Kazakhstan: Country Profile

“Kazakhstan aims to strengthen the strategic partnership with the United States and the countries of the European Union.”

Nursultan Nazarbayev President of the Republic of Kazakhstan at the inauguration ceremony April 8, 2011, Astana “The United States highly values its bilateral relationship with Kazakhstan. Our countries’ strong relations demonstrate our shared and enduring commitment to expand and deepen our cooperation across a wide range of activities from international peace and security to non-proliferation. I look forward to continued cooperation and friendship between our countries. I wish you and the people of Kazakhstan success and prosperity as you celebrate this important day.”

Barack Obama President of the United States of America on the Independence Day of Kazakhstan December 13, 2010, Washington, D.C. “I am grateful to you for your outstanding contribution to the partnership between the U.S. and Kazakhstan, especially with respect to continued contacts between President Nazarbayev and President Obama.”

Secretary of State and Foreign Minister Kanat Saudabayev to Secretary of State Hillary Rodham Clinton January 25, 2011, Washington D.C. “Recently, I witnessed the great progress Kazakhstan has made during my visit to Astana for the first summit of the Organization for Security and Co-Operation in Europe in 11 years. Chairing the OSCE and hosting this summit are important milestones in Kazakhstan's ongoing development as a regional and world leader.”

Secretary of State Hillary Rodham Clinton's on the Independence Day of Kazakhstan December 14, 2010, Washington, D.C. “I think Kazakhstan deserves the warmest credit for removing the nuclear material that you inherited on your territory. And the United States has been your partner in doing this. I think nonproliferation is a human rights issue. I think the effort to go after the nuclear material that can fall in the wrong hands, that can be used to terrorize, maim, kill people, contaminate large areas is a fundamental human rights issue.

And in this area, Kazakhstan has been a world leader, and I want to publicly express my appreciation for that.”

Secretary of State Hillary Rodham Clinton Town Hall on Empowering Civil Society for Central Asia’s Future November 30, 2010, Eurasian University, Astana

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CONTENTS

KAZAKHSTAN AT A GLANCE.......................................................................……........…………………………………...4 Country brief overview Kazakhstan in 10 Economic overview Political structure Political Progress Presidential Elections 2011 Political Parties Civil society Middle Class Court System Media in Kazakhstan Ethnic Composition Religious Composition Myths in the West about Kazakhstan

KAZAKHSTAN FOCUSES ON ECONOMIC DEVELOMENT AND SOICIAL SECURITY........................................37 President Nazarbayev Outlines Major Development Priorities in His State of the Republic Address KAZAKHSTAN – ECONOMIC OVERVIEW………………………………………...........…………… … ….……..........43 General background Key economic indicators Outcomes of the Government‟s Anti-Crisis Package Kazakhstan‟s Energy Sector: Global Impact Mining and smelting industry in Kazakhstan Transport and Communications Agriculture Banking and Financing National Fund of Kazakhstan The State Program of Accelerated Industrial-Innovative Development of Kazakhstan for 2010-2014 National Welfare Fund “Samruk-Kazyna”, JSC People‟s IPO Development Institutions Taxation Trade Regulation Status Report on Kazakhstan‟s WTO Accession Process Kazakhstan‟s Position on the WTO after Creation of the Customs Union Astana Economic Forum Expectiations about Kazakhstan‟s Economy: Outlook by Independent Experts

KAZAKHSTAN'S FOREIGN POLICY: MAIN ACHIEVEMENTS AND NEW GOALS………………………………........………………………………….........116 Brief overview Kazakhstan-US Strategic Partnership 2010 President Nazarbayev‟s Visit to the US Kazakhstan and Non-Proliferatoin Kazakhstan‟s OSCE Chairmanship in 2010 Conference on interaction and confidence-building measures in Asia (CICA) Kazakhstan and the Organization of the Islamic Conference (OIC) Kazakhstan‟s international interreligious initiatives Congress of Leaders of World and Traditional Religions Afghanistan Iraq

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KAZAKHSTAN-THE HEART OF EURASIA ……………………………..……………………….……………...............143 Useful Information Nature and Geography Environment Protection Milestones of History CULTURE AND TRADITIONS...............................................................................................................................................155 Literature Lifestyle Traditions Museums Sports Cinema Architecture Cuisine Music Education “Bolashak” Scholarships Nazarbayev University

TOURISM ......................................................................................................... ...........................................................................176 Exciting Outdoor Activities in Kazakhstan Sample Routes Offered to Tourists in Kazakhstan Air Astana

MAJOR CITIES .........................................................................................................................................................................182 Astana – New Capital for the New Millennium New Horizons in Kazakhstan Almaty – Financial and Cultural Hub RECOMMENDED PUBLICATIONS ON KAZAKHSTAN................................................................................................. 184

DID YOU KNOW THAT ..........................................................................................………………….…………………....... 193

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KAZAKHSTAN AT A GLANCE COUNTRY BRIEF OVERVEW A huge country covering a territory equivalent to the whole of Western Europe, Kazakhstan has vast mineral resources, enormous economic potential and rich traditions, culture and history. The topography varies from the mountainous, heavily populated regions in the east to the sparsely populated, energy-rich lowlands in the west, and from the industrialised north, with its Siberian climate and terrain, to the arid, empty steppes of the centre and fertile south.

Descendants of ancient nomadic tribes and Turkic people of greater Eurasia that later joined the Gengiz Khan Empire, the Kazakhs Independence: December 16, created one of the world's last great nomadic empires in the late 15th 1991 and 16th centuries. Russia annexed their lands in the 18th and 19th Population: 16,5 million (as of February, 2011) centuries, moving settlers into the area. The Kazakh Republic was Location: North of Central formed as an autonomous Republic within the Russian Federation in Asia, on the Caspian Sea August 1920 and became a full Republic of the Soviet Union in Capital: Astana (population 684,018 as of April, 2010) December 1936. On December 16, 1991, Kazakhstan declared its Largest city: Almaty independence. (population 1,404,329 as of As the result of Soviet Union‘s sudden collapse, Kazakhstan April, 2010) Area: 2.7 million sq km shared with its fellow former Soviet republics a fiscal chaos that Neighbours: Russia, included hyperinflation (in 1992 about 2,960 percent), plummeting Turkmenistan, Uzbekistan, industrial production and the exodus of many of its most highly trained Kyrgyzstan, China as well as Azerbaijan and Iran through ethnic Russians. Between 1992 and 1999, the country lost two million Caspian Sea. of its six million Russian Soviet inhabitants. A huge number of Boundaries: Total 7,459 miles Kazakhs lost their livelihoods in the aftermath of the Soviet economic (12,012 km (without Caspian shoreline). The Republic of implosion.

Kazakhstan shares its longest In order to stop the economic downward spiral Kazakhstan borders with Russia, 4,251 launched major reforms and subsequently used its rising oil revenues miles (6,846 km) and China, 951 miles (1,533 km). It also to remake the economy in accordance with Western standards. It also borders 1,183 miles (1,894 km) restructured its Soviet- educational system. This helped to save on the Caspian Sea. Kazakhstan from the financial shock that inflicted Russia. As a result, Comparative area: ninth largest in the world, equivalent the European Union recognized Kazakhstan as a market-based to the size of Western Europe; economy in October 2000. The U.S. did the same in March 2002. Four times the size of Texas; Kazakhstan also was the first among its CIS neighbours to pay off its Five times the size France.

Claims: fledgling democracy debt to the International Monetary Fund -- in 2000 -- seven years Constitution: Secular ahead of schedule. This allowed Kazakhstan to obtain a favourable democracy. The Constitution credit rating, to implement financial institutions approaching Western was approved by referendum on August 30, 1995 and amended standards of efficiency and reliability and to develop a fully-funded in 2007. It established secular nationwide pension program. democracy that values Foreigners have invested heavily in Kazakhstan since its individual ―life, rights and freedoms‖, divided the independence, particularly in Caspian oil. Such investments are among Government between executive, of the key elements in Kazakhstan‘s economic success. In 2001-2003, legislative and judicial branches investment inflow surged to 13 percent of GDP and is currently with a system of checks and balances. The amendments running at almost ten times the rate of Kazakhstan‘s neighbours. The enlarged the powers of the country has enjoyed significant economic growth since 2000, Parliament, raised the role of parties, thus averaging 10 percent annually until the global crisis of 2008. Although political transforming Kazakhstan from reduced in 2009, the growth still remains positive and strong. presidential into presidential-

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The country is ethnically diverse, with native Kazakhs making up more than half of the population. Russians comprise just over a quarter. The remainder are Ukrainians, Germans, Chechens, Kurds, Koreans and Central Asian ethnic groups. All in all, more than 100 ethnic groups live in Kazakhstan. They live in harmony. In order to ensure inter-ethnic peace, the Assembly of the People of Kazakhstan was established, a unique body in the post-Soviet area representing the interests of all ethnic groups.

Kazakhstan is pursuing a staged democratization in all fields of social and political life. Kazakhstan has made notable Constitutional reforms including bolstering the rule of law, establishing free and fair elections, empowering parliament and spreading civil liberties. These were acknowledged when Kazakhstan was unanimously selected by OSCE member nations to chair the Organization in 2010. Kazakhstan is also chairing the Organization of Islamic Conference in 2011.

In 2009, Kazakhstan adopted two major roadmaps for democracy – the ―2009-2012 National Human Rights Action Plan‖ and the ―2010-2020 Legal Concept.‖ Kazakhstan is also a leader in nuclear nonproliferations.

President Nursultan Nazarbayev closed the infamous Semipalatinsk nuclear testing ground obtained nuclear-free state status for Kazakhstan.

parliamentary republic.

Head of state: President Nursultan Nazarbayev Head of government: Prime minister Karim Masimov Chairman of Senate: Kairat Mami Chairman of Majilis: Ural Muhamedzhanov Secretary of State: Kanat Saudabayev Foreign Minister: Mr. Yerzhan Kazykhanov Major languages: Kazakh, Russian; English is promoted as the language of international communication Major religions: Islam, Christianity Life expectancy: 62 years (men), 72 years (women) (UN) Monetary unit: 1 Kazakh tenge =100tiyn ($1=147,4 KZT as of April, 2011) Main exports: Oil, uranium, ferrous and nonferrous metals, machinery, chemicals, grain, wool, meat, coal GDP per capita: US $11,500 Internet domain: .kz

KAZAKHSTAN IN 10 Modern Kazakhstan is built on 3000 years of extraordinary history. The country has experienced epic moments and has been influenced by such legends as Alexander the Great and Genghis Khan. For centuries, the Silk Road provided a route through Kazakhstan for international traders and merchants carrying exotic merchandise. All this has contributed to the richness of Kazakh culture and its capacity to adapt and develop.

Kazakhstan‘s economy is the largest and the fastest evolving of the Central Asian region.

Since 2001, economic growth rate has been among the highest in the world and GDP will grow by 6-7% in 2011, aided by the increasing value of Kazakhstan‘s leading exports (oil, metal and grain).

Since 1993, Kazakhstan has attracted over US $120 billion of foreign direct investment – the highest foreign direct investment per capita in the CIS. Kazakhstan holds 30 billion barrels (4 billion tonnes) of proven recoverable oil reserves and potential reserves of 100-110 billion barrels. Development of new oil fields such as Kashagan (recoverable reserves: 13 billion barrels, peak projected output: 1.5 million barrels/day in 2019) will make Kazakhstan one of the world's top ten oil-producing nations.

Kazakhstan ranks first in the world in reserves of barite and tungsten, second in reserves of chromite, phosphate rock, and uranium, third in reserves of copper, lead, and zinc, fourth in reserves of molybdenum; sixth in reserves of gold, and eighth in reserves of iron ore. The country contains almost a quarter of the world‘s uranium – with production reaching 15,000 tons per year in 2010 making it the first in the world.

Kazakhstan has reinforced its global reputation as a democratic country through a series of major constitutional reforms, including the abolition of the death penalty and increased parliamentary representation.

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Kazakhstan is diversifying its economy away from natural resources. Agriculture makes up 10% of GDP; wheat is a leading commodity in export trade – as is metal processing, chemicals, textiles and food processing. New information technology projects - like the Alatau IT Park – are growing. Ambitious education initiatives make the latest generation of Kazakhs among the most highly skilled in the world. Every year, 3000 young Kazakhs are sponsored to study at the world‘s most prestigious education institutions, before returning home.

Political stability, religious tolerance and a unique location at the crossroads of China, Russia and Europe gives Kazakhstan a stabilising role for the whole region - as well as making it the perfect host for the Congress of World Religions (held in Astana every three years).

Kazakhstan is a forward-thinking country. President Nazarbayev is behind many ambitious projects such as the Aral Sea dam, which will save the disappearance of the world‘s fourth largest inland sea. The country has launched its own ambitious space programme at Baikonour and plans for a pan-Asian canal to further open up trade routes between central Asia and Europe.

Astana, Kazakhstan‘s capital (moved from Almaty in 1997), is situated at the very heart of the country. An incredible US$12 billion has been invested in the city‘s construction and development. Internationally renowned architechts like Norman Foster and Kisho Kurokawa have left their mark on a city that is set to outshine many of the world‘s more established capitals.

Eco-tourism is particularly strong in Kazakhstan, a land of vast unspoiled, open spaces, majestic mountains (with world class ski stations), horseback trails and increasingly vibrant, modern cities.

