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A WEEKLY ONLINE PUBLICATION / WWW.MFA.GOV.KZ ISSUE NO. 375 / FRIDAY, OCTOBER 10, 2014

President Advances EU Partnership, WTO Accession in Brussels

President Announces Plans to Double Samruk Assets to $200bln

Also In The News

KazAid is Key to Kazakh, Regional Development, Says Deputy FM

President Advances EU Partnership, WTO Accession in Brussels

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An Expanding Partnership Agreement between the European Union and Kazakhstan was signed in Belgium on Oct. 9 during the visit of the President of Kazakhstan to Brussels, deepening existing ties between the partners. The new agreement is also expected to facilitate Kazakhstan’s World Trade Organisation (WTO) accession.

Minister of Foreign Affairs of Kazakhstan Erlan Idrissov and Chief Executive Officer of the European External Action Service David O’Sullivan signed a joint document on the completion of negotiations on the draft Agreement on Enhanced Partnership and Cooperation between Kazakhstan and the EU. The agreement will strengthen the current relationship in 29 areas of cooperation, including the economy, trade and investment. It renews a similar agreement signed in 1995 and enacted in 1999.

The agreement also covers such broad questions as legal compatibility, freedom and security, personal data protection and visa procedure facilitation.

President of Kazakhstan Nursultan Nazarbayev and President of the European Commission José Manuel Barroso have also held numerous talks during Nazarbayev’s official visit to Brussels.

Many experts concur that the new agreement is comprehensive and refreshes the current relationship between the Central Asian state and the EU.

“I am pleased to announce that we are completing the active phase of negotiations on the new agreement, and it is an honour for me to confirm that the President of Kazakhstan and the European Commission president will witness the official conclusion of these negotiations. This is a very important milestone for our cooperation, since we will be able to broaden and deepen our cooperation,” Director for Russia, Eastern Partnership, Central Asia, Regional Cooperation and Organisation for Security and Cooperation in Europe (OSCE) of the European External Action Service (EEAS) Gunnar Wiegand said.

“We want Kazakhstan to become more modernised and diversified. For us, it is also important that local companies in Europe and European companies in Kazakhstan could simplify their operations. With the entry into force of the agreement, many new opportunities will arise for citizens, students, researchers and travellers,” he added.

President of Kazakhstan Nursultan Nazarbayev (left) and King Philippe of Belgium

According to him, a great deal of work has been accomplished during the nearly four years of work dedicated to the negotiations of the new agreement. As a result, Kazakhstan and the EU prepared a comprehensive agreement, which provides for in-depth cooperation in various fields.

Olivier Van der Borght, leading international project manager at Multi-Purpose Hybrid Research Reactor for High-Tech Applications (MYRRHA) said: “The tasks defined for the development of the country by President Nazarbayev are aimed at increasing trust in Kazakhstan. I am convinced that Kazakhstan is the centre of Eurasia. It is a vast region, which my European colleagues maybe still do not know as well as I do. But the strategic and geographical position of your country allows, as announced in the President’s message, the dynamic development of the entire infrastructure triad.

“Better to get used to one condition than to different conditions in different countries. If we can work out a formula about exports, about investment in a single customs union, why not? We will support it, and, in particular, will work in Kazakhstan and Russia and using the same formula in all directions,” George Shoshitaishvili, general representative of the Belgian dairy in Russia and the Commonwealth of Independent States (CIS), stressed.

The talks on the enhanced partnership have been ongoing since their official start in June 2011 in Brussels. Eight rounds of negotiations have been held since then.

Within the framework of Kazakhstan’s accession to WTO, Minister of Economic Integration of Kazakhstan Zhanar Aitzhanova and EU Commissioner Karel De Gucht have signed an agreement on export duties, while Kazakhstan and the EU are concluding their bilateral market access negotiations.

The trip also resulted in discussions of bilateral relations in the political, cultural and humanitarian sphere between Kazakhstan and Belgium. The parties noted the increasing level of cooperation between the two countries in various fields and highlighted the presence of a number of promising directions for further development of cooperation.

