Astana Calling #275

Kazakhstan-US Commission forEnergy PartnershipJoint action plan for 2012-2013

Non-Proliferation Discussed in Washington

Bilateral cooperation advanced

Economic Cooperation Organization

SummitBaku Declaration sets out

program to 2015

Kazakhstan On Track ForWTO Accession

Outstanding issues outlined by chief WTO negotiator

A WEEKLY ONLINE PUBLICATION OF THE

MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF KAZAKHSTAN

ISSUE NO 275 FRIDAY, 19 OCTOBER 2012

WWW.MFA.KZ

Thingsto Watch

Also inthe News

Kazakhstani Cinema Goes

GlobalEurasia Film Festival builds

on Cannes success

Kazakh-British Business ForumDialogue on innovation and cooperation

CALLINGASTANA

Kazakh-British Business ForumThe annual Kazakhstan Business Forum organized by the Kazakh-British Chamber of Commerce took place in London on October 18, with the support of the Government of Kazakhstan and the Embassy of Kazakhstan in Great Britain. The Forum provides a platform for dialogue between British and Kazakh companies, investors, experts and state agencies.

The 2012 Kazakhstan Business Forum focused on innovation, cooperation and the People’s IPO program. Speakers, including Deputy Prime Minister Kairat Kelimbetov and Samruk-Kazyna Deputy Chairman Kuandyk Bishimbayev, addressed participants from the Kazakhstani, UK and European business communities on the main avenues for cooperation, and spoke of their country’s initiatives to boost growth, promote innovation and diversify the economy in a complex international environment of economic uncertainty.

Mr Kelimbetov referred to the importance of Britain’s experience of privatizing major state companies that was started under Margaret Thatcher’s rule in the 1980s. He praised the education campaign conducted by the Kazakh government to show people they can participate in Kazakhstan’s economic growth by buying shares. “To develop the economy over the next 10-15 years, we need to bring foreign direct investment as well as local investors and create opportunities.”

Mr Bishimbayev told the Forum the government planned to sell up to 10 percent of state-owned assets under the IPO program. 500,000 people have expressed interest in buying shares, he said. He pointed out that in Kazakhstan’s major cities it takes just five minutes to open a brokerage account. In rural areas, the process takes 24 hours. Fellow panellist, Lady Barbara Judge, a former Commissioner of the US Securities and Exchange Commission, said that opening a brokerage account in the US takes two weeks.

Several speakers talked about the positive influence of the IPO Program on the quality of corporate management in national companies, as well as the development of Kazakhstan’s agricultural potential and its transport and communication infrastructure.

Business innovation was a central theme at the Forum, specifically projects developed in the context of Kazakhstan’s industrial innovation program to 2014. There was also a review of progress on the State Productivity 2020 program, which develops science-intensive and innovative projects. The shared aim of both programs is to advance the transition of Kazakhstan’s economy from a heavy reliance on raw material exports to a focus on industrial innovation.

Several members of Kazakshtan’s delegation at the Forum participated in the annual meeting of the Kazakh-British Trade and Industry Council which took place the previous day at the House of Lords. The Council is a government to government mechanism to promote trade and investments. The two sides signed a protocol on the implementation of a number of agreements in a wider range of areas, including aerospace, construction, education, energy, environmental protection, finance, local content development, subsoil use, tourism and sport.

The UK and Kazakhstan have a strong trade and investment relationship based on free market access, significant bilateral trade and investment flows and regular dialogue at senior levels. In 2010, UK exports to Kazakhstan amounted to USD 315 million while imports from Kazakhstan were USD 300 million.

The UK has historically been a major investor in Kazakhstan, while Kazakhstani companies are increasingly listing on the London Stock Exchange, completing IPOs to a value in excess of USD 14 billion since 2005.