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ECONOMIC OVERVIEW Prime Minister: Mr. Karim Massimov First Deputy Prime Minister: Mr. Umirzak Shukeev (oversees economic, regional, trade and investment policy, sectors of agriculture, construction, natural resources and infrastructure, cooperation with WTO, Customs Union and Eurasia economic community) Deputy Prime Minister: Mr. Erbol Orynbayev (oversees administrative reforms and macroeconomic policy, sectors of employment, demographics, education, science, culture, health-care, business environment, Business Road Map-2020, PPP and SME development, cooperation with World Bank, European Commission, Kazakhstan-United States initiative on public-private economic partnership) Deputy Prime Minister - Minister of Industry and New Technologies: Mr. Asset Isekeshev (oversees the State program of accelerated industrial-innovation development 2010-2014 and local content development, sectors of industry, innovations, foreign investments, electricity and technical regulation, cooperation with OECD) Head of the Prime Minister‟s Office: Mr. Gabidolla Abdrakhimov (coordination of central and regional state bodies, human resources management, interaction with the Administration of the President, Parliament, NWF ‗Samruk-Kazyna‘.)

Minister of Economic Development and Trade: Mr. Kairat Kelimbetov Minister of Economic Integration Affairs: Ms.Zhanar Aitzhanova Minister of Oil and Gas: Mr. Sauat Mynbayev Minister of Finance: Mr. Bolat Zhamishev Minister of Transport and Communications: Mr. Berik Kamaliev Minister of Environment Protection: Mr. Nurgali Ashimov Minister of Agriculture: Mr. Assylzhan Mamytbekov Minister of Tourism and Sports: Mr. Talgat Yermegiyaev Minister of Education and Science: Mr. Bakytzhan Zhumagulov Chairman of National Bank: Mr. Grigoriy Marchenko Chairman of National Welfare Fund „Samruk-Kazyna‟: Mr. Timur Kulibayev Kazakhstan is important to world energy markets Economic development in 2010 because it has significant oil and natural gas reserves.

Real GDP growth: 7.0%.

Within the next decade, Kazakhstan is expected to Index of consumer prices: 7.8% become one of the world's largest oil producers and Investments in fixed capital stock: $33 bln. (-0.5%). exporters.

Total international reserves (including Kazakhstan’s strategic aspiration is to become a modern, reserves of the National Fund): $62,6 bln. or diversified economy with a high value-added and high42.5% of GDP Government and government guaranteed tech component, well integrated into the global economy. debt: 3.1% of GDP A strong energy sector is viewed as a good start to Budget deficit: 2.4% of GDP. achieve this goal.

The future of the Kazakhstan economy is closely connected with further integration into international economic relations, efficient use of reserves of hydrocarbon and mineral resources, export of industrial and agricultural products and the optimum deployment of country's transit potential and highly qualified human resources.

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During the Soviet period, Kazakhstan was an agrarian country and raw-materials supplier.

The military played a dominant role. During 20 years since independence, Kazakhstan has moved from a centrally planned economy to a market economy. Kazakhstan has made considerable progress in implementing complex political, economic and social reforms to establish a politically stable environment.

The first 10 years of Kazakhstan‘s independence were characterized by numerous economic, social and environmental challenges. Due to the disintegration of the Soviet Union, real GDP had dropped to 61.4% of its 1990 level by 1995. This economic deterioration was worse than the Great Depression of the 1930s.The wide-ranging inflation peaked at annual rate of 3000 percent in mid1990s.

Since 1992, Kazakhstan has actively pursued a program of economic reforms designed to establish a free market economy through privatization of state enterprises and economic decentralization. Successful implementation of reforms resulted in general recognition of Kazakhstan in 2001 as the most market-oriented country in the CIS. Western countries have applauded Kazakhstan‘s reforms in the areas of currency convertibility, inflation targeting, foreign investment policy, demonopolization and reallocation of resources.

Being the most successful reformer in CIS Central Asia – and based on its strong macroeconomic performance and financial health -- Kazakhstan became the first former Soviet republic to repay all of its debt to the International Monetary Fund (IMF) in 2000 (7 years ahead of schedule). This helped the nation receive an investment-grade credit rating from major international credit rating agencies. Today, Kazakhstan is rated as follows: BBB/Stable from Standard&Poor's, Baa2/Stable from Moody's Investors Service and BBB-/Positive from Fitch Ratings. The global financial crisis which started at the end of 2007 had multiple implications on Kazakhstan‘s economy and exposed underlying vulnerabilities. With lower oil and commodity prices and adverse conditions in international capital markets, new challenges for emerging economy surfaced – declining public revenue, liquidity shortages, dependence of financial institutions on external funding, negatively affected investors‘ confidence and capital outflows.

In these circumstances the Government quickly stepped in to regulate and stabilize the situation. A set of policies were introduced under the Anti-Crisis Program to help mitigate economic vulnerabilities and establish a basis for the resumption of strong growth. As a part of the policy, Kazakhstan has devalued its currency and vastly expanded its role in the financial sector.

With significant reserves of oil and gas, coal and uranium, Kazakhstan is an important energy provider to the world. In January 2011, Kazakhstan produced 5.9 mln. metric tons of oil (+5.5 in comparison with January 2010), 1.2 mln. metric tons of gas-condensates (+15.8%), 11.1 mln. metric tons of coal (+20.9%) and 3.6 bln. cubic meters of natural gas (+11.6%).

However, bearing in mind recent fluctuations in the world commodities market, the Government‘s energy policy focuses on further diversification of energy resources, efficient energy use, stimulation of R&D in Mining and Manufacturing renewables and raising a profile of extraction; industry; 11% Financial sector; 24% environment component. Today, 2% Trade; 7% investments in natural resources constitute 77% of all investments in Construction; 2% the economy. 75% of investments in Transport and natural resources come from communications; Geologic overseas and the rest is generated by 1% exploration; 53% Others;(%), 2%January-December 2010 Figure 1. Foreign Direct Investments the internal national economy.

Source: National Bank

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Key to the energy sector is a system of pipelines and infrastructure. Kazakhstan‘s counterparts (United States, EU, China and Russia) have identified their strong interest in cooperating with Kazakhstan in this area, particularly in building trans-continental oil and gas transportation systems. Kazakhstan has made it clear that this fully meets its own vision for the development of multiple energy transportation routes from and through Kazakhstan.

As of January 2011, total turnover through pipelines has increased by 36.7% (in comparison with January 2010). Volumes of oil and gas transported through pipelines have increased: in metric tons by 14.4% and 7.6% respectively; in tons per kilometre – by 12.5% and 124.3% respectively (in comparison with January 2010).

Transportation through pipelines constituted 26.4% of all cargo turnovers in 2010. Commercial viability, technical and environmental safety and Figure 2. Pipelines, 2010.

Source: Strategic Forecasting Inc. financial soundness are the guiding principles for Kazakhstan‘s strategy in this crucial area.

On November 27, 2009 leaders of Kazakhstan, Russia and Belarus gathered in Minsk to sign final agreements on the trilateral Customs Union, which launched January 1, 2010. Presidents of the three countries approved a customs code that went into force July 1, 2010, and a single customs tariff with a transitional period that will vary between 1.5 and 5 years depending on the type of goods. The Customs Union sets up a market with a population of 170 mln. people, aggregate trade of $900 bln., aggregate industrial potential of $600 bln., oil reserves of 90 bln. barrels, and agricultural production of $112 bln. The three countries' current aggregate GDP exceeds $2 trln. The establishment of the Customs Union will enable the three countries to have GDP growth over 15% by 2015.

The establishment of the Customs Union doesn‘t affect negatively Kazakhstan‘s negotiations to join the World Trade Organization (WTO). Being a WTO member does not mean that the country cannot be a member of the Customs Union.

The EU, for instance, is the best example of customs unions and member states being in the WTO, so is NAFTA. The three members of the Customs Union announced that they would seek to pursue their WTO memberships individually and Figure 3. Members of the Customs Union Source: Strategic Forecasting Inc. simultaneously and in a coordinated way The national economy as well as the market of the Customs Union is considered by the Government as the basis to build a modern, diversified, highly-technological, flexible and competitive economy with a high value-added component. This is the central goal of the National Strategy ‗Kazakhstan-2030‘ and the Strategic Development Plan of Kazakhstan-2020.

These two strategic programs are the framework of the mid-term 2010-2014 State Program of Accelerated Industrial-Innovation Development, which combines a number of

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regional development and sectoral programs (including the Strategy to enter the 50 most completive nations, 30 Corporate Leaders etc.).

The Program determines the roles of all development institutions, national companies, industrial zones, technological parks and free economic zones.

The objectives of the state industrial-innovation policy is to increase total GDP of Kazakhstan in 2010 by 50% from the level of 2008 and to decrease its energy intensity by Figure 4. State Program of Accelerated Industrial10%, to expand non-oil and gas export by 40%, and to Innovation Development boost labor productivity in manufacturing industry – by 50%, in other sectors – by 100%.

In 2010, 152 projects worth KZT 800 billion were launched within the program, creating 23.5 thousand jobs. As part of the Program to promote Kazakhstan‘s investment opportunities the Ministry of Industry and New Technology (operator of the Program) hosted in 2010 more than 28 meetings and presentations resulting in the signing of 150 contracts worth $9.6 billion. It is expected that in the first half of 2011 approximately 13 innovation-driven industrial projects will be launched by the Program.

The global financial crisis streamlined the Kazakhstan‘s economy by getting rid of companies and financial institutions that placed all their bets on high profits and showed no interest in long-term industrial development. It also correctedthe over-evaluated real estate market and encouraged investment in more economically stable and productive sectors. The crisis demonstrated that the Kazakhstan‘s overall financial system is solid enough to deal with a market collapse.

Further diversification of the economy, social and political stability, sizable natural resources, attraction of foreign capital, implementation of international technical, financial and business standards, accession to the WTO as a member of the Customs Union, promotion of corporate governance, greater transparency and accountability, education and administrative reforms – all are driving Kazakhstan to reach its strategic goals.

Some highlights on Kazakhstan‟s economy: 

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Kazakhstan in 2010 announced a Business Road Map – 2020, which aims to create permanent jobs through business development. According to the program, funds are allocated for further subsidization of interest rates on loans, loan guarantees, development of industrial infrastructure, internships and social assistance. As of January 2011, over 225 applications worth 101.2 billion tenge were approved for subsidizing within the Road Map. More than 30 projects of 129 business entities received loan guarantees. Approximately 1,175 enterprises received orders for rendering services in industrial zones. The total number of employees involved in the program exceeds 20 thousand people.

A state-run scholarship programme ‗Bolashak‘ (―Future‖), since its establishment, in 1994 has increased the number of graduating scholars from 187 in 1994 to 1,259 in 2010. During 1993-2009, Bolashak scholars numbered 6,788. In 2011, approximately 1,058 scholars will receive their Bachelor, Master and PhD degrees.

Kazakhstan has accommodated 8000 foreign companies (270 of them are companies listed in the Fortune 500), which invested over $13.1 bln. in Kazakhstan in 2010.

Kazakhstan in 2010 continued implementing of the Extractive Industries Transparency Initiative with the aim of delivering a clear signal to international investors and financial 10

institutions that Kazakhstan is committed to greater transparency and accountability and improvement in its investment climate  Following adoption of the Law on Islamic Finance in 2010, Kazakhstan is planning to issue by the end of 2011 a $500 million debut Islamic bond (sukuk), which could create a benchmark for corporate lenders aiming to develop an Islamic finance sector in Central Asia.

Kazakhstan plans to attract up to $10 billion in Islamic finance over the next 5 to 7 years.

Islamic finance would play a major role in funding Kazakhstan's drive to develop its industrial base.

Kazakhstan‘s Government is developing a program for initial public offerings (IPO) of the national companies owned by the sovereign welfare fund Samruk-Kazyna, which controls around $70 billion on assets in banks, state energy companies and other major industries. Samruk-Energy, KEGOC and KazPost will put their shares up for an IPO by the end of the year. National companies such as KazMunaiGas, Kazakhstantemirzholy railways and Kazatomprom should follow with initial public offerings in 2012-2013. Later on, the metal producers Eurasian Natural Resources Corp.

(ENRC), Kazakhmys, Kazzinc, and Arcelor Mittal‘s Karmetkombinat will offer some of their shares.

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POLITICAL STRUCTURE Kazakhstan is a presidential-parliamentary republic. The president is the head of state. The president also is the commander in chief of the armed forces and may veto legislation that has been passed by the Parliament. The prime minister chairs the Cabinet of Ministers and serves as Kazakhstan's head of government. There are three deputy prime ministers and 16 ministers in the Cabinet.

Karim Massimov has been serving as the Prime Minister since January 10, 2007.

Kazakhstan has held a number of presidential elections: in January 1999 – first ever alternative presidential elections with 4 alternative candidates for the Presidency, observed by OSCE; in December 2005 – presidential elections with 5 alternative candidates, 2 being major opposition leaders; on April 3, 2011 – presidential elections with 3 alternative candidates. President Nazarbayev won the last elections in a landslide. Kazakhstan invited more than 1,000 international observers to monitor the elections and demonstrated a high level of openness and transparency. Many observers assessed the coduct of elections as ―free and fair,‖ although ODIHR/OSCE came up with a number of criticisms and recommendations for improvement. However, the vast majority of the observers agreed that the elections reflected the will of the people and vote for modernization, stability and economic prosperity.

In May 2007 the Constitution was amended to limit the presidency to two terms and reduced a presidential term from seven years to five years, increasing the powers of Parliament so that the executive branch is more accountable to it. This was introduced in accordance with the OSCE‘s recommendations.

As in the United States, Kazakhstan‘s President annually delivers to the people his vision, a so called road map for future development of the country.

