Darya 
that forms much of the border between Tajikistan and Afghanistan -- 
and would thus reduce the overall amount of water available to 
Central Asia.  He said bluntly that Afghanistan would have to agree 
with the other countries in Central Asia on how to use this water. 
International conventions are not the only constraint, he said. 
There is also Islamic law, according to which upstream users need 
permission from downstream users for their water usage. 
 
DOUBTS ABOUT OUR EFFORTS IN AFGHANISTAN 
 
11. (SBU) When asked if the United States can succeed in 
Afghanistan, Nurushev waxed historical and noted that when the 
Soviet army invaded Afghanistan, Margaret Thatcher predicted that 
the Soviets would be stuck there for 300 years.  "The Soviets 
failed," he said, "why should the United States think it is any 
different?"  He then expressed some prejudices that are not uncommon 
in Central Asia, saying that the Afghan people only know how to 
fight, not work.  They know narco-business very well and have 
 
ASTANA 00000482  003.2 OF 003 
 
 
"Godfather"-like leadership structures (referring to the movie). 
Nurushev said, "Only 'civilized people' should sell drugs.  If you 
allow others (e.g., Afghans), then the result will only be a 
catastrophe." 
 
HOAGLAND

Wikileaks

09ASTANA481, KAZAKHSTAN: SPECIAL 301 REVIEW FOR 2009

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Reference ID Created Released Classification Origin
09ASTANA481 2009-03-17 09:58 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1538
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0481/01 0760958
ZNR UUUUU ZZH
R 170958Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 4934
INFO RUCNCIS/CIS COLLECTIVE 1375
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0752
RUEHKO/AMEMBASSY TOKYO 1455
RUEHUL/AMEMBASSY SEOUL 0439
RUCNDT/USMISSION USUN NEW YORK 2217
RUEHNO/USMISSION USNATO 2547
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0935
RUEKJCS/SECDEF WASHDC 0848
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 05 ASTANA 000481 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EB/TPP/IPE (MCGOWAN) 
STATE PLEASE PASS TO USTR FOR CHOE-GROVES 
COMMERCE FOR ITA/MAC/OIPR (PETERS) 
 
E.O. 12958: N/A 
TAGS: PGOV ECON ETRD KIPR KZ
SUBJECT:  KAZAKHSTAN:  SPECIAL 301 REVIEW FOR 2009 
 
REF:  STATE 8410 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2. (SBU) SUMMARY: Over the past year, the Government of Kazakhstan 
(GOK) has continued to demonstrate a commitment to the development 
and modernization of its IPR protection regime.  The Government of 
Kazakhstan, and more specifically the IPR Committee of the Ministry 
of Justice, continues to move forward in addressing the concerns of 
the international community for the enhanced protection of IPR on 
the legislative, judicial, and enforcement fronts.  The Government 
of Kazakhstan continues to work on legislation to further empower 
customs officials to seize counterfeit materials before they enter 
the country.  In addition, the year 2008 witnessed the first 
criminal sentence for a convicted IPR violator.  Proposed 
legislative changes expected to come to Parliament for ratification 
in 2009 should further improve the IPR environment.  Post recommends 
continuing Kazakhstan's exclusion from the Special 301 Watch List. 
END SUMMARY. 
 
ENFORCEMENT INCREASES, BUT CRIMINAL SENTENCES LAG 
 
3.  (SBU) According to combined statistics released by the Ministry 
of Justice IPR Committee and the Procurator General, the following 
actions were taken in enforcement of IPR legislation in 2008: 
 
-- 991 criminal cases were initiated (compared to 658 in 2007); 
 
-- 707 inspections were conducted by the Ministry of Justice.  As a 
result, 495 administrative cases were initiated -- including 477 
cases for the violation of copyright and allied rights; 4 cases for 
the violation of rights on inventions, useful models, and industrial 
patterns; and 14 cases for the illegal use of trademark -- and 437 
individuals were prosecuted administratively; 
 
-- 5,687,239 KZT (or $47,275.50) was collected in administrative 
fines (compared to 20,250,755 KZT or $168,335 in 2007); 
 
-- 200,972 counterfeit copies and products with illegal trademarks 
valued at 95,105,926 KZT ($790,572.90) were confiscated (compared to 
132,369,884 KZT, or $1,100,331, worth in 2007); 
 
-- 24 manufacturers of counterfeit products and 4 warehouses for 
counterfeit products were uncovered; and 
 
-- 4 channels for importing counterfeit products were suppressed. 
 
