kazakhstan spotlight #1

8
By Joe Watson K azakhstan seeks to establish itself as a leader within the Muslim world and a bridge between Islam and the West. The latest evidence was its hosting of the Seventh World Islamic Economic Forum in Astana this month, where President Nursultan Nazarbayev offered propos- als for Muslim nations to modernize and progress. Ka- zakhstan this month will also become chair of the Organi- zation of the Islamic Confer- ence. The country also showed it was capable of becoming a leader within the Islam- ic world when in 2010 it be- came the first Muslim nation to chair the Organization for Security and Cooperation in Europe. During that chair- manship, it convinced the 56 participating states to hold the organization’s first sum- mit in 11 years, in Astana. In addition, Kazakhstan has taken steps to become a force in Islamic banking and to begin making food and other products that comply with Shariah Law. It is also urging Muslims to practice ethnic and religious toler- ance. Nazarbayev opened his address at the World Islamic Economic Forum by remind- ing participants of Kazakh- stan’s Islamic credentials. “Islam came to our lands more than a thousand years ago,” he said. But he quickly jumped from history to one of the biggest challenges facing the Muslim world: develop- ment. There are three models of Islamic development today, he said. The first is what he called “inertial development” – de- velopment that is so slow or so limited that it fails to meet the population’s needs. “Unfortunately, recent developments have clearly shown that this conservative approach will unavoidably sooner or later lead to out- bursts of protests,” he said. The second development model is based on a “radical return to the past and a com- plete denial of the institu- tions of modern society,” the president said. The third model, he said, is the “modernization of Is- lam.” Kazakhstan has cho- sen modernization, which Nazarbayev said does not conflict with Islam’s core principles. He noted that for centuries much of the world’s prog- ress came from the Muslim world. “Islamic cultural ex- pansion in the Middle Ages gave the world its greatest achievements in mathe- matics, chemistry, astrono- my, medicine, architecture, philosophy and poetry,” he said. Today, however, the Mus- lim world has fallen behind, he said. To start with, Islamic countries have far less eco- nomic clout than their com- bined population -- a fifth of the world’s total – would suggest, Nazarbayev said. “For instance, there is no member of the Group of Eight representing the Um- mah (Muslim society),” he said. The G8 are the coun- tries with the world’s top economies. As for other indicators of Islam’s stature today, Nazarbayev asked these questions of the forum par- ticipants: How many Islamic univer- sities are in the world’s top 100? How many Nobel Prize winners in science and tech- nology have Muslim coun- tries produced? How many important technological breakthroughs have come from Muslim researchers? (The answer to all: none.) Muslim countries need to make a major effort to mod- ernize, Nazarbayev asserted. Otherwise, the Islamic world may lag much of the rest of civilization for another cen- tury, he said. He offered five proposals for modernization: Distributed with The Daily Telegraph KAZAKHSTAN Nazarbayev Presents Plan for Renewed Global Islamic Progress Kazakh President Nursultan Nazarbayev addresses 2,000 participants of the 7th World Islamic Economic Forum in Astana on June 8 By Ambika Behal W hen Kazakhstan, Russia, and Be- larus agreed to set up their Cus- toms Union in July 2010, critics said it would be a death knell for Kazakh trade and business. But one year on, just days before the re- moval of all of its customs borders, the fossil-fuel rich nation has defied the pessi- mists. In the first three months of this year, trade with Rus- sia soared by 57 percent compared with the same pe- riod in 2010. Also, the Customs Union has already confirmed Ka- zakhstan’s success in at- tracting investment from companies in other countries that would take advantage of Kazakhstan’s favourable business climate to use it as a base to sell their products in Russia. Between 2000 and 2007, Kazakhstan enjoyed a boom and it had been the first ex- Soviet Union country to re- ceive an investment grade credit rating. The country saw economic growth bal- loon at over 9 percent each year. Then, in 2007, the glob- al credit crunch hit, and Ka- zakhstan took a beating from a loss of capital inflows. The American Chamber of Com- merce in Kazakhstan report- ed 2009 economic growth for Kazakhstan at 1.2 percent. Kazakhstan, Russia, and Belarus, representing the heart of Central Asia’s his- torical Silk Trade Route, ac- celerated their longstanding talks over joining togeth- er to form a CU in 2007. In 2010, the agreement came together and steps towards implementing economic in- tegration were taken, with removal of customs borders to follow in July 2011. Ex- port duties are to be abol- ished after the creation of the Single Economic Space in January 2012. The aim of the CU was to connect the 170 million peo- ple of the region together, in- to a single market economy. The combined GDP of the three nations is $2 trillion a year. The three combined states are world leaders in oil and wheat production, and have an annual agricultural output worth $112 billion. At the time of signing, Kyrgyzstan and Tajikistan had also expressed consider- ation of possibly joining at a later stage. The two countries Customs Union Boosts Kazakh Energy Leverage Rare Earths... see p. 3 Kazakhstan Can Be Gateway to Central Asia, Foreign Minister Says Q: What opportunities do you see to expand Kazakh- stan’s trade and other re- lations with the European Union and its leading na- tions? A: The European Union is the biggest partner of Ka- zakhstan in terms of trade volume. Our trade volume with the European Union has reached $40 billion already and certainly we consid- er the European Union as a potential partner, and we are planning to expand our co- operation in this respect. Over the last several years our relations have been ex- panding and we took pos- itive note of the decision of the European Union to adopt, during the German Presidency in 2007, a spe- cial program toward Central Asia until 2013. It’s a stra- tegic program aimed at Cen- tral Asia and this program embraces all areas of possi- ble cooperation starting with security, development and humanitarian fields. We also are very much in- terested in expanding our in- dustrial exchange especially involving new and innovative technologies from the Euro- pean Union to Kazakhstan. We always said Kazakhstan can play the role of a gate- way to Central Asia because our economy is the most ad- vanced in the region. In 2008, the government of Kazakhstan adopted a special program called “The Path to Europe” and we have already achieved good re- sults with it. Q: How do you assess the future development of en- ergy relations between Ka- zakhstan and the European nations? A: Kazakhstan is the third largest oil supplier to the Eu- ropean markets after Russia and Norway. We proved to be a very reliable oil suppli- er to the European markets and we would like to contin- ue to do so. Some 30 percent of oil The new Customs Union will encourage Kazakhstan’s light manufacturing sector Kazakh Minister of Foreign Affairs Yerzhan Kazykhanov This report was sponsored by the Government of Kazakhstan. Images courtesy of the Government of Kazakhstan unless otherwise noted. Published by Coast to Coast Communications Ltd. For further informa- tion please contact us at [email protected] Printed at Newsprinters (Broxbourne) Ltd. Great Cambridge Road Waltham Cross, Herts EN8 8DY Customs union... see p.4 INSIDE page 2 Astana Achieves Economic, Architectural Success >> Astana Forum to Broaden Global Nuclear Security Efforts page 4 page 5 page 6 Kazakhstan to Build Bridges During Islamic Body Chairmanship page 3 New Term Charts Path to Continued Progress Customs Union Success Attracts Interest of Central Asian Neighbours Labour Camp Museum Is Reminder of Past Repression Kazakhstan WTO Accession on Track for 2012 Shanghai Security Group Holds Summit in Astana Kazakhstan’s First Female Airline Captain Commands Region’s Skies page 7 Kazakhstan’s Banking Sector Rebounds, Progress Mixed Aircraft Manufacturing Takes Off in Kazakhstan page 8 Kazakhstan Invests in a Renewable Future Kazakh Agro Sector Defies Drought This eight-page pull-out is produced and published by Coast to Coast Communication Ltd, which takes sole responsibility for the contents. SPOT LIGHT Gateway... see p.4 By Colin Berlyne R are earth mining is the latest boom industry in Ka- zakhstan. China’s decision to slash exports and prioritize domestic use of the rare industrial metals crucial for many technolo- gy products set off a glob- al hunt for new sources, and Kazakhstan has proven to be rich in many of them. Kazatomprom, Kazakh- stan’s state-owned uranium mining company, plans to invest $800 million to de- velop rare-earth metal min- ing in Kazakhstan. A joint venture with Rus- sia’s Rosatom company may invest up to $500 mil- lion to mine rare earths, and joint ventures with Japanese Toshiba Corp. and Sumito- mo Corp. plan to invest ad- ditional $300 million. Kazatomprom’s joint ven- ture with Sumitomo, set up in 2010, aims to extract mo- lybdenum and rhenium from uranium ore, while the joint project with Toshiba may produce niobium, rhenium, wolfram, tantalum and be- ryllium. Kazakhstan plans to in- crease its output of berylli- um to around 2,000 tons in 2014 from 712 tons in 2009, according to the country’s Ministry of Industry and New Technologies. Its pro- duction of tantalum, mean- while, will rise to 297 tons in 2014 from 137 tons in 2009. Kazakhstan is also one of the world’s two main pro- ducers of rhenium. At sev- en parts per billion, rhenium is one of the rarest elements in the earth’s crust. Ka- zakhstan and Chile togeth- er provide 86 percent of the world’s supply. Rhenium has an excep- tionally high melting point of 3,186 degrees Celsius, making it invaluable in the construction of jet engines for aircraft. Its price has ris- en 700 percent since 2005 making it one of the most expensive industrial metals in the world. China has dominated the rare earths global supply, but is drastically curtailing exports, throwing high-tech economies and major corpo- rations in the United States, Germany, Japan and South Korea into a hectic search for new supplies. Rare earths are exceptionally rare ele- ments and minerals that are essential for many high-tech industrial processes. They are vital, for example, to produce Blackberrys, televi- sions and hybrid cars. Rare earths can be pro- duced from uranium tail- ings, which means countries rich in uranium are the most likely places to find them, or the minerals and elements from which they can be ex- tracted. And that automati- cally moves Kazakhstan to the top of the list. It is already the largest uranium producer and ex- porter in the world, and as the ninth largest country in the world with a territory of 1 million square miles, there are plenty of places to look for rare earths. Also, as China’s dom- inance of the global mar- ket to this time confirms, Kazakhstan Rides Rare Earths Mining Boom For centuries much global progress came from the Muslim world In the second half of 2010, rare earth prices soared by 700 percent Nazarbayev... see p.4 President gives keynote speech at the 7th World Islamic Economic Forum

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KAZAKHSTAN SPOTLIGHT, Nazarbayev Presents Plan for Renewed Global Islamic Progress

TRANSCRIPT

Page 1: KAZAKHSTAN SPOTLIGHT #1

By Joe Watson

Kazakhstan seeks to establish itself as a leader within the Muslim world and

a bridge between Islam and the West.

The latest evidence was its hosting of the Seventh World Islamic Economic Forum in Astana this month, where President Nursultan Nazarbayev offered propos-als for Muslim nations to modernize and progress. Ka-zakhstan this month will also become chair of the Organi-zation of the Islamic Confer-ence.

The country also showed it was capable of becoming a leader within the Islam-ic world when in 2010 it be-came the first Muslim nation to chair the Organization for Security and Cooperation in Europe. During that chair-manship, it convinced the 56 participating states to hold

the organization’s first sum-mit in 11 years, in Astana.

In addition, Kazakhstan has taken steps to become a force in Islamic banking and to begin making food and other products that comply with Shariah Law. It is also urging Muslims to practice ethnic and religious toler-ance.

Nazarbayev opened his address at the World Islamic Economic Forum by remind-ing participants of Kazakh-stan’s Islamic credentials. “Islam came to our lands more than a thousand years ago,” he said.

But he quickly jumped from history to one of the biggest challenges facing the Muslim world: develop-ment.

There are three models of Islamic development today, he said.

The first is what he called “inertial development” – de-velopment that is so slow or

so limited that it fails to meet the population’s needs.

“Unfortunately, recent developments have clearly shown that this conservative approach will unavoidably sooner or later lead to out-bursts of protests,” he said.

The second development model is based on a “radical return to the past and a com-

plete denial of the institu-tions of modern society,” the president said.

The third model, he said, is the “modernization of Is-lam.”

Kazakhstan has cho-sen modernization, which Nazarbayev said does not conflict with Islam’s core principles.

He noted that for centuries much of the world’s prog-ress came from the Muslim world. “Islamic cultural ex-pansion in the Middle Ages gave the world its greatest achievements in mathe-matics, chemistry, astrono-my, medicine, architecture, philosophy and poetry,” he said.

Today, however, the Mus-lim world has fallen behind, he said.

To start with, Islamic countries have far less eco-nomic clout than their com-bined population -- a fifth of the world’s total – would suggest, Nazarbayev said.

“For instance, there is no member of the Group of

Eight representing the Um-mah (Muslim society),” he said. The G8 are the coun-tries with the world’s top economies.

As for other indicators of Islam’s stature today, Nazarbayev asked these questions of the forum par-ticipants:

How many Islamic univer-sities are in the world’s top 100? How many Nobel Prize winners in science and tech-nology have Muslim coun-tries produced? How many important technological breakthroughs have come from Muslim researchers?

(The answer to all: none.)Muslim countries need to

make a major effort to mod-ernize, Nazarbayev asserted. Otherwise, the Islamic world may lag much of the rest of civilization for another cen-tury, he said.

He offered five proposals for modernization:

Distributed with The Daily Telegraph

KazaKhstan

nazarbayev Presents Plan for Renewed Global Islamic Progress

Kazakh President Nursultan Nazarbayev addresses 2,000 participants of the 7th World Islamic Economic Forum in Astana on June 8

By Ambika Behal

W hen Kazakhstan, Russia, and Be-larus agreed to set up their Cus-

toms Union in July 2010, critics said it would be a death knell for Kazakh trade and business. But one year on, just days before the re-moval of all of its customs borders, the fossil-fuel rich nation has defied the pessi-mists.

In the first three months of this year, trade with Rus-sia soared by 57 percent compared with the same pe-riod in 2010.

Also, the Customs Union has already confirmed Ka-zakhstan’s success in at-tracting investment from companies in other countries that would take advantage of Kazakhstan’s favourable business climate to use it as a base to sell their products in Russia.

Between 2000 and 2007, Kazakhstan enjoyed a boom and it had been the first ex-Soviet Union country to re-ceive an investment grade credit rating. The country saw economic growth bal-loon at over 9 percent each year. Then, in 2007, the glob-al credit crunch hit, and Ka-

zakhstan took a beating from a loss of capital inflows. The American Chamber of Com-merce in Kazakhstan report-ed 2009 economic growth for Kazakhstan at 1.2 percent.

Kazakhstan, Russia, and Belarus, representing the heart of Central Asia’s his-torical Silk Trade Route, ac-celerated their longstanding talks over joining togeth-er to form a CU in 2007. In 2010, the agreement came together and steps towards implementing economic in-tegration were taken, with removal of customs borders to follow in July 2011. Ex-port duties are to be abol-ished after the creation of the Single Economic Space in January 2012.

The aim of the CU was to connect the 170 million peo-ple of the region together, in-to a single market economy. The combined GDP of the three nations is $2 trillion a year. The three combined

states are world leaders in oil and wheat production, and have an annual agricultural output worth $112 billion.

At the time of signing, Kyrgyzstan and Tajikistan had also expressed consider-ation of possibly joining at a later stage. The two countries

Customs Union Boosts Kazakh Energy Leverage

Rare Earths... see p. 3

Kazakhstan Can Be Gateway to Central asia, Foreign Minister says

Q: What opportunities do you see to expand Kazakh-stan’s trade and other re-lations with the European Union and its leading na-tions?A: The European Union is the biggest partner of Ka-

zakhstan in terms of trade volume. Our trade volume with the European Union has reached $40 billion already and certainly we consid-er the European Union as a potential partner, and we are planning to expand our co-

operation in this respect.Over the last several years

our relations have been ex-panding and we took pos-itive note of the decision of the European Union to adopt, during the German Presidency in 2007, a spe-

cial program toward Central Asia until 2013. It’s a stra-tegic program aimed at Cen-tral Asia and this program embraces all areas of possi-ble cooperation starting with security, development and humanitarian fields.

