Embassy of Kazakhstan

News Bulletin No 2, January 19, 2009


POLITICS

•    Kazakhstan’s Lawmakers Approved Amendments to the Law on Elections
•    U.S. seeks Afghan supply route via Kazakhstan

ECONOMY

•    Indian-Kazakh energy ties deepen
•    Aker Solutions awarded Kazakhstan contract  
•    Kazakhstan to keep tight rein on exchange rate

OTHER NEWS

•    GAME: International tangle with Kazakhstan 'Torpedoed' by Lakers


POLITICS

Kazakhstan’s Lawmakers Approved Amendments to the Law on Elections

On January 15, 2008 Kazakhstan’s lawmakers approved amendments to the Law on elections. The amendments were the result of the year-long joint effort of various NGOs, political parties, OSCE institutions and the Government of Kazakhstan. The amended draft of the law was submitted for the President’s approval.

The amended legislation stipulates several important changes that might have a considerable effect on the political life of the country.

Lawmakers have approved measures to streamline the registration of political parties. The number of enlisted members required to register a party will be lowered by 20%, including a minimum of 600 signatories from each province in the country.
   
The amendments make it mandatory for the media to maintain an equal coverage of candidates and parties during electoral campaigns, including the period of nomination and registration. According to the new legislation, foreign observers, who usually come in thousands to observe elections in Kazakhstan, are not required now to have any relevant experience to monitor electoral process. The process of issuing absentee ballots will be more strictly regulated by the Central Election Commission. Local election commissions will have greater authority and independence in organizing electoral processes on the ground, such as determining their schedules to make them more convenient for the voters.

The work on amendments began in May 2007, when Kazakhstan launched a major constitutional reform and announced a gradual move from a strong presidential form of rule towards a presidential-parliamentary system with more powers going to the elected national legislature. At the advice of the OSCE, the old constituent-based electoral system was replaced by the new party-list-based system.  However, the first parliamentary elections (under the newly introduced system) that took place in August, 2007 turned out to be rather a mixed success with only one party winning seats in the Parliament. The major unanticipated downside of the new electoral system was the lack of legislated mechanisms to ensure that the parties which do not have a strong public support and cannot go over the required threshold of 7 percent receive seats in the Parliament.

The approved amendments to the election law tackle this problem as well. Now a multiparty parliament is mandated by legislation. If the 7% threshold is received by one political party only, then the corresponding amendment mandates that a party which comes second in the elections receives seats in the Parliament as well. Thus, Kazakhstan is following the established European tradition of maintaining electoral thresholds to encourage political competition (3% – Spain, Italy; 4% – Austria, Bulgaria, Sweden; 5% – Hungary, Germany, Latvia, Lithuania, Poland, Romania, Slovakia, France, Czech Republic; 7% – Russia, Lithuania (party blocks); 8% – Poland (coalitions), Lichtenstein, Romania (party unions); 10% – Italy (coalitions), Turkey).

Kazakhstan will keep working closely with the OSCE and its other partners to continue perfecting its legislation.


U.S. seeks Afghan supply route via Kazakhstan

Reuters

The United States is talking to Kazakhstan about using the former Soviet republic as a transit point for supplies to NATO troops in Afghanistan, U.S. Central Command chief General David Petraeus said on Wednesday.

NATO officials have already said the alliance wants to divert some supplies from the traditional route through Pakistan where insurgent attacks have become more intense.

Petraeus met Kazakhstan's President Nursultan Nazarbayev on a visit to the Central Asian country. "We have discussed Kazakhstan's contribution to the so-called Northern transit network which would enable us to supply the Afghanistan troops," he told reporters after the meeting.

Kazakhstan, a country roughly the size of Western Europe, does not border Afghanistan, but could serve as a transit hub for the supply route, analysts say. But that would not require the establishment of a military base in the former Soviet republic and the United States has no such plans, Petraeus said.


