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News Bulletin No 24
POLITICS
Kazakh President content with cooperation with Germany
Kazakhstan offers to participate in talks on South Ossetia
Kazakhstan adopts Road to Europe program to promote strategic partnership with continent leaders
Nazarbayev: Kazakhstan interested in developing cooperation with European Union
ECONOMY
Kazakhstan drafts new oil, metals tax rates
Metro to enter into Kazakhstan
OTHER NEWS
Nuclear test ban treaty’s first ever on-site inspection simulation
Astana: The pleasure domes of a new Xanadu
Kazakhstan
News Bulletin
Released by the Embassy of the Republic of Kazakhstan to the United States of America
No 24 September 8, 2008
POLITICS
• Kazakh President content with cooperation with Germany
• Kazakhstan offers to participate in talks on South Ossetia
• Kazakhstan adopts Road to Europe program to promote strategic partnership with continent leaders
• Nazarbayev: Kazakhstan interested in developing cooperation with European Union
ECONOMY
• Kazakhstan drafts new oil, metals tax rates
• Metro to enter into Kazakhstan
OTHER NEWS
• Nuclear test ban treaty’s first ever on-site inspection simulation
• Astana: The pleasure domes of a new Xanadu
POLITICS
Kazakh President content with cooperation with Germany
Interfax-Kazakhstan
Kazakh President Nursultan Nazarbaev said he is content with the way Kazakhstan's economic cooperation and political relations with Germany are developing.
Meeting with German President Horst Koehler in Astana on Wednesday, Nazarbaev said trade turnover between the two countries had grown by 26% over the previous year alone.
"Thanks to agreements reached during my visit to Germany last year, trade between Kazakhstan and Germany grew by 26% to $3 billion in a year," Nazarbaev said.
Kazakhstan is Germany's leading economic partner in Central Asia, and Germany is among Kazakhstan's key partners in Europe, he said.
There are 700 businesses with German capital in Kazakhstan, he said.
"Germany's investments in Kazakhstan's economy have reached $4 billion," Nazarbaev said.
"Germany is a reliable friend and an important foreign political and economic partner of Kazakhstan. Our countries maintain active bilateral contacts at the level of parliaments, governments, ministries, other agencies, and business communities," Nazarbaev said.
Kazakhstan offers to participate in talks on South Ossetia
Xinhua, China
Kazakh President Nursultan Nazarbayev said that his country is ready to participate in multilateral talks on the issue of South Ossetia if needed.
Nazarbayev made the remarks at a press conference after meeting with visiting German President Horst Koehler.
Nazarbayev said he believed that the issue would not be solved only through bilateral talks between Russia and Georgia, or between Russia and Europe.
To solve the issue, multilateral talks involving Russia, Georgia, the European Union and the United States should be launched, he said.
The president added that Russia is an economic and political partner of Kazakhstan, which does not support unilateral criticism against Russia and understands the Russian measures aimed at stopping the bloodshed in the region.
Kazakhstan welcomed the EU's decision to urge all parties concerned to return to the negotiation table and considered it a "balanced" move.
Nazarbayev said that Kazakhstan would keep a close eye on the security of its investment in Georgia.
Koehler started his one-week official tour of Asia Tuesday. The visit will also take him to Mongolia and China.
Kazakhstan adopts Road to Europe program to promote strategic partnership with continent leaders
Interfax-Kazakhstan
Kazakhstan President Nursultan Nazarbaev has approved the state program ”Road to Europe” for 2009-2011.
"The program is aimed at raising the level of strategic partnership with leading European countries through Kazakhstan-Europe trade boost, joint transport network plans, adjustment of standards and specifications to EU norms and improvement of the Kazakhstan legislation with regard to European experience,” according to the comments published in the press.
The program sets three goals: first, to step up cooperation between Kazakhstan and Europe in technology, energy, transport, technical standards, metrology and small business.
“A special focus will be made on improving the lifestyle of Kazakhstan residents by bringing them up to the quality of life in Europe,” according to the statement. That presumes environment amelioration, protection of water resources, prevention of climate change, high healthcare quality, cooperation in education and labor migration.
Second goal embraces improvement of Kazakhstan legislation by drafting laws on media and elections, conducting reforms in state administration and legal system, and liberalization of political life.
