Monthly Archives: August 2009

09ASTANA1450, KAZAKHSTAN: IN VINO VERITAS

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Reference ID Created Released Classification Origin
09ASTANA1450 2009-08-31 05:44 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO4701
PP RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1450/01 2430544
ZNY CCCCC ZZH
P 310544Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6119
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1886
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1256
RUEHUL/AMEMBASSY SEOUL PRIORITY 0913
RUEHKO/AMEMBASSY TOKYO PRIORITY 1954
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/CDR USTRANSCOM SCOTT AFB IL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1444
RUEKJCS/SECDEF WASHDC PRIORITY 1340
RUEHNO/USMISSION USNATO PRIORITY 2762
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2447

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001450 
 
SIPDIS 
 
STATE FOR SCA/CEN 
FROM AMBASSADOR HOAGLAND 
 
E.O. 12958: DECL: 09/01/2019 
TAGS: PGOV PREL PINR MARR SOCI KZ
SUBJECT:  KAZAKHSTAN:  IN VINO VERITAS 
 
Classified By:  Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) On August 28, I hosted a reception at Embassy 
Astana's Chief of Mission Residence in honor of USNAVCENT 
Deputy Commander Rear Admiral Thomas Cropper and his team. 
Deputy Minister of Defense Rear Admiral Ratmir Komratov 
attended as the senior-most Kazakhstani military official, 
and stayed for nearly two hours.  Two senior representives of 
the Committee for National Security (KNB), which generally 
keeps its physical and ideological distance from the U.S. 
Embassy, also attended:  Rear Admiral Kenzhebergen Abikeyev, 
Chief of the KNB's Border Service Coast Guard, and Bulat 
Kirgizbayev, Director of the Border Guard Service and a 
Deputy Chairman of the KNB.  They, too, stayed the full time. 
 
2.  (C) U.S. government bio reporting has portrayed Admiral 
Komratov as a fat, old drunk, a cauliflower-faced ex-boxer. 
But he's much more than that.  Even though he's a classic 
example of his old Soviet culture, a "homo sovieticus," he's 
still very human. 
 
3.  (C) I had the foyer door of the Residence open to the 
back garden, and Komratov grabbed my arm and said, "Show me 
your garden!"  Because I had planted and nurtured a fair 
portion of it myself, I was pleased to do so.  As we walked 
around and chatted one-on-one, he told me that he was born in 
the southern Kazakhstani city of Taraz, where his father had 
been the mayor.  He said that his parents were both 
celebrated gardeners:  "We always had the best garden in the 
city!"  Every time high-level Communist Party officials came 
from Moscow, they asked to see the mayor's famous flower 
gardens.  He commented, "My father built his career on 
chatting up high officials in his garden."  Komratov said, "I 
don't have much time now, but" -- and he pointed to his face 
and his large torso -- "despite this, I'm my father's son at 
heart.  I like to get my hands dirty in the garden.  I want 
God's earth under my fingernails.  I believe in auras.  I 
believe that plants communicate with us and are senstive to 
when they can trust us, because we understand them; they also 
turn their backs on us and wither and die when we don't 
understand them.  That's how God has organized the universe. 
He created plants before he created us.  But generally we 
don't know any more how to listen to God's creation." 
 
4.  (C) Midway through the reception, Komratov told me he has 
known President Nazarbayev as a personal friend for years and 
years, and has the deepest respect for what the president has 
achieved for Kazakhstan since independence -- that he has 
liberated the Kazakh people and has created an independent 
and respected nation.  Komratov said, "I wrote a poem in 
honor of him (Nazarbayev), and recited it to him once; but he 
told me not to recite the poem too often in public, because 
he doesn't want in the modern world that kind of traditional 
honor.  I asked him, 'Could I do it just occasionally when 
I'm drunk?'  He (Nazarbayev) told me, 'OK, occasionally when 
you're drunk, but not too often.'"  Komratov then recited his 
poem. 
 
5.  (C) Later in the evening Admiral Komratov offered several 
toasts (wine only, no vodka).  During one, he noted the 
alliance of the Soviet Union and the United States during the 
Great Patriotic War (WW II) to defeat fascism.  This is a 
very standard, old-guard, Soviet toast.  Then he added, "My 
father fought on the Finland Front, and then in Japan (sic)." 
 I interjected that my father, too, had flown in  U.S. Army 
Air Force planes over Germany (as a reconnaissance 
intelligence photographer) during the same war.  Komratov 
looked at me, and raised his glass.  Then he came around the 
long buffet table and said, "You know, we (the United States 
and Kazakhstan) are divided by language, but otherwise we 
really are pretty much the same people.  We somehow have to 
learn to get beyond that." 
 
6.  (C) Near the end of the reception, Komratov offered one 
 
ASTANA 00001450  002 OF 002 
 
 
more toast.  He said he'd like to suggest -- as a joke! -- 
that the United States should declare war on Kazakhstan, 
which would immediately surrender so that it could become the 
51st U.S. state.  This was by then the hyperbole of red wine 
talking, but there is an important cultural lesson here.  In 
Soviet/post-Soviet culture,
 toasts are a well-oiled 
opportunity for a bit of truth-telling, even if exaggerated. 
In a rigidly circumscribed public culture, as those who grew 
up in the Soviet Union had, once alcohol loosens the tongue, 
bits of internal truth can be told in toasts, and it is 
useful to read the alcohol-oiled signals carefully.  That is 
why officials in countries like Kazakhstan are so insistently 
keen to offer a "hospitality" lunch or dinner to visiting 
U.S. officials.  It is important both to attend such 
functions and to host them ourselves. 
HOAGLAND

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09ASTANA1449, KAZAKHSTAN: SPECIAL ENVOY MORNINGSTAR DISCUSSES

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Reference ID Created Released Classification Origin
09ASTANA1449 2009-08-28 10:27 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO3426
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1449/01 2401027
ZNY CCCCC ZZH
R 281027Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6116
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1883
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1253
RUEHUL/AMEMBASSY SEOUL 0910
RUEHKO/AMEMBASSY TOKYO 1951
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1441
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1337

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001449 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA AND USTR 
 
E.O. 12958: DECL: 03/06/2059 
TAGS: PGOV PREL PINR ECON EINV EPET AJ CH RS TX KZ
SUBJECT:  KAZAKHSTAN:  SPECIAL ENVOY MORNINGSTAR DISCUSSES 
OIL TRANSPORTATION PROJECTS WITH MINISTER OF ENERGY MYNBAYEV 
 
REF: A. ASTANA 1365 
     B. ASTANA 1438 
     C. ASTANA 1445 
     D. ASTANA 1400 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b), (d) 
 
1.  (C) SUMMARY:  On August 26, Special Envoy for Eurasian 
Energy Richard M. Morningstar met with Minister of Energy and 
Mineral Resources (MEMR) Sauat Mynbayev to discuss two oil 
export projects:  the Caspian Pipeline Consortium (CPC) 
pipeline expansion and the Kazakhstan Caspian Transportation 
System (KCTS).  Mynbayev said he expects both projects to 
move forward, albeit slowly, as negotiations with 
international oil companies (IOCs) over tariff structures, 
equity  participation, access rights, and financing terms 
continue.  Mynbayev mentioned that Russia does not openly 
oppose either project.  However, he conveyed Russian 
criticism of CPC and said Russian proposals to export 
Kazakhstani crude oil via an expanded Atyrau-Samara pipeline 
were becoming increasingly attractive to the government of 
Kazakhstan.  He also asked SE Morningstar to raise with Azeri 
President Ilham Aliyev the issue of IOC equity participation 
in the trans-Caspian portion of KCTS, which Kazakhstan 
supports, but Azerbaijan has thus far opposed.  END SUMMARY. 
 
CPC EXPANSION MOVING FORWARD... 
 
2.  (C) During the 45-minute meeting, Mynbayev confirmed that 
the government is still &very interested8 in expansion of 
the CPC pipeline.  He said BP that has already sold its stake 
in CPC to Lukoil and KazMunaiGas (KMG), thus clearing the way 
for a vote to sanction expansion.  (NOTE:  KMG President 
Kairgeldy Kabyldin made similar comments to SE Morningstar, 
reftel B.  However, KMG,s representative to the CPC Board of 
Directors, Timur Rakhanov, told SE Morningstar on August 25 
that BP and Lukoil have not yet signed all of the necessary 
legal documents, and the CPC shareholders, agreement has not 
yet been amended.  BP has made no public statement about its 
withdrawal from CPC.  END NOTE). 
 
...ALBEIT SLOWLY 
 
3.  (C) Mynbayev conceded that progress on CPC expansion has 
been slow, and the consortium continues to discuss who will 
manage the expansion project.  He said Russia is advocating 
for management by the CPC members themselves, based on the 
proportion of share ownership, while Chevron insists on 
hiring an outside firm.  (NOTE:  Having purchased Oman,s 
seven percent of CPC earlier this year, Russia now owns 31 
percent of CPC.  END NOTE).  Mynbayev was optimistic that 
Russia and the IOCs would reach a compromise.  &If Russia 
had serious objections to CPC expansion,8 he said, &they 
would never have come this far.  As for Kazakhstan,8 
Mynbayev continued, &we don,t care who manages CPC 
expansion, as long as the work gets done.  We don,t consider 
this a deal-breaker.8 
 
ATYRAU-SAMARA A VIABLE ALTERNATIVE? 
 
4.  (C) Mynbayev cited the Atyrau-Samara oil pipeline as an 
additional export alternative, but stated &it has some 
disadvantages.  First, the pipeline goes through Russia, 
which does not meet our goal of diversifying export routes. 
Second,8 he continued, &the pipeline lacks a quality 
bank,8 which would compensate Kazakhstani producers if their 
higher-quality crude were blended with lower-quality crude 
from Tatarstan and Bashkiria, thus adversely affecting the 
market price.  Nevertheless, Mynbayev said that Russia is 
&very interested8 in expanding the capacity of 
Atyrau-Samara in order to accommodate increased future oil 
production from Tengiz, Kashagan, and Karachaganak.  &We 
often receive proposals from Russia8 about Atyrau-Samara, 
 
ASTANA 00001449  002 OF 003 
 
 
&and lately, they have become more and more attractive,8 he 
said.  Mynbayev was optimistic that the parties would 
ultimately reach agreement to expand CPC and establish KCTS, 
but he reluctantly added that if negotiations faltered, &We 
would be forced to export our crude almost exclusively 
through Russia.8 
 
CHINA PIPELINE COMES ONLINE IN 2009 
 
5.  (C) Mynbayev also confirmed that the o
il pipeline to 
China will be operational by the end of this year, and the 
final segment (Kenkiyak-Kumkol) has been completed.  He said 
the China pipeline will eventually carry up to 20 million 
tons (400,000 barrels per day). 
 
COMMERCIAL QUESTIONS REMAIN 
 
6.  (C) Turning to KCTS, Mynbayev began by saying that KMG 
President Kabyldin is now the government,s lead negotiator, 
having taken over that role from MEMR.  (NOTE:  During a 
private dinner at the Ambassador,s residence on August 26, 
KMG First Vice President Maksat Idenov said that he, too, has 
been sidelined on the KCTS negotiations.  &I used to be very 
much involved,8 he said, &but I am not any longer.  Mr. 
Kabyldin is now leading the negotiations.  Of course,8 he 
added, &I can always pass a message to him if necessary.8 
END NOTE).  Mynbayev told SE Morningstar that CPC expansion 
would provide a &clearer picture8 of Kazakhstan,s oil 
transportation needs by helping to determine the exact amount 
of crude available for export via the KCTS tanker shuttle 
system.  Confirming Kabyldin,s comments to SE Morningstar on 
August 25, Mynbayev said the government has resolved issues 
concerning tariff stability, throughput volumes, and access 
rights with the Kashagan consortium (the so-called G-6), 
which he claimed needs KCTS more urgently than Tengizchevroil 
(TCO).  Mynbayev said the government was indeed interested in 
project financing for KCTS, which would enable the government 
to buy back the IOC,s minority share, but the IOCs have 
firmly rejected that possibility.  &And I suppose,8 he 
conceded, &that one can understand their point of view.8 
Mynbayev was hopeful that the government and IOCs can resolve 
the remaining questions on KCTS, which he said were &simply 
commercial in nature.8 
 
GOVERNMENT TO OWN 51 PERCENT OF KCTS 
 
7.  (C) Mynbayev explicitly confirmed that the government has 
reached agreement with the IOCs -) including Chevron, 
representing TCO )- that the government would own 51 percent 
of the onshore portion of KCTS (i.e., the Eskene-Kuryk 
pipeline) while the IOCs would own 49 percent.  He added that 
the consortium (which includes KMG, as an equity partner in 
Kashagan) would pay for 100 percent of the initial costs to 
construct the pipeline.  He emphasized, &there is no way 
that we would ever agree to own less than 51 percent of KCTS. 
 Never.8 
 
RUSSIAN CRITICISM OF CPC CONSORTIUM 
 
8.  (C) In an aside, Mynbayev shared Russian criticism of the 
CPC consortium.  He reassured SE Morningstar that the 
Eskene-Kuryk pipeline would not charge exorbitant fees, but 
he insisted that it would be profitable, &unlike the CPC 
pipeline.8  Mynbayev said he frequently hears complaints 
from Russian colleagues, who wonder why they should pay to 
expand a pipeline that transits their territory, causes 
environmental damage, and from which they do not earn a 
profit. 
 
AZERBAIJAN OPPOSED TO IOC PARTICIPATION IN KCTS 
 
9.  (C) As the meeting came to a close, SE Morningstar 
mentioned that he would meet President Aliyev in Baku the 
 
ASTANA 00001449  003 OF 003 
 
 
next day.  Mynbayev sat up straight, looked SE Morningstar in 
the eye, and switching from Russian into fluent English, 
&Please raise with President Aliyev the possibility of IOC 
participation in the trans-Caspian portion of KCTS.  ThaQ 
would be helpful.8  Mynbayev explained that Kazakhstan and 
Azerbaijan have an intergovernmental agreement to establish a 
50-50 joint venture to build the oil terminals and offshore 
infrastructure of KCTS.  He said Kazakhstan would be willing 
to grant the IOCs an equity stake in that joint venture, but 
only if Azerbaijan also sold them an equal percentage of its 
share.  &Either we go together on this,8 he said, &or not 
at all.8  SE Morningstar said he would be pleased to raise 
the issue with President Aliyev. 
 
10.  (C) COMMENT:  The meeting with Mynbayev was significant 
because it confirmed the government,s willingness to grant 
the IOCs up to 49 percent equity in KCTS, rather than 
insisting on retaining 100 percent ownership.  While we have 
no reason to doubt that Mynbayev is able to speak with 
authority on behalf of the government, we note that KMG 
President Kabyldin, who takes his orders from Samruk-Kazyna 
Deputy Chairman Timur Kulibayev, has now replaced Mynbayev as 
the government,s lead negotiator on KCTS.  Kabyldin, 
notably, made no comment about the equity structure of KCTS, 
which might signal that the negotiations are far from over. 
END COMMENT. 
 
11.  (SBU) Special Envoy Morningstar has not cleared this 
cable, but he has approved its release. 
HOAGLAND

Wikileaks

09ASTANA1447, KAZAKHSTAN: UPDATE ON HIGH-LEVEL ATTENDANCE AT THE UN

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Reference ID Created Released Classification Origin
09ASTANA1447 2009-08-28 05:31 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO3171
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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DE RUEHTA #1447 2400531
ZNR UUUUU ZZH
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INFO RUCNDT/USMISSION USUN NEW YORK 2446
RUCNCIS/CIS COLLECTIVE 1882
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1440

UNCLAS ASTANA 001447 
 
SIPDIS 
 
STATE FOR SCA/RA (MAZZONE), IO/UNP (SUN), USUN (DUGAN), AND NSC 
(BROWN) 
 
E.O. 12958: N/A 
TAGS: PREL OTRA OVIP KSEP CVIS UNGA KZ
SUBJECT:  KAZAKHSTAN:  UPDATE ON HIGH-LEVEL ATTENDANCE AT THE UN 
GENERAL ASSEMBLY 
 
REF: (A) ASTANA 1306 
      (B) STATE 68590 
 
1.  The following is an update on Kazakhstan's high-level attendance 
at the 64th UN General Assembly (UNGA), in the requested format. 
Foreign Minister Tazhin will lead Kazakhstan's delegation. 
 
A.  Attendance of the Head of State: 
-- Nursultan Nazarbayev, President 
-- No plans to attend 
 
B.  Attendance of the Head of Government 
-- Karim Masimov, Prime Minister 
-- No plans to attend 
 
C.  Attendance of the Foreign Minister 
-- Marat Tazhin, Foreign Minister 
-- Arrival - September 23; Departure - September 28.  FM Tazhin 
plans to attend the General Debate. 
-- Spouse's travel to be confirmed. 
-- Interpretation not required. 
 
D.  Attendance of other VIPs. 
-- Nurlan Yermekbayev, Deputy Foreign Minister 
-- Arrival - September 23, Departure - September 28 
-- Spouse's travel to be confirmed. 
-- Interpretation not required. 
 
E.  Attendance of Foreign Ministry official responsible for IO 
affairs. 
-- Zhanar Kulzhanova, Attache, Department of Multilateral 
Cooperation 
-- Others TBC 
 
HOAGLAND

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09ASTANA1446, KAZAKHSTAN: OBSERVER LETTER DELIVERED TO CARICC

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Reference ID Created Released Classification Origin
09ASTANA1446 2009-08-28 03:51 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3126
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHAK/AMEMBASSY ANKARA 2217
RUEAWJL/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC 0029

UNCLAS ASTANA 001446 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE, SCA/CEN, EUR/CARC, EUR/RUS 
ANKARA for DEA 
 
E.O. 12958: N/A 
TAGS: PREL SNAR KCRM KZ
SUBJECT: KAZAKHSTAN: OBSERVER LETTER DELIVERED TO CARICC 
 
REF: STATE 85831 
 
1. (U) Sensitive but unclassified.  Not for public internet. 
 
2. (SBU) As requested in reftel, the request for observer status was 
delivered to the Central Asian Information and Coordination Center 
(CARICC) via the UN Office on Drugs and Crime (UNODC) in Almaty on 
August 21.  UNODC's Senior CARICC Coordinator and CARICC National 
Project Officer received the letter and discussed the scheduling for 
the inauguration of CARICC, which was originally scheduled for 
September 9 and 10.  Though an official postponement has not been 
announced by the Ministry of Interior of Kazakhstan, it is believed 
that the inauguration will be held in October or November in order 
to allow for the renovation of CARICC's building, which was started 
on August 20. 
 
3. (SBU) UNODC Executive Director Antonio Maria Costa will attend 
the inauguration of CARICC.  According to UNODC, a visit to 
Kazakhstan by UN Secretary-General Ban Ki-moon has been proposed for 
late October or early November and he might also attend the 
inauguration if scheduling allows. 
 
HOAGLAND

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09ASTANA1445, KAZAKHSTAN: PRIME MINISTER BRIEFS SPECIAL ENVOY

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Reference ID Created Released Classification Origin
09ASTANA1445 2009-08-27 11:05 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO2391
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
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RUEHKO/AMEMBASSY TOKYO 1948
RHMFISS/CDR USCENTCOM MACDILL AFB FL
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RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1437
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1334

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001445 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA AND USTR 
 
E.O. 12958: DECL: 03/06/2059 
TAGS: PGOV PREL PINR ECON EINV EPET CH RS TX KZ
SUBJECT:  KAZAKHSTAN:  PRIME MINISTER BRIEFS SPECIAL ENVOY 
MORNINGSTAR ON ENERGY, ECONOMY 
 
REF: A. ASTANA 1365 
     B. ASTANA 1438 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b), (d) 
 
1.  (C) SUMMARY:  On August 26, Special Envoy for Eurasian 
Energy Richard M. Morningstar met with Prime Minister Karim 
Masimov to discuss economic and energy security issues, 
including oil and gas export routes from Central Asia, the 
September 14 Caspian Sea Summit in Aktau, the influence of 
Russia and China in the region, and early signs of 
Kazakhstan,s economic recovery.  Masimov said Russian 
President Dmitry Medvedev,s August 17 speech on Caspian 
energy issues &helped Medvedev solve some internal issues 
and was not aimed at an external audience.8  Masimov also 
mentioned that former Vice President Cheney has been invited 
to Kazakhstan,s Energy Forum on September 24, but he has not 
yet confirmed his participation.  END SUMMARY. 
 
2.  (SBU) Meeting participants:  Prime Minister Masimov, 
Deputy Foreign Minister Konstantin Zhigalov, Arman 
Sapargaliyev from the Ministry of Foreign Affairs, and a note 
taker represented Kazakhstan.  Special Envoy Morningstar was 
joined by the Ambassador, Senior Advisor Dan Stein, and 
Energy Officer (note taker). 
 
WELCOME BACK 
 
3.  (SBU) Masimov greeted SE Morningstar with a broad smile 
and a hearty handshake.  He recalled that SE Morningstar had 
accompanied Under Secretary Burns to Astana on July 10 and 
said, &Welcome back!  You should visit us every five or six 
weeks.8  An official photographer and video cameraman 
recorded the first five minutes of the meeting.  When SE 
Morningstar reported that he had had a series of excellent 
meetings with government officials on energy issues, Masimov 
replied, &I,m very pleased.  I told them that they should 
be very open with you.8 
 
EXPORT DIVERSIFICATION CRITICAL TO KAZAKHSTAN 
 
4.  (C) Masimov began by stressing the importance of energy 
exports to Kazakhstan.  &Without free transportation (of 
hydrocarbons) out of Kazakhstan,8 he said, &it would be 
very difficult for us to survive.8  Masimov stressed the 
importance to Kazakhstan of secure, diverse, and sustainable 
sources of transportation, especially during difficult 
economic times. 
 
CASPIAN SEA SUMMIT AIMED AT INTERNAL AUDIENCE 
 
5.  (C) Masimov confirmed that the Caspian Sea Summit will 
take place in Aktau on September 14 with the expected 
participation of the presidents of Turkmenistan, Azerbaijan, 
the Russian Federation, and Kazakhstan.  He does not expect 
any breaking news to come from the gathering, which will 
focus on energy issues, including transportation.  &This is 
not a major event, and I do not expect a major announcement 
to come from it,8 he said.  &What is important is that 
people start to talk to each other8 about common problems in 
the Caspian.  When asked how one should read Medvedev,s 
August 17 speech in Astrakhan on Caspian issues, Masimov 
replied, &I think with that speech, he solved an internal 
issue, not external issues.8  When SE Morningstar asked, 
&Do you mean vis--vis Putin?,8 Masimov smiled and replied, 
&You said it, I didn,t!8  Masimov added that he believed 
Medvedev was &marking the Caspian Sea as an issue within his 
portfolio,8 rather than Putin,s. 
 
PRIME MINISTER SUPPORTS CNG SHIPMENTS ACROSS CASPIAN 
 
6.  (C) Masimov drew a deep breath and took a long pause 
while he considered whether Turkmen gas would ever be 
 
ASTANA 00001445  002 OF 003 
 
 
exported to Europe.  &My feeling,8 he said, &is that this 
is doable, but I don,t think the trans-Caspian pipeline has 
a future.8  Instead, he suggested that tanker shipments of 
compressed natural gas (CNG) would be more politically 
feasible than a trans-Caspian pipeline, and he cited a 
Department of State study that proposed cross-Caspian CNG 
shipments.  Stein interjected that the technology is still 
unproven, the costs would be extremely high, and no CNG 
vessel has yet been built.  Still, Masimov seemed undeterred. 
 &These are technical issues that we can solve,8 he said. 
He asserted that oil tanker shipments from Aktau to Baku have 
stimulated development of t
he Kazakhstan Caspian 
Transportation System and suggested a similar dynamic could 
occur between Turkmenistan and Azerbaijan on gas exports. 
 
RUSSIAN BUY-IN CRITICAL TO TRANS-CASPIAN GAS EXPORTS 
 
7.  (C) Masimov admitted that Russian buy-in would be 
critical to sending gas from Central Asia westward.  &If 
someone at a very high level,8 he said, &such as President 
Obama, were to offer Putin a deal, invite him in, and say, 
 Let,s find a way to make this work,, then I believe 
(trans-Caspian gas exports) would be possible.  Putin is in 
charge of this issue.8  Putin is the decision maker.8 
Masimov observed that Russia currently is not buying Turkmen 
gas, which has had a serious, adverse impact on 
Turkmenistan,s budget.  &This is a huge issue for 
Turkmenistan,8 he said.  &They will have a huge budget 
deficit by the end of the year.8 
 
CHINESE INVESTMENT ALREADY AT &OPTIMAL LEVEL8 
 
8.  (C) On China, Masimov delivered a message similar to the 
one he gave CODEL Boehner (reftel A):  &When the economic 
crisis started,8 he said, &China was suddenly more active 
and aggressive.  We faced serious liquidity problems, and 
their assistance was welcome.8  Masimov then struck a 
cautious note, commenting that China,s involvement in 
Kazakhstan is a &matter of national security for us.8  He 
added that the current level of Chinese investment in 
Kazakhstan has reached an &optimal level.  We do not want to 
see it increase.8  However, Masimov said the government 
would not oppose partnerships between U.S. energy companies 
and Chinese companies.  He even offered to raise the issue 
with Chinese officials when he visits China in October.  U.S. 
energy companies have told Masimov that they are not opposed 
to sending their oil production to China, but &they have no 
intention of doing so8 at the moment. 
 
OPTIMISTIC ABOUT THE ECONOMY 
 
9.  (C) On broader economic issues, Masimov acknowledged that 
Kazakhstan,s economy had been in dire straits earlier this 
year.  &We had a huge problem,8 he said, &in our banking 
sector.  We have only now discovered the degree of fraud and 
mismanagement that was taking place, and we are now suing the 
shareholders of one of our largest commercial banks.8 
(NOTE:  Masimov was referring to BTA Bank.  See reftel A. 
END NOTE).  He said the situation in the financial sector has 
greatly improved since the beginning of the year.  He 
elaborated that the government has successfully restructured 
the external debt of one large bank (most likely Alliance 
Bank) and plans to restructure the debt of another large bank 
most likely BTA Bank) in September.  &We have kept the World 
Bank and IMF fully informed every step of the way,8 he said, 
&and in October, once we have completed the debt 
restructuring, we will be more active in our public 
relations.8  Masimov reported positive GDP growth of three 
percent in the second quarter of 2009, compared to the same 
period last year, and said he expects overall positive growth 
in 2009, compared to 2008. 
 
LOCAL CONTENT NOT AN ISSUE IN PRACTICE 
 
ASTANA 00001445  003 OF 003 
 
 
 
10.  (SBU) Special Envoy Morningstar expressed the concerns 
of U.S. energy companies regarding Kazakhstan,s new 
regulations on local content and hope that the new standards 
would not adversely affect Kazakhstan,s investment climate. 
Masimov quickly dismissed the issue, shaking his head.  &All 
of these concerns are theoretical,8 he said.  &In practice, 
there are no problems.8 
 
WTO OR CUSTOMS UNION? 
 
11.  (C) When asked to clarify whether Kazakhstan will join 
the World Trade Organization (WTO) or a Customs Union with 
Russia and Belarus, the Prime Minister did not answer 
directly.  He said that a single negotiating group has now 
been established, with one representative from each of the 
three countries, and confirmed that Vice Minister of Industry 
and Trade Zhanar Aitzhanova will represent Kazakhstan in the 
negotiations.  However, he declined to comment on whether 
Kazakhstan has officially suspended its WTO bid.  (NOTE: 
During a private dinner at the Ambassador,s residence on 
August 26, Vice Minister of Trade and Industry Zhanar 
Aitzhanova (protect) was asked about the proposed Customs 
Union.  She rolled her eyes, shook her head, and said, &We 
are under a constant barrage of Russian press releases,8 
pushing Kazakhstan to move forward.  Aitzhanova curtailed 
vacation plans to fly to Moscow on short notice, and appeared 
frustrated by pressure from Russia to accelerate progress on 
the Customs Union.  END NOTE). 
 