ECONOMY

Indian-Kazakh energy ties deepen

UPI

While the global recession has blindsided the world's oil market, harming the revenue stream of many major producers, Kazakhstan is seeking to overcome the fiscal setback and is looking to the future to diversify its energy exports. A key ingredient in Astana's efforts is its burgeoning uranium production, and it has focused its attention squarely on a rising Asian economic powerhouse -- India.

Underlining the deepening ties between Delhi and Astana, Kazakh President Nursultan Nazarbayev on Jan. 23 will begin an official four-day state visit to India, crowned by his attendance as chief guest for India's Republic Day celebrations, the first Central Asian leader so honored.

Beginning in 1992, Nazarbayev has made three earlier trips to the subcontinent. During his fourth visit India and Kazakhstan are expected to initial several pacts, including a civil nuclear agreement. Nazarbayev and his delegation will hold discussions with Indian Prime Minister Manmohan Singh, President Pratibha Patil and other high-ranking Indian officials.

In the requisite diplomatic niceties preceding Nazarbayev's visit, Kazakhstan's Ambassador to India Kairat Umarov told journalists that "the Kazakh side is ready to cooperate with India because India's reputation is very high," adding that "since all formal hurdles have been overcome, there is a clear road to cooperate."

The relationship represents a marriage made in heaven, as India finally and fully breaks out of the international criticism heaped upon it for its civilian nuclear energy program, which Delhi removed from International Atomic Energy Agency safeguards, while Kazakhstan develops a potentially lucrative and permanent market for its uranium exports. The arrangement dovetails nicely with the Kazakh government's intentions to boost its uranium exports to become the world's leading producer, with Astana planning to increase output nearly 400 percent over the next decade.

While this year Kazakhstan's uranium production quota is set at 11,900 tons, in 2008 Kazatomprom uranium production increased 28 percent to 8,521 tons, still falling short of planned output by 1,080 tons. In 2007 Kazatomprom produced 6,637 tons of uranium.

Global recession notwithstanding, within the next two years Kazakhstan intends to boost its uranium output to 18,000 tons, overtaking Canada and Australia to become the world's largest producer of uranium. Kazakhstan's plans do not stop there, however, as Astana seeks to reach an annual uranium production target of 30,000 tons. Astana is betting that, although uranium prices fell by 40 percent last year in the global economic downturn, the reverse is temporary and the sticker shock of record-high oil prices will continue to raise global interest in nuclear power.

To sustain its economic progress, Delhi is increasingly interested in nuclear electrical power generation. While Indian reactors currently account for 3 percent to 4 percent of the country's power needs, Delhi believes atomic energy is critical to India's future economic growth, and has 19 planned and proposed nuclear power reactors. Indian media report that the Nuclear Power Corp. of India during Nazarbayev's visit is likely to sign a three-year contract with the Kazakh state-owned Kazatomprom nuclear holding company to obtain uranium for its new generation of pressurized heavy water reactors, which, unlike India's earlier indigenous nuclear reactor program, will be under International Atomic Energy Agency safeguards. Under the proposed agreement, NPCIL will begin to import at least 120 tons annually of Kazatomprom uranium.

NPCIL is not putting all its eggs in the Kazakh basket, having recently signed an agreement with France's public industrial AREVA concern for 300 tons of uranium, while also seeking a similar arrangement with a Russian firm to import 200 tons of uranium annually.

Kazatomprom is also broadening its contacts, in the last few years seeking out potential partners in Russia, Japan and China in an attempt to ensure that, rather than remain simply a source of raw uranium, it eventually can participate in all stages of the nuclear fuel production cycle. If Kazatomprom's ambitions come to pass, then by 2015 it will produce 30 percent of the world's uranium, while via joint ventures it will be in a position to supply 12 percent of the global uranium conversion market, 6 percent of the enrichment market, and 30 percent of the fuel fabrication market.

