Monthly Archives: September 2009

09ASTANA1744, KAZAKHSTAN: NATIONAL BANK CHAIRMAN FORESEES 2010

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Reference ID Created Released Classification Origin
09ASTANA1744 2009-09-30 10:39 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7916
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 #1744/01 2731039
ZNR UUUUU ZZH
O 301039Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6479
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1990
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1359
RUEHKO/AMEMBASSY TOKYO 2058
RUEHUL/AMEMBASSY SEOUL 1010
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1545
RUEKJCS/SECDEF WASHDC 1421
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2509
RUEHNO/USMISSION USNATO 2821

UNCLAS SECTION 01 OF 02 ASTANA 001744 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
PLEASE PASS USTDA, OPIC, EXIM 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ
SUBJECT:  KAZAKHSTAN:  NATIONAL BANK CHAIRMAN FORESEES 2010 
TURNAROUND 
 
REF:  A.  ASTANA 1628 
  B.  ASTANA 1626 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  At a meeting with the Ambassador on September 
28, Chairman of the National Bank Grigoriy Marchenko predicted 
economic recovery would begin early in 2010, following restructuring 
of BTA Bank.  He foresees 2-3% growth and a return to a normal 
external debt ratio under 20% of GDP.  As he considered the 
economy's next steps, Marchenko argued for foreign banks to remain a 
minority in Kazakhstan, because, in his view, they bring few 
benefits to an economy in good times and stop lending in bad times. 
END SUMMARY. 
 
POSITIVE ECONOMIC OUTLOOK 
 
3.  (SBU) On September 28, Governor of the National Bank Grigoriy 
Marchenko described to the Ambassador his cautiously positive 
outlook on Kazakhstan's economy.  Inflation has decreased to 6.2% 
from its high of over 20% one year ago.  He argued that, contrary to 
rumors, the exchange rate is stable and will be maintained at its 
current rate of about 150 tenge to the dollar.  Given commodity 
prices, he said, this position "is a no-brainer, that is 
defendable."  He termed bank liquidity increasingly healthy, having 
risen from $2 billion February to $8 billion now. 
 
4.  (SBU) On troubled banks, Marchenko expressed his optimism about 
a quick resolution at Alliance, because "it is smaller and 
restructuring negotiations are more advanced" (ref A).  According to 
Marchenko, "the only black dot on the overall economic picture is 
BTA Bank."  All parties must find a speedy resolution to BTA's 
restructuring (ref B), he argued, in order to return confidence to 
the market.  He expressed his hope that BTA and its creditor 
steering committee will sign an overall agreement on December 7 in 
light of the September 18 MOU.  Echoing a statement to ECA 
delegations, Marchenko argued the psychological importance of a 
conclusion to BTA restructuring.  Currently, banks are scared to 
lend, he stated, but BTA restructuring would signal that the worst 
is over.  Banks would more readily loan money, and individuals and 
companies would more willingly borrow it.  Such a credit growth, 
accompanied by a recovery in the real-estate market that would 
increase the value of collateral, would lead to overall economic 
improvement. 
 
5.  (SBU) Adding to his positive forecast, Marchenko predicted 2-3% 
growth in the coming year, if Kazakhstan attracts foreign 
investment.  Although he posited international capital markets might 
not lend until the fall of next year, Marchenko asked rhetorically, 
"Why borrow when we are overly liquid?"  Looking to the remainder of 
2009, Marchenko predicted, "KKB [Kazakhstan Kommerce Bank] will 
finish its repayment of $800 million before the end of the year, and 
then it will owe nothing.  BTA will only need to service its debt. 
I hope Alliance will be done, and BTA close.  Our $46 billion in 
[total external] debt [as of January 2008] is now $32 billion, not 
including BTA and Alliance restructuring.  In January, it might fall 
to $20-22 billion, which would return the debt to less than 20% GDP 
-- more or less normal -- in two and a half years.  Then, people 
will feel more confident.  The economy will improve." 
 
FOREIGN BANKS ARE NOT OUR SAVIORS 
 
6.  (SBU) Marchenko argued that the Sovereign Wealth Fund 
Samruk-Kazyna will not want to remain a controlling shareholder of 
BTA and Alliance following their restructuring.  Samruk-Kazyna must 
sell, he said, but "should they sell to foreigners?"  According to 
Marchenko, Kazakhstan's overall banking environment would change if 
foreign banks take control of BTA and Alliance, tipping the balance 
of foreign ownership to four of Kazakhstan's six biggest banks. 
 
ASTANA 00001744  002 OF 002 
 
 
 
7.  (SBU) When the Ambassador asked whether this would be a 
"positive or negative change," Marchenko pondered the question and 
concluded, "lateral."  "Foreign banks are not our saviors.  In their 
18 years of operations in Kazakhstan, they have not done anything 
[for us].  They have not brought in new technology.  They prefer to 
do what they know -- service large multi-national corporations," he &
#x000A;lamented.  According to Marchenko, their "only value-added" comes 
through training programs.  "Increased competition, new technology 
-- these are just hype by Western media funded by Western banks 
themselves," Marchenko stated.  He argued that the recent Central 
European and Baltic experience has shown that too much foreign 
involvement is bad in a time of crisis.  Becoming obviously 
frustrated, he continued, "They stop lending.  Boards make decisions 
far away that benefit the banks' bottom lines, not the countries 
where they are operating.  They do not listen to local staff when 
they plead for a resumption of lending.  They don't give a shit 
about the countries!"  Finally, he concluded that foreign banks 
should not compose more than 40% of Kazakhstan's banking sector, and 
the government should re-impose a 50% maximum. 
 
8.  (SBU) COMMENT:  Although Marchenko, a trusted advisor to both 
President Nazarbayev and Prime Minister Massimov, clearly believes 
in the psychological nature of the current crisis, his positive 
economic outlook is not simply an effort to "cheerlead" the country 
out of the downturn.  Because he is widely known as hard-headed, 
pragmatic realist with a successful track record in both economic 
and political spheres, and is especially credited for his precise 
devaluation of the currency earlier this year, observers should 
consider his analysis seriously.  That said, successful BTA and 
Alliance restructuring, upon which his optimistic outlook depends, 
remains largely outside his control.  END COMMENT. 
 
HOAGLAND

Wikileaks

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09ASTANA1697, KAZAKHSTAN: ECOCENTER, ENVIRONMENTAL WATCHDOG;

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Reference ID Created Released Classification Origin
09ASTANA1697 2009-09-28 10:42 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5833
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 #1697/01 2711042
ZNR UUUUU ZZH
O 281042Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6427
INFO RUCNCIS/CIS COLLECTIVE 1987
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1356
RUEHKO/AMEMBASSY TOKYO 2055
RUEHUL/AMEMBASSY SEOUL 1007
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1542
RUEKJCS/SECDEF WASHDC 1418
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHMFISS/CDR USTRANSCOM SCOTT AFB IL
RUEHAST/USOFFICE ALMATY 1900

UNCLAS SECTION 01 OF 03 ASTANA 001697 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB, OES/PCI (PHUDAK) 
 
E.O. 12958: N/A 
TAGS: ECON SENV KZ
SUBJECT:  KAZAKHSTAN:  ECOCENTER, ENVIRONMENTAL WATCHDOG; 
ARCELORMITTAL - MAJOR POLLUTER AND MAJOR ECONOMIC ROLE 
 
ASTANA 00001697  001.2 OF 003 
 
 
1.  SUMMARY:  Karaganda oblast, home to large coal mines, also 
boasts the large ArcelorMittal steel plant in nearby Temirtau, 
Kazakhstan's iron and steel center.  One of the world's pre-eminent 
steel plants, selling steel to more than 60 countries, ArcelorMittal 
is the only steel plant in the world that does not use natural gas 
as a fuel source in production.  Instead it takes advantage of the 
abundant, nearby supply of coal.  Although ArcelorMittal declares 
its desire to be a responsible citizen and reduce its pollution, it 
is torn between meeting environmental regulations and satisfying the 
global demand for steel.  NGO EcoCenter, the Karaganda regional 
environmental center that works closely with all regional 
environmental NGOs, local government officials, and the Ministry of 
Environment, reluctantly admits that ArcelorMittal has gradually 
reduced its pollution outflows into the Nura River after it adopted 
EU production standards.  However, EcoCenter insists that 
ArcelorMittal, which has not yet designated a person responsible for 
its environmental program, could do much better.  END SUMMARY. 
 
KARAGANDA'S REGIONAL ENVIRONMENTAL CENTER 
 
2.  EcoCenter, founded in 1992 immediately after Kazakhstan's 
independence, is the Karaganda oblast (regional) environmental 
center.  It works closely with regional environmental NGOs, local 
government officials, local businesses, schools, and the Ministry of 
Environment.  The Ministry funds EcoCenter publications in order to 
disseminate environmental information throughout the oblast.  The 
Center has also given out micro loans to women (from private funding 
in the United States), ranging from $500-2000, to help them start 
businesses.  More than 70 percent of those businesses are still 
thriving today.  Meanwhile, the government supported a "green" 
telephone project that established a hotline to report environmental 
problems or violations. 
 
SEEKING FUNDING IS NOT A BED OF ROSES 
 
3.  Although the government provides some funding, according to 
Lyudmila Kurtavtseva, Director of Karaganda's EcoCenter, 
environmental groups often must return up to 10 percent of a grant 
to officials as an "otkat" (kickback).  Currently, NGOs receive 
funding for only up to nine months, which also limits their ability 
to make significant change.  At the same time, she said, 
international donors generally are reluctant to finance projects 
outside their own "agendas" and priorities, and some have shifted 
away from Kazakhstan, because it is considered a "rich" country. 
Therefore, EcoCenter wants to become more self-financed. 
 
ARCELORMITTAL, LARGE COAL MINES 
 
4.  Kurtavtseva said Karaganda's large coal mines and the behemoth 
ArcelorMittal steel plant in nearby Temirtau are the main sources of 
pollution in Karaganda oblast.  The Nura River that runs through 
Karaganda is filled with their pollution.  Despite modest 
improvements from a recent EcoCenter project to clean up the river, 
the pollution remains serious.  In 2004, EcoCenter held a seminar 
with ArcelorMittal to show the benefits of production line 
modernization and pollution outflows reduction.  According to 
Kurtavtseva, although improvements occurred since the seminar, 
EcoCenter has been disappointed.  Instead of the quarterly seminars 
and presentations that they expected, they seldom meet.  The current 
financial crisis has led to a reduction in salaries and other 
"unnecessary" expenses. 
 
5.  Despite ArcelorMittal claims of significant pollution reduction, 
Kurtavtseva insists that outside observers disagree.  KazHydroMat's 
single station on the Nura River to monitor pollution flows is 
insufficient, she asserts.  She said they need at least four 
monitoring stations downstream from ArcelorMittal to gain a clear 
picture of the situation. 
 
ECOCENTER ALSO MONITORS NUCLEAR PLANT CONSTRUCTION 
 
6.  According to Kurtavtseva, EcoCenter also monitors the 
construction of nuclear power plants.  She said there is a 
laboratory in Semipalatinsk that monitors and conducts research on 
 
ASTANA 00001697  002.2 OF 003 
 
 
the effects of radiation on health.  (NOTE: Semipalatinsk is the 
Soviet Union's former nuclear test site in northern Kazakhstan where 
460 tests occurred, more than 100 of which were above ground weapons 
tests, and which hosts three of Kazakhstan's four nuclear reactors. 
Widespread radiation pollution exists in this region.  END NOTE.) 
Kurtavtseva claims
 Kazakhstan's 1998 law on the release of radiation 
into the air is inadequate, leading environmental NGOs to lobby for 
a better law. 
 
7.  Kurtavtseva said the United Kingdom's Department for 
International Development (DFID) funded a project on the military 
polygon in Semipalatinsk, researching the use of pasture land and 
plants to determine how much can return to normal use.  Although the 
area is partially closed, she said, people are returning.  She 
accused the Kazakhstani government of "not worrying about the 
safety," nor taking any measure to protect those now living on the 
land.  According to Kurtavtseva, several international organizations 
have studied the polygon.  Enough evidence now exists in 
Kazakhstan's National Nuclear Center in Semipalatinsk to draw 
reliable conclusions, but no entity thus far has accepted 
responsibility to clean it.  In the meantime, people continue to 
return to the polygon area to live. 
 
ARCELORMITTAL, AN IMPRESSIVE STEEL GIANT 
 
8.  ArcelorMittal, the third largest steel "combinat" during the 
Soviet era, is today one of the world's pre-eminent steel plants. 
ArcelorMittal operates non-stop and sells steel to 125 buyers in 
more than 60 countries.  According to ArcelorMittal Press Secretary 
Nikolai Kubrakov, the European Bank for Reconstruction and 
Development (EBRD) loaned ArcelorMittal money to purchase new 
equipment and modernize its production line to meet world standards. 
 Kubrakov proudly boasted that ArcelorMittal is far better than 
Chinese or Ukrainian steel plants, and he urged his American 
"compatriots" to come here to "learn how to make steel again."  REO, 
having seen several modern steel plants in China, agreed with 
Kubrakov that ArcelorMittal is among the best steel plants in the 
world. 
 
9.  According to Kubrakov, ArcelorMittal is the only steel plant in 
the world that does not use natural gas as a production fuel source. 
 Because the Karaganda region is rich in coal, fuel costs for 
ArcelorMittal are practically negligible, he said.  He acknowledged 
a "dirtier" steel production process has resulted.  Galina Drozdova, 
the steel plant's Environmental Protection Division Deputy Director, 
said that ArcelorMittal is a responsible citizen in Temirtau and the 
Karaganda region and wants to reduce its pollution as much as 
possible, "because we live here, too, and we don't want to live in a 
polluted city any more than anyone else does!" 
 
10.  Drozdova said the plant is attempting to comply with 
environmental regulations while struggling to meet the 
ever-increasing demand for steel.  According to her, the plant 
recycles about 80 percent of its waste, either inside the plant as 
part of its production process, or in the community.  Steel slag is 
used in road construction and river embankments, and blast furnace 
slag is utilized in cement production.  Steel production uses a 
tremendous amount of fresh water for cooling.  She said AcelorMittal 
recycles much of the water used, but it still discharges some back 
into the Nura River. 
 
11.  Even EcoCenter reluctantly admits that ArcelorMittal has 
gradually reduced its pollution into the Nura River since it decided 
to adopt EU production standards.  EcoCenter, however, still insists 
that ArcelorMittal, which has not yet designated a director 
responsible for its environmental program, could do much better. 
Kurtavtseva cited a Ministry of Environment report that claimed that 
ArcelorMittal did not demonstrate "meaningful" environmental 
improvement after its modernization project.  EcoCenter went to the 
EBRD and registered its complaints about the continued pollution, 
and the EBRD sent observers to monitor the situation, but they left 
with no tangible results. 
 
12.  COMMENT:  ArcelorMittal is the dominant industrial giant in the 
 
ASTANA 00001697  003.2 OF 003 
 
 
Karaganda oblast, and its company town of Temirtau exists only 
because of the plant.  Approximately half the city's residents work 
at the plant, and the rest in the support economy (restaurants, 
stores, supply, repair, and so on).  NGOs are working hard to reduce 
ArcelorMittal's and the local coal mines' impact on the environment, 
but the steel plant's dominant place in Kazakhstan's economy makes 
that a daunting task.  Partially thanks to EcoCenter's efforts with 
ArcelorMittal and the government's improved environmental 
protection, ArcelorMittal sees itself as a partner in this effort to 
reduce its impact on the environment.  Progress will be slow and 
gradual, but organizations such as EcoCenter -- almost invisible in 
rural Kazakhstan -- deserve our attention and support.  END 
COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1696, KAZAKHSTAN: NEW SCIENCE STRATEGY FACES CONSTRAINTS

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Reference ID Created Released Classification Origin
09ASTANA1696 2009-09-28 10:32 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5817
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 #1696/01 2711032
ZNR UUUUU ZZH
O 281032Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6425
INFO RUCNCIS/CIS COLLECTIVE 1985
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1354
RUEHKO/AMEMBASSY TOKYO 2053
RUEHUL/AMEMBASSY SEOUL 1005
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1540
RUEKJCS/SECDEF WASHDC 1416
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHMFISS/CDR USTRANSCOM SCOTT AFB IL
RUEHAST/USOFFICE ALMATY 1898

UNCLAS SECTION 01 OF 02 ASTANA 001696 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, ECA, OES/PCI 
 
E.O. 12958: N/A 
TAGS: PGOV ECON SENV SOCI KPAO KZ
SUBJECT:  KAZAKHSTAN:  NEW SCIENCE STRATEGY FACES CONSTRAINTS 
 
REF:  ASTANA 0664 
 
ASTANA 00001696  001.2 OF 002 
 
 
1.  SUMMARY:  In a new strategic plan, Kazakhstan's Academy of 
Sciences and the Ministry of Education and Science identified future 
scientific research priorities in the areas of energy, 
biotechnology, mining and metallurgy, renewable energy, information 
technology, and agriculture.  To achieve its strategic goals, the 
government plans to award 30,000 university scholarships, acquire 
modern laboratory equipment, and establish a National Biotechnology 
Center in Astana.  The government also plans to create 
high-technology parks that combine both scientific research and 
commercial production, helping move scientific research from the 
laboratory to the marketplace.  Kazakhstani science officials also 
expressed hope that Kazakhstan and the United States would soon sign 
a bilateral science and technology agreement, which would facilitate 
collaboration on a number of projects.  END SUMMARY. 
 
AN ACADEMY UNDERGOING PHYSICAL AND METAPHYSICAL REPAIRS 
 
2.  Getting inside the Academy of Sciences in Almaty is harder than 
getting inside an exclusive New York City nightclub.  You need to 
know someone in order to get past the guard, but the hardest part of 
all is finding the entrance, since the building is surrounded by 
metal grate fencing.  The Academy has been under reconstruction for 
three years, with no visible improvement and no estimated completion 
date.  Regional Environmental Officer (REO) could not detect any 
visible change to the 1950s-era facade since a previous visit in 
1993, nor detect any improvement to the antiquated Academy Library. 
The Chief Librarian led us through a labyrinth of halls with exposed 
heating pipes and electrical wiring screaming out "fire hazard." 
 
3.  The Head of the International Relations Department, Professor 
Bakhtiyar Mynbayev, and the Chief Scientific Secretary, Academician 
Urishbay Chomanov, said the Academy is developing a new national 
strategy to promote scientific development in Kazakhstan.  Mynbayev 
complained that since independence, students have chosen to study 
finance or business in order to make money, but he said more 
students are now returning to science as job prospects improve.  He 
said that 120,000-150,000 Kazakhstani students graduate from high 
school each year, of whom more than 30,000 receive 
government-sponsored university scholarships.  Of these, 3,000 study 
abroad, after which they are obligated to return to Kazakhstan to 
work.  He laughed when asked how long they must work in Kazakhstan 
after graduation, because, "Kazakhstanis are extremely patriotic and 
will always choose to live and work in Kazakhstan!"  However, he 
said that in general, scholarship students are required to work for 
five years after returning from abroad. 
 
4.  Mynbayev said the Academy is consulting with the Ministry of 
Education and Science and other relevant ministries to determine 
Kazakhstan's major scientific priorities, which tentatively include 
energy, biotechnology, mining and metallurgy, renewable energy, 
information technology, and agriculture.  He said it is not a 
coincidence that these priorities also coincide with the main 
sectors of Kazakhstan's economy, because science is seen as a tool 
to further and enhance Kazakhstan's economic development. 
 
INADEQUATE LABS AND LACK OF ENGLISH 
 
5.  Chomanov said space science and nanotechnology were originally 
priority areas for scientific research, but the government and the 
Academy have had to scale back their initial ambitions in these 
areas and adopt "more realistic and pragmatic goals."  (NOTE: 
Although a draft budget for 2010-2012 allocates 56.7 billion tenge 
($378 million) to develop Kazakhstan's space industry over the next 
three years, the budget earmarks no funds to send a Kazakhstani 
cosmonaut to the International Space Stations (ISS).  As reported in 
reftel, the planned flight of a Kazakhstani astronaut to the ISS 
this September has been delayed indefinitely, due to budget 
constraints.  END NOTE.)  Chomanov said Kazakhstan's laboratories 
are inadequate to carry out advanced research in a number of areas, 
such as nanotechnology or biotechnology.  He said modern laboratory 
equipment is often prohibitively expense, noting that some 
specialized instruments, such as a nanotechnology scanner microscope 
with a 300,000x power magnification, cost several hundred thousand 
 
ASTANA 00001696  002.2 O
F 002 
 
 
dollars each. 
 
6.  Nevertheless, Chomanov said the government is committed to 
upgrading its laboratory equipment and infrastructure.  For example, 
the National Biotechnology Center in Astana has grown to include 
five national laboratories and 15 university affiliates around the 
country.  In addition, Kazakhstani scientists regularly collaborate 
with laboratories abroad, although their ability to do so is 
constrained by their inability to read or speak English.  Chomanov 
acknowledged that this restricts their ability to work in Western 
countries, publish in peer-review journals, and remain current with 
scientific research.  Mynbayev said the Academy would welcome 
English-language training for Kazakhstani scientists. 
 
SCIENCE FUNDS AND TECHNO-PARKS 
 
7.  Mynbayev said Kazakhstan supports scientific research through 
the Science Fund, the Innovation Fund, and regional science funds. 
He explained that these resources help a project move from the 
laboratory to the market, with results and products ready for 
commercial application.  Mynbayev, a veteran administrator schooled 
in the Soviet educational system, observed that capitalist countries 
invest in science and technology parks ("techno-parks") that 
facilitate innovation and commercialization.  Unfortunately, he 
said, Kazakhstan's laws, particularly on the protection of 
intellectual property rights, are "not developed enough" to enable 
the creation of techno-parks.  Mynbayev suggested that Kazakhstan 
has the potential to develop techno-parks in agriculture, oil and 
energy, and metallurgy.  He lamented, however, that while Russia has 
created techno-parks for small- and medium-sized enterprises, 
Kazakhstan does not yet have this capability.  Nevertheless, 
Mynbayev said that Kazakhstan plans to establish 50 "techno parks" 
over the next five years, and would welcome support from the United 
States and Europe. 
 