Comprehensive development targets are outlined by President Nazarbayev in his ―State-of-the-Nation‖ address every year.

On January 28, 2011, President Nazarbayev delivered his message to the people of Kazakhstan at a joint session of the Kazakh Parliament. Here is the summary of his address.

Kazakhstan‘s foreign policy will ―meet hopes and expectations of all our partners,‖ President Nazarbayev said in his state-of-the-nation address. ―Kazakhstan will remain committed to swift and efficient development of the Customs Union between Russia, Kazakhstan and Belarus.‖ He went on to note that in the first 10 months of the CU operation last year, the country‘s trade with the other two partners jumped 38 percent. ―We offer our European partners to jointly develop and 12

Government President: Mr Nursultan Nazarbayev (at the split of the USSR elected president December 1, 1991; as per new, amended Constitution elected to the first seven-year term on January 10, 1999; re-elected to the second seven-year term on December 4, 2005; reelected to the third five-year term on April 3, 2011) Prime Minister: Mr Karim Massimov (since January, 2007) Chairman of the Senate of the Parliament (upper chamber): Kairat Mami Chairman of the Majilis of the Parliament (lower chamber): Mr Ural Mukhamedzhanov (elected October, 2008) Secretary of State (since August, 2007): Mr. Kanat Saudabayev

Other members of the Government: First Deputy Prime Minister: Mr. Umirzak Shukeev Deputy Prime Minister: Mr. Erbol Orynbayev Deputy Prime Minister – Minister of Industry and New Technology: Mr. Aset O. Issekeshev Minister of Foreign Affairs: Mr. Yerzhan Kazykhanov Minister of Defense: Mr. Adilbek Dzhaksybekov Minister of Internal Affairs: Mr. Kalmukhanbet Kassymov Minister of Justice: Mr. Rashid Tusupbekov Minister of Finance: Mr. Bolat Zhamishev Minister of Economic Development and Trade: Mr. Kairat Kelimbetov Minister of Economic Integration Affairs: Mrs. Zhanar Aitzhanova Minister of Labor and Social Protection: Mrs. Gulshara Abdykalikova Minister of Oil and Gas: Mr. Sauat Mynbayev Minister of Transportation and Communications: Berik Kamaliyev Minister of Communications and Information: Mr. Askar Zhumagaliev Minister of Agriculture: Assylzhan Mamytbekov Minister of Environment:

accept, in a multilateral format, a Kazakhstan-EU Energy Charter Mr. Nurgali Ashimov of Healthcare: up to the year 2020,‖ Nazarbayev said. ―This would ensure the Minister Mrs. Salidat Kairbekova guarantee of stability of energy supplies to the European markets, Minister of Education and Science: and the development of pipeline systems.‖ Turning to other Mr. Bakytzhan Zhumagulov of Tourism and Sports: foreign policy issues, Nazarbayev announced his intention to Minister Mr. Talgat Yermegiyayev convene this year a special donor conference on Afghanistan.

Minister of Culture: The Kazakh President also reaffirmed his commitment to Mr. Mukhtar Kul-Muhammed of Emergency Situations: pursue a Stability Pact for the Caspian Region, which, in his view, Minister Mr. Vladimir Bozhko would be a document leading to better cooperation and mutual understanding among the five littoral states.

Another foreign policy priority for Kazakhstan is the development of an inter-state programme of assistance to neighbouring Kyrgyzstan, which last year saw major upheavals and violence. Kazakhstan, as both a close neighbour and the then-chair of the OSCE, helped stabilize the situation there by sending $11 million worth of assistance and coordinating various efforts including the dispatch of a group of police advisors. Kazakhstan will also continue promoting a Universal Declaration of a Nuclear-Weapons Free World, first proposed by President Nazarbayev last year at the Global Nuclear Security Summit in Washington, DC. In 2011, Kazakhstan will assume the presidency in the council of foreign ministers of the Organization of Islamic Conference. Tolerance was one of the major messages of Kazakhstan‘s OSCE chairmanship last year. Kazakhstan aggressively promoted closer ties between international organizations it chaired or initiated, such as the OSCE and the Conference on Interaction and Confidence-building Measures in Asia (CICA) and helped organize the first ever CICA-OSCE forum in Istanbul in June 2010. Astana also invited OIC Secretary General Ekmeleddin Ikhsanoglu to participate in and address numerous OSCE events, including its summit in Astana last December.

Kazakhstan is also a leader of the Shanghai Cooperation Organization (SCO), which is holding its 10th anniversary summit in Astana in June. Kazakhstan was the original co-founder of the SCO, which includes China, Russia and Central Asian countries. Speaking of Kazakhstan‘s economic development, the President said Kazakhstan‘s record since independence 20 years ago offers great promise for the future. ―In December 1991, having chosen the strategic goals of sustainability and success, we moved forward, creating new programmes of development for each new stage… We set ourselves ambitious goals, and we achieved them,‖ Nazarbayev said.

In 1994, Kazakhstan‘s gross domestic product per capita was slightly more than $700 Today it is $9,000, a twelve-fold increase. ―We had planned to reach such a level only by 2015,‖ the President said. ―The international experience shows that in their first 20 years of independence, no other country was able to do that.‖ Last year, Kazakhstan‘s economy grew seven percent, overcoming the global financial crisis. While the GDP grew 8.5 percent in 2007, the growth slowed to 3.2 percent in 2008, and then slowed even further to 1.1 percent in 2009. The economy never contracted, thanks to massive state investments to the tune of 14 percent of the GDP and the recovery of global commodity prices.

Even larger credit for the recovery, according to the President, should go to prudent policies and the Programme of Accelerated Industrial and Innovative Development (PAIID) for 2010-2014, which was launched last year. Already, 152 new enterprises were launched, creating 24,000 new jobs. Kazakhstan‘s gold and foreign currency reserves now stand at $60 billion, more than before the crisis hit, while Kazakhstan attracted $120 billion in foreign direct investment overall since 1993. ―Before 2014, we plan to see through 294 investment projects worth 8.1 trillion tenge (KZT 147 = US$1),‖ Nazarbayev said, adding that 161,000 new permanent jobs will be created and 13

207,000 new jobs will be available for the period of construction. The GDP should grow 30 percent, while the growth in processing industries should exceed that in the extractive industries, the president projected. Investments, both domestic and foreign, should grow by 30 percent. Inflation will be contained within five to eight percent, he said. The share of small and medium-sized businesses should reach 40 percent of the GDP. The population should grow from the current 16 million to 18 million, and qualified specialists will constitute 40 percent of the workforce.

Unemployment will stay below five percent. Kazakhstan will seek to become one of the major exporters of meat in addition to exporting wheat and flour. ―I stand for the principle, ‗strong business means a strong state‘,‖ the President said. Last year Kazakhstan was recognized by the World Bank as the country that improved conditions for domestic businesses the most in a single year. The World Bank also ranked Kazakhstan 59th out of of 183 countries in terms of having the most beneficial business climate. On other fronts, Kazakhstan adopted 16 laws to reform the system of law enforcement and the protection of human rights, while state bodies slashed their staffs by 15 percent. ―Kazakhstan will continue fighting corruption without compromises,‖ Nazarbayev said as he noted that the country jumped 45 places in Transparency International‘s Corruption Perception Index in three years.

Education, healthcare, language proficiency and tolerance have become Kazakhstan‘s top social priorities. Lifelong learning is the mantra for all Kazakhs, Nazarbayev said. By 2020, the country should switch from an 11-year school curriculum to a 12-year curriculum, and, for that, 400 new schools will be built by 2015, the president said. Nazarbayev University and other schools built around the countrywill also be instrumental in furthering educational reforms. By 2020, at least two universities in Kazakhstan should be ranked among the best universities in the world, the president said What is more, according to Nazarbayev, the people in Kazakhstan should have ―an opportunity to save for education of their children, with interest bonuses added from the government.‖ Also, a National Council on Vocational Personnel Training will be set up. Financing for healthcare now stands at 3.2 percent of the GDP. The population is much healthier and longlived as a result.

By 2013, the Unified National Healthcare System will be fully introduced, with the ultimate goal of extending the average life span to 72 years by 2020. The Government will also promote a healthy lifestyle.

Another top priority is the development of languages. ―Peace and harmony are our common achievement,‖ the President said. More than 60 percent of the population speaks Kazakh, the state language that 20 years ago was almost on the brink of extinction due to suppression from Soviet authorities. Plans are afoot to have 80 percent of the ethnically diverse population speak Kazakh by 2017 and 95 percent by 2020. ―In ten years, 100 percent of school graduates will speak the state language,‖ the President said. The government also promotes the study of the Russian and other languages. English is also a priority and ―by 2020, 20 percent of the population should speak English,‖ the president said. ―By May 2011, I instruct the Government to develop a new employment programme,‖ Nazarbayev said. ―This year, we are also raising pensions, scholarships and budget wages by 30 percent. For two years, we have been raising them by 25 percent each. As planned, by 2012, average pensions, salaries and scholarships will grow twice as fast compared to 2008.‖Kazakhstan has a bicameral Parliament, made up of lower house (the Majilis) and upper house (the Senate). Since 2007, the number of MP‘s has been increased: from 39 to 47 members in Senate. The President appoints 15 of them from the choice of prominent public figures, academics, intellectuals etc.

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from 77 to 107 members in Majilis (main legislative body). 98 of the Majilis deputies are elected in a nationwide constituency on the basis of proportional party lists. Nine of the Majilis deputies are elected by the Assembly of the People of Kazakhstan (an umbrella grouping of more than 100 ethnic groups in Kazakhstan).

The Constitution of the Republic of Kazakhstan approved through a national referendum in August 1995 and ratified the following month replaced an earlier ―soviet-style‖ constitution adopted in the wake of independence from the Soviet Union. The Constitution provides for a democratic and secular state. State governance is divided among the executive, legislative and judicial branches. The President is considered the head of state. The Constitutional Council is charged with the responsibility of deciding when to hold presidential and parliamentary elections and examining legislation for compliance with the Constitution.

POLITICAL PROGRESS Kazakhstan began to reform its political system immediately after becoming independent. At the time there was economic recession, hyperinflation (up to 3000%) and a drastic decline in living standards. The groundwork for a market-based economy, political pluralism, amulti-party system, an independent media, NGOs and a vibrant civil society were non-existent. Kazakhstan chose to build the country based on democratic values by joining the OSCE and signing the Helsinki Final Act and Paris Charter. The new political system developed in four stages.

In the first stage (1990–1993), Kazakhstan dismantled the previous soviet style political structure and established the basis for the parliament-president political system‘s development. In the second stage (1993–1995), Kazakhstan selected a new model of political development that reflects political, economic, social, cultural, psychological, geopolitical and ethnic specificities of the country. The first Constitution was adopted, the first elections to the Parliament and newly established local government bodies (Maslikhats) were held. For the first time in the history Kazakhstan, the executive, legislative and judiciary bodies were defined as independent branches of government.

The third stage (1995–1998) brought Kazakhstan to 1995 Referendum of the new Constitution and to the election of a professional bicameral Parliament. During this period, Kazakhstan also shaped its long-term vision of strategic development. -In 1997, President Nazarbayev adopted the national strategy ―Kazakhstan 2030‖ - a road-map for Kazakhstan‘s future growth, which identified seven national priorities through the year 2030: National security. Ensure development of Kazakhstan as an independent sovereign state preserving its complete territorial integrity; Safeguard and strengthen domestic political stability and national unity; Economic growth based on an open market economy with high levels of foreign investments and internal savings. Achieve realistic and sustainable rates of economic growth; Health, education and well-being of the citizens of Kazakhstan. Improve living standards, health, education and opportunities of Kazakhss and improve the natural environment in the country; Energy resources. Effectively utilize energy resources of Kazakhstan through rapid increases in extracting and exploring oil and gas with the aim of gaining revenues to engender stable and diversified economic growth and improved living standards; Develop transportation and communications infrastructure to enhance national security, political stability and economic growth.

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Establish a professional corps of civil servants capable of acting as representatives of the people in achieving national priorities.

The fourth stage of political development (1998–2007) helped Kazakhstan to prioritize the process of democratic development and bring it into compliance with economic development.

Through the Democratization Programme, which was presented in 1998, and efforts to expend power of the Parliament Kazakhstan came to the understanding of the importance of strong Parliament, political parties and civil society. Therefore, in 2002, Kazakhstan established the institution of Ombudsman on human rights, in 2003 - the Human Rights Commission, in 2006 - the State Commission on Democracy that provides a forum for dialogue on further democratization. It also adopted the 2003-2005 Program of the state support of non-governmental organizations and the 2006-2011 Concept of civil society development.

These helped Kazakhstan to move to the fifth stage of political development (2007- present).

Its goal is to ensure steady progress on the fundamental principles of establishing a democracy and civil society that will serve as a model for other countries in Central Asia. Since 2007, Kazakhstan has made notable advances in Constitutional reforms thatwere designed to establish a genuine democracy and civil society. The reform included laws that amended the Constitution, improved elections, provided judicial reform, reduced the presidential term from 7 to 5 years, increased the powers of Parliament, introduced proportional representation to elect members of the Majilis (Parliament) and established a party-based parliamentary system.

The Law amending the Constitution was signed by President Nazarbayev on May 21, 2007 as the result of joint work of the State Democracy Commission and Ad Hoc Working Group. This law enlarged the powers of the Parliament, raised the role of political parties, thus transforming Kazakhstan from presidential into presidential-parliamentary republic.