Third goal concerns the preparation of Kazakhstan for OSCE presidency in 2010.
“In this regard the program outlines the following priorities: maintaining favorable conditions for development of democratic institutions in OSCE, development of transit and transport potential of OSCE members and Eurasian trans continental corridors; environmental solutions; confidence-building measures and regional security regarding Kazakhstan’s contribution to the nuclear disarmament; countering terrorism, extremism, drug trafficking, organized crime and reconstruction of Afghanistan,” according to the statement.
Nazarbayev: Kazakhstan interested in developing cooperation with European Union
Regnum, Russia
Kazakhstan is interested in extending cooperation with the European Union. This was announced by the Republic's President Nursultan Nazarbayev Sep 2 at a ceremony of presentation of credentials by Head of European Commission's Delegation to the Republic of Kazakhstan Norbert Jousten, Kazakhstan Today informed.
''We are going to further extend and develop relations with the European Union,'' Nazarbayev said. ''For the recent years, EU has become a leadig trade and economic partner of Kazakhstan, the major investor in our market.''
According to Nazarbayev, Kazakhstan has developed the Path to Europe state program, which aims to ''bring relations with the European Union to the level of strategic partnership, to attract European technologies, investments, experience, as well as to establish cooperation in the framework of Kazakhstan's chairmanship in OSCE in 2010.''
''We hope that such relationship with the European Union will be continued.''
Besides, Kazakhstan's head of state accepted credentials of Apostolic Nuncio to Kazakhstan Miguel Maury Buendia. Nazarbayev said: ''Relations with Vatican has a special meaning for our country. We highly esteem acts of the Holy See aimed at supporting peace and dialog among civilizations and religions. We are greatful to Vatican for the support of our initiative in the field of dialog among religions and cultures,'' Nazarbayev stated.
''The First Congress of Leaders of World and Traditional Religions could have convened in Kazakhstan exactly thanks to the support of Vatican. We hope that the Holy See renders active support of the Third Congress of World and Traditional Religions that is to be held in 2009,'' Kazakhstan's President said.
ECONOMY
Kazakhstan drafts new oil, metals tax rates
Reuters
The government of Kazakhstan has proposed to set mineral extraction tax rates for oil producers at 7-20 percent of crude's market value from 2011, with higher rates applied to larger producers, according to a draft law.
The resource-rich central Asian state plans to introduce a new tax code from next year which would shift much of the tax burden onto the oil and mining sectors through a new mineral extraction levy.
But the rates set by the tax code will only kick in from 2011 while another draft law sets the rates for 2009 and 2010.
The government has submitted the draft tax code to the parliament.
A portion of the draft obtained by Reuters sets the mineral extraction tax for oil at 7 to 20 percent of the commodity market value depending on a company's annual output. Higher rates apply to larger producers.
The tax will be calculated based on benchmark crude oil grades such as Urals and Brent, the draft says. Oil sold on the domestic market will be taxed at halved rates, it says.
The tax rate for exported natural gas in 10 percent while gas sold domestically will be taxed at 0.5-1.5 percent of market value.
The mineral extraction tax rates for metals are flat regardless of output with calculations based on LME prices. The tax rate for copper is 8.0 percent, zinc -- 9.0 percent, gold and silver -- 5.0 percent, aluminium -- 0.3 percent.
The government suggests taxing chrome ore at 17.0 percent, iron ore at 3.0 percent and pellets at 3.5 percent.
A mineral extraction tax makes up the vast bulk of Russia's heavy tax burden and has gained notoriety for pressuring oil company profitability to the point that production growth has stalled.
Kazakhstan is offering a major exemption for companies working under production sharing agreements and the Chevron-led Tengizchevroil joint venture, which produce the majority of Kazakhstan's oil.
The government has said earlier that the mineral extraction tax would replace royalty payments and compensate for the corporate income tax cut.
It has proposed to cut the corporate income tax, currently at 30 percent, to 20 percent in 2009, 17.5 percent in 2010 and 15 percent from 2011.
Kazakh parliament, dominated by President Nursultan Nazarbayev's Nur Otan party, rarely makes significant changes to key laws submitted by the government.
Metro to enter into Kazakhstan
Trading Markets
German retail company Metro Group has announced its plans to enter into the Kazakhstan market with its self-service wholesale subsidiary, Metro Cash & Carry.