VICE PRESIDENT CHENEY TO VISIT ASTANA? 
 
12.  (SBU) As the meeting came to a close, Masimov mentioned 
in passing that he has invited former Vice President Richard 
Cheney to attend Kazakhstan,s Energy Forum on September 24, 
but he has not yet confirmed his participation.  Masimov also 
asked SE Morningstar to pass along his best regards to SE 
Holbrooke and said he would be pleased to host him in Astana 
in the near future. 
 
13.  (C) COMMENT:  Several times during the meeting, the 
Prime Minister stressed that he was "only expressing his 
personal opinion," particularly when discussing relations 
with Russia and China.  As the head of the government, 
President Nazarbayev's trusted economic counselor, and a 
respected leader in his own right, his opinion certainly 
matters a great deal.  Masimov's observation that Medvedev's 
speech on Caspian issues might have been designed 
to shore up his own political portfolio, rather than assert a 
new Russian foreign policy in the region, was particularly 
intriguing.  It was also interesting to hear an ethnic Uighur 
and fluent Mandarin speaker like Masimov insist without a 
trace of irony that Chinese investment in Kazakhstan had 
reached an "optimum level" and that a larger Chinese presence 
in Kazakhstan would be unwelcome.  END COMMENT. 
 
14.  (SBU) Special Envoy Morningstar has not cleared this 
cable, but he has approved its release. 
HOAGLAND

Wikileaks

09ASTANA1444, KAZAKHSTAN: SAUDABAYEV ON NUCLEAR SECURITY

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Reference ID Created Released Classification Origin
09ASTANA1444 2009-08-27 10:59 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

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RHMFISS/CDR USTRANSCOM SCOTT AFB IL PRIORITY
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RUEHNO/USMISSION USNATO PRIORITY 2760
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2444

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001444 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CE, ISN, DRL 
 
E.O. 12958: DECL: 08/28/2019 
TAGS: PGOV PREL PINR PHUM KNNP KDEM OSCE AU KZ
SUBJECT:  KAZAKHSTAN:  SAUDABAYEV ON NUCLEAR SECURITY 
SUMMIT, RAKHAT ALIYEV, OSCE 
 
REF: A. ASTANA 1328 
     B. ASTANA 1439 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  During an August 27 meeting, State 
Secretary Kanat Saudabayev told the Ambassador: 
 
-- President Nazarbayev still wants an Oval Office meeting 
when he travels to Washington next spring for the Nuclear 
Security Summit and is willing to be flexible about the 
timing; 
 
-- Kazakhstan remains suspicious that the United States has 
contact with Nazarbayev's exiled ex-son-in-law, Rakhat 
Aliyev, and fears we might offer him asylum; and 
 
-- The Presidency is irked with the OSCE Head of Mission in 
Astana who said in a recent local press interview that 
there's still a one-percent chance Kazakhstan might be denied 
the 2010 OSCE Chairmanship because of democracy and human 
rights issues.  END SUMMARY. 
 
NUCLEAR SECURITY SUMMIT 
 
2.  (C) The Ambassador met with State Secretary Kanat 
Saudabayev on August 27 to give him an interim response to 
the request he had made on August 3 that President Nursultan 
Nazarbayev combine his participation in the Spring 2010 
Nuclear Security Summit in the United States with a bilateral 
visit that would include an Oval Office meeting (ref A).  The 
Ambassador told Saudabayev that planning for the Nuclear 
Security Summit is under way and that details should be 
forthcoming.  He advised Saudabayev that deliverables for the 
summit will be discussed with participants in advance, and 
noted that about 30 heads of state will be jostling for White 
House attention; however, the Administration has not ruled 
out an Obama-Nazarbayev meeting "sometime in the spring." 
The Ambassador hastened to add that this preliminary 
information does not/not constitute an "official invitation," 
and that he was providing it simply to be responsive to 
Saudabayev's August 3 request.  Saudabayev said he thoroughly 
understood.  He suggested that an optimal scenario, should a 
bilateral visit be confirmed, would be for Nazarbayev to 
arrive in Washington three or four days before the summit or 
stay in the United States after it for three or four days. 
Nazarbayev would use the extra time to visit New York and 
possibly the headquarters of international oil companies that 
are heavily invested in Caspian Sea projects. 
 
RAKHAT ALIYEV REDUX 
 
3.  (C) When the brief, business-like meeting seemed to be 
over, Saudabayev paused and then said, "I need you to look me 
in the eye and tell me once again that your government has no 
official contact of any kind with Rakhat Aliyev," 
Nazarbayev's estranged ex-son-in-law currently exiled in 
Europe, "and that you will not allow him into the United 
States.  We know that he has 'offered himself' to you."  The 
Ambassador responded, "I can confirm to you that we do not 
have any kind of contact whatsoever with Aliyev, we do not 
want any contact with him, and we would not want to see him 
in the United States because we understand clearly that would 
be a disaster for the bilateral relationship."  The 
Ambassador cautioned that it is possible Aliyev might have 
some contact with U.S. journalists, lawyers, or public 
relations people, but repeated the U.S. government does not 
have and does not want any sort of contact with Aliyev.  He 
added that if Kazakhstan has listed Aliyev with Interpol, 
that would help prevent him from inadvertently being issued a 
visa and slipping into the United States.  Saudabayev 
 
ASTANA 00001444  002 OF 002 
 
 
confirmed Kazakhstan has indeed listed Aliyev with Interpol 
and with "every other agency possible." 
 
4.  (C) The Ambassador asked why this Aliyev issue has come 
up again.  Saudabayev responded, "His 'criminal partner' 
(former KNB Chairman Alnur) Musayev has just turned against 
him, he will have mounting problems in Austria, we know he is 
not welcome in London," then he paused and added, "and we 
continue to have indications 'your people' might want to give 
him asylum in the United States.  That would be a 
cata
strophe."  The Ambassador repeated his "do not have 
contact, do not want contact" mantra.  Saudabayev seemed 
reassured and said, "All right.  We trust you.  The President 
believes you personally are seriously trying to build the 
relationship he wants with the United States.  We are pleased 
that our bilateral relationship has become stable, 
predictable, positive, and is growing step by step.  But it 
takes two to tango.  We are reciprocating President Obama's 
positive impulses.  It appears both sides are trying to be 
'understanding realists.'" 
 
DISPLEASURE WITH OSCE AMBASSADOR'S PRESS INTERVIEW 
 
5.  (C) Saudabayev said that his government was "perplexed" 
by OSCE Head of Mission in Kazakhstan, Ambassador Aleksandre 
Keltchewsky's "intemperate" comments in his two-part 
interview recently published in the widely read newspaper, 
"Liter," in which he raised the "one-percent" possibility 
that Kazakhstan might still be denied the 2010 OSCE 
Chairmanship because of democracy and human-rights issues. 
Clearly irritated, Saudabayev said, "I think he needs a dose 
of 'realistic understanding.'  He needs to understand that 
those who once stood at the barricades now sit at the same 
table (at the OSCE).  The name of that organization includes 
the word, 'security,' and more attention should be paid to 
that aspect.  Four of the world's nuclear powers are OSCE 
members, but what has OSCE ever done for nuclear disarmament 
and non-proliferation?  Not very much!"  (NOTE: 
Non-proliferation has become one of Saudabayev's signature 
issues.  In fact, on the day of this meeting, he had just 
returned at 4:00 am from a meeting on nuclear issues in 
Nagasaki, Japan, where, he said, he had been most impressed 
by the U.S. head of delegation, Susan Burk.  END NOTE.) 
Saudabayev concluded, "We fully understand and respect that 
the OSCE has three dimensions.  We would hope that others 
understand that, too." 
 
"HE'S A CLEVER GUY" 
 
6.  (C) At the end of the meeting, The Ambassador commented 
that he had read Presidential Policy Adviser Yermukhamet 
Yetysbayev's recent "Liter" interview (ref B) very closely 
and had found it most interesting.  Saudabayev smiled 
enigmatically and said only, "He's a clever guy." 
HOAGLAND

Wikileaks

09ASTANA1439, KAZAKHSTAN: PRESIDENT’S ADVISOR WARNS OF AN “INFORMATION

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1439 2009-08-27 05:14 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2127
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1439/01 2390514
ZNR UUUUU ZZH
O 270514Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6103
INFO RUCNCIS/CIS COLLECTIVE 1873
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1245
RUEHKO/AMEMBASSY TOKYO 1943
RUEHUL/AMEMBASSY SEOUL 0902
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RUEHNO/USMISSION USNATO 2757
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RHEFAAA/DIA WASHDC
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RUEKJCS/SECDEF WASHDC 1329
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 001439 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL, EUR/RPM 
 
E.O. 12958: N/A 
TAGS: PHUM PREL PGOV PINR KDEM KCOR OSCE KZ
SUBJECT:  KAZAKHSTAN:  PRESIDENT'S ADVISOR WARNS OF AN "INFORMATION 
WAR" 
 
REF: (A) ASTANA 1402 
 (B) ASTANA 1255 
 (C) ASTANA 0943 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  In an August 22 interview published in the 
newspaper "Liter," Yermukhamet Yertysbayev, President Nazarbayev's 
advisor on political issues, railed against the "runaway 
billionaires" who have declared an "information war" designed to 
besmirch Kazakhstan's international reputation and denied rumors 
about making President Nazarbayev President-for-Life.  Yertysbayev 
sided with the prosecutors in discussing several recent court cases 
involving journalists, and he warned that any pressure on the 
authorities investigating the Kazatomprom case "will not bring good 
results."  In his view, political opposition is "a component of 
Western culture" that has failed to take root in Kazakhstan.  He 
dismissed rumors of early elections, noting the single-party 
parliament's "positive role" in support of the anti-crisis program. 
Yertysbayev asserted that the OSCE is "undergoing a certain crisis" 
that Kazakhstan could help resolve.  On the future of Kazakhstan's 
multi-vector policy, Yertysbayev said that he would like to see the 
"European vector" become Kazakhstan's main direction.  END SUMMARY. 
 
 
"AN INFORMATION WAR ON KAZAKHSTAN" 
 
3.  (SBU)  In an interview in the widely read daily "Liter" 
headlined "Yertysbayev: An Information War Has Been Declared Against 
Kazakhstan," Yertysbayev described the situation in the country as 
generally stable but claimed that that the nation's rivals, the 
"runaway billionaires" -- presumably the former Bank Turan Alem 
(BTA) Chairman Mukhtar Ablyazov and the President's former 
son-in-law, Rakhat Aliyev -- have begun an "information war" 
designed to disgrace Kazakhstan in advance of its 2010 OSCE 
chairmanship.  "For three months, public opinion has been 
indoctrinated to discredit Kazakhstan in the eyes of the world 
community," he asserted.  He railed against the opposition press for 
comparing the government's anti-corruption investigations with 
Stalin's repressions of 1937.  The fight against corruption is a 
legitimate attempt to weed out dishonest government officials and 
lessen the "corruption tax" on citizens in times of economic crisis, 
he asserted.  Yertysbayev also ascribed the growing rumors about 
making President Nazarbayev President-for-life, which have appeared 
almost exclusively in opposition media, to this "anti-government" 
information campaign.  He categorically denied that such a project 
is in the works and generally advised "Liter" readers to stop paying 
heed to "mass hallucinations" and trust government sources. 
 
"YESERGEPOV KNEW HE WAS VIOLATING THE LAW" 
 
4.  (SBU) Yertysbayev was unequivocal that the courts were correct 
to convict Ramazan Yesergepov, the editor and owner of newspaper 
"Alma-Ata Info" (reftel A), although he allowed that the three-year 
sentence may have been "too harsh."  "Yesergepov knew he was 
violating the law and still published [classified] documents, not 
altogether for unselfish reasons," Yertysbayev asserted, making 
reference to the allegation that Yesergepov was paid for writing the 
article that landed him in trouble.  "What does this have to do with 
freedom of speech?" asked Yertysbayev.  "This idea is being imposed 
on us that freedom of speech is absolute," he continued, "that 
private telephone conversations and secret government documents can 
be published."  (NOTE: Yertysbayev was clearly referring to several 
controversial, and at times embarrassing, conversations between 
high-placed government officials thought to be transcripts of 
wire-taps that Rakhat Aliyev had kept from when he was Deputy 
Chairman of the Committee for National Security (KNB) and then 
posted on the Internet, to the great consternation of the Ak Orda, 
the Presidential Administration.   END NOTE.) 
 
5.  (SBU)  Asked about OSCE's Representative for Freedom of the 
Media Miklos Haraszti's public criticism of the Yesergepov ruling, 
Yertysbayev said that "Haraszti is a very intelligent and 
progressive person, but he trusts unofficial information too much." 
 
ASTANA 00001439  002 OF 003 
 
 
The Law on State Secrets is very clear, said Yertysbayev, and a 
journalist that obtains and publicizes classified information 
illegally shall b
e punished. 
 
BTA'S LIBEL SUIT IS "ABSOLUTELY JUSTIFIED" 
 
6.  (SBU)  Yertysbayev believes that BTA bank is "absolutely 
justified" in suing the opposition newspaper "Respublika" for 
allegedly undermining the bank's credibility among clients and 
investors.  BTA filed suit against the newspaper on August 19, 
alleging that the newspaper's public speculations that the bank was 
close to failure led to a run on the bank's deposits in excess of 
1.4 million tenge (approximately $9 million).  Yertysbayev defended 
the suit, saying that "Respublika" has run a "continuous campaign to 
disgrace the bank," thus undermining the government's efforts to 
keep the bank afloat.  Yertysbayev criticized Kazakhstan for 
"lacking the unity of government and society" that he believes exist 
in countries like the United States, Spain, France, and Japan.  He 
quoted President Nazarbayev -- "Without unity between the government 
and the people, we will not overcome the current economic crisis." 
 
KAZATOMPROM CASE "SHOULD NOT BE POLITICIZED" 
 
7.  (SBU)  Yertysbayev shied away from making statements on the case 
against the former head of state-owned nuclear company Kazatomprom 
Mukhtar Dzhakishev, saying simply that he prefers to wait for the 
verdict because this is "a complicated case with serious charges" 
(reftel C).  He did, however, sharply criticize Dzhakishev's lawyer 
Daniyar Kanafin for "politicizing a purely criminal case" and 
generating a public reaction that could "destabilize the situation." 
 (NOTE:  As reported in reftel B, the KNB recently sought Kanafin's 
disbarment for fostering a negative image of Kazakhstan, a request 
which the Almaty Bar Association denied.  END NOTE.)  A lawyer "who 
ignores clear legal norms and forms a negative public opinion of 
government agencies" does a disservice to his client, argued 
Yertysbayev.  "Pressure on the investigation, the upcoming trial, on 
the country's rulers, even with the involvement of the international 
community, will not bring positive results," he asserted. 
 
OPPOSITION "HAS FAILED TO TAKE ROOT" 
 
8.  (SBU) Yertysbayev gave a glum assessment of the prospects for 
opposition parties:  "Neither ten years ago, nor now, nor in the 
future does the opposition have a chance.  Opposition is an 
essential component of Western culture which has failed to take root 
on Kazakhstani soil, even in Russia it failed to take root.  It's 
unlikely that the opposition in Georgia and Ukraine would have come 
to power without American support." 
 
NO EARLY ELECTIONS 
 
9.  (SBU) Yertysbayev categorically denied that Kazakhstan will have 
early elections before it assumes the OSCE chairmanship.  "The 
President said he sees no reasons for early elections," he stressed. 
 Asked about the comments he made last year in favor of elections, 
Yertysbayev said that the only way it could happen would be if the 
Mazhilis unanimously voted for it.  "I do not think it will happen 
now," he said, "because the single-party parliament has played such 
a positive role in the support of the government's anti-crisis 
program." 
 
THE SIGNIFICANCE OF THE OSCE CHAIRMANSHIP 
 
10.  (SBU) Yertysbayev commented that Kazakhstan's OSCE chairmanship 
is an event of "historic and symbolic significance," the first time 
a post-Soviet, predominantly Muslim country will head the 
organization.  He outlined Kazakhstan's priorities for the 
chairmanship - to promote inter-religious tolerance, regional 
security, and non-proliferation, and to tackle issues of energy and 
food security.  Yertysbayev also asserted that the OSCE is 
"undergoing a particular crisis," and here as well Kazakhstan's 
chairmanship carries "certain significance."  Kazakhstan could serve 
the role of an independent broker because it has constructive 
relationships with all OSCE members, "regardless of political 
 
ASTANA 00001439  003 OF 003 
 
 
conditions," he said.  When asked about the future of Kazakhstan's 
multi-vector policy, Yertysbayev admitted that he personally would 
like to see the "European vector" become Kazakhstan's main 
direction, the one that Kazakhstan uses as a model for further 
development. 
 
11.  (SBU) BIO-NOTE AND COMMENT:  Yertysbayev, who is serving as 
advisor to President Nazarbayev for the third time, is known for his 
sometimes unorthodox, but always intriguing, statements to the 
press.  During his tenure as the Minister of Culture from 2006 to 
2008, Yertysbayev was sued twice for publicly insulting reporters by 
calling them "scoundrels and rogues," and he was at the epicenter of 
several scandals involving irregular tender procedures.  Last year 
he caused a stir when he said that Kazakhstan should hold early 
elections so that it would enter the OSCE chairmanship with at least 
a two-party parliament, and the subsequent rumors were only put to 
rest when Nazarbayev publicly stated that he sees no reasons for 
early elections.  Yertysbayev's reference in this interview to the 
effectiveness of the single-party parliament mirrors recent public 
comments from Nur Otan party functionaries and appears to confirm 
that Kazakhstan is not preparing for early elections.  Even though 
some see him as the odd man out, Yertysbayev remains an Ak Orda 
insider and is a member of the President's inner circle.  He may 
stray from the party line at times, but we believe that he could not 
have published this interview without the knowledge, and the 
approval, of his superiors.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1438, KAZAKHSTAN: SPECIAL ENVOY MORNINGSTAR DISCUSSES

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Reference ID Created Released Classification Origin
09ASTANA1438 2009-08-26 10:32 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO1382
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1438/01 2381032
ZNY CCCCC ZZH
R 261032Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6098
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1868
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1240
RUEHUL/AMEMBASSY SEOUL 0897
RUEHKO/AMEMBASSY TOKYO 1938
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1427
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1324

C O N F I D E N T I A L SECTION 01 OF 05 ASTANA 001438 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, EUR/CARC, EAP/CM, EEB/ESC 
STATE PLEASE PASS TO USTDA AND USTR 
 
E.O. 12958: DECL: 03/06/2059 
TAGS: PGOV PREL PINR ECON EINV EPET IR RS CH GG
TX, KZ 
SUBJECT:  KAZAKHSTAN:  SPECIAL ENVOY MORNINGSTAR DISCUSSES 
ENERGY, GEOPOLITICS WITH TIMUR KULIBAYEV 
 
REF: A. 08 ASTANA 2081 
     B. 08 ASTANA 2291 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b), (d) 
 
1.  (C) SUMMARY:  In a wide-ranging, frank, and lively 
conversation on August 25, Special Envoy for Eurasian Energy 
Richard M. Morningstar discussed regional energy security 
with a panel of senior government officials, including the 
Deputy Chairman of the National Welfare Fund Samruk-Kazyna, 
Timur Kulibayev, and the President of national oil company 
KazMunaiGas (KMG), Kairgeldy Kabyldin.  Kabyldin was 
optimistic about ongoing negotiations to expand the Caspian 
Pipeline Consortium (CPC) pipeline and establish the 
Kazakhstan Caspian Transportation System (KCTS) although he 
acknowledged that the CPC partners have not been able to 
agree on who will manage the expansion project.  Kulibayev 
offered insights about Kazakhstan,s broader relationship 
with countries in the region, in particular Russia, China, 
Turkmenistan, and Georgia.  Kulibayev said Kazakhstan would 
have a "neutral" attitude if U.S. companies partnered with 
Chinese firms, and declared, "In the energy sector at least, 
China is becoming more important to us than Russia."  He said 
Kazakhstan has proposed building trans-Caspian pipelines for 
oil and gas, but he admitted this would be "impossible" 
without the support of at least four of the five Caspian 
littoral states (excluding Iran).  Although Kulibayev claimed 
that Russia "never pushes us" to make certain decisions, he 
conceded that Russia would likely oppose a trans-Caspian 
pipeline.  END SUMMARY. 
 
KULIBAYEV IN CONTROL 
 
2.  (C) Kulibayev, President Nazarbayev,s tanned and 
perfectly manicured billionaire son-in-law, warmly greeted 
each of his guests with the grace of a statesman.  He 
announced that this was his first meeting following his 
return from vacation, and said he was very pleased to welcome 
SE Morningstar, whom he first met in 1999, during the 
groundbreaking ceremony for the CPC pipeline in Novorossiysk. 
 "It was a very cold and windy day," he recalled, "and they 
left us up there on that stage, shivering for hours!" 
Kulibayev was clearly in command, often calling on Kabyldin 
to provide technical details on oil export projects.  He 
spoke Russian at the beginning of the meeting, but switched 
to fine English as he became more comfortable and the 
conversation gained momentum, moving from technical issues to 
geopolitics. 
 
ONE REMAINING QUESTION ON CPC EXPANSION 
 
3.  (C) At Kulibayev,s request, KMG,s Kabyldin provided an 
update on the status of negotiations to expand CPC and 
establish KCTS.  He said the government is "fully behind" 
both projects and declared the remaining unresolved issues 
technical, not political, in nature.  Kabyldin said BP has 
exited the CPC consortium by selling its shares in Kazakhstan 
Pipeline Ventures to KMG in March, and in LukArco to Lukoil 
in July, thus clearing the way for the CPC Board of Directors 
to sanction expansion at its next meeting in Almaty in 
September.  (NOTE:  Timur Rakhanov, KMG,s representative on 
the CPC Board of Directors, subsequently told SE Morningstar 
that although BP,s deal with Lukoil has been finalized, the 
documents have not yet been signed.  He expects this 
transaction to be concluded by the end of the year, which 
would set the stage for a vote on expansion in mid-2010.  END 
NOTE).  Kabyldin informed SE Morningstar that the "only 
remaining question" on CPC expansion was how the project 
would be managed.  He said Russia would prefer that the 
consortium members manage the project themselves while the 
international oil companies (IOCs) wanted to hire an outside 
management firm. 
 
ASTANA 00001438  002 OF 005 
 
 
 
THE COMPLICATED CASE OF KCTS 
 
4.  (C) On KCTS, Kabyldin said that negotiations were ongoing 
with the Kashagan consortium (the so-called G-6) and Chevron, 
representing Tengizchevroil (TCO).  The equity structure, 
financial plan, and tariff schedule for KCTS were all 
addressed in the Second Supplemental Agreement to the 
Kashagan Production Sharing Agreement, signed in October 
2008.  Kabyldin said that in exchange for long-term 
commitments of crude throughput, the government provided a 
long-term guarantee of stable tariffs.  "Unfortunately," he 
said, "Chevron is not a party to that agreement and they have 
insisted on different terms and conditions."  Kabyldin said 
Chevron wants to use KCTS to accommodate additional volumes 
from its Future Growth Project, which has not yet been 
sanctioned by the government,s "competent authority," the 
Ministry of Energy and Mineral Resources (MEMR).  According 
to Kabyldin, MEMR is still completing its review of the 
Future Growth Project, but he expects approval during the 
first half of 2010.  Kabyldin attempted to reassure SE 
Morningstar that the government was acting in good faith: 
"KMG is also a partner in the Kashagan consortium," he 
observed, "and we have the same interests as the IOCs in 
KCTS." 
 
RUSSIAN COMPLAINTS ABOUT CPC 
 
5.  (C) Kulibayev said Kazakhstan,s own antimonopoly 
regulations would ensure that KCTS tariffs are reasonable. 
"We can,t generate exces profits from tariffs and fees," he 
said, "and, in any case, the transportation costs of KCTS 
would definitely be lower than CPC."  Kulibayev then 
criticized the CPC consortium, calling it poorly managed.  He 
said the IOCs are making a profit on oil production and also 
set the tariffs for the transit of their oil.  For that 
reason, he said, Russian officials have been "very critical" 
of CPC.  "For ten years," he said, "they have not received 
one penny of profit, not one penny in dividends.  They often 
complain to us that they have not benefitted at all from this 
pipeline." 
 
BLACK SEA STATES 
 
6.  (C) Kulibayev was confident that the government would 
find common ground with the IOCs and Azerbaijan on KCTS. 
"The real issue," he said, "is, where do we go after we get 
to Baku?  We will gain access to the Baku-Tbilisi-Ceyhan 
(BTC) pipeline, but we need a pipeline to Batumi, and we are 
willing to build one."  Kulibayev explained that KMG would 
like to ship oil to Batumi where it owns the oil loading 
terminal, and then ship it via tanker to the Black Sea port 
of Constantia, Romania, where KMG owns refineries managed by 
its subsidiary Rompetrol.  From Romania, KMG could sell crude 
on the world market, or refined oil products to European 
customers.  Commenting briefly on Ukraine, Kulibayev said KMG 
is reducing the volumes it ships to Odessa.  "It is simply 
not possible to do business in Ukraine," he complained. 
"There are no rules, and they just steal your oil, replacing 
it with mazut.  We do not expect any changes in Ukraine after 
the presidential elections," he added.  "The oligarchs 
control that country.  The government is not powerful enough 
to control them." 
 
DISAPPOINTED BY GEORGIA 
 
7.  (C) Turning to Kazakhstan,s relations with Georgia, 
Kulibayev said Kazakhstan has been "disappointed and 
frustrated" with the Georgian government.  He said Kazakhstan 
has strongly supported Georgia politically and economically, 
but "it has become very hard to invest there.  They don,t 
honor their commitments and their obligations.  They don't 
 
ASTANA 00001438  003 OF 005 
 
 
allow Tbilgas to operate there.  They are driving us out of 
the country.  We don,t feel comfortable there now, not at 
all.  Georgian companies owned by the government are driving 
us to give up our assets."  (NOTE:  Since March, KMG has come 
under increasing pressure from the Georgian government and 
Georgian NGOs to divest its ownership of KazTransGas-Tbilisi. 
 END NOTE).  Kulibayev noted that more than one million 
Georgians live in Russia and wondered why a country in such a 
position would go out of its way to "aggravate Russia."  He 
said Kazakhstan,s support for, and investment in, Georgia 
has "spoiled our relations in the region."  Kulibayev said 
that Kazakhstan had plans to export natural gas to Georgia, 
but "now, it is not possible for us to supply our gas to 
Georgia." 
 
CASPIAN SEA SUMMIT 
 
8.  (C) When asked for his views on the issues confronting 
the Caspian littoral states, Kulibayev said that the heads of 
state would soon meet to discuss Caspian issues, primarily 
the Caspian littoral gas pipeline (the so-called 
"Prikaspiskii" pipeline).  (NOTE:  Shell,s country manager 
Campbell Keir told the Ambassador on August 24 that a number 
of IOC executives have been summoned to Aktau on September 14 
to brief President Nazarbayev on energy issues, especially 
oil and gas transportation.  END NOTE). 
 