The renewed Constitutional Law ―On elections in the Republic of Kazakhstan‖ (signed on June 21st 2007) introduced proportional representation, political parties-based system for election to the Majlis. The Assembly of the People of Kazakhstan gained the status of the constitutional body together with the fixed quota of seats - 9 mandates in the lower chamber of the Parliament. The transition to the procedure by which the Government is formed by the parliamentary majority party was completed. Depending on the outcome of the elections, partial state funding of political parties wasintroduced. The maslikhats became the basis of local self-government. A number of ODIHR recommendations were implemented. On August 18, 2007, the early elections to the Parliament took place (as per the amended Constitution). This was the first election to the new, completely partybased Parliament thus signalling the gradual move of Kazakhstan from a strong Presidential form of rule toward a parliamentary majority system.

All of the efforts were acknowledged when Kazakhstan was unanimously selected by OSCE member nations in 2007 to chair the Organization. The OSCE chairmanship, which Kazakhstan took over in 2010, encouraged Kazakhstan to continue strengthening democracy in the country. President Nazarbayev had already proposed additional reforms that included requiring the media to provide equal coverage to all candidates and parties, reducing the requirements for registering as a political party, prohibiting by law a single-party Parliament, eliminating the requirement to register electronic media, including internet sites, and granting more authority to local officials over their own affairs.

The rule of law has been affirmed by the Constitutional Council and regional courts that have recently issued a series of rulings upholding the rights of individuals, often against state and local authorities, notably in cases involving religious freedom.

In February 2009, Kazakhstan signed into law new legislation regarding the media, elections, political parties and local government. Through close cooperation and intensive discussions with NGOs, political parties and OSCE institutions, Kazakhstan incorporated many of their proposals 16

into a final draft of the new legislation. The ODIHR and the Office of the Representative on the Freedom of the Media were very active and most helpful in bringing Kazakhstan‘s laws in line with OSCE standards. As Chargй d'Affaires of the U.S. Mission to the OSCE Kyle Scott stated at the OSCE Permanent Council in Vienna: ―This legislation marks a step forward on Kazakhstan‘s path to democracy.‖ The law on elections. Twenty-nine amendments have been signed into the law on elections.

Five of them were recommended by the ODIHR/OSCE. Eight of them were recommended by Kazakhstan‘s human rights community in close cooperation with U.S. human rights NGOs, including Freedom House. The law now guarantees representation of at least two parties in the Parliament even if one of them does not win enough votes (i.e., over a 7 percent threshold). The law excludes the possibility of electing a one-party Parliament, makes it mandatory for the media to equally cover the candidates and parties, including the period of nomination and registration, cancels any requirements for thousands of foreign observers, who usually come to Kazakhstan during elections, to have any relevant experience to monitor electoral process and decentralizes authority of the Central election commission in favor of local election commissions. Local election commissions have greater authority in organizing the electoral process, such as determining their schedules to make them more convenient for the voters, increases salaries for non-public servant members of election commissions at the election periods and authorizes the Central Election Commission to strictly regulate the process of issuing absentee ballots.

The law on political parties. Seven amendments signed into the law on political parties partly reflect recommendations made by the OSCE and Kazakhstan‘s human rights community, in close cooperation with U.S. human rights NGOs, including Freedom House. The original goal of the amendments is to further liberalize and expand the space for political debate. The law significantly reduces the number of requirements for registering a political party (in the new text of the law even a party that submits erroneous lists of its members cannot be denied registration on these grounds), decreases required membership size for a party to be registered (now a party needs to have only 600 members in each of the country‘s regions and 40,000 members nationwide to be registered as a national political party), simplifies the registration process and the funding of political parties to strengthen their role in public life, regulates the legal and technical process of establishing (merger, incorporation, split-up or split-off) a political party (the ODIHR recommendation) and provides public financing of political parties.

The law on mass media addressed the concerns that have been voiced by the media community. It has been amended to increase the rights of journalists and media to ensure greater self-regulation. The amendments reflect the recommendations of the ODIHR. The law removes administrative barriers and re-registration requirements for mass media and extends the rights of journalists. For example, media representatives are not required to ask for permission to use recording equipment when conducting interviews, provides the right of a citizen to demand retraction of the published defamation or slander if a person who published this information cannot support the allegations with facts and denies this right to citizens, thus upholding the adversarial principle in the court‘s deliberations.

On January 28 2009, the OSCE Representative on Freedom of the Media, Miklos Haraszti, welcomed the adoption of a number of amendments to Kazakhstan's media law and underscored the need for further democratization of media governance. "I welcome the easing of administrative burdens on the media, as well as the fact that civil society was involved in the discussion about the changes," Haraszti wrote in a letter to Kazakhstan's Foreign Minister, Marat Tazhin, and Culture and Information Minister, Mukhtar Kul Mukhammed. "However, the process of liberalization of Kazakhstan's media law should continue, because the current body of law, notwithstanding these 17

useful amendments, still fails to meet several international standards." He provided the authorities with a list of the most important reforms that still need to be carried out, including: The media market should be de-monopolized; Registration should be managed by an independent body, and should be declarative and not permissive; The use of closure or confiscation of circulation as a penalty should be abolished; Libel and insult should be decriminalized; Only officials should be in charge of protecting classified information; breach of secrecy by others, including journalists, should not be criminalized.

Haraszti offered his office's assistance to help the Kazakh government carry out further reforms in the field of media legislation.

The law on local self-government codifies local self-governance in the regions (oblast), districts, cities, districts within the cities, towns and villages, significantly increases the political role of Maslikhates (local elected legislatures) and improves the effectiveness of a ―checks and balances system‖ between maslikhates and akimates (local executives). The law reflects the experience of both France and Britain in providing local self-governance. It includes attributes of the European Charter on local self-government, is generally in line with the final document of the 1990 Copenhagen Meeting and reflects the vision of the United States on independence of local governance.

Members of Maslikhates are elected by people of a region. They approve regional development programs, claim the regional budget, and are accountable to voters. Voters have the right to request a report on the work of members of Maslikhates, as well as to recall them in case of a duties‘ breach. Heads of Akimats (akims) appointed by the President of Kazakhstan take office only after approval by Maslikhate. They are accountable to Maslikhates on budget issues. The law also lowers the needed majority (to 51 percent) for Maslikhates to vote Akims out of office.

Kazakhstan has also signed and ratified 35 major international instruments aimed at upholding human rights and civil liberties. These include international treaties on civil, political, economic, social and cultural rights, as well as conventions of the International Labor Organization, the optional protocol to the International Treaty on Civil and Political Rights and the protocol to the Convention Against Torture.

REFERENDUM-2020 and Kazakhstan‟s commitments to democracy. 2011 began with a jumpstart for political life in Kazakhstan with the initiative of a group of Kazakh citizens to hold a national referendum to extend the incumbent President‘s term of office until 2020. The logic behind their proposal was that Kazakhstan has prospered under President Nazarbayev. The country has established good governance, dynamic economic growth and basic rights and freedoms for its citizens. As a young nation, Kazakhstan still faces tough challenges in an unstable environment.

Those in favor of referendum argued that in order to ensure the continuity of economic reforms and political modernization, Kazakhstan needed long-term stability, which President Nazarbayev best ensured.

This initiative generated a great deal of support. More than 5 million people, or 55 percent of registered voters, signed a petition in favor of holding the referendum. The Parliament also approved the initiative and adopted constitutional changes to pave the way for the referendum.

But President Nazarbayev chose to adhere to democratic principles by vetoing the initiative.

The matter was also sent to the Constitutional Council of Kazakhstan to check its compliance with the country‘s Constitution. The Council ruled that it contradicts the provisions of the Constitution.

The President announced his full agreement with the conclusion of the Constitutional Council. Not to disappoint the supporters of the initiative, he offered a compromise solution by calling early 18

presidential elections, thus agreeing to cut his term of office by two years. Later, April 3rd was set as the date for presidential elections.

The President‘s decision not to create a precedent that could have been interpreted as a setback for the fledgling democracy was overwhelmingly appreciated on the international scene. In a letter to the President, U.S. legislators said they ―commended the decision of the President‖ and stated that ―the West was right to pin its hope on Kazakhstan as a stabilizing partner committed to democracy and the rule of law in one of the world‘s tougher neighborhoods.‖

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PRESIDENTIAL ELECTIONS 2011 Kazakhstan as an emerging democracy spared no effort to ensure that its presidential elections were free and fairand upheld high international standards and remain fully open for international and domestic observers.

Kazakhstan‘s Central Electoral Commission confirmed applications from eleven presidential candidates. .

Nominees of three political parties continued the presidential campaign: acting President Nursultan Nazarbayev from the Nur Otan Party, Secretary of the Communist Party‘s Central Committee Zhambyl Akhmetbekov and Senator Gani Kasymov from the Party of Patriots. Another candidate for the presidency, the leader of the Zheltoksan /December/ patriotic movement, filed an application on the last day of the nominations period.

On April 3, 2011 the presidential elections were held. The result: a landslide victory for the incumbent President. According to the Central Election Commission of Kazakhstan, the following was the distribution of votes among the candidates: Communist Zhambyl Ahmetbekov has won 1.36% of all the votes.

Mels Eleusizov, leader of the Environmental Union ―Tabigat‖ (―Nature‖) - 1.15%.

Gani Kasimov, the leader of the Patriots Party – 1.94%.

Incumbent President Nursultan Nazarbayev – 95.55 %.

For western onlookers, the figure might seem too high to be true. However, observers who visited Kazakhstan during the elections confirmed the genuine popularity of the leader among the citizens.

The result was foreshadowed by a survey conducted by IRI (International Republican Institute)/NED (National Endowment for Democracy). The survey, which took place February, 2011, indicated a 90% approval rate for Mr. Nazarbayev.

To ensure open and transparent elections, Kazakhstan welcomed 1,059 observers, including 357 from the ODIHR/OSCE, 426 from CIS observer mission, 13 from SCO observer mission, 7 from Turkic Speaking Countries Parliamentary Assembly, 5 from the Organization of the Islamic Conference, 8 from the Council of Europe Parliamentary Assembly (PACE), 80 from OSCE Parliamentary Assembly, 163 from 25 different countries, 90 foreign media representatives.

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A majority of the observers, including from CIS, SCO, CSTO and OIC, confirmed that the elections were ―free and fair.‖ The head of the CIS observation mission, Sergey Lebedev, said, ―The necessary conditions had been created in the Republic for international observation of the elections, attesting to the openness of the electoral process. Furthermore, the mission concluded that the legislation of the Republic of Kazakhstan makes it possible to hold free and democratic elections on the basis of universal, equal and direct suffrage.‖ The head of the SCO observation mission, Muratbek Imanaliyev, also declared that the elections had been free and transparent. The head of the observation mission sent by the Parliamentary Assembly of the Turkic-Speaking Countries, Aidyn Mirzazade, considered the presidential elections in Kazakhstan to be legitimate and in compliance with all international democratic standards.

The elections were also monitored by a group from the U.S. comprised political and economic analysts from the Center for Strategic and International Studies, Institute for New Democracies, Hudson Institute, Georgetown University and The Jamestown Foundation. On April 4, 2011 the group issued the ―Independent Observer Mission for the Presidential Election in Kazakhstan: PostElection Assessment.‖ It found: - The electoral process was generally well-administered and transparent at almost all the 65 polling stations that were visited; - Organizational errors or significant lapses seemed rare and could not detract from the overall impression of a decently run electoral process; - Electoral commission members were invariably open and forthcoming with information about technical aspects of the process; - The turnout rate for these elections was extraordinarily high at 89.9 percent. Such a turnout bespeaks a yearning to maintain stability and political continuity in Kazakhstan. Voters often said that they valued Kazakhstan‘s stability, security, and steadily increasing living standards in their country. They contrasted this with the chaos engulfing many Muslim countries, from North Africa and the Middle East to Afghanistan and Kyrgyzstan next door; - In most places election commissions members had undergone training ahead of the presidential election; Improvements in electoral process were found by the delegation of the Parliamentary Assembly of the Council of Europe. The head of the delegation said, ―PACE has observed elections in Kazakhstan in the past and is pleased to state progress from one election to another in this country.

The delegation is united in its view that despite certain imperfections that invariably mark all elections in any country, the outcome of this vote truly reflects the will of Kazakhstan‘s electorate.‖ The ODIHR/OSCE observer mission, which usually gives a cautious assessment of the elections in Kazakhstan, in its statement acknowledged improvements compared to previous elections. It stated that ―compared to the last presidential elections, the media provided more equality in covering candidates in the news programmes.‖ At the same time, it came up with a number of criticisms and recommendations for further improvements needed in the electoral process. Kazakh authorities have committed to continue working with ODIHR/OSCE on its recommendations in a cooperative manner.

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Against the backdrop of the positive assessment of all the international observers, ODIHR‘s focus on irregularities caught everyone‘s attention. It is widely held view in Kazakhstan that ODIHR mission of observers did not grasp the free and transparent atmosphere, in which elections were held, as well as a significant progress in Kazakhstan in this direction. The ODIHR estimations did not reflect the fact that the authorities and society exercised political will and aspiration to facilitate that the elections match the international standards.

The international community also recognized the legitimacy of the elections. Among the world leaders who congratulated Kazakhstan were French President Nicolas Sarkozy, Indian Prime Minister Manmohan Singh, Russian President Dmitry Medvedev, Chinese President Hu Jintao and Turkish Prime Minister Recep Tayyip Erdogan.