SEEKS U.S. HELP AND COOPERATION 
 
8.  Mynbayev said he hopes that Kazakhstan and the United States 
will soon sign a bilateral science and technology agreement, because 
it will make research cooperation with U.S. partners much easier. 
He said that Kazakhstani scientists are eager to cooperate with 
American partners on a range of projects, not only in pure science, 
but also in efforts to bring research out of the laboratory and into 
the marketplace.  He hopes that the United States can help 
Kazakhstan increase its understanding of how cutting-edge science is 
conducted in an interconnected, globalized world and said the 
Academy strongly supports scientific exchanges with U.S. educational 
institutions. 
 
9.  COMMENT:  The government looks to the Academy of Sciences, 
handicapped with aging infrastructure, outdated equipment, and 
staffing shortages, to boost economic development in key sectors. 
Despite these constraints, we believe that there are commercial and 
research opportunities in Kazakhstan for U.S. companies, and 
recommend they consider scientific partnerships with the Academy. 
END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1694, KAZAKHSTAN: REGIONAL ENVIRONMENTAL CENTER FOR CENTRAL

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Reference ID Created Released Classification Origin
09ASTANA1694 2009-09-28 09:13 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO5757
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DE RUEHTA #1694/01 2710913
ZNR UUUUU ZZH
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FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6422
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RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1352
RUEHKO/AMEMBASSY TOKYO 2051
RUEHUL/AMEMBASSY SEOUL 1003
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1538
RUEKJCS/SECDEF WASHDC 1414
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHMFISS/CDR USTRANSCOM SCOTT AFB IL
RUEHAST/USOFFICE ALMATY 1895

UNCLAS SECTION 01 OF 02 ASTANA 001694 
 
SIPDIS 
 
STATE FOR SCA/CEN, OES/PCI 
 
E.O. 12958: N/A 
TAGS: PREL ECON SENV SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN:  REGIONAL ENVIRONMENTAL CENTER FOR CENTRAL 
ASIA 
 
ASTANA 00001694  001.2 OF 002 
 
 
1.  SUMMARY: The Regional Environmental Center for Central Asia 
(CAREC), founded in 1998 by the five countries of Central Asia, the 
United Nations Development Programme (UNDP), and the European 
Commission (EC), has a mandate to promote regional dialogue and 
cooperation across a wide range of environmental and developmental 
areas.  CAREC's largest portfolio is water, and its goal is to 
attempt to facilitate a Central Asian regional agreement on water 
management, "in the most neutral way possible."  CAREC is critical 
of large-scale hydro projects, considering them "politically-driven" 
and not economically feasible.  CAREC plans to work in Afghanistan 
to promote sustainable development and environmental awareness, 
working through its Tajik branch office.  Although U.S. Government 
funding for CAREC ended in 2005, Chevron continues to be a strong 
donor and partner, and CAREC hopes to see renewed U.S. support for 
its regional activities.  END SUMMARY. 
 
REGIONAL SCOPE AND REACH 
 
2.  CAREC was established during the Fourth Pan-European Conference 
in 1998 in Aarhus, Denmark, by all five Central Asian countries, the 
United Nations Development Programme, and the European Commission. 
CAREC established its current headquarters in Almaty in 2001, and 
has offices in all five member countries.  Director Talabek Makeyev 
said CAREC seeks to address Central Asia's environmental problems 
through regional cooperation and dialogue in eight areas: 
environmental management and policy, civil society, sustainable 
development, water, climate change, sustainable energy, information 
sharing, and capacity building.  Possibly the greatest challenge 
CAREC faces, he said, is to establish regional cooperation on water 
resource management and ensure sustainability of water basin 
ecosystems. 
 
LARGE-SCALE WATER PROJECTS NOT ECONOMICALLY FEASIBLE 
 
3.  Makeyev said water is CAREC's largest portfolio, with more than 
one million Euros spent on various water projects since 2003.  This 
includes a potable water supply project for the city of Almaty, 
which USAID funded 2003-05.  Norway funded the project 2005-09, and 
Germany will support future phases.  Makayev stressed that this 
water project relies on co-funding by the local and oblast 
(regional) governments, and by the local water committee 
administration. 
 
4.  CAREC is also cooperating with the European Union (EU) to help 
local regions harmonize water standards with the EU, develop a water 
quality data exchange project in the Almaty District, and ensure 
access to trans-boundary water supplies in border communities. 
CAREC plans to host a regional conference in Almaty on water issues 
on October 6 as part of its overall strategy to enhance regional 
dialogue. 
 
5.  Makeyev acknowledged that water management is an extremely 
sensitive political issue in Central Asia, and said that if the 
countries in the region are not able to reach agreement, it will 
have troubling, long-lasting implications.  According to Makeyev, 
CAREC's goal is to integrate the Central Asian countries into a 
regional agreement, "in the most neutral way possible."  He said 
CAREC is working on some "neutral and trans-boundary projects," 
including community-to-community, trans-boundary watershed 
management projects that can lay the groundwork for a more 
long-term, regional solution. 
 
6.  Makeyev said that although water is the most accessible 
renewable energy source in Central Asia, the cost of hydropower is 
still much greater than coal, so the decision to use water rather 
than coal to generate electricity is more about politics than 
economics.  In general, large-scale dams are not profitable, he 
said.  However, communities need alternatives to coal in order to 
reduce the impact on the environment.  As a result, CAREC is 
exploring ways to provide incentives for communities that incur 
costs when they abandon coal.  He cited the example of Kazakhstan's 
and Kyrgyzstan's cooperation on the construction and operation of 
dams.  Makeyev was critical of Kazakhstan's decision to invest in 
 
ASTANA 00001694  002.2 OF 002 
 
 
the maintenance and operation of a number of Kyrgyz dams and 
reservoirs in the Chu and Talas river basins that supply water to 
both countries.  He insisted that this is neither economically &#x000
A;viable nor environmentally sustainable, calling it a "political 
solution" to the problem of access to trans-boundary water. 
 
CAREC'S OFFICE A SHOWCASE OF ENERGY EFFICIENCY 
 
7.  Makeyev said CAREC's own headquarters building in Almaty is a 
centerpiece of its energy efficiency project.  CAREC plans to 
renovate the building, originally a kindergarten typical of office 
buildings throughout Central Asia, and promote it as a showcase of 
energy efficiency.  CAREC wants to demonstrate, in the most 
cost-efficient way, how to change current energy usage, eliminate 
waste, and improve energy efficiency. 
 
AARHUS AN IMPORTANT PART OF CAREC'S WORK 
 
8.  For Makeyev and CAREC, the four basic pillars of environmental 
sustainability are mobilizing resources and people, building 
capacity, raising awareness, and supporting pilot projects.  CAREC 
works with local organizations and the Ministries of Education and 
Environmental Protection to prepare secondary school and university 
courses on sustainable development.  CAREC, with support from the 
European Commission, plans to carry out an environmental awareness 
campaign in Central Asia in 2010, to emphasize the role of civil 
society and educate citizens about their rights and responsibilities 
under the Aarhus Convention.  (NOTE:  The United Nations Economic 
Commission for Europe Convention on Access to Information, Public 
Participation in Decision-making, and Access to Justice in 
Environmental Matters, usually known as the Aarhus Convention, was 
signed on June 25, 1998, in the Danish city of Aarhus.  The Aarhus 
Convention grants the public rights regarding access to information, 
public participation, and access to justice in governmental 
decision-making processes on matters concerning the local, national, 
and trans-boundary environment.  END NOTE.) 
 
CAREC MOVING INTO AFGHANISTAN TO PROMOTE SUSTAINABLE DEVELOPMENT 
 
9.  Makeyev said that CAREC is now working in Afghanistan to promote 
sustainable development and increase environmental awareness. 
Through its Tajik branch office, he said that CAREC has easy access 
to Afghan culture and society, and can work closely with local 
governments and NGOs to foster civil society development. 
 
U.S. GOVERNMENT SUPPORT FADED, BUT CHEVRON A STRONG PARTNER 
 
10.  Makeyev thanked the United States government for its past 
support of CAREC, but said that most of that support ended in 2005. 
He expressed hope that, with a new administration, the United States 
would again consider helping CAREC carry out its mission.  He said 
that Chevron has been a strong partner of CAREC, willing to fund 
education programs to teach youth about sustainable development. 
Makeyev urged the United States to send an expert to work in CAREC 
alongside a German expert resident in Almaty. 
 
11.  COMMENT:  CAREC is one of the few environmental organizations 
in Central Asia with a regional mandate.  Even though it has strong 
UNDP and EU support, CAREC is nevertheless eager to work with the 
United States and sees a renewed opportunity with the new 
administration.  The Department of Energy is also looking for 
reliable partners to help implement renewable energy and energy 
efficiency projects, and this appears to be a natural fit.  As the 
United States seeks to engage local entities in Kazakhstan and 
elsewhere in Central Asia, CAREC certainly deserves our attention. 
END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1693, KAZAKHSTAN: ZHOVTIS DETERMINED TO KEEP FIGHTING

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Reference ID Created Released Classification Origin
09ASTANA1693 2009-09-28 07:09 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5634
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 #1693/01 2710709
ZNR UUUUU ZZH
O 280709Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6420
INFO RUCNCIS/CIS COLLECTIVE 1981
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1350
RUEHKO/AMEMBASSY TOKYO 2049
RUEHUL/AMEMBASSY SEOUL 1001
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1536
RUEKJCS/SECDEF WASHDC 1412
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHGV/USMISSION GENEVA 1007
RUEHVEN/USMISSION USOSCE 2056
RUCNDT/USMISSION USUN NEW YORK 2507

UNCLAS SECTION 01 OF 02 ASTANA 001693 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RPM, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM KDEM OSCE KZ
SUBJECT:  KAZAKHSTAN:  ZHOVTIS DETERMINED TO KEEP FIGHTING 
 
REFTEL:  ASTANA 1538 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Convicted human rights advocate Yevgeniy Zhovtis 
told the visiting First Deputy Director of the Office for Democratic 
Institutions and Human Rights (ODIHR) on September 19 that he does 
not want any special treatment, just a chance at a fair appeal 
hearing.  Zhovtis was in good spirits, had a good rapport with the 
detention center staff, and was determined to keep fighting.  He 
considers an acquittal very unlikely, but insists that a suspended 
sentence or an amnesty (rumored to happen in December) will not be 
acceptable.  Civil society activists told us separately that 
Zhovtis' conviction "shocked" many senior government officials, 
including officials within the Committee for National Security 
(KNB).  Director of the Soros Foundation, Kazakhstan told us 
procedural violations in Zhovtis' trial, while numerous, were the 
norm rather than the exception in the Kazakhstani legal system, and 
she is not convinced they were aimed specifically at Zhovtis.  END 
SUMMARY. 
 
ZHOVTIS IN BATTLE SPIRITS 
 
3.  (SBU) Douglas Wake, First Deputy Director for the Office for 
Democratic Institutions and Human Rights (ODIHR), visited convicted 
human rights advocate Yevgeniy Zhovtis on September 19.  He reported 
afterwards that Zhovtis is in good spirits, determined to keep 
fighting, and has good rapport with the detention center staff. 
Zhovtis told Wake that he does not want any special treatment, just 
a chance at a fair appeal hearing.  Although he would like to appear 
at the appeal personally and present witnesses excluded in the first 
hearing, he admits that appeals under Kazakhstani practice involve 
no more than a review of the written record and limited statements 
by the prosecutor and defense. 
 
4.  (SBU) Zhovtis outlined for Wake four possible outcomes for the 
appeal:  an acquittal (which he believes very unlikely); a reduction 
or suspension of the sentence that takes into account his settlement 
with the family (which, in his view, should have resulted in the 
dismissal of the case); return of the case to the first instance 
court for a new trial; or sustainment of the original verdict.  He, 
along with other civil society representatives, expects that there 
will be a general amnesty in December that would cover non-grave 
crimes, such as the one for which Zhovtis was convicted.  He 
insisted to Wake that neither a suspended sentence nor an amnesty 
would be acceptable.  Because he believes himself innocent of any 
crime, he is determined to fight until the conviction is overturned. 
 
 
5.  (SBU) Zhovtis told Wake that the timing of the appeal will 
depend on how the authorities want to present the case at OSCE's 
Human Dimension Implementation Meeting (HDIM) in Warsaw -- they 
could either speed up the process in order to have a "result" to 
present at the HDIM, or wait until after event so that they can tell 
people in Warsaw that the case is still under review.  (NOTE: 
Several leading Kazakhstani NGOs plan to organize a side-event at 
the HDIM specifically on Zhovtis' case.  Considering the HDIM begins 
this week, it is unlikely that Zhovtis' appeal will be heard before 
that.  END NOTE.) 
 
6.  (SBU) Zhovtis was happy about the support he has received, 
although he was irritated that several picketers in Almaty were 
fined for holding protests of his conviction.  He was quite unhappy 
with the Kazakhstani government's official response to international 
interventions, which cited statistics implying that Zhovtis' 
sentence was typical for such cases, or maybe even a bit light.  He 
and other interlocutors insisted that the response grossly distorted 
the reality by lumping him in with the people who were drunk or 
killed pedestrians in crosswalks.  He, on the other hand, was sober 
and blinded by oncoming traffic before hitting someone who was 
walking in the middle of a dark road. 
 
PICKETS OF EMBASSIES "NOT HELPFUL" 
 
 
ASTANA 00001693  002 OF 002 
 
 
7.  (SBU) Almaty Helsinki Committee's chair Ninel Fokina told the 
DCM separately on September 20 that Zhovtis will either get a 
suspended sentence on appeal and/or fall under the December amnesty, 
and that an acquittal is "extremely unlikely."  She said the pickets 
of Kazakhstani embassies abro
ad organized by Zhovtis' international 
supporters "are not helpful," because they put the authorities on 
the defensive.  She underlined the authorities' extreme sensitivity 
to the international attention to this case. 
 
SENIOR OFFICIALS STUNNED 
 
8.  (SBU) Fokina believes that the verdict surprised many senior 
officials within the Kazakhstani government as much as the 
international community.  The local courts "went overboard," she 
said, and many people within the Presidential Administration, the 
Ministry of Interior (MOI), and the Procurator General's Office 
(PGO) were "in shock."  Zhemis Turmagambetova, the director of 
Charter for Human Rights, who is on good terms with many senior 
officials, confirmed this assessment.  Turmagambetova told us she 
received a "frantic phone call" shortly after the verdict from an 
unnamed Deputy Director of the Committee for National Security 
(KNB), who asked for her advice on how to handle "this horrible 
situation."  "Even the KNB has its hawks and its doves," said 
Turmagambetova.  She shared that the Chairman of the Constitutional 
Council said in response to her query about the appeal timeline that 
the process will not be "dragged out." 
 
OSI'S LEGAL AID 
 
9.  (SBU) The director of Soros Foundation, Kazakhstan, Anna 
Alexandrova, told the DCM on September 22 that the procedural 
violations in Zhovtis' trial, which were certainly numerous, were 
the norm, rather than the exception, in the Kazakhstani legal 
system.  She is not convinced that they were aimed specifically at 
Zhovtis.  She said Open Society Institute (OSI) dispatched a 
prominent U.S. lawyer, Scott Horton, to Kazakhstan to assist 
Zhovtis' legal team.  According to Alexandrova, Horton also was to 
meet with people outside Zhovtis' defense team to obtain a "broad 
perspective" on the case.  (NOTE: The ambassador alerted DFM Umarov 
of Horton's pending arrival on September 11 and underscored that 
this was an OSI, not/not a USG initiative (see reftel). Political 
LES who attended Zhovtis' trial briefed Horton on September 25. END 
NOTE.) 
 
10.  (SBU) COMMENT:  Fokina and Turmagembetova's comments fall in 
line with what we heard previously from Zhovtis' lead lawyer, 
Vitaliy Voronov (reftel).  It seems momentum is building within the 
government to resolve this case quietly.  To smooth the process, the 
MFA has cautioned that we should continue to be sensitive and 
careful about how we approach the Kazakhstani government on this 
issue and stick strictly to advocating a fair and transparent appeal 
process.  END COMMENT.

Wikileaks

09ASTANA1628, KAZAKHSTAN: THE TANGLED WEB OF (NON)TRUE TRADE FINANCE AT

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Reference ID Created Released Classification Origin
09ASTANA1628 2009-09-28 02:00 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5456
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 #1628/01 2710200
ZNR UUUUU ZZH
O 280200Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6353
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1978
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1347
RUEHKO/AMEMBASSY TOKYO 2046
RUEHUL/AMEMBASSY SEOUL 0998
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1533
RUEKJCS/SECDEF WASHDC 1409
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2504
RUEHNO/USMISSION USNATO 2818

UNCLAS SECTION 01 OF 03 ASTANA 001628 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
PLEASE PASS USTDA AND OPIC 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ
SUBJECT:  KAZAKHSTAN:  THE TANGLED WEB OF (NON)TRUE TRADE FINANCE AT 
ALLIANCE BANK 
 
REFTEL:  ASTANA 1626 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  While ECAs represented on the BTA steering 
committee appear to be finding a compromise (reftel), Alliance Bank 
has recently reneged on a commitment to separate the restructuring 
options for trade finance due to pressure from creditors on its 
steering committee.  At the center of the issue lies Alliance Bank 
and its creditors' efforts to distinguish between so-called "true 
trade finance" and "non-true trade finance."  Whether a legitimate 
mechanism to separate ECA-guaranteed credit used in possibly 
fraudulent transactions, or a self-preservation tactic Alliance Bank 
is using to reduce its overall obligations, it poses another threat 
to long-term credit providers, such as the USDA Commodity Credit 
Corporation's future operations, in Kazakhstan.  END SUMMARY. 
 
ALLIANCE BANK TAKES CENTER STAGE 
 
3.  (SBU) Unable to join the delegation of ECAs that traveled to 
Kazakhstan in early September (reftel), USDA Branch Chief for Risk 
and Asset Management Teri Ryan and Financial Analyst Hal Taylor 
again made the case for preferential trade finance conditions in 
Almaty and Astana September 17-24.  After learning that Alliance 
Bank assurances for preferential trade finance treatment were in 
jeopardy, Ryan and Taylor focused on Alliance Bank.  (NOTE:  The 
USDA, via the Credit Commodity Corporation has over $230 million in 
exposure to the Kazakhstani banking sector.  Of this, they have $49 
million in exposure to BTA, and $85 million to Alliance Bank.  END 
NOTE.) 
 
4.  (SBU) Referencing the non-binding MOU signed on July 6 to 
prevent imminent liquidation of the bank by the Kazakhstani 
Financial Supervision Agency (FSA), Director of the Department of 
International Relations at Alliance Bank Director Victoria Tyo 
explained during a September 24 meeting that Alliance and its 
creditor steering committee are currently negotiating in London to 
establish a legally-binding terms sheet.  This document will include 
an allocation/reallocation mechanism (currently under development) 
to prevent creditors over-subscribing to any of the five options 
originally set forth in the MOU.  All involved creditors must 
ultimately approve it in a vote expected by November 15.  While not 
committing to the timeframe, Tyo said Alliance officials hope that 
the steering committee will sign the terms by October 1. 
 
5.  (SBU) Unlike BTA, Tyo said that Alliance Bank originally pledged 
to keep trade financing debt out of restructuring negotiations in 
order to provide preferential terms for full repayment.  (NOTE:  As 
a result, ECAs have not had direct representation on the Alliance 
Steering Committee.  END NOTE.)  However, Tyo explained that 
steering committee members now insist on the inclusion of trade 
finance in the binding terms sheet, and have put enormous pressure 
on Alliance for equal treatment of all creditors.  She explained 
that they must find some form of compromise on trade finance and 
Alliance must now "draw a line" between categories of trade finance 
debt.  Alliance Bank Senior Manager for Global Trade Finance Aida 
Amanova said that this "line" will likely be drawn according to a 
distinction between what they term "true trade finance," and 
"non-true trade finance." 
 
(NON)TRUE TRADE FINANCE? 
 
6.  (SBU) According to Amanova, "true trade finance" requires an 
underlying contract for the import of real goods to Kazakhstan and a 
letter of credit.  In the opinion of Alliance, "non-true trade 
finance" transactions have no underlying trade (commodity).  Rather, 
they represent a direct cash flow to a bank, such as Alliance or 
BTA.  USDA Financial Analyst for Risk and Asset Management Hal 
Taylor emphasized the fundamental flaw in this distinction.  While 
 
ASTANA 00001628  002 OF 003 
 
 
on the surface, he argued, some of USDA's exposure to Alliance may 
not appear to be "true trade finance," every guaranteed transaction 
effectively had an underlying commodity exchange. 
 
7.  (SBU) As explained by USDA Branch Chief for Risk and Asset 
Management Teri Ryan, in "pure trade finance transactions," loans 
are characterized by short-term se
lf-liquidating debt.  In practice, 
an exporter unwilling to accept foreign importer repayment risk 
obtains a letter of credit from a bank.  Once the importer receives 
the commodity, the bank that issued the letter of credit pays the 
exporter in full, and then demands repayment from the importer. 
These letters of credit tend to be short-term loans and normally 
require full repayment within 30-90 days.  To assist importers 
without the necessary liquidity to repay within 30-90 days, often a 
secondary bank will honor the issued letter of credit by extending 
the repayment period for up to three years at a competitive 
refinancing rate.  In accordance with its mandate to facilitate 
domestic exports, an ECA frequently guarantees the secondary bank's 
refinanced letter of credit. 
 
8.  (SBU) USDA via the Commodity Credit Corporation (CCC) serves as 
the guarantor of trade finance loans for CoBank and DeutscheBank's 
New York branch, which provided BTA and Alliance banks with 
competitive refinancing for up to three years on original letters of 
credit for "true trade finance" transactions (i.e. the export/import 
of real U.S. commodities to "Eurasia," which includes Kazakhstan). 
CoBank and Deutsche Banks' refinancing of original letters of credit 
freed obligated liquidity in the short-term for BTA and Alliance -- 
that they would have otherwise been obligated to repay in full in 
30-90 days -- for use at their discretion.  USDA refers to this 
common mechanism, which provides competitive financing for U.S. 
exports, as structured trade finance.  As a matter of practice, the 
USDA regards any transaction that involves a letter of credit from 
which an actual commodity was shipped, regardless of any inclusive 
structured refinancing, as "true trade finance."  In many cases, it 
is likely that BTA and Alliance used this liquidity to make 
additional loans, which may have included investment in assets in 
Russia. 
 