Back to Contents2ASTANA CALLING / ISSUE 275 /


Kazakhstan-US Commission for Energy PartnershipThe 9th meeting of the Kazakhstan-US Energy Partnership Commission was held in Washington on October 15-16. The meeting was chaired by Kazakhstan’s Oil and Gas Minister Sauat Mynbayev and US Deputy Secretary of Energy Daniel Poneman.

The meeting focused on the direction of further joint work across four key areas: the nuclear industry and non-proliferation; hydrocarbons; power energy; and renewable energy sources and energy saving.

The outcome of the meeting was the signing of a new joint action plan on energy partnership between Kazakhstan and the U.S. for 2012-2013. This follows on the successful implementation of a similar plan adopted at the last meeting of the Commission for Energy Partnership held in 2011 in Astana.

The Kazakh delegation included the Chairman of the Atomic Energy Agency, Timur Zhantikin; officials from the Ministries of Industry and New Technologies, the Environment, and Finance; and representatives from KazMunaiGas, KazTransGas, Kazmortransflot, the Institute of Nuclear Physics and the Institute of Atomic Energy.

During his time in Washington Minister Mynbayev held bilateral meetings with several other high-ranking members of the U.S. President’s administration team. The Minister also participated in a round table discussion organized by the American-Kazakh Business Association with the aim of involving the U.S. corporate sector.

“Since gaining independence, Kazakhstan has made important macroeconomic reforms which have

resulted in large international investments in the chemical mining and agricultural sectors. We expect

that new investments will be made in the energy sector as well as other sectors in the next few years.”

US Deputy Secretary of Energy, Daniel Poneman


Non-Proliferation Discussed in WashingtonOn October 9-10 Kanat Saudabayev, Chairman of the Non-Proliferation Commission of Kazakhstan and Director of the Nazarbayev Center, was in Washington to further advance cooperation between Kazakhstan and the U.S.on non-proliferation.

Mr. Saudabayev is a former Secretary of State and Minister of Foreign Aff airs of Kazakhstan. He has also served as Ambassador to Turkey, the United Kingdom and – for seven years – to the United States.

His Washington visit follows the meeting between President Nazarbayev and President Obama during the Seoul 2012 Nuclear Security Summit, which gave new momentum to bilateral cooperation in the area of nuclear security.

Prospects for ongoing cooperation were discussed during a meeting with Laura Holgate, Senior Director of the U.S. National Security Council for Weapons of Mass Destruction, Terrorism and Threat Reduction. Both parties acknowledged the importance of the joint statement by the Presidents of Kazakhstan, Russia and the U.S. at the Seoul Summit, which confi rmed that most of the infrastructure of the Semipalatinsk Nuclear Test Site had been destroyed.

Mr. Saudabayev outlined progress on international non-proliferation initiatives by Kazakhstan, notably the ATOM project recently launched by President Nazarbayev (The acronym stands for “Abolish Testing. Our Mission” www.theatomproject.org). The project seeks to mobilize international support for global nuclear disarmament and a ban on nuclear weapons testing. Mr Saudabayev highlighted the project’s signifi cance in generating grassroots support, which in turn is an important driver of political initiatives that are eventually implemented at the highest level of government.

ATOM is one of the most important projects currently managed by the Nazarbayev Center, established in January 2012 in Astana. The Center, modeled on the presidential centers and libraries in the U.S., Russia and other countries, has the dual remit of advancing understanding of the political and humanitarian development of Kazakhstan internationally and domestically, and researching and preserving the nation’s history of statehood.

Ms. Holgate confi rmed that the President of the United States remains fi rmly committed to the goal, set out in his 2009 speech in Prague, of ridding the world of weapons of mass destruction. She emphasized that Kazakhstan’s continuous input and leadership on this issue is highly valued in Washington.