TRANS-CASPIAN PIPELINE PROPOSAL 
 
9.  (C) Kulibayev insisted that Kazakhstan would not be a 
major supplier of natural gas to Europe, but it would play a 
role as a transit country, moving gas from Turkmenistan to 
China, Russia, and even Azerbaijan.  Surprisingly, Kulibayev 
said that Kazakhstan has proposed (to the governments of 
Turkmenistan and Azerbaijan) building a trans-Caspian gas 
pipeline from Kazakhstan to Azerbaijan.  He then pulled out a 
map and pointed to an area of the Kazakhstani shoreline just 
north of the border with Turkmenistan, where a Soviet-era 
pipeline already exists, and drew his finger in a straight 
line across the Caspian to Baku.  Kulibayev said, "We have 
existing onshore facilities and infrastructure.  This would 
not be difficult to do."  According to Kulibayev, the real 
question is whether or not Turkmenistan has sufficient 
reserves of natural gas to supply such a pipeline.  He agreed 
with SE Morningstar that Turkmenistan,s supply security 
would increase if they would allow IOCs to work onshore. 
"Everyone expected the new president (Berdymukhamedov) to be 
more active and a "modern man," but no one is in Turkmenistan 
except the Chinese."  He said it has been difficult to get a 
clear, consistent reading of Turkmenistan.  "Their policy is 
uncertain and undefined," he said.  "It,s a policy of 
Permanent Ambiguity," playing on Ashgabat,s Permanent 
Neutrality policy. 
 
RUSSIAN SUPPORT ESSENTIAL TO TRANS-CASPIAN PIPELINE 
 
10.  (C) When pressed, Kulibayev admitted that a 
trans-Caspian pipeline would require Russian support, which 
he acknowledged would not be likely.  At first, Kulibayev 
told SE Morningstar that "all five" Caspian littoral states 
would have to agree on a trans-Caspian pipeline.  Later, he 
backtracked somewhat and said that "at least four" of the 
Caspian states would have to agree (i.e. all except Iran). 
He said the first step in building a trans-Caspian pipeline 
would be to improve relations between Azerbaijan and 
Turkmenistan, which he said would require goodwill and 
compromise on both sides.  Then, he said, the CIS countries 
would have to improve relations with Iran.  As a result, 
Kulibayev said, "I don,t believe a trans-Caspian pipeline 
will happen in the nearest future."  (NOTE:  KMG,s Rakhanov 
later told SE Morningstar that Russia has used media outlets 
and private channels to discourage the countries in the 
 
ASTANA 00001438  004
OF 005 
 
 
region from moving forward with a trans-Caspian pipeline. 
When asked what could happen if the countries moved ahead 
with the project despite Russian objections, Rakhanov said, 
"They keep reminding people what happened to Georgia last 
year.  They can be very creative and they could create some 
conflicts."  Rakhanov suggested it might be possible to 
overcome Russian opposition by giving them a commercial 
interest in the project.  END NOTE). 
 
"CHINA IS BECOMING MORE IMPORTANT THAN RUSSIA" 
 
11.  (C) Kulibayev said the countries of Central Asia are 
under increasing pressure from China, which is now a central 
player in the region.  He claimed that only the Chinese are 
investing in the region and noted that state-owned Chinese 
companies are willing to pay a premium above the market price 
for Central Asian hydrocarbon resources.  "Normal companies," 
he said, "cannot compete with that."  Kulibayev asserted that 
Kazakhstan has no objection to Chinese investment, because 
the government typically works with China on a 50-50 basis to 
modernize infrastructure in Kazakhstan.  When asked if 
Kazakhstan would react positively or negatively to U.S. 
companies that choose to partner with Chinese companies, 
Kulibayev said the government,s position would be "neutral." 
 He added, "Of course, we would prefer that American 
companies come on their own, but we would have no objections 
if they partner with China."  Kulibayev called China a "big, 
economically aggressive" neighbor, but also an important 
market for Kazakhstan,s energy and mineral resources.  "In 
the energy sector," said Kulibayev, "China is becoming more 
important for us than Russia." 
 
RUSSIAN INFLUENCE 
 
12.  (C) Russia, however, is "definitely not happy" about 
China,s more active involvement in the region, according to 
Kulibayev, despite the fact that China recently provided a 
$10 billion loan to Russia, and the China National Petroleum 
Corporation (CNPC) invested in Russian companies Transneft 
and Rosneft.  On energy policy, Kulibayev said that, "of 
course, Putin is the final decision maker."  However, he 
noted that Deputy Prime Minister Igor Sechin makes most 
day-to-day decisions and is an independent and influential 
figure.  Kulibayev was particularly impressed by Russia,s 
recent agreements with Turkey on energy issues.  He asserted 
the agreements will help Russia reduce its dependence on 
Ukraine for the transit of gas to Europe, and gives Russia a 
"new alternative around Nabucco."  Regarding relations with 
the United States, Kulibayev said, "Russia had lost 
confidence" in its bilateral relationship with the United 
States under the previous administration, and said it would 
now take "real steps and real action to rebuild relations." 
When asked how Russia influences Kazakhstan,s decisions, 
particularly on energy, Kulibayev insisted that Russia has no 
direct influence over government policy.  "They never push 
us," he said, "Never.  Putin trusts our president, as does 
Medvedev.  We do business with Russia on a commercial basis, 
and there has never been any pressure from Russia" to take a 
certain course of action. 
 
RESTRAINT ON IRAN 
 
13.  (C) Kulibayev acknowledged that Kazakhstan trades 
agricultural goods (mostly wheat) and steel with Iran, but 
"our position is with the (international) mainstream," he 
said.  According to Kulibayev, Kazakhstan has ceased oil 
swaps with Iran, for example, and has no plans to invest or 
participate in an oil pipeline through Iran, "despite the 
fact that our companies tell us this is the most feasible, 
commercially attractive route."  He said Kazakhstan has taken 
this position in deference to U.S. policy, although "we, like 
the other Caspian Sea states, are not uncomfortable dealing 
 
ASTANA 00001438  005 OF 005 
 
 
with Iran." 
 
14.  (C) COMMENT:  With the onset of the economic crisis, 
Kulibayev began to assume a more public and more 
authoritative role in government after spending two quiet 
years out of the limelight as chairman of the KazEnergy 
business association.  Now, as Deputy Chairman of 
Samruk-Kazyna, the state-owned holding company that owns or 
controls virtually all of Kazakhstan,s real economy, he has 
direct influence over the oil and gas, atomic energy, metals 
and mining, and banking sectors.  As he demonstrated to SE 
Morningstar, Kulibayev combines sharp business acumen with a 
keen understanding of the geopolitical consequences of 
billion-dollar deals.  His family ties and personal wealth 
give Kulibayev access to senior political and business 
leaders in the region, and we consider his information and 
insights to be valuable, reliable, and reflective of 
Kazakhstan,s pragmatic, realistic role in the region.  END 
COMMENT. 
 
15.  (SBU) Special Envoy Morningstar has cleared this cable. 
HOAGLAND

Wikileaks

09ASTANA1432, KAZAKHSTAN: AES FILES FOR ARBITRATION, BUT

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Reference ID Created Released Classification Origin
09ASTANA1432 2009-08-26 00:15 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO0973
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1432/01 2380015
ZNY CCCCC ZZH
R 260015Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6091
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1865
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1237
RUEHUL/AMEMBASSY SEOUL 0894
RUEHKO/AMEMBASSY TOKYO 1935
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1424
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1321

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001432 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA AND USTR 
 
E.O. 12958: DECL: 03/06/2059 
TAGS: PGOV ECON ENRG EINV SOCI KZ
SUBJECT:  KAZAKHSTAN:  AES FILES FOR ARBITRATION, BUT 
WILLING TO COMPROMISE 
 
REF: A. ASTANA 0555 
     B. ASTANA 0837 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b), (d) 
 
1.  (SBU) SUMMARY:  On August 10, U.S. power company AES 
notified the government that it will go to international 
arbitration to appeal more than $200 million in fines 
assessed for allegedly monopolistic behavior.  This action 
would be the final step in a long, public, legal battle 
between the company and the government, and it could impact 
the continued presence of the company in Kazakhstan.  During 
the Ambassador's visit to the East Kazakhstan region on 
August 20 (septel), AES Vice President Mike Jonagan (protect 
throughout) and East Kazakhstan governor Berdybek Saparbayev 
both said they were optimistic about an amicable resolution 
of the issues.  Jonagan, however, privately told the 
Ambassador that other forces were at play, including the 
personal interest in the hydropower plants managed by AES 
shown by President Nazarbayev's billionaire son-in-law Timur 
Kulibayev.  The government,s management of this dispute will 
test its commitment to creating a favorable investment 
climate, as powerful interests attempt to influence the 
outcome.  END SUMMARY. 
 
ARBITRATION TRIGGER LETTER 
 
2.  (SBU) On August 10, AES sent Prime Minister Masimov a 
Notice of Dispute letter, which is the "trigger" for 
arbitration but does not start the arbitration process 
itself.  The Notice of Dispute initiates a cooling-off 
period, in which both sides are expected to negotiate in good 
faith.  If no settlement is reached during that period, 
arbitration begins.  Jonagan told the Ambassador on August 4 
that there are three possibilities for arbitration:  (1) the 
London Court of International Arbitration; however, that is 
probably too limiting because it deals only with contracts; 
(2) the Energy Charter Treaty (NFI); (3) Kazakhstan,s 
bilateral investment treaties with the United States and the 
Netherlands; AES would probably choose the U.S. treaty, 
especially because it provides the possibility of claiming 
attempted expropriation.  Jonagan told the Ambassador that 
AES would prefer to avoid arbitration and would be willing to 
amend its 1997 Altai Agreement, in which AES obtained the 
hydro-energy plants in East Kazakhstan.  He said the 
amendment could result in Kazakhstan getting "a slightly 
bigger piece of the pie."  Jonagan admitted that Kazakhstan 
had sold AES the hydro plants much too cheaply in 1997 but 
added, "that,s Kazakhstan,s problem, not AES.," 
 
THE NEW GOVERNOR IN EAST KAZAKHSTAN 
 
3.  (SBU) Berdybek Saparbayev became Akim (governor) of the 
East Kazakhstan oblast (region) in March.  Like all Akims, he 
was personally selected and appointed by President 
Nazarbayev.  Originally from the southern city of Shymkent, 
Saparbayev served previously as Minister of Labor and Social 
Protection, Vice Minister for Economy and Budget Planning, 
head of the Customs Committee, and Vice Minister of Finance. 
According to Jonagan, Saparbayev became embroiled in a 
political scandal soon after taking office.  In response to 
the economic crisis in this heavily industrial region, the 
Akim has embarked on an ambitious and expensive renovation of 
the oblast administration building and surrounding areas.  He 
also removed several tall evergreen trees to improve his view 
of the city and ordered that all street curbs in the city be 
torn out and replaced with new prefabricated concrete ones -- 
manufactured at a factory in Shymkent owned by his son. 
Enterprising local investigative journalists disclosed the 
terms of this lucrative contract and, according to Jonagan, a 
major public outcry followed.  This reaction did not stop the 
Akim's renovation projects.  However, jonagan said it 
indirectly helped AES, because the Akim was more willing to 
 
ASTANA 00001432  002 OF 003 
 
 
listen to ways in which the company could contribute to 
economic growth in the region.  "When he first took office," 
said Jonagan, "(Saparbayev) said he was going to run AES out 
of Kazakhstan.  After this early scandal, he realized he 
didn't need to create any new enemies." 
 
POLITICAL WILL TO WORK THINGS OUT 
 
4.  (SBU) During a public meeting/press event with the 
Ambassador on August 20, Saparbayev called AES a "valued and 
reliable partner" that employs 4,200 Kazakhstanis and pays 
more than three billion KZT (approximately $20 million) in &
#x000A;taxes annually.  He acknowledged that there are some 
outstanding issues between AES and the oblast and central 
governments, but, he said, "these are not serious problems, 
and we fully expect to resolve them with AES senior 
management." 
 
5.  (SBU) Later that day, during a joint press conference 
with the Ambassador, the Eurasia Foundation, and AES's 
Jonagan, First Deputy Akim Serik Abdenov praised AES for 
demonstrating "good corporate social responsibility," 
employing thousands of Kazakhtanis, and paying its corporate 
and social taxes on time.  (NOTE:  Over dinner at a mountain 
ski resort, Abdenov said he was surprised to learn that AES 
employs only two expatriates in Kazakhstan.  "Sometimes I 
forget that we're targeting AES,s Kazakhstani employees as 
well," he said, "but then I realize that their first loyalty 
is to AES anyway, not to Kazakhstan.  END NOTE).  In response 
to a journalist's question, Jonagan said that AES's 
concession agreement to manage two hydropower plants in East 
Kazakhstan expires in October 2017, and there have been no 
negotiations about the possibility of a follow-on contract. 
He added, however, that the contract stipulates that the 
assets will return to the government in 2017, and AES is 
operating under that assumption.  Deputy Akim Abdenov quickly 
added that the contract is between two parties and "of 
course, AES will have something to say about whether or not 
the contract is extended." 
 
IS KULIBAYEV AFTER THE HYDROS? 
 
6.  (C) During a private meeting on August 20, Jonagan 
briefed the Ambassador on the company's ongoing dispute over 
$200 million in fines levied by the government for allegedly 
monopolistic behavior.  He said that when AES filed for 
international arbitration, the company simultaneously filed 
an injunction with a London court to prevent a Kazakhstani 
joint stock company from obtaining confidential information 
about the ownership and registration of shares in the two 
hydropower plants managed by AES.  Jonagan said this joint 
stock company, which he suspects is owned or controlled by 
Timur Kulibayev, has "made a strong push" for the hydropower 
plants.  "Two or three years ago," he said, "someone -- most 
likely Kulibayev -- gave the order to start these court cases 
against us.  Kulibayev has a personal interest in buying 
shares in these hydropower companies.  He's now back in the 
game," as Deputy Chairman of Samruk-Kazyna, which owns Samruk 
Energo, which is the beneficial owner of the hydropower 
plants.  "He got these legal issues started, and now it's 
taken on a life of its own." 
 
7.  (SBU) In response to AES's decision to go to 
international arbitration, Jonagan said the government has 
engaged an international law firm to represent their 
interests, the same firm that represented them during 
litigation with K-Mobile.  (NOTE:  According to Jonagan, 
during that dispute, Kulibayev "stole the company" for 
$1,000, then sold it to Russian mobile phone operator Beeline 
for $350 million.  END NOTE).  Jonagan said he hopes the 
dispute can be settled out of court and said AES is willing 
to amend the hydropower contracts in the government's favor, 
in order to "normalize relations and move forward with a 
 
ASTANA 00001432  003 OF 003 
 
 
clean slate." 
 
AES APPEALS FOR AN HONEST BROKER 
 
8.  (C) Jonagan expressed frustration that no senior 
government leaders have apparently read the agreement.  He 
said the Akim told him on August 17, "No one ever signed that 
contract, so why are you making all these claims and taking 
us to court?"  Jonagan told the Ambassador that the Prime 
Minister did, in fact, sign the original contract, but not 
all of the associated addenda.  He complained that statements 
such as the Akim's have helped to create an urban myth that 
AES has taken advantage of the government and is interested 
only in turning a quick profit. 
 
9.  (C) For six years, Jonagan said he has tried to meet with 
Prime Minister Masimov and his predecessors in order to 
discuss AES's operations in Kazakhstan, "but they will not 
meet with us."  He asked the Ambassador to raise the issue 
during his next meeting with the Prime Minister, and the 
Ambassador agreed to do so.  "They need someone with a cool 
head to give them good advice and complete information," said 
Jonagan.  "They need someone to explain the risks and 
opportunities, and help them make the right 
decision.  We want to be here for a long time, and we're 
willing to make concessions to make that happen." 
 
10.  (SBU) COMMENT:  Although there are issues between AES 
and the government of East Kazakhstan, the Akim values the 
company,s tax payments and social contributions.  If this 
were solely a local dispute, it would likely be resolved 
amicably.  However, Kulibayev,s potential efforts to acquire 
these hydropower plants through political and legal pressure 
could complicate resolution of the ongoing court case and 
adversely impact AES,s long-term presence in Kazakhstan. 
END COMMENT. 
HOAGLAND

Wikileaks

09ASTANA1429, KAZAKHSTAN: WHY TO PAY SERIOUS ATTENTION

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Reference ID Created Released Classification Origin
09ASTANA1429 2009-08-25 04:36 2011-08-30 01:44 SECRET//NOFORN Embassy Astana

VZCZCXRO0197
PP RUEHDBU
DE RUEHTA #1429/01 2370436
ZNY SSSSS ZZH
P 250436Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6085
INFO RUEHAH/AMEMBASSY ASHGABAT PRIORITY 7380
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1233
RUEHEK/AMEMBASSY BISHKEK PRIORITY 8372
RUEHDBU/AMEMBASSY DUSHANBE PRIORITY 0015
RUEHIL/AMEMBASSY ISLAMABAD PRIORITY 2176
RUEHBUL/AMEMBASSY KABUL PRIORITY 0461
RUEHMO/AMEMBASSY MOSCOW PRIORITY 1586
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0548
RUEHNT/AMEMBASSY TASHKENT PRIORITY 0026
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/CDR USTRANSCOM SCOTT AFB IL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1420
RUEKJCS/SECDEF WASHDC PRIORITY 1317
RUEHNO/USMISSION USNATO PRIORITY 2753
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2437
RHEHAAA/WHITE HOUSE WASHDC PRIORITY

S E C R E T SECTION 01 OF 04 ASTANA 001429 
 
NOFORN 
SIPDIS 
 
STATE FOR D, P, T, S/P, S/SRAP, SCA, P/M, EEB, DRL 
WHITE HOUSE FOR OVP 
NSC FOR MICHAEL MCFAUL 
 
E.O. 12958: DECL: 08/25/2029 
TAGS: PGOV PREL ECON EPET MARR SOCI KNNP KDEM AF
RS, KZ 
SUBJECT:  KAZAKHSTAN:  WHY TO PAY SERIOUS ATTENTION 
 
REF: A. ASTANA 1423 
     B. ASTANA 1422 
     C. ASTANA 1416 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (A), (B), (D) 
 
1.  (S/NF) During USCENTCOM CDR General David Petraeus' 
August 13 meetings in Astana, senior Kazakhstani officials 
made more clear than ever that President Nursultan Nazarbayev 
wants an enhanced relationship with the United States and is 
offering us a logistics/transit facility for U.S. and 
Coalition troops in Afghanistan that would supplement and 
back up the Manas Transit Center in Kyrgyzstan.  These 
officials told us that Washington's "reset" with Moscow has 
given Nazarbayev room to recalibrate Kazakhstan's 
relationship with the United States (reftels).  Kazakhstan, a 
country at peace with its neighbors and internally stable, 
strategically shares some of the longest borders in the world 
with both Russia and China.  It's Gross Domestic Product is 
larger than that of the other four countries of Central Asia 
combined, and a strong private sector and real middle class 
continue to grow.  Despite occasional contentious issues, the 
U.S.-Kazakhstan relationship is generally smooth and without 
drama.  Kazakhstan has established a strong record on issues 
of importance during the nearly two decades of its 
independence and continues on a long-term positive trajectory. 
 
2.  (C) Kazakhstan's fundamental achievements include: 
 
NON-PROLIFERATION:  At independence, Nazarbayev irrevocably 
relinquished Kazakhstan's nuclear status (the fourth largest 
arsenal in the world at that time), mostly because he was 
intimately aware of the massive human cost incurred because 
the Soviet Union had tested its nuclear weapons on 
Kazakhstan's soil.  Kazakhstan is now one our strongest 
non-proliferation partners in the world, despite occasional 
speed-bumps at the bureaucratic level. 
 
ECONOMICS:  Soon after independence, Nazarbayev made the 
fundamental decision to transition Kazakhstan from a Soviet 
to a Western economic model.  Before the global financial 
crisis, Kazakhstan's banking and financial sectors were 
judged to be equal to Central Europe's.  Even now during the 
crisis, the consensus of the International Financial 
Institutions and private Western bankers is that Kazakhstan 
has reacted responsibly and flexibly.  Unless there are 
further hidden land-mines to explode, Kazakhstan will emerge 
fundamentally intact from the current global financial 
crisis.  In about 2014-2015, when the oil starts to gush from 
Kazakhstan's North Caspian "elephant" fields, in which 
American corporations are heavily invested, Kazakhstan will 
experience stunning financial growth.  While natural 
resources continue to attract the lion's share of foreign 
investment, Kazakhstan seeks to diversify beyond the 
extractive sector, and is showing success in this policy. 
 
EDUCATION:  Soon after independence, Nazarbayev understood 
the only way to transition his new country into the broader 
world was to change fundamentally the psychology of 
Kazakhstan's next generation of leaders.  He chose 
strategically to do this by embracing Western education for 
his nation.  He established the Bolashak (Future) Program 
that has now provided thousands of young Kazakhstanis with 
international, mostly Western, university educations.  The 
results are strikingly apparent every day, both in government 
 
ASTANA 00001429  002 OF 004 
 
 
offices and in the private sector, where bright, globalized, 
young Kazakhstanis are incrementally setting the agenda for 
the future. 
 
KAZAKHSTAN WANTS AN ENHANCED BILATERAL RELATIONSHIP 
 
3.  (C) President-elect Obama's telephone call to Nazarbayev 
in November 2008 was hugely welcomed in Kazakhstan from the 
top down, as was Vice President Biden's April telephone call 
to personally invite Nazarbayev to the 2010 Nuclear Security 
Summit in Washington.  Whether or not we intended these calls 
as any kind of signal, Nazarbayev and the
 progressive element 
of his top leadership -- and even the general population -- 
interpreted the calls as a clear and meaningful signal of a 
new U.S.-Kazakhstan relationship, and warmly, 
enthusiastically welcomed them.  That's the power of the 
image of the United States and of President Obama himself. 
We would do well for our long-term interests -- including 
stability in Afghanistan -- to build on the power of that 
perception. 
 
AFGHANISTAN 
 
4.  (S/NF) One of the highest U.S. priorities is getting 
Afghanistan right.  As the August 12-15 visit to Astana by 
USCENTCOM Commander General David Petraeus made clear, 
Kazakhstan is eager to assist the United States and has 
across the board, from every senior official we have met, 
declared that U.S. policy on Afghanistan is "absolutely 
correct."  From late March onward, President Nazarbayev has 
indicated he is willing to act independently of Moscow, and 
has offered us a new transit/logistics facility to complement 
the U.S. Transit Center at Manas in Kyrgyzstan.  General 
Petraeus's visit was calculated to draw out exactly what 
Nazarbayev's offer might mean, and resulted in an oral 
agreement that a joint USCENTCOM-USTRANSCOM expert-level 
delegation would visit Kazakhstan soon to explore concrete 
"next steps."  This is a high-wire strategic decision for 
Kazakhstan and suggests that President Nazarbayev is willing 
to act independently from Moscow in the window-of-opportunity 
space he now has because of the U.S. effort to improve its 
relationship with Russia. 
 
RUSSIA 
 
5.  (C) An enhanced bilateral relationship with Kazakhstan 
would complement our new Russia policy, and would reinforce 
the clear message Vice President Biden recently delivered in 
Kyiv and Tbilisi.  Since shortly after the August 2008 
Russia-Georgia conflict, President Nazarbayev has 
increasingly signaled his desire to "recalibrate" his 
great-power relationships.  The Kazakhstani leadership has 
told us repeatedly it is pleased with President Obama's 
efforts to "reset" Washington's relations with Moscow, 
because that opens new space for Astana to cooperate with 
Washington.  Because of geography, history, language, 
economics, and culture, Russia will always necessarily be 
Kazakhstan's number-one strategic partner; but Nazarbayev 
seeks a higher-profile relationship with the United States. 
The key for us would be transparency with both Astana and 
Moscow.  At the same time, we should not underestimate 
Moscow's "Putinism," it's neo-imperial pressures -- and 
skullduggery -- in its self-proclaimed "sphere of privileged 
influence." 
 
 
ASTANA 00001429  003 OF 004 
 
 
DEMOCRACY 
 
6.  (C) U.S. interests are not coldly geostrategic:  we care 
deeply about democratic progress for our regional partners 
and for their citizens.  President Nazarbayev understands 
this, because he listened to the international community 
earlier this year and found a way to scuttle the overly 
restrictive Religion Law, which hard-liners around him had 
drafted and pushed through Parliament, by sending it to the 
Constitutional Council that declared it unconstitutional. 
This gave him the cover to allow it to die. 
 
7.  (C) Nazarbayev consistently promotes inter-ethnic harmony 
and general religious tolerance.  Civil society played a 
significant role in drafting the government's 100-plus-page 
human rights action plan.  Kazakhstan's Parliament, although 
wholly dominated by Nazarbayev's ruling party, Nur Otan, is 
nevertheless a real parliament with a broad spectrum of 
opinion among its members; it has a professional committee 
structure and holds hearings at which civil society testifies 
freely and even vociferously.  But Nazarbayev has a blind 
spot we have to acknowledge.  The two most recent events of 
concern -- the new Internet Law and the conviction of 
journalist Ramazan Ysergepov -- are intimately related to the 
cosmic feud Nazarbayev has with his ex-son-in-law, Rakhat 
Aliyev, currently exiled in Europe.  Nazarbayev is blinded to 
international opinion on issues that arise from his struggle 
with Aliyev -- thus the Internet Law and the Yesergepov case, 
both of which we believe are knee-jerk reactions to limit 
distribution of Aliyev's expose, "Godfather-in-Law."  In 
fact, the print media in Kazakhstan are remarkably free and 
stand head and shoulders above the print media in the other 
four countries of the region, promoting investigative 
reporting and regularly exposing corruption and other 
scandals. 
 
NAZARBAYEV WANTS RECIPROCAL PRESIDENTIAL VISITS 
 
8.  (C) Head-of-state visits among Eurasian leaders are a 
dime a dozen and not always especially productive, because 
they all know how to play each other.  Western visits, 
however, are of a different order of magnitude and can be 
used to drive forward goals and objectives -- i.e., produce 
deliverables, both for short-term interests and for long-term 
goals. 
 
9.  (C) On August 3, Nazarbayev's childhood friend and the 
current State Secretary of Kazakhstan (ostensibly the 
number-two position in lieu of a Vice President) and former 
Ambassador to the United States and the United Kingdom, Kanat 
Saudabayev, explicitly asked the Ambassador if Nazarbayev 
could have a separate bilateral day in Washington, with an 
Oval Office meeting, when he attends the Nuclear Security 
Summit early in 2010.  We will point out to Saudabayev that a 
lot of leaders will be jostling for face time while we 
continue to explore this option with Washington. 
 
10.  (C) Ever since President Obama's election, Kazakhstan 
has made it clear it would eagerly and warmly welcome an 
Obama visit, even if simply an over-night in conjunction with 
a visit to a larger power in the greater region.  No sitting 
U.S. President has ever visited Central Asia.  An Obama visit 
to Kazakhstan would be an historic first and a powerful 
statement to all great-power and regional players.  Such a 
visit, in conjunction with, for example, an India visit 
 
ASTANA 00001429  004 OF 004 
 
 
(which would not directly poke either Moscow or Beijing in 
the eye), would further enhance our policy of knitting 
together South and Central Asia. 
 
11.  (C) Kazakhstan is rich, relatively progressive, and 
recalibrating its great-power relationships closer to the 
United States.  It would be in our long-term national 
interest to consider, and act on, this opening.  Such a rare 
window of opportunity does not stay open indefinitely. 
HOAGLAND

Wikileaks

09ASTANA1428, KAZAKHSTAN STEPS CLOSER TO SUPPORT FOR A SINGLE-WINDOW FOR

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Reference ID Created Released Classification Origin
09ASTANA1428 2009-08-24 10:40 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO9566
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1428/01 2361040
ZNR UUUUU ZZH
O 241040Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6083
INFO RUCNCIS/CIS COLLECTIVE 1863
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1231
RUEHKO/AMEMBASSY TOKYO 1933
RUEHUL/AMEMBASSY SEOUL 0892
RUCNDT/USMISSION USUN NEW YORK 2435
RUEHNO/USMISSION USNATO 2751
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1418
RUEKJCS/SECDEF WASHDC 1315
RUEKJCS/JOINT STAFF WASHDC
RUEHAST/USOFFICE ALMATY 1819

UNCLAS SECTION 01 OF 02 ASTANA 001428 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/ACE 
STATE PLEASE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAID ECON SOCI KZ
SUBJECT:  KAZAKHSTAN STEPS CLOSER TO SUPPORT FOR A SINGLE-WINDOW FOR 
IMPORTS AND EXPORTS 
 
ASTANA 00001428  001.2 OF 002 
 
 
1.  SUMMARY:  Since 2007, the USAID Regional Trade Liberalization 
and Customs Project, in cooperation with the German International 
Development Agency (GTZ), has encouraged the Governments of 
Kazakhstan, Kyrgyzstan, and Tajikistan to implement electronic 
single-window systems to simplify the processes of obtaining the 
necessary certificates, licenses, quotas, permissions, and other 
documents required to import and export goods through Customs.  On 
August 11, Kazakhstan, through its Vice-Chairman of the Customs 
Control Committee, announced its intention to implement the 
single-window system at a major conference on transportation and 
trade facilitation.  Experiences from other countries with 
single-window systems demonstrate that considerable savings in time 
and financial cost can be achieved through the establishment of 
single-windows.  END SUMMARY. 
 