9.  (SBU) This year, both BTA and Alliance defaulted on principal 
repayments for the refinanced letters of credit to CoBank.  This 
action triggered CCC guarantor (claim) payments by USDA.  To date, 
the USDA via the CCC has paid claims on BTA and Alliance defaults of 
approximately $5.5 million and $9.1 million respectively. 
 
OR ARE THEY BUNGE/CARGILL SCHEMES? 
 
10.  (SBU) According to Amanova, members of the steering committee 
believe that many of the transactions potentially classified as 
"non-true trade finance" could also be called "Bunge or Cargill 
Schemes."  In these schemes -- named after the large agricultural 
conglomerates in Argentina and the U.S. -- a collaborating exporter 
and importer -- such as Cargill -- approach a bank -- such as 
Alliance -- with an export/import transaction with a request to 
issue a letter of credit.  Knowing that a secondary bank -- such as 
CoBank -- will refinance, and that an ECA likely will guarantee the 
credit, the agricultural company will offer to arrange the deal for 
a significant fee.   Once the underlying contract is completed, the 
secondary bank pays in full the first bank, which issued the letter 
of credit.  The first bank thus gained a short-term cash loan for 
the value of the initial commodity transaction, which it only needs 
to repay within the period of time determined by the specific 
refinancing -- normally within three years.  In this scenario, 
Alliance simply used trade finance transactions as a vehicle to 
secure pure cash loans from ECA creditors.  Therefore, many argue 
that the ECAs should not receive special terms. 
 
AN ACCEPTABLE ECA OPTION? 
 
 
ASTANA 00001628  003 OF 003 
 
 
10.  (SBU) Clearly displeased by Alliance steering committee 
actions, Ryan and Taylor emphasized that ECAs cannot accept any of 
the current options offered in Alliance's restructuring MOU, and 
argued that the steering committee must include representation of 
trade finance interests.   Ryan said USDA will press for the release 
of concrete definitions of "true trade finance" versus "non-true 
trade finance" transactions, which Alliance has not yet provided. 
Tyo reiterated that Alliance Bank officials fully understand the 
implications should ECAs not receive an acceptable option, and 
pledged to actively seek the support of the remaining creditors.  At 
the conclusion of the meeting, Tyo said that this specific issue was 
raised already in London and mentioned current attempts to create an 
alternative to the proposed seven-year trade financing option. 
However, she could not yet disclose precise terms.  According to 
Amanova, total ECA exposure to Alliance is approximately $136 
million.  However, she either would not, or could not, disclose how 
much of this exposure they might define as "true trade finance." 
 
SAMRUK-KAZYNA KEEPING DISTANCE FROM ALLIANCE 
 
11.  (SBU) Since February of this year, Samruk-Kazyna officially 
owns a 76% ownership stake in Alliance Bank.  However, it has yet to 
recapitalize the bank.  With no equity ownership, Samruk-Kazyna 
extended an initial loan for deposits to keep the bank functioning, 
but it is biding its time in the conversion of its loans and 
deposits to equity.  When pressed directly on this issue by Taylor 
and Ryan on September 18, who asked if this signaled a possible 
reluctance to actually preserve the bank, Samruk Kazyna Director of 
Risk Management Kamilla Khairova said that past government 
assurances and anti-crisis measures indicate a commitment for 
eventual conversion.  However, Khairova admitted that the conversion 
partly depended on the success of a restructuring agreement and the 
bank's subsequent liquidity requirements.  (NOTE:  The MOU that 
serves as the basis for current negotiations includes a provision 
requiring Samruk-Kazyna's recapitalization of the bank.  END NOTE.) 
 
12.  (SBU) COMMENT:  After an initial period of calm, the struggle 
between ECA and non-ECA creditors now is playing out in Alliance 
Bank restructuring talks.  Because someone must take a loss in the 
end, all parties are attempting to shift blame.  Arguments over the 
validity of distinguishing between "non-true" and "true trade 
finance" are simply the most recent volley.  Still, like many of the 
financial instruments employed in the go-go days of the credit 
bubble, it will take significant efforts to untangle the complicated 
webs of trade finance.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1627, KAZAKHSTAN: SCENESETTER FOR DOE DEPUTY SECRETARY PONEMAN

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1627 2009-09-28 01:55 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5445
OO RUEHAG RUEHAST RUEHBC RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDE RUEHDF
RUEHDIR RUEHFL RUEHIK RUEHKUK RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ
RUEHNEH RUEHNP RUEHPOD RUEHPW RUEHROV RUEHSK RUEHSL RUEHSR RUEHTRO
RUEHVK RUEHYG
DE RUEHTA #1627/01 2710155
ZNR UUUUU ZZH
O 280155Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6348
INFO RUCNCIS/CIS COLLECTIVE 1973
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1342
RUEHKO/AMEMBASSY TOKYO 2041
RUEHUL/AMEMBASSY SEOUL 0993
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RUEKDIA/DIA WASHINGTON DC
RHEHNSC/NSC WASHDC 1528
RUEKJCS/SECDEF WASHINGTON DC
RUEKJCS/JOINT STAFF WASHINGTON DC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1890

UNCLAS SECTION 01 OF 05 ASTANA 001627 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC, DRL, EUR/RPM 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON ENRG EPET EINV KZ
SUBJECT:  KAZAKHSTAN:  SCENESETTER FOR DOE DEPUTY SECRETARY PONEMAN 
 
ASTANA 00001627  001.2 OF 005 
 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Embassy Astana warmly welcomes your October 5-8 
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 slowed, with 
political institutions, civil society, and the independent media 
still underdeveloped.  Our fundamental strategic objective is a 
secure, democratic, and prosperous Kazakhstan that fully 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.  Your visit can reinvigorate the U.S.-Kazakhstan Energy 
Partnership and shed light on the government's plans and underscore 
our goals and priorities regarding Kazakhstan's future energy 
transactions and policies.  END SUMMARY. 
 
ECONOMY:  AGGRESSIVE STEPS TO TACKLE ECONOMIC CRISIS 
 
3. (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 
a modest 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 government has taken significant steps to tackle the domestic 
reverberations of the economic crisis.  It has allocated around $20 
billion to take equity stakes in private banks, propped up the 
construction and real estate sectors, and supported small- and 
medium-sized enterprises and agriculture. 
 
4.  (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.  In July, BTA Bank, the country's 
largest commercial bank, declared a moratorium on interest and 
principal payments.  BTA's external debts are valued at $13 billion, 
of which the bank said it will repay $3 billion this year.  In 2008, 
BTA's net losses were $7.9 billion, and total obligations exceeded 
the value of its assets by $4.9 billion.  Kazakhstani authorities 
continue to investigate former BTA Chairman 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. 
 
OIL AND GAS PRODUCTION 
 
5. (SBU) Kazakhstan produced 70.7 million tons of oil in 2008 
(approximately 1.41 million barrels per day (bpd), and is expected 
to become one of the world's top ten crude oil exporters soon after 
2015.  From January - August, Kazakhstan increased oil production by 
8.8 percent, to 41.83 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. 
 
6.  (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, a
lthough the majority of the gas that will be exported via 
 
ASTANA 00001627  002.2 OF 005 
 
 
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. 
 
OIL AND GAS TRANSPORTATION 
 
7. (SBU) With 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, national 
oil company KazMunaiGaz (KMG) announced the completion of the 
Atasu-Alashankou segment, and in October, it expects to begin crude 
shipments via the Kenkiyak-Kumkol segment of the 3,000 kilometer oil 
pipeline to China, which will initially carry 200,000 bpd, with 
expansion capacity of 400,000 bpd. 
 
8. (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 the Kazakhstan 
Caspian Transport System (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. 
 
 
RENEWABLE ENERGY 
 
9. (SBU) Despite the abundance of relatively cheap fossil fuels in 
Kazakhstan, the government is clearly serious about climate change, 
renewable energy, and energy efficiency.  The March ratification of 
the Kyoto Protocol, the July law on renewable energy, and the draft 
law on energy efficiency demonstrate that the government is taking 
the first legislative steps to achieve its ambitious goal of 
increasing the share of renewable energy in Kazakhstan's total power 
consumption from 0.02 percent to 4.0 percent by 2020. 
 
ELECTRICAL POWER 
 
10.  (SBU) Despite these legislative mandates to stimulate the 
development of renewable energy sources, in 2008, coal-fired power 
plants produced 83 percent of the 80 billion kilowatt hours of 
electricity generated in Kazakhstan.  According to national power 
grid operator KEGOC, hydropower generated 12 percent of Kazakhstan's 
electricity, and natural gas power plants generated the remaining 
five percent.  Among the issues and challenges facing the electrical 
power industry in Kazakhstan, generating equipment is old and in 
need of modernization, the number of peak power plants is limited, 
generation capacity is unevenly distributed, and the country's power 
grid is not integrated, so that western Kazakhstan must import 
electricity from Russia. 
 
11.  (SBU) On September 17, Kazakhstan President Nursultan 
Nazarbayev attended a ceremony in the northern Kazakhstan city of 
Ekibastuz to mark the completion of the country's second north-south 
power transmission line.  The 500 kilovolt (kV) line, completed 
ahead of schedule at a cost of $290 million financed by the World 
Bank and European Bank for Reconstruction and Development, will 
 
ASTANA 00001627  003.2 OF 005 
 
 
allow the country's national grid operator to deliver power 
generated in Kazakhstan's north to major load centers in the south. 
President Nazarbayev celebrated the completion of this new line by 
asserting that Kazakhstan's southern region, including the major 
cities of Almaty, Shimkent, and Taraz, would no longer depend on 
power transmission from Kazakhstan's southern neighbors, and that 
Kazakhstan has "become fully independent from all other electricity 
exporters." 
 
NUCLEAR ENERGY 
 
12.  (SBU) Kazakhstan is committed to developing a civilian nuclear 
power industry.  On September 25, Kazatomprom Vice President Sergei 
Yashin announced at the Eurasian Energy Forum that Kazakhstan has 
completed a feasibility study for a VBER-300 nuclear power plant in 
Aktau under a Russian-Kazakhstani joint venture established in 
October 2008.  According to Yashin, the plant will be powered by a 
pressurized water reactor of 300 megawatts (mW) and the first of two 
blocks will be operational in 2016.  In 2008, Kazakhstan produced 
8,500 tons of uranium (24 percent of total world output), and three 
percent of the world's nuclear fuel.  The country plans to increase 
both production figures dramatically.  By 2020, for example, 
Kazakhstan expects to produce 13 percent of the world's nuclear 
fuel.  Kazatomprom has joint ventures with atomic energy companies 
from Japan, France, Russia, India, China, and Canada.  On September 
24, Kazakhstan signed a nuclear trade agreement with Canada, under 
which Canada agreed to sell nuclear technology and equipment to 
Kazakhstan. 
 
NON-PROLIFERATION:  A HALLMARK OF BILATERAL COOPERATION 
 
13. (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 
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. 
 
14.  (SBU) The government of Kazakhstan is responsible for funding 
the transport of the BN-350 spent fuel from Aktau to Baikal-1.  On 
September 18, the Prime Minister signed two decrees authorizing 
reserve funding and duty-free equipment transfer that will help 
ensure continuation of spent fuel transport operations.  While these 
decrees are helpful and timely, we continue to urge the government 
to take further steps, such as adopting simplified procedures for 
tax exemptions, customs clearances, and tariff and non-tariff 
exemptions. &#x000
A; 
15. (SBU) The Kazakhstanis are active participants in the Global 
Initiative to Combat Nuclear Terrorism and are seeking additional 
ways to help them burnish their non-proliferation credentials.  On 
April 6, President Nazarbayev announced 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. 
 
DEMOCRACY:  SLOW GOING 
 
16. (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 
 
ASTANA 00001627  004.2 OF 005 
 
 
standards.   The next parliamentary and presidential elections are 
scheduled for 2012. 
 
17. (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 through with additional reforms. 
 
18.  (SBU)  On September 3, the Balkash district court sentenced 
Kazakhstan's leading human rights activist Yevgeniy Zhovtis to four 
years imprisonment for vehicular manslaughter. The charge stemmed 
from a July 26 accident in which Zhovtis struck and killed a 
pedestrian with his car. On September 15, Zhovtis' lawyers filed an 
appeal of the conviction, which is still pending. Local and 
international civil society representatives and opposition activists 
heavily criticized the trial for numerous procedural violations. 
Some observers alleged that the harsh sentence imposed on Zhovtis, a 
strong critic of the regime, was politically motivated.  The 
Ambassador has publicly urged the Kazakhstani authorities to provide 
Zhovtis access to fair legal proceedings, and we have raised the 
case with senior government officials in Astana and in Washington. 
 
 
19. (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. 
 
20. (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 
 
21. (SBU) Kazakhstan has supported 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 
 
ASTANA 00001627  005.2 OF 005 
 
 
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. 
 
22. (SBU) In 2008, the Kazakhstani government provided approximately 
$3 million in assistance to Afghanistan 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. 
 
HOAGLAND

Wikileaks

09ASTANA1626, KAZAKHSTAN: THE GOVERNMENT’S EVOLVING APPROACH TO BTA

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1626 2009-09-28 01:05 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO5437
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 #1626/01 2710105
ZNR UUUUU ZZH
O 280105Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6345
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1970
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1339
RUEHKO/AMEMBASSY TOKYO 2038
RUEHUL/AMEMBASSY SEOUL 0990
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1525
RUEKJCS/SECDEF WASHDC 1406
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2501
RUEHNO/USMISSION USNATO 2815

UNCLAS SECTION 01 OF 03 ASTANA 001626 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN (PLEASE PASS TO PARTY AT UNGA), EEB/ESC 
STATE PLEASE PASS USTDA AND OPIC 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN GM UK IT KZ
SUBJECT:  KAZAKHSTAN:  THE GOVERNMENT'S EVOLVING APPROACH TO BTA 
TRADE FINANCE DEBT 
 
REF:  A.  ASTANA 1613 
  B.  ASTANA 1509 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Kazakhstani financial officials are negotiating 
with export credit authorities (ECAs) from at least 14 countries, 
who have demanded sovereign guarantees for debt repayment on several 
billion in exposure.  For several months, Kazakhstani officials have 
stood united in their refusal to accept such terms, publicly arguing 
that such a practice would constitute special treatment for ECA 
debts compared to other obligations.  Although the Kazakhstani 
government maintains its distance in the resolution of ECA debt, 
numerous officials have begun expressing a willingness to consider 
ECA terms.  Emboldened by a signed MOU that provides for full 
repayment on acceptable terms of trade finance debt, ECAs will now 
push for the government's sovereign guarantee.  END SUMMARY. 
 
 
MOU SIGNED WITH ECA OPTION 
 
3.  (SBU) Following London negotiations September 10-17, troubled 
BTA Bank and its creditor steering committee signed a 
unanimously-accepted memorandum of understanding (MOU) on 
restructuring that ultimately satisfied a September 18 submission 
deadline set by the Kazakhstani Financial Supervision Agency (FSA) 
(ref A).  They thus warded off the risk of liquidation.  The MOU 
included an option specifically designed for export credit agencies 
(ECA) that provides for full repayment of trade finance debt within 
seven years, with an initial three-year grace period on principal 
payments.  While this ECA option alleviated some fears about trade 
finance's access to preferential terms, international ECAs remain 
seriously concerned that full repayment remains in jeopardy without 
explicit sovereign guarantees. 
 
NATIONAL BANK'S HANDS-OFF APPROACH 
 
4.  (SBU) Although somewhat receptive, Kazakhstani financial 
authorities indicated a strong preference for a quick resolution, 
and adopted a generally hands-off approach in the days and weeks 
prior to the signing of the MOU.  This tactic left BTA and the 
members of its steering committee in charge of determining the 
specific terms of the agreement even for international ECAs who took 
their case for preferential conditions in restructuring to the top 
Kazakhstani financial and regulatory agencies.  During a September 9 
meeting with Chairman of the National Bank of Kazakhstan (NBK) 
Gregory Marchenko, a delegation of international ECAs comprised of 
representatives from Italy, Germany, Belgium, Hungary, the United 
States and Korea pressed their demand for an extension of the strict 
MOU submission timeline and revision of restructuring terms, which 
they described as "unprecedented" and "blackmail."  Otherwise, they 
argued long-term economic relations with Kazakhstan would suffer 
significant consequences. 
 
5.  (SBU) Marchenko initially recoiled at the suggestion that the 
government should assume liability for the trade finance obligations 
of banks that include BTA and Alliance, whose management was fired 
or are fugitives charged with massive fraud.  He responded by 
rhetorically asking how many ECA executives were fired for "not 
having seen any of the abundant red flags that were present at the 
time."  Because the NBK believes that most ECA assets ended up being 
used to finance projects in Russia, Marchenko said the government is 
distancing itself from restructuring talk -- the banks and creditors 
must negotiate amongst themselves.  He further explained his opinion 
that the FSA should have begun to limit BTA's banking operations in 
June because of the risks associated with loss of confidence in the 
banking sector.  Calming a bit, Marchenko said he understood Lazard 
(i.e. BTA's Financial Advisors) were "playing hardball," but he 
believed room for negotiation remained. 
 
 
ASTANA 00001626  002 OF 003 
 
 
6.  (SBU) When ExIm Bank Vice President for Asset Management Frances 
Nwachuku assessed that "mistakes were made on all sides, including 
oversight," Marchenko, with unexpected grace, responded that the 
government does
not want to turn its back on the ECAs.  However, it 
is wary, he said, because bad deals backed by sovereign guarantees 
in the early 1990s cost Kazakhstan nearly $2 billion.  Marchenko 
ended the meeting by calling ECA concerns surmountable, 
acknowledging the need to defend public funds, and saying he would 
"speak with the government."  However, he closed with a thinly 
veiled warning that if additional creditor demands made 
restructuring too expensive, the government would see little use in 
maintaining the institution. 
 
MORE OF THE SAME FROM THE FSA 
 
7.  (SBU) The ECA delegation expressed similar concerns and received 
similar responses during a September 7 meeting with the Director of 
the FSA Banking Supervision Department Mukhtar Bubeyev.  Bubeyev 
repeated the official government position that negotiations remain 
solely between the banks and their creditors, and that the FSA 
exercises no influence over the process.  Denying Germany's Euler 
Hermes' accusations that FSA certainly plays a central role in the 
process, Bubeyev explained that FSA's primary role will be to review 
the restructuring proposals.  If FSA does not believe that the plans 
leave the banks with sufficient capital and liquidity, it will 
reject them. 
 
8.  (SBU) The banks and the creditors alone must negotiate the 
potential separation of ECA trade finance and commercial debt, he 
said.  According to Bubeyev, some ECAs conducted "proper banking 
business," as opposed to "true trade finance."  However, the 
government planned to leave resolution of this issue to the banks 
and creditors.  The FSA, he argued, is charged with the maintenance 
of financial stability in Kazakhstan, and public confidence is 
tantamount to stability.  Diminishing public confidence precluded 
the possibility of any extension.  Finally, without mincing words, 
Bubeyev said, "The bank (BTA) has been operating with negative 
capital since June; we are expecting a bank run.  The deadline is 
firm." 
 
BTA OPEN TO ECA OPTION 
 
9.  (SBU) BTA Chairman and Samruk-Kazyna Co-Chairman Arman Dunayev 
explained in a September 7 meeting with ECA creditors that he 
personally had hoped to keep ECA debts separate from commercial 
finance in the restructuring process.  However, he understood that 
other creditors on the steering committee wanted immediate cash 
returns and were heavily influencing the process.  According to 
Dunayev, Samruk-Kazyna Chairman Kairat Kelimbetov had acknowledged 
the need for ECAs' preferential treatment.  Dunayev urged the group 
to raise the issue with the steering committee, but refused an Euler 
Hermes request for a strongly-worded endorsement of their position, 
saying that he had no legal right to interfere in negotiations. 
 
10.  (SBU) Reflecting the final outcome, Dunayev highlighted the 
firmness of the September 18 MOU deadline, but indicated they could 
sign a final agreement by November 15.  "Right now, it is very 
important to sign an MOU; otherwise we risk actions being taken by 
the FSA," he said.  At the same time, he emphasized that the 
agreement could be preliminary.  Dunayev also admitted that he 
learned of some possibly fraudulent ECA-financed assets in Russia. 
 
 
11.  (SBU) In conclusion, Dunayev again expressed his support for 
the ECA position, but acknowledged competing interests.  "I'm very 
concerned.  It seems like there are a lot of lions, ECA and 
Commercial banks, and jackals, small investors, who want a piece.  I 
will recommend that you are treated differently, but you are lions. 
Crisis comes and goes, but business stays.  I hope the situation 
around BTA and Alliance will be sorted out.  I hope we buy back all 
 
ASTANA 00001626  003 OF 003 
 
 
debts, ECAs first, according to an appropriate schedule.  I hope we 
find a proper solution." 
 
MINFIN OPENS DOOR TO SOVEREIGN GUARANTEE 
 
12.  (SBU) The combined international ECA delegation concluded its 
trip with September 8 talks in Astana with Minister of Finance Bolat 
Zhamishev.  Reiterating his September 4 discussion with Ambassador 
Hoagland (ref B), Zhamishev defended government actions and noted 
the initial decision to bail out the banks in February, rather than 
simply liquidate, as the strongest proof of its support.  Zhamishev 
emphasized the lack of legal precedent for this decision and for the 
potential use of public funds to cover obligations never taken on by 
the government.  He restated the government position that half of 
the ECA financing was used for projects in Russia.  Regardless, he 
argued, a government bail-out of these debts is a politically 
sensitive issue. 
 
13.  (SBU) At the same time, Zhamishev referenced a recent 
conversation with Dunayev and announced his support for ECA 
preferential treatment if the BTA steering committee reaches such a 
consensus.  Consistently defending his actions to date, and 
maintaining a delicate distance from other regulatory agencies 
including the FSA, Zhamishev finally conceded that the Kazakhstani 
government might assume sovereign guarantees, but only with the 
condition that such a move would not be activated in the near 
future.  "Our budget is limited.  Please keep this in mind -- but, 
based on what I know, I think we will find a compromise." 
 
WHAT NOW? 
 