U.S. congressmen, including Gregory Meeks, Michael Honda, Eni Faleomavaega, John Conyers, Laura Richardson, Madeleine Bordallo, in their congratulatory message to the President said, ―Although we are fully aware that the election is not without criticism, we commend you for inviting more than 1059 international observers to monitor the conduct of the electoral process.‖ During the meeting of the House of Representatives on April 7, 2011, Rep. Faleomavaega stated, ―Since its independence, Kazakhstan has fully supported US-led efforts against nuclear proliferation and, under the leadership of President Nazarbayev, Kazakhstan continues to provide indispensable aid to US troops in Afghanistan. I am proud of Kazakhstan‘s accomplishments and, once more, I congratulate President Nazarbayev on his re-election as President of Kazakhstan. I have every confidence that he will spare no effort in delivering stability, security and prosperity for and on behalf of the people of the Republic of Kazakhstan.‖ The U.S. Government was among the first to offer its opinion on the election results. The U.S. Embassy in Astana issued a statement on April 4, 2011, which reads: ―We congratulate President Nursultan Nazarbayev on his re-election as President of the Republic of Kazakhstan. We look forward to continuing to work with him and the people of Kazakhstan to implement our broad-ranging strategic partnership. ―We endorse the preliminary conclusions of the Organization for Security and Cooperation in Europe (OSCE). We appreciate the improvements it noted. We urge the government of Kazakhstan to rapidly address the shortcomings the report highlighted. We welcome Kazakhstan‘s commitments to further liberalize the political environment and believe that continued improvements in the electoral process are critical components.‖ In his inaugural speech on April 8, President Nazarbayev outlined major priorities of his new term. The democratic reforms featured highly in his speech.

The president said that he always envisioned Kazakhstan ―as a modern and strong nation, an equal partner of advanced powers,‖ That is why he and his team are building Kazakhstan ―as an open economy and full-fledged democracy,‖ he said. The

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pace of Kazakh reforms, he said, was ―higher than in any other developed countries, where it took them centuries to develop their democracies.‖ He reaffirmed his commitment and determination to further ―democratization of the society.‖ He vowed to seek the best way of ensuring checks and balances in the government system through ―expanding powers of the Parliament and responsibilities of the Government.‖ He also spoke in favor of decentralizing power and delegating more authority to the local regions.

The Kazakh leader also promised to ―further improve the electoral process.‖ He underscored the need for ―developing a political culture.‖ He noted the absence of ―black pr‖ during the elections.

The elections were held in ―a stable atmosphere, without extreme confrontation,‖ he said, which should be the direction for future election campaigns. ―Only this way will it be possible to develop a real democracy and an efficient multiparty system,‖ he said.

The President also vowed to promote a ―responsible and free media.‖ He also underlined the importance of making sure that ―every citizen is equal before the law.‖ For that to happen, he expressed his willingness to ―take new steps to further improve the judicial system.‖ ―An uncompromising fight against corruption‖ is another priority for the re-elected President. There will be more ―rigid actions in place against corruption through criminal prosecution and eliminating loopholes in the laws,‖ he said. He also assured citizens that there would be ―adequate protection of rights and properties of individuals and legal entities.‖ POLITICAL PARTIES Kazakhstan‘s law on political parties prohibits parties based on ethnic origin, religion, or gender.

There are 10 political parties in Kazakhstan as compared to 13 in 2006. Four parties representing supporters of the current Government merged by the end of 2006, and as a result ―Nur-Otan‖ - a new pro-presidential pro-reform party able to effectively represent interests of its numerous supporters - emerged on the political stage of Kazakhstan. Also in 2006 a leftist Nationwide Social Democratic Party was registered joining the ranks of several other opposition parties. The beginning of 2007 has seen a robust process of mergers and consolidation of political parties, including opposition ones, particularly, in the run-up to 18 August, 2007 parliamentary elections.

CIVIL SOCIETY Since its independence, Kazakhstan has been fully engaged in the transition from a Soviet political system to democracy. It charts its own destiny under a banner of increasing freedom and decided to follow a formula that has worked for other democracies and requires the involvement of all stakeholders in the society. In the mid-1990s, Kazakhstan decided to establish and maintain a strong and independent civil society.

In close cooperation with European and American partners, Kazakhstan has been creating a legal environment for NGO development and growth. Kazakhstan‘s non-for-profit legislation has been internationally recognized as one of the best among the Commonwealth of Independent States.

The first measure was adopted in the early 1990s and gave a powerful boost to the development of civic organizations in Kazakhstan. In the middle of the 1990s, the government separated NGOs from commercial entities, significantly simplified the process of state registration, separated their activity from government and granted them special benefit status. In its ―1998 NGO Sustainability Index in Kazakhstan‖ report, USAID said, ―…NGOs exercised tax benefits without undue difficulty.‖ 23

Kazakhstan also has been providing opportunities for foreign and international donors to provide financial support to the national non-for-profit sector through grants and other means. The peak period of foreign support for the Kazakh NGO sector was from 1996 to 1998. Today, 162 international organizations are giving grants to Kazakhstan‘s NGOs and implementing various programs in the country. Funds received by Kazakh NGOs under state contracts are exempt from corporate income and value-added taxes.

Since Kazakhstan‘s independence, thousands of Kazakh NGOs have been trained by the UNDP, the USAID, the OSCE and other foreign and international organizations to increase their role in society and participate in nearly all spheres of public life. Recently, NGOs have become increasingly active in advocacy efforts.

The United States Agency for International Development‟s (USAID‟s) 2010 NGO Sustainability Index for Central and Eastern Europe and Eurasia scored Kazakhstan better than many Eastern European and Eurasian countries and identified Kazakhstan as having achieved one of the highest levels of NGO sector development among Central Asian countries. The report also projected that the number of NGOs in Kazakhstan is expected to rise because of the ―stable domestic policy climate laws that are favorable to NGOs.‖ The dynamic of NGO growth in numbers. In the early 1990s, about 400 NGOs were established as Kazakhstan experienced a rapid rate of reform. These NGOs were mainly involved in human rights issues and furthering democracy in the country. From 1994 to 1997, more than 1,600 NGOs were registered. That growth continues today. Last year, the number of NGOs rose by 10 percent. Today, more than 25,000 nonprofit organizations are active in Kazakhstan, including 13,000 NGOs. More than 550,000 people are involved in the ―third sector.‖ Cooperation between government and NGOs. At the beginning of 2002, the government decided to expand its effort to develop the third sector. It approved the Concept of State Support for Non-Commercial Organizations, including support for socially significant projects of NGOs through the signing of social contracts with them. In 2006, Kazakhstan adopted the Concept of Civil Society Development for 2006-2011, a ―road map‖ for improving relations between the government and the not-for-profit sector. During the first and second phases of implementing the Concept, Kazakhstan reduced the registration fee for NGOs, signed and ratified the Optional Protocol to the 1966 International Covenant on Civil and Political Rights, simplified long-criticized reporting requirements for NGOs receiving foreign aid and lifted the ban on state financing of NGOs. A number of laws have encouraged active cooperation with civil society institutions.

Kazakhstan will continue drafting an effective legal framework for NGOs. The original goal was to promote and secure stable development of civil institutions and improve the quality of dialogue between the government and NGO community. One of the most prominent platforms for this dialogue was established in 2003 with the creation of the so-called biannual ―Civic Forum.‖ Civic Forum. Years ago, President Nazarbayev called for the government to cooperate with the NGO sector, recognizing the power that partnerships with these organizations can play in developing and improving a civil society. As a result, Kazakhstan initiated the Civil Forum to facilitate greater involvement of the NGO community in the government‘s efforts for political reform nationwide. Civil Forum is a mechanism for engaging in meaningful dialogue, positive interaction and results-driven collaboration with NGOs, giving these organizations direct access to decision-makers within government. This process promotes the kind of participation, synergy and exchange that result in the formulation of beneficial policies and laws. The Civic Forum provides the opportunity for Kazakh NGOs to participate in government policy discussions and formulation.

At the time of the Civil Forum I, the nongovernmental sector of Kazakhstan was recognized as an important power within the democratic process. A new partnership among the government, business, 24

and NGOs was announced during this initial forum. The Civil Alliance of Kazakhstan was created during Civil Forum II. The Concept of Civil Sector Development was adopted and approved by the President. The action plan for the concept implementation was developed and approved by the Prime Minister during this forum as well. Civil Forum III was devoted to further developing partnerships within the framework of the civil society democratization and realization of the Civil Sector Development Concept.

The 2009 Civic Forum IV held in Astana on November 23-24 hosted more than 700 participants from an array of countries, including the United States, Russia, Germany, France, Ukraine and Azerbaijan. Representatives from trade unions, media, international and foreign NGOs, central and local executive bodies, and regionally elected representatives from various political parties attended. ―The Civic Forum, which this year is the largest ever, proves that the partnership between Kazakh society and the Government is deepening,‖ said Program Director for Central Asia at the International Center for Not-for-Profit Law (American based NGO) Elizabeth Warner.

The forum was opened by 2010 OSCE Chairman-in-Office H.E. Kanat Saudabayev. He stressed that cooperation between NGOs and the government will only increase as Kazakhstan begins its chairmanship of the Organization for Security and Co-operation in Europe (OSCE). He called on NGOs to contribute to Kazakhstan‘s success as chair of the OSCE, which he said is a ―great honor and huge responsibility not only for state organs but for all the institutions of civil society, including NGOs.‖ At the 2009 forum, the government reported to assembled NGOs that it had implemented 226 socially significant projects during the previous year—all in partnership with various NGOs. As a result, Kazakhstan was able to avoid social instability and, through this partnership, minimized the after-effects of the world economic recession. This partnership has had a defining effect as observed

by Ms.Warner: ―Since the first Civic Forum in 2003, we have seen many important developments in the partnership between the Government and civil society—simplified registration laws, the participation of NGOs in policymaking at the national and regional levels, and the beginning of more favorable tax laws that will promote private philanthropy.‖ One of the main outcomes of Civil Forum IV is the agreement reached between the government and NGOs to continue working together on improving the quality of their cooperation, the role of NGOs in the social and political life of the country, social monitoring, social orders, among other important areas.

Setting the Course Together. One of the more telling signs of the ―deepening‖ partnership on issues of political development has been the government‘s involvement in the drafting two significant documents—the National Human Rights Action Plan of the Republic of Kazakhstan, 2009-2012, outlining steps to strengthen the national system of human rights protection, and the Concept of Legal Policy for 2010-2020, which sets a plan for improving state governance based on the principles of effectiveness and accountability, ensuring protection of human rights and freedoms, and protecting the interests of the state and society.

Eighty percent of the Action Plan was developed by Kazakhstan‘s non-governmental organizations. It was preceded by a baseline study and report on human rights in Kazakhstan that analyzed national legislation, law enforcement practices and compliance with international law provisions in human rights protection. The Human Rights Commission and the group working on the plan closely studied the breath of international experiences. The Legal Concept was also prepared in close cooperation with Kazakhstan‘s NGO community. It defines the main directions of legal policy and is intended as a foundation for the development of programs in the sphere of legal policy and is projected to bring Kazakhstan‘s legal system closer to international standards in such

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areas as the constitution, administration, taxation, customs, as well as civil, financial, and criminal law. It envisages reforms in law enforcement, the judiciary and the protection of human rights.

MIDDLE CLASS Unlike many nations that have recently developed their energy reserves, the rise in revenues from foreign energy sales has had a trickle-down effect in Kazakhstan, producing the embryo of a new middle class. Kazakhstan has made a cornerstone of its social policy fostering the development of an indigenous middle class, seeing it as a social and political guarantor of stability. Privatisation, housing, banking, education reforms and numerous initiatives on supporting small and medium businesses have helped Kazakhstan‘s emerging middle class. Kazakhstan‘s middle class has begun to use its disposable income to travel abroad and to acquire items essential for a Western lifestyle such as computers and cell-phones. According to Kazakhstan‘s Statistics Agency, in mid-2008 there were more than 8 mln. cell phone users in Kazakhstan, representing more than half of the population. As the Kazakh middle class became increasingly visible, new political parties and the government itself began to vie for its support.

While estimates vary, some analysts put its numbers at 25 percent of the total population, representing people who consume 50-80 percent of the financial value of all goods sold in Kazakhstan. Analysts further divide this group into two sections, a lower middle class, with individual annual incomes of $6,000-9,000, (an estimated 70 percent of the stratum,) and the ―upper‖ middle class, with annual individual incomes of $9,000-15,000, (30 percent of the total group). According to official Kazakh statistics, salaries increased by 21 percent in 2001 and by 12 percent in 2002 and have consistently risen each year since.

COURT SYSTEM The legal system of Kazakhstan owes its origin to the Continental (Roman-German) legal family.

Since independence, Kazakhstan has successfully reformed its legal and judicial sectors and constantly continues the modernization process by introducing the best world practices. Such reforms as the move of penitentiary system from the Ministry of Interior to the Ministry of Justice, introduction of a moratorium on the death penalty with a view of future total abolition and the introduction of jury trials for the most serious crimes have all won international acclaim.

There are local and oblast (regional) level courts and a national-level Supreme Court and Constitutional Council. A special arbitration court hears disputes between state enterprises. There is also a military court system. Local level courts serve as courts of first instance for less serious crimes such as theft and vandalism. Oblast level courts hear more serious criminal cases and also hear cases in rural areas where no local courts have been established. A judgment by a local court may be appealed to the oblast level. The Supreme Court hears appeals from the oblast courts. The constitution establishes a seven member Constitutional Council to determine the constitutionality of laws adopted by the legislature. It also rules on challenges to elections and referendums and interprets the constitution. The president appoints three of its members, including the chair.