President Announces Plans to Double Samruk Assets to $200bln

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President Nursultan Nazarbayev announced ambitious plans to increase the effectiveness of the national welfare fund, improve its management and divide responsibility among its key players at the Samruk Kazyna Transformation forum on Oct. 6. The event focused on concrete tasks that would achieve the aim of doubling Samruk Kazyna’s total assets to $200 billion within five years.

According to Nazarbayev, the programme is based on the experience of the leading funds in the world and has several purposes. “Firstly, the increase in the value of the fund. Second, improving the efficiency of portfolio management. Thirdly, a clear division of responsibility between the government, the Board of Directors and the Management Board of the Fund, as well as between the fund and its portfolio companies,” he told the audience of government agencies of Kazakhstan, international financial institutions, similar foreign funds and international experts.

Chairman of the Board of the Samruk Kazyna Welfare Fund Umirzak Shukeev noted that the transformation programme focuses on achieving a number of interrelated goals.

“The fund will review all of the key performance indicators for all investment and operating policies of subsidiaries. We will have to strengthen the industry team within the fund, give investment committees exclusive authority for the implementation of major projects. To achieve this objective, we suggest conducting an audit of the total assets of the fund to determine the optimal portfolio structure through restructuring, privatisation, mergers and acquisitions, to get rid of inefficient assets in traditional industries and create new enterprises in energy, metallurgy, the chemical industry, tourism and green industry,” he said.

Nazarbayev pointed out that today, Samruk Kazyna has virtually no competition in the country but is not comparable in terms of efficiency with multinational companies and leading foreign state corporations.

“The fund needs to significantly improve its efficiency and productivity. The growth should not be at 2-3 percent, but needs to make a leap of 30-40 percent over the next five years,” said the President. He called for the active involvement of strategic partners and investors who have the technology of production and management, as well as market expertise. He also said that

The Samruk Kazyna Transformation Forum headed by President Nursultan Nazarbayev (centre)

the companies of the fund should compete in the markets of the Customs Union first, then in other foreign markets.

Nazarbayev also set a task of including three companies owned by the fund in the list of Fortune 500 companies. The President noted that the rating list, traditionally dominated by Western players, had seen a significant increase in the proportion of Asian companies in recent years. The main criteria for entry into the Fortune 500 are the size of revenues and transparency of financial reporting.

“By revenue, at least two of the companies owned by Samruk Kazyna – KazMunayGas and Kazakhstan Temir Zholy – can already enter the list,” said Nazarbayev. He cited as an example that from 2003 to 2014, the number of Chinese companies increased from 8 to 95, and the China National Petroleum Corporation joined the top five. The list also includes eight Russian companies.

“Currently, only Air Astana, to which we have attracted a foreign strategic partner, is a worthy competitor in the global market. It is the only company that shows the efficiency of capital at a higher level than that of competing companies. Kazatomprom and Kazakhstan Temir Zholy also show good results and the efficient use of capital. But other companies of the fund, unfortunately, cannot boast of such success. KazPost and KEGOC [Kazakhstan Electricity Grid Operating Company] remain low-efficiency local companies and to date are not able to compete with similar companies in the world,” said the President.

He also stated that the start of the transformation is an important event for the country, and should be kept under strict control.

“The fund needs to significantly improve its efficiency and productivity. The

growth should not be at 2-3 percent, but needs to make a leap of 30-40 percent

over the next five years.”-Kazakhstan President Nursultan Nazarbayev

KazAid is Key to Kazakh, Regional Development, Says Deputy FM

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Kazakhstan’s burgeoning KazAid programme, currently under development, will benefit Kazakhstan itself as well as its neighbours, First Deputy Minister of Foreign Affairs of Kazakhstan Rapil Zhoshybayev told The Astana Times in a recent interview. The programme will systematise rather than increase the country’s aid contributions.

Official direct aid (ODA) may seem to divert resources from domestic issues, he said. “However, international experience shows that ODA is an effective mechanism for improving the stability and prosperity in the region and the whole world; in fact, it is another tool to create favourable external conditions for the development of the country.” This is one of the reasons for the prevalence of aid agencies, he said.