4.  (SBU) According to the General Prosecutor's Office, 415 criminal 
cases were sent to the courts, of which 170 people were convicted 
under Article 184 of the Criminal Code, and one person under Article 
184-1.  (NOTE: Parts 1-3 of Article 184 represent, in order, 
increasing categories of severity in both the level of the offense 
and severity of punishment based on the amount of damage, scale of 
the offense, repetition of the violation, etc.  END NOTE.) 
Penalties for those convicted of violations of Article 184 vary. 
They include fines ranging from 100 to 700 times the Monthly 
Calculation Unit (one Monthly Calculation Unit is currently set to 
1,273 KZT, or $8.50), the confiscation of 5 to 10 months' wages, 
community service of 100 to 240 hours, or imprisonment from 2 to 5 
years and the possible confiscation of property. 
 
5.  (SBU) According to private industry representatives, the actual 
number of raids conducted in 2008 was reduced by almost half in 
comparison to the previous year. Private industry representatives 
account for this in two ways.  First, On February 1, 2008 the 
Government of Kazakhstan enacted a year-long moratorium on 
inspections of small and medium enterprises in an effort to ease 
administrative burdens on business in the wake of the global 
financial crisis.  (NOTE:  This moratorium has since been extended 
until July 1, 2009.  END NOTE.)  Second, private industry 
representatives believe that an increase in crime rates associated 
 
ASTANA 00000481  002 OF 005 
 
 
with the deteriorating economic conditions have led to refocus of 
law enforcement efforts away from addressing piracy and toward 
addressing other crimes. 
 
FIRST INCARCERATION FOR IPR VIOLATIONS 
 
6.  (SBU) The first significant criminal sentence for IPR violations 
was delivered by the courts in 2008.  Unlike previous cases where 
convicted violators were given suspended sentences, one vendor of 
counterfeit products was sentenced to two years imprisonment in East 
Kazakhstan oblast under Article 184 (parts 2 and 3) of the Criminal &#
x000A;Code.  This is considered by some public and private officials to be 
an extraordinary example of enforcement in Kazakhstan, as well as 
the CIS as a whole.  However, the President the "Copyright and 
Related Rights Association," a Kazakhstani IPR NGO, maintains that 
the "big fish" in the piracy market remain at large. 
 
RULING PARTY ENDORSES IPR ENFORCEMENT 
 
7.  (SBU) In 2008, the ruling Nur Otan party lent its support to IPR 
protection.  Zhas Otan, the youth wing of the Nur Otan, organized 
several Astana-based campaigns in connection with IPR protection, 
including anti-piracy round tables and public rallies.  According to 
private industry representatives, the campaigns have significantly 
contributed to raising IPR awareness and clearing the streets of 
Astana of vendors of pirated audio and video products. 
 
NEW AND CONTINUED CHALLENGES 
 
8.  (SBU) Under the new Tax Code, which went in effect in January, 
copyright holders are not exempt from payment of duties when filing 
suit for copyright violations.  Article 541 of the Tax Code grants 
such an exemption to authors, but not to affiliated rights holders. 
Some private sector representatives consider this to be inconsistent 
with international standards.  As a practical matter, injured 
parties will lose a percentage of the estimated value of the damage 
inflicted by piracy whenever they file a legal claim. 
 