BUILDING SUPPORT THROUGH EDUCATION 
 
2.  USAID and the German International Development Agency (GTZ) have 
worked closely to promote the implementation of the single-window 
system in Kazakhstan, Kyrgyzstan and Tajikistan.  USAID and GTZ 
built support for the single-window through presentations by 
commercial providers of single-window systems and conferences that 
presented the concept to both government officials and the private 
sector.  USAID and GTZ organized study tours for Kazakhstani 
officials to Hamburg, Brussels, and Amsterdam in 2008, to Senegal in 
November 2008, and to the World Customs Organization (WCO) 
Conference on Single-Window and Trade Facilitation in Morocco in 
April 2009. 
 
3.  These study tours attracted senior government officials, 
including Customs Control Committee Chairman Kozy-Korpesh Karbuzov, 
who attended the World Customs Organization (WCO) Morocco conference 
this year, as well as the Committee's deputy chairman, who 
participated in a separate study tour to Sweden.  These officials 
acknowledged that their understanding of the concept and the 
alternative ways of implementing single-window systems was greatly 
influenced by the various events sponsored by USAID and GTZ. 
 
4.  During a conference organized by the Organization for Security 
and Cooperation in Europe (OSCE) and the Ministry of Transport and 
Communications regarding transportation and trade facilitation, the 
Deputy Chairman of Customs Control Committee, Serzhan Duissebayev, 
announced Kazakhstan's intention to implement a single-window system 
for the import and export of goods in Kazakhstan.  Based on various 
factors, including the experiences gained from the professional 
study tours, according to Duissebayev, Kazakhstan will adopt a model 
that is derived from the experiences of Sweden and Singapore. 
 
5.  While the Government has not determined which agency will 
oversee and implement the single-window, the Customs Control 
Committee, based upon instructions from the Office of the Prime 
Minister, appears to be the leading candidate.  Instructions from 
the Prime Minster to the Ministry of Finance and the Customs Control 
Committee called for the establishment of a working group, to 
include all relevant agencies.  This working group is to be chaired 
by the Customs Control Committee, and will analyze the potential for 
integration of information systems of the relevant government 
agencies with the information system of the Operative Management 
Center of the Customs Control Committee, which will lead to the 
introduction of the electronic single-window for customs 
registration and control. 
 
COMMITTING TO SINGLE-WINDOW - A BEGINNING 
 
6.  Kazakhstan's announcement that customs officials are ready to 
develop the single-window system will require modification of the 
Customs Modernization Project (CMP), currently underway with support 
from the World Bank.  This process will lead directly to a detailed 
planning effort by the Government of Kazakhstan that will bring the 
single-window on-line.  USAID will continue to provide key technical 
assistance to the Customs Control Committee on single-window through 
the CMP, including project management training, assistance in 
negotiating and entering contracts with commercial providers of 
 
ASTANA 00001428  002.2 OF 002 
 
 
single-window systems, and expertise on specific issues at the 
request of the Customs Control Committee. &#x000A
; 
HOAGLAND

Wikileaks

09ASTANA1427, KAZAKHSTAN: MUSLIM ACTIVIST STRUGGLES TO TURN GRAND IDEAS

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Reference ID Created Released Classification Origin
09ASTANA1427 2009-08-21 08:59 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO8076
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1427/01 2330859
ZNR UUUUU ZZH
O 210859Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6081
INFO RUCNCIS/CIS COLLECTIVE 1861
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1229
RUEHKO/AMEMBASSY TOKYO 1931
RUEHUL/AMEMBASSY SEOUL 0890
RUCNDT/USMISSION USUN NEW YORK 2433
RUEHNO/USMISSION USNATO 2749
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1416
RUEKJCS/SECDEF WASHDC 1313
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 001427 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: PHUM PREL PGOV KDEM KISL KIRF PINR KZ
SUBJECT:  KAZAKHSTAN:  MUSLIM ACTIVIST STRUGGLES TO TURN GRAND IDEAS 
INTO CASH, COMRADES AND CONCRETE 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Murat Telibekov, a Kazakhstani Muslim activist 
and president of three NGOs, is never short on grand ideas, and most 
of them involve the U.S. Embassy.  His newest idea is to build 
Islamic centers in Astana and Almaty, and he is looking to the U.S. 
Ambassador and American Muslims to help him.  He would also like to 
build the first American-Kazakhstani mosque, and he is counting on 
the Ambassador's presence at the ground-breaking as the necessary 
impetus to get the project going.  In June, his idea was to host a 
series of round-tables on the Iranian elections, and he wanted 
Iran's presidential candidate Khussein Mussavi and former president 
Khattami to participate, with the U.S. Embassy covering the expenses 
for the two leaders' travel to Kazakshtan.  And in May, Telibekov 
announced to the press that he reached agreement with Sacha Baron 
Cohen, the director of the "Borat" movie, to film another movie 
about Kazakhstan.  END SUMMARY. 
 
3.  (SBU)  On August 13, an article entitled "The U.S. Campaign to 
Build Islamic Centers in Kazakhstan" appeared on the Internet news 
website zona.kz.  The article printed a press release from the 
Kazakhstani-American Organization for Cooperation (KAOC), which 
announced that a campaign has started in the United States to 
collect money to build Islamic centers in Almaty and Astana. 
According to the release, businessmen, religious leaders, and 
political activists were involved, and Tucson prisoners sent a 
letter to the KAOC expressing their wish to contribute money to the 
project.  The Union of Muslims of Kazakhstan and the Muslim 
Committee on Human Rights in Central Asia were actively 
participating in the initiative, said the press release. 
 
4.  (SBU) Blindsided but intrigued, we contacted the chairman of the 
KAOC, Murat Telibekov.  We found that the project is still very much 
in the idea stage, and Telibekov is betting on U.S. Embassy support 
to move it forward.  Telibekov is also the chairman of the Union of 
Muslims of Kazakhstan and the Muslim Committee on Human Rights, and 
his combined staff is three people.  The KAOC was established in 
March of this year, and Telibekov's U.S. counterpart is an American 
Muslim from Atlanta, Khassan Kamal, whom Telibekov met when he went 
to the United States on an IVLP in 2007.  Telibekov told us on 
August 14 that Kamal is raising funds for the project with Muslim 
organizations in the United States, supposedly including the "Muslim 
Observer" newspaper and the Islamic Center of Maryland.  He claimed 
that he also had the support of Congressman Keith Ellison, a 
representative from Minnesota and the first Muslim elected to U.S. 
Congress.  His idea is to build two Islamic centers, in Astana and 
Almaty, each with a prayer house, a press center, and a tennis 
court.  He was vague on the operational details, such as the goal of 
the centers, who would use them, how they would be financed, or even 
where in each city they would be located.  Nevertheless, he told us 
he wants to hold ground-breaking ceremonies for the centers in 
October, and would like the Ambassador to attend, because, he 
believes, the Ambassador's participation would help attract 
financing and support from local businesses and the authorities. 
 
5.  (SBU)  Telibekov's projects tend to be grand ideas, but ones 
that are fuzzy on details and implementation strategies.  He 
recently proposed a similar idea -- to build a Kazakhstan-American 
mosque, either here or in Almaty.  He told us in July that he has 
picked the sites for the mosques, but the project has not progressed 
much further.  Much like the centers, the fund-raising was supposed 
to be done by his American counterpart, Khasan Kamal.  Here again, 
his strategy was to have the Ambassador attend the ground-breaking 
with the hope that support from the authorities and businesses will 
follow.  He formally invited the Ambassador to participate in the 
ground-breaking.  At the time, we thought the project was rather 
nebulous and wanted to see it develop further before committing the 
Ambassador to participate. 
 
6.  (SBU) In June, Telibekov approached us with yet another idea to 
host a series of TV shows and press conferences on the Iranian 
elections.  He
wanted Iran's presidential candidate Khussein Mussavi 
and former president Khattami to participate, and he wanted the U.S. 
Embassy to invite the two leaders and to cover their travel expenses 
 
ASTANA 00001427  002 OF 002 
 
 
to Kazakhstan.  The round-tables would have included Kazakhstani 
political leaders, political scientists, as well as the Spiritual 
Administration of Muslims in Kazakhstan (SAMK), which was 
surprising, because Telibekov has frequently criticized the SAMK as 
corrupt.  (NOTE:  When we contacted the SAMK about this project, the 
Deputy Chief Mufti called Telibekov a "swindler" and told us the 
SAMK would never support any of his endeavors.  END NOTE.) 
Telibekov's proposed topic list of discussion for these round-tables 
was ambitious, to say the least - aside from Iranian elections, he 
also wanted to discuss North Korea's nuclear program, the war in the 
Caucuses, the fight against drug-trafficking in Afghanistan, and 
Turkey's EU membership.  The funding for this project would have 
come exclusively from the U.S. Embassy. 
 
7.  (SBU)  Telibekov has a talent for media relations, but his 
statements can sometimes get ahead of reality.  In May, he publicly 
claimed to have reached an agreement with Sacha Baron Cohen, of 
"Borat" fame, to film another movie about Kazakhstan.  He told the 
press that it would be a sci-fi movie set in Almaty, with a cast 
that includes Kazakhstan's political and business leaders, and a 
plot line that revolves around the excavated pit on the city's main 
square.  The working title of the film was "A Saga About a 
Kazakhstani Pit."  Telibekov claimed to have sent a letter to the 
Akimat (city administration) with the request to stop filling the 
pit; the Akimat denied receiving such a request. 
 
8.  (SBU) BIO NOTE: Murat Telibekov is a native of Almaty, and a 
professor at Central Asian University, a private institution in 
Almaty, where he teaches classes on labor safety and environmental 
protection.  He is the founder and chairman of three NGOs -- the 
Muslim Committee for Human Rights, the Union of Kazakhstani Muslims, 
and, most recently, the Kazakhstani-American Cooperation 
Organization.  He is a prolific writer and claims to have authored 
over 500 articles on culture, religion, and politics.  He founded 
his organizations with the expressed goal of "consolidating various 
Muslim organizations and uniting Muslims in solving urgent social 
and spiritual problems in society," although to date his 
organizations do not have many members.  Telibekov has strained 
relations with the official Spiritual Administration of Muslims of 
Kazakhstan (SAMK), whom he has frequently criticized for corruption. 
 
 
9.  (SBU) COMMENT: Telibekov is never short of ideas, although we 
are not sure that he or his organizations have the necessary 
wherewithal or credibility to implement them.  Visionaries are not 
always good managers.  We'll keep watch for Telibekov's next grand 
-- and entertaining - idea.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1423, KAZAKHSTAN: USCENTCOM CDR GENERAL PETRAEUS’

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Reference ID Created Released Classification Origin
09ASTANA1423 2009-08-20 07:05 2011-08-30 01:44 SECRET//NOFORN Embassy Astana

VZCZCXRO6875
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL
DE RUEHTA #1423/01 2320705
ZNY SSSSS ZZH
O 200705Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6077
INFO RUCNCIS/CIS COLLECTIVE PRIORITY 1859
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1227
RUEHUL/AMEMBASSY SEOUL PRIORITY 0888
RUEHKO/AMEMBASSY TOKYO PRIORITY 1929
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1414
RUEKJCS/SECDEF WASHDC PRIORITY 1311
RUEHNO/USMISSION USNATO PRIORITY 2747
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2431

S E C R E T SECTION 01 OF 02 ASTANA 001423 
 
NOFORN 
SIPDIS 
 
STATE FOR SCA/CEN, S/SRAP, EUR/RUS, P/M 
PLEASE ALSO PASS TO ALL POLADS COLLECTIVE 
 
E.O. 12958: DECL: 08/20/2029 
TAGS: PGOV PREL MARR RS AF KG TI UZ KZ
SUBJECT:  KAZAKHSTAN:  USCENTCOM CDR GENERAL PETRAEUS' 
MEETING WITH SECURITY COUNCIL CHAIRMAN SULEYMENOV, AUGUST 13 
 
REF: ASTANA 1250 
 
Classified By:  Ambassador Richard E. Hoagland:  1.4 (A), (B), (D) 
 
1.  (S/NF) SUMMARY:  During an August 13 meeting in Astana, 
USCENTCOM CDR General Petraeus and Security Council 
Chairman Suleymenov discussed potential Kazakhstani 
noncombatant military and other assistance to support U.S. 
policy in Afghanistan, including the possibility of 
Kazakhstan hosting a logistics/transportation hub as a 
back-up to the Manas Transit Center.  Suleymenov said 
President Nazarbayev judges that U.S. Afghanistan policy is 
"absolutely correct" and wants quick decisions for what 
Kazakhstan will do to help support this policy.  General 
Petraeus suggested that a joint USCENTCOM-USTRANSCOM 
experts team might be able to arrive in Kazakhstan within a 
month to develop a detailed proposal for a 
logistics/transit hub.  The meeting was unusually frank, 
detail-oriented, and cordial.  END SUMMARY. 
 
2.  (C) On August 13 in Astana, Security Council Chairman 
Kairbek Suleymenov welcomed USCENTCOM Commander General 
David Petraeus and underlined Kazakhstan's full intention 
to fulfill all of its commitments to the United States, 
which should stand, he said, as a good example for 
Uzbekistan, Kyrgyzstan, and Russia. 
 
3.  (S/NF) After providing a detailed read-out of U.S. 
policy in Afghanistan and Pakistan, as well as how the 
post-2006 strategy and approach in Iraq relates to the 
current AfPak strategy -- and after reprising his 
meetings earlier in the day with the Ministers of Defense 
and Foreign Affairs (septels) -- General Petraeus told 
Suleymenov he wanted to respond to President Nazarbayev's 
offer to the United States to locate a 
logistics/transportation hub for Afghanistan in Kazakhstan 
(reftel).  He noted he and Minister of Defense Adilbek 
Dzhaksybekov had already agreed that a team of U.S. experts 
would come to Kazakhstan to work on a concrete proposal. 
Petraeus suggested such collaboration would help replace 
the Great-Game mentality in the larger region with a model 
of broad partnership to counter terrorism, extremism, and 
narcotics. 
 
U.S. AF-PAK POLICY IS "ABSOLUTELY CORRECT" 
 
4.  (S/NF) Suleymenov responded that U.S. policy is 
"absolutely correct -- stability in Pakistan is required 
for stability in Afghanistan, and the answer cannot be 
solely military.  Our President tells the other Presidents 
in the region -- and I do not mean just in the immediate 
region -- that he supports the U.S. view.  Nazarbayev is 
very positive about the United States."  General Petraeus 
expressed appreciation for this support.  Suleymenov 
commented, "The critics of U.S. policy should be in your 
place!"  He reaffirmed that President Nazarbayev supports 
developing a logistics facility hub in Kazakhstan as a way 
to demonstrate concrete support for U.S. policy in 
Afghanistan.  He urged that U.S. and Kazakhstani experts 
meet soonest to develop a concrete proposal. 
 
NEXT STEPS 
 
5.  (S/NF) Moving to a greater level of detail, Suleymenov 
said that after a year of debate, Kazakhstan has identified 
the staff officers who will go to the International 
Security Assistance Force headquarters in Kabul, and that 
this will happen soon.  About trainers and instructors for 
the Explosive Ordnance Destruction school in 
Mazar-i-Sharif, he said that this, too, will happen. 
However, Kazakhstan must follow its own standard 
procedures.  The next step is a "legal agreement" through 
the U.S. Embassy, which will be reported to the cabinet of 
ministers for approval.  After ascertaining the view of the 
government of Afghanistan, President Nazarbayev will then 
 
ASTANA 00001423  002 OF 002 
 
 
finalize this decision.  [NOTE:  The DATT, in the first 
instance, and the Ambassador will follow up to determine 
exactly what Suleymenov means by a "legal agreement."  We 
strongly prefer agreement by an exchange of diplomatic 
notes, rather than a document that would need Kazakhstani 
inter-agency approval and then ratification by the 
parliament, a process that could drag on for months.  END 
NOTE.] 
 
"OUR NEIGHBORS HAVE SENSITIVITIES, BUT WE MAKE OUR OWN 
DECISIONS" 
 
6.  (S) Suleymen
ov said he wanted to be certain that 
Uzbekistan, Kyrgyzstan, and Tajikistan are fully informed 
about these possible developments, and suggested that they, 
too, might want to provide noncombatant personnel to 
Afghanistan.  General Petraeus noted these are policy 
decisions and that there has long been an understanding 
that Afghanistan's contiguous neighbors cannot provide 
troops, mainly because of "the neighbor to the west 
[i.e., Iran]," rather than their northern neighbor (i.e., 
Russia).  General Petraeus also noted his pending Kazbrig 
visit and suggested that as Kazakhstan increased its 
economic and political stature, it might consider the 
idea of offering Kazbrig for a UN mission to demonstrate 
Kazakhstan's regional, and in fact, global role. 
Suleymenov said others had suggested this and that he 
supports this as an issue for further discussion. 
 
7.  (S) Suleymenov became more precise about Kazakhstan's 
policy debate for military personnel, even if noncombatant, 
to deploy to Afghanistan.  He noted Kazakhstan had provided 
troops for the international coalition in Iraq.  "Iraq was 
far away, but Afghanistan is in our backyard and sensitive 
for our neighbors.  Our assistance inside Afghanistan will 
ultimately be a political decision.  When I report to 
President Nazarbayev, I'll need to tell him exactly what 
you are asking our neighbors to do, too."  Suleymenov said 
Kazakhstan is especially sensitive about President 
Karimov's views, since Uzbekistan borders Afghanistan and 
has very legitimate concerns about the Islamic Movement of 
Uzbekistan:  "We would not want one wildfire to ignite a 
neighboring wildfire," i.e., that terrorists and extremists 
move from Afghanistan and Pakistan to Central Asia. 
 
8.  (S/NF) At the end of the meeting, Suleymenov urged that 
a team of U.S. military experts arrive in Kazakhstan 
soonest to develop, with Kazakhstani counterparts, a 
concrete proposal for a logistics/transportation hub that 
could be presented quickly to President Nazarbayev for his 
approval.  Suleymenov said, "We want these decisions sealed 
before we become chairman of the OSCE so that together we 
can present a common front."  He added, "We do not make 
promises to anyone that we cannot keep." 
 
9.  (C) COMMENT: Suleymenov is the equivalent of the U.S. 
National Security Adviser.  He is also considerably more 
powerful than the Minister of Defense, because the MOD is 
an implementing, not a policy-making, body.  In this 
meeting with General Petraeus, Suleymenov was more focused 
and more forthcoming about Kazakhstan's internal 
decision-making processes than we have seen him before. 
The meeting concluded cordially with a group photo.  END 
COMMENT. 
 
10.  (U) USCENTCOM has cleared this caQ 
 
HOAGLAND

Wikileaks

09ASTANA1422, KAZAKHSTAN: USCENTCOM CDR PETRAEUS’ MEETING WITH FOREIGN

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Reference ID Created Released Classification Origin
09ASTANA1422 2009-08-20 06:33 2011-08-30 01:44 SECRET//NOFORN Embassy Astana

VZCZCXRO6828
OO RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL
DE RUEHTA #1422/01 2320633
ZNY SSSSS ZZH
O 200633Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6075
INFO RUCNCIS/CIS COLLECTIVE 1857
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNAFG/AFGHANISTAN COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1225
RUEHKO/AMEMBASSY TOKYO 1927
RUEHUL/AMEMBASSY SEOUL 0886
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1412
RUEKJCS/SECDEF WASHDC 1309
RUEKJCS/JOINT STAFF WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUCNDT/USMISSION USUN NEW YORK 2429
RUEHNO/USMISSION USNATO 2745
RHMFISS/CDR USTRANSCOM SCOTT AFB IL

S E C R E T SECTION 01 OF 02 ASTANA 001422 
 
NOFORN 
SIPDIS 
 
STATE FOR SCA/CEN, S/SRAP, EUR/RUS, P/M 
 
E.O. 12958: 08/20/2029 
TAGS: PGOV PREL PINR MARR OSCE RS AF KZ
SUBJECT:  KAZAKHSTAN:  USCENTCOM CDR PETRAEUS' MEETING WITH FOREIGN 
MINISTER TAZHIN, AUGUST 13 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (A), (B), (D) 
 
1.  (S/NF) SUMMARY:  USCENTCOM Commander General David Petraeus met 
Minister of Foreign Affairs Marat Tazhin on August 13 to discuss 
U.S.-Kazakhstani military cooperation and request support for U.S. 
forces in Afghanistan.  Petraeus specifically requested the 
deployment of Kazakhstani staff officers to the International 
Security Assistance Force headquarters in Kabul and explosive 
ordnance disposal instructors for the training facility at 
Mazar-i-Sharif.  He also responded to President Nazarbayev's offer of 
a logistics facility in Kazakhstan.  The substantive hour-long 
meeting focused on Kazakhstan's concern that insecurity in 
Afghanistan poses a direct threat to Central Asia through the 
northward flow of Islamic militants and narcotics.  Tazhin asked 
Petraeus for his assessment of the situation in Afghanistan, 
described Kazakhstani plans to provide humanitarian and development 
assistance to Afghanistan, and urged that the United States procure 
goods from Kazakhstan as part of the U.S.-Kazakhstan agreement for 
the Northern Distribution Network that provides for the commercial 
transit of non-lethal supplies for U.S. troops in Afghanistan. 
Tazhin told Petraeus the improved U.S.-Russian relationship is 
helpful for Kazakhstan and makes it easier for Kazakhstan to 
cooperate with the United States on many issues, including 
Afghanistan.  END SUMMARY. 
 
2.  (S/NF) General Petraeus provided a comprehensive assessment of 
the situation and U.S. policy directions in Afghanistan and Pakistan. 
 He asked that Kazakhstan consider sending several staff officers to 
the International Security Assistance Force (ISAF) headquarters in 
Kabul and instructors to the Explosive Ordnance Disposal training 
facility in Mazar-i-Sharif.  He emphasized that the personnel would 
serve in noncombatant roles.  Petraeus also told Tazhin that we 
welcomed President Nazarbayev's offer of a logistics/transportation 
hub in Kazakhstan because "we need additional capacity and a back-up 
to the Manas Transit Center in Kyrgyzstan."  Petraeus mentioned that 
in his earlier meeting with the Minister of Defense, he offered to 
send a team of logistics experts to assess opportunities and develop 
options, and the Minister accepted the offer.  Tazhin listened 
closely but responded, "These are questions for the Ministry of 
Defense to decide."  [COMMENT:  This was the proper diplomatic 
response, but, in fact, Tazhin will be deeply involved in deciding a 
response to these requests because President Nazarbayev will take 
into close consideration when deciding his response the 
"sensitivities" of Kazakhstan's Central Asian neighbors and Russia, 
as Security Council Chairman Suleymenov made explicit in a subsequent 
meeting (septel).  END COMMENT.]  General Petraeus also mentioned 
that technicians were working to get the Huey-II helicopters up and 
running by September 6 -- as soon as the parts clear customs. 
 
U.S. APPROACH TO AF-PAK "ABSOLUTELY CORRECT" 
 
3.  (C) Tazhin told Petraeus that Afghanistan poses a direct threat 
to Kazakhstan and the rest of Central Asia because of the northward 
flow of Islamic militants and narcotics.  Tazhin asked Petraeus -- 
for whom he professed respect for his role as a "decision-maker" who 
successfully resolved "a serious and tense situation" in Iraq -- to 
evaluate the current situation in Afghanistan.  In response to 
Petraeus' description of the current U.S. "integrated approach" to 
Afghanistan and Pakistan, Tazhin said this strategy is "absolutely 
correct."  Tazhin stated that the solution to instability in 
Afghanistan includes "more than just military solutions," noting he 
was concerned about what would happen when U.S. and coalition forces 
eventually leave Afghanistan. 
 
AFGHANISTAN TO BE OSCE PRIORITY 
 
4.  (C) Tazhin said encouraging stability and development in 
Afghanistan will be one of Kazakhstan's priorities during its 2010 
OSCE chairmanship.  Tazhin called the threat from extremist groups 
 
ASTANA 00001422  002 OF 002 
 
 
and narcotics trafficking in Afghanistan "not only possible, but 
real."  In view of this threat Tazhin said that, despite budgetary 
constraints, Kazakhstan was committed to suppor
ting regional OSCE 
institutions and the Almaty-based Central Asian Information and 
Coordinating Center (CARICC) to strengthen border protection. 
 
FREE EDUCATION FOR AFGHAN STUDENTS IN KAZAKHSTAN 
 
5.  (C) Tazhin also confirmed Kazakhstan would continue to support 
stabilizing and developing Afghanistan through technical and 
financial support, and is working to finalize its 2009-2011 
assistance plan for Afghanistan.  Tazhin said his government will 
initiate a program to provide free university and college education 
to 1,000 Afghan students -- primarily medical staff, agricultural 
specialists, and teachers.  Tazhin explicitly asked for U.S. 
transportation from Afghanistan to Kazakhstan for the students. 
Petraeus said we would need to consider this request, but pointed out 
that "an air transportation hub" -- such as the logistics facility 
President Nazarbayev has twice suggested -- might make such an 
arrangement more feasible.  Petraeus also noted that as the current 
global financial crisis abates, Kazakhstan might consider purchasing 
C-130Js and that these could also be used to help with the 
transportation needs. 
 
KAZAKHSTAN SUPPORTS THE NORTHERN DISTRIBUTION NETWORK... 
 
6.  (C) Tazhin said Kazakhstan intended to continue to support U.S. 
military efforts in Afghanistan.  (NOTE:  Kazakhstan has provided 
critical support for the U.S. effort to stabilize and reconstruct 
Afghanistan, primarily by participating in the Northern Distribution 
Network (NDN), and through bilateral agreements from 2001 and 2002 
that allow U.S. military aircraft supporting Operation Enduring 
Freedom to transit Kazakhstani air space cost-free and to make 
emergency landings in Kazakhstan when conditions do not permit 
landing at Kyrgyzstan's Manas Air Base.  END NOTE.)  Tazhin also told 
Petraeus that his government hoped the United States would consider 
increasing procurement in Kazakhstan, and Petraeus replied that he 
recently signed a policy directive to buy locally where possible. 
 
... AND INQUIRES ABOUT U.S.-RUSSIAN AGREEMENTS 
 
7.  (C) Tazhin also asked Petraeus about the status of U.S.-Russian 
negotiations to allow the shipment of lethal goods through Russian 
territory.  Tazhin asked that the United States inform Kazakhstan if 
it is considering shipping lethal goods by road or rail.  He said he 
welcomed the improved U.S.-Russia relationship, which "is completely 
different from a year and a half ago."  He noted this more 
cooperative relationship is helpful for Kazakhstan and makes it 
easier for Kazakhstan to cooperate with the United States on many 
issues, including Afghanistan. 
 
8.  (U) USCENTCOM has cleared this cable. 
 