Kazakh-Indian energy cooperation is not limited to nuclear fuel. Getting more bang for its rupee, on Jan. 15 Indian Oil Secretary Raghav Sharan Pandey told journalists that following Nazarbayev's visit India expects to sign an agreement with the Kazakh government for India's state-run explorer Oil and Natural Gas Corp. overseas arm ONGC Videsh to receive up to a 40 percent share in Kazakhstan's Caspian Satpayev exploration block.

Satpayev, one of seven projects being developed under Kazakhstan's state Program of Development of the Kazakh sector of the Caspian Sea, consists of the three prospective structures of Satpayev, Eastern Satpayev and Karina, which are estimated to contain up to 253 million tons of recoverable reserves, which is equivalent to 1.85 billion barrels.

Accordingly, Kazakhstan and India need each other to make their energy dreams come true. Both economies have weathered the global economic downturn fairly well, but the bureaucracies in both countries will have to be prodded to move the contracts from paper to reality. In the case of Kazakhstan's Caspian oil, India is behind a pack of Western companies that have been operating there for years.

Reflecting this reality, Pandey commented on India's interest in Satpayev, "We will be happy if they allow us some stake." While Astana's government energy accountants grapple with the global collapse of oil prices, one thing is certain -- India's energy demands can only increase. Accordingly, Nazarbayev should attempt during his visit to make Pandey as happy as possible.



Aker Solutions awarded Kazakhstan contract  

Press release

Aker Solutions has announced that, in a joint venture with CB&I and WorleyParsons, it has received a front-end engineering and design (FEED) services contract for Phase II of the full-field development of the Kashagan oil field in Kazakhstan.
The contract value is NOK 900M (GB£90M) (USD 135 million), according to a Aker Solutions press release.

"The Kashagan field is at the core of our strategy for our international field development business. This contract demonstrates our competitive strengths within offshore technology in environmentally sensitive areas, harsh climate conditions as well as international contracting with a high level of local content. We look forward to working with our partners on this very important field development," says Simen Lieungh, President & CEO of Aker Solutions.
The scope of work for Phase II includes the front end engineering and design of both onshore and offshore facilities and pipelines. The FEED contract also includes options for early works, detail engineering, procurement services, technical assistance, and design/system integrity. Additionally, the contract provides for optional FEEDs for other Kazakhstan oil fields (Aktote, Kairan, and Kalamkas).
Work on the project, initiated after tender under a letter of intent issued by Agip KCO, began on 3 November 2008 and is expected to be completed in the first quarter of 2010. Additional options might extend the work up to an 8-year period.


Kazakhstan to keep tight rein on exchange rate

Reuters

Kazakhstan will keep the exchange rate of its tenge currency under tight control to protect its heavily dollarised economy, central bank Chairman Anvar Saidenov said on Tuesday.

Kazakhstan, hit hard by the global financial crisis, unofficially pegged the tenge to the dollar in late 2007 and kept the exchange rate between 120 and 121 tenge throughout last year, a task made easier by high oil prices at the time.

But this week the rate broke out of the corridor with the tenge falling to 121.12 on Tuesday.

However, Saidenov told a government meeting the exchange rate would not be floated or reviewed sharply.

"The government and the central bank will control the state of balance of payments and the exchange rate," Saidenov said. "This is important because a considerable part of assets and liabilities in the economy are denominated in dollars."

"The government and central bank's task is to keep the currency stable or make sure the exchange rate moves smoothly within a manageable range without incurring losses to the gold and foreign exchange reserves."

The central bank had earlier said it defined acceptable exchange rate fluctuations as plus or minus five percent a year.

Analysts say a devaluation would make it harder for banks and their customers to repay debt. Kazakh banks are due to repay $10.6 billion in foreign debt next year and another $7 billion in 2010 out of their total $40 billion liabilities.

Saidenov also said the central bank would continue to provide short-term loans to banks this year but would limit them to half the size of each bank's capital.



OTHER NEWS

GAME: International tangle with Kazakhstan 'Torpedoed' by Lakers

The Scope

A different type of hockey team skated into the Innisfil Recreation Complex Sunday.