We also are very much in-terested in expanding our in-dustrial exchange especially involving new and innovative technologies from the Euro-pean Union to Kazakhstan. We always said Kazakhstan can play the role of a gate-way to Central Asia because our economy is the most ad-vanced in the region.

In 2008, the government of Kazakhstan adopted a special program called “The Path to Europe” and we have already achieved good re-sults with it. Q: How do you assess the future development of en-ergy relations between Ka-zakhstan and the European nations?A: Kazakhstan is the third largest oil supplier to the Eu-ropean markets after Russia and Norway. We proved to be a very reliable oil suppli-er to the European markets and we would like to contin-ue to do so.

Some 30 percent of oil

The new Customs Union will encourage Kazakhstan’s light manufacturing sector

Kazakh Minister of Foreign Affairs Yerzhan KazykhanovThis report was sponsored by

the Government of Kazakhstan.

Images courtesy of the Government of Kazakhstan

unless otherwise noted.

Published by Coast to Coast Communications Ltd. For further informa-

tion please contact us at [email protected]

Printed at Newsprinters (Broxbourne) Ltd.Great Cambridge Road

Waltham Cross, Herts EN8 8DY

Customs union... see p.4

INSIDE

page 2

Astana Achieves Economic, Architectural Success

>>

Astana Forum to Broaden Global Nuclear Security

Efforts

page 4

page 5

page 6

Kazakhstan to Build Bridges During Islamic Body

Chairmanship

page 3

New Term Charts Path to Continued Progress

Customs Union Success Attracts Interest of Central

Asian Neighbours

Labour Camp Museum Is Reminder of Past

Repression

Kazakhstan WTO Accession on Track for 2012

Shanghai Security Group Holds Summit in Astana

Kazakhstan’s First Female Airline Captain Commands

Region’s Skies

page 7

Kazakhstan’s Banking Sector Rebounds,

Progress Mixed

Aircraft Manufacturing Takes Off in Kazakhstan

page 8

Kazakhstan Invests in a Renewable Future

Kazakh Agro Sector Defies Drought

This eight-page pull-out is produced and published by Coast to Coast

Communication Ltd, which takes sole responsibility for the contents.

sPotLIGht

Gateway... see p.4

By Colin Berlyne

Rare earth mining is the latest boom industry in Ka-zakhstan. China’s

decision to slash exports and prioritize domestic use of the rare industrial metals crucial for many technolo-gy products set off a glob-al hunt for new sources, and Kazakhstan has proven to be rich in many of them.

Kazatomprom, Kazakh-stan’s state-owned uranium mining company, plans to invest $800 million to de-velop rare-earth metal min-ing in Kazakhstan.

A joint venture with Rus-sia’s Rosatom company may invest up to $500 mil-lion to mine rare earths, and joint ventures with Japanese Toshiba Corp. and Sumito-mo Corp. plan to invest ad-ditional $300 million.

Kazatomprom’s joint ven-ture with Sumitomo, set up in 2010, aims to extract mo-lybdenum and rhenium from uranium ore, while the joint project with Toshiba may produce niobium, rhenium, wolfram, tantalum and be-ryllium.

Kazakhstan plans to in-crease its output of berylli-um to around 2,000 tons in

2014 from 712 tons in 2009, according to the country’s Ministry of Industry and New Technologies. Its pro-duction of tantalum, mean-while, will rise to 297 tons in 2014 from 137 tons in 2009.

Kazakhstan is also one of the world’s two main pro-ducers of rhenium. At sev-en parts per billion, rhenium is one of the rarest elements in the earth’s crust. Ka-zakhstan and Chile togeth-er provide 86 percent of the world’s supply.

Rhenium has an excep-tionally high melting point of 3,186 degrees Celsius, making it invaluable in the

construction of jet engines for aircraft. Its price has ris-en 700 percent since 2005 making it one of the most expensive industrial metals in the world.

China has dominated the rare earths global supply, but is drastically curtailing exports, throwing high-tech economies and major corpo-rations in the United States,

Germany, Japan and South Korea into a hectic search for new supplies. Rare earths are exceptionally rare ele-ments and minerals that are essential for many high-tech industrial processes. They are vital, for example, to produce Blackberrys, televi-sions and hybrid cars.

Rare earths can be pro-duced from uranium tail-ings, which means countries rich in uranium are the most likely places to find them, or the minerals and elements from which they can be ex-tracted. And that automati-cally moves Kazakhstan to the top of the list.

It is already the largest uranium producer and ex-porter in the world, and as the ninth largest country in the world with a territory of 1 million square miles, there are plenty of places to look for rare earths.

Also, as China’s dom-inance of the global mar-ket to this time confirms,

Kazakhstan Rides Rare Earths Mining Boom

For centuries much global progress came from the Muslim world

In the second half of 2010, rare earth prices soared by 700 percent

Nazarbayev... see p.4

President gives keynote speech at the 7th World Islamic Economic Forum

Page 2: KAZAKHSTAN SPOTLIGHT #1

By Joe Watson

Astana, Kazakhstan’s progressive capital in the steppe, has plenty to celebrate as it ap-

proaches its 13th anniversa-ry. The city recently revised its master plan to better man-age Astana’s rapid growth. And the futuristic capital will complete a number of key structures in time for the 20th anniversary of Kazakh-stan’s independence on De-cember 16.

It is also planning a huge 13th anniversary celebration on July 6 with almost 100 events and headline perform-ers such as Britain’s Sarah Brightman, Sting and Cana-da’s Lara Fabian.

The main changes in the master plan are aimed at en-suring a seamless transition of architectural and street-layout integrity between the city and its surrounding ar-eas.

Thus the main feature of the revised master plan is “that much attention will be given to an indivisible de-velopment of the city and its suburbs,” said the plan’s chief architect, Bakhtybay Taytaliev. “The suburban area of 30 to 60 kilometres around the city is viewed as an integral part of the city (in the revised plan) to make sure that there is no uncon-trolled urban sprawl.”

Taytaliev’s team’s revision of the master plan is the latest tweaking of the 30-year blue-print that renowned Japanese architect Kisho Kurakawa drew up in 1998 after win-ning an international compe-tition to design the city.

The first phase of the plan, between 1998 and 2001, laid the groundwork for con-verting a provincial city of 200,000, once known as Ak-mola, into a modern capital. That work focused on revi-talizing existing administra-tive buildings for government ministries and building hous-ing for government workers moving from the old capital of Almaty.

The second phase, between 2001 and 2006, involved es-tablishing a new city centre

on the left bank of the Ishim River and rebuilding the old city centre on the right bank in a way that complied with Kurakawa’s master plan. The heart of the new city centre is an array of government buildings -- for ministries and agencies, for Parliament and for the Supreme Court.

President Nursultan Naz-arbayev, who came up with the idea of moving the capi-tal from Almaty to Astana in the early 1990s, said recently that most of the administra-tive, educational and sports facilities in the master plan

have been built. All that’s re-maining are premier cultural and arts facilities, he said – and they will be in place by December.

Among the government-fi-nanced additions to Astana’s skyline that will be complet-ed this year are an Opera and Ballet Theatre, a Stu-

dents’ Creativity Palace and new components of a national medical complex.

The new National Library, the centerpiece of whose de-sign is a Mobius strip, is scheduled to be finished next year.

Privately financed projects that will be finished this year or in the near future include a mosque that can accommo-date 5,000 worshippers; the 382-meter-tall Abu Dhabi Plaza, which will be Kazakh-stan’s tallest building; and a domed city within a city that will contain housing for 20,000 people and include shopping, dining, entertain-ment and recreational facil-ities, including a mini-golf course.

The 45,000-square-metre Student’s Palace will consist of a Kazakh history museum, a planetarium, libraries, sports facilities and dancing halls.

Two major infrastructure projects that Astana plans this decade are a larger air-port and a larger central train station.

The new airport, which

will be about 20 miles from the city, will be dedicated to international travel. The cur-rent airport will handle do-mestic flights. The existing airport is only a decade old but is straining to keep up with the increase in passen-ger volume resulting from the city’s population growth and the capital’s growing in-ternational political and eco-nomic importance.

The new Chrystal Rain-bow train station will be near the intersection of Akzhol and Musrepov Streets. In 2014, Astana will start build-ing a 42-mile light rail line with 42 stations. The line will link the existing central train station with the existing airport.

Astana has progressed greatly since Parliament agreed to Nazarbayev’s pro-posal to move the capital in 1994.

Its futuristic look has gar-nered international attention. Centerpieces of Astana’s ar-chitecture include the Bait-erek statehood monument, the Palace of Peace and Har-mony and the Khan Shatyr shopping and entertainment centre.

The Baiterek consists of a gold, egg-shaped dome sit-ting on a tall tower depicting a tree of life described in Ka-zakh legends. The pyramid-shaped Palace of Peace and Reconciliation and the Khan Shatyr -- which is billed as the largest tent in the world because of a vinyl covering that converges to a point at the top – were both designed by heralded British architect Norman Foster. Lord Fos-ter’s firm are now designing the Abu Dhabi Plaza.

Astana’s progress over the past 13 years has been more than architectural, however.

The third phase of the master plan, whose imple-mentation began in 2006, is aimed at ensuring that As-tana, which has 700,000 residents, can handle an an-ticipated 1.2 million people by 2030. Because the hun-dreds of thousands of new-comers will need jobs, part of the third-phase challenge involves using city planning

to foster additional business opportunities.

Astana’s economy has grown an astonishing 50-fold the past decade, Mayor Iman-gali Tasmagamgetov said at the Astana Invest 2011 forum in April. That has led to the city accounting for 10 per-cent of Kazakhstan’s gross domestic product – more than six times the 1.5 percent it accounted for in 2001.

Almost every month Asta-na officials announce a new business coming to the city. Two of the most high-profile in recent years were a joint venture with General Electric of the United States to assem-ble railroad locomotives and an Astana Space Centre that is a joint venture with EADS Astrium of France.

The new businesses have led to Astana’s industrial production increasing sev-enfold over the past decade, Tasmagamgetov said. In-vestment is needed to start new enterprises, of course, and that investment has in-creased 30-fold since 2000, the mayor said.

The investment surge dem-onstrates “the competitive-ness of our city and the value it presents,” he said.

A spurt in convention busi-ness the past few years has

also been one of the contrib-utors to Astana’s economic growth.

The city has shown it can handle world-class events such as last year’s summit of the Organization of Security and Cooperation in Europe and this year’s Asian Winter Games, which Astana hosted jointly with Almaty.

Astana also has devel-oped a reputation for holding important economic con-ventions. One is the annu-al Astana Economic Forum, which this year attracted seven Nobel Prize winners, heads of state, internation-al business leaders and aca-demics.

Other major economic events include the yearly Ka-zEnergy Forum oil and gas convention and the Minex international mining indus-try conference.

Astana is also seeking to host both an international Expo and a Winter Olympics in the next decade.

The city has also become home to a cutting-edge ed-ucational centre and major medical facilities.

Nazarbayev University opened last year in Astana with a mandate of becoming Kazakhstan’s higher-educa-tion flagship.

President Nazarbayev, who has a metallurgy back-ground, asked that the uni-versity that bears his name become a force in applied science.

Its mandate also includes being an experimental gen-erator of ideas that the rest of Kazakhstan’s universities can use to improve their pro-grams, university Vice Presi-dent Kadisha Dairova said.

In just a few short years, Astana has also developed the best medical complex in the country.

It includes a National Sci-entific and Health Centre, a National Neurosurgical Centre, a National Cardi-ac Surgery Centre, a Nation-al Emergency Care Centre, a National Diagnostic Centre, a National Maternity Care Centre and a National Chil-dren’s Rehabilitation Centre, as well as a National Medical Academy.

Astana’s progress in cre-ating an eye-catching sky-line, a thriving business environment, and quality ed-ucational and health-care es-tablishments has exceeded domestic and international expectations. On the eve of its 13th anniversary, it looks as if that progress is likely to continue.

Distributed with The Daily Telegraph

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

astana achieves Economic, architectural success

The KazMunayGaz headquarters is one of Astana’s Iconic structures

By Alex Walters

At the end of June Ka-zakhstan takes over the rotating annu-al chairmanship of

the world’s largest and most representative organization of predominantly Muslim states, the Organization of the Islamic Conference. As-tana has already drawn up plans to advance the OIC’s goals of peaceful develop-ment and cooperation with the rest of the world.

“Kazakhstan attaches great importance to cooper-ation with the OIC countries based on mutual respect and our commitment to shared values. Taking over the OIC chairmanship, Astana aims to further boost relations with the Muslim world and become more actively en-gaged in the OIC activities,” Bakhyt Batyrshayev, Ka-zakhstan’s permanent repre-sentative to the OIC, said in a recent interview.

The 57 nations of the OIC contain 1.4 billion people, 20 percent of the world’s population of nearly sev-en billion, and are its fastest growing segment. They con-trol 70 percent of global en-ergy reserves and 40 percent of the world’s raw minerals. In terms of the countries that are its members, the OIC is the world’s second most populous international orga-nization after the United Na-tions.

Kazakhstan will take over the chairmanship following a major OIC conference in As-tana June 28-30 after which the OIC name will change to the Organization of Islam-ic Cooperation to reflect the changed nature of the group which has been in existence for more than 40 years.

“Recognising the meeting

as a major political event, Kazakhstan is carrying out a comprehensive prepara-tion,” Batyrshayev said. “We are preparing for a top-lev-el meeting with meaningful discussions that will reach concrete decisions.”

Kazakhstan’s presidential, prime ministerial and foreign ministry officials are experi-enced and confident coming off their successful year of leading the 56-nation Orga-nization for Security and Co-operation in Europe (OSCE) through 2010 and the six-na-tion Shanghai Cooperation Organization (SCO) whose summit meeting concluded in Astana earlier in June.

Kazakh officials were praised for the resources and care they put into

achieving consensus among OSCE delegations and foreign ministries for new initiatives. Batyrshayev said they would bring that same expertise to their ef-forts to revitalize the OIC.

“Kazakhstan has the ap-propriate tools and ample ex-perience gained from hosting the Organization for Security and Cooperation in Europe (OSCE) Summit in Decem-ber 2010,” he said. “Kazakh-stan opened its Permanent Mission to the OIC in March 2010. This office is respon-sible for the organizational aspects of our chairmanship and for strengthening the country’s cooperation with the OIC.”

Kazakhstan assumes the OIC leadership hav-ing already established re-lationships that position the country as a bridge between north and south, east and west.

“Following the OSCE chairmanship, our presi-dency in the OIC will be a logical continuation of mul-

tilateral diplomacy,” Batyr-shayev said. “At the helm of the OSCE, we seized an opportunity to bring the in-terests of the Central Asian countries to the fore of the

Vienna-based organization’s agenda.”

“As the chair of the OIC Council of Foreign Minis-ters (CFM), Kazakhstan will encourage the inter-institu-

tional dialogue between the OSCE and the OIC on issues of security, economic and humanitarian cooperation, thus paving the way towards a rapprochement between

the West and the Muslim world,” he added.

The Kazakhs have made clear that they want to launch new programs and strength-en the institutionalized coop-eration between the OIC and other major inter-govern-mental organizations such as the OSCE, the Conference on Interaction and Confi-dence-Building Measures in Asia and the Shanghai Coop-eration Organization.

Strongly religious Muslim nations like Iran and Sau-di Arabia enjoy good rela-tions with Kazakhstan. They know that Kazakhstan shares their devotion toward deep-ening Islamic cooperation.