Plans to create an international low-enriched uranium fuel bank in Kazakhstan, under the aegis of the International Atomic Energy Agency (IAEA), were also raised at the meeting. The intention is for the fuel bank to serve as a last resort guarantee

Kanat Saudabayev, Chairman of the Non-Proliferation Commission of Kazakhstan

of assurance of supply of uranium for countries developing peaceful nuclear energy, and be an extra element to stabilize the international nuclear fuel market and, by extension, strengthen the nuclear non-proliferation regime. Discussions continue between Kazakhstan and the IAEA on a so called host country agreement for construction of such a facility.

Mr. Saudabayev also met with David Hoff man, contributing editor of “The Washington Post” and author of “The Dead Hand: The Untold Story of the Cold War Arms Race and its Dangerous Legacy”. Winner of the 2010 Pulitzer Prize for non-fi ction, the book tells the story of the tense fi nal years of the Cold War arms race and the cooperation between the U.S. and Kazakhstan and other former Soviet states in eliminating weapons of mass destruction. Mr. Saudabayev updated Mr Hoff man on the activities of Kazakhstan’s Non-Proliferation Commission and prospects for further cooperation with the U.S. in this area.

Economic Cooperation Organization SummitThe 12th summit of the Economic Cooperation Organization (ECO) was held in Baku on October 16, culminating in the adoption of the Baku Declaration outlining the vision and direction of the organization to 2015.

The ECO is an intergovernmental organization formed in 1985 by Iran, Pakistan and Turkey to promote economic, cultural and technical cooperation between member states. In 1992 the ECO was expanded to include seven new members: Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. Today, the membership comprises these ten countries with an aggregate population of over 400 million people.

In 1993 the ECO was granted observer status at the UN and a year later in the Organization of Islamic Cooperation.

The summit was attended by the Presidents of Afghanistan, Azerbaijan, Iran, Pakistan and Tajikistan and by the Prime Minister of Turkey and high-ranking representatives of Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan. The Kazakhstan delegation was led by Askar Zhumagaliyev, Minister of Transport and Communications.

Discussions at the summit focused on the strengthening of regional ties in energy and environmental protection, the agriculture, science and technology and transport sectors, as well as on socio-cultural and humanitarian issues. Ways to further integrate the ECO member states were also the subject of debate.

Azerbaijan, the host of the Summit, has now taken over the Chair of the ECO from Turkey. At the opening ceremony President Ilham Aliyev of Azerbaijan said that ECO member states are united by a common history, religion and culture. He pledged that Azerbaijan will work during its chairmanship to advocate the shared values of member states, strengthen partnership and foster the development of trade between member states.

The Prime Minister of Turkey, Recep Erdogan, said that despite the growing strength and infl uence of the ECO, the economic indicators of member states do not refl ect their full trade capacities. He emphasized the importance of cooperation in economic, energy and transport sectors and called for the removal of barriers to trade and the abolition or simplifi cation of tax and customs duties, to promote the development of trade between the ECO member countries.

Iranian President Mahmoud Ahmadinejad proposed the creation of a political forum within the ECO, to coordinate actions in the international arena, assist member states in disputes, protect the rights and interests of ECO member states in international organizations, and take joint steps to reform international structures, including the UN.

Member states agreed on a new trade target of a 20 per cent increase in trade between member states by 2015. On the political front, the status of ECO observer state was granted to the Turkish Republic of Northern Cyprus. In two years’ time the ECO Chairmanship will pass to Pakistan, which will host the next ECO Summit.

“Kazakhstan has actively participated in the ECO since it joined, and is fi rmly committed to developing regional cooperation in a consistent manner… We now need to step up joint eff orts to create a functioning

mechanism which will implement the documents that have already been signed and fulfi ll the agreements reached.”

Askar Zhumagaliyev, Kazakhstan’s Minister of Transport and Communications


Askar Zhumagaliyev, Minister of Transport and Communications

Kazakhstan On Track For WTO AccessionKazakhstan remains on track to progress early in 2013 from observer to member status in the World Trade Organization, a process begun 16 years ago with its 1996 application for accession to full membership.