With the announcement, the company is expected to extend its activities to 33 countries. Together with the government of the Republic of Kazakhstan, Metro Cash & Carry has signed an agreement on this investment.
If all pre-conditions are fulfilled accordingly, like foremost the securing of land-plots and obtaining the necessary licenses, Metro Cash & Carry sees a potential for 10 to 15 wholesale stores in Kazakhstan. The company is aiming at opening the first store in summer 2009 in the capital of the country, Astana.
On average, each Metro Cash & Carry store is an investment of about E15 million to E20 million and employs more than 250 people from the local community. In addition, the national head office is expected to create over 100 new jobs.
Frans Muller, member of the management board of Metro Group and CEO of Metro Cash & Carry International, said: "With its rapid economic growth and in particular the swift development in the hotel, gastronomic and service sector, Kazakhstan offers great potential for our self-service wholesale business."
OTHER NEWS
Nuclear test ban treaty’s first ever on-site inspection simulation
Press Release, Sept 2, 2008
The biggest and most ambitious project to date to test the preparedness of on-site inspections – a key element of the Comprehensive Nuclear-Test-Ban Treaty’s (CTBT) global alarm system - started on 1 September 2008 in Kazakhstan. The 2008 Integrated Field Exercise, IFE08, will examine inspection methods and procedures and test their functioning and effectiveness.
The CTBT bans all nuclear explosions on Earth. The Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) is building a global system to monitor the Earth for signs of nuclear explosions. On-site inspections constitute the system’s final verification measure. They complement the International Monitoring System (IMS) with its 337 facilities located worldwide and the data analysis conducted at the International Data Centre (IDC) in Vienna.
Hypothetical State of Arkania to be inspected
The exercise will simulate a complete on-site inspection, testing most elements of the on-site inspection regime. In order to provide a realistic setting, a scenario has been developed involving the hypothetical State of Arkania and a nuclear explosion that – based on IMS data and IDC analysis – is suspected to have been conducted on its territory. Following a request for an on-site inspection, a mandate was prepared and a team created consisting of international and CTBTO experts.
Before moving to the former Soviet Union nuclear test site at Semipalatinsk to conduct the on-site inspection simulation, first meetings took place Monday in Almaty, Kazakhstan, between the inspection team and representatives of “Arkania”, the inspected State Party. Both groups consist of international and CTBTO experts. Details of the on-site inspection were discussed, including the mandate, the plan, techniques and equipment.
Testing the CTBT verification regime
“We want to see where we stand with the four elements of the verification regime”, said Tibor Tóth, CTBTO Executive Secretary, commenting on the purpose of the exercise. Mr. Tóth explained that following the announcement of a nuclear test explosion by the Democratic People’s Republic of Korea in October 2006, three key elements of the CTBTO global system proved to meet the expectations as set out in the Treaty. “As the fourth element, on-site inspection was not put to the test then, but the exercise will now show that the entire verification regime is working as prescribed by the CTBT”, Tóth said.
Kazakhstan’s contribution to nuclear non-proliferation and disarmament
It is no coincidence that Kazakhstan is hosting this first large scale integrated field exercise. The Central Asian State has an impressive record in the field of nuclear non-proliferation and disarmament, having closed the former Soviet Union nuclear test site at Semipalatinsk and renounced the stockpile of nuclear weapons upon gaining independence in 1991.
“Nuclear non-proliferation and disarmament are very important for Kazakhstan”, said Bolat Akchulakov, Vice-Minister of Energy, Mineral Resources and Environmental Rehabilitation of Kazakhstan. “Knowing about the serious consequences of nuclear testing, Kazakhstan is highly committed to strengthening the non-proliferation regime as a guarantee for international security,” he added. Mr. Akchulakov also referred to Kazakhstan’s active role in the establishment of the Central Asian Nuclear Weapon Free Zone in 2006.
Kazakhstan’s active support for the CTBT
Kazakhstan is an active supporter of the CTBT and the CTBTO, having signed the Treaty in 1996 and ratified it in 2001. In addition to the five IMS stations located on its territory, Kazakhstan has played an active role in developing the on-site inspection regime by hosting three previous exercises in 1999, 2002 and 2005.