“The continued growth of Kazakhstan’s economic re-lations with other Muslim countries is of great impor-tance,” Batyrshayev said. “Kazakhstan has already de-veloped mutually beneficial cooperation with Turkey, the United Arab Emirates, Saudi Arabia and many other Mus-lim nations many of them in the key areas: economic co-operation, trade, transport, travel and finance.”

Special importance is at-tached to cooperation with the Islamic Development Bank and other financial and consulting institutions. At present, the IDB financially backs the implementation of several economic and infra-structure projects in Kazakh-stan totalling $500 million. Among the projects are building the Karaganda-As-tana highway and assisting the development of Astana’s infrastructure and small to medium-sized businesses.

But at the same time, the nations of North America, Europe and Northeast Asia also know that the Kazakhs are moderates and construc-tive players in the global

community and that they are sincere in their commitment to launch new initiatives of mutual engagement.

Kazakhstan also has a large infrastructure of or-ganizations dedicated to inter-religious and inter-civ-ilization bridge-building.

The upheavals across the Middle East in Tunisia, Lib-ya, Egypt, Syria, Bahrain

and Yemen against long-es-tablished governments have also raised question marks about the future of the re-gion. Fears of possible U.S. or Israeli attacks on Iran’s nuclear facilities are wide-spread.

In this strained and fearful atmosphere, Kazakhstan’s efforts to launch business initiatives from the platform of the OIC are likely to be welcomed by its member na-tions.

Kazakhstan’s OIC leader-ship is also likely to accel-erate the integration process between the five former So-viet republics of Central Asia and the core Arab Mus-lim nations of the Middle East.

Kazakhstan’s growing fi-nancial ties with Qatar and the United Arab Emirates in particular provide a signifi-cant conduit to step up bank-ing and general financial coordination.

During the year of its OIC chairmanship, Kazakhstan is widely expected to issue its first sukuk, or Islamic bond, for around $500 million, in accordance with the princi-ples of Sharia Islamic law.

That offers the prospect of reinvigorating the interna-tional sukuk market, which has remained small and flat in recent years.

The country’s OIC eco-nomic plans, however, are only one facet of its agenda for the OIC chairmanship.

“Before and during its chairmanship of the OIC, Kazakhstan intends to hold

such large-scale events as the 7th Session of the World Islamic Economic Forum, the Third Conference of the OIC Health Ministers, re-search and practice confer-ence on “The Role of Islam in the CIS countries”, and the Ministerial Conference on Women’s Role in the De-velopment of OIC Mem-ber States and some other events still awaiting approv-al,” Batyrshayev said.

“Other meetings concern-ing the issues of ecology, nuclear disarmament, glob-al and regional security, and sustainable development are to take place,” he added.

The OIC countries adopt-ed a document titled “Ten Year Programme of Action” at their Mecca Extraordinary Summit in 2005. Based on this plan, the new OIC char-ter adopted in 2008 engaged the organization in an un-precedented internal reform process with the aim of mak-ing it effective and capable of meeting new challenges.

“Kazakhstan wants to con-tinue the process of redirect-ing the OIC’s activities to correspond to new global re-alities,” Batyrshayev said.

Kazakhstan to Build Bridges During Islamic Body Chairmanship

Kazakhstan’s Permanent Representative to the Organization of the Islamic Conference Bakhyt Batyrshayev

capital Marks its 13 anniversary on July 6 with Major celebration

Astana’s futuristic look has garnered international attention

The OIC chairmanship will be a logical continuation of Astana’s multilateral diplomacy

Sting’s upcoming concert in Astana excites locals and guests with tickets going out fast

Page 3: KAZAKHSTAN SPOTLIGHT #1

Distributed with The Daily Telegraph

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

By Colin Berlyne

K azakhstan’s Presi-dent Nursultan Naz-arbayev followed his re-election victo-

ry in April by implementing changes to the government that point to the priorities Ka-zakhstan will pursue over the coming decade.

Kazakhstan intends to be-come an international trade, logistics and financial hub by 2016, Nazarbayev announced on May 18 while speaking to the 24th session of the For-eign Investors Council (FIC) in Astana.

Current plans envisage achieving a 50 percent rise in labor productivity and a 100 percent rise in the manufac-turing sector by 2014.

The country will also push ahead with its 2030 Devel-opment Strategy to create a strong and diversified light industrial sector, including a large food processing indus-try.

Agricultural production, especially in wheat and beef, will also be expanded to make Kazakhstan a global food exporting power com-parable to Argentina, Canada and Australia.

The heat wave and drought that swept Central Asia in 2010 slowed the implementa-tion of that agricultural expan-sion but also underlined the wisdom of pursuing it.

Despite a drop of 7 million tonnes in grain production last year compared with the record harvest of 2009, Kazakhstan became the key “swing” pro-ducer of grain in the former Soviet republics. It was able to replace Russia as the main

wheat exporter to nations such as Azerbaijan and became an important back up supplier of specialized grain to Russia to compensate for grain short-falls there.

A new customs union with Russia and Belarus will al-so come into full implemen-

tation during the president’s new term. In the first quarter of 2011, the new CU boosted Kazakhstan’s trade volume with the other two member nations by 57 percent over Q1 2010.

The union will also help in-crease Kazakhstan’s growing

trade relationship with China.Kazakhstan also looks cer-

tain to expand trade and dip-lomatic relations with the nations of Western Europe, while at the same time seek-ing to raise funds for invest-ment in the Middle East and East Asia thereby reducing

the country’s dependence on Western stock markets.

Kazakhstan will also use its chairmanship of the Orga-nization of the Islamic Con-ference starting at the end of June to strengthen its cooper-ation with major Muslim na-tions and to raise its profile in

the Islamic world. Domestically, the govern-

ment is looking to financially strengthen the middle class.

The government this year launched plans for initial pub-lic offerings (IPOs) for the Kazakh public to buy minority stakes in major national com-panies, particularly in the en-ergy sector. This program will increase the scale of popu-lar participation in the nation-al economy and provide the public, especially the grow-ing middle class, with an in-creased share in the benefits of Kazakhstan’s economic de-velopment.

The strengthening of the power and wealth of the mid-dle class through these eco-nomic initiatives will also progress the country’s demo-cratic maturity. That maturi-ty will be strengthened further by plans to expand popular in-volvement in non-governmen-tal organizations (NGOs) and to expand and strengthen the institutions of democracy at the grassroots level.

The 2010-2014 National Program also lays out a series

of development target goals including a 12.5 percent in-crease in the manufacturing in-dustry’s contribution to GDP, a 43 percent increase in non-primary export volume to total volume produced in manufac-turing, a 10 percent increase in innovative enterprises and at least an 8 percent decrease

in transportation costs.Kazakhstan also hopes over

the coming years to expand the number of foreign-exper-tise training programs in its oil, chemical, high-technol-ogy, engineering, spacecraft manufacturing and IT sectors. It will also seek more technol-ogy, expertise, and funding for small and medium-sized en-trepreneurs (SMEs).

A new series of pro-busi-ness tax and other incentives will also be created to encour-age and protect foreign invest-ment in critical projects.

Joint educational and re-search projects between do-mestic and foreign institutions with funding from major cor-porations are also on the coun-try’s agenda.

The new presidential term has also brought a series of changes to government ap-

pointments.Secretary of State Kanat

Saudabayev retained his po-sition but gave up his oth-er job as the foreign minister to concentrate on major na-tional issues. His deputy Yer-zhan Kazkykhanov, an expert on relations with the Middle East and the Arab world, took

over in the foreign ministry just before Kazakhstan begins its year-long chairmanship of the 57-nation Organization of the Islamic Conference, the Islamic world’s largest and most influential internation-al organization. Prime Minis-ter Karim Massimov retained his position.

Nazarbayev also appoint-ed six new ministers to the

government: Kalmukhanbet Kassymov as Minister of In-ternal Affairs, Kairat Kelime-tov as Minister of Economic Development and Trade, As-sylzhan Mamytbekov as Minister of Agriculture, Ber-ik Kamaliyev as Minister of Transport and Communica-tions, and Talgat Yermegi-yayev as Minister of Tourism and Sports. The Harvard-edu-cated Zhanar Aitzhanova was appointed to a new position of the Minister for Econom-ic Integration, to continue to spearhead Kazakhstan’s ac-cession to the World Trade Organization and coordinate efforts within the Customs Union. Timur Kulibayev took over as Chairman of the Samruk Kazyna National Welfare Fund.

Nazarbayev’s significant reelection victory in April was an affirmation of the prosper-ity the country has enjoyed since gaining independence nearly 20 years ago. The new initiatives seek to build on that progress.

new term Charts Path to Continued Progress

President Nursultan Nazarbayev was elected to a new term on April 3

By Colin Berlyne

K azakhstan will host an International Forum for A Nuclear Weap-ons-Free World in its

capital Astana October 11-13.The meeting is designed to

be an important step towards creating greater momentum in moving ahead the global nu-clear disarmament agenda. It will also come on the heels of the April 2010 non-prolifer-ation summit in Washington, in which President Barack Obama hosted 47 nations. It will point the way to the scheduled full nuclear summit to be held in Seoul, the capital of South Korea, in 2012.

Kazakhstan Secretary of State Kanat Saudabayev an-nounced the Astana gather-ing during a visit to London in May 2010 to attend a confer-ence on “Deterrence: Its Past and Future.”

“Kazakhstan, which volun-tarily renounced the world’s fourth largest nuclear arse-nal, has been, is and will be a reliable partner of the inter-national community in non-proliferation, disarmament

and peaceful use of atomic en-ergy,” Saudabayev said.

Speaking to Kazakh report-ers outside Lancaster House in London, where the confer-ence took place, former U.S. Senator Sam Nunn, one of the world’s most respected experts on nuclear non-proliferation issues, said, “Kazakhstan has contributed [to nuclear disar-mament] not only by getting

rid of nuclear weapons, which was an example for the world, but also by working diligent-ly over the last few years and blending down the highly en-riched uranium, the weapon grade material.”

The London conference focused on three objectives: First, to stimulate an interna-tional dialogue on deterrence, including a better understand-ing of regional perspectives on threats to international se-curity and the role of nuclear

deterrence in addressing those threats.

Second, to develop a com-mon language on nuclear dis-armament that can facilitate short-term steps to move to-ward a safer and more stable form of deterrence.

And third, to identify and discuss short-term steps ap-plied regionally and global-ly to facilitate the transition

from mutual assured destruc-tion (MAD) toward a new and more stable form of de-terrence with decreasing nu-clear risks.

“If the international com-munity fails to discontinue the growth in the number of states possessing nuclear weapons in the foreseeable future, the concept of nuclear deterrence may completely lose its mean-ing,” Saudabayev warned. “In this regard, we believe that the steady decline in the number

of nuclear arsenals, the uncon-ditional refusal of all members of the international communi-ty (to support) horizontal and vertical proliferation, con-trol over proliferation and the non-discriminatory usage of nuclear energy and tech-nology for peaceful purposes under the absolute IAEA su-pervision is the way that has no alternative.”

The Astana gathering is scheduled to mark the 20th an-niversary of the closing down of the notorious Soviet nu-clear testing site at Semipal-atinsk in eastern Kazakhstan. The Soviet Union conduct-ed almost 500 nuclear tests at the test site for 40 years un-til the site was shut down by the president of Kazakhstan, Nursultan Nazarbayev, in de-fiance of the Soviet leadership in August 1991.

Kazakhstan President Nursultan Nazarbayev pro-posed, at the Nuclear Secu-rity Summit in Washington in April 2010, an initiative to adopt a Universal Declaration of a Nuclear-Weapons Free World, which would stipulate the commitment of all states to move towards a nuclear weapons-free world.

“We intend to actively and consistently work on pro-moting this initiative,” Saud-abayev said.

The Washington nucle-ar summit of April 12-13 achieved no binding agree-ments. Nor did it attempt to. But it nevertheless marked a significant step forward in global nuclear security, non-proliferation and international cooperation against terrorists and rogue states seeking to ac-quire nuclear weapons.

Leaders of some 47 nations as well as top officials of the United Nations, the Interna-tional Atomic Energy Agen-cy and the European Union attended the summit in Wash-ington hosted and organized by Obama.

The Obama administra-tion prepared a detailed list of measures that were already being taken by each country to ensure the security of its nu-clear installations and materi-al. It also drew up a detailed list of the additional measures that administration experts re-garded as necessary and prac-tical for each of those nations to ramp up its nuclear security.

President Obama dis-cussed these issues with each

astana Forum to add Momentum to Global nuclear Disarmament Efforts

The monument “Stronger than Death” in Semey remembers the more than 1.5 million people who suffered from radiation from 500 Soviet nuclear tests in eastern Kazakhstan

rare earths appear to be con-centrated in their geologi-cal distribution in the heart of north-Central Asia. That makes the neighbours of western China -- Kazakhstan and Kyrgyzstan -- the prime locations to look for them.

The Sumitomo Corpora-tion, the third largest trading house and a major corpo-ration in Japan, certainly thinks so. In 2010, they an-nounced a new joint venture (JV) -- the Summit Atom Rare Earth Company -- with Kazatomprom, Kazakhstan’s national nuclear corporation, to make rare earths from ura-nium tailings.

Up to now, China has not only dominated the glob-al rare earths supply, it has effectively monopolized it. More than 90 percent of rare earths produced and sold ev-ery year come from there.

But the hunger of Chi-na’s own rapid and colos-sal industrial expansion and high-tech progress is now swallowing up most of that production. In July 2010, China rocked the world mar-ket by announcing it was withholding nearly three-quarters of its previously an-nounced export quota of rare earths for the second half of this year to supply its own domestic requirements. The quota figures were slashed by 72 percent.

As a result in the second half of 2010, global prices for rare earths soared by 700 percent. In response, corpo-rations such as Glencore In-ternational AG, Stans Energy Corp and Greenland Min-erals & Energy Ltd., have led the rush to prospect and open new rare earth mines, or reopen old ones.

The term “rare earths” re-fers to 17 chemically similar elements, including neo-dymium and dysprosium. Neodymium oxide is vital

for mini-hard drives in lap-tops and headphones in Ap-ple’s iPod. Its price was just over $19 per kilogram a year ago. Now that has risen to $80 per kilogram.

This is good news for Summit Atom and the Ka-zakhs. They hope within 18 months to two years to mine up to 1,100 tons of rare earth concentrates per year for Japanese customers, Bloom-berg reported this month.

It could boost its supplies to a massive 10,000-15,000 tons by 2014-2015, the re-port said. That would be the equivalent of 10 percent of

the entire world’s annual demand today. And global demand is anticipated to al-most double to an estimated 225,000 tons by 2015.

But if Kazakhstan does succeed in becoming a ma-jor global producer of rare earths, as seems likely, will that propel it into a poten-tially tough trade rivalry with China? After all, Ja-pan’s relations with China have soured over this is-sue alone over the past six months.

That is unlikely to happen between China and Kazakh-stan. The two countries enjoy excellent trade and diplo-matic relations and they are improving all the time. Ka-zakhstan just signed a new far-reaching deal to supply high-grade uranium oxide to China to fuel its next gener-ation of civilian nuclear re-actors. China plans to build 500 of them in the next 30 years.

It is much more likely that Kazakhstan’s current coor-dination of its oil exporting policy with neighbouring Russia will frame Kazakh-

stan’s future dealings with China on rare earths produc-tion and exports.

Kazakhstan formed a new Customs Union with Russia and Belarus last summer and quickly imposed an export tax on its own oil production as the Russians wanted -- al-though it was only around 8 percent of the far higher tar-iffs the Russians impose on their own oil exports. But this relatively mild measure alone will net well over $1 billion extra per year in rev-enues for Kazakhstan.