Under constitutional amendments of 1998, the president appoints a chairperson of a Supreme Judicial Council, which nominates judges for the Supreme Court. The Council consists of the chairperson of the Constitutional Council, the chairperson of the Supreme Court, the Prosecutor General, the Minister of Justice, senators, judges, and other persons appointed by the president. The president recommends and the senate (upper legislative chamber) approves these nominees for the Supreme Court. Oblast judges (nominated by the Supreme Judicial Council) are appointed by the president. Lower level judges are appointed by the President from a list presented by the Ministry of Justice. The Ministry receives the list from a Qualification Collegiums of Justice, composed of 26

deputies from the Majlis (lower legislative chamber), judges, prosecutors, and others appointed by the president). Under legislation approved in 1996, judges serve for life.

In accordance with 2008 Constitutional reform, the judicial-legal system was improved with the aim of strengthening the independence of courts in pronouncing judgments. The reform facilitated a near total abolishment of capital punishment in Kazakhstan, limiting its application exclusively to terrorist crimes involving the loss of human life, or wartime crimes. A system of judicial custody has been introduced and the Constitution prohibits investigation by the Office of Public Prosecutor. These reforms are directed at further democratization of the institutions of the Government and society. In order to make the legislation activity more effective, the Kazakh Government is in the process of creating a system that would be modern in content and have regulations that vividly reflect all stages of legislation and law-enforcement activity.

Each Legal Act is being evaluated as per international standards to ensure that the interests of Kazakh citizens, society and the State are comprehensively and rationally taken into consideration.

JUVENILE JUSTICE REFORM IN KAZAKHSTAN. Kazakhstan, like other countries that were part of the Union of Soviet Socialist Republics (USSR), did not have a juvenile justice system at independence. Some institutions specifically for children did exist, notably juvenile correctional facilities and juvenile police. But there was no law on juvenile justice, nor specialized courts or judges. Juveniles accused of an offence were tried by ordinary criminal courts, under the Criminal Code and the Code of Criminal Procedure.

While offenses by juveniles increased in the years following independence, they have been decreasing since 1994. In recent years, the number of offences has fallen from 8,237 in 2002 to 5,383 in 2007. The decline has been dramatic for administrative offenses, such as drunkenness, drug use and disorderly conduct, and less pronounced for criminal offenses. The number of offenders has remained relatively stable during these years, however, apparently due to the growing number of crimes committed by juveniles acting as a group. Nevertheless, the number of convicted juvenile offenders has diminished by more than half since 2000, and the number of juveniles given custodial sentences annually has fallen from 1,668 in 2000 to 751 in 2006. The total population of the four juvenile correctional facilities was 473 persons in 2007, and the number in ‗pretrial‘ detention facilities was 459.

UNICEF supported a situation analysis on juvenile justice in 2000. The lead role then passed to the Open Society Institute, which undertook a major project from 2001 to 2006 (the ‗Juvenile Justice Project‘). The project led to a comprehensive set of recommendations, many of which have been incorporated into a ‗Juvenile Justice System Development Concept‘ approved by the President in 2008. Adoption of this ‗Concept‘ marks the beginning of a key stage in the development of juvenile justice in Kazakhstan.

In 2010, a UN assessment team found much that is positive: a commitment to the creation of a juvenile justice system that complies with international standards and best practices, strong cooperation with the international community, pilot specialized juvenile courts and juvenile police units, a specialized defense team in Almaty, the improvement of conditions in colonies and the policy of early release of juvenile prisoners who show evidence of rehabilitation.

The ‗Juvenile Justice System Development Concept‘ establishes the basic framework for the future juvenile justice system. The time frame for the creation of this system is 2009–2011. The Open Society Institute is no longer involved in juvenile justice. The Organization for Security and Co-operation in Europe (OSCE) supports the development of probation and mediation, but does not play a direct role in juvenile justice. The government has asked UNICEF to help develop the juvenile justice system, which builds on UNICEF‘s previous work on de-institutionalization.

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MEDIA IN KAZAKHSTAN When it emerged on the world stage from the shackles of Major Kazakh media outlets the Soviet Union in 1991, Kazakhstan began to develop its media Newspapers Kazakhstanskaya Pravda market. It started with only few media outlets, purely official, and www.kazpravda.kz now has more than 2,000 local media resources, about 85 percent Ekspress-K of which are non-governmental. www.express-k.kz There are major newspapers as well as TV and radio Zhas Alash channels providing news and entertainment in 11 languages, www.zhasalash.kz including German, Ukrainian, Turkish and Ukrainian. Media Liter outlets broadcasting in ethnic languages receive grants and other www.liter.kz types of financial support from the national budget. In 2002, the Vremya (opposition) – first Kazakh satellite channel – Caspionet – was launched and www.time.kz Karavan – www.caravan.kz broadcasts both in the country and abroad.

International media corporations such as CNN, BBC, Zonakz (opposition web source) www.zonakz.net Radio Free Europe, Deutsche Welle, Polonia and others broadcast Geo (opposition web source) their programs in Kazakhstan through local cable television www.geokz.tv companies. More than 80 foreign media outlets from more than 20 countries, including the largest news agencies such as the Television Associated Press, Interfax, France Press,Xinhua, Reuters, ITAR- Khabar TV – www.khabar.kz TASS and Bridge news are accredited in Kazakhstan.

Kazakh Commercial TV (KTK) www.ktk.kz Benefits to the media include: Caspionet – www.caspionet.kz legal guarantees of the principles of freedom of speech; continuing improvement of the legal framework for mass El Arna http://www.elarna.kz/ Hit TV www.hittv.kz media activity; Channel 31 a transparent process of receiving frequencies for TV and http://www.31.kz/ radio broadcasting. The Commission on providing rights for radio frequency use comprises representatives of the Radio Parliament, international and Kazakhstan public Radio NS – www.ns.kz associations. Activity of the Commission is widely Europa Plus – www.europaplus.kz covered by the mass media; creation of economic conditions for mass media growth. Auto Radio – www.avtoradio.kz All the publications and TV stations are exempted from VAT. Charges for use of radio frequency decrease almost News Agencies Kazinform – www.inform.kz every year; Interfax Kazakhstan – continuing and constructive cooperation with public www.interfax.kz associations, international organizations, media research Kazakhstan Today – institutes in the area of mass media development. www.gazeta.kz Journalists‘ rights associations such as the Journalists Congress of Kazakhstan, Journalists Union of Kazakhstan, Teleradiobroadcasters Association of Kazakhstan and offices of international organizations (the OSCE, Human Rights Watch, Internews network and Adil Soz) are all established in Kazakhstan; close attention to journalists‘ development. The government provides grants and loans for education in this field; a TV Journalism School was established.

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ETHNIC COMPOSITION. Kazakhstan has 130 nationalities within its borders.

Kazakhstan‘s ethnic composition is the driving force behind much of the country‘s political and cultural life. The country‘s principal ethnic groups include Kazakh (63.1%), Russian (23.7%), Uzbek (2.9%), Ukrainian (2.1%), Uighur (1.4%), Tatar (1.3%) and German (1.1%), and other groups (4.4%).

Many nationalities were driven to Kazakhstan by political repression and persecution. In Stalin‘s time, Kazakhstan hosted 1.5 million political prisoners from Russia and other regions of the USSR. More than 1.3 million people were deported by Stalin during World War II ―as representatives of unreliable nations,‖ All these people found understanding and support among the Kazakh people.

The principle of equality of all ethnic groups is strictly adhered to. About 40% of secondary schools use Russian in teaching. In higher education, 70% is in Russian.. In areas of residence of compact ethnic groups schools function with Uyghur, Tajik, Ukrainian, German, Polish and other languages of teaching.

The Sunday schools of national and cultural unions also receive support in the teaching of native languages. Today 30 languages of ethnic groups are taught in about 200 Sunday schools and 3 schools of national revival. Magazines and newspapers are published and TV and radio programs are broadcast in 11 national languages. Books in the languages of ethnic minorities of Kazakhstan are published annually, with a total number exceeding 80,000. Besides Kazakh and Russian theatres, there are also Uyghur, German and Korean ones.

Ethnic cultural centres have been established in all areas of Kazakhstan to support ethnic identity of different nationalities. Their highest forum is the Assembly of peoples of Kazakhstan.

Today this powerful social force has become an organic part of the civil society and expresses its views in the chambers of the Parliament, political parties, mass-media, state and non-government organizations. The Assembly of peoples of Kazakhstan has become an important element of the political system of Kazakhstan. It has forged the interests of all the ethnos and ensures the rights and freedoms of all citizens regardless of their ethnic origin and religion. 27 republican and regional, more than 300 district ethnic cultural unions enter the Assembly of people of Kazakhstan. Three centres have an international status. The Assembly deals with 16 Small Regional Assemblies of peoples of Kazakhstan which act as consultative bodies by the regional administrations and comprise representatives of local ethnic-cultural and social unions.

Kazakhstan‘s efforts to ensure inter-ethnic peace and accord are essential for internal stability and are widely recognized in the world. The Pope as well as UN General Secretary Koffi Annan who paid visits to our country over the last five years cited Kazakhstan as the example of inter-ethnic consent and sustainable development of a multi-ethnic society. The interethnic policy is based on the principle of unity in variety. The civil peace and consent in Kazakhstan are the result of a persistent policy of the Government which enjoys the support of the whole society.

Languages: Kazakh, which belongs to a Turkic group, spoken by over 70.1% of the population, is the state language. Russian, spoken by 94.3%, enjoys an equal status under the Constitution and is a means of interethnic communication in Kazakhstan. English is spoken by 15.4%. There is the National Trinity of Languages Program which aims to ensure that all Kazakh citizens have full command of Kazakh, Russian and English to have an international competitive edge in the 21st century. Newspapers, TV/Radio programs, school instruction are done in 11 languages (Kazakh, Russian, Uzbek, German, Korean, English, etc.)

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RELIGIOUS COMPOSITION Two major religions in Kazakhstan are Islam and Christianity (70.1% and 26.1% of all believers, respectively). Most Muslims in Kazakhstan belong to the Sunni denomination of Islam, while most of Christians belong to the Russian Orthodox Church. Kazakhstan is home to more than 40 religions. in Kazakhstan which are organised in more than 3000 religious organisations. It is worth mentioning that although most people in Kazakhstan associate themselves with a certain religion, most of the population is not deeply religious.

In accordance with 2009 US Department of State ―Human Rights Report: Kazakhstan,‖ the constitution and law provide for freedom of religion and religious groups worship largely without government interference. The government continues to express publicly its support for religious tolerance and diversity. The country is multiethnic, with a long tradition of tolerance and secularism.

In particular, Muslim, Russian Orthodox, Roman Catholic, and Jewish leaders reported high levels of acceptance in society. The number of registered religious groups and places of worship increased during the year.

The State doesn‘t interfere with the activities of religious organizations (unless laws are violated). The State provides no material or any other support, including financial aid, to religious organizations. Religious organizations don‘t exercise any state functions. Religious organizations don‘t interfere with the matters of the State.

NATIONAL UNITY DOCTRINE. On the eve of the Day of Unity of Kazakhstan People on May 1, 2010, the authorities and civil society groups achieved consensus on the final version of the National Unity Doctrine, a project initiated by President Nazarbayev in October 2008 at the 14 th Session of the Assembly of People of Kazakhstan and designed to reflect the common ideals consolidating all citizens of Kazakhstan into a single nation, regardless of one‘s ethnic heritage, religion, or social class.

The first draft, designed by the Assembly of People of Kazakhstan and published in news media in November 2009, created much public interest and encouraged a wide debate on the ways to enhance social cohesion in the country of 130 ethnicities and 40 religious denominations.

The Doctrine of National Unity, a blueprint for strengthening the inter-ethnic harmony of Kazakhstan for years to come in a country destined to maintain its multicultural character and consolidation around common values, has caused a significant debate, which ultimately made for stimulating dialog between the government and civil society. ―The doctrine‘s final version proved that we can reach agreements and understand each other. This wasn‘t forced upon us, people discussed it and felt it through their hearts,‖ said Murat Auezov, a prominent intellectual and philosopher.

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MYTHS IN THE WEST ABOUT KAZAKHSTAN Common misconceptions. Kazakhstan is frequently described in Western media articles as a ―dictatorship‖ led by a ―corrupt‖ and ―autocratic ruler‖ who has been in power for ―too long.‖ In fact, Kazakhstan is a country that is only 20 years old and that, in that short time, has achieved remarkable progress in transforming itself from a former Soviet republic into a new and increasingly successful Western-style democracy.

Kazakhstan has a record to be proud of. It has settled its borders with its vast neighbors. It has strengthened its external security by a shrewd foreign policy that has achieved close ties with Russia, China, the United States and Europe simultaneously. It has achieved an unprecedented degree of interethnic harmony, thereby laying the foundation for internal stability. The economy has been privatized and has been growing at about 10% per annum for the last several years. Oil exports will continue to grow and steps have been taken to diversify the economy. Kazakhstan‘s citizens have strong property rights. They are able to borrow money from banks to buy homes, land and other property knowing that they have a real chance to develop a personal stake in the economy.

When they get old or ill, they know that they will receive adequate support and medical care.

The result is that today Kazakhstan is probably the most stable and developed country in the former Soviet Union. How was this achieved? Many Westerners think the story is only about oil.