On October 15 at a conference in Astana on the theme: “Customs Union and WTO: regional and global aspirations – Russia and Kazakhstan”, Kazakhstan’s Minister for Economic Integration and chief WTO negotiator, Zhanar Aitzhanova, said that concluding the negotiations on Kazakhstan’s accession to the WTO would probably take another six months.

The Minister emphasized that there are several issues which have yet to be resolved and said that the looming year-end deadline for the end of negotiations has created pressure. However, the conditions of the agreement are of such importance for Kazakhstan that it is important to get them right, whether they are drawn up by year-end or in the fi rst quarter of 2013, she said.

Minister Aitzhanova highlighted three key areas where conditions on accession to WTO membership have yet to be fi nalized. Firstly, despite the fact that Kazakhstan has concluded bilateral negotiations with 30 WTO member States (including the USA), and signed the necessary agreements and protocols, it has still to agree terms with the European Union.

The principal impediment to agreement over four years of negotiation with the EU has been Kazakhstan’s right to apply export customs duties on exports to the EU, the Minister said. At present, 70% of all exports go to the EU and the majority of these are raw materials, which the EU wants to see enter its markets unencumbered by duties. However, Kazakhstan wants to increase the refi ning of raw materials within its borders, particularly through joint production facilities with European companies in Kazakhstan, which would bring new jobs and additional budgetary revenue, she explained.

Another area of contention is the volume of agricultural subsidies. The key issue here is whether Kazakhstan can provide transport subsidies for grain exports, which has proved a sticking point in multilateral negotiations, according to Minister Aitzhanova. Acknowledging the opposition of major grain-exporting WTO member states such as Australia, Canada and the US, who do not themselves grant export subsidies, the Minister pointed out that Kazakhstan’s position diff ers in that, as a landlocked nation, its transport costs to the nearest Russian port are enormous, at USD 136 per tonne of grain.

Another agricultural subsidy on which agreement has yet to be reached relates to meat production, where Kazakhstan would no longer be competitive in the market if no subsidies were allowed, Minister Aitzhanova stated.

She also said that that an adequate level of agricultural subsidy is required to protect the 46 % of Kazakhstan’s population living in rural areas, whose wages and welfare depend directly on the competitiveness of the goods they produce.

The fi nal outstanding issue highlighted by the Minister is the level of Kazakhstani content, in purchases that are part of subsoil contracts, which at present goes against WTO norms, in particular, the WTO agreement on trade-related investment measures, she said.

Minister Aitzhanova emphasized that a long transition period would be required during which investors could fulfi l their obligations under existing contracts to purchase Kazakhstani products. Furthermore, she pointed out that Kazakhstani goods account for no more than 15% of the total of investor purchases, with imported goods and equipment accounting for at least 85%, which in her view did not unfairly restrict import levels.

The Minister was confi dent that Kazakhstan can complete negotiations and be eligible for WTO accession in the course of 2013.

“At present the agricultural sector is not receiving the maximum amount of help, which the state could provide. That is why we

are taking into account our long-term development programs aimed at supporting the agricultural sector”

Minister Zhanar Aitzhanova


Kazakhstan’s Minister for Economic Integration and chief WTO negotiator, Zhanar Aitzhanova

Kazakhstani Cinema Goes GlobalInternational recognition of Kazakhstani cinema continues to grow, with two movies set for international distribution after success at the 2012 Cannes Film Festival and its business counterpart, the Cannes Film Market.

Distribution rights for “Zhauzhurek Myn Bala” (1,000 Brave Boys) were recently purchased by Canada’s 108 Media company. Director Akan Satayev’s historical epic, with a USD 7 million budget, set a new fi nancial record for Kazakhstan fi lm-making. Made in commemoration of the 20th anniversary of Kazakhstan’s independence, the movie tells its tale through the eyes of a group of Kazakh children and teenagers. It has been selected as Kazakhstan’s entry in the Best Foreign Language category at the 85th Academy Awards in February 2013.