14.  (SBU) With a signed and submitted MOU, the difficult task of 
due diligence resumes.  BTA must evaluate its toxic assets, which 
will be contentious on all sides.  (NOTE:  BTA is paying KPMG for 
this service.  In turn, the BTA steering committee is financing 
oversight of KPMG's work by Deloitte.  END NOTE.)  The end goal 
remains the signing of a legally-binding agreement in the middle of 
November. 
 
15.  (SBU) COMMENT:  The signing of the BTA MOU accomplished one of 
the immediate goals of the Kazakhstani government.  The local media 
are hailing it as a success, which is likely part of a concerted 
public relations initiative to restore confidence in the beleaguered 
Kazakhstani banking sector.  It should also satisfy the immediate 
demands of the international ECAs.  However, as KPMG and their 
Deloitte minders work to unravel the tangled web of toxic assets in 
an attempt to establish true value, contentious results will likely 
emerge for creditors, BTA management, and regulatory agencies. 
Should the U.S. government consider joining international colleagues 
in pressing for preferential treatment of trade finance debts, we 
should exercise a degree of caution, making certain that we do not 
ask Kazakhstan to accept liabilities we would be unwilling to take 
on ourselves.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1622, KAZAKHSTAN: CONOCO DISCUSSES TURKMENISTAN,

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Reference ID Created Released Classification Origin
09ASTANA1622 2009-09-25 08:50 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO4362
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1622/01 2680850
ZNY CCCCC ZZH
R 250850Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6335
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1967
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1336
RUEHUL/AMEMBASSY SEOUL 0987
RUEHKO/AMEMBASSY TOKYO 2035
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 1522
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1403

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001622 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: DECL: 03/06/2059 
TAGS: PGOV PREL PINR ECON EINV EPET AJ RS TX KZ
SUBJECT:  KAZAKHSTAN:  CONOCO DISCUSSES TURKMENISTAN, 
KASHAGAN, AND KULIBAYEV 
 
REF: A. ASTANA 0352 
     B. ASTANA 0529 
     C. ASTANA 1438 
 
Classified By: Ambassador Richard E. Hoagland, 1.4 (b), (d) 
 
1.  (SBU) SUMMARY:  On September 24, senior executives from 
ConocoPhillips (COP) briefed the Ambassador on their 
continued pursuit of a natural gas deal in Turkmenistan, the 
status of the N Block exploration in Kazakhstan's sector of 
the Caspian, and concerns about exposure and delays with the 
Kashagan project.  They also provided a candid assessment of 
the changing role and influence of KazMunaiGas (KMG) First 
Vice President Maksat Idenov in negotiating and closing deals 
for the government of Kazakhstan.   END SUMMARY. 
 
CONTINUED INTEREST IN TURKMENISTAN 
 
2.  (C) Don Wallette, COP Vice President for Russia and the 
Caspian Region, told the Ambassador that COP is still very 
interested in pursuing an exploration and production deal for 
Blocks 19 and 20 in Turkmenistan.  CEO Jim Mulva was 
scheduled to meet Turkmenistan President Berdimuhamedov 
during a dinner event in New York on September 24.  However, 
on short notice, Mulva was &summoned,8 along with senior 
executives from Shell, Total, ENI, and other international 
oil companies, to attend a meeting on Russia,s Yamal 
peninsula with Russian President Putin.  COP,s Chief 
Operating Officer will join the dinner with Berdimuhamedov in 
lieu of Mulva. 
 
"A LUKOIL PROBLEM" 
 
3.  (C) Wallette said that on September 23, COP Vice 
President Larry Archibald met Yagshygeldi Kakayev, Head of 
the State Agency for Management and Use of Hydrocarbon 
Resources, to brief him on COP,s proposal to develop Blocks 
19 and 20.  Kakayev, according to Wallette, was surprisingly 
blunt and direct, for the first time in two years.  Without a 
doubt, Wallette said, Conoco has &a Lukoil problem.8  He 
said that Kakayev told Archibald that the government of 
Turkmenistan likes ConocoPhillips, &but not your partner.8 
Among the reasons for Turkmenistan,s dislike of Lukoil, 
Wallette suggested that Lukoil may have unintentionally 
drilled in waters in disputed territory, due to the lack of 
full delimitation of the Caspian Sea.  He also said that 
Lukoil retained legal advisors that had previously 
represented the Argentinian company Bridas in a dispute with 
the Turkmenistani government that went to international 
arbitration. 
 
4.  (C) As a result, Wallette said that Mulva will meet Vagit 
Alekperov, the CEO of Lukoil, in Russia next week to inform 
him that COP will not go forward with Lukoil as a partner in 
Turkmenistan, and that Lukoil will need to stand down. 
Wallette also mentioned that Conoco may take advantage of the 
Turkmenistan Investment Forum on October 15 to present a new 
bid for Blocks 19 and 20, which would not include Lukoil, but 
would include their partner from Abu Dhabi, Mubadala 
Corporation, with whom they partnered on the successful N 
Block bid in Kazakhstan.  According to Wallette, British 
Petroleum (BP) is COP,s strongest competition for Blocks 19 
and 20.  He said the government of Turkmenistan is impressed 
with BP,s experience in Azerbaijan, &although they say they 
also like ConocoPhillips.8  U.S. company Marathan Oil may 
also be a competitor for the project, Wallette judged. 
 
N BLOCK EXPLORATION 
 
5.  (C) Kazakhstan's N Block is still in the early stages of 
exploration.  COP said the next big milestone, after further 
seismic work, is to drill an appraisal well by the third 
quarter of 2010.  The company is somewhat concerned by the 
 
ASTANA 00001622  002 OF 003 
 
 
lack of drilling capacity currently in the Caspian Sea. 
Wallette said that there is only one rig able and available 
to do the work, and they are now negotiating to lock it up. 
Other complications include staffing and salary issues. 
Wallette said that Kazakhstan has &a different compensation 
philosophy8 than Conoco.  KMG,s candidate for the General 
Director position, for example, was making $8,000 per month, 
and is now asking $24,000 per month before he will accept the 
new position.  Wallette commented that this is way beyond the 
standard Houston scale. 
 
IDENOV,S IN
FLUENCE MAY BE WANING 
 
6.  (C) Wallette and Regional Director Nick Olds both said 
that KMG First Vice President Idenov is no longer their 
primary interlocutor on the N Block project.  Instead, that 
responsibility has been given to Askar Balzhanov, former CEO 
of KMG Exploration and Production, whom Olds described as a 
hard-driving businessman, strong advocate for local content, 
big believer in the fundamental principles of doing business, 
and a nationalist.  Olds also said that Balzhanov is likely 
under the influence of Timur Kulibayev, President 
Nazarbayev,s son-in-law and Deputy Chairman of 
Samruk-Kazyna, whose political star continues to rise as he 
becomes more directly involved in managing the economy 
(reftel C).  Wallette told the Ambassador that he and the 
other Kashagan consortium partners meet monthly in Paris to 
discuss the project, and they all agreed that on September 1, 
&Maksat,s world changed dramatically.8  According to 
Wallette, on that day, Idenov was relieved of his 
responsibility for negotiating the Kazakhstan Caspian 
Transportation System (KCTS), supervising the N Block 
project, and overseeing the government,s stake in 
Tengizchevroil (TCO). 
 
FAVORED SON 
 
7.  (C) When asked why the change was made, Wallette said he 
had noticed for some time the &tremendous animosity8 
between Idenov and Kulibayev.  Wallette said Idenov's "eyes 
get big" when he talks about Kulibayev, and he once 
complained that he has to do the "dirty work" of negotiating 
complex, international transactions, whereas Kulibayev is 
protected and sheltered by President Nazarbayev.  Wallette 
said Idenov then waved his left arm as if pushing someone 
behind him, and acted out Nazarbayev telling Kulibayev, 
&That,s ok, son, you go on back there and just lay low.8 
Then he motioned with his right hand.  &Now come here, 
Maksat, and sort this mess out.8  Olds said that Idenov was 
recently asked to resign his position, but turned to the 
Prime Minister for support and was able to remain with KMG 
)- at least for the time being.  Idenov has reportedly 
expressed a strong interest in returning to a position with 
an international oil company.  (NOTE:  Idenov was a regional 
vice president with Shell in the Middle East from 2004-2007. 
END NOTE). 
 
KASHAGAN EXPOSURE 
 
8.  (C) COP also expressed concerns with delays and 
contractual exposure on Kashagan.  Wallette said that more 
than 700 contracts totaling $11 billion have piled up, 
waiting for Idenov,s approval.  He said that Idenov has not 
signed any documents since October 2008, when the Kashagan 
contract was renegotiated.  &He is scared to death that the 
tax police will come after him,8 Wallette said.  &He won,t 
sign anything.  At a certain point, the exposure will be too 
high and Kashagan will begin to shut down operations.  I 
don't know exactly what our pain threshold is," he said.  "It 
could be $10 billion, $20 billion, $50 billion.  But 
eventually, something, somewhere, will have to give." 
 
9.  (C) COMMENT:  Conoco's colorful and candid comments offer 
 
ASTANA 00001622  003 OF 003 
 
 
further evidence of the rising political influence of 
Kulibayev.  In addition to his private business empire, which 
includes Halyk Bank and engineering/construction firm 
KazStroiService, Kulibayev is Deputy Chairman of National 
Welfare Fund Samruk-Kazyna, which owns KMG, Kazatomprom, and 
more than 90 percent of Kazakhstan's manufacturing sector. 
He therefore has the ability to direct much of Kazakhstan's 
economic policies and investment decisions.  As his economic 
role has expanded, so has his political power and public 
persona, seen on display this week as host of the Eurasian 
Energy Forum, a week-long conference and exhibition attended 
by the Prime Minister, other senior government officials, and 
more than 500 energy executives.  Conoco's description of a 
frightful, paralyzed Idenov is consistent with scenarios 
being played out elsewhere, as government officials watch the 
drama of the corruption charges and jail sentences handed 
down to former high flyers such as Mukhtar Dzhakishev, former 
head of Kazatomprom.  We have heard from multiple sources 
that senior government and business leaders across the 
country, and across all sectors, are paralyzed by fear, and 
extremely reluctant to take risks of any kind, lest they get 
caught in the anti-corruption net.  END COMMENT. 
HOAGLAND

Wikileaks

09ASTANA1620, KAZAKHSTAN: NEW POWER LINE INCREASES ENERGY INDEPENDENCE

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Reference ID Created Released Classification Origin
09ASTANA1620 2009-09-25 06:09 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO4136
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 #1620/01 2680609
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INFO RUCNCIS/CIS COLLECTIVE 1965
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RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1334
RUEHKO/AMEMBASSY TOKYO 2033
RUEHUL/AMEMBASSY SEOUL 0985
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 1520
RUEKJCS/SECDEF WASHDC 1401
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1882

UNCLAS SECTION 01 OF 02 ASTANA 001620 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON ENRG EINV KZ
SUBJECT:  KAZAKHSTAN:  NEW POWER LINE INCREASES ENERGY INDEPENDENCE 
 
REF:  (A) ASTANA 0419 
      (B) 08 ASTANA 1373 
      (C) ASTANA 0251 
 
ASTANA 00001620  001.2 OF 002 
 
 
1.   (U) Sensitive but unclassified.  Not for public Internet. 
 
2.   (U) SUMMARY:  On September 17, Kazakhstan President Nursultan 
Nazarbayev attended a ceremony in the northern Kazakhstan city of 
Ekibastuz to mark the completion of the country's second north-south 
power transmission line.  The 500 kilovolt (kV) line, completed 
ahead of schedule at a cost of $290 million financed by the World 
Bank and European Bank for Reconstruction and Development, will 
allow the country's national grid operator to deliver power 
generated in Kazakhstan's north to major load centers in the south. 
President Nazarbayev celebrated the completion of this new line by 
asserting that Kazakhstan's southern region, including the major 
cities of Almaty, Shimkent, and Taraz, would no longer depend on 
power transmission from Kazakhstan's southern neighbors, and that 
Kazakhstan has "become fully independent from all other electricity 
exporters."   END SUMMARY. 
 
3.   (SBU) The completion of the second north-south transmission 
line is an important development for Kazakhstan that will 
substantially contribute to the Kazakhstan Electric Grid Operating 
Company's (KEGOC) ability to supply southern load centers with power 
during winter peak demand.  Until completion of the first 
north-south transmission line in 1997, southern Kazakhstan operated 
in isolation from the power system in the north, due to design 
limitations of the Soviet-legacy Central Asia Power Grid (CAPG) that 
linked Kazakhstan with Uzbekistan, Kyrgyzstan, Tajikistan, and 
Turkmenistan.  In recent years, the supply from the CAPG has become 
unreliable, with frequent line faults, generation capacity 
shortfalls, and mismanagement by grid-operating companies in other 
CAPG countries resulting in outages in Kazakhstan's south (ref A). 
The new line will also help alleviate frequent over-loading of the 
existing north-south 500kV line.  The April 15 outage that plunged 
Kazakhstan's southern load centers, as well as Kyrgyzstan's capital 
Bishkek, into complete darkness for many hours resulted from such 
overloading. 
 
4.  (SBU) KEGOC and representatives of the Tashkent-based 
Coordinating Dispatch Center (CDC) confirm that the second 
north-south transmission line will improve supply reliability in 
Kazakhstan's south and KEGOC's flexibility to respond to emergency 
situations and unsanctioned drawing of load in other parts of the 
CAPG (ref A).  (NOTE:  Should KEGOC temporarily withdraw from the 
CAPG, Kyrgyzstan will likely bear the brunt of such a decision, as 
was the case in February and April of this year.  END NOTE.) 
 
5.  (SBU) Contacts at KEGOC and CDC asserted that KEGOC does not 
intend to discontinue its coordinated operation as part of the CAPG. 
 KEGOC will continue to rely on hydroelectric facilities in 
Kyrgyzstan and Tajikistan for least-cost, peak-load generation and 
to regulate capacities and balance power (ref B).  Moreover, 
Kazakhstan's ability to meet the country's current power demand 
through existing generating capacities may partially result from the 
approximately 10 percent fall in consumption that has accompanied 
the global economic decline and reduced Kazakhstan's industrial 
output.  Furthermore, Kazakhstan's marginal cost for production at 
its more expensive plants, such as the Dzhambul power plant in 
Taraz, is considerably higher than power sourced from Kyrgyzstani or 
Tajikistani hydroelectric plants.  As economic activity increases, 
growth in demand will ensure that Kazakhstan remains reliant on 
continued parallel operation within the CAPG for least-cost power 
generation. 
 
6.  (SBU) COMMENT:  The completion of the second north-south 
transmission line demonstrates that Kazakhstan -- like its neighbors 
Uzbekistan, Kyrgyzstan, and Tajikistan, who are also pursuing 
expansions of their national high-voltage transmission grids -- 
considers it a priority to invest in critical economic 
infrastructure.  While the line will immediately improve the 
 
ASTANA 00001620  002.2 OF 002 
 
 
reliability of power supplied to Kazakhstan's south, the expanded 
capacity in the long term will also enhance dispatch optimization 
and region
al trade in what has effectively become an expanded CAPG. 
For Kazakhstan, and for the rest of the Central Asian region, the 
greatest challenge in the coming decade will be to finance new power 
generation capacities whose costs dwarf, by an order of magnitude, 
the cost of transmission capacity construction.  It is therefore 
especially important to develop market infrastructure and policy 
initiatives at the regional and national levels that ensure adequate 
revenues for the power sector.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1619, KAZAKHSTAN: INDEPENDENT AND OPPOSITION MEDIA ASK TOUGH

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Reference ID Created Released Classification Origin
09ASTANA1619 2009-09-23 11:02 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2358
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 #1619/01 2661102
ZNR UUUUU ZZH
O 231102Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6330
INFO RUCNCIS/CIS COLLECTIVE 1963
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1332
RUEHKO/AMEMBASSY TOKYO 2031
RUEHUL/AMEMBASSY SEOUL 0983
RUCNDT/USMISSION USUN NEW YORK 2499
RUEHNO/USMISSION USNATO 2813
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1518
RUEKJCS/SECDEF WASHDC 1399
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 001619 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM KDEM KPAO OSCE KZ
SUBJECT:  KAZAKHSTAN:  INDEPENDENT AND OPPOSITION MEDIA ASK TOUGH 
QUESTIONS 
 
REF:  A.  ASTANA 1616 
  B.  ASTANA 1509 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  The Ambassador answered questions from 
independent and opposition journalists during a media roundtable in 
Almaty on September 14 (ref A).  The lively group, pleased to have an 
opportunity to express their concerns to the Ambassador, peppered him 
with questions about Kazakhstan's upcoming Chairmanship-in-Office of 
the Organization for Security and Cooperation in Europe (OSCE) and 
President Obama's views on Kazakhstan.  END SUMMARY. 
 
HOW WILL YOU ENFORCE OSCE COMMITMENTS? 
 
3.  (SBU) After a long and fruitful exchange on media freedom in 
Kazakhstan (ref A), the Ambassador agreed to respond to four 
questions on-the-record.  The eager editors immediately queried, 
"Four questions each?"  When the Ambassador reaffirmed that he 
unfortunately only had time for four questions total before his next 
event, pandemonium ensued.  All began to talk at once, vying for the 
chance to pose a question.  Seizing her opportunity, Gulzhan 
Yergaliyeva of "Svoboda Slova" verbally muscled aside the others and 
launched into a long statement/harangue with at least four embedded 
questions:  "What interests us most is the stance of your country -- 
and other OSCE member countries -- in relation to acute problems in 
Kazakhstan."  She told the Ambassador that "the public is getting the 
impression that the West is not pressuring Kazakhstan as it did 
during the Bush administration," and asked what Congress, the Obama 
Administration and the State Department think about recent cases, 
"which violate Kazakhstan's OSCE commitments."  Without pausing to 
allow the Ambassador to answer, Yergaliyeva continued, "What will the 
West do so that Kazakhstan meets all of its obligations as Chairman 
of the OSCE?" 
 
4.  (SBU) The Ambassador replied, "Many complicated countries have 
been very successful OSCE Chairs, and I am optimistic that Kazakhstan 
will be successful."  The Ambassador said the U.S. government 
continues to do the same work under the Obama Administration as under 
the Bush Presidency, although the tone, nuances, and style have 
changed.  "President Obama believes the best way to bring change is 
by building strong partnerships.  We don't hesitate to say very 
honest words to each other," Ambassador Hoagland underscored, "but we 
also want to build a strong productive partnership with Kazakhstan, 
which, in the end, I think will benefit the people of Kazakhstan 
including those sitting around this table." 
 
5.  (SBU) One of the editors followed, "Are there any plans for 
President Obama to come to Kazakhstan?"  Various other 
representatives, led by Taukina, interrupted before the Ambassador 
could begin to answer, "Why should he come to such a country? 
Wouldn't that be rewarding a country that violates the principles of 
the OSCE?"  The Ambassador replied "it is not at all impossible that 
Obama would visit Kazakhstan, although it is not on his schedule at 
this time.  I assure you that the President is very well aware of 
Kazakhstan and watches issues here on a very regular basis." 
 
"REFUSE THEIR VISAS, PLEASE" 
 
6.  (SBU) Editor-in-Chief of "Taszhargan" Yermurat Bapi jumped in as 
soon as the Ambassador finished, "I would like to ask the State 
Department to prohibit the entry of certain Kazakhstani officials who 
contributed to the limitation of the freedom of speech in the 
country."  Bapi listed a few key names, starting with the Chairman of 
the Committee for National Security (KNB) and several 
Parliamentarians, and then passed the Ambassador a hand-written list. 
 Although he acknowledged the unlikelihood that the United States 
would prohibit the officials to visit, he announced his hope that the 
information reach the Kazakhstani government.  When the Ambassador 
agreed to provide the information to Washington, other media 
representatives immediately clamored to add more names. 
 
WORTH PAYING ATTENTION TO 
 
 
ASTANA 00001619  002 OF 002 
 
 
7.  (SBU) Media representatives voiced palpable concerns about U.S. 
perceptions of Kazakhstan's domestic political situation.  One 
representative asked, "What is Obama's impression of Kazakhstan? 
What is he worried abou
t in relation to Kazakhstan's situation?"  The 
Ambassador replied that President Obama is not "worried" about 
Kazakhstan, which Obama considers a strong Eurasian country, 
important in the region and for U.S. investors.  The Ambassador 
reiterated that Kazakhstan plays an vital role in non-proliferation 
of weapons of mass destruction -- an issue that is extremely 
important to President Obama and the United States.  "Kazakhstan is a 
country with a strong, growing, and very well-educated middle class 
-- a country that is worth paying attention to," the Ambassador 
reminded the roundtable participants. 
 
KAZAKHGATE AND THE PRESIDENCY-FOR-LIFE 
 
8.  (SBU) One of the editors returned to a favorite opposition media 
topic, asking, "What does President Obama think about the proposal of 
a lifetime presidency in Kazakhstan?  And aren't you worried that he 
will follow President Nazarbayev's model?"  The Ambassador responded, 
"First, I don't think President Obama would choose to be President 
for Life.  But let's be very careful with facts, simply because no 
one has announced that the president of this country will in fact 
become president for life."  Roslana Taukina of "Obsheshtvenaya 
Positsia" followed up with the question, "Are you aware of the 
situation around the Kazakhgate trial?  And can you comment on the 
fact that the judge has again postponed consideration of the case?" 
The Ambassador replied, "It is never a good idea to comment about 
trials that are still under way.  The trial continues to be postponed 
-- not for ideological or political reasons.  But to say more than 
that would not be very wise on my part." 
 
THEY COULD HAVE TALKED ALL NIGHT 
 
9.  (SBU) Editor-in-Chief of "Respublika" Oksana Makushina asked, 
"What do you say to Prime Minister Masimov who says that your 
companies who have invested here must place their money in 
Kazakhstani banks?"  The Ambassador responded, "Deputy Prime Minister 
Orynbayev and Minister of Finance Zhamishev told me in our recent 
meetings that foreign companies will not be subject to this proposed 
regular; it is targeted at one specific major sector of the economy" 
(ref B).  After 90 minutes, the journalists still wanted to continue 
the interview indefinitely, asking the Ambassador, who was scheduled 
to depart to host an Iftaar dinner with Kazakh-language journalists 
(septel), if he could just answer a few more questions.  The 
Ambassador compromised, agreeing to accept, and respond to, 
additional questions in writing. 
 