Similarly, Kazakhstan looks likely to carefully co-ordinate its own rare earth exports to the global market with Beijing. The Chinese did not impose their latest rare earth export restrictions to destroy high-tech produc-tion of industries around the world, but just to give their own industries the first bite at the raw materials they need. They are likely to wel-come the Kazakh increase in production as a way to ease international complaints about their export cutbacks. The Kazakh move will also create a new potential supply that the Chinese can look to in the event of shortfalls in their own production.

With rare earth commod-ity prices rising around the world, Kazakhstan appears well positioned to capitalize on the boom.

From left: CNN founder and nuclear disarmament activist Ted Turner, former U.S. Senator Sam Nunn, Kazakh and international experts examine expansion plans for a plant in Ust Kamenogorsk, the site of Kazakh rare earth metals production

Nuclear Summit... see p.6

Rare Earths... from p.1

Kazakhstan intends to become an international trade and financial hub

Will encourage increased NGO participation to strengthen democracy

Meeting marks the 20th anniversary of the closing of the Semipalatinsk test site

Kazakhstan’s state-owned uranium mining company plans to invest $800 million in rare-earth mining

Page 4: KAZAKHSTAN SPOTLIGHT #1

Distributed with The Daily Telegraph

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

First, the 10 largest Mus-lim economies should form a group similar to the G8 “with the aim of creating a new dimension of econom-ic cooperation.”

Second, Islamic coun-tries should create an “in-ternational innovation hub” to help close the technology gap with the West and the rest of the world’s top inno-vators, such as Japan, Chi-na and South Korea.

Third, the World Islam-ic Economic Forum should work with the Islamic De-velopment Bank to create a fund for financing small and medium-sized Muslim businesses.

Fourth, the development bank should consider in-creasing its financing of the $1.5-billion Kazakhstan-Turkmenistan-Iran railway, which will increase trade between Central Asia and the Persian Gulf region.

Fifth, a food-assistance fund should be established to help Muslim nations in need. Kazakhstan would be a good place to locate the fund’s headquarters since the country is a major food exporter, Nazarbayev said.

The president said Ka-zakhstan’s rapid progress since independence two de-cades ago is an example of what a country can achieve by following a policy of en-lightened Islam.

“Today, Kazakhstan is trying to prove to the world

that a nation with a pre-dominantly Muslim popu-lation is capable of making major strides in socio-eco-nomic and democratic re-forms,” he said.

The keys to Kazakhstan’s success have been political stability, a comprehensive economic strategy and ac-cord among the country’s 140 ethnic and religious communities, Nazarbayev said.

Part of Kazakhstan’s eco-nomic strategy has been to facilitate Islamic banking, a move that will both help with the country’s devel-

opment and benefit con-sumers. Kazakhstan is committing billions of dol-lars of its own money and raising additional billions overseas to modernize its industry and build infra-structure such as highways, railroads and oil pipelines.

It was the first former So-viet country “to have adopt-ed laws regulating Islamic banking,” Nazarbayev said. Putting the legal framework in place led to the opening of the country’s first Islam-ic bank last year, he noted.

Although Nazarbayev

didn’t mention it in his speech, Kazakhstan also is developing halal prod-ucts, such as food and cos-metics, to serve the huge Muslim market in Central and Southwest Asia and the Middle East. The coun-try set up a halal certifica-tion system to ensure that products comply with Is-lamic law.

Nazarbayev, who has pushed for years for the world’s religious commu-nities to come together for dialogue, noted that for cen-turies “it was Muslims who demonstrated tolerance” and a “remarkably relaxed attitude to dissent.”

Yet today, he said, much of the world’s media de-monizes Islam as a “threat to global security” and to other cultures and reli-gions. “Islam is shown as a religion endorsing political violence, extremism and terrorism,” he said.

The Muslim communi-ty needs to do something about this “painful issue for all of us,” Nazarbayev said. “We must work together to build a positive image of Is-lam as a religion of peace, kindness, tolerance and jus-tice.”

Part of the solution could be a “major media project” against “the discrediting of the great teaching,” the president said.

The theme of the World Islamic Economic Forum at which Nazarbayev spoke

was “Globalizing Growth: Connect, Compete, Collab-orate.”

It was chosen partly to encourage Muslim and non-Muslim nations to work together on economic de-velopment, organizers said.

The theme also was cho-sen to remind participants that “globalization has al-so thrown up new challeng-es, like growing inequality across and within nations.” Those challenges “can and should be addressed through empowering peo-ple through business op-portunities and creating a support network to make the Muslim world a more attractive trading partner to the rest of the world,” it said.

The forum featured 150 speakers and panelists from government, business, ac-ademia and other profes-sions.

Malaysian Prime Min-ister Datuk Seri Najib Tun Razak gave one of the most provocative address-es. He called on the Is-lamic community to clean up corruption so that more rank-and-file Muslims en-joy the fruits of economic development.

The topics that forum sessions dealt with includ-ed innovative technologies, infrastructure development, alternative energy, food se-curity, Islamic banking, halal, and small and medi-um-sized businesses.

By Alex Walters

K azakhstan’s Cus-toms Union with Russia and Belarus is attracting the in-

terest of Tajikistan and Kyr-gyzstan while Turkmenistan and Uzbekistan have not ex-pressed an interest to join.

The Customs Union, which came into being in mid-2010, will create a common eco-nomic space with the free movement of goods, servic-es and labour starting in full force January 1, 2012.

The new Customs Code introduces a single standard for the goods of the Customs Union member states, which allows free movement of goods throughout the terri-tory of the three countries.

The overall gross do-mestic product of its three founding states is $2 tril-lion per year with combined annual industrial output of $600 billion. The oil re-serves of the three states amounts to 90 billion bar-rels and total annual agricul-tural output is $112 billion. Together they produce 12 percent of the world’s annu-al production of wheat and 17 percent of annual global wheat exports.

The union has gotten off

to a good start with trade volumes doubling year-on-year between Kazakhstan, Russia and Belarus and cus-toms procedures between them have become more tangible and transparent. The three CU states have a total combined annual trade volume of $900 billion.

These factors have attract-ed the attention of at least two of Kazakhstan’s Central Asian neighbours.

Kyrgyzstan and Tajikistan do not have direct access to the oil and natural gas riches of the Caspian Basin and are the two least developed na-tions in the region.

Their labour forces also are increasingly flocking to Kazakhstan’s emerging in-dustrial economy to fill a growing need for workers. And that need is likely to in-crease even further as Ka-zakhstan plans to expand its agricultural sector.

Kyrgyzstan and Tajikistan need to be able to export their relatively high qual-

ity, but costly agricultural production to the growing, prosperous markets of Ka-zakhstan.

But the new Customs Union, with its tariff pro-tection against imports, freezes out small export-dependent economies that lack the capital, populations or markets to independent-ly sustain their own growth. That means Kyrgyzstan and Tajikistan must either try to

join the Customs Union or go under.

Both these countries are also plagued with internal unrest.

Therefore, Prime Minis-ter Almazbek Atambayev of Kyrgyzstan and President Emomali Rahmon of Tajik-istan have recognized that their long-term political sur-vival rests heavily on the economic benefits of joining the Customs Union.

Immediately after becom-ing prime minister in De-cember, Atambayev flew to Moscow to establish warm

relations with Russian Prime Minister Vladimir Putin and make clear his desire to join the CU. He reiterated that desire in May.

Tajikistan’s government is also signaling clearly to Moscow and Astana that it wants to join the CU quick-ly. It wants to enter the CU right after Kyrgyzstan, a top Tajik official told a customs chiefs meeting in Russia on June 10.

“We will join to the union after Kyrgyzstan, which has already made a decision,” the AsiaPlus.tj news agen-cy reported Tajik Customs Service chief Gurez Zaripov as saying at a Customs Ser-vices Council meeting in the Siberian city of Irkutsk.

Russian customs head An-drei Belyaninov gave a cau-tious nod of approval to the Tajik statement.

Belyaninov noted that the current CU leaders have the power to decide which na-tions are admitted, but said he saw no insurmountable difficulties in Tajikistan’s desire to join.

“We must have a politi-cal will,” Belyaninov said. “If the customs officers are charged with such problem, I think we will have enough professionalism to realize it.”

customs Union success attracts Interest of central asian neighbours

coming to Austria and some European countries is pro-duced in Kazakhstan and we will be expanding our oil production. Of course, Euro-pean markets need more oil and Kazakhstan will contin-ue to provide more.Q: Do you see opportunities to diversify Kazakhstan’s trading relations with the European nations?A: During the visit of our President to France last year a large number of contracts were signed between the two coun-tries and the volume of those contracts exceeded six bil-lion dollars. Similarly we are very closely working with Ita-ly. There are a number of Ital-ian companies present here, as well as companies from Ger-many and Spain as well. They are big European players who have strong relations with Ka-zakhstan these days.

But now we’re trying to diversify our trade and eco-nomic cooperation from the energy sector to a more in-dustrial sector. We are work-ing on the important issue of industrialization of our econ-omy and certainly in order to do that we need new technol-ogies, we need expertise, we need support and investment.

We are asking our Europe-an partners: “Try to have a second look, a different look at the Kazakhstan economy not just as an energy source country but also as an indus-trial hub for the potential mar-kets in our region, including Southern Russia, Western China or Central Asia.”Q: What are Kazakhstan’s main objectives when it as-sumes the chairmanship of the Organization of the Is-lamic Conference at the end of June?A: Our first and foremost thinking is that member coun-tries of the OIC have to have a chance to assess the situation in the Middle East and then to see what can be done in order to move forward, in order to bring this organization up to date, in order to make the Is-lamic world more suitable for current economic and politi-cal conditions.

We will concentrate on oth-er important areas. First is the political and security area. Second is the economic and development issues; the third is the humanitarian. Q: Will Kazakhstan use its chairmanship of the OIC to promote the nuclear non-proliferation agenda?A: We are planning to put pri-ority on our well-known and well-developed issue which is the strengthening of the non-proliferation regime and also the facilitation of the entry in-to force of the Comprehensive Nuclear Test Ban Treaty. This is also very closely linked to the initiative of Kazakhstan to mark this year the 20th anni-versary of the closure of the Semipalatinsk nuclear test site in Kazakhstan. We have already received wide sup-port on the part of the Islam-ic countries in this respect and we are strong advocates for banning any nuclear testing anywhere in the world.Q: What other security is-sues does Kazakhstan want the OIC to focus on during the coming year?

A: The other issue that is of grave concern to us in our immediate neighbourhood is the illicit drug trafficking originating from Afghani-stan. We are trying to bring more attention of the Islam-ic countries to the problems and needs of Afghanistan, to the economic rehabilitation of this country and we are ta-bling a relevant resolution on this issue which will receive some good support.

There are a number of oth-er issues relating to securi-ty. Unfortunately, the Islamic world is not immune to pro-tracted conflicts. We will be discussing these issues dur-ing the meeting. The other important area is social and economic stability in the re-gion.

One of the important is-sues will be food security and we are planning to concen-trate on that. Food security was one of the topics dis-cussed during the World Is-lamic Economic Forum that took place at the beginning of June in Kazakhstan as well.

Q: Will Kazakhstan present its own economic strategy for the OIC during its year of chairmanship?A: In the area of economic co-operation, Kazakhstan is very much interested in raising the issue of investment opportu-nities in the Islamic world.

First, we would like to raise the awareness about the po-tential economic opportu-nities in Kazakhstan and in Central Asia. We introduced new legislation allowing us to develop the Islamic bank-ing in Kazakhstan. We are planning to also unite our ef-forts with the Islamic world in promoting the so-called Spe-cial Program on Central Asia that has been initiated by the Secretary General of the Is-

lamic Conference. Accord-ing to that program, Central Asian countries are coming up with a number of projects in the economic and social ar-ea which will be supported by the Islamic world and that would also be helpful given the fact that we have underde-veloped countries also in Cen-tral Asia.

Kazakhstan and the other Central Asian countries also belong to the group of the so-called land-locked developing countries. We all need better access to world markets, we need greater support because of the dependence on the tran-sit countries and certainly we will raise this issue during the discussion.

We will try to facilitate South-South cooperation be-tween the Islamic countries, exchange of technologies, ex-change of expertise, exchange of knowledge, trying to facil-itate economic interaction be-tween the Islamic countries.Q: How do you view the state of Kazakhstan’s relations with its two giant neigh-

bours, Russia and China?A: Cooperation with Russia is one of the main priorities of Kazakhstan’s foreign poli-cy, and Russia is our strategic partner. Kazakhstan and Rus-sia steadfastly deepen mutu-ally beneficial cooperation across the entire spectrum of bilateral relations, make joint efforts to overcome the crises in the region, coordinate eco-nomic policy in the interests not only of the two countries, but the entire region as well.

Kazakhstan and Russia co-operate in a coordinated and consistent manner.

The People’s Republic of China is also our strate-gic partner. The outcomes of the recent state visit of Pres-ident Nazarbayev to Beijing

on February 21-23 this year and of the state visit to Astana by President Ju Jintao earlier in June reaffirmed our mutual desire to enhance the strategic cooperation.

Today, China is Kazakh-stan’s second (after the EU) largest trade partner. The share of Kazakhstan’s trade with China has exceeded 17 percent in our total foreign trade. Similarly, Kazakhstan is the second trading part-ner for China among the CIS countries, after Russia.

Following the 2010 results, the trade turnover between our countries exceeded the pre-crisis figures and reached $20.4 billion.

Interaction in the oil and gas industry continues to play a key role in shaping these record levels of trade and economic cooperation. Ac-cording to the results of 2010, 10.92 million tons of oil were exported to China. At present, the work on expanding the ca-pacity of the existing pipelines by 20 million tons per year.

Partnership in the gas in-dustry seems promising. Last year, our supplies of natural gas to China totaled 4.4 bil-lion cubic meters.

Currently, the parties attach high priority to diversifica-tion of trade. It is possible to achieve it by increasing trade in products with high added value and enhancing coopera-tion in non-extractive sectors of the economies. The imple-mentation of the Action Plan to the program for intergov-ernmental cooperation in the non-extractive sectors will contribute to it. The plan cov-ers 20 projects in the spheres of agriculture, new technolo-gies, cross-border trade, trans-port and communications.

The innovation and tech-nological cooperation has high potential. The agreement with China on construction of the 1,050 km Astana-Almaty high-speed railroad reached during the state visit of Pres-ident Nazarbayev to China earlier this year was a break-through in this direction.

Kazakh Minister of Foreign Affairs Yerzhan Kazykhanov

Nazarbayev... from p.1

wanted to see how the oth-er nations fared in achieving independent economic prow-ess whilst remaining simulta-neously unified as a common state in regard to trade. Since then, the success of the CU has already made it attractive to other CIS nations.

However, the CU ratifica-tion process wasn’t an easy one. Delays to the signing had included Minsk want-ing Russia to drop its export duty on oil and oil products. However, Belarus eventually signed the treaty despite this unresolved concern.

The volume in trade growth in the first quarter of 2011 was especially wel-come to the CU nations as it came after Russia and Ka-zakhstan were both hit by one of the hottest and driest summers the Eurasian heart-land had seen in 130 years. The severe drought that fol-lowed forced Russia, one of the world’s largest wheat producer and exporters, to stop exporting grain in Au-gust of that year.

Russia also had to ask its CU partners, Kazakhstan and Belarus, to also halt grain ex-ports, worried that Russian grain would be exported via

the two countries. On July 1, Kazakhstan and

China will open a major tran-sit centre for trade at Horgos in China’s Xinjiang province near their common border, giving Chinese exporters an easy way into Central Asia and on to Europe – and Ka-zakh exporters, a road into Asia. Horgos will essential-ly also become China’s gate-way into the Russian market, thanks to the CU.