“Student” by Kazakhstani director Darezhan Omirbayev, met with a warm reception from the Cannes critics after showing in the “Un Certain Regard” sidebar at the festival. Inspired by Dostoyevsky’s Crime and Punishment, “Student” is the tale of an impoverished, lonely philosophy student who commits a fatal robbery. Germany’s Media Luna has secured the international distribution rights.

At the Eurasia Film Festival, held in Almaty on September 17-22, Chairman of the Jury Wolfgang Petersen had high praise for “Zhauzhurek Myn Bala”. He described it as a beautiful movie and an example of the global potential of Kazakhstani cinema. Mr Petersen is a renowned German fi lmmaker, screenwriter and producer whose movies include “Troy”, “The Perfect Storm”, “Poseidon” and “Boot” , which garnered six Oscar nominations.

The 8th Eurasia Film Festival also included an international feature competition which attracted 149 entries from 33 countries; a program on “Dynamic Kazakh Cinema”; a program featuring the cinematography of Greece and Turkey; and the showing of four recent winners of the famous Golden or Silver Bear awards at the Berlinale fi lm festival.

Amir Karakulov represented Kazakhstan on the Festival jury. His latest movie, “Virtual Love”, featuring a complex plot which develops in parallel real and virtual worlds, was screened at the opening ceremony of the Film Festival, held at Almaty Republic Palace.

It was one of 16 Kazakhstani movies featured at the Festival, all shot between September 2011 – September 2012, and with a range of themes and styles demonstrating the dynamism of the country’s fi lm industry.

The history of Kazakhstan’s fi lm industry extends back to the Second World War, when renowned Russian fi lmmaker Sergei Eisentein sought refuge in Kazakhstan, bringing with him the entire staff and equipment of Mosfi lm and Lenfi lm, the two leading Soviet studios. After the war ended, many fi lmmakers chose to stay in Kazakhstan and from this foundation grew a renowned fi lm industry.

The industry fell into decline after the end of the Soviet era, but was revived by President Nazarbayev in 2005 with USD 37 million funding for “Nomad”, a historical epic recounting the feats of Kazakh warrior Ablai Khan. Since then, the fi lm industry in Kazakhstan has gone from strength to strength, with both domestic and international movies in regular production. Among international movie stars who have fi lmed in Kazakhstan in recent years are Gérard Depardieu, the French character actor, and Oscar-winners Adrien Brody and Hilary Swank.


“Zhauzhurek Myn Bala” (1,000 Brave Boys) directed by Akan Satayev


Also in The News…

• The population of Kazakhstan has officially reached 16.8 million, according to recent data published by the national statistics agency. Since 1 September 2012, the population has increased by 21,100 people. (Interfax-Kazakhstan)

• Kazakhstan’s GDP grew by 5.2% in the period from January to September 2012 according to Alikhan Smailov, head of the national statistics agency. The Ministry for Economic Development and Trade estimates that the economy will grow by 6% in 2012, against a 7.5% growth rate recorded in 2011. (Interfax-Kazakhstan)

• Figures released by the statistics agency show that investment in fixed assets amounted to 3.536 trillion tenge in the period from January to September 2012, representing an increase of 3.3% compared to the same period last year. 54% of investment came from domestic private capital, while foreign funds invested 14.8% of the total. A large proportion of fixed assets investments accounted for mining and quarrying (30.8%), transportation and warehousing (17%) and real estate (8.9%). (Interfax-Kazakhstan)

• Kazakhstan’s foreign trade surplus increased by 1.5% from January to August 2012, standing at USD 34.202 billion. The foreign trade turnover increased by 13.5% on last year’s figure. The main buyers of Kazakhstani products in this period were Italy, representing 16.8% of total exports, China at 15.9%, and the Netherlands at 9.3%. The main importers of Kazakhstani products during this period were Russia at 37.9% of the total, China at 16.6% and Ukraine at 7.4%. (Interfax-Kazakhstan)