9.  (SBU) Outside of Kazakhstan's two largest cities (Almaty and 
Astana), the vast majority of pirated media available originates in 
Russia and China.  Russia -- with its many railway links to northern 
Kazakhstan -- presents a particular challenge for Kazakhstani 
authorities.  As noted by the IIPA, customs officials continue to 
lack the ex officio authority required to seize counterfeit 
materials at the borders when such materials are discovered. 
 
10.  (SBU) According to private industry representatives, 2008 has 
witnessed an increase in the availability and sales, particularly in 
Almaty and Astana, of domestically produced counterfeit CDs and 
DVDs.  This is largely due to the increasing availability of 
pirating technology and the willingness of small-time media pirates 
to engage the police in the "cat and mouse" game of street sales. 
Industry representatives assert that local police charged with 
enforcing the prohibition of street sales are often unmotivated and 
indifferent to the presence of such vendors, if not directly paid to 
ignore them. 
 
11.  (SBU) According to the Fifth Annual Business Software 
Association (BSA) and IDC Global Software Piracy Study, the software 
piracy rate in Kazakhstan was approximately 70% in 2007.  Local 
software industry experts believe that internet piracy has also 
became widespread in Kazakhstan over the last several years.  In 
addition to widespread file-sharing technologies, such as the 
open-source application BitTorrent, that facilitate the direct 
distribution of pirated audio and video over the internet, private 
industry representatives from Almaty have noted the launch of 
several internet delivery services there.  According to these 
sources, customers can order pirated movies over the internet and 
have them delivered just as they might a pizza to their front door. 
These operations have reportedly proven very difficult to physically 
locate. 
 
ASTANA 00000481  003 OF 005 
 
 
 
12.  (SBU) The pursuit of rulings against IPR violators in civil 
courts remains problematic because of legal norms carried over from 
Soviet times.  According to the Prosecutor General's office and 
private industry representatives, this is particularly so when 
licensed copyright holders attempt to sue vendors of pirated 
material for damages.  Under current IPR legislation, plaintiffs are 
subject to an unnecessarily heavy burden of proof, whereby they are 
required to demonstrate a direct contractual link to the artist or 
author whose pirated material is being illegally sold.  (NOTE:  An 
example would be a direct contract between a performer and record 
store. END NOTE.)  If a licensed copyright holder or distributor can 
not substantiate this direct linkage, they can not, in the eyes of 
the court, demonstrate financial damages caused by illegal sales. 
In addition, civil claims must also be brought in a court in the 
region where the infringement is alleged to have occurred.  Regional 
courts tend to lack regular exposure to -- and knowledge of -- this 
relatively new and complex area of law, which has historically 
inhibited the successful prosecution of violations. 
 
OPTICAL MEDIA PROTECTION 
 
13.  (SBU) Currently only one plant producing optical discs 
specializing in films and music remains operational in Kazakhstan. 
The plant has source identification codes (SIDs) issued by the IFPI 
(International Federation of the Phonographic Industry) and, as the 
International Intellectual Property Alliance (IIPA) notes, provides 
samples of its products for use as forensic evidence. 
 
SOFTWARE INDUSTRY ENGAGEMENT 
 
14.  (SBU) According to local Microsoft representatives, all newly 
procured government computers have licensed software.  Recognized 
for its successes in defense of IPR in Russia, Microsoft 
representatives did express hope that its intensifying partnership 
with the Government of Kazakhstan will improve IPR preventative and 
enforcement capacity, particularly in the field of internet-based 
piracy. 
 
15.  (SBU) Despite positive relations developing between Microsoft 
and the Government of Kazakhstan, Microsoft representatives continue 
to recommend that Kazakhstan be placed on the Special 301 Watch 
List.  Findings from Microsoft-funded research indicated that levels 
of privately used pirated (or unlicensed) software remains extremely 
high.  According to their current estimations, approximately 90 
percent of privately owned PCs in Kazakhstan use illegally obtained 
software. (NOTE: In 2008, Microsoft sold only 2,000 software 
licenses in Kazakhstan.  Microsoft data also indicate that the 
overwhelming majority of respondents believe piracy rates would 
decrease if the prices of commercially available software were to be 
lowered.  END NOTE.) 
 