10.  (SBU) COMMENT:  The group's intense interest in talking with the 
Ambassador for as long as possible shows the independent and 
opposition media's desire to work with the U.S. government to convey 
their points of view to Kazakhstani leaders.   Post used the event to 
communicate our message; we are trying to encourage Kazakhstan to 
develop more freedom the media, not just as a form of 
"window-dressing" before its Chairmanship-in-Office, but to improve 
good governance and build a pragmatic, long-term partnership with the 
government of Kazakhstan.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1618, KAZAKHSTAN: IFTAAR DINNER BUILDS RAPPORT WITH

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Reference ID Created Released Classification Origin
09ASTANA1618 2009-09-23 10:37 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2318
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG
DE RUEHTA #1618/01 2661037
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TO RUEHC/SECSTATE WASHDC IMMEDIATE 6328
INFO RUCNCIS/CIS COLLECTIVE 1961
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1330
RUEHKO/AMEMBASSY TOKYO 2029
RUEHUL/AMEMBASSY SEOUL 0981
RUCNDT/USMISSION USUN NEW YORK 2497
RUEHNO/USMISSION USNATO 2811
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1516
RUEKJCS/SECDEF WASHDC 1397
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 001618 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM SOCI KISL SOCI RS KZ
SUBJECT:  KAZAKHSTAN:  IFTAAR DINNER BUILDS RAPPORT WITH 
KAZAKH-LANGUAGE AND MUSLIM COMMUNITY LEADERS 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On September 14, the Ambassador hosted an Iftaar 
dinner for more than 20 prominent Muslim community members, 
including the Deputy Chairman of the Kazakhstani Muslims' Spiritual 
Board Muhammad Alsabekov, many Kazakh-language journalists, and 
university students.  Participants thanked the Ambassador for 
arranging such a culturally-appropriate opportunity to convey 
President Obama's Ramadan message and hold a fruitful conversation. 
The participants -- leaders of Kazakhstan's Muslim community who 
predominantly speak Kazakh -- urged Post to engage more with the 
Kazakh-language community.  END SUMMARY. 
 
ENTHUSIASTIC, APPRECIATIVE PARTICIPANTS 
 
3.  (SBU) During an Iftaar dinner the Ambassador hosted in Almaty on 
September 14, more than 20 leaders of the Muslim community and 
Kazakh-language journalists engaged in a lively discussion about 
bilateral relations and domestic events.  The Deputy Chairman of the 
Kazakhstani Muslims' Spiritual Board Muhammad Alsabekov -- serene, 
soft-spoken, and understated except for his gold-embroidered 
navy-blue velvet traditional robe -- told the Ambassador that the 
Grand Mufti would have attended, but was currently hospitalized 
because of serious complications from diabetes.  For his formal 
remarks, the Ambassador read an abridged version of President 
Obama's Ramadan message.  Participants applauded more than politely 
and took home copies of Post's Russian translation. 
 
4.  (SBU) The following day, journalists from "Alash Ainasy" 
newspaper and the "Assyk Arna" Islamic television station thanked 
Post, saying, "We are very thankful for yesterday's after-fast 
evening meal.  Those people who give such a meal to people who are 
fasting shall be rewarded with God's goodness.  May Allah be 
rejoiced seeing your respect to Islam!"  A scholar with a doctorate 
in philosophy who works as a senior manager for Price Waterhouse 
Coopers also wrote to PolOff expressing appreciation for "the 
opportunity to chat with the Ambassador and hear his answers to my 
questions." 
 
A NEW PERSPECTIVE FROM THE KAZAKH-LANGUAGE COMMUNITY 
 
5.  (SBU) Participants pointed out that Kazakh-language media view 
international political incidents, especially the Russo-Georgian 
conflict of August 2008, very differently than Kazakhstani Russian 
press.  According to one of the Ambassador's interlocutors, the 
Kazakh-language press immediately criticized Russia's actions during 
the August 2008 conflict and "100 percent supported Georgia."  They 
criticized the Russian-language media for largely supporting Russia. 
 One professor told the Ambassador that the Kazakh-language 
intellectual community is significantly more pro-American than the 
Russian-language community.  They encouraged Post to expand outreach 
to Kazakh-language media and NGOs, rather than focus on larger and 
more entrenched Russian-language entities.  Everyone spoke Russian, 
but one of the most respected young people at PolOff's table was a 
man who had won a national Kazakh-language contest.  The group 
agreed that Kazakh usage is -- and should be -- increasing, telling 
PolOff, "Next time you come back, let's speak only in Kazakh." 
(COMMENT:  Being able to hold a basic conversation in Kazakh helped 
PolOff establish a rapport.  END COMMENT.) 
 
ISLAM ON THE RISE AGAIN 
 
6.  (SBU) According to students from Al-Farabi National University, 
"religion is a growing force in Kazakhstan."  They noted 
Kazakhstan's July 1-2 Congress of Leaders of World Religions 
demonstrated Kazakhstan's values of religious diversity and 
tolerance.  (NOTE:  Kazakhstani officials announced their country 
will make promoting inter-religious tolerance a key tenet of 
Kazakhstan's 2010 OSCE Chairmanship.  END NOTE.)  Iftaar 
participants at PolOff's table, mostly young people in their 20s and 
30s, unanimously agreed that the number of followers of Islam in 
Kazakhstan is growing rapidly.  One journalist told PolOff he just 
founded a new religious television station broadcasting in the 
Almaty area.  PolOff's interlocuters highlighted the importance of 
 
ASTANA 00001618  002 OF 002 
 
 
charity in Islam, and its positive effects on society. 
"Unfortunate
ly, our charity organizations, even Islamic ones, are 
not well-developed yet," Kuanyshbekova said.  "We could learn a lot 
about this from U.S. organizations, which are well-known for their 
activities."  One of the most talkative interlocutors, "Alash 
Ainasy" newspaper correspondent Anar Kuanyshbekova, said the 
post-Soviet rebirth of Islam is a positive force, causing a sharp 
drop in alcohol abuse -- and associated problems. 
 
CAN YOU WEAR HEADSCARVES IN U.S. SCHOOLS? 
 
7.  (SBU) PolOff's interlocutors, none of whom had travelled to the 
United States, expressed sincere interest in learning more about 
U.S. Islamic communities.  Kuanyshbekova asked if U.S. schools 
permitted women to wear headscarves, and said her cousin, a 
Kazakhstani teacher, had been told she could not wear hers at 
school.  PolOff asked the young journalists  to comment on a 
conversation PolOff overheard between three young women on an Almaty 
bus near the Grand Mosque, comparing attitudes towards religion, 
specifically wearing headscarves, in France and Kazakhstan.  (NOTE: 
According to PolOff's personal observation, wearing the hijjab in 
Kazakhstan is increasing, although less than 10 percent of the 
female opulation wear headscarves, even during Ramadan.  PolOff 
observed two young women enter a restaurant to break their Ramadan 
fast wearing headscarves, pray before eating, and then tuck their 
headscarves into their purses.  Fewer women wear headscarves in 
Astana than Almaty.  END NOTE.)  Iftaar attendees echoed 
Kazakhstan's prevailing sentiment of tolerance, and said women 
should be free to wear headscarves, if they choose. 
 
THEY'RE NOT READING WHAT WE'RE READING 
 
8.  (SBU) None of PolOff's interlocutors spoke English well, or had 
read President Obama's Cairo speech.  Only one person at PolOff's 
table, a young man also fluent in Arabic, said he watched a few 
televised portions.  The young man said he "had a positive 
impression of the United States," due to a friend's experience.  His 
friend wanted to visit a mosque in the United States, but got lost. 
Since he looks Central Asian, he was initially afraid to ask the 
police for directions, because he thought they would think he was a 
terrorist.  The young man recounted that when he did finally ask a 
police officer, he politely replied and personally helped him find 
the mosque! 
 
9.  (SBU) COMMENT:  Post held several well-attended events focused 
on the President's Cairo speech.  The warm reception the 
participants gave the Ambassador suggests that we might have 
opportunities to build bridges with Kazakhstan's growing population 
of observant, Kazakh-speaking Muslims.  The majority of the news 
here originates from Russia.  But, as we have urged before, 
providing Post with more funding to translate documents and 
distribute them, including increasing our Kazakh-language 
translation capacity, is critical to break down communication 
barriers.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1617, KAZAKHSTAN: IFTAAR DINNER BUILDS RAPPORT WITH

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Reference ID Created Released Classification Origin
09ASTANA1617 2009-09-23 10:36 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2367
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RUEKJCS/SECDEF WASHDC 1395
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 001617 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PHUM SOCI KISL SOCI RS KZ
SUBJECT:  KAZAKHSTAN:  IFTAAR DINNER BUILDS RAPPORT WITH 
KAZAKH-LANGUAGE AND MUSLIM COMMUNITY LEADERS 
 
ASTANA 00001617  001.2 OF 002 
 
 
ZFR (CANCEL) ENTIRE MESSAGE. 
THIS CABLE IS RETRANSMITTED AS ASTANA 1618. 
 
 
ASTANA 00001617  002.2 OF 002 
 
 
ZFR (CANCEL) ENTIRE MESSAGE. 
THIS CABLE IS RETRANSMITTED AS ASTANA 1618. 
 
HOAGLAND

Wikileaks

09ASTANA1616, KAZAKHSTAN: THE COMPLEXITY OF “OPPOSITION MEDIA”

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Reference ID Created Released Classification Origin
09ASTANA1616 2009-09-23 09:45 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO2265
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
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RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 03 ASTANA 001616 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/PPD, DRL 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINR PHUM KPAO KDEM OSCE KZ
SUBJECT:  KAZAKHSTAN:  THE COMPLEXITY OF "OPPOSITION MEDIA" 
 
REF:  A.  ASTANA 1470 
      B.  ASTANA 0431 
      C.  ASTANA 0744 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  During a media roundtable the Ambassador hosted 
in Almaty, independent and opposition journalists detailed their 
opinions, concerns, and experiences.  It was a useful and informative 
snapshot, but it wasn't the whole story.  As always, reality is 
complexly layered.  END SUMMARY. 
 
COURT CASE SILENCES PAPER BUT NOT EDITOR 
 
3.  (SBU) "Taszhargan" newspaper's Editor-in-Chief, Yermurat Bapi, 
told the Ambassador on September 14 during an editor's roundtable in 
Almaty that he has not published this paper for five months as a 
result of a local court ruling, subsequently upheld by the Supreme 
Court, that had fined the newspaper 30 million tenge -- about 
$200,000 -- for libel against a Parliamentarian (refs B, C).  Bapi 
said even if he had the money he probably wouldn't pay the fine.  As 
a result, "Taszhargan" almost certainly will cease operations. 
 
4.  (SBU) Bapi plans to replace "Taszhargan" with a newspaper that he 
has published quarterly for the last two years.  (NOTE:  It's common 
practice in Kazakhstan for editors anmd publishers to register 
multiple "ghosts" -- infrequently or never published -- to keep in 
reserve.  END NOTE.)  Bapi accused the authorities of pursuing this 
"non-newspaper," by suing it for unpaid taxes in the amount of 1.7 
million tenge (about $11,333) -- a calculation based on a quarterly 
circulation of 500 copies over two years.  Bapi said he also 
publishes two other quarterly newspapers.  After he provided the 
latest edition to the authorities in June, Bapi asserts the 
authorities began harassing him with claims that he had not supplied 
the necessary copies.  (NOTE:  According to Bapi, Kazakhstani law 
stipulates that quarterly newspapers are "infrequent" publications of 
which copies must be provided to the authorities, including to the 
Ministry of Information and Culture.  END NOTE.)  Even though he 
expects the authorities to invalidate the registration of all three 
newspapers, Bapi intends to continue publishing, by hook or by crook. 
 
MAJOR DIFFICULTIES 
 
5.  (SBU) Oksana Makushina, Deputy Editor-in-Chief of "Respublika," 
which the courts had recently ruled must pay BTA Bank 60 million 
tenge (about $400,000), claimed this on-going libel case is 
politically motivated, noting the current government management of 
the bank.  She also asserted that the publicity usually associated 
with a bank suing a newspaper would damage the bank more, and that 
two articles alone could not have seriously undermined the reputation 
of one of the largest banks in the Commonwealth of Independent 
States, which was, in any case, already in default.  According to 
Makushina, "Respublika" plans to appeal up to the Supreme Court, 
despite the possibility that "another zero will probably be added to 
the sum we need to pay" -- as happened to "Taszhargan."  Although her 
firm also has a "reserve newspaper," it is still considering whether 
to publish it due to the close scrutiny anticipated and potential 
refusal of printing houses to touch it.  (NOTE:  Subsequent to this 
meeting, the alternate, "Moya Respublika," was published, authorities 
seized the entire print run, and the financial police raided the 
printing house, causing further scandal.  END NOTE.) 
 
6.  (SBU) The Ambassador told Makushina he had been surprised a few 
days earlier by a "Respublika" article, that drew attention even in 
foreign capitals, implying that President Nazarbayev is mentally 
weakened by old age and is so out of touch with reality that Prime 
Minister Masimov is "manipulating him like a puppet."  The Ambassador 
asked if she believes this view.  She replied, a bit umcomfortably, 
"It was just an opinion piece.  That's freedom of speech, isn't it?" 
 
7.  (SBU) COMMENT:  In fact, maybe not.  The "puppet" article and 
others like it might be another reason for "Respublika's" harsh 
treatment.  It is widely believe that former BTA Chairman Mukhtar 
Ablyazov, self-exiled in London and accused of embezzling over $1 
billion from BTA, is "Respublika's" financial godfather.  We have 
 
ASTANA 00001616
  002 OF 003 
 
 
heard from other sources that Ablyazov, and London-exiled and 
super-wealthy former Prime Minister Kazhigeldin planned an autumn 
black-propaganda media campaign against the Nazarbayev government in 
the run-up to Kazakhstan's 2010 OSCE Chairmanship.  In another 
intriguing tid-bit from the roundtable, we heard that the 
Moscow-based propaganda guru, Gleb Pavlovsky, and about a half-dozen 
other highly-paid "media consultants" were recently in Astana for 
meetings with government officials.  END COMMENT. 
 
NEWSPAPER UNSCATHED BUT OUTLOOK "NOT-SO-ROSY" 
 
8.  (SBU) Igor Vinyavskiy, Editor-in-Chief of "Vzglyad," voiced 
concerns about freedom of expression despite the absence of specific 
problems at his paper.  Vinyavskiy said the last edition of his 
newspaper was dedicated to the Zhovtis case (ref A), which he called 
"the culmination of illegality in Kazakhstan."  Vinyavskiy contrasted 
efforts to superficially meet legal and procedural norms in the trial 
and conviction of "the Democratic Choice of Kazakhstan" movement's 
leaders earlier in this decade to the current situation.  "The 
authorities nowadays do not even bother to abide by the law," 
Vinyavskiy alleged.  He particularly called for increased attention 
to the Zhovtis case and the formation of a "club" of journalists from 
major newspapers.  However, Vinyavskiy expressed concern that 
authorities are watching many prospective members of the club, and 
these journalists fear "provocations" against them. 
 
"GET-OUT-OF-JAIL-FREE" CARD FOR "NAZARBAYEV'S NEWSPAPER" 
 
9.  (SBU) Gulzhan Yergaliyeva, the animated and outspoken 
Editor-in-Chief of the independent "Svoboda Slova," told the 
Ambassador she was surprised by her newspaper's lack of lawsuits, 
because individuals in various state and private companies had told 
her senior newspaper staff they had heard objections to various 
articles.  Yergaliyeva speculated that simply the newspaper's size 
protected it, since "Svoboda Slova" is one of the only Kazakhstani 
newspapers with a circulation of over 100,000 and is even regularly 
handed out to passengers on Air Astana.  Yergaliyeva further 
speculated that "Svoboda Slova" is allowed to operate freely, without 
pressure, because some whisper cynically that it is "Nazarbayev's 
newspaper" -- i.e., he wants to have one major "opposition" newspaper 
that operates without problems to "prove freedom of the press in 
Kazakhstan," especially in the run-up to its 2010 OSCE Chairmanship. 
 
10.  (SBU)  All around the table agreed when Yergaliyeva listed four 
subjects that are "untouchable" for any newspaper, independent or 
opposition:  "Kazakhgate" (the ongoing James Giffin trial in the 
Southern District Court of New York that has implicated Nazarbayev in 
major corruption in the 1990s), anything to do with Nazarbayev's 
exiled ex-son-in-law Rakhat Aliyev, Nazarbayev's personal life (like 
speculation about his mistresses and possible illegitimate children), 
and Nazarbayev's personal fortune. 
 
IF IT'S RELATED TO THE GOVERNMENT, IT MUST BE BAD 
 
11.  (SBU) Roslana Taukina, Editor-in-Chief of "Obsheshtvenaya 
Positsia," alleged that only 10 or 12 print, and no broadcast, 
outlets out of 3,000 registered media outlets are "allowed" to oppose 
the government.  Taukina agreed with Yergaliyeva's view that the 
government is leaving a few outlets "untouched" as "pre-OSCE" symbols 
of media freedom.  Taukina called Kazakhstan an "artificial 
democracy" with a club of leading journalists, specifically the 
Editors-in-Chief Club in Astana, that claims to represent the media 
but, in fact, "supports repressive laws", including the Internet Law. 
 Taukina also disparaged participants in the Annual Media Forum, 
Congress of Journalists, and Council for Media Issues under the 
President -- groups which she said were created to oppose the work of 
the 10-12 viable sources of opposition media.  (COMMENT:  We would 
judge that this is a simplistic exaggeration.  While a group like the 
Editors-in-Chief Club of Astana is government-approved and partly 
government-funded, we know from experience it presents a public forum 
for a broad range of opinion.  END COMMENT.) 
 
INTERNET LAW UNWORKABLE? 
 
12.  (SBU) Yuriy Mizinov, Chief Editor of www.zonakz.net, which he 
 
ASTANA 00001616  003 OF 003 
 
 
created in 2002 after every Kazakhstani printing house refused to 
touch his newspaper, described his challenges with "technical 
censorship."  According to Mizinov, his Internet site, through which 
his newspaper is covering the cases of Zhovtis and several 
high-profile officials arrested this summer for alleged large-scale 
corruption, suffers frequent hacker attacks.  He suggested that his 
Internet site has become "a testing ground for massive 
government-sponsored 'denial-of-service' attacks" under the Internet 
Law, although they were regularly occurring before the passage of 
this legislation.  However, he asserted, the government cannot block 
specific bloggers "at-large."  Mizimov claimed, "I know the 
organization that initiates the attacks -- a state company 
subordinate to the Information Agency."  According to Mizinov, the 
Internet law aims to limit access to foreign Internet sites, which 
might contain material unacceptable to the authorities -- especially 
if it has been posted by Rakhat Aliyev -- and to make bloggers 
accountable for comments that contradict government policies. 
Mizinov judged, "The Internet law contradicts most of the legal basis 
of the whole country and is very difficult to implement."  He 
asserted that the head of the Information Agency -- whom he knows 
well -- is trying now to develop a sub-law that will allow the 
internet law to work "legally."  According to Mizinov, the 
Information Agency itself has formed a council, which will attempt to 
mediate cases instead of automatically sending them to the courts. 
Mizinov said he plans to found an association of journalists to play 
an active role in all initiatives related to the Internet law. 
 
AND NOW FOR SOMETHING COMPLETELY DIFFERENT... 
 
13.  (SBU) In a departure from the "bad news blizzard," Aidos 
Sarimov, Chief Editor of www.abai.kz , told the Ambassador that the 
rise of Kazakh-language mass media is an important trend that he 
attributed to the increasing percentage of ethnic Kazakhs in the 
population and to an increasing emphasis on Kazakh as the national 
language.  Sarimov noted that his Kazakh-nationalist site receives 
support from the Sarsenbayev Foundation as well as the European Club 
of Kazakhstan and the Fund for the Development of the State Language. 
 Sarimov said his Internet site aims to spread European values, 
promote Kazakh nationalism, and stand against Russian colonialism and 
imperialism.  Sarimov said he hopes to create a 
Turkic-language-oriented Internet space to facilitate regional 
interaction in Central Asia. 
 
14.  (SBU) COMMENT:  This roundtable provided a valuable snapshot of 
concerns by opposition and independent journalists
, but it didn't 
give the full picture of the state-of-play of print journalism in 
Kazakhstan.  Popular independent newspapers like "Vremya" and 
"Express-K" that have no special opposition connection regularly 
report real news, uncover and investigate corruption and scandals, 
and probably, in the end, play a more important role in the larger 
scheme of good governance and open discourse than rigidly ideological 
"opposition" papers that, ironically, might be paid from time to time 
to be destabilizing.  This view is certainly not to dismiss the 
potential positive force of an opposition press, nor is it to 
downplay in any way the government's occasionally thuggish tactics 
against them.  It is simply to suggest that reality, as always, is 
complexly layered.   END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1613, KAZAKHSTAN: GERMANS HYPER ABOUT BTA RESTRUCTURING MOU

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Reference ID Created Released Classification Origin
09ASTANA1613 2009-09-22 10:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO1262
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RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1509
RUEKJCS/SECDEF WASHDC 1390
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2490
RUEHNO/USMISSION USNATO 2804

UNCLAS SECTION 01 OF 02 ASTANA 001613 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN (PLEASE PASS TO PARTY AT UNGA) 
ALSO FOR EEB/ESC 
PLEASE PASS USTDA AND OPIC 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EFIN KZ GM UK
SUBJECT:  KAZAKHSTAN:  GERMANS HYPER ABOUT BTA RESTRUCTURING MOU 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  Germany is highly concerned that BTA bank is 
about to declare bankruptcy, endangering large investments by the 
German export credit agency.  Our sources in ExIm disagree, and 
believe a settlement is in the works.  Berlin has asked SCA that 
Secretary Clinton express concern to Foreign Minister Saudabayev 
during their meeting at UNGA.  We suggest this is unnecessary, based 
on ExIm's reading of the situation.  END SUMMARY. 
 