Indeed, KazAid is a key step in Kazakhstan’s progress according to the Kazakhstan Strategy 2050 laid out by President Nursultan Nazarbayev last year. The regional growth it supports is one of the conditions for implementing the strategy, Zhoshybayev said. “No country can develop in isolation and not depend on external conditions,” he stated, and a high standard of living for Kazakhstan depends on the development of others.

The first deputy foreign minister quoted President Nazarbayev’s words from the Astana Economic Forum in May: “It is impossible to live in harmony and prosperity in a globalised world when there are serious problems in the world, especially in neighbouring countries. The fire of their conflicts can come to any country. … We aim to become one of the 30 most-developed countries in the world. And we intend to achieve these goals in a tight integration with our neighbours. We care about what is happening in our region. Growth due to separation from our neighbours, due to their sinking into chaos and disorder, ultimately makes us weaker in the region and the world as a whole.”

Currently, the foreign ministry is working to implement the main provisions of the comprehensive concept document approved in April 2013, Zhoshybayev said. The document includes a strategic vision for the development of national policy regarding financial, technical and other assistance to foreign countries.

First Deputy Minister of Foreign Affairs of Kazakhstan Rapil Zhoshybayev

“A road map which provides a list of specific measures aimed at creating a national system of ODA was developed and is being implemented,” Zhoshybayev said, and a draft law defining the legal category of official development aid and creating a legal framework for aid activities is currently in the process of being approved. He expects the law to be finalised later this month.

Kazakhstan will benefit from the participation of international partners like the UN Development Programme, according to Zhoshybayev. International partners will ensure that the law on Kazakhstan’s ODA incorporates best global practices, he said.

Kazakhstan has already been providing aid to its neighbours, Zhoshybayev pointed out, having allocated more than $100 million over the past 10 years, according to UNDP statistics. The plan, therefore, is not to increase the amount of foreign aid, he said, but to systematise its provision.

Past aid was distributed unsystematically, in one-time chunks. KazAid will define objectives, principles and priority sectors for aid, and will provide planned, targeted support to projects that contribute to the development of the regional economy, safety and people’s well-being. The money will not be dispersed to foreign governments, he said, but to programmes whose efficacy will be monitored and evaluated.

Kazakhstan’s experience in e-government, the tax system, education, health care, supporting small- and medium-sized enterprises and investment will likely shape the nature of the aid it provides, Zhoshybayev said.

“The presence of the national system of international development assistance is one of the essential attributes of states seeking to become among the most-developed countries of the world. With economic development and the growth of the international prestige of the country, the responsibility of Kazakhstan for ensuring international and regional security and stability increases,” he said.

Also In The News... • Internationale-governmentforumheldinAstana

The international global e-government forum, “Smart management for sustainable development: new partnership opportunities in the network society,” brought together government officials and international experts in the information and communications technology field to discuss global information development trends and exchange experiences. The Astana event was attended by Prime Minister of Kazakhstan Karim Massimov, Deputy Secretary-General of the United Nations Wu Hongbo and leading experts from 70 countries. It addressed issues of interest to both developed countries and developing countries making their first steps in e-government. (bnews.kz)

• HumanitarianaidfromKazakhstandeliveredtoSerbiaThe government of Kazakhstan has sent humanitarian aid to Serbia, responding to that country’s formal request for assistance in the aftermath of catastrophic flooding this summer. The Embassy of Kazakhstan in Hungary and Serbia, the Ministry of Foreign Affairs of Serbia, the Department of Emergency Management of the Ministry of Internal Relations of Serbia and the Red Cross of Serbia together carried out the transfer of humanitarian aid. Ten wagons of materials, including 42 water tanks, 1,000 beds, 170 tents, 2,500 bedding sets and 340 teapots were sent from Kazakhstan by rail. Deputy Secretary of State of the Serbian Foreign Ministry Goran Petrovic expressed gratitude to Kazakhstan’s leadership and population for their assistance on behalf of the Serbian government and the people of the country. (mfa.gov.kz)