SCHEDULED AND ENACTED IPR LEGISLATIVE IMPROVEMENTS 
 
16.  (SBU) During the reporting period, Kazakhstan continued to 
pursue legislative changes that strengthen the government's hand in 
protecting intellectual property rights.  The legal basis for 
preventing and prosecuting IPR violations remains the "Law on 
Amending Legislative Acts of the Republic of Kazakhstan on the 
Issues of Intellectual Property", which entered into force on 
November 26, 2005.  This law amended the country's Criminal Code, 
Criminal Procedure Code, Civil Code, Administrative Code, and the 
Copyright Law as they pertain to the protection of intellectual 
property.  Amendments to the Patent Law were ratified in 2007, 
significantly s
implifying the patent system (as compared with the 
old Soviet two-stage system) and bringing it into closer conformity 
with international standards. 
 
17. (SBU) In June 2008, the Government of Kazakhstan amended laws 
concerning domestic (internal) trade with the aim of preventing the 
illegal distribution of pirated audiovisual products and software in 
 
ASTANA 00000481  004 OF 005 
 
 
"spontaneous markets," meaning sales on the streets, in bazaars, and 
at unlicensed kiosks.  According to the amendments, audiovisual 
products may only be sold in stores.  Members of the Ministry of 
Justice's IPR Committee are confident that this measure will reduce 
the spread of counterfeit products. 
 
18.  (SBU) Proposed amendments to the Copyright Law, Law on 
Licensing, and Customs Code are currently being evaluated separately 
by independent experts and members of Parliament.  Proposed 
amendments to the Copyright Law have been praised by private 
industry representatives in as much as they directly address the 
weaknesses hindering copyright enforcement in civil courts (see para 
7 above).  According to private industry sources, the proposed 
amendments will relieve IPR holders of the heavy burden of proof and 
facilitate more effective law enforcement.  In accordance with WIPO 
requirements, the draft amendments also detail the use of technical 
means for the protection of copyrights, and specifically prohibit 
the removal of any types of technical or coded copyright protection 
technologies.  All digital media designated for commercial sale 
whose technical copyright protection has been deliberately tampered 
with will by default be considered counterfeit and its owners will 
be subject to prosecution.  Representatives from the Ministry of 
Justice's IPR Committee expressed confidence that this will greatly 
enhance IPR protection in Kazakhstan.  Finally, changes to the 
Copyright Law would also improve governance of Kazakhstani copyright 
associations, forcing increased transparency and accountability in 
the registration of licenses and collection of associated royalties 
and fees.  According to the Chairman of the IPR Committee, the 
amendments to the Copyright Law are expected to be approved by 
Parliament by July 2009. 
 
19. (SBU) The IPR Committee believes that the proposed amendments to 
the Licensing Law stipulating mandatory licensing for the commercial 
reproduction of any copyright protected audio and visual recordings 
meet WTO requirements.  These amendments are expected to come before 
Parliament by the end of 2009. 
 
20.  (SBU) Amendments to the Customs Code granting ex officio 
authority to customs agents are expected to be considered by 
Parliament in 2009.  These amendments will grant customs agents the 
authority to more readily seize counterfeit goods at the border, 
which has long been recommended by the International Intellectual 
Property Alliance (IIPA.) 
 
IIPA REPORTING AND CONCERNS ADDRESSED 
 
21.  (SBU) Over the last several years, IIPA reporting has 
consistently reiterated several concerns regarding the development 
and efficacy of IPR protective measures in Kazakhstan.  They have 
also, however, continued to report several significant inaccuracies. 
 
 
22.  (SBU) The IIPA report states that "only the Ministry of Justice 
(Copyright Office) and not the police can bring charges for 
[administrative violations]" and recommends "that the existing 
police authority be broadened to include administrative violations 
as well."  Article 620 of the Administrative Violations Code 
specifically provides such powers to the police. 
 