HOAGLAND

Wikileaks

09ASTANA1416, KAZAKHSTAN: USCENTCOM CDR PETRAEUS’ MEETING WITH

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1416 2009-08-19 04:18 2011-08-30 01:44 SECRET//NOFORN Embassy Astana

VZCZCXRO5842
OO RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL
DE RUEHTA #1416/01 2310418
ZNY SSSSS ZZH
O 190418Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6067
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1854
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1222
RUEHUL/AMEMBASSY SEOUL PRIORITY 0883
RUEHKO/AMEMBASSY TOKYO PRIORITY 1924
RHMFISS/CDR USTRANSCOM SCOTT AFB IL PRIORITY
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1409
RUEKJCS/SECDEF WASHDC PRIORITY 1306
RUEHNO/USMISSION USNATO PRIORITY 2742
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2426

S E C R E T SECTION 01 OF 03 ASTANA 001416 
 
NOFORN 
SIPDIS 
 
STATE FOR SCA/CEN, S/SRAP, EUR/RUS, P/M 
 
E.O. 12958: DECL: 08/17/2029 
TAGS: PGOV PREL PINR MARR OSCE AF KZ
SUBJECT:  KAZAKHSTAN:  USCENTCOM CDR PETRAEUS' MEETING WITH 
DEFENSE MINISTER DZHAKSYBEKOV, AUGUST 13 
 
REF: ASTANA 1250 
 
Classified By:  Ambassador Richard E. Hoagland:  1.4, (A), (B), (D) 
 
1.  (S/NF) SUMMARY:  During an August 13 meeting in Astana, 
USCENTCOM CDR General Petraeus and Minister of Defense 
Dzhaksybekov discussed: 
 
-- further Kazakhstani assistance in Afghanistan, including 
staff officers for ISAF HQ in Kabul, noncombatant trainers 
and instructors for the Explosive Ordnance Disposal school in 
Mazar-i-Sharif, and the setablishment of a 
logistics/transportation hub to provide further logistics 
capacity for the U.S. and Coalition military effort in 
Afghanistan (and as an alternative to the Manas Transit 
Center near Bishkek, Kyrgyzstan, should that be needed in the 
future); 
 
-- Kazakhstan's policy decision to move away from conscripts 
toward a professional army that would include a 
non-commissioned officer corps and, eventually a military 
reserve system; 
 
-- the Huey-II program and the need for Kazakhstan to 
transition from Foreign Military Financing to Foreign 
Military Sales; and 
 
-- the possible development of a Kazakh naval force for the 
Caspian Sea. 
 
Dzhaksybekov suggested military intelligence sharing.  END 
SUMMARY. 
 
2.  (C) USCENTCOM Commander General David Petraeus met with 
Minister of Defense Adilbek Dzhaksybekov on August 13 in 
Astana.  The minister excused himself for arriving late, 
explaining he had been on the telephone with President 
Nazarbayev who had asked Dzhaksybekov to pass his greetings 
to General Petraeus and who had instructed the minister to 
"discuss all questions in full detail in light of our 
strategic partnership."  The minister expressed appreciation 
for U.S. assistance in military education and training, 
noting this is important to change the psychology of 
Kazakhstan's military personnel.  After reviewing other areas 
of the bilateral military relationship, Dzhaksybekov 
commented, "I know there was lots of discussion and doubt 
about our desire to head OSCE in 2010, but it is a 
significant honor for us to be the first former Soviet state 
to achieve the OSCE chairmanship.  We intend for Kazakhstan 
to be seen as a positive example in the OSCE's security 
dimension."  General Petraeus responded that the OSCE 
chairmanship is indeed an honor and moves Kazakhstan from the 
regional to the world stage. 
 
3.  (C) Concluding a detailed briefing and analysis of U.S. 
policy directions in Afghanistan and Pakistan, General 
Petraeus said, "It is in our common interest to ensure that 
Afghanistan does not become again a safe-haven for 
transnational extremists."  He expressed appreciation for 
Kazakhstan's help in Afghanistan, including overflight and 
divert agreements and participation in the Northern 
Distribution Network (NDN) for the transit of non-lethal 
supplies to U.S. and Coalition troops in Afghanistan.  He 
told Dzhaksybekov he had recently signed a "Central Asia 
First" policy letter directing NDN contractors to purchase 
local goods, wherever possible, for U.S. troops. 
 
PERSONNEL FOR ISAF HQ AND MAZAR-I-SHARIF, AND A 
LOGISTICS/TRANSPORTATION HUB 
 
4.  (S) General Petraeus listed his requests for further 
cooperation in Afghanistan.  He asked that Kazakhstan detail 
staff officers to the International Security Assistance Force 
 
ASTANA 00001416  002 OF 003 
 
 
headquarters in Kabul and provide instructors/trainers for 
the Explosive Ordnance Disposal school at Mazar-i-Sharif, 
noting that in both cases Kazakhstani personnel would be in 
noncombatant roles.  Dzhaksybekov stated that they were 
studying these. 
 
5.  (S/NF) Responding to President Nazarbayev's recent offers 
of a logistics facility in Kazakhstan to assist the U.S. 
military in Afghanistan (reftel), General Petraeus said that 
the United States would like to have additional locations for 
a logistics facility and transportation hub as we increase 
our activity in Afghanistan.  He emphasized, "We have no 
desire for permanent military bases in the region, but we do 
appreciate your President's offer."  He proposed to send a 
technical team to Kazakhstan to make an assessment and to 
discuss location and other details.  Dzhaksybekov responded, 
"We'd like to create with you
 a detailed draft of an action 
plan to present to President Nazarbayev for his approval. 
But we know since this was his idea, he will support it, and 
we will, of course, do everything possible to fulfill it." 
(NOTE:  General Petraeus subsequently confirmed with 
USTRANSCOM that a joint USCENTCOM-USTRANSCOM survey team 
could arrive in Kazakhstan by the middle of September to 
begin working out a detailed proposal with the government of 
Kazakhstan.  END NOTE.) 
 
PROFESSIONAL ARMY VS. CONSCRIPTS 
 
6.  (C) Noting continuing U.S. assistance to KazBrig 
(Kazakhstan Brigade, the elite force being trained for 
International peace-keeping operations) and the Caspian 
Response Force, General Petraeus asked Dzhaksybekov if 
Kazakhstan is considering professionalizing its entire 
military and reducing its reliance on conscripts.  The 
minister acknowledged that this transition had been slowed 
because of the current global financial crisis as well as by 
leadership issues.  However, Dzhaksybekov said he has studied 
this question since becoming Defense Minister in June.  Some 
urged a return to the "old system," but "the decision has 
been made to follow this path" toward a professional army 
with a noncommissioned officer corps, although Kazakhstan 
will need significantly more equipment and support, he said. 
He added that, over time, he also wants to develop a military 
reservist system.  General Petraeus praised these policy 
directions. 
 
HUEY-II PROGRAM 
 
7.  (C) General Petraeus told Minister Dzhaksybekov he is 
aware of the need for the United States to keep its promise 
on the Huey-II helicopter program.  Since it is not likely it 
can ever be completed under the Foreign Military Financing 
(FMF) program, he intends to recommend that the 
administration seek a special Congressional appropriation to 
finish the program.  In the meantime, a U.S. maintenance 
assistance team is currently in Kazakhstan to get the first 
two helicopters in the air by September 6.  Kazakhstan can 
help immediately by releasing the final shipment of parts 
that seems stuck in Customs.  In the longer term, especially 
as the current global financial crisis abates, Kazakhstan, 
because of its wealth and economic success, will need to 
transition from FMF to Foreign Military Sales.  Petraeus 
said, "I hope you'll seriously consider this new kind of 
partnership." 
 
KAZAKHSTAN'S NAVY 
 
8.  (C) General Petraeus acknowledged Kazakhstan's 
long-standing request to acquire a 1,000-ton naval ship from 
the United States for use in the Caspian.  He noted that he 
did not know of anything available at this time, but offered 
to continue to look.  Minister Dzhaksybekov told General 
Petraeus there is lots of discussion within the government of 
 
ASTANA 00001416  003 OF 003 
 
 
Kazakhstan how to develop its navy.  He said, "We must pay 
more attention to our ground forces, but for political 
reasons we also must look at the Caspian."  General Petraeus 
noted that if Kazakhstan makes a formal request, the United 
States would be pleased to provide an assessment as 
Kazakhstan considers enhancing its naval forces. 
 
INTELLIGENCE COOPERATION 
 
9.  (S) After a further review of the situation in 
Afghanistan and Pakistan, General Petraeus urged a broader 
partnership north of Afghanistan to move away from a 
Great-Game mentality to one that recognizes the utility of 
working together broadly on the common threats of terrorism, 
extremism, and narcotics.  Dzhaksybekov fully agreed. 
Presumably speaking about military intelligence, he said, "We 
are observing events closely.  I want to emphasize we want to 
develop or intelligence cooperation between our officers.  It 
would be important that we share information and analyses." 
 
10.  (U) CDR USCENTCOM General Petraeus cleared this cable. 
HOAGLAND

Wikileaks

09ASTANA1415, KAZAKHSTAN: LIFE ON THE STEPPE, AUGUST 3-7

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Reference ID Created Released Classification Origin
09ASTANA1415 2009-08-18 10:29 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5160
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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DE RUEHTA #1415 2301029
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RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 2425
RUEHNO/USMISSION USNATO 2741
RUEHAST/USOFFICE ALMATY 1817

UNCLAS ASTANA 001415 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
TAGS: PGOV PHUM ECON SOCI SENV KCRM KDEM KZ
SUBJECT:  KAZAKHSTAN:  LIFE ON THE STEPPE, AUGUST 3-7 
 
1.  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. 
 
KAZAKHSTAN OPENS CONSULATE IN NEW YORK 
 
2.  According to the Ministry of Foreign Affairs, President 
Nazarbayev signed a decree on August 4 establishing a Consulate 
General in New York City, since the volume of consular work done by 
the Kazakhstani Embassy in the United States has increased 
dramatically.  The Consulate will also promote the trade and 
economic interests of Kazakhstan. 
 
PRESIDENT NAZARBAYEV CALLS FOR POPULATION INCREASE 
 
3.  Kazakh television reported that while visiting a maternity 
hospital on August 4, President Nazarbayev called for a population 
increase.  Nazarbayev, who presented baby strollers to the families 
of newborn babies, said, "We have a vast territory, but a small 
number of people.  We need to increase our population." 
 
GRASSHOPPERS ATTACK IN AKTOBE 
 
4.  Aktobe province has spent 63 million tenge (approximately 
$420,000) to control increasing numbers of grasshoppers.  An August 
4 article claimed the grasshoppers "even attacked the central 
stadium in Aktobe, causing problems for both players and fans." 
 
MICHAEL JACKSON FANS HOLD COMMEMORATION NIGHT 
 
5.  Almaty fans of Michael Jackson organized a charity event with 
the Orda Band in memory of "the King of Pop."  A video from the 
event will be sent to Los Angeles for an upcoming memorial concert. 
Money collected at the event was contributed to the medical care of 
two-year-old Daniyar Bayshibulov, who suffers from a cardiac defect, 
congenital brain problems, and a tumor in both eyes. 
 
HOAGLAND

Wikileaks

09ASTANA1407, KAZAKHSTAN: SCENESETTER FOR SPECIAL ENVOY MORNINGSTAR

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Reference ID Created Released Classification Origin
09ASTANA1407 2009-08-18 07:25 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5001
OO RUEHAG RUEHAST RUEHBC RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDE RUEHDF
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RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV RUEHSK RUEHSL RUEHSR RUEHTRO
RUEHVK RUEHYG
DE RUEHTA #1407/01 2300725
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O 180725Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6050
INFO RUCNCIS/CIS COLLECTIVE 1848
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
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RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1802

UNCLAS SECTION 01 OF 05 ASTANA 001407 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EPET EINV KZ
SUBJECT:  KAZAKHSTAN:  SCENESETTER FOR SPECIAL ENVOY MORNINGSTAR 
 
REF:  (A) ASTANA 1400 
(B) ASTANA 1365 
(C) ASTANA 1187 
(D) ASTANA 1019 
(E) ASTANA 1035 
(F) ASTANA 1105 
 
ASTANA 00001407  001.2 OF 005 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Embassy Astana warmly welcomes your August 26-28 
visit to Kazakhstan, which comes at a particularly opportune time. 
With its upcoming 2010 chairmanship of the Organization for Security 
and Cooperation in Europe (OSCE) and its thriving energy sector, 
Kazakhstan is showing increasing confidence on the international 
stage.  Kazakhstan has proven to be an increasingly reliable 
security partner and a steady influence in a potentially turbulent 
region.  The pace of democratic reform, however, has been slow, with 
political institutions, civil society, and the independent media 
still underdeveloped.  Our fundamental strategic objective is a 
secure, democratic, and prosperous Kazakhstan that embraces market 
competition and the rule of law; continues its partnership with us 
on the global threats of terrorism, weapons of mass destruction 
(WMD) proliferation, and narco-trafficking; and develops its energy 
resources in a manner that bolsters global energy security. 
 
3.  (SUMMARY, CONTINUED) Since your last visit to Astana on July 10, 
negotiations over the Kazakhstan Caspian Transportation System 
(KCTS) have stalled, KazMunaiGas (KMG) postponed the sale of 
MangistauMunaiGas to the China National Petroleum Corporation 
(CNPC), and the Antimonopoly Agency has pushed to raise the export 
customs duty on oil, gasoline, and diesel fuel.  Despite these 
developments, Kazakhstan continues to offer attractive investment 
opportunities, particularly for oil exploration and production. 
Your visit can help get the KCTS negotiations back on track and shed 
light on the government's plans and priorities regarding future 
energy transactions and transportation options.  END SUMMARY. 
 
ECONOMY:  AGGRESSIVE STEPS TO TACKLE ECONOMIC CRISIS 
 
4. (SBU) Kazakhstan is Central Asia's economic powerhouse, with a 
GDP larger than that of the region's other four countries combined. 
Economic growth averaged over nine percent per year during 2005-07, 
before dropping to three percent in 2008 with the onset of the 
global financial crisis.  The International Monetary Fund is 
predicting negative two percent growth for Kazakhstan in 2009, with 
an economic recovery poised to begin in 2010.  Astute macroeconomic 
policies and extensive economic reforms have played an important 
role in Kazakhstan's post-independence economic success.   The 
country is justifiably proud of its modern banking and financial 
system, a well-endowed pension fund, and a sovereign wealth fund 
with over $20 billion in assets.  The government has taken 
significant steps to tackle the domestic reverberations of the 
economic crisis, allocating around $20 billion to take equity stakes 
in private banks, prop up the construction and real estate sectors, 
and support small- and medium-sized enterprises and agriculture. 
 
5. (SBU) On a less promising note, the Kazakhstanis announced in 
June that they would suspend their bilateral negotiations to accede 
to the World Trade Organization (WTO) and would instead launch 
negotiations together with Russia and Belarus to enter the WTO 
jointly as a customs union.  We have informed Kazakhstan that there 
is no mechanism allowing a customs union to accede to the WTO 
without its member states doing so individually. 
 
6.  (SBU) The banking sector continues to struggle, as Kazakhstan's 
leading commercial banks have been unable to repay creditors and 
seek to restructure their debt.  On July 24, BTA Bank, the country's 
largest commercial bank in terms of deposits, declared a moratorium 
on interest payments, which follows the bank's decision in April to 
cease debt principal payments.  BTA's external debts are valued at 
$13 billion, of which the bank said it will repay $3 billion this 
 
ASTANA 00001407  002.2 OF 005 
 
 
year.  In 2008, BTA's net losses were $7.88 billion, and total 
obligations exceeded the value of its assets by $4.9 billion. 
Kazakhstani authorities continue to investigate former BTA Chairman &#x
000A;Mukhtar Ablyazov and other former top managers of the bank.  On July 
14, the Prosecutor General's office charged 12 members of BTA's 
credit committee with embezzlement, and six were found guilty and 
sentenced to jail. 
 
AN EMERGING ENERGY POWER 
 
7. (SBU) Kazakhstan produced 70.7 million tons of oil in 2008 
(approximately 1.41 million barrels per day, or bpd), and is 
expected to become one of the world's top ten crude exporters soon 
after 2015.  From January - July, Kazakhstan increased production of 
oil and gas condensate by six percent, to 43.6 million tons, 
compared to the same period last year.  U.S. companies -- 
ExxonMobil, Chevron, and ConocoPhillips -- have significant 
ownership stakes in each of Kazakhstan's three major hydrocarbon 
projects:  Tengiz, Kashagan, and Karachaganak. 
 
8.  (SBU) While Kazakhstan has significant gas reserves (2.0 
trillion cubic meters is a low-end estimate), current gas exports 
are less than 10 billion cubic meters (bcm), in part because gas is 
being reinjected to maximize crude output, and in part because 
Gazprom, which has a monopoly on the gas market in the region, pays 
producers only a fraction of the going European price.  The 
country's 40 bcm gas pipeline to China will help to break that 
monopoly, although the majority of the gas that will be exported via 
this pipeline will come from Turkmenistan and Uzbekistan, not 
Kazakhstan.  The first line of the China gas pipeline was completed 
in July, and the first shipments are planned in November. 
Kazakhstani gas exports to China will be modest, 4-6 bcm annually. 
The government of Kazakhstan has made several public statements 
confirming that it has no objection to the Nabucco gas pipeline 
project, but the government has emphasized that Kazakhstan does not 
and will not produce enough gas to supply the pipeline. 
 
9. (SBU) In the next five years, Kazakhstan's largest oil and gas 
fields are poised to increase production dramatically: 
 
-- Tengizchevroil, with 50 percent Chevron and 25 percent 
ExxxonMobil ownership, increased output this year to 600,000 bpd, 
and its Future Growth Project will increase production to more than 
one million bpd. 
 
-- Kashagan -- the largest oilfield discovery since Alaska's North 
Slope, and among the world's most technically complex oil 
development projects -- is expected to come on-line around 2014, 
with production reaching one million bpd by 2020. 
 
-- The Karachaganak Petroleum Operating Company, in which Chevron 
owns 20 percent, contains more than 1.2 billion tons of oil and 
condensate, and 1.35 trillion cubic meters of gas.  This year, the 
consortium is expected to approve Phase III, which would increase 
oil production to 350,000 bpd, and gas to 38 bcm/year. 
 
-- On June 12, ConocoPhillips signed a contract to explore and 
develop the offshore N Block, estimated to contain 2.13 billion 
recoverable barrels of oil. 
 
-- China's CNPC owns and operates AktobeMunaiGas (130,000 bpd) and 
PetroKazakhstan (220,000 bpd), and once it completes the acquisition 
of 50 percent of MangistauMunaiGas (150,000 bpd), it will control 
approximately 20 percent of Kazakhstan's total oil production in 
2009. 
 
-- Russia's Rosneft continues to explore the offshore Kurmangazy 
field, where two appraisal wells have been unsuccessful. 
 
-- Other significant, but undeveloped, oil and gas reservoirs in the 
North Caspian include Pearls (lead operator Royal Dutch Shell), 
 
ASTANA 00001407  003.2 OF 005 
 
 
Satpayev (negotiations ongoing with India's Oil and Natural Gas 
Corporation), Zhambyl (negotiations ongoing with the Korean national 
oil company), and Abai (negotiations ongoing with Norway's 
Statoil). 
 
10. (SBU) With these significant oil production increases on the 
horizon, Kazakhstan must develop additional transport routes to 
bring its crude to market.  Our policy is to encourage Kazakhstan to 
seek diverse transport routes, which will ensure the country's 
independence from transport monopolists.  Currently, most of 
Kazakhstan's crude is exported via Russia, although some exports 
flow east to China, west across the Caspian through Azerbaijan, and 
south across the Caspian to Iran.  In July, for example, KMG 
announced the completion of the Atasu-Alashankou segment of the 
3,000 kilometer oil pipeline to China, which will initially carry 
200,000 bpd, with expansion capacity of 400,000 bpd. 
 
11. (SBU) We support the expansion of the Caspian Pipeline 
Consortium (CPC) pipeline, which is the only oil pipeline crossing 
Russian territory that is not entirely owned and controlled by the 
Russian government.  We also support implementation of KCTS, which 
envisions a "virtual pipeline" of tankers transporting up to one 
million barrels of crude per day from Kazakhstan's Caspian coast to 
Baku, from where it will flow onward to market through Georgia, 
including through the Baku-Tbilisi-Ceyhan (BTC) pipeline. 
Negotiations with international oil companies to build the onshore 
pipeline and offshore marine infrastructure for this $3 billion 
project have recently stalled, although the government has expressed 
an interest in resuming talks.  The U.S. Trade and Development 
Agency is considering providing technical assistance to expedite 
clearance of vessels at port, and ensure that Kazakhstan's maritime 
laws and regulations meet international standards.  While a 
trans-Caspian crude pipeline would likely be a cheaper long-term 
transport option, Kazakhstan is reluctant to openly pursue such a 
pipeline in the absence of an agreement on delimitation of the 
Caspian Sea among the five Caspian littoral states. 
 
DEMOCRACY:  SLOW GOING 
 
12. (SBU) While the Kazakhstani government articulates a strategic 
vision of democracy, it has lagged on the implementation front. 
President Nazarbayev's Nur Otan party officially received 88 percent 
of the vote and won all the parliamentary seats in August 2007 
elections which OSCE observers concluded did not meet OSCE 
standards.   The next parliamentary and presidential elections are 
scheduled for 2012. 
 
13. (SBU) When Kazakhstan was selected to be 2010 OSCE 
chairman-in-office at the November 2007 Madrid OSCE Ministerial 
meeting, Foreign Minister Tazhin promised  his government would 
amend Kazakhstan's election, political party, and media laws in 
accordance the recommendations of the OSCE and its Office of 
Democratic Institutions and Human Rights (ODIHR).  (NOTE:  Foreign 
Minister Tazhin also promised that as OSCE chairman, Kazakhstan 
would support the OSCE's Human Dimension and preserve ODIHR's 
mandate, including its critical role in election observation.  END 
NOTE.)  President Nazarbayev signed the amendments into law in 
February.  While key civil society leaders were disappointed that 
the new legislation did not go further, we considered it to be a 
step in the right direction and continue to urge the government to 
follow thro
ugh with additional reforms. 
 
14.  (SBU) On August 8, in a closed session, Taraz city court found 
the editor and owner of "Alma-Ata Info," Ramazan Yesergepov, guilty 
of divulging classified documents and sentenced him to three years 
in prison.  Yesergepov's wife announced his intention to appeal the 
verdict, but no date for the appeal has been set.  Local and 
international civil society representatives and opposition activists 
have sharply criticized the ruling.  Local and international print 
media picked up the critical statements made by Reporters Without 
Borders, Freedom House, and the OSCE's Representative on Freedom of 
 
ASTANA 00001407  004.2 OF 005 
 
 
the Media.  We believe that the sentence against Yesergepov is 
incongruent with Kazakhstan's OSCE commitments on media freedom. 
The Ambassador has publicly urged the Kazakhstani authorities to 
apply international norms in resolving such issues, and has raised 
the Yesergepov case privately with senior government officials. 
 
15. (SBU) While the Kazakhstanis pride themselves on their religious 
tolerance, religious groups not traditional to Kazakhstan, such as 
evangelical Protestants, Jehovah's Witnesses, Hare Krishnas, and 
Scientologists, have faced difficulties with the authorities. 
Parliament passed legislation in late 2008 aimed at asserting more 
government control over these "non-traditional" religious groups. 
Following concerns raised by civil society and the international 
community, President Nazarbayev chose not to sign the legislation, 
but instead sent it for review to the Constitutional Council -- 
which ultimately declared it to be unconstitutional. 
 
16. (SBU) Though Kazakhstan's diverse print media include many 
newspapers sharply critical of the government and of President 
Nazarbayev personally, the broadcast media are essentially 
government-controlled.  On July 10, President Nazarbayev signed into 
law Internet legislation which will provide a legal basis for the 
government to shut down and block websites whose content allegedly 
violates the country's laws.  This appears to be a step in the wrong 
direction at a time when the Kazakhstan's record on democracy and 
human rights is in the spotlight because of its forthcoming OSCE 
chairmanship.  We have expressed our disappointment that the 
legislation was enacted, and have urged the government to implement 
it in a manner consistent with Kazakhstan's OSCE commitments on 
freedom of speech and freedom of the press. 
 
AFGHANISTAN:  POISED TO DO EVEN MORE 
 
17. (SBU) Kazakhstan has provided significant support to our 
stabilization and reconstruction efforts in Afghanistan, and in 
recent months, has expressed a willingness to do even more.  We 
signed a bilateral blanket over-flight agreement with Kazakhstan in 
2001 that allows U.S. military aircraft supporting Operation 
Enduring Freedom (OEF) to transit Kazakhstani airspace cost-free. 
This was followed in 2002 with a bilateral divert agreement that 
permits our military aircraft to make emergency landings in 
Kazakhstan when aircraft emergencies or weather conditions do not 
permit landing at Kyrgyzstan's Manas Air Base.  There have been over 
6500 over-flights 
and over 60 diverts since these agreements went into effect.  In 
January, Kazakhstan agreed to participate in the Northern 
Distribution Network -- which entails commercial shipment through 
Kazakhstani territory of non-lethal supplies for U.S. troops in 
Afghanistan.  Kazakhstan is working on sending several staff 
officers to the International Security Assistance Forces (ISAF) 
headquarters in Kabul and is considering providing small-scale 
non-combat military support, as it did for five-plus years in Iraq. 
 
18. (SBU) The Kazakhstani government provided approximately $3 
million in assistance to Afghanistan during 2008 for food and seed 
aid and to construct a hospital, school, and road.  The Kazakhstanis 
are finalizing a proposal to provide free university education in 
Kazakhstan to Afghan students.  The government has also offered to 
provide training to Afghan law enforcement officers at law 
enforcement training institutes in Kazakhstan, and is working on a 
2009-2011 assistance program for Afghanistan that might include free 
university education for up to 1,000 Afghan students.  The 
Kazakhstanis hope to make Afghanistan one of their priority issues 
during their 2010 OSCE chairmanship. 
 
NON-PROLIFERATION:  A HALLMARK OF BILATERAL COOPERATION 
 
19. (SBU) Non-proliferation cooperation has been a hallmark of our 
bilateral relationship since Kazakhstan quickly agreed to give up 
the nuclear weapons it inherited from the USSR after becoming 
independent.  The Kazakhstanis recently ratified a seven-year 
 
ASTANA 00001407  005.2 OF 005 
 
 
extension to the umbrella agreement for our bilateral Cooperative 
Threat Reduction (CTR) program, which remains the dominant component 
of our assistance to Kazakhstan.  Key ongoing CTR program activities 
include our efforts to secure the radiological material at the 
Soviet-era Semipalatinsk nuclear test site and to provide long-term 
storage for the spent fuel (sufficient to fabricate 775 nuclear 
weapons) from Kazakhstan's BN-350 plutonium breeder reactor. 
 
20. (SBU) The Kazakhstanis are active participants in the Global 
Initiative to Combat Nuclear Terrorism and are seeking additional 
ways to burnish their non-proliferation credentials.  On April 6, 
President Nazarbayev announced publicly that Kazakhstan is 
interested in hosting the Nuclear Threat Initiative's 
IAEA-administered international nuclear fuel bank.   We welcomed the 
offer, but explained to the Kazakhstanis that they need to work out 
the details directly with the IAEA.  President Nazarbayev also has 
called for the United Nations to designate August 29 as annual World 
Non-Proliferation Day, which we support. 
 
HOAGLAND

Wikileaks

09ASTANA1403, KAZAKHSTAN: NARCOTICS AND PROPERTY SEIZURES BY COMMITTEE

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1403 2009-08-17 10:39 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4187
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1403/01 2291039
ZNR UUUUU ZZH
P 171039Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6044
INFO RUCNCIS/CIS COLLECTIVE 1845
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1213
RUEHKO/AMEMBASSY TOKYO 1915
RUEHUL/AMEMBASSY SEOUL 0874
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1400
RUEKJCS/SECDEF WASHDC 1302
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1799
RUEAWJL/DEPT OF JUSTICE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMCSUU/FBI WASHINGTON DC
RUEABND/DEA HQS WASHINGTON DC
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC 0026

UNCLAS SECTION 01 OF 03 ASTANA 001403 
 
SENSITIVE 
SIPDIS 
 
STATE FOR INL/AAE, SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV SNAR KCRM KZ
SUBJECT:  KAZAKHSTAN:  NARCOTICS AND PROPERTY SEIZURES BY COMMITTEE 
FOR NATIONAL SECURITY 
 
ASTANA 00001403  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public internet. 
 