3.  (SBU) On September 21, German Charge d' Affaires in Astana, 
Wolfgang Brett, informed EconOff that the London-based negotiations 
between BTA bank and its creditor steering committee failed to reach 
a debt restructuring agreement.  According to the Brett, the German 
government and their export credit agency (ECA) Euler Hermes 
believed that the absolute failure of negotiations to sign an MOU on 
BTA debt restructuring by the September 18 deadline set by the 
Financial Supervision Agency (FSA) implied in imminent declaration 
of bankruptcy.  Fearful of an imminent declaration of bankruptcy, 
Brett said that the German Embassy submitted a sharply-worded 
non-paper (see text in para five below) to Kazakhstani government 
agencies, including the Ministry of Foreign Affairs, the Ministry of 
Finance, the National Bank, the FSA, Samruk Kazyna and BTA on 
September 18.  Brett requested similar action from the U.S. Embassy. 
 On September 22, Brett informed EconOff that the German MFA in 
Berlin had contacted SCA Deputy Assistant Secretary George Krol 
directly about the perceived failure of negotiations.  According to 
Brett, DAS Krol said that Secretary Clinton would raise this issue 
during her upcoming meeting with Foreign Minister Saudabayev. 
 
4.  (SBU) Well-informed officials at the U.S. Export-Import (ExIm) 
Bank, the USDA Credit Programs Division, the Kazakhstani FSA, and 
BTA contradict German statements.  According to ExIm Bank Asset 
Management and Restructuring Officer Katie Janik, the steering 
committee members met in London for seven days straight, working 12 
hours per day to negotiate an acceptable MOU before the FSA's 
September 18 deadline for submission.  Working through the night on 
Thursday September 17, they created an acceptable MOU.  However, 
several last-minute changes to the wording of some "non-critical" 
passages caused a one day delay in submission, which missed the 
deadline.  This situation, she believes, may have triggered the 
Germans' anxious response.  Janik confirmed that the MOU was 
eventually signed by all steering committee members, including the 
German ECA Euler Hermes, and BTA, and accepted by the FSA for 
review.  While Janik conceded that the sides have not resolved every 
detail of debt restructuring, ExIm Bank considers the negotiations a 
success, because the MOU warded off the immediate specter of 
bankruptcy and gave all parties more time.  The debt restructuring 
negotiation process will continue for the next six weeks. 
 
5.  (SBU) BEGIN TEXT OF GERMAN EMBASSY NON-PAPER: 
 
The Government of the Federal Republic of Germany is most concerned 
to note that the negotiations between the BTA Bank and its creditors 
on restructuring did not arrive at a successful conclusion.  The 
Government of the Federal Republic of Germany fears that this 
development may result in most disadvantageous consequences for the 
BTA Bank and its creditors, but also for the economic development of 
Kazakhstan and for economic relations between Germany and 
Kazakhstan. 
 
The Government of the Federal Republic of Germany has followed the 
negotiations taking place in London very closely and takes the view 
that it is still possible to achieve a fair agreement between the 
two sides.  However, a prerequisite for this is that the Kazakh side 
itself makes a substantial contribution towards the success of the 
negotiations. 
 
The Memorandum of Understanding negotiated between the parties and 
accepted by the creditor side reflects the progress attained in the 
negotiations this week.  The Government of the Federal Republic of 
 
ASTANA 00001613  002 OF 002 
 
 
Germany expects the negotiations between the contracting parties to 
be continued on this basis wit
h a desire to find a mutually 
acceptable solution. 
 
END TEXT. 
 
6.  (SBU) COMMENT:  The German ECA Euler Hermes is one of 14 members 
of the BTA steering committee that participated in the London-based 
negotiations during the week of September 10-17.  Of the approximate 
$920 million in ECA exposure to the troubled Kazakhstani banking 
sector, Euler Hermes accounts for approximately $500 million and 
therefore has actively mobilized resources to ensure that all 
relevant levels of the Kazakhstani Government remain aware of 
Germany's concerns regarding full repayment of trade finance debt. 
While the MOU does not signal the successful restructuring of BTA, 
it does incorporate additional input by steering committee members 
and is widely seen as progress towards the eventual stabilization of 
the Kazakhstani banking sector.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1547, KAZAKHSTAN: TEMIRTAU IS “AIDS CAPITAL OF KAZAKHSTAN”

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Reference ID Created Released Classification Origin
09ASTANA1547 2009-09-21 06:35 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0216
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 #1547/01 2640635
ZNR UUUUU ZZH
O 210635Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6249
INFO RUCNCIS/CIS COLLECTIVE 1951
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1320
RUEHKO/AMEMBASSY TOKYO 2019
RUEHUL/AMEMBASSY SEOUL 0973
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1506
RUEKJCS/SECDEF WASHDC 1387
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHMFISS/CDR USTRANSCOM SCOTT AFB IL
RUEHAST/USOFFICE ALMATY 1872

UNCLAS SECTION 01 OF 03 ASTANA 001547 
 
SIPDIS 
 
STATE FOR SCA/CEN, S/GAC, OES/PCI (PHUDAK) 
 
E.O. 12958: N/A 
TAGS: PGOV ECON SOCI SNAR KHIV KZ
SUBJECT:  KAZAKHSTAN:  TEMIRTAU IS "AIDS CAPITAL OF KAZAKHSTAN" 
 
ASTANA 00001547  001.2 OF 003 
 
 
1.  SUMMARY: Home to AcelorMittal, Kazakhstan's giant steel plant, 
Temirtau is known as the "AIDS capital of Kazakhstan."   An 
"explosion" of new HIV/AIDS cases peaked in 1997, then dropped, and 
has since held steady.  The local AIDS Center believes that 
financial difficulties and layoffs following Kazakhstan's 
independence, a young migrant population without social restraints, 
and the fact that drugs are cheaper than vodka led to the city's 
high rate.  While no reliable drug-use data exists, the Center 
estimates that two-thirds of HIV/AIDS cases are drug users or their 
sexual partners.   Many of those who seek counseling and treatment 
do not work, cannot adapt to societal norms, and need help obtaining 
government assistance.  END SUMMARY. 
 
AIDS IN TEMIRTAU 
 
2.  ArcelorMittal, Kazakhstan's massive steel plant that employs 
45-50 percent of the people living in the "company" town of 
Temirtau, attracts many outsiders to Termirtau looking for work. 
Temirtau has the highest incidence of HIV/AIDS in Kazakhstan, with 
1767 new cases registered since 1990 when the city registered its 
first case.  An ongoing "explosion" of HIV/AIDS cases in the city 
accompanied AcelorMittal's 1996 resurgence.  This "explosion" peaked 
in 1997 with 386 new registered cases, then tapered off until 2001 
when only 76 new cases of HIV/AIDS were registered.  The rate of new 
cases each year held steady until 2006, at approximately 70 new 
registered cases each year, but then increased again to its current 
level of over 130 new cases per year. 
 
POSSIBLE CAUSES OF HIV/AIDS "EXPLOSION" IN TEMIRTAU 
 
3.  Speculating on the reasons for such a high rate of HIV/AIDS 
cases in Temirtau, the Head Doctor-Epidemiologist of the city's AIDS 
Center, Sholpan Baimurznina, linked the situation to the history of 
ArcelorMittal, which employs almost half the city's population. 
After Kazakhstan's independence, ArcelorMittal's financial 
difficulties forced it to lay off many workers.  The resulting 
economic destabilization profoundly affected the emotional 
well-being of this company town with only one real source of jobs. 
Temirtau is right in the middle of a major narcotics route, and drug 
use is widespread among the young and the unemployed.  Drugs are 
very cheap; a hypodermic needle filled with drugs costs less than a 
shot of vodka.  Because most of those with HIV/AIDS also use drugs, 
Baimurznina attributes much of the spread of HIV/AIDS to 
contaminated needles.  With many young men out of work, going to 
bars, and having loose, unprotected sex, it should not be surprising 
that many discovered, to their astonishment, that they had 
contracted HIV/AIDS.  Many who initially left the city in search of 
work, returned when the plant resumed production with various 
problems, including drug addiction and HIV/AIDS.  According to 
Baimurznina, the U.S. Centers for Disease Control (CDC) conducted a 
gene type identification test on the cases of HIV/AIDS in Temirtau 
and determined that many of the viruses were genetically similar to 
viruses circulating in Europe.  While the AIDS Center wants to use 
this data to conclude that people were bringing HIV/AIDS with them 
to Temirtau, CDC cautioned REO against drawing any conclusions from 
that fact, since there could be many different routes of 
transmission. 
 
4.  2005-2006 saw a large influx of youth looking for work.  Mostly 
students who had just graduated from college, they lived without 
restraints, free for the first time, and partook in Temirtau's night 
life.  Baimurznina believes these factors contributed to the second 
"jump" in cases.  Baimurznina complained that it is difficult to 
change how people think about using condoms.  Kazakhstan is stuck in 
"old" ways of thinking, she said, different than the West. 
 
5.  Baimurznina said that, unfortunately, no adequate data exists on 
the extent of drug use in Temirtau and the Karaganda region.  5500 
people voluntarily have sought help with their addiction, but many 
more are not registered because they have not come forward.  She 
believes, but cannot confirm due to statistical deficiencies, there 
is a strong connection between the growth of drug use and the 
increase in the incidence of HIV/AIDS.  She estimated that 
two-thirds of HIV/AIDS cases are drug users or their sexual 
partners.  Temirtau was also one of the Soviet Union's prison 
 
ASTANA 00001547  002.2
 OF 003 
 
 
centers, and many of the exiles sent to the region had a high 
incidence of drug usage, according to Baimurznina. 
 
LOCAL AND INTERNATIONAL RESPONSES 
 
6.  In 1990 following the official registration of the first 
HIV/AIDS case in the city, the Ministry of Health designated 
Temirtau a zone of concern and established its AIDS Center.  At that 
time, Almaty hosted the only other AIDS Center in Kazakhstan. 
Currently, the Center's services range from the distribution of 
information about AIDS prevention to the provision of treatments, 
including anti-viral therapy.  The United Nations Development 
Program (UNDP) has helped the Center educate the local population 
about HIV/AIDS and its prevention.  UNDP and the Center have carried 
out a harm reduction project and worked with at-risk groups (drug 
users, prostitutes, transients, prisoners and ex-prisoners, 
unemployed, and others).  The AIDS Center is continuing this work on 
its own while it seeks additional funding to help with this 
program. 
 
SITUATION NOW "UNDER CONTROL"...OR IS IT? 
 
7.  In response to the question, "Is the situation under control 
now?" Baimurznina asserted that people will take drugs and engage in 
unprotected sex regardless of information campaigns.  She said 
indicators do not exist to measure the effect of the Center's 
program to encourage prophylactic use.  Even though the Center 
advocates restraint, condoms, and "know your partner," Temirtau's 
incidence of new cases of HIV/AIDS each year remains high.  She used 
a counter-example to illustrate the "mentality" that persists in 
Kazakhstan (and throughout the former Soviet Union): only 1-2 
percent of Temirtau's residents use contraception to restrict birth; 
abortion remains the overwhelming preferred method of birth control. 
 However, she highlighted that 40 percent of those who use abortion 
say they will start using contraception in the future.  Baimurznina 
could not easily say the situation is under control, even though the 
number of new cases each year remains steady. 
 
VOLUNTARY AND MANDATORY HIV/AIDS SCREENING 
 
8.  Baimurznina said 10 percent of Temirtau's residents submit to 
voluntary screening for HIV/AIDS each year.  In addition, all 
prisoners and blood and organ donors must undergo a mandatory 
HIV/AIDS test.  She said Temirtau's AIDS Center also serves 
prisoners and noted that 30 percent of all HIV/AIDS cases are 
prisoners in the Karaganda region.  Of these, one-third are from 
Karaganda, and the rest are prisoners transferred from other 
Kazakhstani regions. 
 
SHAPAGAT NGO DIRECTOR AN HIV/AIDS VICTIM, COUNSELOR IS FORMER DRUG 
ADDICT 
 
9.  One of Temirtau AIDS Center's implementing partners is the 
HIV/AIDS NGO Shapagat.  Kazakh for "mercy, benefaction, patronage," 
Shapagat carries out education campaigns, gives guidance to victims 
and sex workers, and provides emotional and psychological counseling 
to those with HIV/AIDS and drug users.  Its director, Zoya 
Ruzhnikova, is a lively mid-30s woman who is currently undergoing 
anti-viral therapy and taking medication to treat her own HIV/AIDS. 
She says that this personal tragedy gave her life a new direction. 
Shapagat's counselor, Aida Arapbayeva, is a recovering drug addict 
in her late 20s whose voice has been damaged by drug use.  Studying 
to be a counselor, she works with Shapagat to help current and 
former addicts. 
 
10.  Ruzhnikova said Shapagat gets its funding for counseling and 
educational work from Counterpart Consortium, The TIDES Foundation 
(a U.S. philanthropic fund), the Dutch AIDS Foundation East-West 
(AFEW), and the International Red Cross.  In addition, Shapagat has 
worked with legal aid groups to create the "All Kazakhstan Union of 
AIDS" network to help HIV/AIDS victims with questions concerning 
employment, housing, and benefits.  Shapagat recently started a 
pilot project to place an HIV/AIDS treatment clinic inside a 
maternity home to treat sex workers, women with HIV/AIDS, and drug 
users.  It will also provide counseling and advice to those with 
 
ASTANA 00001547  003.2 OF 003 
 
 
psychological and/or emotional problems, give guidance to family 
members, provide support groups, and help with rehabilitation and 
social reintegration.  Ruzhnikova hopes to expand this service to 
other cities in the region. 
 
11.  Ruzhnikova said many who seek counseling and treatment do not 
work, cannot adapt to society's norms, and need help obtaining 
government assistance.  (NOTE: In Kazakhstan, citizens must have a 
document called a "propusk" that grants them legal status in a city 
or region.  While many move to work, without a proper "propusk," 
they cannot receive government assistance should they need it.  END 
NOTE.)  Ruzhnikova said most of those seeking counseling have a 
complex of associated problems:  HIV/AIDS, tuberculosis, drug 
addition, homelessness, unemployment, and social intransigence. 
 
12.  COMMENT:  Temirtau has the reputation of being the "AIDS 
capital of Kazakhstan" because of its high incidence of cases. 
While it is easier for donor organizations to work with groups and 
centers in Astana and Almaty, Temirtau's experience shows much about 
the spread of HIV/AIDS in Kazakhstan, its likely causes, and the 
effect of economic turmoil, drug use, and transient populations on 
transmission.  As the U.S. Government looks for worthy organizations 
to support, we should not overlook the work by local groups, such as 
those in Temirtau.  END COMMENT.

Wikileaks

09ASTANA1546, KAZAKHSTAN: ENVIRONMENTAL NGO “REFLECTION” WORKS INSIDE

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Reference ID Created Released Classification Origin
09ASTANA1546 2009-09-21 06:33 2011-08-30 01:44 UNCLASSIFIED Embassy Astana

VZCZCXRO0213
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 #1546/01 2640633
ZNR UUUUU ZZH
O 210633Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6247
INFO RUCNCIS/CIS COLLECTIVE 1949
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1318
RUEHKO/AMEMBASSY TOKYO 2017
RUEHUL/AMEMBASSY SEOUL 0971
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1504
RUEKJCS/SECDEF WASHDC 1385
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RHMFISS/CDR USTRANSCOM SCOTT AFB IL
RUEHAST/USOFFICE ALMATY 1870

UNCLAS SECTION 01 OF 02 ASTANA 001546 
 
SIPDIS 
 
STATE FOR SCA/CEN, OES/PCI (PHUDAK) 
 
E.O. 12958: N/A 
TAGS: ECON SENV SOCI KDEM KZ
SUBJECT:  KAZAKHSTAN:  ENVIRONMENTAL NGO "REFLECTION" WORKS INSIDE 
ECO-SCHOOL IN TEMIRTAU, CENTRAL KAZAKHSTAN 
 
ASTANA 00001546  001.2 OF 002 
 
 
1.  SUMMARY:  The environmental organization/NGO Otrazhenie 
(Reflection), physically located in one of 22 "eco-schools" in 
Kazakhstan, engages in community service projects, works closely 
with the Temirtau city council, and serves as the city's 
environmental information center.  The school and NGO have combined 
to promote an "eco-lifestyle," such as recycling, which has greatly 
improved this industrial city.  Students at School 16 teach 
environmental classes to each other, which motivates them to remain 
active in later years.  Reflection has found financial support from 
the Kazakhstani government, U.S. Institute for Soviet and American 
Relations (ISAR), EU, Global Environmental Fund, and the U.S. 
Department of State.  END SUMMARY. 
 
REFLECTION: ENVIRONMENTAL NGO INSIDE A SCHOOL 
 
2.  Temirtau is Kazakhstan's premier steel manufacturing town, home 
to the massive ArcelorMittal steel-mill complex, a major source of 
pollution.  So it is fitting that the Temirtau environmental 
organization/NGO Otrazhenie (Reflection), focusing on youth 
outreach, is located inside a school (Temirtau School 16, grade and 
high school combined).  Its director, Yelena Varganova, a trained 
ecologist, not only runs the NGO but also has a dedicated classroom 
in order to teach environmental courses as part of the school's 
regular curriculum.  Reflection also participates in community 
service projects and works closely with the city council, serving as 
its environmental information center.  The organization has five 
people on staff, plus numerous teacher, student, and community 
volunteers.  Reflection conducts seminars, training workshops, and 
conferences throughout the region to raise environmental awareness 
and promote sustainable development.  Reflection also closely works 
with other environmental groups in the region on projects that 
directly affect Temirtau.  In addition, it helped five other 
Karaganda schools achieve the "eco-school" designation. 
 
ECO-SCHOOLS IN KAZAKHSTAN 
 
3.  With School 16, Temirtau boasts one of Kazakhstan's 22 
"eco-schools."  In order to become an eco-school, the school must 
form an eco-committee composed of teachers, students, and school 
administrators to select activities.  The school also must actively 
promote an "eco-lifestyle" in the community, such as recycling, 
using lamps with less wattage, planting trees, and maintaining green 
and clean yards.  The recycling and yard cleanup projects have had a 
particularly telling effect on Temirtau, Varganova said. 
 
REFLECTION'S VARIOUS FUNDING, INCLUDING U.S. SOURCES 
 
4.  Although some of Reflection's funding comes from the government, 
it primarily relies on donor support.  In the past, it received a 
grant from the U.S. Institute for Soviet and American Relations 
(ISAR) Resources for Environmental Activists program to carry out a 
water-related environmental project.  The EU sponsored a children's 
video conference on the environment.  The Global Environmental Fund 
gave Reflection money to buy outdoor solar lamps for ten schools in 
the Karaganda region, which demonstrate alternative energy to local 
residents.  Reflection has also used this project to solicit ideas 
from children on how to use solar energy.  Varaganova traveled to 
the United States on a U.S. Department of State "Creating Community 
Partnerships" Grant in October-November 2008 where she garnered 
valuable information on how to teach children about healthy 
lifestyles, one of her missions at Reflection. 
 
5.  Varaganova said that she (and her NGO) does not just teach 
children about the environment.  She has organized a youth 
roundtable to prepare environmental protection and awareness 
projects.  Several students have attended international 
competitions, such as this year's group that went to South Korea to 
present their environmental project in competition with other 
international teams.  Students also prepare and teach classroom 
materials.  When students from other schools see students teaching 
each other about the environment, they become more actively involved 
in the learning process and more motivated to remain engaged in 
later years. 
 
 
ASTANA 00001546  002.2 OF 002 
 
 
RECYCLED EGG SHELL PICTURE AS GIFT 
 
6.  Varaganova showed REO several pictures on the school wall, made 
by children from garbage.  They were quite s
tunning and could easily 
have been displayed in several museums, including the Paris Museum 
of Modern Art.  Varagonova found a picture, made from discarded egg 
shells during a recent Easter Day celebration, and presented it as a 
gift to the REO.  It now hangs in the Embassy and is a touching 
reminder that education is far reaching, recycling can take many 
forms, and environmental education can have an aesthetic and 
artistic component. 
 
7.  COMMENT:  Kazakhstan -- a country polluted from heavy industry, 
massive industrial complexes, and Soviet era radioactive waste -- 
has a very positive and active environmental community.  Its 
committed citizens demonstrate a heightened environmental awareness, 
and NGOs actively engage as partners with local governments and 
communities to bring about positive change in society.  In this way, 
Reflection strongly exemplifies the growing role of civil society in 
Kazakhstan.  END COMMENT.