23.  (SBU) The IIPA's assertion that the 2004 statutes only provide 
for a 50-year term of copyright protection is inaccurate, as the 
November 2005 amendments specifically provide for the extension of 
copyright protection to 70 years, in keeping with international 
standards. 
 
24.  (SBU) The IIPA repeats another error from its previous reports, 
overstating the minimum damages threshold for criminal prosecution. 
IIPA misinterprets what it calls "the key amendment" in the November 
2005 legislation. i.e., the change to Article 184 of the Criminal 
Code, which repealed the undefined "huge damage" threshold for 
criminal cases and replaced it with a threshold of 100 Monthly 
 
ASTANA 00000481  005 OF 005 
 
 
Calculation Units (MCU's).  The IIPA again incorrectly reported that 
damages must exceed 100 times the government-set monthly wage.  In 
fact, there is a large difference between an MCU and the monthly 
wage: one MCU currently equals 1,273 tenge, or $8.50, and the 
monthly wage in 2008 was 60,734 tenge (about $504.85) -- which means 
that the threshold for prosecution is just $850.00 (100 MCUs) in 
damages, not, as the IIPA believes, $50,485 (100 times the monthly 
wage). 
 
25. (SBU) The IIPA cites Kazakhstan's need to establish a legal 
basis for the confiscation and destruction of equipment used in the 
criminal manufacture of pirated goods.  The IPR Committee continues 
to assure post that a combination of statutes in the Criminal Code 
and the Criminal Procedure Code constitutes an adequate provision 
for the confiscation of such equipment.  Moreover, the IPR Committee 
has stated that such confiscations are routinely carried out and do 
not require a court order.  A court order is necessary only to 
destroy such equipment -- a procedural requirement which the IPR 
Committee defends as necessary to preserve potentially material 
evidence. It should also be noted that the abovementioned proposed 
amendments to the Copyright Law will require judges, in the event of 
a conviction, to make a ruling regarding the named piracy equipment. 
This provision is expected to increase occasions in which 
confiscated equipment will be destroyed. 
 
26. (SBU) The IPR Committee of the Ministry of Justice is the 
authorized government agency for IPR protection.  In contrast to 
what was stated in the IIPA report, the Ministry of Culture and 
Information has no role regarding this issue.  However, the Ministry 
of Internal Affairs, General Prosecutor's Office, and the Financial 
Police are all partner organizations in the enforcement of IPR 
legislation. 
 
27.  (SBU) COMMENT: Kazakhstan's continued progress on and 
commitment to IPR protection merits its continued exclusion from the 
Special 301 Watch List.  At this stage, acknowledging Kazakhstan's 
significant achievements while stressing to the Government of 
Kazakhstan that they must continue to enhance their IPR efforts is a 
better approach to facilitate further U.S.-Kazakhstani IPR 
cooperation and achieve results on the grounds than returning 
Kazakhstan to Watch List status.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA480, KAZAKHSTAN: ALMATY NOTES, MARCH 2-13

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Reference ID Created Released Classification Origin
09ASTANA480 2009-03-17 09:52 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO1535
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0480/01 0760952
ZNR UUUUU ZZH
O 170952Z MAR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4932
INFO RUCNCIS/CIS COLLECTIVE 1373
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0750
RUEHKO/AMEMBASSY TOKYO 1453
RUEHUL/AMEMBASSY SEOUL 0437
RUCNDT/USMISSION USUN NEW YORK 2215
RUEHNO/USMISSION USNATO 2545
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 0933
RUEKJCS/SECDEF WASHDC 0846
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 000480 
 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM ECON EFIN ELAB SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN:  ALMATY NOTES, MARCH 2-13 
 
1.  The "Almaty Notes" series from U.S. Office Almaty focuses on 
developments in civil society, the media, and the opposition in 
Kazakhstan's "southern capital." 
 