2. (U) SUMMARY:  Kazakhstan's Committee for National Security (KNB) 
publicly reported its narcotics seizures for the first half of 2009. 
 Total KNB seizures increased 466% from the same period last year. 
In addition, the KNB reported that it began seizing property 
purchased with drug profits, the first time a Kazakhstani law 
enforcement agency has taken such action.  END SUMMARY. 
 
3. (U) German Didenko, Head of the KNB Division on Combating 
International Drug Trafficking spoke to the press on July 30 and 
reported that the KNB had arrested members of 25 drug rings and 
blocked 56 drug routes, including 36 international routes, during 
the first half of 2009.  As a result of KNB operations, he said, two 
metric tons of drugs, including 261 kilos of heroin, 104 kilos of 
hashish and 1,500 kilos of marijuana, were seized.  The KNB's drug 
seizures increased 466%, with a 1.3% increase in heroin seizures. 
NOTE:  Total seizures in Kazakhstan during the first half of 2009 
will be reported septel.  END NOTE. 
 
INTERNATIONAL COOPERATION 
 
4. (U) The KNB participated in 11 joint operations with special 
services throughout Central Asia, Russia, and China, resulting in 
the seizure of hundreds of kilos of drugs headed to the Russian 
cities of Omsk, Kazan, Novosibirsk, and Samara via Kyrgyzstan and 
Kazakhstan.  During one operation, the Russian Federal Security 
Service (FSB) and Kazakhstani KNB arrested two Tajik citizens 
delivering nine kilos of heroin to Kazan, Tatarstan.  As a result of 
a controlled delivery operation from Taldykorgan, Kazakhstan to 
Novosibirsk, Russia, two Russian citizens were arrested for 
trafficking. 
 
5. (U) The Chinese Ministry of Public Security and the KNB 
participated in the Safari Transit joint operation September 2008 
through March 2009, stopping a large transnational drug ring 
transporting Afghan heroin through Kazakhstan to China.  As part of 
the operation, the KNB conducted three controlled delivery 
operations to China.  Members of a Nigerian organized crime group 
were living in China and had long been working with Pakistani 
organizations.  Couriers transported heroin via commercial flights 
from Kabul and Islamabad to Almaty and onward to Guangzhou via 
Beijing.  On January 30, an Afghan citizen flying to Kabul was 
arrested with four kilos of heroin at a security checkpoint in the 
Almaty airport.  As a result of the operation, three Mongolians, 
five Afghans, and one Ghanaian were arrested in Almaty and seven 
Nigerians, one Mongolian, and one Uzbek were arrested in Guangzhou, 
China.  A total of 15 kilos of heroin was seized during the 
operation. 
 
STATISTICS 
 
6. (U) Authorities seized large amounts of heroin in Astana (19.9 
kilos), Almaty (17.5 kilos), Almaty Oblast (7.6 kilos), 
East-Kazakhstan Oblast (39.7 kilos), Zhambyl Oblast (63.5 kilos), 
North-Kazakhstan Oblast (42.2 kilos), and South-Kazakhstan Oblast 
(63.7 kilos).  But law enforcement officials seized especially large 
quantities of marijuana and hashish in Akmola Oblast (271.4 kilos), 
Zhambyl Oblast (832 kilos), Karaganda Oblast (486 kilos), and 
Pavlodar oblast (375.7 kilos).  The KNB also seized synthetic drugs, 
including 232 tabs of ecstasy and 124 amphetamine pills, being 
trafficked from Moscow to Astana. 
 
DOMESTIC EFFORTS 
 
7. (SBU) During the press conference, Didenko also mentioned that 
there has been a noticeable reduction of heavy drug traffic in 
Kazakhstan, which he attributed to the financial crisis.  This 
theory was substantiated during INL's July 24 meeting with the 
Chairman of the Ministry of Interior's (MVD) Committee on Combating 
 
ASTANA 00001403  002.2 OF 003 
 
 
Drugs.  The Chairman mentioned that there has been a marked increase 
in drug dealers bartering heroin for vehicles.  At the same time, 
there has been an increase in the sale of marijuana from the Chu 
Valley, leading law enforcement agencies to strengthen their efforts 
in the valley, located on the Kazakhstani-Kyrgyz border.  Each year 
from May 20 through October 20, Kazakshtan conducts an Operation 
known in Russian as Mak and in Kazakh as Koknar (poppy), during 
which the MVD, KNB, and Customs crea
te a security zone around the 
valley.  This operation often accounts for a large percentage of 
annual marijuana seizures.  Last year, for example, Operation 
Mak/Koknar resulted in the seizure of 20,000 kilos of marijuana. 
 
8. (U) The KNB also has seen new concealment methods used by 
traffickers.  For example, on the theory that wolves' scent will 
confuse canines, traffickers are covering narcotics with powdered 
wolf's tooth.  Narcotics have also been found in nut shells and 
vegetables, as well as in liquid form. 
 
9. (U) The KNB reported that it is strengthening the southern border 
of Kazakhstan to help stem the flow of narcotics.  Construction and 
equipping of additional border posts and the purchase and 
installation of barriers and inspection equipment is foreseen within 
the State Program on Combating Drug Trafficking.  Of the 38.7 
million KZT (approximately $258,000) allocated by the government to 
the 2009-2011 Program on Combating Drug Addiction and Drug 
Trafficking, the KNB is to receive 18.7 million KZT (approximately 
$124,666). 
 
GOING AFTER THE PROFITS 
 
10. (U) During the first half of the year, the KNB became the first 
Kazakhstani law enforcement agency to seize property purchased with 
drug proceeds.  In one case, a ring operating six drug houses in and 
around Almaty was shut down by the KNB as part of Operation Pyramid, 
conducted in April and May.  Reportedly, each of the houses was 
earning approximately 200,000 KZT ($1,333) per day. As a result of 
the operation, the head of the cartel and six members were arrested 
and the KNB seized approximately $206,000 in various currencies, 
more than 5.5 kilos of heroin, cocaine, hashish and marijuana, three 
weapons, ammunition, and gold.  The KNB tracked the laundered 
proceeds, seizing three houses, two apartments, 14 vehicles, 100 
hectares of land, and a farm. 
 
11. (U) During Operation Temyr Tor (Iron Trap), the KNB dismantled a 
cartel trafficking heroin from Kyrgyzstan and Uzbekistan to Russia 
through Kazakhstan.  The head of the cartel and its members were 
arrested with more than 42 kilos of heroin.  While tracing the 
laundered proceeds, the KNB also found luxury cars and real estate. 
 After it was discovered that drug profits had been invested in a 
business owned by the cartel leader's spouse, investigators found 
that the business was also liable for $260,000 in unpaid taxes. 
Additionally, a high-ranking member of the cartel was charged with 
attempting to bribe a KNB official. 
 
COMMENT 
 
12. (SBU) The KNB has publicly emphasized the importance and 
complexity of tracing and seizing drug proceeds.  However, the lack 
of an Anti-money Laundering (AML) Law complicates the process. The 
AML Law, passed by Parliament in June, is currently before the 
Constitutional Council and cannot be signed by the President until 
the Council determines that the new Law is constitutional.  The KNB 
and the newly-formed Financial Intelligence Unit of the Ministry of 
Finance have discussed how to cooperate once the AML Law is signed. 
The MVD's Interagency Counter Narcotics Training Center (CN Center) 
is also reacting to the new challenges and has asked for INL 
assistance in developing a curriculum for drug-related money 
laundering investigation training.  INL will continue its technical 
assistance to the FIU and CN Center and will work with DEA to 
provide training sessions next year.  END COMMENT. 
 
ASTANA 00001403  003.2 OF 003 
 
 
 
HOAGLAND

Wikileaks

09ASTANA1402, KAZAKHSTAN: “ALMA-ATA INFO” EDITOR LOSES TWO COURT

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1402 2009-08-17 09:58 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4150
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1402/01 2290958
ZNR UUUUU ZZH
O 170958Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6041
INFO RUCNCIS/CIS COLLECTIVE 1842
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1210
RUEHKO/AMEMBASSY TOKYO 1912
RUEHUL/AMEMBASSY SEOUL 0871
RUCNDT/USMISSION USUN NEW YORK 2422
RUEHNO/USMISSION USNATO 2738
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1397
RUEKJCS/SECDEF WASHDC 1299
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 001402 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, EUR/RPM, DRL 
 
E.O. 12958: N/A 
TAGS: PHUM PREL PGOV KDEM OSCE KZ
SUBJECT:  KAZAKHSTAN:  "ALMA-ATA INFO" EDITOR LOSES TWO COURT 
BATTLES OVER MEDIA FREEDOM 
 
REF: (A) ASTANA 1399 
(B) ASTANA 0351 
 (C) ASTANA 0191 
 (D) ASTANA 0058 
 (E) 08 ASTANA 2383 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On August 13, Kazakhstan's Supreme Court ruled 
against "Alma-Ata Info" newspaper and upheld a lower court's ruling 
that suspended the newspaper for three months for publishing 
allegedly classified documents.  This ruling is related to -- but 
separate from -- the case against "Alma-Ata Info" owner and 
editor-in-chief Ramazan Yesergepov.  On August 8, in a closed and 
separate process, Taraz city court found Yesergepov guilty of 
divulging classified documents and sentenced him to three years in 
prison.  Yesergepov's wife announced his intention to appeal the 
verdict, but no date for the appeal has been set.  Local and 
international civil society representatives and opposition activists 
have sharply criticized the ruling, which received wide coverage in 
local print and some TV media. Both local and international print 
media picked up the critical statements made by Reporters Without 
Borders, Freedom House, and the Organization for Security and 
Cooperation in Europe's (OSCE) Representative on Freedom of the 
Media Miklos Haraszti.  The Ambassador has raised U.S. concerns 
about the case with the presidential administration.  END SUMMARY. 
 
SUPREME COURT RULES AGAINST "ALMA-ATA INFO" 
 
2.  (SBU) On August 13, Kazakhstan's Supreme Court upheld a lower 
court's ruling that suspended the newspaper "Alma-Ata Info" for 
three months for publishing allegedly classified documents.  The 
original suspension ruling dates back to early January, when the 
newspaper's owner and editor-in-chief Ramazan Yesergepov was 
separately charged with dissemination of classified documents 
(reftels B-E), a crime of which he was convicted on August 8. 
Contrary to some media reporting, the Supreme Court's ruling 
addressed solely the suspension of the newspaper and has no 
immediate bearing on the case against Yesergepov, or on his appeal. 
 
 
3.  (SBU) At the hearing before the Supreme Court, "Alma-Ata Info" 
representatives argued that the suspension was illegal because the 
documents published by the paper should not have been classified to 
begin with.  Kazakhstani legislation outlines several kinds of 
government information that can be classified as secret, in 
particular, information on covert law enforcement operations and 
information dealing with national security.  The law also stipulates 
that documents showing the wrongdoing of government employees cannot 
be kept confidential.  The newspaper's representatives argued that 
the documents published did not contain any information that could 
be classified as secret and, in fact, contained proof of wrongdoing 
on the part of the Taraz KNB.  The Supreme Court rejected these 
arguments and moved swiftly to deny the newspaper's appeal. 
 
EARLIER, YESERGEPOV SENTENCED AT CLOSED HEARING 
 
4.  (SBU)  In a separate process, on August 8,  the Taraz city court 
judged Yesergepov guilty under Articles 172 and 339 of Kazakhstan's 
Criminal Code for allegedly gathering and divulging confidential 
information.  The court, which read its ruling behind closed doors, 
also banned him from publishing a newspaper for two years after his 
release.  The trial has been closed to the public since it began in 
April on the grounds that it concerned state secrets.  Nonetheless, 
several journalists, civil society leaders, and an embassy 
representative traveled from Almaty to Taraz to observe the 
sentencing hearing.  Yesergepov's wife, Raushan Yesergepova, 
announced on August 11 that Yesergepov plans to appeal the verdict, 
but the date of the appeal has not yet been set. 
 
5.  (SBU) Yesergepov's co-defendants were sentenced at the same 
hearing on August 8.  Sultan Makhmadov, the Taraz alcohol magnate 
accused of passing confidential KNB documents to Yesergepov (reftel 
C), was sentenced to seven years in prison; Bolat Zhanuzakov, the 
 
ASTANA 00001402  002 OF 003 
 
 
former KNB officer who allegedly sold the documents to Makhmadov, 
was sentenced to nine years; and Yerlan Sandybayev, head of security 
for Makhmadov and whom the prosecution accused of serving as the 
go-between between Makhmadov and the KNB, was sentenced to eight 
years.  In an interesting twist, the night before the hear
ing, 
Makhmadov disappeared from his house, where he had been under house 
arrest.  He was apprehended the next day at the Bishkek airport and 
returned to Taraz in time for his sentencing.  No information was 
available on how he was able to flee from his KNB guards. 
 
DATE OF HEARING A MOVING TARGET 
 
6.  (SBU) The date of Yesergepov's sentencing hearing was a moving 
target for more than a week.  The presiding judge rescheduled the 
hearing four times before finally holding it on Saturday, August 8. 
Originally scheduled to take place on August 7, it was postponed 
late in the evening the night before, causing local and 
international observers coming from Almaty to turn around mid-way. 
The presiding judge postponed the hearing until Monday morning, then 
again until Tuesday afternoon, before announcing his decision to 
hold it on Saturday morning.  Yesergepov's wife shared her 
suspicions with Poloff that the judge was trying to limit the number 
of observers at the trial. 
 
SHARP CRITICISM OF THE VERDICT... 
 
7.  (SBU) At a press conference in Almaty on August 11, journalists 
and civil society activists strongly criticized the court 
proceedings and the ruling.  Rozlana Taukina of the NGO Journalists 
in Trouble argued that Yesergepov was simply fulfilling his 
journalistic duty in uncovering corruption.  She listed the 
violations that allegedly occurred during Yesergepov's detention and 
trial, including the fact that he was denied bail, and the fact that 
his defenders were not granted access to his file, because they 
lacked the necessary security clearances.  Taukina expressed hope 
that the Court of Appeals will repeal the ruling and give Yesergepov 
a suspended sentence.  In an article published on the website of the 
opposition newspaper "Respublika," independent journalist Sergey 
Duvanov praised Yesergepov for fulfilling his duty in uncovering 
official corruption and condemned the courts for punishing him for 
"airing the KNB's dirty laundry." 
 
8.  (SBU) The OSCE's Representative on Freedom of the Media, Miklos 
Haraszti, sent a letter to the Minister of Foreign Affairs Marat 
Tazhin, criticizing Yesergepov's sentence as a violation of the 
OSCE's commitment to media freedom, and urging Kazakhstan to 
overturn the verdict.  Criminalizing journalists for breach of 
secrecy "leaves investigative journalism without one of its most 
important tools:  the liberty to go beyond official stonewalling," 
Haraszti's letter said. 
 
... GETS BROAD MEDIA COVERAGE 
 
9.  (SBU) The press conference by Yesergepov's defenders was widely 
covered by the opposition print media, some local television 
stations, and several international media outlets, including the 
Associated Press, RFE/RL, BBC, and Agence France Press.  Local and 
international print media also printed statements made by OSCE's 
Haraszti and international NGOs, including Reporters Without 
Borders, which called Yesergepov's sentence "outrageous," and urged 
that it be overturned by the court of appeals, and Freedom House, 
which referred to the trial as "shameful conduct not befitting" the 
future Chairman in Office of the OSCE. 
 
OPPOSITION, CIVIL SOCIETY PLAN PROTEST ACTIONS 
 
10.  (SBU) Several journalists and opposition activists set up an 
organization called "Headquarters in Support of Ramazan Yesergepov" 
and announced plans for several protest actions, including public 
demonstrations, suspension of publication of newspapers, 
internet-protests, and possible hunger strikes.  Four opposition 
newspapers -- "Respublika," "Vzglyad," "Alga," and "Obshestvennaya 
Pozitsiya" -- declared their intention to publish a blank page in 
the papers' next editions in support of Yesergepov.  Several 
 
ASTANA 00001402  003 OF 003 
 
 
activists from opposition parties joined the "Headquarters in 
Support of Ramazan Yesergepov," and opposition party Azat released a 
statement calling for Yesergepov's immediate release and warning of 
the "growing role" of KNB in domestic politics. 
 
11.  (SBU) COMMENT:  We agree with Haraszti that the sentence 
against Yesergepov is incongruent with Kazakhstan's OSCE commitments 
on media freedom.  In an August 5 interview with the newspaper 
"Vremya," the Ambassador expressed concern that libel lawsuits 
against media organizations and journalists in Kazakhstan take the 
country away from European standards and urged the Kazakhstani 
authorities to apply international norms in resolving such issues. 
The Ambassador also raised Yesergepov's case in his August 12 
meeting with Kairat Sarybai, the President's Foreign Policy Advisor 
(reftel A).  We will continue to closely monitor the proceedings of 
Yesergepov's appeal.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1400, KAZAKHSTAN: KMG HALTS KCTS NEGOTIATIONS, THEN

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1400 2009-08-17 03:04 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO3843
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1400/01 2290304
ZNR UUUUU ZZH
R 170304Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6037
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1839
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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RUEHUL/AMEMBASSY SEOUL 0868
RUEHKO/AMEMBASSY TOKYO 1909
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RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1394
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1296
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL 0010
RUEHAST/USOFFICE ALMATY 1796

UNCLAS SECTION 01 OF 03 ASTANA 001400 
 
SENSITIVE 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EPET ECON KZ
SUBJECT: KAZAKHSTAN:  KMG HALTS KCTS NEGOTIATIONS, THEN 
SEEKS NEW TALKS WITH COMPANIES 
 
REF: A. ASTANA 0578 
     B. ASTANA 0675 
     C. ASTANA 0748 
     D. ASTANA 1201 
     E. ASTANA 1303 
 
ASTANA 00001400  001.2 OF 003 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  From recent discussions with energy 
executives and government officials, it is clear that 
negotiations over the Kazakhstan Caspian Transportation 
System (KCTS) have stalled.  The key issue is whether and to 
what extent international oil companies (IOCs) will be 
allowed to take an equity stake in the project.  The 
government of Kazakhstan wants to build, own, and operate the 
onshore pipeline and other related infrastructure, but the 
IOCs will not provide financing or volume commitments without 
equity participation in the project.  The government sent a 
letter to the IOCs last week, requesting the resumption of 
negotiations.  While the letter does not indicate flexibility 
in the government's position, it is encouraging that the 
parties are prepared to continue negotiations.  END SUMMARY. 
 
ENERGY EXECUTIVES EXPRESS FRUSTRATION 
 
3.  (SBU) In July and August, the Ambassador met with key 
U.S. energy executives with major investments in Kazakhstan, 
who provided an update on their negotiations with the 
government over KCTS.  On July 21, Jay Johnson, Managing 
Director of Chevron's Eurasia Business Unit (please protect), 
told the Ambassador that the parties were very close to 
announcing an agreement on the eve of the Foreign Investors 
Council that President Nazarbayev hosted in Kostanai on June 
12.  He said that KazMunaiGaz (KMG) First Vice President 
Maksat Idenov worked tirelessly with Chevron, representing 
the Tengizchevroil (TCO) consortium, and ExxonMobil, 
representing the Kashagan consortium (or G-6), to "hammer out 
a deal" that stipulated 49 percent ownership of the 
Eskene-Kuryk pipeline by the IOCs.  Johnson said Idenov 
presented the proposal to Minister of Energy and Mineral 
Resources (MEMR) Sauat Mynbayev, who approved the deal. 
Then, unexpectedly, KMG President Kairgeldy Kabyldin "threw a 
handgrenade to kill the deal at the last minute."  Johnson 
said Kabyldin introduced several new terms affecting the 
ownership structure and financing of the deal that the IOCs 
simply could not accept.  He called Kabyldin "nationalistic" 
and said it seemed as if Kabyldin didn,t want the IOCs 
owning critical infrastructure on Kazakhstani soil.  Johnson 
said Kabyldin seemed to believe the government could take its 
time to complete the negotiations on KCTS, i.e., to build the 
system only when increasing production from Kashagan really 
requires it, after 2020.  Johnson said it seemed as if 
Kabyldin were saying, "Why give away the infrastructure 
today, when I can wait until Kashagan comes on line?  At 
least then, this deal won,t happen on my watch." 
 
4.  (SBU) On July 31, the Ambassador met with Steve Rose, 
Caspian Russia Joint Interest Manager, and Mike Crews, 
Kazakhstan Country Manager, of ExxonMobil (protect 
throughout).  They confirmed that negotiations on the onshore 
portion of KCTS, including the pipeline from Eskene to Kuryk, 
were very close to resolution in June, but came to a halt 
when the government introduced additional provisions at the 
last minute.  Rose said Kabyldin demanded the unilateral 
right to (1) expand the capacity of the Eskene-Kuryk 
pipeline; (2) set or raise transit tariffs; and (3) authorize 
the front-end engineering design (FEED).  According to Rose, 
Kabyldin also wants the option to buy out the IOC's equity 
stake in KCTS at any time.  Rose said those terms were 
 
ASTANA 00001400  002.2 OF 003 
 
 
unacceptable to the G-6 and to TCO.  "They 
want us to assume all of the project risk," he said, "without 
giving us any guarantees.  We want sufficient control over 
the tariffs to ensure profitability of the system.  We also 
believe that the owners of the project should determine when 
and how much to expand the pipeline -- not just the 
government.  And we simply cannot commit to FEED until and 
unless we are an owner," with control of cost, risk, and 
other factors.  Rose estimated the
 cost of the FEED to be 
$100-200 million and said ExxonMobil would not commit this 
kind of money without ownership.  Rose confirmed that 
Mynbayev had "blessed the outline of the agreement" (without 
the new terms introduced by Kabyldin), but when he saw 
Mynbayev on July 31, the Minister said the government was not 
ready to make a deal, and had made no progress on the MOU. 
Rose said Mynbayev did not seem angry or upset.  According to 
Rose, as the meeting adjourned, he smiled, shook hands, and 
said, "We just need a time out."  Rose and Crews said they 
will wait until the government "makes up its mind," but they 
insisted that either the government must build and finance 
the system on its own, using ship-or-pay contracts as 
collateral to raise capital on the open market, or it must 
include the IOCs as equal (49 percent) partners with 
ownership rights and authorities.  "They can,t have it both 
ways," said Rose. 
 
VICE MINISTER SUPPORTS KCTS -- "BUT WHY THE RUSH?" 
 
5.  (SBU) On August 10, Energy Officer asked Vice Minister of 
Energy Lyazzat Kiinov how important KCTS is to Kazakhstan. 
He replied, "It is very important.  Even if CPC is expanded, 
which we expect to happen next year, there will not be enough 
capacity for Kazakhstan,s crude exports.  The Atyrau-Samara 
pipeline is old, Soviet infrastructure, and in need of 
modernization.  We will definitely need KCTS for TCO,s 
future growth, Karachaganak,s Phase III, and Kashagan.  But 
we don,t need it now.  There is no rush.  We won,t have the 
big increase in volumes until 2013 at the earliest.  Why take 
the risk to build the infrastructure now, without the 
certainty that the oil will be there?  And why rush to train 
all these new sea captains and officers now, when we won,t 
have the tankers for another four or five years?  They,ll 
come back from training in six months, and who will then give 
them a job?"  Kiinov said that KCTS will require large 
tankers (up to 63,000 deadweight tons) and said that the 
government has received expressions of interest from Russia, 
Azerbaijan, and Iran to build the tankers for Kazakhstan. 
But he said, "We don,t want to give up the contract for the 
tankers.  We want to attract an investor who will build the 
ships in Kazakhstan."  (NOTE:  As reported in reftel A, it is 
expected to take at least three years to build the onshore 
pipeline, oil terminals, and offshore buoys for KCTS, and up 
to eight years to train fully accredited sea captains.  END 
NOTE). 
 
KMG DISAPPOINTED THAT USTDA WILL NOT FUND FEASIBILITY STUDY 
 
6.  (SBU) On August 10, Arman Darbayev, KMG's Director of Oil 
Transportation Projects, met with visiting USTDA officials to 
discuss possible assistance to expedite vessel clearance at 
Kazakhstani ports and ensure that Kazakhstan's maritime 
legislation meets international standards (reftel E). 
Darbayev's first question to USTDA was, "Why did you back 
out" from financing a feasibility study for the trans-Caspian 
portion of KCTS?  He said that KMG was very eager to have 
USTDA carry out that work.  USTDA responded by noting that 
the IOCs are still engaged in negotiations with the 
governments of Kazakhstan and Azerbaijan over the structure 
and ownership of that portion of KCTS, and USTDA did not want 
 
ASTANA 00001400  003.2 OF 003 
 
 
to get ahead of those negotiations.  Darbayev was 
disappointed, but he said that KMG and the State Oil Company 
of the Azerbaijan Republic (SOCAR) would have the estimated 
$3 million and technical expertise required to carry out the 
work, independently of the IOCs.  Darbayev said the 
engineering studies "will take years" to complete and he 
pushed for a parallel approach, in which the feasibility 
studies would be carried out even as negotiations over 
project ownership and volume commitments continue.  He said, 
"We need the technical details in order to reach agreement on 
commercial issues."  Darbayev also told USTDA that the 
government of Kazakhstan is still willing to grant the IOCs 
an equity share of the Eskene-Kuryk pipeline.  However, he 
did not discuss the ownership structure for the oil terminals 
or offshore infrastructure, which falls under a 50-50 joint 
venture between KMG and SOCAR.  (COMMENT:  To the best of our 
knowledge, negotiations between KMG and the IOCs have focused 
solely on the construction of the Eskene-Kuryk pipeline and 
related onshore infrastructure.  The port facilities in 
Kazakhstan and Azerbaijan are expected to remain under the 
stewardship of the host country.  If that is the case, the 
companies will insist on clear, stable, and strictly 
enforceable terms to ensure a fair and transparent fee for 
the use of the ports.  The IOC track record with the ports of 
Aktau and Baku suggests that this is possible, but not easy. 
END COMMENT).  Darbayev confirmed to Energy Officer that in 
June, the IOCs and KMG were "very close to an agreement on 
KCTS.  We had a two-page MOU ready for signature," he said, 
until a senior government official (NOTE:  Likely KMG 
President Kabyldin.  END NOTE) introduced additional terms 
that the IOCs refused to accept.  Darbayev also disclosed 
that the IOCs demanded that the contract have fiscal (tax) 
and legal stability, but the Ministry of Finance refused to 
guarantee that.  Darbayev said that KMG is eager to continue 
discussing the project, and said that Kabyldin sent a letter 
to the IOCs 
on August 9, asking them to resume negotiations.  However, he 
indicated that KMG will still insist on the new terms and 
conditions it introduced in June. 
 