Wikileaks

09ASTANA1542, KAZAKHSTAN: DEMARACHE DELIVERED ON AFGHAN PRESIDENTIAL

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Reference ID Created Released Classification Origin
09ASTANA1542 2009-09-21 00:57 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXYZ0000
OO RUEHWEB

DE RUEHTA #1542 2640057
ZNY CCCCC ZZH
O 210057Z SEP 09
FM AMEMBASSY ASTANA
TO SECSTATE WASHDC IMMEDIATE 6243

C O N F I D E N T I A L ASTANA 001542 
 
SIPDIS 
 
STATE FOR SCA/CEN, SCA/A 
 
E.O. 12958: DECL: 09/12/2019 
TAGS: PGOV PREL NATO AF KZ
SUBJECT:  KAZAKHSTAN:  DEMARACHE DELIVERED ON AFGHAN PRESIDENTIAL 
ELECTION 
 
REFTEL:  STATE 95019 
 
Classified By: Ambassador Richard E. Hoagland, for reasons 1.4 (B), 
and (D) 
 
1.  (C) During a September 16 meeting with Talgat Shaldanbay, Chief 
of the Middle East Division of the Kazakhstani Ministry of Foreign 
Affairs, PolOff delivered the talking points (ref) on the Afghan 
Presidential Election.  Shaldanbay agreed to pass the message to 
appropriate points of contact within the Kazakhstani government. 
HOAGLAND

Wikileaks

09ASTANA1541, KAZAKHSTAN: A KEY PARTNER ON NON-PROLIFERATION REF: A. A. ASTANA 00607 B. B. ASTANA 01090 C. C. ASTANA 01164 D. D. 08 ASTANA 01867 E. E. 08 ASTANA 01648 F. F. 08 ASTANA 01649 G. G. ASTANA 02232 H. H. ASTANA 00200 I. I. ASTANA 00623 J. J. STATE 76904 K. K. ASTANA 00521 L. L. 08 ASTANA 02298 M. M. 08 ASTANA 02316 N. N. ASTANA 00254 O. O. ASTANA 01536 Classified By: Ambassador Richard E. Hoagland, 1.4 (b/d)

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Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol).Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #09ASTANA1541.
Reference ID Created Released Classification Origin
09ASTANA1541 2009-09-18 11:12 2011-08-30 01:44 SECRET Embassy Astana

VZCZCXRO9078
RR RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL
DE RUEHTA #1541/01 2611112
ZNY SSSSS ZZH
R 181112Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 6239
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1945
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1314
RUEHUL/AMEMBASSY SEOUL 0967
RUEHKO/AMEMBASSY TOKYO 2013
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC 1381
RHEHNSC/NSC WASHDC 1500
RHEFAAA/DIA WASHDC
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

S E C R E T SECTION 01 OF 04 ASTANA 001541 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RUS, ISN, NSC FOR MCFAUL, DONNELLY 
 
E.O. 12958: DECL: 09/18/2029 
TAGS: PARM PGOV PREL ECON MNUC KNNP KZ
SUBJECT: KAZAKHSTAN:  A KEY PARTNER ON NON-PROLIFERATION REF: A. A. ASTANA 00607 B. B. ASTANA 01090 C. C. ASTANA 01164 D. D. 08 ASTANA 01867 E. E. 08 ASTANA 01648 F. F. 08 ASTANA 01649 G. G. ASTANA 02232 H. H. ASTANA 00200 I. I. ASTANA 00623 J. J. STATE 76904 K. K. ASTANA 00521 L. L. 08 ASTANA 02298 M. M. 08 ASTANA 02316 N. N. ASTANA 00254 O. O. ASTANA 01536 Classified By: Ambassador Richard E. Hoagland, 1.4 (b/d)

1. (SBU) SUMMARY: Kazakhstan is a full and supportive partner of the United States on countering proliferation of weapons of mass destruction (WMDs). Kazakhstan actively participates in many international counter-proliferation organizations. Recently, it sought to enhance its role in non-proliferation, requesting to join the Missile Technology Control Regime (MTCR), volunteering to host a nuclear fuel-bank, and developing its uranium and nuclear industries. Kazakhstan's leaders consistently reiterate that non-proliferation, especially through the Cooperative Threat Reduction Agreement (CTR), is a fundamental pillar of U.S.-Kazakhstani relations. The United States and Kazakhstan have decommissioned reactors, secured borders, and built safe scientific laboratories. In 2009, Kazakhstan ratified the extension of the CTR Agreement, resolved issues related to customs and taxes on technical assistance, provided a first tranche of funding for the spent-fuel project, and moved ahead of schedule on securing the Semipalatinsk Test Site. Now, Kazakhstan must allocate additional funding for the spent-fuel transfer program and strengthen border protection and legal controls to prevent proliferation. END SUMMARY.

HIGH-LEVEL COUNTERPROLIFERATION SUPPORT

2. (SBU) In every possible forum, high-level Kazakhstani officials praise non-proliferation as a cornerstone of our bilateral relationship (reftels A-C). On June 18, Nazarbayev organized a massive memorial event on the 20th anniversary of the last nuclear test at Semipalatinsk (ref B) at which he thanked the U.S. and Russian governments -- represented by their Ambassadors -- for their assistance in the field of non-proliferation. Nazarbayev also urged adoption of a new universal non-proliferation treaty, proposed a prohibition on any improvements to existing nuclear arsenals, and advocated the United Nations designate August 29 -- the date on which he closed the test-site in 1991 -- as World Non-Nuclear Day. Kazakhstani officials have subsequently aggressively sought support from other nations, particularly the U.S. and Japan, for this proposal.

ACTIVE PARTICPATION IN NON-PRO ORGANIZATIONS

3. (SBU) Kazakhstan actively participates in the International Atomic Energy Agency (IAEA), the Nuclear Suppliers' Group (NSG), the Proliferation Security Initiative (PSI) and the Global Initiative to Combat Nuclear Terrorism (GICNT). Kazakhstan hosted the Global Initiative to Combat Nuclear Terrorism's senior-level Plenary Meeting in June 2007, conducted two working-level exercises in 2008 (ref D), and is considering hosting additional activities in 2010. Within the NSG, Kazakhstan supported U.S. government initiatives on civil nuclear cooperation with India and enhancement of controls on transfers of enrichment and reprocessing (ENR) equipment and technology. It has signed the Nuclear Non-proliferation Treaty (NPT), the International Code of Conduct Against Ballistic Missiles (ICCBM), and the Biological and Toxin Weapons Convention (BTWC). In 2001, ASTANA 00001541 002 OF 004 Kazakhstan ratified the Comprehensive Test Ban Treaty (CTBT) and has hosted four exercises, most recently a large verification exercise in 2008. Kazakhstan also led efforts to establish the Central Asian Nuclear Free Zone in 2006. In February 2009, Kazakhstan expressed its strong interest in joining the Missile Technology Control Regime (MTCR).

QUIETLY SUPPORTIVE ON IRAN

4. (S) Critical due to its large volume of uranium production and geographic location (reftels E-F), Kazakhstan consistently supports U.S. non-proliferation initiatives -- especially in relation to Iran, North Korea, and Syria. President Nazarbayev told Under Secretary Burns in Astana in July, that he has privately urged Iran's President Ahmadinejad to negotiate with the United States about its nuclear program (Ref O). State's ISN Office told PolOff that Kazakhstan has provided especially strong support for the implementation of UN Security Council resolutions on Iran over the last year.

NUCLEAR FUEL-BANK PROPOSAL

5. (SBU) During Iranian President Ahmadinejad's April 6-7 visit to Kazakhstan, Nazarbayev asserted Iran's right to the peaceful use of nuclear energy, and announced Kazakhstan's offer to host an international nuclear fuel bank -- an offer that Iran appeared to welcome (ref A). (COMMENT: Nazarbayev, an expert at balancing foreign policy priorities, also emphasized support for the President's non-proliferation policy and initiative to negotiate with Iran, during a joint press conference with Ahmadinejad. END COMMENT
.) Yerzhan Kazykhanov, Kazakhstan's Permanent Representative to International Organizations in Vienna, outlined Nazarbayev's fuel-bank proposal during the June 18 IAEA Board of Governors' meetings. Vice President of Kazakhstan's National Nuclear Company, Kazatomprom, Sergei Yashin, said Vladimir Shkolnik, Kazatomprom's Director, planned to present a comprehensive nuclear strategy to Nazarbayev in June. Post has requested more information about the fuel bank, but has not received any official response.

WORKING LEVEL PRAISE -- AND SOME CONCERNS

6. (C) On September 2, PolOff met with a junior staffer, Alen Dauletov, in Kazakhstan's Ministry of Energy and Mineral Resources, which has responsibility for most non-proliferation issues. Dauletov, who had attended two U.S.-sponsored non-proliferation meetings in 2009 (reftels J-K), approached PolOff unofficially -- without approval from his supervisors -- for guidance on his assignment to analyze "the risks and advantages of U.S.-Kazakhstani cooperation on non-proliferation." Dauletov said several governmental bodies, particularly the Committee for National Security (KNB), view cooperation with the United States "negatively." Dauletov confided that some MEMR officials worry close cooperation with the United States could undermine Kazakhstani-Russian cooperation, and the Russian Embassy in Astana inquired about U.S.-Kazakhstani projects. According to Dauletov, some Kazakhstani entities are concerned that locating a nuclear fuel bank in Kazakhstan, while beneficial for Kazakhstan's image, would "make Kazakhstan a U.S. colony" and render it a more appealing target of a terrorist attack.

7. (C) Dauletov also thanked the United States for holding several inter-agency training events on preventing nuclear smuggling in Kazakhstan, and said participants found them very useful. Other participants asserted that these events marked the first time such a broad range of Kazakhstani agencies met to discuss prevention of, and if necessary, reaction to, an attempt to proliferate WMDs. A follow-on workshop on legal reform is planned for September 29-October 1 in Astana.

WITH POWER COMES RESPONSIBILITY ASTANA 00001541 003 OF 004

8. (SBU) Kazakhstan, among the top three uranium producers in the world, has some of the world's largest reserves. Its National Atomic Energy Company, Kazatomprom, has established a large variety of joint ventures with Russian, Chinese, Japanese, French, and Canadian companies (ref G). It also continues to pursue cooperation with Westinghouse. Kazatomprom has established two joint ventures with Russia called the International Uranium Enrichment Center in Angarsk and the Kazakh-Russian Uranium Enrichment Center. Kazakhstan also is pursuing potential uranium deals with India and China (reftels G-H). A member of the Global Nuclear Energy Partnership since 2007 due to its vast uranium reserves, Kazakhstan plays a significant role in supplying new reactors.

U.S. ASSISTANCE IN KAZAKHSTAN -- THE BIG PICTURE

9. (S) Under the aegis of the Cooperative Threat Reduction (CTR) Agreement, the United States has provided assistance worth over 600 million dollars since 1993 that has resulted in the destruction of Kazakhstan's nuclear war-heads and decommission of its BN-350 nuclear reactor. The United States has dismantled bio-weapons facilities, and helped Kazakhstani scientists find sustainable employment in peaceful research projects. However, Kazakhstan still possesses enough spent fuel to fabricate 775 nuclear weapons, and access to dangerous biological and chemical substances by terrorists remains a concern. 2008 security assistance to Kazakhstan in the amount of $80 million -- more than half, i.e. $44 million, allocated under the CTR -- worked to secure potentially dangerous materials, strengthen borders, build safe scientific laboratories, enhance scientific cooperation, and improve Kazakhstan's ability to prevent and respond to attempts to smuggle WMDs.

CLOSURE OF NUCLEAR TEST TUNNELS

10. (S) The Defense Threat Reduction Agency (DTRA) funds the Weapons of Mass Destruction-Proliferation Prevention Initiative (WMD-PPI), which has led to the elimination of 181 nuclear test tunnels and containment of dangerous materials at the former Semipalatinsk Test Site (STS). DTRA has also provided physical security enhancements on the STS. Since 2000, U.S and Kazakhstani teams of experts jointly completed five projects to eliminate or minimize the threat from the residue of nuclear activity (RONA).

KAZAKHSTAN EFFORTS TO "DOUBLE THE PACE"

11. (S) Currently, the government of Kazakhstan is actively cooperating with DTRA on a project to provide additional security at the STS -- known as K-3. Since the United States and Kazakhstan completed high-level negotiations in April, the pace of the project has doubled, and the project is running ahead of schedule. DTRA and Kazakhstan's National Nuclear Center (NNC) agreed on a schedule according to which K-3 sites will be completed by 2010. In several recent instances, the central government of Kazakhstan even pressured the NNC to proceed with work before contracts were completely finalized, resulting in an accelerated schedule.

THREE STEPS FORWARD ON SPENT-FUEL TRANSFER

12. (C) On September 9, the government of Kazakhstan committed $5 million in financing for the initial 2009 fuel runs. This positive development significantly advances the $118 million, decade-long project. On September 18, Kazakhstan's Prime Minister signed decrees on reserve funding and equipment transfer, removing the last obstacles to getting spent-fuel transfer underway. Post has received positive signals that the government intends to provide funding for 2010 in order to quickly and successfully complete the project. The only other remaining step necessary to safely dispose of all BN-350 materials is the ASTANA 00001541 004 OF 004 provision of funding to complete the Geocement Stone Facility (reftels L-M). Kazakhstan, with DOE assistance, returned nearly 75 kilos of highly enriched uranium to Russia in May.

OTHER KEY ACCOMPLISHMENTS AND NEXT STEPS

13. (C) Kazakhstan and the United States have worked together at all levels of government to prevent WMD proliferation. The Weapons of Mass Destruction-Proliferation Prevention Initiative (WMD-PPI) provided training and equipment to help Kazakhstan develop a WMD detection and interdiction capability in the Caspian Sea region. Through the Second Line of Defense (SLD) Program, the DOE installed Radiation Portal Monitors and trained border operators at seven border crossings sites, and EXBS provided Customs and Border Guards with inspection/detection devices and training (ref I). Post is providing expertise in biosafety regulatory reform and constructing several labs with adequate (Biosafety-level 3) standards. The United States funded 13 projecs to support scientists who previously worked in bio-weapons programs (ref N) and hosted an August workshop on sustainable development. U.S. specialists also helped Central Asian states establish the Biosafety Association for Central Asia and the Caucasus (BACAC) and supported a September bio-safety conference in Astana as part of an ongoing effort to help Kazakhstan ensure compliance with its Biological Weapons Convention obligations. Customs, and the Ministries of Emergency Situations, Health, Education and Science, Defense, the Interior, Energy, and Foreign Affairs and most government agencies, consistently work enthusiastically with Post. Only the Committee for National Security (KNB) and its subordinate, the Border Guards, opt not to participate in U.S. events.

14. (C) COMMENT: PolOff observed a group of usually serious U.S. and Kazakhstani nuclear scientists, celebrating the successful completion of several tasks, dancing together to Beatles music played by one of the scientist's bands. As monumentally important projects approach completion, Post looks forward to using the cooperative relationships built over many years with various Kazakhstani officials to move on to the next objectives in our long-term, cooperative non-proliferation relationship. END COMMENT. HOAGLAND

Wikileaks

09ASTANA1539, KAZAKHSTAN: CASPIAN SEA SUMMIT

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Reference ID Created Released Classification Origin
09ASTANA1539 2009-09-18 10:26 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO9030
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 #1539/01 2611026
ZNR UUUUU ZZH
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FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6235
INFO RUCNCIS/CIS COLLECTIVE 1942
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1311
RUEHKO/AMEMBASSY TOKYO 2010
RUEHUL/AMEMBASSY SEOUL 0964
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 1497
RUEKJCS/SECDEF WASHDC 1378
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1865

UNCLAS SECTION 01 OF 03 ASTANA 001539 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/CARC, EEB/ESC, EUR/RUS 
STATE PLEASE PASS TO USTDA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL ECON EPET EINV IR RS KZ
SUBJECT:  KAZAKHSTAN:  CASPIAN SEA SUMMIT 
 
ASTANA 00001539  001.2 OF 003 
 
 
1. (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) SUMMARY:  On September 12, President Nazarbayev hosted the 
presidents of Russia, Azerbaijan, and Turkmenistan at a private 
resort in Kenderliy, south of the port city of Aktau in western 
Kazakhstan.  According to press reports and interviews with 
government officials and resident diplomats, the presidents 
discussed economic, energy, environmental, and boundary issues.  No 
documents were signed and no declaration was issued following the 
informal summit.  The presidents stressed that they had not 
conferred on the delimitation of the Caspian Sea, and would not do 
so until all five Caspian littoral states, including Iran, have an 
opportunity to discuss the issue, possibly in Baku later this year. 
The meeting supposedly allowed Nazarbayev to play the role of 
gracious host and honest broker against the backdrop of tension 
between Turkmenistan and Russia over gas shipments, and between 
Turkmenistan and Azerbaijan over boundary issues.  It also 
underscored Russia's continuing desire to influence economic and 
energy policy in the Caspian, particularly regarding the 
transportation of oil and gas.  END SUMMARY. 
 
AKTAU ATMOSPHERICS 
 
3.  (SBU) The September 12 informal summit brought together the 
presidents of Kazakhstan, Russia, Azerbaijan, and Turkmenistan in 
Kazakhstan for the first time, and the port city of Aktau was well 
dressed for the occasion.  Several local residents told Energy 
Officer on September 13 that before the presidents' arrival, all of 
the city's roads had been resurfaced, new landscaping was installed, 
and dozens of billboards were erected to highlight Nazarbayev's 
steady leadership, promote the capital city of Astana, and welcome 
the distinguished visitors.  Nazarbayev also opened a new airport 
terminal and trading center during his visit.  For security reasons, 
the port of Aktau was closed for five days, while empty oil tankers 
waited offshore, unable to load their cargo.  An American oil 
company executive based in Aktau told Energy Officer on September 13 
that the local government commandeered vehicles -- and their drivers 
-- from international companies working in Aktau to support the 
summit.  "This was not a polite request," he said.  "They basically 
ordered us to give up a couple cars for ten days, and they had our 
drivers on call the whole time, 24/7." 
 
MEDVEDEV'S SPEECH SETS THE STAGE 
 
4.  (SBU) Russian President Medvedev set the stage for the Caspian 
Sea Summit with his August 17 speech in Astrakhan.  In the speech, 
Medvedev acknowledged "the Caspian Sea's mineral resources enormous 
significance" to global energy security, but said Russia's main goal 
was "to preserve the Caspian Sea for future generations, not 
allowing it to be spoiled" by oil and gas exploration.  Medvedev 
also called for "active talks" to define the legal status of the 
Caspian Sea, announced Russia's interest in developing Caspian 
maritime transportation infrastructure, endorsed the creation of the 
Caspian Sea Economic Cooperation Organization, and confirmed 
Russia's strong desire to convene a meeting of experts in Baku "to 
develop a pentalateral agreement on security cooperation in the 
Caspian Sea."  The next day, the office of President Nazarbayev 
announced that Kazakhstan would host the leaders of Russia, 
Azerbaijan, and Turkmenistan at Kenderliy.  The informal summit was 
on, and diplomats across the region hurriedly began to prepare their 
principals.  During a September 10 reception in Astana, a Russian 
Embassy Political Officer told PolOff that his Embassy was 
essentially empty, with most staff in Aktau to prepare for the 
Caspian Sea Summit.  The Russian Embassy also suspended 
non-emergency consular services, due to the deployment of the 
Consular Officer to Aktau. 
 
HIGH-STAKES GAS GAMES AT ORENBURG 
 
5.  (SBU) On September 11, on the eve of the Caspian Sea Summit, 
Russian President Medvedev met President Nazarbayev in Orenburg for 
the sixth annual Russia-Kazakhstan Interregional Cooperation Forum. 
 
ASTANA 00001539  002.2 OF 003 
 
 
According to press reports, Medvedev and Nazarbayev discussed border &#x
000A;security, immigration, and energy cooperation.  Specifically, they 
spoke about oil and gas exploration in Kazakhstan, the 
transportation of oil and gas via Russia, and expansion of the 
combined heat and power plant Ekibastuz-2 in eastern Kazakhstan.  On 
September 10, Todd Levy, General Director of Tengizchevroil (TCO), 
called Energy Officer to say that Russia had suddenly stopped 
receiving natural gas exports from Kazakhstan.  As a result, TCO 
reduced its production of oil at Tengiz, and considered flaring 
natural gas far in excess of agreed-upon limits.  Levy said that if 
gas flows to Russia did not resume quickly, TCO would have to 
severely curtail production, which could cost the company up to $2 
billion in lost revenue in 2009.  Levy flew to Orenburg and raised 
the issue with Minister of Energy and Minister Resources Sauat 
Mynbayev, who discussed it with Gazprom CEO Alexei Miller. 
According to Levy, on September 11, Miller agreed to allow dry gas 
shipments from TCO to Russia to resume for six days, during which 
negotiations would continue on a long-term sales contract.  (NOTE: 
TCO was expected to export up to five billion cubic meters of gas to 
Russia in 2009, through a 50-50 joint venture between KazRosGaz and 
Invest Gas Limited.  TCO has not received confirmation that Invest 
Gas Limited has a permit for transportation via Russia.  END NOTE). 
 
WHAT WAS DISCUSSED AT AKTAU? 
 
6.  (SBU) Reports of what the presidents discussed and agreed during 
their informal summit are sketchy and speculative.  On August 21, 
Campbell Keir, Country Manager for Shell Kazakhstan, told the 
Ambassador that he and other international energy executives had 
been summoned to Aktau to brief Nazarbayev on energy issues before 
the Caspian Sea Summit.  However, days before the summit, Nazarbayev 
abruptly postponed the energy briefing until the end of September, 
leading Keir and others to speculate that the presidents would not 
be discussing oil and gas issues in great detail.  Keir noted that 
the four presidents have much to talk about in addition to 
delimitation and oil transportation, including vessel flagging, 
sturgeon conservation, oil spill response, and leaking sunken ships 
in the Caspian. 
 
LIMITED PRESS COVERAGE 
 
7.  (SBU) On September 12, the local newspaper in Aktau, "Mangistau 
Ogniy" (Fires of Mangistau), quoted Nazarbayev saying that "global 
and strategic issues" would not be discussed at the summit, since 
these would require the presence of all five Caspian littoral 
states, including Iran.  "Nevertheless," said Nazarbayev, "our four 
countries have something to talk about" in an informal and relaxed 
setting.  According to the article, Russian President Medvedev said, 
"although our economies are showing signs of growth, we should not 
become complacent.  We all need to reconstruct our financial 
systems, and discuss solutions to achieve economic growth."  Azeri 
President Aliyev confirmed that Azerbaijan would host the next 
Caspian summit in Baku and emphasized that all five Caspian states 
will be invited "to discuss global issues and take concrete 
decisions" about the status of the Caspian Sea.  (NOTE:  An 
accompanying photograph of the four presidents showed Medvedev and 
Nazarbayev smiling broadly and standing shoulder to shoulder, while 
Aliyev and Berdimukhamedov flank them awkwardly, some distance away. 
 The paper also published full-page profiles of Kazakhstan's 
relations with Russia ("Friendship Forever"), Azerbaijan ("Country 
of Fire"), and Turkmenistan ("The Dialogue Continues").  END NOTE). 
 
EVEN INSIDERS WERE ON THE OUTSIDE LOOKING IN 
 
8.  (SBU) On September 15, a senior political advisor to the 
governor of Mangistau oblast told the Ambassador that the Caspian 
Sea Summit was poorly organized and "improvised."  He said the 
agenda was "not well prepared" and confirmed that no documents were 
signed during the Summit.  He also said that President Nazarbayev 
traveled to Turkmenbashi, Turkmenistan, on September 13 with Russian 
President Medvedev.  An Azeri diplomat in Astana told Energy Officer 
on September 15 that, while he had no first-hand knowledge of what 
 
ASTANA 00001539  003.2 OF 003 
 
 
was discussed at the summit, he understood that the presidents 
discussed oil and gas transportation, as well as the delimitation of 
the Caspian Sea.  He speculated that the presidents wanted to 
"define a common position" on the issue, before all five Caspian Sea 
littoral states convene in Baku, "later this year." 
 