It is anticipated that as much as 80 percent of the goods that enter Kazakhstan through Horgos from Chi-na will end up in Russia. But the black market activity has been on Russia’s mind, for these concerns have domi-nated talks between Russian Prime Minister Vladimir Pu-tin and Kazakhstan’s Prime Minister Karim Massimov.

Kazakhstan, however, topped the World Bank’s 2010 survey of 183 countries for introducing pro-business reforms. It has focused on its attractiveness as an invest-ment destination.

“A positive result of the CU is growth of Russian di-rect investments by 0.5 per-cent and a registration of over 400 Russian enterpris-es in Kazakhstan for the last

few months,” Kazakh Minis-ter for Economic Integration, Zhanar Aitzhanova, said in May. These figures make the nation the most popular relo-cation point for Russian in-dustry – due primarily to the fact that Kazakhstan has the lowest tax structure in Cen-tral Asia.

Furthermore, Kazakh-stan intends to set up a 6,000 hectare Special Econom-ic Zone at Horgos, drawing industry and manufacturers to create a larger market of “Made in Kazakhstan” prod-ucts for export.

The Agency for Statistics in Kazakhstan reported that its exports to CU states in Q1 2011 grew by 57.2 percent as compared to the same period in 2010. Exports totaled $1.9 billion during that time. Ka-zakh imports from the CU grew by 46.7 percent, reach-ing $3.2 billion.

The Customs Union has increased the combined clout that Russia and Kazakhstan can now exert on global en-ergy markets.

Right after the Customs Union started operating, and to the alarm of Western oil majors, the Kazakhs imposed a tariff of $20 per tonne on their oil exports that is still

in effect.With global oil prices high

and looking likely to head higher, the Kazakhs, work-ing in coordination with the Russians, have now re-es-tablished the precedent of imposing a tariff, or export tax, on oil pumped out of the country. And they will have the option of raising it further if they think market forces can stand it.

One of the main bene-fits of the Customs Union, therefore, looks likely to be the establishment of a mini-OPEC, or sub-cartel between Russia and Kazakhstan in oil and natural gas exports.

The fact that Kazakhstan is the dominant economy of Central Asia automatical-ly also puts pressure on the least developed economies in the region – Tajikistan and Kyrgyzstan – to join the CU as quickly as possible or for-feit the loss of much of their biggest local export market. Uzbekistan and Turkmeni-stan, with their own wealthy energy economies, are far less affected.

The CU has certainly opened new borders for Ka-zakhstan – with increased trade likely from north, south, east and west.

Customs Union... from p.1

Gateway... from p.1

Kyrgyzstan and Tajikistan need to export to the markets of Kazakhstan

The European Union is Kazakhstan’s largest trade volume partner

Leaders of current and potential customs union member nations. Pictured from left: Tajik President Emomali Rahmon, Russian President Dmitry Medvedev, Kazakh President Nursultan Nazarbayev, Kyrgyz President Roza Otunbayeva, Armenian President Serzh Sargsyan, Belarus President Alexander Lukashenko

We must build an image of Islam as a religion of peace

Page 5: KAZAKHSTAN SPOTLIGHT #1

Distributed with The Daily Telegraph

By Colin Berlyne

K azakhstan’s leaders are optimistic that their country will be able to join the World

Trade Organization (WTO) by the end of 2012.

Negotiations with the Unit-ed States, the European Union and other major nations in the WTO are going well despite complications and addition-al reviews caused by Kazakh-stan’s entry into a Customs Union with Russia and Belar-us starting in July 2011.

Kazakhstan hopes to com-plete its review of trade and labour laws to win U.S. ap-proval for its accession to the WTO by the end of 2012, Economic Integration Minis-ter Zhanar Aitzhanova told a press conference in Washing-ton on May 26.

“I have learned not to make predictions of specific dates,” Aitzhanova said. “(Howev-er) we really hope everything goes smoothly to finalize (the agreement) in the course of the next year.

“We still have multilateral issues on customs formalities and trade regimes (to com-plete). Therefore, it’s taking time. … (But) we’re really hoping to complete the pro-cess by the end of next year.”

Aitzhanova said no ma-jor areas of disagreement re-

mained between Kazakhstan and the United States and the European Union about Ka-zakhstan’s accession to the WTO. She acknowledged Kazakhstan’s membership in the new Customs Union with Belarus and Russia required a thorough review and revision with U.S. officials of regula-tions. But she said the process was going smoothly and at a fast rate.

“We (still) need to final-ize these negotiations and put the technical details in order,” Aitzhanova said. “(But) U.S. experts are working vigor-ously day and night.”

“Overall, the work is go-ing well on the examination of Customs Union regula-tions (to ensure their compat-ibility with WTO accession requirements),” the minis-ter said. “We need to undergo this process.”

The accession to the WTO of a united market of three nations is unprecedented. Therefore, the three member states of the Customs Union

have agreed to continue their individual track accession ne-gotiations and simultaneously coordinate among each other the issues related to the Cus-toms Union.

Aitzhanova said U.S. trade negotiators had been very co-operative in her Washington talks.

“We have had very con-structive discussions with the U.S. Trade Representative (Ron Kirk),” she said. “We have agreed in principle on our commitments.”

Aitzhanova said Kazakh-stan still had “issues of sub-stance in the agricultural sector” to negotiate with the United States in the WTO-related trade talks. However, she emphasized, “We didn’t see (any) large differences on agriculture.”

“It is mostly (on matters of) technical assessment on the figures we are presenting,” Aitzhanova said. “(And) we didn’t have an adequate reg-ulatory framework in place for many of the services such as telephones, transportation, energy and financial services that are being reviewed.”

Aitzhanova said Customs Union operations would con-tinue normally during the WTO accession process.

“The (operation of the) Customs Union will not be interrupted by the accession

of its member states to the WTO,” she said.

The Group of Eight (G8) major industrialized nations announced at a gathering in Deauville, France, on May 27 that they hoped Russia, the largest of the three Cus-toms Union member nations, would complete its WTO ac-cession process and become a full WTO member before

the end of 2011.Kazakhstan first submit-

ted its application to join the WTO in 1996. Its bilateral negotiations with the Unit-ed States are now in their fi-nal stage.

Kazakhstan’s First Depu-ty Prime Minister Umirzak Shukeyev visited Washington in September and then met with Trade Representative

Kirk and senior White House officials. As a result of those meetings, Kazakhstan and the United States finalized their negotiations on access to Ka-zakhstan’s goods market. The bilateral negotiations were officially concluded after Ait-zhanova signed a document with U.S. Representative to the WTO Michael Punke in Geneva in November 2010.

Kazakhstan has also al-ready brought its national legislation into compliance with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) by passing amend-ments to its Customs Code.

The government and legis-lature of Kazakhstan have al-so approved amendments to national legislation on vet-erinary, plant quarantine and sanitary-epidemiological measures. These measures are of especial importance to the Kazakhs because of their ambitious program to expand their agricultural base and make their country a global grain and meat producing na-tion comparable with Argen-tina, Canada and Australia.

Aitzhanova said Kazakh-stan was also pushing ahead with more measures to stream-line its government regula-tions of industry and foreign investments in the country to improve its already favour-able climate for business and foreign direct investment.

She said the complexity of the systems to issue licenses and permits for investors has been significantly reduced.

“This year, another 30 per-cent reduction (in licenses and permits is scheduled) to be completed. These changes will enhance our investment climate,” she said.

Kazakhstan has already completed its accession nego-tiations with 24 WTO nations including Oman, Pakistan, Turkey, China, Georgia, Kyr-gyzstan, South Korea, Cu-ba, Mexico, Japan, Norway, Honduras, India, the Domini-can Republic, Bulgaria, Swit-zerland, Egypt, Israel, Brazil, Malaysia, Canada, Australia, Mongolia and Ecuador.

It is now close to comple-tion in its WTO negotiations with the 27-nation Europe-an Union, Saudi Arabia and Taiwan, along with the Unit-ed States.

Kazakhstan is attractive to foreign direct investment (FDI). It has attracted $126 billion in FDI in its nearly two decades of independence. But it is now expanding its major export industries to add rare earths mining and agriculture to its established basics of oil, uranium, natural gas, copper and other precious metals.

The country also wants to attract specific foreign invest-ment to expand its light in-dustrial base, including food processing, to take advantage of the opportunities opened up in the Russian market by the creation of the Customs Union, and across the less well developed nations of Central Asia. WTO member-ship could greatly expedite these goals.

Kazakhstan Wto accession on track for 2012

We have agreed in principle on our

commitments

Kazakh Minister for Economic Integration Zhanar Aitzhanova

By Joe Watson

A nna Fedenchuk was 17 when the Soviet secret police arrested her in 1945.

At the time, western Ukrai-nian nationalists were taking advantage of World War II to start a fight for independence against the Soviet Union.

The secret police, the infa-mous NKVD, accused Feden-chuk, a Carpathian Mountain village girl, of being part of the Bandera independence movement.

“I’m not with Bandera,” she protested – but the NKVD had already made up its mind. It shipped her off to a labour camp in Moldova, then trans-ferred her to a similar facility in Kazakhstan.

Kazakhstan recently marked the reopening of a museum in the Karaganda area dedicat-ed to the hundreds of thou-sands like Fedenchuk who spent years in the Soviet la-bour camps in what was then the Kazakh Soviet Socialist Republic. The national gov-ernment and the Karaganda Province government put up the money to modernize the museum, which is the onetime headquarters of the Karaganda Labour Camp.

Kazakh President Nursul-tan Nazarbayev supported the modernization of the muse-um, saying that Kazakhs need to remember the repression in the camps so history will not repeat itself. The country has launched similar initiatives to ensure that Kazakhstan does not forget the victims of four decades of Soviet nuclear test-ing in the Semipalatinsk area. A notable success was con-vincing the United Nations to proclaim August 29 of each year as the International Day against Nuclear Testing.

The Karaganda labour camp’s commonly used ab-breviated name of Karlag comes from the first three letters of Karaganda, the lo-cation of the camp’s head-quarters, and the first three letters of “lager,” which means “camp” in Russian.

Fedenchuk lost the best 10 years of her life – from the ag-es of 17 to 27 – in the Karlag and other labour camps in Ka-zakhstan for a crime she nev-

er committed. Her mother and sister suffered the same fate.

Fedenchuk recalls arriv-ing from the Moldova la-bour camp weighing only 92 pounds. Her weight im-proved very little in the Ka-zakh camps. The labourers got a meager ration of bread and occasionally other food, and were constantly hungry.

Fedenchuk and her mother and sister were declared “re-habilitated” and freed from the camps in 1956. Her mother and sister returned to Ukraine, but Fedenchuk had been in Ka-zakhstan so long that it seemed home. So she stayed on, taking a job as an equipment operator in a coal mine.

Karlag, which opened in 1931 in Dolinka, was one of the largest of the labour camps that the NKVD operated across the Soviet Union from the 1920s until Premier Niki-

ta Khrushchev ordered the fa-cilities closed in 1959. Karlag occupied lands and facitilies across an area 290 kilometers long and 193 kilometers wide.

Most Karlag labourers worked in agriculture or in coal mines – mainstays of the Karaganda-area economy even today.

In addition to sending tens of thousands of people to Ka-zakhstan’s labour camps, So-viet leader Josef Stalin ordered millions of members of eth-nic groups whom he distrust-ed exiled to Kazakhstan from the 1930s to the 1940s. They included Koreans, Chech-ens, Germans, Ukrainians and many others.

Although Karlag residents included criminals such as thieves, many were dissidents or were there simply because they belonged to professions or socio-economic groups that Soviet leaders were suspi-cious of. They included cler-gy, intellectuals and anyone of even modest means, including farmers and merchants.

Karlag’s intellectuals in-cluded Alexander Solzhenit-syn, who portrayed the Soviet

Union’s network of labour camps in his book “The Gu-lag Archipelago,” and anthro-pologist Lev Gumilev, whose studies of nomad civilization have made him a revered fig-ure in Kazakhstan.

The repression that the So-viet system visited on Ka-zakhstan occurred both inside and outside the camps.

One of the darkest chapters in Kazakhstan’s history was the Soviets’ forced collectiv-ization of agriculture begin-ning in the late 1920s.

NKVD officials and Red Army troops swooped onto the steppe to force hundreds of thousands of nomads to give up their wandering existence in favour of life in one place – a collective farm.

The Karlag museum shows a scene of the terror that the Soviets inflicted on the no-mads. It depicts Red Army

troops taking the possessions of a nomad family and forc-ing them to go to a farm. The family members are wax-mu-seum-type, lifelike depic-tions, and they clearly show the fear etched on a little no-mad girl’s face.

The forced collectiviza-tion of Kazakhstan’s agricul-tural and livestock sectors led to more than 1 million Ka-zakhs starving during the ear-ly 1930s, historians say.

Half of the country’s nomads – an estimated 1.3 million peo-ple – fled with their livestock to surrounding countries such as Mongolia and China rather than be collectivized.

Anyone who resisted collec-tivization was sent to a labour camp or prison, or shot.

Kazakhs rose up to resist collectivization in major re-bellions in 1929 and 1931. But their crude arms were no match for the Red Army’s modern weapons, which in-cluded machine guns. Many of the rebels were killed.

Like all of the Soviet gu-lags, Karlag was a state within a state. It had its own judicial and postal systems, for exam-

ple. Local officials had no say in its operation. The NKVD was its one and only master.

The Karlag museum has three floors. The first focus-es on the history of Soviet re-pression in Kazakhstan from the 1920s to the 1950s. It de-picts forced collectivization of agriculture and what life was like in the camps.

One display is of a typi-cal labourer’s room. It looks like a rough-hewn cabin, and the only furnishings are a ti-ny wooden table, a chair and a few tools.

Another scene shows a white-robed scientist at work with basic laboratory equip-ment, including a microscope and vials.

Many of the biologists, bot-anists, animal-husbandry ex-perts and other scientists at the camp conducted research that improved agricultural and livestock production. Scientist Anna Lanina, for example, de-veloped a cattle breed known as the Kazakh Whitehead.

The museum’s second floor is devoted to the labourers themselves, with records of camp residents ranging from agricultural workers to intel-lectuals. Altogether, the mu-seum’s three floors include records and mug-shot-type photos of 146,000 residents.

The museum’s basement floor depicts the jails and pris-ons where labourers were sent when they crossed the camp masters. It didn’t take much to be put into confinement.

Labourers were forbidden to contact relatives or friends outside the camps. So one day, when Fedenchuk was being transferred from one camp to another, she purposely dropped a letter on the road. Her hope was that someone would find it, and mail it to her brother.

Instead, another labourer saw what she’d done and re-ported her.

“I was kept in a jail cell for five days because of the let-ter,” she said. During the con-finement the total amount of food she received was 300 grams of bread.

One of the saddest features of camp life was what hap-pened to the labourers’ chil-dren. Mothers were allowed to raise babies until the chil-dren were 3 years old.

“After that, the children were taken to orphanages,” said Marly Maskill, an Amer-ican Peace Corps volunteer from Ann Arbor, Michigan, who gave English-speak-ing visitors a tour of the Kar-lag museum on its dedication day, May 31. “The conditions in the orphanages were very poor, and many of the chil-dren died.”

When orphans became 15, Maskill said, they could be given the same “enemies of the state” designation that their parents had been given. Many did receive the designa-tion and were forced to work

labour camp Museum Is reminder of Past repression

Wax figures of inmates recreate the horrific conditions of the camp

KazaKhstanPromoting Stronger Dialogue and Better UnderstandingOn June 28, 2011, Kazakhstan will assume the Chairmanship of the Council of Foreign Ministers of the Organisation of The Islamic Conference, a 57-nation organization representing 20 percent of the world’s population.