7.  (SBU) COMMENT:  The negotiations over KCTS will continue 
to be complex, arduous, and time-consuming.  That fact will 
neither surprise nor deter any of the oil companies doing 
business in Kazakhstan.  We find it reassuring that the 
government has already expressed its desire to return to the 
negotiating table, and we find it curious that a technocrat 
like Kabyldin could overturn an agreement reached with the 
Minister of Energy.  Our expectation is that Mynbayev, 
Kabyldin, and Idenov will discuss the issue of IOC equity 
ownership with Prime Minister Masimov, who has proven his 
ability to resolve internal conflicts and forge consensus. 
We believe that Masimov can get the wheels moving in the 
right direction on KCTS.  Post will continue to monitor the 
situation and will explore who is driving the government's 
decision-making on this important oil-export project, and 
whether this represents a trend toward greater national 
control over critical infrastructure.  END COMMENT. 
HOAGLAND

Wikileaks

09ASTANA1399, KAZAKHSTAN: PRESIDENTIAL ADVISER HEARS MESSAGE

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1399 2009-08-17 01:41 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO3820
PP RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1399/01 2290141
ZNY CCCCC ZZH
P 170141Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6035
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1837
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1205
RUEHUL/AMEMBASSY SEOUL PRIORITY 0866
RUEHKO/AMEMBASSY TOKYO PRIORITY 1907
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1392
RUEHNO/USMISSION USNATO PRIORITY 2736
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2420

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001399 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, P/M, DRL 
 
E.O. 12958: DECL: 08/17/2019 
TAGS: PGOV PREL PHUM MARR KDEM OSCE RS KG KZ
SUBJECT:  KAZAKHSTAN:  PRESIDENTIAL ADVISER HEARS MESSAGE 
ON DEMOCRACY, SAYS CSTO BASE IN KYRGYZSTAN WAS A SURPRISE 
 
REF: A. ASTANA 1166 
     B. MOSCOW 2070 
 
Classified By:  Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  During a frank conversation with the 
Ambassador on August 12, Presidential Adviser Kairat Sarybai 
said he expected that the new State Commission for the OSCE 
would propose further steps, "since that is part of the 
commission's mandate," that could be taken on democratization 
before Kazakhstan assumes the OSCE chairmanship in 2010. 
Sarybai also averred that Russia's announcement of a new CSTO 
military base in Kyrgyzstan had blindsided Kazakhstan.  When 
President Nazarbayev demanded an explanation, Russian 
President Medvedev allegedly replied that this was strictly a 
bilateral agreement between Russia and Kyrgyzstan, and that 
Russia would simply use the base to train Kyrgyz troops.  END 
SUMMARY. 
 
TIME FOR SOME MORE STEPS FORWARD ON DEMOCRACY 
 
2.  (C) During an August 12 meeting with Presidential Foreign 
Policy Adviser Kairat Sarybai, the Ambassador told him that 
the trend of events in Kazakhstan is raising some eyebrows in 
Washington, as well as in Europe.  The most high-profile 
examples drawing attention are the passage of the Internet 
Law and the trial and conviction of journalist Ramzan 
Yesergepov.  Kazakhstan is under closer scrutiny and is being 
held to higher international expectations because of its 
upcoming 2010 OSCE chairmanship.  The Ambassador suggested it 
would be important to take some concrete steps soon to 
improve this image -- and reality -- problem.  He recommended 
that the government of Kazakhstan consider initiating action 
to follow up on the request by Under Secretary of State Burns 
to Foreign Minister Tazhin during their private one-on-one 
meeting in Astana on July 10 -- that Kazakhstan take concrete 
steps toward further fulfillment of its "Madrid commitments," 
before it takes the OSCE chairmanship on January 1, 2010 
(reftel A).  Such a concrete step that would be well-received 
in Washington, Brussels, and Vienna, could be, for example, 
to decriminalize libel for the mass media.  Another valuable 
step would be to establish by law fully independent election 
commissions.  The Ambassador conceded this latter suggestion 
might be harder, but argued that President Nazarbayev is 
strong and broadly supported by Kazakhstan's voters; he can 
afford to take such a "radical" step, which would gain him 
considerable international credit. 
 
3.  (C) Sarybai thanked the Ambassador for this "straight 
talk" and said, "We will consider this closely."  He noted 
that the newly formed State Commission for the OSCE mwould 
likely, in fact, as part of its mandate propose next steps 
that can be taken on democracy.  "But," Sarybai cautioned, "I 
want you to remember, as President Nazarbayev told Under 
Secretary Burns, that democratization in Kazakhstan is not 
tied to our OSCE chairmanship; it's an ongoing process that 
must take into account the political, cultural, and social 
traditions and conditions of the nation."  (NOTE:  The new 
State Commission for the OSCE, announced several days earlier 
in the press, is an inter-agency body, but does not, we're 
told, include civil society representatives.  We are seeking 
more details about this commission.  END NOTE.) 
 
4.  (C) Later in the conversation, Sarybai reminded the 
Ambassador that President Obama is welcome to visit 
Kazakhstan at any time, "perhaps a brief visit in conjuction 
with an Obama visit to a larger country in the region."  He 
added that President Nazarbayev would appreciate a separate 
bilateral visit to Washington next spring at the time of the 
Nuclear Security Summit, which he plans to attend.  The 
Ambassador responded frankly that working to achieve either 
or both would be easier if Kazakhstan would evidence some 
positive steps as we had just discussed.  Sarybai asked, "Are 
these preconditions?"  The Ambassador said, "No, our new 
administration does not necessarily do 'preconditions.' 
However, as an enormously experienced diplomat yourself, 
surely you understand the power of negative image and 
 
ASTANA 00001399  002 OF 002 
 
 
positive perception."  Sarybai smiled and said, "Message 
received." 
 
5.  (C) COMMENT:  We recall that Sarybai had once told us 
that letters of protest by international NGOs, along with 
frank, quiet diplomacy from respected embassies, have the 
tendency to catch President Nazarbayev's attention.  However, 
he is not likely to back down on the Internet Law and the 
Yesergepov case, we are convinced, because both are in one 
way or another a result of his cosmic feud with his 
ex-son-in-law, Rakhat Aliyev, now exiled in Europe and 
publishing exposes like "Godfather-in-Law."  However, we do 
hold out hope for Kazakhstan's new State Commission for the 
OSCE, and are cautiously optimistic that positive steps on 
democratization might result from it.  END COMMENT. 
 
NAZARBAYEV BLINDSIDED ON CSTO BASE IN KYRGYZSTAN? 
 
6.  (C) Sarybai had just returned from accompanying President 
Nazarbayev to the Collective Security Treaty Organization 
(CSTO) informal summit in Kyrgyzstan.  He commented that the 
summit was held "without agenda"; and so, little was prepared 
and even less accomplished (see reftel B).  The real reason 
for the summit, he speculated, was to toast President 
Bakiyev's birthday,an old Soviet tradition among leaders. 
 
7.  (C) Sarybai said he wanted to pass along a private 
conversation he had had with his Moscow counterpart, Sergei 
Prikhodko, who had enthused to him about the Obama-Medvedev 
Summit in Moscow.  The Kremlin is "very optimistic about the 
'reset'" and believes it will bear fruit because the 
atmosphere between Obama and Medvedev was "remarkably 
different" than between Bush and Medvedev.  Sarybai said 
Prikhodko had called this a "source of real optimism." 
 
8.  (C) Sarybai also averred that Russia had blindsided 
Kazakhstan by announcing the establishment of a CSTO/Russian 
military base in Kyrgyzstan.  The Ambassador responded this 
is hardly believable since Kazakhstan seems to be a member in 
good standing of the CSTO, and surely Moscow must have 
consulted with Astana in advance on this issue.  Sarybai 
maintained there had been no prior consultation, and that 
Nazarbayev had been furious and demanded an explanation from 
Medvedev.  According to Sarybai, Medvedev told Nazarbayev not 
to worry, that this is simply a Russia-Kyrgyzstan bilateral 
agreement, and that Russia will only use the base to train 
Kyrgyz troops.  The Ambassador asked, "Do you believe that?" 
Sarybai replied," In public, we accept public explanations." 
 
9.  (C) COMMENT:  It seems inconceivable that Russia would 
have acted in the name of the CSTO without ever having 
consulted with the other members.  And so it is unclear if 
Sarybai was trying to spin us (which we've never seen him do 
before), or if, in fact, CIS relations are even more 
Byzantinely opaque than we had assumed.  END COMMENT. 
HOAGLAND

Wikileaks

09ASTANA1376, KAZAKHSTAN: EXBS ADVISOR’S REPORTING CABLE (JULY 2009)

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1376 2009-08-12 06:43 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0383
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1376/01 2240643
ZNR UUUUU ZZH
R 120643Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6008
INFO RUCNCIS/CIS COLLECTIVE 1835
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 1905
RUEHBJ/AMEMBASSY BEIJING 1203
RUEHUL/AMEMBASSY SEOUL 0864
RUEAORC/US CUSTOMS AND BORDER PROTECTION WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RULSJGA/COMDT COGARD WASHINGTON DC
RUEKJCS/SECDEF WASHDC 1294
RHEHNSC/NSC WASHDC 1390
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1785

UNCLAS SECTION 01 OF 02 ASTANA 001376 
 
SIPDIS 
 
DEPT FOR SCA/CEN, ISN/ECC, EUR/ACE, SCA/RA, CBP/INA 
STATE PASS TO DOE/NNSA 
AMEMBASSY BERLIN FOR CUSTOMS ATTACHE 
AMEMBASSY TASHKENT, BISHKEK, BAKU, DUSHANBE AND ASHGABAT FOR EXBS 
ADVISORS 
 
E.O. 12958: N/A 
TAGS: PARM PREL ETTC MNUC KNNP KSTC KZ
 
SUBJECT:  KAZAKHSTAN:  EXBS ADVISOR'S REPORTING CABLE (JULY 2009) 
 
ASTANA 00001376  001.2 OF 002 
 
 
I.  BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY MANAGERS 
 
1.  The Export Control and Related Border Security Program (EXBS) 
was successful in nominating three Kazakhstani Customs Officers, 
Ermek Smagulov, Marat Kabdushev, and Abzal Shogelbaev, for 
participation in the International Visitor Leadership Program (IVLP) 
in Washington D.C., from August 24 to September 16. 
 
2.  On July 27, a Diplomatic Note was sent to the Ministry of 
Foreign Affairs inviting Dr. Gulnara Eligbayeva, Kazakhstan Atomic 
Energy Committee, to a Technical Experts Working Group (TEWG) 
conference in Istanbul, Turkey, from September 15-18.  This event is 
sponsored by the Department of Energy's International 
Nonproliferation Export Control Program (INECP). 
 
3.  The U.S. Customs and Border Protection (CBP) Office of 
International Affairs has announced that Karen Chaisson will replace 
Sandy Baker as Kazakhstan program manager for CBP. 
 
4.  The new Astana EXBS advisor, Paul J. Shott, is scheduled to 
arrive in Astana on August 30.  The current Astana EXBS advisor will 
depart post on September 12 and be on leave until the end of his 
contract. 
 
II. COMPLETED ACTIONS FOR THE REPORTING PERIOD 
 
A.  SITE ASSESSMENTS AND MEETINGS CONDUCTED 
 
5.  On July 16, the EXBS advisor was informed that Kazakhstan 
Customs Control Committee Chairman Kozy-Korpesh Zhaparkhanovich 
Karbuzov and the Secretary General of the World Customs Organization 
(WCO) Kunio Mikuriya signed a Memorandum establishing a Regional 
Training Centre for Central Asia in Astana, Kazakhstan.  The opening 
ceremony of this Central Asia Regional Training Centre is scheduled 
for December in Astana during the WCO Secretary General's visit. 
 
6.  On July 16, the EXBS advisor was informed that Kazakhstan had 
deposited their instruments of accession to the Revised Kyoto 
Convention on the simplification and harmonization of Customs 
procedures to the WCO Secretary General, raising the number of 
contracting parties to sixty-two. 
 
7.  On July 17, the EXBS advisor was informed by Colonel Mermankulov 
Meirkhan, Customs Control Committee, that the Government of 
Kazakhstan is interested in entering into an extradition agreement 
with the United States.  Mr. Alzhan Nurbekov, Senior Prosecutor of 
the International Cooperation Department, was designated as the 
Kazakhstani point of contact and Senior Special Agent Kenneth Jones, 
Legal Attache at the U.S. Embassy in Astana, was designated at the 
point of contact for the U.S. 
 
8.  On July 28, the EXBS advisor participated in a Security 
Assistance Working Group (SAWG) meeting on border security 
assistance to the Government of Kazakhstan. 
 
B. TRAINING COURSES CONDUCTED DURING THE REPORTING PERIOD 
 
9.  From July 16-17, the U.S. Department of Justice Office of 
Overseas Prosecutorial Development, Assistance and Training (OPDAT) 
successfully conducted an U.S.-Kazakhstan Export Control and 
Counter-Proliferation Exchange Workshop for prosecutors and 
investigators in Almaty.  The workshop consisted of 23 
representatives from the General Prosecutor Office, Ministry of 
Interior, Customs Control Committee, and National Security 
Committee.  U.S. participants included Nancy Langston, OPDAT 
Resident Legal Advisor, U.S. Embassy Kyrgyzstan; Heather Schmidt, 
Trial Attorney, National Security Division of the U.S. Department of 
Justice; James Warwick, Assistant U.S. Attorney, District of 
 
ASTANA 00001376  002.2 OF 002 
 
 
Maryland; John Burgess, Senior Special Agent and Assistant ICE 
Attache, U.S. Embassy Singapore; and Olga Kalashnikova, OPDAT 
Program Analyst for Counterterrorism Programs. 
C.  EQUIPMENT DELIVERED DURING THE REPORTING PERIOD 
 
10.  None 
 
D.  IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 
 
11.  The Regional Procurement Support Office/Frankfurt (RPSO) is 
working on the procurement of three (3) portable modular shelter 
complexes valued at $850,000 for the Kazakhstani Border Guard 
Service.   The Nuclear Smuggling Outreach Initiative (NSOI) has 
provided an additional $300,000 in funding to be added to this 
contract for procurement of an additional portable modular shelter 
complex in support of the Kazakhstan Green Border Project. 
 
12.  The Regional Procurement Support Office/Frankfurt (RPSO) is 
working on the procurement of six (6) x-ray screening systems valued 
at $625,000 for the Kazakhstan Customs Control Committee. 
 
13.  The Astana General Services Office is working on the 
procurement of 85 laptops and nine (9) power point projectors with 
screens valued at $75,000 for the Kazakhstani Border Guard Service's 
Training Centers. 
 
E. SIGNIFICANT DEVELOPMENTS IN EXPORT CONTROLS, NONPROLIFERATION, OR 
RELATED BORDER SECURITY 
 
14.  None 
 
F.  CASPIAN SECURITY INFORMATION 
 
15.  The EXBS advisor notified Shewit Habtemichael, 
U.S. Coast Guard International Affairs, that the Ambassador has 
decided that no U.S. Government funds should be expended to repair 
the "Sea Ark," a 42-foot vessel donated in 1996 to Kazakhstan's 
Maritime Border Guards. 
 
III. RED FLAG ISSUES: 
 
16.  None 
 
HOAGLAND

Wikileaks

09ASTANA1373, POWERING AFGHANISTAN: CONSIDERING THE CONTRIBUTION OF

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1373 2009-08-11 06:07 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9325
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1373/01 2230607
ZNR UUUUU ZZH
O 110607Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6001
INFO RUCNCIS/CIS COLLECTIVE 1830
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1198
RUEHKO/AMEMBASSY TOKYO 1900
RUEHUL/AMEMBASSY SEOUL 0859
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1385
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1780

UNCLAS SECTION 01 OF 05 ASTANA 001373 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: ENRG PGOV ECON EAID EINV KZ AF ZK
SUBJECT:  POWERING AFGHANISTAN:  CONSIDERING THE CONTRIBUTION OF 
CENTRAL ASIA TO STABILITY AND GROWTH 
 
REF:  (A) ASTANA 0251 
      (B) ASTANA 0419 
 
ASTANA 00001373  001.2 OF 005 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Reliable, affordable electricity is vitally 
important to Afghanistan's economic growth, prosperity, and 
stability.  Donors are investing substantial resources in 
Afghanistan to build a power transmission and distribution 
infrastructure.  Using this infrastructure to satisfy demand remains 
a challenge and a substantial increase in supply is required. 
Options include building new generation in Afghanistan to exploit 
viable natural gas, coal, and hydroelectric potential, but 
Afghanistan-based generation will likely be insufficient, especially 
in the near-term, to satisfy demand.  Central Asia appears to 
represent a viable near-term option to supply Afghanistan. 
 
3.  (SBU) In the long-term, Central Asian power should enjoy a 
cost-competitive position for exports to Afghanistan, and possibly 
other South Asian markets.  There are challenges to realizing this 
potential.  USAID advisors in Central Asia believe that USG emphasis 
on accelerated development of the CASA-1000 project to bring 
Tajikistan and Kyrgyzstan generation to Afghanistan and Pakistan 
exacerbates these challenges, and is based on inadequate analysis of 
the financial viability and political risk of the project.  A 
thorough analysis is accessible via OpenNet at the following 
address: 
 
http://intranetcar.ee.usaid.gov/Home/ 
Almaty-Offices/Economic-Growth/Resources---Li nks/ 
Powering-Afghanistan---- 
The-Contribution-of-Centra.aspx. 
 
END SUMMARY. 
 
AFGHANISTAN'S POWER SECTOR INFRASTRUCTURE 
 
4.  (SBU) Afghanistan lacks sufficient domestic generation capacity 
to meet demand, and relies on limited (and subsidized) imports from 
Turkmenistan, Uzbekistan, and Tajikistan, and on costly donor-funded 
diesel generation plants.  Only about a third of households in Kabul 
enjoy electricity service.  Service in other urban areas is less 
common, while electricity service in rural areas is virtually 
unknown. The Afghanistan and U.S. governments, multi-lateral 
development banks, and other donors put a high priority on 
developing the power sector.  Electricity generated or imported has 
increased from 500 million kilowatt hours (kWh) in 2004 to 1.57 
billion kWh in 2008 and the number of electricity customers has 
increased by almost 280% in the last six years. 
 
5.  (SBU) A major obstacle to expanding coverage is the poor 
financial performance of Afghanistan's nascent power institutions. 
To ensure long-term sustainability, the U.S. Government is working 
with the Afghanistan Government to improve the sector's commercial 
performance and build the capacity of Afghans to govern, manage, and 
maintain their electricity systems. The U.S. Government is assisting 
in expanding domestic generation.  When these projects are 
completed, the total grid-connected installed capacity in 
Afghanistan should exceed 500 MW, still far short of the estimated 
1000 MW potential demand that an expanded and reinforced Afghanistan 
North East Power System (NEPS) might serve. 
 
POWER FROM UZBEKISTAN 
 
6.  (SBU) Turkmenistan, Uzbekistan, and Tajikistan have stated their 
willingness to promote stability in Afghanistan by supplying 
electrical power.  Uzbekistan has considerable potential to supply 
Afghanistan with relatively low-cost power, drawing on its 
substantial natural gas reserves.  Uzbekistan has agreed to supply 
up to 70 MW to cover Mazar-e-Sharif and parts of Kabul.  The recent 
completion of a single-circuit 220 kV interconnection enables 
 
ASTANA 00001373  002.2 OF 005 
 
 
Uzbekistan to expand the supply to 150 MW.  A second 220 kV 
interconnection will double this transmission capacity. 
 
POWER FROM TURKMENISTAN 
 
7.  (SBU) Turkmenistan's potential to provide electric power to 
Afghanistan relies on its abundant reserves of natural gas.  Current 
supplies to Afghanistan are limited, via a 110 kV line supplying 
approximately 25 MW to Herat.  Tur
kmenistan and Afghanistan, with 
U.S. Government help are discussing a new dedicated 500 kV line to 
connect Turkmenistan generation to NEPS at Andkhoy, with a potential 
initial supply of up to 300 MW from a new gas-fired plant.  The 
discussions are still at the exploratory stage, however, and have 
not yet included a discussion of price. 
 
POWER FROM TAJIKISTAN 
 
8.  (SBU) Tajikistan has enormous potential for hydroelectric 
generation, with about 4000 MW installed, and moderate new capacity 
under development.  Tajikistan also has some coal-fired generation 
potential.  Tajikistan currently endures winter shortages and forced 
rationing, however, due to a combination of seasonal fluctuation in 
hydroelectric power availability, the significant load represented 
by TALCO, the country's Soviet-legacy aluminum smelter, and its 
reliance on erratic power supplies from neighboring Central Asian 
countries during peak winter demand.  Despite its potential, new 
capacity development in Tajikistan is constrained by financing 
uncertainties and regional water-sharing disputes, with downstream 
Uzbekistan strongly opposed to new large hydroelectric development 
that doesn't consider its water-security concerns. 
 
POWER FROM KYRGYZSTAN 
 
9.  (SBU) Kyrgyzstan's energy endowments are similar to 
Tajikistan's.  Kyrgyzstan also has viable coal deposits.  Like 
Tajikistan, Kyrgyzstan suffers from severe winter power deficits. 
New hydro-electric development in Kyrgyzstan faces similar 
challenges to those in Tajikistan. 
 
POWER FROM KAZAKHSTAN 
 
10.  (SBU) Kazakhstan possesses approximately 17,000 GW of installed 
capacity, the majority of which is lignite-fired and located in 
Kazakhstan's north.  Remaining thermal generation capacities in the 
south rely on rail deliveries of Kazakhstan lignite.  Domestic 
generation capacity in Kazakhstan's southern districts is 
insufficient to meet the demands of its largest load centers. 
Kazakhstan imports power from Kyrgyzstan, and relies on limited 
volumes of power that can be delivered from northern Kazakhstan via 
the 500 kV line connecting northern Kazakhstan generation capacities 
with the Central Asian Power Grid (CAPG) via Almaty. 
 
CASA-1000 - PROS AND CONS 
 
11.  (SBU) CASA-1000 is envisaged as the first phase in a 
prospective "Central Asia - South Asia Regional Electricity Market", 
or CASAREM, in which Central Asia would supply power to South Asian 
markets, including Afghanistan.  CASA-1000 would link Tajikistan 
with northern Pakistan via a 500 kV DC transmission line, with the 
capacity to transmit up to 1000 MW of power from Central Asia to 
Peshawar via Afghanistan.  The Afghanistan power system would draw 
up to 300 MW at an intermediate point along the line via a DC to AC 
converter station.  Power would be supplied during periods of 
generation surpluses in Tajikistan and Kyrgyzstan. 
 
THE CASE FOR CASA 
 
12.  (SBU) Proponents of CASA-1000 argue it would provide Tajikistan 
and Kyrgyzstan with higher revenues from hydroelectric generation 
than they currently earn under existing arrangements for power sales 
within Central Asia.  CASA-1000 thus would stimulate investment in 
 
ASTANA 00001373  003.2 OF 005 
 
 
Central Asian generation. 
 
UNDERMINED BY UNREALISTIC ASSUMPTIONS 
 
13.  (SBU) However, USAID's Central Asia advisors believe the 
CASA-1000 project makes a number of unrealistic assumptions, 
including the following:  (1) that Pakistan is a credible market for 
Central Asian power that the CASA-1000 line would deliver; (2) that 
the CASA-1000 line's security can be reliably assured; and (3) that 
Kyrgyzstan and Tajikistan will be able to supply at least 2 TWh and 
3 TWh per year, respectively. 
 
MARKET AND PAYMENT RISK 
 
14.  (SBU) The ability of Afghanistan's power companies, and their 
customers, to pay the full cost of consumed power is currently very 
limited.  Based on discussions USAID advisors have held with 
power-sector representatives in Central Asia, concern for the 
prospect of non-payment by Afghanistan is significant, is likely to 
constrain investment in new plants and would jeopardize the dispatch 
of power to Afghanistan if large arrearages accumulated.  Pakistan 
has a total installed capacity of about 16,000 MW, of which about 
6,000 MW is operated by Independent Power Producers (IPPs).  In 
March, local trade press reported Pakistan's single-buyer wholesale 
customer for IPP-produced power had arrearages to Pakistan's IPPs of 
over $2 billion, despite the IPPs' low contract price of about 
$0.05/kWh, according to Pakistan's Water and Power Development 
Authority.  Pakistan's IPPs have begun taking generation off-line in 
response. 
 
15. (SBU) Since the market in Central Asia, especially Kazakhstan, 
is supply constrained, it is likely that Kyrgyzstan and Tajikistan 
would seek a price beyond the ability of CASA-1000 and the Pakistan 
market to pay.  Kyrgyzstan sells summer electricity to Kazakhstan at 
$0.046/kWh as part of their annual water release agreement.  We can 
expect that Tajikistan will seek to export its power on similar 
terms.  Given the financial crisis in the Pakistan power sector and 
the cost of exporting Kyrgyzstan or Tajikistan power via CASA-1000, 
investment in infrastructure that relied on a paying Pakistan buyer 
would seem imprudent, if based solely on commercial considerations. 
 
PHYSICAL SECURITY RISK 
 
16.  (SBU) The risk of sabotage against power infrastructure in 
Afghanistan appears likely to remain for the foreseeable future.  As 
against market or payment risks, financial guarantees will be 
required to satisfy would-be investors in any commercially 
structured supply arrangement. The proposed CASA-1000 line would 
traverse very inhospitable territory, with its Pakistan terminus in 
the Federally Administered Tribal Areas near Peshawar.  The physical 
security of a high-voltage transmission line stretching several 
hundred kilometers would be very difficult to ensure.  This risk 
would deter investment based on commercial considerations, or result 
in high costs and the need for complicated and costly insurance. 
 
17. (SBU) CASA-1000's initial financial models assumed that 
Kyrgyzstan and Tajikistan would have sufficient surplus capacity to 
provide power to energize the CASA-1000 line and supply up to a 
combined 5 TWh per year, during peak summer months.  USAID and World 
Bank advisors have independently concluded that such supply 
estimates are based on optimistic assumptions.  If Kyrgyzstan and 
Tajikistan together are unable to provide a combined 5 TWh per year 
for export via CASA-1000, the economic viability of the project 
becomes very questionable, as fixed transmission costs would raise 
the unit-cost of power delivered. 
 
INTERCONNECTION WITH CENTRAL ASIAN TRANSMISSION 
 
&
#182;18.  (SBU) The expansion of power supplies from Central Asia to 
Afghanistan will entail the interconnection of NEPS with 
high-voltage transmission infrastructures in Turkmenistan, 
 
ASTANA 00001373  004.2 OF 005 
 
 
Uzbekistan, and Tajikistan.  The practical difficulties of 
interconnection will increase as the volume of power exported from 
Central Asia to Afghanistan increases. 
 
19.  (SBU) Currently, Turkmenistan, Uzbekistan, and Tajikistan 
provide power to Afghanistan on what is known as an "island" basis. 
With current limited volumes, the potential impact of an Afghanistan 
network fault on the stability of the exporting countries' systems 
is negligible.  However, as load increases with the completion of 
high-voltage 220 kV interconnections, Afghanistan system reliability 
becomes increasingly important. 
 
POLITICAL RISK 
 
20.  (SBU) Power exports to Afghanistan from Turkmenistan and 
Uzbekistan appear to entail no substantial domestic political risk, 
as the two exporting countries do not currently endure domestic 
supply shortages.  Moreover, both appear prepared and able to 
increase generation capacity to expand exports to Afghanistan. 
Unfortunately, the same cannot be said for Kyrgyzstan and 
Tajikistan.  Neither country currently satisfies its own domestic 
load requirements year-round, and the prospects for significant 
capacity expansion in both countries remains remote for the 
foreseeable future.  The political risks to the delivery of 
Kyrgyzstan and Tajikistan power to Afghanistan would be amplified 
under a CASA-1000 scenario.  Assuming the project's economic 
assumptions are correct, Pakistan and Afghanistan would most likely 
capture all of Kyrgyzstan's and Tajikistan's surplus hydroelectric 
power.  In addition to the likely increasing of rationing in these 
countries, it might precipitate a decision by Kazakhstan to 
disconnect from the CAPG, with repercussions for regional 
cooperation. Meanwhile, CASA-1000 would create conditions to expand 
hydroelectric capacities in Kyrgyzstan and Tajikistan.  Uzbekistan 
has vehemently opposed such investment, and government officials 
have told USAID that they have strong reservations about the 
CASA-1000 proposal for this reason, among others. 
 