“We have already done a lot in the field of nuclear non-proliferation and disarmament. The conduct of IFE08 in our country will further strengthen the non-proliferation regime, support the CTBT and promote the entry into force of the Treaty”, said Akchulakov.
Astana: The pleasure domes of a new Xanadu
By James Mackintosh, the Telegraph
Mr Schuler, the manager of the five-star Radisson SAS in Astana, can’t keep up with the number of heads of state coming through his hotel doors.
"Three European presidents in the next few weeks and that’s our hotel alone,” he informs me. “Although of course we can’t reveal which ones.” He smiles, a trifle wearily.
It’s only a couple of months since Kazakhstan’s president Nursultan Nazarbayev was joined by President Medvedev of Russia, President Gül of Turkey, the King of Jordan plus heads of all the neighbouring ’Stans for the culmination of Astana’s 10th anniversary bonanza as capital of Kazakhstan.
What a bash that was. It took a year to prepare, hundreds of millions of dollars to execute and attracted international attention from around the world.
But why all the fuss over what, a decade ago, was a windswept, remote, provincial trading post no one had ever heard of?
In a nutshell, Astana is not only one of the world’s fastest-growing cities, possibly the world’s largest construction site and maybe the world’s most audacious, ongoing, architectural project, it is also, crucially, at the epicentre of global oil diplomacy as nations court Kazakhstan for its massive energy supplies.
I arrived late last month, too late for the celebrations. But that’s OK. The weather is bright and the sky is blue and clear. There’s enough extreme and breathtaking modern architecture to turn your head. There are enough relaxation possibilities to put you straight again: the oceanarium, the huge sauna-banya-Turkish bath complex or a trip out to the steppes.
There’s a satisfying contrast between the futuristic, gold-plated, new city extravagance on the right bank of the river Ishim and the bustling, ex-Soviet commercial centre on the left bank. And it’s all a manageable size, navigable on foot and rather relaxing.
But then I’m not on the front line, catering for the political and business elites storming Astana. Mr Schuler is.
“A rhyme keeps running round my head,” he reveals, pauses, and starts: “In Xanadu did Kubla Khan…”
“A stately pleasure-dome decree,” I join in, recalling Coleridge’s famous stanza.
“Nazarbayev is a latter day Kubla Khan. And Astana is his Xanadu,” I suggest.
“Astana is our Xanadu!” Mr Schuler corrects me.
Back in 1997, President Nazarbayev signed a decree moving the capital 600 miles north from cosmopolitan Almaty to the dusty, nondescript, provincial town of Akmola, which he renamed Astana (Kazakh for “capital city”). Since then, billions of dollars (some say up to 30 billion) have been poured into his dream capital.
The new city is a two-mile-long, rectangular block of magnificent proportions with gardens and fountains, sumptuous, metallic, gold-glinting tower blocks and austere, glass-and-marble government ministries.
At one end is the imposing blue-domed presidential palace with park sloping to the river. Across the river is a Norman Foster-designed giant Pyramid of Peace, complete with basement opera house. Near the palace is the 345-ft Baiterek Tower which has become a symbol of the city and houses an art gallery, an aquarium and a restaurant.
At the other end of the block squats the imperial grey-black, granite nerve centre of Kazmunaigaz, the state oil company and beyond that, another Foster extravaganza: the, as yet uncompleted, Khan Shatyr — the largest tent structure in the world — where, during the severe Astana winters, visitors will swim, sunbathe and stroll in lush garden terraces — in truth, a stately pleasure-dome, as the latter-day Khan decreed.
But for all its grand pretensions, Astana retains something of the Russian and Soviet steppe trading post of its roots. Traces of elegant, pastel-coloured, tsarist merchant mansions; the bustle of the dusty streets; the familiar Soviet grid-avenues lined with birch trees and ugly 1950s housing blocks; the cosy but elegant Russian drama theatre; the ubiquitous circus.
Placid, gold-toothed women sit all day at street stalls selling raspberries, cucumbers and varieties of forest berries in cut-off plastic bottles. Astana girls, miniskirted and flirtatious, Russian blondes and oriental-looking Kazakhs, cling giggling together like natural-born cousins.
At Line Brew, a Belgian pub quirkily designed as a Crusader castle, a Nordic-looking family and friends are swilling back lager. They speak Russian but this scene could be anywhere in Germany. They are Volga Germans, shunted by Stalin to this backwater many decades ago. We’re at the heart of Central Asia but, the paradox is that much of the culture is European.