During its chairmanship, Kazakhstan will work to improve security

for all, address social and economic problems and champion the

development of science, technology and environmental protection.

At this critical moment in history, when the world faces

unprecedented challenges and remarkable transformations,

Kazakhstan will work tirelessly to promote a greater dialogue

and better understanding between cultures and civilizations.

Kazakhstan’s experience as a multi-ethnic and multi-religious

tolerant society can facilitate this critical dialogue, helping to

foster peace, mutual understanding and a safer world.

www.oic2011-2012.kz

www.mfa.kz

in the camps as well.Dolinka has a children’s

cemetery where a lot of the labourers’ youngsters are bur-ied. In a stark reminder of So-viet indifference toward the labour-camp system, many of the grave markers identify the dead not with names but numbers.

Fedenchuk was one of a number of camp residents and children of residents who attended the museum ded-ication ceremony, but she couldn’t bring herself to en-ter the museum.

“I don’t need to see the mu-

seum to learn about life in the camps,” she said. “I was in them for 10 years. I don’t need to be reminded of what I went through.”

A speech written by Naz-arbayev and read at the dedi-cation ceremony by the deputy chairman of the Assembly of Peoples of Kazakhstan, Yera-ly Tugzhanov, seemed to have Fedenchuk and millions like her in mind.

“The memory of millions of people of different ethnicities and religious beliefs, who suf-fered from the totalitarian sys-tem” yet did nothing wrong,

“has always been and will be sacred,” Nazarbayev wrote.

Kazakhstan has worked hard for justice for them – and for those who have come after them, he said.

In addition to Tugzhanov, other dignitaries at the dedi-cation included Deputy Minis-ter of Culture and Information Gaziz Telebayev; Dukuvakh Abdurakhmanov, chairman of the Parliament of the Rus-sian Federation’s Chechen Republic; Professor Mambet Kulzhabayuly, a prominent re-searcher on Stalinist repres-sion, and Tamara Lavrenenko,

president of the Astana-Baiter-ek women’s club.

Many of those attending the dedication went on to a flower-laying ceremony at the Spassky Memorial Com-plex, which marks the graves of prisoners of World War II whom the Soviets forced in-to labour during and after the war. More than 5,000 prison-ers died and were buried at the complex’s cemetery.

Many Kazakhs want such events to continue annually so that the lessons of the past are not lost on the younger generation.

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

People need to be reminded of past repression so history doesn’t repeat itself

Page 6: KAZAKHSTAN SPOTLIGHT #1

By Joe Watson

T ota Amirova, Ka-zakhstan’s only fe-male airline captain, was born with an apt

first name for her profession.“Tota” is a nickname for

“Toty” (pronounced as Toe-tyh) -- which means “fire-bird” in Kazakh -- and from the time Amirova was a girl, piloting was all she wanted to do.

In 2007, Kazakhstan’s flagship carrier Air Asta-na gave her the ultimate rec-ognition for her 20 years of cockpit experience: It made her first pilot, or commander of the ship. That means she’s in charge of every flight she’s on, making the crucial deci-sions that keep the journey comfortable and safe.

Not only did she become the first female airline cap-tain in Kazakhstan, she also became the first in all of the former Soviet Union.

And last year she was one of only two women captains of big passenger planes in the world, according to interna-tional airline records.

The number of female Ka-zakh pilots is likely to in-crease, however, as an Air Astana program to train more Kazakhs as commer-cial-airline pilots enrolled its first woman in 2009, Po-lina Pavlova.

The fact that the 42-year-old Amirova could rise from humble circumstances in the eastern Kazakhstan village of Besterek to a prestigious profession dominated by men is a testament to her de-termination.

Amirova remembers 2006 as the year she went all out

to become a captain. She said she was flying so much to en-sure that she could meet the rigorous qualification crite-ria “that I was virtually liv-ing on the plane. I barely had enough time to go to fitness centers and swimming pools in hotels to lift the physio-logical stress with physical exercise.”

Her commitment not on-

ly earned her a captain’s rank but also a top-pilot award. The Commonwealth of In-dependent States’ Interna-tional Aviation Committee named her one of the three best pilots in the former So-viet Union in 2007.

Amirova said many men have raised their eyebrows over the years about the field she’s chosen. But they’ve all

been non-pilots.“Pilots are a special cat-

egory of people,” she said. “Their reaction depends on-ly on whether you can fly or you can’t.”

Amirova, who flies both Boeings and AirBuses, said becoming a pilot isn’t easy, whatever your gender. “Only six to seven percent of men are theoretically capable of becoming pilots,” she said.

Because it’s so important to license only pilots who can react to any contingency, the weeding-out process is most intense in the early stages of training, Amirova said.

The thousands of hours of practice occur in all kinds of weather. And the constant re-sponsibility takes a toll not only on the mind but on the body, Amirova said.

Flying a plane requires in-credibly fast thinking, she said. And “one must not think ahead of the plane or lag be-hind it.” The thinking must coincide only with what’s happening at the moment.

All of Amirova’s flying has been for Kazakhstan airlines. In addition to Air Astana’s predecessor, Air Kazakhstan, she was a pilot at Kazakhstan Aue Zholy and Euro-Asia Airline.

She’s turned down high-er salary offers at carriers in other countries to continue blazing a trail in her home-land.

One question she’s been asked over the years is whether she’s an extreme-sports type. The implication behind the question is she be-came a pilot because she’s a thrill-seeker.

Her reply is that she doesn’t go in for extreme sports – and

in her opinion extreme-sports types shouldn’t be allowed in a cockpit.

“No one has a right to put the lives of passengers at risk,” she said. “One can do with his own life what he likes. But not when there are passengers behind your back. In this cabin you have no right to take any risks what-soever.”

Amirova trained early-on at the Institute of Civil Avi-ation in Riga, Latvia. She’s subsequently trained in many other countries, including Britain, Germany, France, Greece, Turkey and the Unit-ed Arab Emirates.

There are pilot training schools in the Kazakh cities of Almaty and Aktobe, but they fall short of overseas programs, Amirova noted in an interview a few years ago.

A key problem is that the schools lack the modern air-craft and training equipment that students need for mas-tering today’s skills, accord-ing to those familiar with the situation.

The Soviet Union had ex-cellent pilot training schools, Western experts have noted, but many have deteriorated since it broke up.

Air Astana began send-ing young Kazakhs to the Pilot Training College in Melbourne, Florida, some years ago as a way of devel-oping home-grown talent.

A major reason for the car-rier’s decision was a pilot shortage affecting airlines throughout the former Soviet Union. It stemmed from the fact that many fliers who had earned their wings during So-viet times were retiring.

Distributed with The Daily Telegraph

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

shanghai security Group holds summit in astana

By Alex Walters

ASTANA – There were no surprises but many significant developments when the lead-ers of the world’s most pop-ulous international security organisation met at their annu-al summit in Astana, the capi-tal of Kazakhstan, on June 15.

The Shanghai Cooperation Organisation (SCO) contains Russia, China and four of the five former Soviet repub-lics of Central Asia – Kazakh-stan, Uzbekistan, Kyrgyzstan and Tajikistan. (Only Turk-menistan of the five Central Asian states has never joined it). The Astana summit was held on the 10th anniversary of its founding on in the Chi-nese city of Shanghai on June 15, 2001.

Hosting the summit, Ka-zakhstan’s President Nursul-tan Nazarbayev urged the SCO to create a new regional security group within it.

“I propose creating a con-ference on the resolution of territorial and regional con-flicts to take preventive action in potential trouble spots with-in the SCO area of responsi-bility,” he said.

This body would focus on

decision-making and decid-ing on appropriate action to head off the kind of violence that rocked Kyrgyzstan, one of the smallest and least de-veloped nations in the SCO, a year ago.

Several hundred people were killed in ethnic clashes between majority Kyrgyz and minority Uzbek communities in the southern Kyrgyzstan cities of Jalalabad and Osh then. The SCO, for all its suc-cess in maintaining peace and external security across Eur-asia over the past decade, was reduced to the role of being a passive observer.

Nazarbayev said the new conference body was neces-sary to head off and respond to similar crises in SCO mem-ber states in the future.

“We observed conflicts and coups in neighboring Kyr-gyzstan and our organization was unable to do anything,” he said.

The six SCO presidents al-so focused on issues of re-gional stability and security, as well as the ongoing trans-national struggle against ter-rorism, human trafficking and the drug trade.

On June 14, the day before

the summit, the SCO and the United Nations signed a new agreement to boost their partnership in fighting the drug trade cross Eurasia. The signing ceremony was attended by SCO Secretary General Imanaliev and Ex-ecutive Director of the UN Office on Drugs and Crime Yury Fedotov.

The new SCO drug war strategy will be framed as a five year plan from 2011 to

2016, SCO Secretary-Gener-al Muratbek Imanaliev told a press conference in Beijing on June 2. He said the drugs scourge remained the biggest threat to peace and prosperity in the region

The SCO leaders at the summit approved a new mem-orandum that allowed them to launch talks with three na-tions – India, Iran and Pak-istan – about joining the organization as full members.

All three countries have en-joyed observer status with the SCO since 2005. The process of starting consultations with them will start after the sum-mit, but it is expected to be a long-drawn-out one.

Iran is currently precluded from joining the SCO as a full member because it is still un-der United Nations sanctions over its nuclear development program. India and Pakistan have fought several wars and

tensions between them remain high. That would make the ac-cession of either major nucle-ar-powered nation, or of both of them, to the SCO potential-ly difficult.

In a summit communiqué, the SCO nations promised to boost their cooperation with observer states and dialogue partners, further expanding their already great joint influ-ence across Eurasia.

Indian External Affairs

Minister S. M. Krishna repre-sented India at the summit.

Pakistan’s President Asif Ali Zardari expressed his op-timism that his country could soon become a full SCO mem-ber nation.

“We hope that our mem-bership application will be put on a fast track,” he told SCO leaders. “In the meantime Pakistan will participate in all of the SCO’s peace and devel-opment programmes.”

“We would like to coop-erate with regional countries in the financial and banking sector, the setting up of joint ventures, educational, infra-structural and theological pro-grammes,” Zardari said.

The future in that area looks bright. Russian Presi-dent Dmitry Medvedev said the group should create an economic cooperation “road map” by the end of this year to launch major cooperative regional initiatives.

“I think that this document should be worked out and ap-proved by the end of the year and implemented without de-lay,” he said.

These programmes are ex-pected to include the creation of a new joint venture fund,

a United Business Coopera-tion Center and the creation of a special account for fund-ing project feasibility studies, Medvedev added. “I think the issue is overdue and almost all the states are ready for a deci-sion,” he said.

Nazarbayev praised the progress the regional securi-ty organization has made over the past decade. Kazakhstan oversaw the SCO in the sec-ond half of 2010 and the first half of 2011.

“We have built a solid con-tractual base and the Region-al Anti-Terrorist Structure, maintained close contacts be-tween the competent bodies, conducted counterterrorism exercises, and exchanged cor-responding information on persons and organizations ac-cessory to extremist, terrorist and separatist activities. Be-sides, we witness enhanced cooperation in the fight against drug and arms trafficking, transnational crime, and ille-gal migration,” he said.

In his speech at the summit, Chinese President Hu Jintao set the stage for his coun-try’s 2011-12 role of chair-ing the organization. He said the SCO member states need-ed to step up their fight against “the three evil forces” of sep-aratism, extremism and terror-ism, as well as keeping up the

fight against organized crime and drug trafficking.

Hu Jintao also re-em-phasized the importance of expanding economic cooper-ation between the SCO mem-ber nations.

“China will continue deliv-ering preferential loans to oth-er SCO members and try to turn the Euro-Asia Econom-ic Forum and the China-Asia-Europe Expo into regional economic cooperation plat-forms so as to better promote regional economic develop-ment and prosperity,” he said.

On June 15, Kazakhstan formally handed over SCO leadership to China.

Afghanistan has also ap-plied for observer status with the SCO. The summit stopped short of approving that, but Russian President Medve-dev gave the Afghans an en-couraging message. “Russia is calling for more intensive and deeper cooperation be-tween the SCO and Afghan-istan,” he said.

Medvedev emphasized that all of the participants of the summit endorsed his view-point.

“Eventually, the process of political stabilization in Af-ghanistan depends on this [ex-tended cooperation with the SCO], and the security of our states on a great degree de-

pends on the situation in this country,” the Russian pres-ident said. Afghanistan has formally filed an application for the observer status and it is expected he will be granted that soon.

The summit positioned the SCO to take major steps to-wards increased economic integration between its mem-ber states. The six presidents even discussed the possibil-ity of creating a new reserve currency to boost trade be-tween them. That issue will be explored further by the time the prime ministers of the six countries next convene in Moscow in half a year’s time.

Speaking in Moscow on June 2, SCO Secretary-Gener-al Imanaliev assessed Kazakh-stan’s year-long chairmanship of the SCO as a successful and substantial one. He said during those 12 months, the organisation had made signif-icant progress in the fields of security cooperation, defence, foreign affairs, internal affairs, health, and culture.

The SCO “has become an important factor for security and stability in this region”, Imanaliev concluded.

The 10th anniversary sum-mit built on that founda-tion. The SCO is here to stay, and its regional clout is still growing.

SCO Secretary General Muratbek Imanaliev

leader and took the initial steps to providing U.S. assis-tance where necessary to help achieve them. The summit, therefore, while not produc-ing any sweeping diplomat-ic agreements, laid down the template for a new structure of international cooperation on improving nuclear securi-ty with the United States at its centre.

Obama intended the Wash-ington gathering to be the first step on what he recognized would be a long and complex path for the major nuclear na-tions of the world. With his approval, U.S. planners of the summit arranged that every participating nation appoint one key official (a Sherpa) to arrange and coordinate their involvement in the meeting and to direct the measures that their individual governments would undertake to achieve the conference’s goals.

Together, the Sherpas from the 47 participating nations now have created their own global network to further the cause of nuclear non-prolif-eration.

The Sherpas will also work towards achieving anoth-er diplomatic milestone that President Obama has planned: a second global non-prolifera-tion and nuclear summit to be held in South Korea in 2012 before the end of his first term of office. At that meeting, world leaders will assemble again to see how far they have come since their Washington meeting to present their own governments with the next round of goals to boost glob-al nuclear security.

Kazakhstan, the world’s ninth largest country with a population of 16.5 million, is far smaller in population than the United States, Russia or India. But Nazarbayev played a prominent role at the sum-mit with the full approval and encouragement of Obama be-cause the U.S. government wanted to present Kazakh-

stan as a model nation for the cause of unilateral nuclear disarmament.

President Nazarbayev ad-vanced proposals at the Wash-ington summit to create an international nuclear fu-el bank, strengthen the legal norms for nuclear weapon free zones, and create new nuclear weapon free zones, including in the Middle East. He also pushed for the prompt signing of a Fissile Material Cut-Off Treaty and the swift entry in-to force of the Comprehensive Nuclear Test Ban Treaty.

“It is time already to start discussing the adoption of a Universal Declaration of a Nuclear-Weapons Free World,” President Nazarbayev stressed.

Affirming that Kazakhstan supported fully the summit and its goals, the Kazakh lead-er said that in June 2010 Asta-na was to host a conference on the Global Initiative to Com-bat Acts of Nuclear Terrorism, which it did. The conference became an opportunity to dis-cuss developing measures and mechanisms to respond to ter-rorist efforts to acquire nucle-ar materials across the board, including all the way up to es-tablishing a special body un-der UN auspices.

More importantly, in No-vember 2010, Kazakhstan and the United States announced the successful completion of a joint project to secure almost 800 nuclear bombs worth of uranium and plutonium in spent fuel.