THE RISKS OF CASA-1000 OUTWEIGH THE REWARDS 
 
21. (SBU) Enthusiasm for CASA-1000 appears to be waning among many 
involved in the project.  The Asian Development Bank withdrew its 
financial backing for the project earlier this year, ostensibly due 
to financing constraints and competing ADB priorities.  In internal 
ADB correspondence seen by USAID, however, ADB staff echoed many of 
the concerns outlined above.  USAID understands the World Bank is 
conducting its own due diligence of the CASA-1000 project.  In 
April, Pakistan's cabinet vetoed the Inter Governmental Agreement on 
CASA-1000 pending a comprehensive presentation of the project's 
viability by its sponsors. 
 
CONCLUSIONS AND RECOMMENDATIONS 
 
22.  (SBU) We recommend pursuing diversified options to expand power 
exports from Central Asia to Afghanistan.  Simultaneously, the 
United States government should emphasize domestic industry 
development in Afghanistan (including commercialization), and 
support sector reform and development in Central Asia to facilitate 
expanded trade in Central Asia and with Afghanistan and beyond. 
Expanded trade between Central Asia and South Asia, including 
Pakistan, could at that point be developed with a significantly 
lower risk profile and a more certain and sustainable future. 
 
THE COSTS OF CASA-1000 
 
23.  (SBU) We recommend that the United States reconsider support 
for the CASA-1000 project, pending a clear demonstration of its 
financial viability.  Further, we recommend that the U.S. government 
consider the opportunity cost of pursuing CASA-1000, in terms of 
alternative investments in options to supply power to Afghanistan, 
the relative timeliness of delivery of such supply, and the 
potential regional political and geostrategic repercussions that 
 
ASTANA 00001373  005.2 OF 005 
 
 
CASA-1000 would have.  Where mitigation of power-supply constraints 
in Pakistan is of concern, we recommend that alternative options for 
supply be compared with and evaluated against CASA-1000. Continued 
pursuit of CASA-1000 would appear to jeopardize constructive 
engagement with Uzbekistan to resolve Afghanistan's power supply 
deficit.  Uzbekistan's immediate support and commitment are more 
important to Afghanistan's energy security than the potential future 
benefits of the CASA-1000 project. 
 
THE VIABILITY OF AFGHANISTAN'S POWER SECTOR 
 
24.  (SBU) Regardless of the source of power, the key issue is the 
financial sustainability of the Afghanistan power sector. U.S. 
efforts should continue to emphasize putting the Afghanistan power 
sector on a solid footing, ensuring that the sector's revenues are 
sufficient to cover its costs, and creating the institutional 
arrangements necessary for the sector's sustainability as donor 
assistance declines.  Assistance should include support for new 
capital investments, institutionalization of commercially-oriented 
management practices operating companies, and appropriate tariff 
policies combined with effective subsidy mechanisms for the 
vulnerable.  Until domestically-generated revenues are sufficient, 
donor-funded fiscal support to the sector will remain necessary to 
cover commercially-procured power. 
 
SUPPORTING REGIONAL TRADE IN ELECTRICAL POWER 
 
25.  (SBU) The power systems of Uzbekistan, Tajikistan, Kyrgyzstan, 
and Kazakhstan are inter-connected via the CAPG.  However, this 
physical interconnection is not supported by a robust institutional 
framework governing the trade in electric power.  The USG should 
support existing initiatives to establish a regional power market 
with enhanced system dispatch efficiency and the transparent and 
non-discriminatory allocation of transmission capacities in the 
CAPG. This should be matched by efforts to resolve regional water 
disputes.  The emerging framework will make more power generated 
within the region available to Afghanistan and enhance the 
investment environment for new generation. 
 
26.  (SBU) Embassies Ashgabat, Astana, Dushanbe, Kabul, and Tashkent 
have cleared this cable.  Embassy Bishkek did not clear, but does 
not object to this cable's transmission. 
 
HOAGLAND

Wikileaks

09ASTANA1366, KAZAKHSTAN: NEW MINISTER OF DEFENSE OPTIMISTIC

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Reference ID Created Released Classification Origin
09ASTANA1366 2009-08-10 14:02 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO8832
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1366/01 2221402
ZNY CCCCC ZZH
R 101402Z AUG 09 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 5993
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1195
RUEHUL/AMEMBASSY SEOUL 0856
RUEHKO/AMEMBASSY TOKYO 1897
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1291
RHEHNSC/NSC WASHDC 1382
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHEBAAA/DEPT OF ENERGY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001366 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, P/M 
 
E.O. 12958: DECL: 08/10/2019 
TAGS: PGOV PREL PINR MARR RS KZ
SUBJECT: KAZAKHSTAN:  NEW MINISTER OF DEFENSE OPTIMISTIC 
ABOUT U.S.-KAZAKHSTANI MILITARY COOPERATION 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b/d) 
 
1.  (C) SUMMARY:  The Ambassador met with Minister of Defense 
Adilbek Dzhaksybekov on August 7 to congratulate him on his 
June 24 appointment, and discuss U.S.-Kazakhstani military 
cooperation.  Dzhaksybekov: 
 
-called bilateral military relations positive, and expressed 
hope relations would continue to develop "strategically." 
-praised U.S.-Kazakhstani cooperation and said he hoped to 
expand cooperation as part of his plan to modernize the 
Kazakhstani armed forces. 
-thanked the Ambassador for his efforts to fulfill U.S. 
promises to Kazakhstan concerning security assistance, 
especially the "politically-important" Huey-II program. 
-said Kazakhstan has a strong interest in a stable 
Afghanistan, and will do all it can to support 
U.S.-government efforts there. 
-told the Ambassador Kazakhstan will send two officers to the 
headquarters of the International Security Assistance Force 
in Kabul. 
-said he will discuss President Nazarbayev's offer of a 
logistics base in Kazakhstan and the U.S. request for 
deployment of explosive ordnance disposal instructors during 
the Petraeus visit. 
-commented on Kazakhstan's "special relationships" with 
Russia and the United States, drawing on his personal 
experience as a former Ambassador to Russia. 
 
Throughout the meeting, the new Minister of Defense was 
relaxed and personable.  END SUMMARY. 
 
AMBASSADOR RAISES REQUEST FOR ASSISTANCE IN AFGHANISTAN 
 
2.  (C) The Ambassador paid a courtesy call on recently 
appointed Minister of Defense Adilbek Dzhaksybekov on August 
7.  The Ambassador congratulated Dzhaksybekov on his 
appointment, highlighted milestones of bilateral cooperation, 
noted Kazakhstan's importance in regional stability, and 
previewed three points that CENTCOM Commander General 
Petraeus is likely to raise during his August 13 visit to 
Astana: 
 
-Kazakhstan's deployment of explosive ordnance disposal (EOD) 
instructors to the Afghan EOD school in Mazar-i-Sharif is a 
high priority, and would be of immediate assistance. 
 
-General Petraeus and the Ambassador are aware that the 
U.S.-Kazakhstani security assistance program has had some 
problems and that the lack of progress on the Huey-II 
helicopter program has been an irritant in the relationship 
for far too long.  General Petraeus is working on a possible 
solution for this issue, which has strategic importance for 
Kazakhstan. 
 
-General Petraeus might want to explore further President 
Nazarbayev's March 30 offer to provide a "logistics base" for 
U.S. troops in Afghanistan. 
 
NEW MINISTER OF DEFENSE CALLS RELATIONS POSITIVE AND STRATEGIC 
 
3.  (C) Dzhaksybekov, who clearly understands and speaks some 
English, said he believes U.S.-Kazakhstani military relations 
are positive, and he hoped relations would continue to 
develop "strategically."  He thanked the U.S. government for 
its support of Kazakhstan, even during the most difficult and 
complex times in Kazakhstan's history.  Dzhaksybekov told the 
Ambassador he hoped to increase training of Kazakhstani 
military personnel at U.S. institutions and supported 
bilateral military exercises and regional cooperation. 
"Kazakhstan has a strong interest in a stable Afghanistan; 
therefore, the Ministry of Defense, under the direction of 
Kazakhstan's leadership, will support all U.S. efforts to 
ensure stability in Afghanistan," Dzhaksybekov declared. 
 
 
ASTANA 00001366  002 OF 003 
 
 
UNITED STATES IS MORE OPEN THAN SOME "OTHER FRIENDS" 
 
4.  (C) Throughout the meeting, Dzhaksybekov emphasized his 
priority is adopting modern best-practices and developing the 
professionalism of the Kazakhstani armed forces.  He told the 
Ambassador training military personnel in various countries 
-- particularly the United States, Turkey, and Russia -- is 
an important element in accomplishing this goal. 
Dzhaksybekov said the United States is Kazakhstan's preferred 
destination for training military personnel.  "According to 
our military experts, it is best for Kazakhstan 
strategically, as well as from the point of view of quality, 
for officers to be trained in U.S. military schools.  At 
least 320 military personnel have been trained at the U.S. 
National Defense University.  It is our goal to increase this 
number," Dzhaksybekov stated.  The Minister of Defense also 
praised U.S.-Kazakhstani cooperation during joint
military 
exercises, noting his officers had told him U.S. trainers are 
"more open and friendly than some of our 'other friends.'" 
(COMMENT:  By "other friends" Dzhaksybekov was clearly 
referring to Russia.  END COMMENT.) 
 
DEFENSE MINISTER CALLS FOR INCREASED BILATERAL COOPERATION 
 
5.  (C) Dzhaksybekov welcomed increased bilateral military 
cooperation, inviting the Ambassador to attend the opening 
ceremony of the upcoming Steppe Eagle exercises with him.  "I 
am glad to see our cooperation is so advanced," Dzhaksybekov 
said, noting that in 2008-2009, the U.S. and Kazakhstan 
conducted over 100 military-to-military events -- compared to 
only 30 events in 2003-2004.  It is important to develop and 
demonstrate our enhanced level of cooperation," Dzhaksybekov 
added, commenting that, in principle, he agreed with the U.S. 
proposal of holding a multilateral exercise in 2010.  He 
noted Kazakhstan had conducted a similar activity in 2007, 
but said he was still working with other government 
institutions to finalize review of the proposal. 
 
KEEPING PROMISES -- A POLITICAL QUESTION 
 
6.  (C) After the Ambassador briefly explained the issue 
concerning funding for the Huey-II helicopter program, 
Dzhaksybekov replied, "We believe that the U.S. government 
always keeps its promises.  If there is a possibility for you 
to deliver more helicopters in the program more quickly, we 
would appreciate this very much."  Dzhaksybekov told the 
Ambassador Kazakhstan can develop independently, and its 
military is financed "not badly."  He reiterated, however, 
that it is important for Kazakhstan to demonstrate 
U.S.-Kazakhstani bilateral military cooperation.  According 
to Dzhaksybekov, expansion of the helicopter program is "a 
political question."  (COMMENT:  Dzhaksybekov appeared to be 
trying to make the point that while Kazakhstan intends to 
modernize on its own, U.S. support in following through on 
its original promises in the Huey-II program would be an 
important political gesture demonstrating strong commitment 
to a close bilateral military relationship.  END COMMENT.) 
 
MINISTER REITERATES SUPPORT FOR U.S. EFFORTS IN AFGHANISTAN 
 
7.  (C) When the Ambassador initially raised the request for 
Kazakhstani assistance in Afghanistan, Dzhaksybekov laughed 
and said,"Afghanistan - your government's favorite theme." 
In his response, however, the Minister stated seriously, 
"Kazakhstan has a strong interest in a stable Afghanistan." 
He described the humanitarian assistance Kazakhstan provided 
in 2008 and intended to provide in 2009-2011.  While 
reminding the Ambassador that Kazakhstan had also supported 
the U.S. military effort through bilateral agreements, 
Dzhaksybekov remarked, laughing wryly, "When I was the 
Ambassador of Kazakhstan to the Russian Federation, I 
received a lot of criticism about such agreements."  In the 
first firm indication that Kazakhstan will commit military 
personnel to Afghanistan, Dzhaksybekov said, "we will send 
two officers to the headquarters of the International 
 
ASTANA 00001366  003 OF 003 
 
 
Security Assistance Force in Kabul."  Regarding the U.S. 
request for deployment of explosive ordnance disposal 
instructors to the Afghan EOD school in Mazar-i-Sharif and 
the logistics base, Dzhaksybekov said he hoped Kazakhstan 
will be ready to discuss these issues during the upcoming 
Petraeus visit. 
 
LOCATION, LOCATION, LOCATION 
 
8.  (C) In his discussion of regional issues, Dzhaksybekov 
stated, "Kazakhstan has had to make certain decisions based 
on its geopolitical location, and we thank the U.S. 
government for understanding and supporting these decisions." 
 In response, the Ambassador reiterated that the U.S. 
government wants cooperation with Kazakhstan -- and its 
neighbors.  Emphasizing that President Obama is working hard 
to improve the U.S.-Russia relationship, the Ambassador said 
he hoped that the next time the Minister visited Moscow, he 
would hear less criticism, eliciting an appreciative chuckle 
from Dzhaksybekov.  The Minister concluded the meeting by 
saying, "I, personally, always look positively towards the 
United States.  Our countries have a very special 
relationship, and I look forward to the development of our 
friendship." 
 
NEW MINISTER -- LOGICAL AND ANALYTICAL 
 
9.  (C) Prior to his sudden appointment on June 24 -- 
following the dismissal of the previous minister after a 
spate of accidents and scandals -- Dzhaksybekov served as 
Kazakhstan's Ambassador to the Russian Federation. 
Dzhaksybekov has also held a variety of other important 
positions, including Akim (mayor) of Astana, Minister of 
Industry and Trade, Head of the Presidential Administration 
(twice), and First Deputy Chairman of the ruling Nur Otan 
Party.  (COMMENT:  Prior to the Ambassador's meeting with 
Dzhaksybekov, Post's interlocutors had commented that the new 
Minister of Defense is logical and analytical.  Interlocutors 
said he is known for carefully analyzing policy options, 
selecting "best practices" in pursuit of key strategic goals. 
 Dzhaksybekov's behavior during the meeting supported this 
analysis.  Since his appointment, it was clear he had 
consulted with experts in the Ministry of Defense.  Overall, 
he appeared well-briefed, and paid close attention to all the 
topics discussed, several times stopping to confer with his 
staff members and to take notes.  Demonstrating a 
consultative leadership-style, Dzhaksybekov made a point at 
the end of the meeting of asking the U.S. DATT, who 
accompanied the Ambassador, for his view of bilateral 
relations.  END COMMENT.) 
 
HOAGLAND

Wikileaks

09ASTANA1365, KAZAKHSTAN: PRIME MINISTER BRIEFS BOEHNER CODEL

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Reference ID Created Released Classification Origin
09ASTANA1365 2009-08-10 13:58 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO8823
PP RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1365/01 2221358
ZNY CCCCC ZZH
P 101358Z AUG 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 5989
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1826
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1191
RUEHUL/AMEMBASSY SEOUL 0852
RUEHKO/AMEMBASSY TOKYO 1893
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1378
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1287
RUMICEA/USCENTCOM INTEL CEN MACDILL AFB FL 0006

C O N F I D E N T I A L SECTION 01 OF 04 ASTANA 001365 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC, H 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: DECL: 03/06/2059 
TAGS: PGOV PREL PINR EAGR EPET ECON EFIN EINV SOCI
KZ 
SUBJECT:  KAZAKHSTAN:  PRIME MINISTER BRIEFS BOEHNER CODEL 
ON ECONOMIC AND ENERGY ISSUES 
 
REF: (A) ASTANA 1220 (B) ASTANA 0678 (C) ASTANA 0924 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b), (d) 
 
1.  (C) SUMMARY:  On August 8, Prime Minister Karim Masimov briefed a 
U.S. Congressional delegation led by House Minority Leader John 
Boehner (R-OH) on a wide range of economic and energy issues. 
Masimov said Kazakhstan is showing 
signs of recovery from the global economic and financial crisis, and 
he detailed his vision for Kazakhstan's long-term development and 
economic diversification, even as he acknowledged the country's 
dependence on oil exports for the foreseeable future.  Masimov judged 
that China has become stronger as a result of the global financial 
crisis, but that Russia has not responded well and is in serious 
difficulty.  After one of Masimov's advisors outlined the 
government's financial-sector recovery plan, Masimov told the 
Congressmen that Mukhtar Ablyazov, former Chairman of BTA Bank, "will 
soon be as famous as (Bernard) Madoff.  But your Madoff is in jail; 
ours is in London."  END SUMMARY. 
 
2.  (C) Speaking fluent English, Prime Minister Masimov was relaxed 
and displayed a sense of humor during a late Saturday afternoon 
meeting with a U.S. 
Congressional delegation led by Minority Leader Boehner during which 
he responded with candor and in detail to questions about energy, 
agriculture, banking, education, and health care.  After one 
Congressman described the difficulty that east Texas has had trying 
to diversify its economy, reduce its dependency on oil revenue, and 
stabilize its banking sector, Masimov joked, "Are you sure you're not 
talking about Kazakhstan?"  The Prime Minister was flanked by Deputy 
Minister of Foreign Affairs Nurlan Yermekbayev and Vice Minister of 
Energy Lyazzat Kiinov, while two Western banking advisors were in 
back-bench positions waiting to brief.  Other members of the 
Congressional delegation included Rep. Dan Boren (D-OK), Rep. Jo 
Bonner (R-AL), Rep. Dave Camp (R-MI), Rep. Tom Latham (R-IA), and 
Rep. Greg Walden (R-OR). 
 
APPRECIATION FOR U.S. POLITICAL AND ECONOMIC SUPPORT 
 
3.  (C) Masimov told the delegation he was grateful for the political 
support and private investment Kazakhstan has received from the 
United States since Kazakhstan achieved independence in 1991.  "We 
have achieved a lot, thanks to the support of the United States," he 
said.  "Without it, things would have been very different."  Masimov 
acknowledged the importance of U.S. economic and technical assistance 
for market reforms, thanked the United States for backing 
Kazakhstan's bid to become 2010 Chairman-in-Office of the OSCE, 
noting that Kazakhstan will be the first country from the former 
Soviet Union to occupy that 
office. 
 
EARLY SIGNS OF ECONOMIC RECOVERY 
 
4.  (C) Rep. Boehner informed Masimov that the purpose of the 
Congressional delegation's visit to Kazakhstan was to learn more 
about the country's current economic conditions and developments in 
the energy sector.  In response, Masimov provided a brief history of 
Kazakhstan's economic development since independence, noting that 
Kazakhstan has experienced both the best and the worst aspects of 
globalization.  Prior to August 2007, he said, Kazakhstan's 
commercial banks enjoyed "unlimited access" to global financial 
markets and raised capital with little trouble.  Then, during the 
early days of the financial crisis in August 2007, Kazakhstan's banks 
were suddenly cut off from the market, and found themselves in a very 
difficult situation, unable to service their external debt. 
According to Masimov, however, the economy is showing signs of 
improvement.  "August 2009 is much better than August 2008," he said. 
 "We experienced 3 percent growth in 2008, and I believe that we will 
again show positive growth before the end of this year."  Masimov 
cited statistics to bolster his claim, informing the delegation that 
unemployment declined from 7 percent in July to 6.6 percent in 
August. 
 
ASTANA 00001365  002 OF 004 
 
 
 
OIL AND GAS ARE KAZAKHSTAN'S BREAD AND BUTTER 
 
5.  (C) Masimov noted that all of the major international oil 
companies are present and active in Kazakhstan, including U.S. 
companies Chevron, ExxonMobi
l, and ConocoPhillips.  He candidly 
acknowledged that, "from time to time, we have some disagreements, 
but in general, we are able to find a solution that is within the 
law, and mutually agreeable."  As evidence, he pointed to the 
recently negotiated contract with ConocoPhillips to explore and 
produce the sizeable offshore N Block, Kazakhstan's first major new 
deal in years.  The Prime Minister reaffirmed the government's 
multi-vector oil transportation 
policy, and said that although Kazakhstan exports most of its oil 
through Russia via the Caspian Pipeline Consortium (CPC) and 
Atyrau-Samara pipelines, the government is determined to develop 
alternative export routes to the west via the Baku-Tbilisi-Ceyhan 
(BTC) and to the east via the newly-completed China pipeline. 
Masimov said that Kazakhstan is "not as strong" in natural gas 
production as in oil production and made a distinction between 
Kazakhstan and Turkmenistan in this regard.  In fact, Masimov 
confided his own surprise at learning that by 2015, Kazakhstan will 
not produce enough natural gas to meet domestic needs.  To help meet 
demand, Masimov said the government is constructing a pipeline that 
will transport gas from the northwest, where there is overcapacity, 
to the south, where there is a deficit.  "This is a national security 
issue for us," he declared.  Masimov said that the government's 
contract to supply Russian gas monopoly Gazprom will expire in 2015, 
implying that Kazakhstan will likely then consume the gas it now 
exports to Russia. 
Masimov pointedly noted that, "before 2006, we did not receive a fair 
price for our gas from Russia, but since 2007, we have received a 
European price, minus 
transportation expenses." 
 
WHY KAZAKHSTAN IS LIKE CANADA AND AUSTRALIA 
 
6.  (C) Rep. Boren asked the Prime Minister to describe his vision 
and expectations for the next generation of Kazakhstanis, 
particularly if oil and gas exports are no longer the centerpiece of 
the economy.  Masimov responded with enthusiasm and optimism in 
describing Kazakhstan's future economic and social development.  He 
said that reforming health care and mortgage finance are among his 
top priorities and joked, "Unfortunately, we don't have Fannie Mae or 
Freddie Mac here yet!"  Drawing an interesting analogy, the Prime 
Minister compared Kazakhstan to Canada or Australia, countries with 
large territories and relatively small populations, like Kazakhstan. 
He said he has studied their 
national development strategies, and observed that Canada and 
Australia have invested in the development of "three or four major 
cities" in order to achieve a sustainable, long-term impact on 
national development.  Masimov said the 
government of Kazakhstan is considering a similar strategy that would 
entail investments in infrastructure, health care, and education in 
targeted urban areas, although he did not name the ones he had in 
mind.  Among Kazakhstan's major infrastructure projects, Masimov 
highlighted the $3 billion, 3,000-mile highway from Russia to China 
that he said will create new opportunities for small and medium 
enterprises.  He also said that Kazakhstan is developing new railway 
links to China and Turkmenistan, touted a recently opened General 
Electric plant in Astana that assembles railroad locomotives, and 
confirmed plans to build an energy hub in Aktau on the Caspian Sea. 
 
COMPETITION IS THE KEY 
 
7.  (C) Rep. Camp asked the Prime Minister to describe the 
government's plans for health care reform.  In response, Masimov said 
that his main priority is to introduce greater competition, so that 
private hospitals can compete with state-owned hospitals on cost and 
quality.  "The competitiveness of the economy is the key issue," he 
said.  Masimov acknowledged that Kazakhstan is dependent on the 
export of oil, gas, and mineral resources, "but this cannot last 
 
ASTANA 00001365  003 OF 004 
 
 
forever," he said.  "One day, it will stop.  And when it does, we 
want the world to continue to do business here.  We want people to 
say, 'Kazakhstan has the best legal system, the best IT 
infrastructure, the best hotels, the best airports in the region.' 
We want to be like Singapore in Central Asia." 
 
AGRICULTURE AS IMPORTANT AS OIL AND GAS 
 
8.  (C) Rep. Latham asked the Prime Minister how important the 
agricultural sector is to Kazakhstan's economy.  Masimov answered 
that agriculture is "as important as oil production and exploration. 
In fact, from a social perspective, it is even more important than 
oil."  According to Masimov, 47 percent of the population of 
Kazakhstan lives in rural or agricultural areas, and 23 percent are 
directly employed in the agricultural sector.  Masimov acknowledged 
that Kazakhstan's agricultural productivity is not as high as it 
should be and said, "there is room for improvement."  First and 
foremost, he said, Kazakhstan is a grain producer, with 16 million 
tons produced in 2008, of which 4-5 million tons were exported. 
Masimov claimed that Kazakhstan is the largest grain supplier to the 
countries of Central and South Asia, although he noted that 
Kazakhstan prefers to sell grain products rather than grain itself. 
He also said that Kazakhstan is a major producer of meat, 
particularly beef and lamb, and said they are eager to meet a greater 
share of the demand for meat from Russia, which he said even now buys 
$2 billion of meat per year.  Calling investment in agriculture the 
government's "number one priority" for economic development, Masimov 
said Kazakhstan needs new technology, new machinery, and new genetic 
stock to increase efficiency and productivity.  "We are committed to 
this," he insisted, "and we will make it happen." 
 
"THEY ARE DIFFERENT FROM US" 
 
9.  (C) Masimov stressed the importance of education to Kazakhstan's 
long-term development, calling the government's decision to pay for 
3,000 scholarships 
abroad each year, "the best investment we can make in our future." 
He drew a striking distinction between his generation, and 
Kazakhstan's future generation of leaders.  "Our young people 
studying at universities here and abroad are different from us.  We 
all have a Soviet background.  They don't.  The Soviet experience is 
still in our minds.  They don't think that way.  And that is very 
important for Kazakhstan's future." 
 
CHINA GAINS STRENGTH WHILE RUSSIA STRUGGLES 
 
10.  (C) Rep. Bonner asked the Prime Minister how other countries in 
the region have managed their response to the global economic crisis. 
 In response, Masimov was direct and honest.  "China has done very 
well," he judged.  "They have benefitted from this crisis, and have 
become stronger and stronger as a result.  I don't want to say that 
they have become agressive, but step by step, they have become more 
influential, certainly in this part of the world, as a result of the 
crisis."  Masimov described how China approached Kazakhstan earlier 
this year with an offer to lend the government $10 billion "on very 
favorable terms, from one sovereign to another" (reftel B).  He sai
d 
that $5 billion of the loan will be invested in the oil and gas 
sector, and $5 billion will be used to help diversify the economy. 
Speaking candidly, he told the delegation, "We would have preferred 
to take the money from someone else, but no one else offered."  About 
Russia, Masimov said Moscow continues to face severe economic 
difficulties, and he does not forecast a quick turnaround.  "I told 
Putin myself, 'You are not managing this crisis very well,'" he said. 
 
BANKING-SECTOR EXIT STRATEGY 
 
11.  (C) Rep. Walden (R-OR) asked the Prime Minister if the 
government had an exit strategy for the financial crisis.  In 
response, he said, "I thought you would ask me about that!," turned 
to his left, and summoned to the table Marcia Favale-Tarter, a 
Western banking advisor who owns her own consulting firm and 
regularly advises the Prime Minister and the Chairman of National 
 
ASTANA 00001365  004 OF 004 
 
 
Welfare Fund Samruk-Kazyna, Kairat Kelimbetov.  Favale-Tarter, who 
clearly has the Prime Minister's confidence, explained the 
government's plans to the delegation.  She pointed out that the 
government has taken majority ownership of only one bank and has made 
no sovereign guarantees to the other banks in which it owns a 
minority stake.  "We only intervened in this case in order to limit 
the systemic risk." (NOTE:  Favale-Tarter was referring to BTA Bank, 
in which the government owns 75 percent.  The government acquired a 
25 percent share in three other leading commercial banks.  See reftel 
C.  END NOTE).  Favale-Tarter said a creditor's committee, which 
includes the Export-Import Bank, had been formed to restructure BTA 
Bank's outstanding debt, and said they expect to reach consensus by 
September 15.  She added that a similar creditor's committee had 
already signed an agreement to restructure debt held by Alliance 
Bank, and said that BTA Bank's future as a going concern would be 
resolved either by attracting a strategic investor like Russia's 
Sberbank, or "via market forces."  Masimov noted sardonically that 
the former chairman of BTA Bank, Mukhtar Ablyazov, "will soon be as 
famous as your (Bernard) Madoff.  But your Madoff is in jail; ours is 
in London." 
 
12.  (C) As the delegation left the room, Masimov stopped the 
Ambassador and commented, "I think this was an important meeting. 
I'm glad I did it, even if it was a Saturday afternoon." 
 
13.  (U) Congressman Boehner did not clear this cable, but authorized 
that it be sent. 
 
HOAGLAND

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