The truth is different. Since the beginning, President Nazarbayev and the Government have placed emphasis on achieving political stability and economic growth, without which there can be no longterm future for the country. The economy was privatized in the 1990s and today, thanks to this policy and the rapid development of the energy sector, the nation is reaping the benefits. By staying faithful to the strategy of putting the economy and stability first, the Government has been able to unveil a series of important democratic reforms that will in time lead to a full-fledged democratic state.

Despite the obvious signs of progress, Kazakhstan has been frequently criticized in the West for being ―slow‖ to implement democratic reforms. This is unfair. In England, for example, democracy developed over more than 700 years, with often violent interludes. In Kazakhstan, we have achieved an extraordinary degree of political freedom in just twenty years without any violence. Democracy is not only about laws and institutions. It is fundamentally about custom, habit and culture - supported by property rights backed by the rule of law. In practice this means that it is impossible to create a parliament one day and expect democratic debate to occur the next. One cannot create a responsible opposition or media at the stroke of a pen. Establishing and nurturing an independent judiciary is an even greater challenge, as is tackling corruption.

A common misconception in the West is that Kazakhstan is ―forcefully‖ being dragged down the path to democracy against its will. This is not true. Kazakhstan has chosen to become a democracy because it is the best way to run our society, ensure the prosperity of the people and guarantee the long-term security of the state. A large and stable democracy in the heart of Central Asia is surely a positive thing for Kazakhs and for their Western allies.

Over the last years, Kazakhstan‘s Government has set out and started to implement detailed plans for further democratization and economic development. These reforms are an integral part of the Government‘s domestic agenda and they will be persistently implemented.

Kazakhstan‘s impressive record in reforming its economic and political system, its global promotion of inter-ethnic and inter-religious tolerance, its leadership in non-proliferation activities and its overall responsible and constructive foreign and domestic policies were recognized in December, 2007 when fifty-six nations of the Organization on Security and Cooperation in Europe unanimously elected Kazakhstan as their Chair in 2010. Kazakhstan was the first former republic of

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the Soviet Union, the first nation ―to the East of Vienna,‖ and the first country with a Turkicspeaking Muslim majority to lead the OSCE. “The President for life” myth. In May 2007, President Nazarbayev announced a series of important political reforms designed to take to the next stage Kazakhstan‘s unique experiment to establish a genuine democracy and civil society. Among his proposals was judicial reform, the reduction of the presidential term from seven to five years, increasing the powers of Parliament so that the Government would be accountable to it, introducing proportional representation to elect members of the Majilis (Lower House) and establishing a party-based parliamentary system.

Although the President‘s announcement was greeted positively in the United States and Europe, the coverage in the Western media has been almost wholly negative, focusing on the decision by the Majilis to grant President Nazarbayev the right to stand as a candidate for the presidency for a third time when his term of office expired in 2012. The gist of the media comment is that this is yet another example of the ―authoritarian‖ Nazarbayev centralizing power around himself and his family. It was widely reported, quite incorrectly, that he has arranged for the Majilis to vote him ―President for life.‖ Under the Constitution of the Republic of Kazakhstan, the maximum number of presidential terms to which an individual may be elected is two. This rule is the same in the United States.

President Nazarbayev is currently serving his second term. The Majilis‘ decision to grant Mr. Nazarbayev the right to run for a third term of office did not grant him the presidency ―for life.‖ It permitted him by law to stand for election a third time, and only if he so chose to.

Second, this vote was a unanimous decision by the elected Members of Parliament. It was not an executive order from the President. Under the Constitution, President Nazarbayev – indeed, any president – cannot refuse Parliament‘s unanimous decision under any circumstances, whether he supports the proposal or not.

Third, the Majilis made their decision in the light of the unique set of circumstances facing the country, granting a privilege -- certainly – but also imposing an onerous duty upon a single individual whose role in the founding of the State of Kazakhstan has been pivotal. This is not an example of an autocratic leader propping up his power. It is the behavior of an increasingly stable and prosperous society seeking to bolster one of the main anchors upon which the security and welfare of millions depend.

The key to understanding what the Majilis voted for lies in understanding Kazakhstan's quest for stability. As any informed observer of events in the former Soviet Union will acknowledge, illconsidered or overhasty experiments with democracy have unleashed forces that have been deeply harmful. The result has been economic failure, inter-ethnic discord and, in some cases, a reversal of the very freedoms that democratic reform was supposed to bring about.

Kazakhstan, with its vast territory and small but diverse population, has a once-in-a-lifetime opportunity to build a viable and prosperous state. It cannot afford to play with experiments that will not succeed.

For this reason, the Majilis' decision to grant President Nazarbayev the unique status of being able to stand for election to a third term of office was sensible and pragmatic. In the short- to medium- term, it is the best guarantee for the stability. The law does not mean that Mr. Nazarbayev will be President for life, or that he may stand for an indeterminate number of times, or even that he might stand unopposed.

Religious Freedom: Myth or Reality? In Kazakhstan, religious freedom is guaranteed by the Constitution, promoted by President Nazarbayev, praised by the country‘s Chief Rabbi and recently affirmed by the Constitutional Council‘s landmark decision that further safeguards this fundamental right. Yet the Western media and human rights organizations occasionally report on small incidents 32

involving non-traditional religious groups in the country that have portrayed religious freedom as controversial rather than a fundamental right. There is undeniable evidence that religious freedom is a way of life in Kazakhstan. Kazakhstan‘s culture is multiethnic and tolerant; the state is secular and neutral, converging in a way to insure that Kazakhstan, more than any country in Central Asia, is respectful to any and all faiths. The Department of State‘s Human Rights report points to Kazakhstan‘s Constitution and laws that ―provide for freedom of religion,‖ which guarantee this right in Article 39. It states: ―Human rights and freedoms shall not be restricted in any way.‖ Article 14 prohibits ―discrimination on religious basis‖ and Article 19 insures that everyone has the ―right to determine and indicate or not to indicate his/her ethnic, party and religious affiliation.‖ The Constitutional Council recently affirmed these rights by ruling that a proposed law that would have limited the rights of certain individuals to practice their religion was declared to be inconsistent with the country‘s Constitution that guarantees freedom of religion.

Although Kazakhstan is sixty percent Muslim, the Jewish community is exceptionally well regarded, according to Chief Rabbi Yeshaya E. Cohen. In a statement before the Conference on Human Rights and Religious Freedom, Rabbi Cohen reported, ―In Kazakhstan, every religion and faith enjoys complete freedom of expression and government support and can well serve as an authentic model to all countries with regard to preventing and eliminating anti-Semitism and terrorism.‖ President Nazarbayev‘s personal commitment to respecting all faiths and insuring that religious harmony is a way of life in Kazakhstan is evidenced by his hosting of the third triennial Congress on World and Traditional Religions in July, 2009. It brought together hundreds of religious leaders from around the world to promote religious tolerance, common ideals, and interfaith dialogue.

During a visit to Kazakhstan in September 2001, Pope John Paul II stated: ―It is with great affection that I kiss this land, which has given rise to a multi-ethnic state. Each guaranteed the same rights and freedoms, the spirit of openness and cooperation is part of your tradition.‖ ANSWERING CRITICS. Despite Kazakhstan‘s impressive strides in transitioning to a democratic society, criticisms by some non-government organizations unfairly portray Kazakhstan in negative terms. While some of the criticism may be warranted, it should be viewed in the larger context of Kazakhstan‘s commitment to and progress towards achieving a true democracy.

CRITICISM #1: Kazakhstan‘s 2011 election was not fairly conducted, nor was it transparent and fully open to international observers.

RESPONSE: The improvements in electoral process were attested to by the majority of the 1,059 internatational observers. The head of the delegation of the Parliamentary Assembly of the Council of Europe said, ―PACE has observed elections in Kazakhstan in the past and is pleased to state progress from one election to another in this country. The delegation is united in its view that despite certain imperfections that invariably mark all elections in any country, the outcome of this vote truly reflects the will of Kazakhstan‘s electorate.‖ The ODIHR/OSCE observer mission, which usually gives a cautious assessment of the elections in Kazakhstan, in its statement acknowledged the improvements as compared to previous elections. It stated that ―compared to the last presidential elections, the media provided more equality in covering candidates in the news programmes.‖ At the same time, it came up with a number of criticisms and recommendations on further improvements needed in the electoral process. Kazakh authorities have committed to continue working with ODIHR/OSCE on its recommendations in a cooperative manner.

ODIHR‘s focus on irregularities caught the attention of the many. It is the Kazakh view that ODIHR mission of observers did not grasp the free and transparent atmosphere in which elections were held, as well as the significant progress in Kazakhstan in this direction. The ODIHR estimations did not

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reflect the fact that the authorities and society exercised political will and aspire to attain international standards.

CRTICISM #2: The media in Kazakhstan, with a few exceptions, is owned or controlled by the state and those close to the President. The few independent news publications and broadcast outlets that do exist are often subject to intimidation by state authorities.

RESPONSE: While press freedoms are limited in comparison to Western standards, Kazakhstan has proven to be far more progressive than other countries in Central Asia. Unlike some neighboring countries, where government control has tightened over the media, Kazakhstan is steadily embracing reforms to bring media more into conformity with OSCE and international standards. This is a remarkable achievement for a country that once had only a few media outlets, purely government controlled. It now gives access to more than 2,000 local media resources, about 90 percent of which are non-governmental.

In January, 2009, the Kazakh Parliament adopted a reform package that places limits on the prosecution in libel cases, curtails the ability of arbitrary arrest and detention and extends the right of media to appeal to the courts. The new media law was drafted by Kazakh NGOs, the Congress of Journalists and the OSCE Representative for Media Freedom.

CRITICISM #3: Kazakhstan is essentially a one party state, under authoritarian rule with no viable opposition party and little opportunity for citizens to challenge the incumbent party and vote out of office the current leadership.

RESPONSE: It is undeniable that President Nazarbayev received over 90 percent of the vote and his Nur Otan Party captured 88 percent without a single parliamentary seat going to the opposition in an election generally considered to be fair and open. It is difficult for the critics to accept that such staggering percentages are due to President Nazarbayev‘s personal popularity and the fact that opposing parties do not have effective campaigns. Yet it is not unusual for a U.S. Congressman to receive ninety percent of the vote in their contested races.

The Western media has coined the phrase ―President for life‖ to describe a constitutional amendment allowing a third term for Nursultan Nazarbayev, yet the U. S. Constitution allowed four terms for President Roosevelt. Recently, New York Mayor Michael Bloomberg pushed through a change in the city‘s charter to allow him to run for a third term.

There is little question that President Nazarbayev is portrayed as an authoritative figure, but in Kazakhstan he is viewed as a father-like leader who is moving the country out of its Soviet past toward independence and prosperity. He exemplifies the qualities of Singapore‘s Lee Kuan Yew, whos e 30 year reign as Prime Minister transformed a backward Third World Country into a modern, prosperous and stable Asian giant and who remains one of the most influential figures in the world.

CRITICISM #4: Reports in news publications have raised questions about Kazakhstan‘s treatment of certain ―nontraditional‖ religious groups, notably the Jehovah‘s Witnesses, HareKrishna‘s and the Unification Church. In most cases, the reported incidents have involved regional or local authorities and often the issues concerned state laws that require registration of such groups or legal proceedings over property rights.

RESPONSE:Jehovah‘s Witnesses. Kazakhstan enjoys friendly relations with Jehovah‘s Witnesses (JW). Kazakhstan‘s Ambassador to the U.S. has met with the leaders of JW: Mr. Philip Brumley, General Counsel to the Governing Body of Jehovah‘s Witnesses, and Mr. Gregory Olds, Associate General Counsel, and had an extensive and friendly exchange. JW have been freely and happily operating in our country for more than a century and have been successfully resolving any difficulties they may have had through dialogue. Recently, some of the 16,000 JW followers in Kazakhstan had legal difficulties over registration matters that are now resolved. JW‘s leaders are publicly recognizing that Kazakhstan‘s Government ―stands up for religious freedom.‖

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Hare Krishna. The situation around Hare Krishna Community in the Karasay District is a property dispute. Legal actions against some members of the local Hare Krishna Community were initiated to stop their violations of Kazakhstan legislation regarding improper use of property, falsification of property titles, violation of building, design and sanitary norms, as well as fire safety.

Despite the obvious violations and the fact that the local HK Community has no legal basis for claiming the property, Kazakhstan‘s authorities are doing their best to help the HK Community and have offered local HK Community members the choice of five free of charge land plots to move their houses. These were rejected as inadequate. The essence of the dispute is what constitutes proper compensation and/or an alternative site to be provided to that HK community. Local authorities remain open to negotiation. There are about 10 other Krishna Consciousness community groups legally active in Astana and six other regions of Kazakhstan. These law-abiding communities are actively participating in strengthening inter-religious dialogue and have never had any problems with Kazakh authorities.

Evangelical Christian-Baptists. Leaders of 300 Evangelical Christian-Baptists Churches have registered their communities and freely operate in Kazakhstan. There are normal relations between them and Kazakhstan‘s Government. However, some Evangelical Christian-Baptists leaders are persistently evading any form of legally prescribed registration at all levels citing religious creed. It is a shame as the law requires a very simple form of notification (name, address, contact details etc.), which is not burdensome. Having faced administrative fines imposed by local courts for violating Kazakhstan‘s legislation, they twisted the situation by presenting law enforcement actions as ―vivid examples of religious persecution‖ in Kazakhstan.

CRITICISM #5: The imprisonment of Mr. Yevgeni Zhovtis, a prominent Kazakh human rights activist, inspired all sorts of allegations among international human rights activists.