On my last day in Astana, loitering around the embassy quarters, I am unexpectedly invited to a cocktail reception given by the French Embassy. That evening I am hobnobbing with the diplomatic crowd. It is apparent everyone knows everyone and, touchingly, they stick together in this remote outpost. “We are all friends here,” says the black South African Ambassador, smiling broadly.
An attractive French diplomat called Delphine takes me under her wing. Perhaps she senses the loneliness of the independent traveller. She introduces me to everyone, regularly commandeers waiters to top up my champagne glass with the free-flowing Taittinger Comtes de Champagne Blanc de Blancs, and informs me – with merriment in her eyes – that she’s a divorcee, and better for it. I can see she’s a free spirit.
Several Taittinger refills later: “We’re moving on,” she informs me. “Coming?”
“Where?”
“Chocolate.”
“I beg your pardon?”
“Chocolate. The coolest, hippest night club in Astana.”
We jump into taxis and head for Chocolate, situated in the caverns of the Radisson.
Delphine and I arrive, we are witnesses to elite face control – ruthlessly executed by security guards who determine your financial status in a split-second – on the whole crowd in front of us, who are waved disdainfully away.
Soon it is our turn. My attire is scrutinised. No I don’t wear hand-tailored Brioni suits. I don’t sport Italian calf leather shoes. I’m a writer. I don’t look rich. Usually it doesn’t matter. Now it does – intensely . Split-seconds pass. Security raises an imposing, podgy hand to bar my entrance.
“It’s OK. He’s with me.’’
Her smile is devastating.
The podgy hand is lowered (reluctantly). This petite, blonde, charmante française is truly my saviour of the night.
We enter to rainbow laser lights and the deafening whine of the latest Kazakh rap. Long-limbed Kazakh girls perch on bar stools. The dance floor is heaving. The Brioni-suited new Kazakhs, in discreet alcoves, roar at each other above the hubbub, tossing back vodkas and beaming at their general good fortune.
Hours slip hypnotically by. I have danced wildly along with the diplomatic crowd, conversation proving impossible.
Enough champagne has been drunk. Enough vodka has been consumed. I have a flight to catch in a few hours. I am in urgent need of fresh air and sleep. Delphine guides my uncertain progress to the exit.
Outside, the quiet of the Siberian night has descended. On the other side of the river the gaudy lights of modern-day Kubla Khan’s proud and ambitious creation are glittering, out for show.
“Reviens, monsieur,” Delphine declares softly with an insouciant, joyful swing of her hip, a whirl of her exquisitely-tailored Parisian dress.
I kiss her formally, if a little unsteadily, on both cheeks. For a brief instant she holds me close and whispers…
“Come back to Xanadu.”
Getting there
* Air Astana (01293 596 622, www.airastana.com) flies direct from Heathrow to Almaty and to Astana via Amsterdam. Prices start from £299 plus tax. Air Astana operates six daily shuttle services from Almaty to Astana.
* Austrian Air (020 7766 0300, www.aua.com) and Lufthansa (0871 945 9747, www.lufthansa.com) fly direct to Astana from Vienna and Frankfurt respectively four times weekly.
More information
British passport-holders require a visa to visit Kazakhstan. These can be obtained from the Embassy of the Republic of Kazakhstan, 33 Thurloe Square, London SW7 2SD (020 7581 4646; www.kazakhstanembassy.org.uk); or the Consulate of Kazakhstan, 12 North Silver Street, Aberdeen AB10 1RL (01224 622 465). Single-entry visas cost £20 for a 30-day stay. Holders of Air Astana tickets can use an express visa service allowing UK passport holders to process visas in one day if they apply at consulates in person.
Accommodation
Top Range: Radisson SAS Hotel, Astana, Sary Arka Street 4 (007 7172 66 00 00, www.astana.radissonsas.com)
Budget: Hotel Mukammal, 53/1, Pobeda Ave (007 7172 38 29 39, www.mukammal.kz).
News Bulletin of the Embassy of the Republic of Kazakhstan
Contact person: Zhanbolat Ussenov
Tel.: 202-232-5488 ext 104; Fax: 202-232-5845
E-mail: zhan@kazakhembus.com