IRAN IRATE 
 
9.  (SBU) On September 9, in a meeting with Kazakhstan's new 
ambassador to Iran, Iranian Foreign Minister Manuchehr Mottaki said 
that the informal Caspian Sea Summit "runs contrary to Iran's 
national interests."  According to wire reports, he said the meeting 
"violates previous agreements, in which the five Caspian littoral 
states came to the understanding that any decision on the waterway 
should be made with the participation of all its neighboring 
countries."  Following the summit, the presidents of Russia, 
Kazakhstan, Azerbaijan, and Turkmenistan all issued similar 
statements, confirming that the status of the Caspian Sea could only 
be determined with the presence and participation of all five 
Caspian littoral countries.  According to Interfax, Medvedev said, 
"I believe that resolution of the Caspian issue requires serious 
discussion among all of the states that border the Caspian."  He 
added that such a discussion would take place in the near future, in 
Baku. 
 
10.  (SBU) COMMENT:  Hosting the summit showed Kazakhstan's 
interest, desire, and willingness to play the role of facilitator, 
honest broker, and balancer of interests among the other countries 
in the region.  The summit also revealed Russia's continued desire 
to influence the policies of the other former Soviet states in the 
region, in order to maintain Russian control over the transportation 
of oil and gas from the Caspian.  We have no way of knowing if 
Russia used the summit to exert direct pressure on the other 
countries to cease specific projects such as the Kazakhstan Caspian 
Transportation System, but it the summit did provide Medvedev an 
opportunity, in a relaxed setting "among friends," to lobby for 
increased oil and gas shipments through Russia.  END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1538, KAZAKHSTAN: ZHOVTIS’ LEAD LAWYER COMMENTS ON THE

WikiLeaks Link

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Reference ID Created Released Classification Origin
09ASTANA1538 2009-09-18 09:24 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO8950
PP RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1538/01 2610924
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FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6232
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1939
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1308
RUEHUL/AMEMBASSY SEOUL PRIORITY 0961
RUEHKO/AMEMBASSY TOKYO PRIORITY 2007
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/CDR USTRANSCOM SCOTT AFB IL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
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RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1494
RUEKJCS/SECDEF WASHDC PRIORITY 1375
RUEHGV/USMISSION GENEVA PRIORITY 1004
RUEHNO/USMISSION USNATO PRIORITY 2801
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2487

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 001538 
 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/RPM, DRL 
 
E.O. 12958: DECL: 09/18/2019 
TAGS: PGOV PREL PHUM KDEM OSCE KZ
SUBJECT:  KAZAKHSTAN:  ZHOVTIS' LEAD LAWYER COMMENTS ON THE 
CASE 
 
REF: A. ASTANA 1512 
     B. ASTANA 1494 
     C. ASTANA 1487 
     D. ASTANA 1470 
     E. ASTANA 1429 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  Convicted human rights advocate Evgeniy 
Zhovtis' lead lawyer, Vitaliy Voronov, predicts Zhovtis will 
not be acquitted at his appeal hearing but that his sentence 
might be reduced.  Voronov said he had been told that 
"someone high up in the government" had triggered the trial 
by telling President Nazarbayev that Zhovtis had been drunk 
when the auto accident happened.  Kazakhstan remains 
hypersensitive to any criticism about the Zhovtis case.  To 
benefit Zhovtis, we recommend that any public statements and 
private conversations with Kazakhstani government officials 
hue strictly to advocating a fair and transparent appeals 
case that fully respects the rule of law.  END SUMMARY. 
 
2.  (SBU) On September 15, the Ambassador met in Almaty with 
Vitaliy Voronov (strictly protect throughout), the lead 
lawyer for Evgeniy Zhovtis's legal team and President of the 
Almaty Legal Corporation.  Zhovtis is the internationally 
respected human rights advocate and director of Kazakhstan's 
Human Rights Bureau, as well as one of the principal drafters 
of Kazakhstan's recently released National Human Rights 
Action Plan 2009-2012.  He was convicted on September 3 of 
the Kazakhstani equivalent of vehicular manslaughter 
(reftels).  Voronov said he had very recently visited Zhovtis 
in prison where he is in a large cell with one cellmate. 
Zhovtis is in good spirits and regularly receives his 
medications and newspapers.  He will remain in detention 
until his appeal, which will probably be heard during the 
third week of October. 
 
3.  (SBU) Voronov thanked the Ambassador for the statement 
the U.S. Embassy released on September 4 and characterized it 
as "balanced and correct."   He also thanked the Ambassador 
for working quietly with high-level Kazakhstani officials to 
express concerns about the way in which the Bakanas court and 
the local prosecutor had handled the case.  Voronov cautioned 
that it would be inadvisable to "politicize" the case at this 
time, although it would be appropriate for all interested 
parties who want to be helpful to Zhovtis and his supporters 
to continue to express hope that the procedures and ruling of 
the appeals court will be fair. 
 
SOMETHING HAPPENED 
 
4.  (C) As they discussed the case in detail, Voronov told 
the Ambassador that initially, immediately after the 
accident, the investigation had been conducted fairly and 
professionally.  Zhovtis had provided the investigator with a 
copy of a written statement from the victim's family that 
acknowledged Zhovtis had helped them "with financial and 
moral support" and that requested no charges be brought 
against him.  Subsequently, however, Voronov said, the 
prosecutor "cheated" Zhovtis by not including the statement 
in the documentary evidence for the case.  Voronov added that 
Zhovtis, too, had made a "stupid mistake" by not insisting on 
a receipt for the document.   In any case, likely under 
pressure from the prosecutor, the investigator unexpectedly 
changed Zhovtis' status from "witness" to "suspect" without 
notifying him.  Further, during the trial, the prosecutor 
denied that he had ever received a copy of the document from 
the victim's family requesting that no charges be filed 
against Zhovtis. 
 
ZHOVTIS HAS MANY HIGH-LEVEL FRIENDS 
 
 
ASTANA 00001538  002 OF 003 
 
 
5.  (SBU) Voronov made clear that Zhovtis is widely respected 
by a number of high government officials.  Voronov told the 
Ambassador that in recent days he had spoken about Zhovtis 
with State Secretary-Foreign Minister Kanat Saudabayev and 
several other senior Foreign Ministry officials, all of whom 
openly expressed respect for Zhovtis. 
 
6.  (SBU) When shown the latest "News Bulletin" (Special 
Issue No. 25, 09/14/09), in which Kazakhstan emphasizes the 
rule of law, from the Embassy of Kazakhstan in Washington, 
Voronov commented that Ambassad
or Idrissov, too, is close 
friends with Zhovtis.  He said that Zhovtis is "a very 
correct person, who has never had a conflict with the 
President."  Asserting Zhovtis is practically the conscience 
of Kazakhstan and a human symbol of Kazakhstan's 
democratization, Voronov claimed that no one could wish to 
silence him, "not Nazarbayev, and not anyone else in the 
government."  Voronov said that, in his opinion, the court 
case occurred because Zhovtis refused to plead guilty, which 
would have meant the case would never have gone to court. 
"But according to the law, he is innocent," Voronov declared 
and, therefore, Zhovtis was taking a principled stand to 
prove that he had acted appropriately after the accident.  If 
he had pled guilty, Zhovtis feels he would have lost public 
credibility and would be unable to continue his work as a 
human rights' defender. 
 
SO WHO DUNNIT? 
 
7.  (C) If it's true that "no one wanted to silence Zhovtis," 
the Ambassador asked Voronov, what, in his view, had really 
happened to cause the government to file the case that 
eventually led to Zhovtis' conviction and a harsh, if legal, 
sentence.   Backing off from his earlier statement that no 
one in the government could have wished to silence Zhovtis, 
Voronov confided he had met with Presidential Domestic Policy 
Adviser Yermukhamet Yertysbayev who was outraged by the 
Zhovtis case.   According to Voronov, Yertysbayev said that 
apparently someone told the president, when Nazarbayev 
enquired about the case, that Zhovtis had been drunk when the 
fatal accident happened.  Nazarbayev reportedly responded, 
"OK, in that case, follow the law."  When the Ambassador 
asked who would have done this, Voronov replied it would have 
had to have been someone at the "top" of either the Committee 
for National Security (KNB) or the Presidential 
Administration  -- i.e., KNB Chairman Shabdarbayev or Head of 
the Presidential Administration Musin.  Voronov added, "I am 
inclined to believe it was most likely the KNB.  Maybe it was 
the Chairman acting on his own." 
 
VORONOV SPECULATES ON WHAT TO EXPECT 
 
8.  (C) "There is a significant danger that the appeals court 
ruling will not be fair, since it is now under pressure," 
asserted Voronov.  "The appeals court will not acquit him. 
'They' achieved what 'they' wanted."  Voronov said he expects 
Zhovtis will be given a reduced sentence of up to two years, 
which he might be allowed to serve under the condition of 
"deprivation of freedom/limitation of movement."  During this 
period, Zhovtis would be able to continue his human rights 
work, although he would not be allowed to participate in 
"public actions."  (NOTE:  This is somewhat like house arrest 
in the United States, including the requirement to wear an 
electronic monitor.  However, the term "house arrest" in 
Kazakhstan means a police officer is required to guard the 
residence door.  END NOTE.)   Voronov noted that the 
provision of deprivation of freedom/limitation of movement 
exists in Kazahstani law but has never before been used. 
Under a sentence of deprivation of movement, Zhovtis might 
not be able to travel internationally and would need to check 
in with authorities, possibly as often as once a week. 
Voronov then speculated further that -- because of domestic 
 
ASTANA 00001538  003 OF 003 
 
 
and international outrage -- the government might include 
Zhovtis in a possible Independence Day Amnesty in December. 
 
9.  (SBU) If, as Voronov expects, the appeals court upholds 
the first court's verdict, even with a suspended sentence, 
Zhovtis plans to appeal to the Supreme Court of Kazakhstan, 
and possibly even to the United Nations Council on Human 
Rights (UNCHR).  Voronov commented, "Zhovtis' case could be 
the first case in Kazakhstan to reach the UNCHR since 
Kazakhstan ratified the protocol in November 2008." 
 
10.  (SBU) Voronov said the Zhovtis case "unmasks" Kazakhstan 
and demonstrates "the lack of rule of law and democracy."  He 
noted that Zhovtis had previously, in the course of his work, 
 heard many stories about problems in the legal system, but 
now he has personal experience.  Zhovtis will not be 
satisfied with a reduced sentence, even one as "relatively" 
mild as deprivation of freedom/limitation of movement, or 
even an amnesty, because he believes he is innocent according 
to the law, and he will maintain that principled stand. 
 
"THAT WOULD BE SEEN AS A PROVOCATION" 
 
10.  (C) On September 11, during a meeting on other issues, 
the Ambassador informed Deputy Foreign Minister Kairat Umarov 
that the Open Society Institute planned to send prominent 
U.S. lawyer Scott Horton to Kazakhstan to consult with 
Zhovtis' legal team.  The Ambassador emphasized that this was 
a private-sector NGO initiative and not in any way sponsored 
by the U.S. government.  He added, "I want to make clear 
there are no official fingerprints on this," and reiterated 
the private-sector NGO nature of this initiative.  Umarov 
replied that the Horton visit would be counter-productive and 
viewed by some as "a provocation." 
 
12.  (C) COMMENT:  Voronov's version of why the Zhovtis case 
went to trial might explain Kazakhstan's hypersensitive 
reaction to international pressure on this issue, a reaction 
that sharply emphasizes that no one is above the law.  If 
indeed Nazarbayev actually said, "OK ... follow the law," all 
subsequent talking points would flow from Number One's rather 
off-hand comment.  More interesting to know would be, if in 
fact it happened as Yertysbayev told Voronov, what 
Shabdarbayev or Musin had in mind.  Silence a human rights 
critic during Kazakhstan's OSCE chairmanship?  Damage 
Kazakhstan in the eyes of the West?  Both are reportedly 
hard-core, old-guard, and pro-Moscow.  To benefit Zhovtis, we 
recommend that any public statements and private 
conversations with Kazakhstani government officials hue 
strictly to advocating a fair and transparent appeals case 
that fully respects the rule of law.  END COMMENT. 
HOAGLAND

Wikileaks

09ASTANA1536, KAZAKHSTAN LIKELY TO BUZZ ON IRAN

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Reference ID Created Released Classification Origin
09ASTANA1536 2009-09-17 08:43 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO7835
PP RUEHBC RUEHBI RUEHCI RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHLH RUEHNEH
RUEHPW RUEHTRO
DE RUEHTA #1536 2600843
ZNY CCCCC ZZH
P 170843Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6231
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNDT/USMISSION USUN NEW YORK 2486
RUEHGV/USMISSION GENEVA 1003
RUEHUNV/USMISSION UNVIE VIENNA 0076
RUCNIRA/IRAN COLLECTIVE

C O N F I D E N T I A L ASTANA 001536 
 
SIPDIS 
 
STATE FOR SCA/CEN, NEA/IR, IO/MPR 
 
E.O. 12958: 09/04/2019 
TAGS: PREL PARM MNUC AORC KNNP IAEA UN IR KZ
SUBJECT:  KAZAKHSTAN LIKELY TO BUZZ ON IRAN 
 
REFTEL:  SECSTATE 95073 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) During a September 16 meeting with Kazakhstani Deputy Foreign 
Minister Kairat Umarov, the Ambassador delivered the talking points 
(ref) urging Kazakhstan to send a strong private message to Iran 
about its nuclear program, possibly during a bilateral meeting at 
UNGA.  Umarov agreed to pass the message to Foreign Minister Kanat 
Saudabayev who will attend UNGA, saying "Let's see.  We will consider 
the idea."  Umarov promised to inform the Ambassador of the Foreign 
Minister's response. 
 
2.  (C) COMMENT:  Umarov's seeming reserve is likely due to the fact 
that he is brand new in his job, after having been out of Kazakhstan 
for five years as ambassador to India.  We believe it is very likely 
Saudabayev will follow through, especially because President 
Nazarbayev himself has told us in the past that he has raised almost 
exactly the same points with President Amadinejad and Ayatollah 
Komeini.  We note, however, that Nazarbayev also added that arguing 
these points with the leadership of Iran was "like talking to a brick 
wall."  END COMMENT. 
 
 
HOAGLAND

Wikileaks

09ASTANA1535, KAZAKHSTAN TO RESUME WTO ACCESSION TALKS SEPARATE FROM

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Reference ID Created Released Classification Origin
09ASTANA1535 2009-09-17 06:45 2011-08-30 01:44 CONFIDENTIAL Embassy Astana

VZCZCXRO7722
OO RUEHBI RUEHCI RUEHDBU RUEHFL RUEHKW RUEHLA RUEHLH RUEHNEH RUEHNP
RUEHPW RUEHROV RUEHSL RUEHSR
DE RUEHTA #1535/01 2600645
ZNY CCCCC ZZH
O 170645Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6229
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE 1937
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1306
RUEHKO/AMEMBASSY TOKYO 2005
RUEHIT/AMCONSUL ISTANBUL 0156
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1492
RUEKJCS/SECDEF WASHDC 1373
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFISS/CDR USCENTCOM MACDILL AFB FL
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2484
RUEHNO/USMISSION USNATO 2799

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001535 
 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
PLEASE PASS TO USTR 
 
E.O. 12958:  09/17/2019 
TAGS: PGOV PREL ECON EFIN WTO RS KZ
SUBJECT:  KAZAKHSTAN TO RESUME WTO ACCESSION TALKS SEPARATE FROM 
RUSSIA? 
 
REF A.  ASTANA 1509 
    B.  MOSCOW 2372 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  There are signs Kazakhstan might be willing to 
resume its suspended bilateral WTO accession negotiations. 
Concluding U.S.-bilateral WTO negotiations would be in our national 
interest and would enhance Kazakhstan's independence and sovereignty. 
 END SUMMARY. 
 
2.  (C) On September 4, immediately following a meeting with the 
Minister of Finance Bolat Zhamishev (reftel A), the Ambassador had an 
unexpected conversation with former WTO negotiator and current 
Finance Ministry Head of International Relations Sophia Isagalieva in 
which she freely expressed personal frustration with the planned 
Russia-Belarus-Kazakhstan Customs Union (RBK-CU) and what she sees as 
an attempt by Prime minister Putin to enhance Russian economic 
influence in Kazakhstan.  Eager to provide some personal insights 
into the current WTO negotiation process and the impact of the 
planned RBK-CU, Isagalieva said Kazakhstani officials were "very 
surprised" by the June announcement of the customs union.  Isagalieva 
grumped that Russia's WTO negotiations appear to be going forward 
now, "but ours have stopped."  Clearly concerned, Isagalieva 
explained, "Kazakhstan is in deep trouble now and we don't know what 
to do."  When asked why she felt that the customs Union had been 
announced when it was, and the underlying purpose, Isagalieva readily 
attributed it to northern neighbors:  "Putin wanted this as a way to 
reestablish influence in Kazakhstan." 
 
3.  (C) On September 11, USDA WTO Accessions Coordinator Karina 
Ramos-Hides met with Econoff to discuss recent queries from 
Kazakhstani government officials about possible direct WTO 
negotiations to be held on the margins of the October TIFA meeting in 
Washington, DC.  Ramos had spent the previous week delivering 
technical seminars to an "eager and attentive" audience at the Center 
for Trade Policy Development (CTPD) on sanitary and phytosanitary 
certification (SPS) as part of the Embassy Science Fellows program. 
(NOTE:  The CTPD is considered part of the Ministry of Industry and 
Trade and operates under the direction of Ministry of Industry and 
Trade SPS negotiator Aray Kassebekova.  Its activities are supervised 
by lead WTO negotiator Vice Minister Zhanar Aitzhanova.  END NOTE.) 
According to Ramos, CTPD staff were told that the official deadline 
for the harmonization of regulatory systems for the 
Russia-Belarus-Kazakhstan Customs Union is January 1, 2010.  However, 
Ramos also reported that CTPD staff are diligently preparing for 
technical tariff negotiations to be conducted in Washington in early 
October.  When pressed whether the technical meetings would be 
relevant to the Customs Union or WTO, Ramos said that CTPD staff 
would not directly answer the question, saying on that they were 
"accession negotiations."  (COMMENT:  The indirect response from CTPD 
staff would seem to indicate the practical resumption of WTO 
negotiations on a technical level.  END COMMENT.) 
 
4.  (C) During a September 16 meeting, OECD Deputy Secretary General 
Aart de Geus briefly described to the Ambassador what he had heard of 
a possible "decoupling" from Russia and the likely restart of 
independent WTO negotiations.  According to de Geus, who cited 
unnamed Kazakhstani officials with whom he had met earlier in the 
week, Kazakhstan has been frustrated by a lack of action on the part 
of the lead Russian WTO negotiator and is planning to reinvigorate 
its accession talks separate from the Customs Union. 
 
5. (C) COMMENT:  We note in reftel B Russian Deputy Prime Minister 
Igor Shuvalov's comment that Russia might be willing to postpone the 
entry-into-force of the RBK-CU by a year or two to allow time for 
Russia to enter the WTO first.  If so, that would give a new window 
of opportunity to conclude accession talks for Kazakhstan.  Should 
this happen, Astana would press hard for what it perceives are its 
interests, and high-level direction would be needed on our part. 
Concluding U.S.-bilateral WTO negotiations would be in our national 
 
ASTANA 00001535  002 OF 002 
 
 
interest and would enhance Kazakhstan's independence and sovereignty. 
END COMMENT. 
 
HOAGLAND

Wikileaks

09ASTANA1531, KAZAKHSTAN: FOREIGN MINISTER WILL ATTEND UNGA FOOD

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Reference ID Created Released Classification Origin
09ASTANA1531 2009-09-16 11:41 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7022
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 #1531 2591141
ZNR UUUUU ZZH
O 161141Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6228
INFO RUCNCIS/CIS COLLECTIVE 1936
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RUEHBJ/AMEMBASSY BEIJING 1305
RUEHKO/AMEMBASSY TOKYO 2004
RUEHUL/AMEMBASSY SEOUL 0960
RUCNDT/USMISSION USUN NEW YORK 2483
RUEHNO/USMISSION USNATO 2798

UNCLAS ASTANA 001531 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PREL EAID ETRD EAGR UNGA KZ
SUBJECT:  KAZAKHSTAN:  FOREIGN MINISTER WILL ATTEND UNGA FOOD 
SECURITY EVENT 
 
REF: STATE 93894 
 
1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
2.  (SBU) On September 15, we delivered the official invitation for 
the head of Kazakhstan's delegation to the UNGA to attend the 
meeting on Partnering for Food Security (reftel).  On September 16, 
Zhanar Kulzhanova of the MFA's International Cooperation Department 
confirmed that Kazakhstan's State Secretary and Foreign Minister 
Kanat Saudabayev will attend the meeting. 
 
HOAGLAND

Wikileaks

09ASTANA1530, KAZAKHSTAN: DEMARCHE DELIVERED ON THE CHILD LABOR REPORT

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Reference ID Created Released Classification Origin
09ASTANA1530 2009-09-16 11:39 2011-08-30 01:44 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Astana

VZCZCXRO7019
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 #1530 2591139
ZNR UUUUU ZZH
O 161139Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6227
INFO RUCNCIS/CIS COLLECTIVE 1935
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1304
RUEHKO/AMEMBASSY TOKYO 2003
RUEHUL/AMEMBASSY SEOUL 0959
RUCNDT/USMISSION USUN NEW YORK 2482
RUEHNO/USMISSION USNATO 2797

UNCLAS ASTANA 001530 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, DRL 
 
E.O. 12958: N/A 
TAGS: EIND ELAB ETRD PHUM SOCI KZ
SUBJECT:  KAZAKHSTAN:  DEMARCHE DELIVERED ON THE CHILD LABOR REPORT 
 
REF: SECSTATE 92560 
 
1.  (U) Sensitive But Unclassified.  Not for public Internet. 
 
2.  (SBU) Per reftel, on September 11, Post spoke with Committee on 
Control and Social Protection Chairman Serikkali Bissakayev in the 
Kazakhstani Ministry of Labor and Social Protection.  Chairman 
Bissakayev informed EconOff of the findings of a November 2008 
International Labor Organization (ILO) workshop on the protection of 
child labor held in Taraz, southern Kazakhstan.  According to 
Bissakayev, the findings published by the ILO demonstrate that child 
labor employed in the cultivation and processing of cotton and 
tobacco in southern Kazakhstan is limited almost exclusively to the 
children of seasonal migrant families from Kyrgyzstan.  State law 
enforcement agencies continue to take preventative measures. 
Chairman Bissakayev concluded the discussion by thanking EconOff for 
the message, saying that he "welcomed further open dialogue" on 
child labor in Kazakhstan. 
 
HOAGLAND

Wikileaks