The ambitious and labori-ous project, co-financed also by the United Kingdom and carried out under the safe-guards of the IAEA, consisted of shutting down Kazakh-stan’s BN-350 plutonium pro-duction reactor in Aktau on the Caspian seashore, secur-ing the spent fuel produced by it, and safely transporting the depleted fuel to the new long-term storage facility at the former Semipalatinsk nu-clear test site.

In Washington, DC, U.S. Senator Richard Lugar, a prominent authority in nuclear disarmament matters and the co-founder of the Nunn-Lugar Cooperative Threat Reduction programme, hailed the com-pletion of the project as an-other example of the strong cooperation between Kazakh-stan and the United States.

Former U.S. Senator Sam Nunn called this project “a sig-nificant achievement that will make the world safer and re-duce the risk of nuclear terror-ism,” He added that in 2005, the Nuclear Threat Initiative worked with Kazakhstan to complete a project at the same reactor, removing and blend-ing down the fresh fuel con-taining 2,900 kilograms of weapons-usable highly en-riched uranium. That blending down was done at Kazatom-prom’s Ulba Metallurgical Plant in Ust-Kamenogorsk.

“Kazakhstan has a solid history of nuclear non-pro-liferation and disarmament. The country showed cour-age and leadership when it renounced the nuclear weap-ons remaining on its territo-ry, after the dissolution of the Soviet Union. Kazakhstan’s leadership understands that the essential steps required to reduce nuclear dangers must be accomplished with the co-operation of all nations,” Nunn added.

Kazakhstan and the USA, along with partners across the world, are now working to se-cure vulnerable nuclear mate-rial by the end of 2013 in order to prevent a possibility of ter-rorists’ acquiring them.

The Astana gathering in Oc-tober will have a wider goal, beyond securing vulnerable nuclear materials. By inviting the top international leaders from countries such as Russia, the United States, the United Kingdom and others, Kazakh-stan hopes the October forum will help generate and main-tain the global momentum to-wards nuclear disarmament.

Nuclear Summit... from p. 3Kazakhstan’s First Female airline Captain Commands Region’s skies

Presidents of the six SCO member states pose for a family photo at the Astana summit on June 15. From left: Islam Karimov of Uzbekistan, Hu Jintao of China, Nursultan Nazarbayev of Kazakhstan, Dmitry Medvedev of Russia, Emomali Rakhmon of Tajikistan, and Rosa Otunbayeva of Kyrgyzstan

Female Pilot... see p.7

The six SCO presidents focused on regional security and combating terrorism,

human trafficking and drugs

Air Astana Pilot Tota Amirova is Central Asia’s first female commercial airline captain

Page 7: KAZAKHSTAN SPOTLIGHT #1

Distributed with The Daily Telegraph

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

By Joe Watson

K azakhstan’s bank-ing sector contin-ues to recover from the global finan-

cial crisis of 2008 and 2009, but the rebound hasn’t been fast enough to suit many ex-perts and its strength has var-ied from bank to bank.

The main problem is a con-tinuing increase in banks’ bad loans. The face value of loans on which no principal or in-terest has been paid for three months has jumped 12.8 per-cent this year -- from $14.9 billion on January 1 to $16.8 billion on May 1. Bad loans now make up 26.4 percent of banks’ $63.4 billion portfolio.

On June 15, Daniyar Ak-ishev, deputy governor of Kazakhstan’s National (Cen-tral) Bank, announced in the country’s Parliament that the National Bank has set up a Problem Loans Fund. Such a fund would buy out bad loans as a way of giving the most debt-ridden banks a fresh start.

“We hope this company will start working, amendments to the tax law are needed, and if approved, this company, we think, will be successful. It will allow cleaning up the banks’ loan portfolio allowing them to restart giving loans,” Akishev told the members of Parliament’s lower house, Majilis, as he presented a bill to regulate the work of sec-ond-tier banks and minimize the risks of bankruptcy.

But many questions need to be answered about the size, scope and workings of such a fund. So it may be some time before it fully emerges.

Kazakhstan’s banking pic-ture is not all gloom, however. Here are some positive signs:

-- Banks are profiting from the resurgence of two engines of the economy, petroleum and minerals companies, which are cashing in on high commodity prices.

-- The amount of money that Kazakh banks owe over-seas financial institutions is plummeting. Last year alone the total fell by 33 percent to $20 billion, half of the figure at the height of international borrowing in 2008.

-- Restructurings are restor-ing the profitability of BTA

Bank, Alliance Bank and Temirbank, which the govern-ment had to take over during the financial crisis.

-- A few domestic banks have turned around losses or are achieving higher prof-its than other financial in-stitutions because of sound business strategies and solid management.

-- Most foreign-owned banks in Kazakhstan are do-ing well.

-- Islamic banking has come to the country, thanks to an aggressive government promotion effort.

Balanced against the pos-itives, however, are a num-ber of problems besides bad loans:

-- Foreign banks, once the main source of capital for Ka-zakhstan banks, are sending little money to the country’s financial institutions after be-ing burned during the finan-cial crisis.

-- Banks’ loan portfolios for 2011 are forecast to be flat. That’s a negative sign because loan income is a key source of banks’ revenue.

-- The recovery of the three restructured banks – BTA, Al-liance and Temirbank – is ex-pected to be slow.

The reason that bad loans are such a drag on banks is that regulations require finan-cial institutions to set aside money to cover losses stem-ming from loans becoming unrecoverable. Since banks can’t use the set-asides to generate cash, the “provision-ings” limit their profits.

What to do about bad loans is a vexing problem for any country whose banking sector is weighed down with them.

The International Monetary Fund, the European Bank for Reconstruction and Develop-ment and other global finan-cial institutions have urged Kazakhstan to create a toxic-assets fund. Earlier this year, the governor of the country’s central bank, Grigory March-enko, has pledged to do so. In fact, Marchenko said, the fund may issue more than $1 billion in bonds to buy bad loans from banks.

But, according to an in-ternational financier famil-iar with Kazakhstan, there are practical problems with creating a toxic-assets fund,

announced by Marchenko’s deputy, Daniyar Akishev, earlier in June. “For example, how much of a discount will the fund buy bad loans for? Banks will want the smallest discount they can get -- say, 50 percent of the face value of the loan. But those buy-ing the bad loans will want a

much higher discount – say, 80 percent.”

In addition, as Akishev rightly pointed out, Kazakh-stan needs to change its laws before creating a toxic-assets fund, said the banker, who asked not to be identified. That’s because current laws provide no tax breaks to banks

that write off bad loans.Marchenko, whose effec-

tive stewardship of the cen-tral bank has led to his being mentioned as a contender for IMF managing director, has said publicly that no toxic-assets fund can be created until Kazakhstan’s banking laws change.

Since a revision could take months, Kazakhstan may be unable to address the bad-loan problem the rest of the year. That means banking-sector improvement in 2011 is like-ly to be incremental, the inter-national financier said.

His prognosis echoes what others are saying.

Yelena Bakhmutova fore-cast in February that there would be no growth this year in Kazakhstan banks’ loan portfolios, normally an im-portant profit point. She made the prediction as head of the now-disbanded Financial Su-pervision Agency, whose reg-ulatory duties the central bank has absorbed.

Bakhmutova said that “with regard to profitability, the sit-uation (in 2011) will be better than last year,” when many banks lost money or had mea-ger profits.

The implication is that Bakhmutova, who was viewed as one of the candi-dates to head any toxic-assets fund that Kazakhstan creates, anticipates only moderate earnings increases at most fi-nancial institutions.

The fact that Kazakhstan banks are no longer able to acquire overseas loans has

made it much more difficult for them to generate work-ing capital, experts say. Dur-ing the go-go years preceding the financial crisis, Kazakh-stan banks borrowed heavi-ly from overseas banks at low interest rates, then loaned the money domestically at much higher rates.

But “credit flows into the country are unlikely to return to pre-crisis levels,” Business Monitor International said. That means “the onus for growth (of the banking sec-tor) will lie increasingly on domestic sources of financ-ing,” it concluded.

Some Kazakhstan banks are expecting a banner year in 2011, however.

The country’s second-larg-est, Halyk Bank, sees earn-ings soaring 24 percent to $310 million as it issues more loans and the quality of its loan portfolio improves.

Kazakhstan’s Samruk Ka-zyna sovereign wealth fund took a 27 percent stake in Halyk during 2009 when the bank appeared financial-ly shaky. Halyk rebounded so nicely during 2010 that it repurchased the shares this year.

Another financial institu-tion that is poised for a prof-it surge this year is Eurasian Bank, which turned an $8.9 million loss in 2009 into a $5.3 million profit last year under a new management team.

The turnaround came dur-ing Chairman Michael Eggle-ton’s first full year on the job. Eggleton, an American who is the only non-Kazakh to head a Kazakh bank, began over-seeing Eurasian Bank in Oc-tober 2009.

Kazakhstan’s largest bank, Kazkommertsbank, expects a 2011 profit 5 to 10 percent larger than last year’s $149 million despite a flat loan portfolio. Earnings were in the forecast range in the first quarter, coming in at $40.6 billion or 6 percent more than in the first quarter of 2010.

A worrisome sign, however, was that the percentage of bad loans in Kazkommertsbank’s portfolio rose from 25.2 per-cent at the start of the quarter to 27.7 percent at the end.

Most foreign financial in-stitutions in Kazakhstan are performing well, benefiting from the ability of cheap cap-ital from their home opera-tions, experts say.

One of the leaders is Rus-sia’s Sberbank, which expects profit from its Kazakhstan op-eration to rise 15 percent to $21 million this year. Sber-bank is planning to triple its investment in Kazakhstan to $1 billion as it tries to in-crease its market share from the current 2 percent to 5 per-cent in 2015.

Kazakhstan officials have been trying for months to con-vince Sberbank to take over BTA, the largest domestic bank to default in 2009. But Sberbank has been cautious.

The recovery of BTA, which was once Kazakhstan’s top bank, is a work in prog-ress, although it posted an $11 million profit in the first quar-ter of 2011. It went through a restructuring in 2010 that re-

duced its debt by 75 percent from $16.7 billion to $4.2 bil-lion, stiffing lenders in Eu-rope and the United States.

BTA is suing its former chairman, Mukhtar Ablyazov, who is now avoiding prosecu-tion by living in Britain, to try to recover $4 billion. The now government-owned BTA says Ablyazov loaned the money to himself, then used it to buy overpriced property in Russia that subsequently crashed.

The outcome of the case is one of the issues clouding BTA’s future, along with a re-cent report that the bank may have underestimated its bad-loan total by up to 10 per-cent. The report came from Nick Dove, director of Lon-don-based John Howell and Co., which BTA hired as a consultant.

Alliance Bank, Kazakh-stan’s second-largest financial institution to fail in 2009, lost $11 million in the first quar-ter of 2011. Its restructuring last year eliminated $3.8 bil-lion or 57 percent of its $6.7 billion debt.

Islamic banking has giv-en Kazakhstan officials who have watched the sector strug-gle something to smile about – although its impact in the country is expected to be lim-ited for some time.

Kazakhstan revamped its financial laws recently to fa-cilitate the introduction of banking that complies with Islamic law. That led to the opening of Kazakhstan’s first Islamic bank – Al Hilal of the United Arab Emirates – in March of 2010. Other Islam-ic banks have signaled they will set up shop in Kazakh-stan, too.

President Nursultan Naz-arbayev spearheaded the ef-fort to attract Islamic banks. He thought they would be another good source of fi-nancing for Kazakhstan’s ambitious program of indus-trial and infrastructure devel-opment.

As with any industry, a close look at Kazakhstan’s banking sector reveals a com-plex tapestry of things going right and things that could be improved. Bankers and those who regulate the industry are working through the problems with an eye toward long-term stability and prosperity.

Kazakhstan’s Banking sector Rebounds, Progress Mixed

Kazakhstan’s BTA Bank successfully restructured following the global financial crisis

By Joe Watson

K azakhstan has en-tered the lucrative aircraft-manufactur-ing business.

Partnerships have already been established with Russian and French companies, and talks are under way toward the creation of a joint venture with a Ukrainian company.

The partnership with the Russians will produce crop-dusting planes, the venture with the French – helicopters, and the partnership with the Ukrainians -- short- and me-dium-range passenger planes.

The crop-duster venture will be a manufacturing oper-ation from the start. The other two will likely begin with as-sembly, then gravitate to man-ufacturing.

Because aircraft are such high-tech products, the be-ginning of their manufacture in Kazakhstan will help meet two government goals: creat-ing more value-added prod-ucts at home and having more Kazakhs working in high-tech and innovative jobs.

All of the ventures will produce aircraft for the do-mestic market, but plans are for production to be export-ed as well.

The KazAviaSpektr joint venture with MVEN of Ka-zan, Russia, will produce Sunkar Farmer 2 and Farm-er 500 planes that spray in-secticides and herbicides on fields.

A $25 million plant be-ing built in the village of No-vouzenka, near Karaganda, will help Kazakhstan replace hundreds of its aging Antonov An-2 crop-dusters.

“This will not be just as-sembly work, but full-cycle production,” Kazakhstan’s Transportation Ministry said in announcing the partnership last fall.

The facility is expected to produce 50 aircraft in its first

year – 2012 – and up to 500 a year by 2015.

Sunkar aircraft can spray up to 120 hectares in an hour at a cruising speed of 130 ki-lometers an hour.

Alexander Vaschenko, the director of KazAviaSpektr, said Kazakhstan took into ac-count the country’s geogra-phy and climate in choosing Sunkar aircraft over lots of competing models.

A bonus, Vaschenko said, is that the Sunkars’ advanced reciprocating engines al-low them to burn “car petrol, which is very important when there’s an insufficient amount or lack of aviation fuel.”

The Sunkars will sell for a relatively modest $145,000 apiece, the joint-venture partners said. That’s less than the cost of a new trac-tor, so many farming oper-ations will be able to afford the planes, according to agri-cultural officials.

Kazakh President Nursul-tan Nazarbayev said when the crop-duster venture was an-

nounced that the Sunkars will be vital to the country’s ef-fort to increase its agricultural production.

The country has become one of the world’s top grain exporters, but wants to in-crease its output even further.

That will require top-flight equipment, such as a new generation of crop-dusters, Nazarbayev said.

As for the helicopter joint venture, Kazakhstan Engi-neering’s partnership with France’s Eurocopter will as-semble the EC 145 models at a new facility in Astana.

The agreement also pro-vides for training and a maintenance facility in the Almaty area.

As part of the deal, Ka-zakhstan agreed to buy 45 of

the helicopters that are pro-duced domestically within six years of the start of assembly. They will be used for govern-ment missions, according to Kazakhstan officials.

The first six choppers are expected to roll off the man-ufacturing line before this year is out.

The EC 145 is at the top of its class in the medium-sized,

twin-engine helicopter cate-gory, according to experts.

Eurocopters boast an ad-vanced cockpit design plus state-of-the-art avionics and rotor systems.

And the chopper is de-signed to work in challeng-ing environments, including the minus-45-degree temper-atures seen in Kazakhstan’s winters.

Eurocopter said it has sold about 400 of the EC 145s worldwide.

“Eurocopter, together with its joint-venture partner Ka-zakhstan Engineering, will develop a major aeronauti-cal industry capability in Ka-zakhstan” that creates several hundred high-tech jobs, Eu-rocopter President and Chief Executive Lutz Bertling said in announcing the partner-ship late last year.

“Moreover, this project will foster helicopter usage in Kazakhstan, making this country the Commonwealth of Independent States’ show-case for government heli-copter operations,” Bertling said. “The joint venture al-so positions Eurocopter for future business development in Kazakhstan, Central Asia, Russia and Belarus, provid-ing helicopters that are well tailored for applications” in the oil and gas industry, in government and in other sec-tors, he said.