• Ulrich Bentersbuch, Director of Global Energy Policy for the International Energy Agency, said on a visit to Astana this week that oil exports from Kazakhstan should more than double by 2035, with Kazakhstan set to become the fourth-largest contributor to global oil-production growth. The IEA director also praised Kazakhstan for its green energy initiatives. (UPI)

• Kazakhstan’s Ministry of Interior and the International Organization for Migration (IOM) have signed a memorandum on cooperation in the fight against human trafficking. “The memorandum provides for cooperation between the sides in providing help to human trafficking victims; sharing information to alert about, suppress, uncover and investigate human trafficking crimes; as well as in taking preventive measures,” the Interior Ministry’s criminal police committee reported. (Interfax-Kazakhstan)

• A delegation led by Rapil Zhoshybayev, Executive Secretary of the Foreign Ministry and National Coordinator for EXPO 2017, visited Greece and Croatia this week to promote Astana’s bid to host EXPO 2017. Delegates met with the Deputy Minister of Foreign Affairs of Greece in Athens, and with Croatian Deputy Foreign Minister Josko Klisovic in Zagreb. (Kazinform, Caspionet)

• Kazakhstan’s parliament has ratified the UN Convention Convention concerning Equal Opportunities and Equal Treatment for Men and Women Workers: Workers with Family Responsibilities. The Convention, adopted in Geneva at the General Conference of the International Labour Organization in June 1981, establishes equal opportunities and treatment for men and women workers with family responsibilities. The text has been sent to the President for signature. The Parliament also ratified the Convention on the civil aspects of international child abduction, or Hague Convention. (Interfax-Kazakhstan, KazTag)

• Kazakhtan’s Victoria Wagner won a silver medal at the Junior World Weightlifting Championships in Slovakia. She lifted 230kg in the 69kg category and is one of the hopes for the national team at the Rio Olympics in 2016. (KazTag)

• Kazakhstan’s team Almaty won second place at the World Sambo championship in Bulgaria (Russian martial art). The team won a total of 20 medals, of which 4 gold, 5 silver and 11 bronze. (KazTag)


Things to Watch…• President Nazarbayev will pay an official visit to Austria on October 22-23 He will meet with Austrian President Heinz Fischer

and with the President of the National Council of Austria Barbara Prammer. The two sides will discuss political, trade, economic, energy, cultural and humanitarian cooperation and exchange views on a wide range of international issues. A business forum will also be held during the visit. Austria and Kazakhstan are important trading partners.

• President Nazarbayev will make his first official visit to the Czech Republic on October 23-24. He will meet with President Vaclav Klaus and Prime Minister Petr Necas to discuss the development of bilateral relations as well as possibilities for strengthening economic and cultural relations. A business forum will take place in Prague on October 24. In 2011 bilateral trade was worth USD 211.7 million. From January to August 2012 trade levels stood at USD 208.3 million, a 38% rise on the same period the previous year.

ASTANA CALLING is a weekly online publication of the Ministry of Foreign Affairs of the Republic of Kazakhstan

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• Kazakhstan’s team Astana, led by pilot Artur Ardavicus, is taking part in the Dakar 2013 rally raid next year. The rally will take the teams through Peru, Argentina and Chile from 5th to 20th January 2013. Team Astana will also take part in the Africa Race rally from 27th December to 9 January which will take them through Spain, Morocco, Mauritania and Senegal. (Interfax-Kazakhstan)

• The winner of the national competition for the design of the mascot, logo and slogan for the 28th World University Winter Games to be held in Astana in 2017 will receive 1 million tenge from the organizing committee. The competition is open to anyone over the age of 18 from 15th October to 12th November. (meta.kz)

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Astana Calling #275