PresidentcongratulatesKazakhstan’sathletesonAsianGamesperformancePresident of Kazakhstan Nursultan Nazarbayev has congratulated Kazakhstan’s athletes on their successful performance at the 17th Asian Games in Incheon, South Korea, on behalf of all of Kazakhstan’s people and himself personally. President Nazarbayev noted that the athletes lived up to the expectations of their countrymen and that the nation was very proud of their triumphs at the games. “Your persistence, excellence and will to win allowed you to outshine sportsmen from 45 Asian countries and collect 84 medals, including 28 golds. This is the best we have ever done; a new record for Kazakhstan at the Asian Games,” the congratulatory message read. The President also stressed that this success will pave the way for more victories at the upcoming Olympic Games in Rio de Janeiro. (akorda.kz)

• Fiji supports Kazakhstan’s candidacy forUN Security CouncilseatDeputy Foreign Minister and Special Representative of the President of Kazakhstan Askar Mussinov met President Ratu Epeli Nailatikau on Oct. 6 during a trip to Fiji. During the meeting, Mussinov gave Nailatikau a response from President of Kazakhstan Nursultan Nazarbayev to Fiji’s support of Kazakhstan’s candidacy for a nonpermanent seat on the UN Security Council for 2017-2018. Mussinov also invited the president of Fiji to take part in the upcoming specialised exhibition EXPO 2017 in Astana. Mussinov also met with Minister of Foreign Affairs of Fiji Ratu Inoke Kubuabola to discuss bilateral cooperation and cooperation in international organisations. A special envoy met with Fiji’s Minister of Tourism Stefan Pichler to discuss ways to establish direct links between travel agencies and companies of the two countries. (mfa.gov.kz)

• Mazhilisratifiesdam-operationagreementwithChinaKazakhstan’s Mazhilis (lower chamber of parliament) approved a draft law ratifying an agreement between the governments of Kazakhstan and China on the management and operation of the jointly owned Dostyk Dam on the Khorgos River, which forms part of the border between the two countries, on Oct. 8. The agreement states that both states hold equal shares of the facility, Minister of Agriculture of Kazakhstan Asylzhan Mamytbekov said. The main purpose of the facility is to guarantee the equal division of diverted river water, which is important for local irrigation. The facility is also intended to mitigate flooding. According to Mamytbekov, competent authorities of both countries have developed and approved rules for managing and operating Dostyk. (inform.kz)

• KazakhstanandSanMarinosigncooperationmemorandumThe Foreign Ministries of Kazakhstan and San Marino signed a memorandum of cooperation on Oct. 9 during a visit by a delegation from San Marino to Astana. The visit by San Marino’s foreign minister and delegation opened a new chapter in the relationship between the two countries and will serve as a serious impetus for further trade and economic cooperation, Minister of Foreign Affairs of Kazakhstan Erlan Idrissov said at the signing. The San Marino delegation also met with the minister for investment and development of Kazakhstan. They agreed to develop a process for economic cooperation in such areas as tourism, banking, industrial processing, agricultural processing and pharmaceuticals. (mfa.gov.kz)

• AstanacyclistLutsenkowinsTourofAlmatyAstana Pro Team cyclist Alexey Lutsenko won the Tour of Almaty, a race of 186 kilometres (in six 31-km loops), on Oct. 5. Sergey Chernetsky of Russia’s Team Katyusha took second place, while RusVelo’s Sergey Lagutin took third. Organised by the akimat (city administration) of Almaty and the Kazakhstan Cycling Federation, the Tour of Almaty drew contestants from the Astana Pro Team, Team Katyusha, Team La Pomme Marseille 13 (France), Bardiani (Italy), RusVelo (Russia), Team Novo Nordisk (U.S.), Vino 4-Ever (Kazakhstan) and the Kazakhstan National Team, among others. Lutsenko also recently won a gold medal at the Asian Games in Incheon, South Korea. (tengrinews.kz)

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