ALMATY MASLIKHAT ELECTIONS 
 
2.  Bi-elections for the Almaty maslikhat (local legislature) will 
take place on March 29.  According to the city's electoral 
commission, 28 candidates will be competing for three seats.  Only 
one of the candidates is officially representing a political party 
-- in this case, the small, pro-government Adilet party -- with the 
rest having registered themselves as "independents."  The key 
opposition parties are boycotting the bi-elections, claiming that 
the electoral system is inherently unfair. 
 
OPPOSITION PARTIES MULLING OVER STABILITY MEMORANDUM 
 
3.  The opposition Azat party, National Social Democratic Party 
(NSDP), and Communist Party are still mulling over whether to sign a 
"memorandum on stability" initiated by the ruling Nur Otan party. 
The memorandum includes a promise to refrain from protest actions 
until the economic situation improves.  On March 13, several 
pro-government parties -- Rukhaniyat (Spirituality), Adilet 
(Justice), the People's Communist Party, and the Party of the 
Patriots -- signed the memorandum.  Alikhan Baimenov's Ak Zhol 
party, sometimes considered to be the government's "pocket 
opposition," is expected to sign soon.  Nur Otan party secretary 
Yerlan Karin criticized Azat, OSDP, and the Communist Party for 
being dilatory in signing the memorandum, saying they must be too 
busy "coordinating their positions."  OSDP deputy head Amirzhan 
Kosanov told "Novaya Gazeta" newspaper that the three parties are 
"no simpletons" who would blindly sign on to a document put together 
unilaterally by Nur Otan. 
 
DIRE STRAITS FOR SMALL- AND MEDIUM-SIZED BUSINESS 
 
4.  The Independent Association of Entrepreneurs issued an appeal to 
President Nazarbayev to take urgent action to improve the economic 
situation.  Small- and medium-sized enterprises are in dire straits, 
said the statement, and if the situation does not improve, the 
Association will organize a protest rally on March 22.  In their 
appeal, these entrepreneurs asked for assistance in refinancing 
loans, postponing debt payments, and allowing them to pay back 
dollar-denominated loans in tenge. 
 
NUR OTAN, AZAT PARTIES DISCUSS HOUSING ISSUES 
 
5.  The opposition Azat party and the ruling Nur Otan party 
discussed Almaty housing issues during a meeting of the Almaty city 
administration's Council on Social Conflicts.  Both parties are 
represented on the Council.  The issues discussed included illegally 
constructed houses in the Bakai district and "dolshiki" (i.e., 
individuals who invested money into apartments that were never 
completed).  Over 350 families in the Bakai area are seeking to 
legalize the houses they built without proper land ownership rights, 
but the local administration said it does not have the authority to 
do this.  The Council recommended that every case be considered 
individually and decided to set up a working group on the problems 
of the "dolshiki."  The Council also decided to ask the Procurator 
General to file a criminal case against Oleg Nam, a member of the 
Almaty maskikhat and owner of the KUAT construction company.  He has 
been accused of failing to pay KUAT employees for more than one 
year.  The Council will also appeal to the masklikhat to unseat Nam 
as a maslikhat member. 
 
"DOLSHIKI" PICKET DISTRESSED ASSET FUND 
 
6.  On March 11, "dolshiki" from the "Leave the Houses to People" 
movement picketed the office of the government's Distressed Assets 
Fund in Almaty.  The activists wanted to meet with the head of the 
fund, but were told that he was out.  The protesters threatened an 
escalation of protest actions if the Distressed Assets Fund does not 
immediately buy out their bad mortgages.  The activists delivered a 
petition and then dispersed. 
 
ASTANA 00000480  002 OF 002 
 
 
 
INSPECTION REVEALS LABOR VIOLATIONS 
 
7.  A procurator from Almaty's Bostandyk district inspected 22 large 
companies in Almaty and discovered numerous violations of labor law. 
 The most frequent violation is a failure to pay employees their 
salaries.  As a resu
lt of the inspections, almost 2,000 employees 
received their wage arrears.  At some companies, management paid to 
local workers salaries two to three times lower than those paid to 
expatriate employees.  Their licenses to hire foreign employees have 
been revoked by a court. 
 
HOAGLAND

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