The joint venture that Ka-

zakhstan and Ukraine are ne-gotiating will manufacture Antonov An-140 regional-flight passenger craft.

Kazakhstan is a huge coun-try, and planes that connect its different regions could be an impetus to its devel-opment. The country needs at least 100 such craft, offi-cials said.

Kazakhstan has proposed that a new facility be built in the Almaty area to produce the turboprops.

The typical An-140 con-figuration can carry 52 pas-sengers, Antonov said. The company, whose opera-tions are based in Kharkov, Ukraine’s second-largest city, also produces a higher-end version of the plane that can carry up to 30 passengers.

The An-140 is a relatively new aircraft, with production starting in 1997. It carries a modest price tag of $9 mil-lion.

Antonov has sold several dozen of the aircraft world-wide. In addition to its Khar-kov operation, it has another manufacturing operation in Russia and licenses Iran to produce the An-140.

In addition to being used as an airliner, the An-140 can be used as a military plane, for maritime patrolling, for medical flights, for aerial photography, for geological exploration and other pur-poses.

The Antonov company is probably best known in the West for building three of the largest cargo planes that have ever been manufactured – the An-22, the An-124 and the An-225.

Kazakhstan officials hope that the country’s initial foray into aircraft manufacturing represented by its Russian, French and Ukrainian joint ventures is just the start of an aviation industry that de-velops into a sparkplug of the economy.

aircraft Manufacturing takes off in Kazakhstan

This will not be just assembly work, but full-cycle production

Some Kazakhstan banks are expecting a banner year in 2011

Kazakhstan has recently signed deals to manufacture helicopters and other aircraft

Air Astana had to hire lots of foreign pilots to fill the gap.

The carrier decided to come up with initiatives not only to address the domes-tic-pilot shortage but also to improve its in-house pilot-training capability.

An initiative besides the Florida training program for new pilots was sending expe-rienced pilots for instructor training with Delta Air Lines in Atlanta. The idea was that Air Astana pilots with in-structor ratings could train some of the airline’s less ex-

perienced fliers.Another training initiative

was purchasing a sophisti-cated flight simulator -- the Aerosim Enhanced Virtu-al Procedure Trainer for the Airbus A320. That aircraft is a key component of the Air Astana fleet.

The simulator at the air-line’s Almaty headquarters is expected to save $375,000 a year in overseas training costs.

The young Kazakhs whom Air Astana selects for the Florida training program go through a rigorous selec-tion process.

The first phase is a phys-ical examination, a psycho-logical evaluation and an interview.

The second is a pilot apti-

tude test that includes math, physics, psychology and knowledge of English, the global language for commu-nication between pilots and the ground.

Phase three is a team-building operation in which candidates work together to solve a problem. There is al-so a second, more compre-hensive interview.

Phase four involves a run through a flight simulator.

Those selected for the Florida program go through 12 weeks of intensive Eng-lish before heading for the

training school in Melbourne, which is affiliated with Flori-da International University.

The reward for those who complete the training is a first-officer position.

Each of the new pilots re-pays Air Astana half of their flight-training costs through deductions in pay over time.

Although the cost of train-ing young Kazakhs overseas is high, the payoff is expect-ed to be a stable domestic pi-lot corps for years to come, industry observers say. Such stability should help keep pi-lot costs in check, they say.

The more Kazakhs that are trained for the national carri-er the better chance that some will be women. And that will be just fine with Kazakhstan’s flying pioneer Tota Amirova.

Female Pilot.. from p.6

Air Astana is home to Central Asia’s first female commercial airline captain

Page 8: KAZAKHSTAN SPOTLIGHT #1

By Susan Goodman

Establishing green cre-dentials is a good move for emerging nations. It helps win

friends and attract invest-ment. But for Kazakhstan, celebrating its twentieth an-niversary of independence this year, a commitment to renewable energy could pro-vide a whole new dynamic for the country’s economy.

Spreading across Eurasia, the world’s largest landlocked country has vast reserves of fossil fuels and minerals. Its oil reserves alone place it eleventh among the world’s oil producers, and last year it became the world’s largest ex-porter of uranium. The gov-ernment cites as a major goal of structural policy the “diver-sification and the strengthen-ing of the non-oil sector.”

The sheer enormity of this land mass, however, poses particular challenges to the energy industry. Most pow-er is being generated by old coal-fired plants that were built during the Soviet era and sited to provide the en-ergy requirements of indus-tries involved in mining and processing metals to satis-fy Soviet needs. Even where transmission lines were built into remoter areas, the costs have been exorbitantly high

and the line losses over such great distances mean power is often wasted.

The age of the coal-fired plants means their systems need replacing to increase efficiency and reduce carbon emissions. At present about 90 percent of the country’s electricity is generated by coal; about another 10 per-cent comes from hydropow-er (HP).

Jacquelin Cochran of the Kazakhstan Institute of Management Economics and Strategic Research says the time has come for the gov-ernment to consider diver-sifying its energy supply to include non-carbon sources.

In a country renowned for its cold winters, with temperatures in some areas dropping below 40 degrees Celsius, it’s easy to overlook the role that solar power can play. However, maps of so-lar insolation – which mea-sure annual solar radiation energy -- show that much of Kazakhstan has the same values as central Spain. This makes it ideal for the instal-lation of concentrated solar thermal plants, where sur-rounding mirrors (heliostats) focus the sun’s rays on a re-ceiver in a central tower.

A hybrid model, devel-oped by world leaders in this field EZKlein, can also op-

erate on any alternative fuel source -- fossil fuel, bio fu-el -- thereby guaranteeing an uninterrupted power supply, 24 hours a day. The compa-ny is now considering Ka-

zakhstan as an ideal market for this highly efficient, cost effective system, especially as the parts can be manufac-tured locally. This is a cost effective option compared to

traditional solar power that relies on expensive, import-ed photovoltaic cells.

Kazakhstan is also work-ing with the United Nations in a program begun seven years ago to increase its energy effi-ciency through alternative en-ergy sources, including solar.

As part of the first steps of the project, solar panels were installed on the roof of the AlmatyTeploKommunEner-go heating company offices in Almaty.

The Hotel Almaty also placed 210 square metres of solar panels on its roof – the largest photovoltaic array of its kind in Kazakhstan at the time.

Another initiative in Al-maty, Kazakhstan’s largest city, was placing solar-pow-ered street lights in a city park. The solar panels cap-

ture and store energy dur-ing the day to light the park at night.

And Kazakh-based en-trepreneur Nurlan Dzhiyen-bayev and his ND & Co firm are now making a living sell-ing small solar power cells to rural villages that are either off the main power grid or suffer from unreliable pow-er supplies.

“Kazakhstan’s territory is huge, and in the 1990s a lot of people” lost electrici-ty when the grid deteriorated after the break-up of the So-viet Union, he said.

That’s why “our company is primarily targeting rural areas and mountainous areas.”

Dzhiyenbayev’s products utilize a passive energy sys-tem which converts sunlight directly into electricity. That means they don’t require a

lot of land and can be placed on rooftops or beside homes.

With vast wind-swept steppes stretching across much of the country – the ninth largest in the world by land mass – wind power is al-so a viable energy option.

A glance at the wind maps produced by the United Na-tions Development Program shows there are a large num-ber of locations with wind speeds well above the 4 me-tres per second minimum required for the efficient op-eration of wind turbines.

Gennady Doroshin, head of the Kazakhstan Govern-ment Project on Wind Ener-gy in combination with the UNDP says expert assess-ment indicates that Kazakh-stan’s wind power potential exceeds 1.8 trillion kilowatt hours a year.

In March, it was an-

nounced that the southern Kazakh province of Zhambyl will invest $1 billion to build two electricity generating wind farms in Kazakhstan with one generating 200MW and the other 400MW.

Several energy partners will be involved in this proj-ect, including the Kazakhstan Electricity Grid Operating Company and Central Asia Green Power, which is a joint venture (JV) between a Turk-ish subsidiary of the Italian Relight Group and the Ka-zakh private equity firm Vi-sor Group. The project is scheduled to be operation-al within two years. It will be immensely important in a region where electricity is often imported to prevent blackouts.

Though wind farms can-not yet provide the majori-

ty of a community’s power, the electricity provided by a small wind turbine can be used whenever it is operating to provide the power need for agricultural activities, such as pumping water and oper-ating machinery for process-ing grain into flour.

And in other alternative energy efforts, the Kazakh-stan government recently published a list of small-scale hydropower plants that will be built over the next five years in the south and south-east of the country, several in collaboration with Russia’s biggest hydropower compa-ny, RusHydro.

RusHydro noted that Ka-zakhstan has considerable potential for small hydro-electric plants, according to a report by RIA Novosti.

These facilities would uti-lize the natural flow of the

rivers, rather than require dam construction.

Almost half of Kazakh-stan’s population of 16 mil-lion is designated as rural and they can best be served by establishing distributed, off-grid electricity supplies. Renewable energy sources, such as wind power and solar power, offer ideal solutions for the provision of electric-ity to these dispersed, largely agricultural communities.

It is anticipated that Ka-zakhstan will surge ahead of its neighbours in the produc-tion of electricity from re-newable energy sources and will become a net exporter of clean electricity. Its out-dated, Soviet-era coal-fired power plants may just pro-vide the impetus needed to shift the energy balance to-wards renewables.

Kazakhstan Invests in a Renewable Future

Distributed with The Daily Telegraph

KazaKhstan: InTErnaTIonal lEaDErshIP anD PErsPEcTIvE

By Jane Josephs

K azakhstan remains on track to fulfill ambitions of be-coming a leading

global food provider despite a drought which decimated its harvest last year.

Last year, Kazakhstan and much of Central Asian was hit by one of the worst droughts in its history, with up to 70 percent of Kazakh crops com-promised in some wheat-growing regions. According to data from the Agency of Statistics of Kazakhstan, the country produced only 9.6 million metric tons of wheat – a record low for the previ-ous 10 years and a 52 per-cent fall in yield from the 20 million metric tons harvest-ed in 2009.

However, in a world where growing demand has pushed food prices up 37 percent compared to last year, accord-ing to UN data, Kazakhstan is still in a strong position to wield clout as a global food exporter.

First, Kazakhstan has a small population of only 16 million to feed, unlike neigh-bouring Russia, which last year introduced a grain ex-port ban in an attempt to pro-tect domestic markets and feed its population of 150 million.

Indeed, Kazakhstan actu-ally benefited from the ban, as it stepped in to supply the markets which previously imported from Russia.

“Those countries that tra-ditionally buy from Rus-sia – mainly countries in the Caucasus region, such as Ar-menia, Georgia, parts of Tur-key and Azerbaijan – have found Kazakhstan to be their next closest market,” the country’s agriculture minis-ter Asylzhan Mamytbekov told Reuters in May.

According to Kazakh cus-toms data, Azerbaijan was the largest buyer of Kazakh grain in the 2010 calendar year, purchasing 1.4 million

metric tons at a cost of $242 million.

The lifting of Russia’s grain export ban, due to come into force July 1, is not expected to affect sales of Kazakhstan wheat, or world trade in gen-eral, according to analysts.

Some Russian officials say there may be further restric-tions on exports this year. Sergei Ignatiev, head of the Russian Central Bank, has called for an introduction of grain export duties linked to prices on the domestic mar-ket, and Arkady Zlochevsky, president of the Russian Grain Union, says there may be fresh restrictions in the au-tumn once the harvest has been gathered, reports the Fi-nancial Times.

The wheat that Russia ex-ports is generally of lower quality, so it does not fulfil the criteria of food quality mill-

ing wheat, and the crop yield will be further hindered by the end of last year’s drought. Furthermore, the forecast for this summer is for more hot and dry conditions.

As well as continuing to supply other nations in the Commonwealth of Indepen-dent States (CIS), Kazakh-stan has increasingly looked at exporting beyond the re-gion to countries such as Iran, Turkey, Egypt, Afghani-stan and Saudi Arabia.

This trade is likely to con-tinue, as a Food Outlook re-port from the UN Food and Agriculture Organization (FAO), released in June, said that several of the countries supplied by Kazakhstan will increase wheat imports over the coming year.

Imports in Egypt, the world’s largest importer, for example, will remain steady at around 10 million metric

tons, and Saudi Arabia may import more foreign wheat following a decision to com-bat water scarcity by reduc-ing domestic production, said the report.

In June, Kazakh Presi-dent Nursultan Nazarbayev proposed creating a food re-serve, with Kazakhstan at the helm, to improve food securi-ty and guard against shortag-es in Islamic countries.

Speaking at the World Is-lamic Economic Forum in Astana on June 8, Naz-arbayev said the fund would act as a Muslim counterpart to the United Nations’ Food and Agriculture Organisation (FAO) and would involve the Saudi Arabia-based Islamic Development Bank.

Looking beyond Asia, Ka-zakhstan will also play a leading role in global wheat exports, helping offset falls in

wheat production in the Unit-ed States, France and Ger-many, which are anticipating lower yields because of dry weather conditions, accord-ing to the FAO.

Shipments from the five major traditional wheat ex-porters (Argentina, Austra-lia, Canada, the EU and the U.S.) are expected to reach 88.5 million metric tons in 2011-12. This will make up 70 percent of the global to-tal, down from 77 percent in 2010-11.

By contrast, exports from the leading CIS export-ers (Kazakhstan, Ukraine and Russia) will represent 19 percent of world trade in 2011-12, up from 6.5 percent in 2010-11.

According to analysts at JSC KazAgroMarketing, the potential grain production in 2011 will allow Kazakh-stan to export about 7 mil-

lion tons of wheat (excluding flour) in 2011-12.

Furthermore, Kazakh-stan’s leaders are investing in new farming methods and infrastructure.

The country has invested heavily in improving crop cultivation ever since having to battle soil erosion, which was caused by excessive mono-crop cultivation dur-ing the Soviet era. Over the past decade the country has also taken care to study and apply new contour plowing methods.

At the Kazakhstan-U.S. investment forum in New York last year, Kazakh dep-uty minister of industry and new technologies Nurmu-hambet Abdibekov empha-sized that a major part of the country’s development plan up to 2020 involves adapting new technologies – includ-ing agribusiness - that will make farm water use more efficient.

Farmers will use capil-lary irrigation systems that require less water to feed crops, he said.

The country also often shows a willingness to en-gage with other nations in terms of agricultural prac-tices, as demonstrated by the-then agriculture minis-ter Akylbek Kurishbayev’s meeting with US Agricul-ture Secretary Tom Vilsack in North Dakota, the U.S., last year.

To transport food exports, Kazakhstan has the best road and rail transportation sys-tems in Central and Northern Asia and is pushing through a number of maritime devel-opments, including a joint venture terminal in the port of Amirabad, designed to al-low Kazakhstan to ship more wheat to Iran via the Caspi-an Sea.

Exports to Asia have also received a huge boost from China’s lifting of a ban on grain transit through its terri-tory, allowing Kazakhstan to trade with South Korea and other Asian nations on the Pacific Rim.

To supply these territories, Kazakhstan has announced plans for a grain rail termi-nal on the border with China, due to be built in 2011-12, with a capacity of 500,000 metric tons.

Ultimately, Kazakh-stan’s embrace of globaliza-tion and investments over the past few years have giv-en the country the resilience to battle the record drought conditions of last year. Im-proved infrastructure and farming methods may well ensure Kazakhstan will re-main a leading powerhouse in terms of food exports, es-pecially at a time when other nations may struggle to keep crop yields high.

Kazakh Agro Sector Defies Drought

Kazakhstan is turning to solar and other eco-friendlier ways to produce its electricity

Kazakh agricultural exports remain strong despite 2010 drought

Renewable energies, such as wind and solar power, offer ideal solutions

Kazakhstan will play a leading role in global wheat exports