They were smaller, younger and didn't speak a word of English, but they reigned from Kazakhstan in Eastern Europe. They contained six to eight players who are candidates for Team Kazakhstan in the under-18 World Championships in Minsk, Belarus in April.

The Innisfil Lakers were up for the international flavour, beating the Kazzing-Torpedo USTKamenogorsk squad, 5-3 in an exhibition contest. The game featured seven loaner players from two other Greater Metro Junior 'A' Hockey League teams. Five players came from the Minden Riverkings, including forwards Brett Myers, Thomas Faladareau and Jeff Beall, as well as defencemen Devin Hunter and Lane Schmid. Forwards Brain and Alex Busyvek were also borrowed from the Oro-Medonte 77's.
 
"Canada has a more physical game than in Europe or Russia," said one of the Torpedo's captains, defenceman Nikita Mokin, as translated by bilingual Laker forward Alex Kulikouskiy, who is originally from Belarus, so he also speaks Russian.

Kulikouskiy spent four days with the team, touring to different places, such as Barrie and downtown Toronto.

"It was pretty nice to hear some hometown language," said Kulikouskiy, who moved from Belarus to Sonoma, Calif., four and a half years ago.

The Kazakhstan team fired early, as forward Daylet Kenbayev scored with about three minutes into the game.

Laker forward Caleb Lister scored on a two-man advantage powerplay seven minutes later. Max Douglas then scored with about five minutes left in the period to give Innisfil a 2-1 lead after the first frame.

The second had the Lakers dominate, with forward Ryan Brain, defenceman Dustin Timm and Douglas each scoring to give Innisfil a 5-1 lead.

The Lakers let up slightly in the third, as Kenbayev and defenceman Evgeny Sokolov brought Torpedo back in the game.
 
"It was a great opportunity to promote our league, so I'm glad we had a chance to so this" said Lakers head coach Shane Hicke. "Bob Russell (GMHL president) does an excellent job by bringing in international teams, giving our league a different style than other leagues. Obviously with our NCAA rules, we matched up well against (Torpedo)."

"They were used to that fancy style of play instead of the physicality of what we play up here (in Canada)," said Laker forward Brain Davidson, who's originally from Reno, Nev. "They were very good though, and came to play, which is something we like to see from teams now and then."

The South Division firstplace Lakers (24-4-1, 49 points) increased their GMHL winning streak to 14 games after beating the Ontario Lightning Rams, 12-4, in Innisfil Friday. They will attempt to tie the South Muskoka's season winning streak league record of 15 games against the South Division seventh-place Tamworth Cyclones (3-19-2, eight points) at home Friday, starting at 7:30 p.m.

Also, so far Torpedo has lost, 5-4 against the South Muskoka Shield Dec. 29, and won 8-5 versus the Toronto Canada Moose Friday. The Kazakhstan squad will compete their eight GMHL-team skid Saturday (Jan. 10) against the King Wild in Nobleton, before they travel back to Kazakhstan Tuesday (Jan. 13).
 
Innisfil will have the chance to beat the record against the fourth-place Wild (17-10-2, 36 points) Sunday in Innisfil at 2:30 p.m.

Injury report: Innisfil were still missing 11 players from their lineup from holiday vacationers and injuries and hope to have a majority of them back in the next seven to 10 days. That list includes forward Max Newman, who had emergency bladder surgery Friday, coupled with a shoulder injury. He is reported to be out of the lineup for the next three weeks.

From the front office:

The GMHL trade deadline is just around the corner, Sunday (Jan. 10) and the Lakers' Director of Hockey Operations Dan Garneau hopes to pull the trigger on some deals to improve his squad before the playoffs.

"It's like Christmas for me," said Garneau. "Anytime you get new players it's very exciting. There's a couple of possibilities, I'm just trying to land them now."





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
 Web-site: www.kazakhembus.com