RESPONSE: On September 3, 2009, Mr. Yevgeni Zhovtis (Director of the Kazakhstan International Bureau for Human Rights and Rule of Law) was found guilty of the car incident that resulted in the death of Mr. Kanat Moldybayev. The Balkhash District Court (Almaty Region) sentenced Mr. Zhovtis to four years of imprisonment in a special minimum security settlement.

The tragic accident happened the night of July 30, 2009, when Mr. Zhovtis was returning from fishing. While driving an SUV towards Almaty, Mr. Zhovtis was blinded by the high beam headlamps of the cars coming in the opposite direction, which led him to temporarily lose full visual control of the road ahead of him. The Court ruled that Mr. Zhovtis did not take the necessary precautions by stopping or slowing down his vehicle, as the traffic rules mandate in these types of situations. Mr. Zhovtis continued to drive at the speed of 80-90 km/h. The failure to take this precaution resulted in the death of a 35-year-old pedestrian, Mr. Kanat Moldybayev, who died immediately at the scene of the accident due to multiple injuries.

The Kazakh legal system is based on the continental legal tradition, which puts absolute liability on the person that causes the death or severe injury of a human being. In this particular case, the person who caused the death of Mr. Moldybayev was Mr. Zhovtis. In addition, the Court found Mr. Zhovtis guilty of not taking necessary precautions that would have made it possible to avoid the accident. Mr. Zhovtis‘s efforts to reconcile with the relatives of the victim did not qualify as a circumstance mitigating his guilt since he had pleaded innocent. Besides, only some of the late Mr. Moldybayev‘s relatives agreed to reconcile; others strongly insisted on pursuing the criminal case against Mr. Zhovtis. Still, the Court took into account Mr. Zhovtis‘s good character, both professional and personal, provided by his friends and colleagues, and assigned him to a minimum security facility instead of regular detention facilities. It was also fully recognized that Mr. Zhovtis was not drunk, did not violate the speed limit, did not attempt to leave the scene of accident and tried to help the victim by calling the ambulance and police.

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The Statistics: From January-July 2009, there were 179 similar cases throughout Kazakhstan.

Among them, 136 cases, or 76 percent, resulted in prison sentences (the rest of the cases did not involve loss of life or severe injuries): 4 persons got 1 year, 50 persons got 1-3 years, 50 persons got 3-5 years, 32 persons got 5-10 years.

The Controversy: Unfortunately, this tragedy has become a subject of controversy and gross misrepresentation of facts. Given the nature of Mr. Zhovtis‘s activities and his high international status, immediately after the accident, various speculations circulated that the verdict was politically motivated. There were attempts to incriminate the Government by focusing on a few procedural irregularities. Behind this rhetoric and the efforts to politicize the case, the fact is that a person died as a result of Mr. Zhovtis‘s actions.

Director of the Kazakhstan International Bureau for Human Rights and Rule of Law Mr. Yevgeni Zhovtis is a prominent human rights activist who worked closely with the Government of Kazakhstan to improve national legislation. His expertise, proactive involvement and constructive criticism were valuable to the efforts of reforming Kazakhstan‘s legislation and legal system. Mr. Zhovtis is widely respected both by his colleagues in the NGO community and his partners in the Government of Kazakhstan.

The Court found Mr. Zhovtis guilty in the death of Mr. Kanat Moldybayev. The Court proceedings were as transparent, open and unbiased as it was possible. Many supporters of Mr. Zhovtis, including the Embassies of the United States and some other countries, received unimpeded access to the Court hearings. There was no government interference in the Court‘s deliberations.

Any allegations to the contrary are baseless and false. The fact that Kazakhstan‘s judicial system is still maturing does not present any grounds for questioning its credibility.

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KAZAKHSTAN FOCUSES ON ECONOMIC DEVELOMENT AND SOICIAL SECURITY PRESIDENT NAZARBAYEV OUTLINES MAJOR DEVELOPMENT PRIORITIES IN HIS STATE OF THE REPUBLIC ADDRESS

On 28 January 2011, President Nazarbayev delivered his message to the people of Kazakhstan at a joint session of the Kazakh Parliament.

Here is the summary of his address: The decision on the referendum in Kazakhstan will be made after the Constitutional Court takes brings out its conclusion; The President is willing to work as long as his health and strength permit and the nation desires his leadership; About 2 thousand inmates will be freed in 2011 as part of humanization of the criminal legal framework; GDP per capita exceeded USD 9 thousand by 2011; The Kazakh leader asked the Government to draft a Energy Efficiency and Regional Development Plan; Kazakhstan should have strong businesses; By 2020, GDP growth will be 30% or more, the population will increase up to 18 million; By 2014, Kazakhstan plans to materialize 294 investment projects; By 2020, Kazakhstan will shift to 12-year school education model; From 2011, Kazakhstan abandon its current scientists training model; Customs union is a very pragmatic project aimed at ensuring regional economic prosperity By 2020, 95% of all Kazakh citizens will be able speak Kazakh; 37

From July 2011, scholarships and salaries of public service officers will grow up by 30%; The President asked the Government to prepare coherent measure to enhance agribusiness; By 2020, all Kazakhstan children will be covered by pre-school training; Kazakhstan will adopt a national children’s and women’s medical programs; By 2015, the percentage of real estate requiring major overhaul should decrease by 22%; The Head of State takes note of the presence of “strong corruption lobby” among government officials President Nazarbayev delivers 2011 State-of-the Nation Address Kazakhstan‘s foreign policy will ―meet hopes and expectations of all our partners,‖ President Nursultan Nazarbayev said in his state-of-the-nation address on January 28 as he outlined major priorities for the country‘s development for both 2011 and the next decade. ―Kazakhstan will remain committed to swift and efficient development of the Customs Union between Russia, Kazakhstan and Belarus,‖ the President told the members of Parliament, the government and the people of the country during his one-hour address televised nationally. He went on to note that in the first 10 months of the CU operation last year the country‘s trade with the other two partners jumped 38 percent. ―We offer our European partners to jointly develop and accept, in a multilateral format, a Kazakhstan-EU Energy Charter up to the year 2020,‖ Nazarbayev said. ―This would ensure the guarantee of stability of energy supplies to the European markets, and the development of pipeline systems.‖ Turning to other foreign policy issues, Nazarbayev announced his intention to convene this year a special donor conference on Afghanistan. Last year, Kazakhstan launched a special 50million-dollar educational programme to train 1,000 Afghans in Kazakhstan and signed an agreement, as yet to be ratified by the Parliament, to send officers to ISAF headquarters in Kabul.

The Kazakh President also reaffirmed his commitment to pursue a Stability Pact for the Caspian Region, which, in his view, would be a document leading to better cooperation and mutual understanding among the five littoral states.

Taking up the subject of the Organization for Security and Cooperation in Europe (OSCE) and Kazakhstan‘s chairmanship in it last year, the President said the country would continue to stay involved, especially in efforts to resolve conflicts.

Another foreign policy priority for Kazakhstan would be the development of an inter-state programme of assistance to neighbouring Kyrgyzstan which last year saw major upheavals and violence. Kazakhstan, as both a close neighbour and a chair of the OSCE, helped stabilize the situation there by sending 11 million dollars worth of assistance and coordinating various efforts within the organization, including the dispatch of a group of police advisors.

Kazakhstan will also continue promoting its idea of reaching a Universal Declaration of a Nuclear-Weapons Free World, first proposed by President Nazarbayev last year at the Global Nuclear Security Summit in Washington, DC. Later in 2011, Kazakhstan will assume the presidency in the council of foreign ministers of the Organization of Islamic Conference. As part of its mission, Kazakhstan will continue to promote the East-West dialogue and better understanding, President Nazarbayev said. Internationally there are expectations Astana can indeed contribute to these efforts.

Tolerance was one of the major messages of Kazakhstan‘s OSCE chairmanship last year, resulting in a stronger focus within the organization on problems related to intolerance based on

38

ethnic, religious, sexual or other grounds. Also last year, Kazakhstan aggressively promoted closer ties between international organizations it chaired or initiated, such as the OSCE and the Conference on Interaction and Confidence-building Measures in Asia (CICA), helping organize the first ever CICA-OSCE forum in Istanbul in June 2010. Astana also invited OIC Secretary General Ekmeleddin Ikhsanoglu to participate in and address numerous OSCE events, including its summit in Astana last December.

One more important foreign policy priority for Kazakhstan is its current leadership in the Shanghai Cooperation Organization (SCO) and the holding of the group‘s 10th anniversary summit in Astana in June. Kazakhstan was the original co-founder of the SCO and this organization, which also groups China, Kyrgyzstan, Russia, Tajikistan and Uzbekistan, will continue to be of great importance for the country, President Nazarbayev said.

Referendum decision to be based on people‟s best interests Turning to the much discussed issue of a referendum to extend the President‘s term of office up to 2020, Nursultan Nazarbayev said the people‘s initiative, now supported by more than five million signatures or almost two thirds of the typically voting electorate, created a complicated ―political collision‖. ―I am sincerely grateful to all the people of Kazakhstan, as well as the initiators of this idea,‖ the President said. ―As you know, by my decree I declined the proposal of the Parliament to have a referendum, as I was planning to stand for re-election in 2012,‖ he noted. ―The Parliament overruled my objections and passed a law. I sent it to the Constitutional Council for review. Only after they make a conclusion, the final decision [on whether or not have the referendum] will be made.‖ ―In any case, I am very touched by such attitude from the people… I take it as a signal to continue in my job, to continue doing my work,‖ Nazarbayev said. ―Whatever decision we will make… If my health and strengths allow me, if there is such support from the people, I will continue doing my job,‖ the President said to a rousing applause from the audience. ―For we have created this country almost from scratch, and I, your obedient servant, has led this process. I can‘t say I am the founder, but I did lead this process, and this country is my creation, our creation, which is precious for me and whose independence is precious for me and for us,‖ he stressed. ―The decision will take into account the position of the Constitutional Council and the interests of the people. We need to look not in front of our feet, but farther ahead. In any case, the will of the people will be above all for me,‖ President Nazarbayev noted.

Economic growth top priority Speaking of Kazakhstan‘s economic development, the President said its record since independence 19 years ago offers a great promise for the future. ―In December 1991, having chosen the strategic goals of sustainability and success, we moved forward, creating new programmes of development for each new stage… We set ourselves ambitious goals, and we achieved them,‖ Nazarbayev underscored.

In 1994, Kazakhstan‘s gross domestic product per capita was slightly above 700 dollars, while today it reaches 9,000 dollars, an increase of 12 times. ―We had planned to reach such a level only by 2015,‖ the President proudly said. ―The international experience shows that in their first 20 years of independence, no other country was able to do that.‖ 39

Last year, Kazakhstan‘s economy grew seven percent, overcoming the influence of the global financial crisis which affected the country over the past couple of years. While the GDP grew 8.5 percent in 2007, the growth slowed to 3.2 percent in 2008, and then slowed even further to 1.1 percent in 2009. The economy never contracted, though, thanks to both massive state investments to the tune of 14 percent of the GDP, and the recovery in the global commodity prices.

An even larger credit for that recovery, according to the President, should go to both prudent policies and the Programme of Accelerated Industrial and Innovative Development (PAIID) for 2010-2014, launched last year.

Already, 152 new enterprises were launched, creating 24,000 new jobs. Kazakhstan‘s gold and foreign currency reserves now stand at 60 billion dollars, more than before the crisis hit, while Kazakhstan attracted 120 billion dollars in foreign direct investment overall since 1993. ―Before 2014, we plan to see through 294 investment projects worth 8.1 trillion tenge (KZT 147 = US$ 1),‖ Nazarbayev said adding that 161,000 new permanent jobs will be created and 207,000 new jobs will be available for the period of construction.

The PAIID‘s main result is the ―beginning of the structural changes in the economic development thanks to the expansion in the real sector of the economy,‖ the President said as he went on to outline the expectations for economic development up to 2020 according to a strategic development plan offered last year.

The GDP should grow 30 percent, while the growth in processing industries should exceed that in the extractive industries. The assets of the National Fund, set up in 2000, would reach 30 percent of the GDP. Investments, both domestic and foreign, should grow by 30 percent. Inflation will be contained within five to eight percent. The share of small and medium-sized businesses in the GDP should reach 40 percent of the GDP. The population should grow from the current 16 million to 18 million, and qualified specialists will constitute 40 percent of the workforce.

Unemployment will stay below five percent [Last year it fell to 5.6 percent]. The productivity in agriculture will grow twice by 2014, and four times by 2020, as Kazakhstan will seek to become one of the major exporters of meat, in addition to exporting wheat and flour. Along all of that development, energy consumption of the economy should be reduced. ―I stand for the principle, ‗strong business means strong state‘,‖ the President noted as he reaffirmed his commitment to further creating beneficial conditions for businesses. Already, last year Kazakhstan was recognized by the World Bank as the country which improved conditions for domestic businesses the most in one year. The World Bank also ranked Kazakhstan 59th in the rating of 183 countries in terms of the most beneficial business climate.

Elsewhere, 16 laws were adopted to reform the system of law enforcement and the protection of human rights, while state bodies slashed their staff by 15 percent. ―Kazakhstan will continue fighting corruption without compromises,‖ Nazarbayev underscored as he noted that the country jumped 45 points in Transparency International‘s Corruption Perception Index in three years.

Education, healthcare, languages and tolerance top social priorities Lifelong learning should be the motto for all Kazakhs, Nazarbayev said, adding that Kazakhstan will continue to create conditions for the people to pursue this goal.

By 2020, the country should switch from an 11-year school curriculum to a 12-year one, and, for that, 400 new schools will be built by 2015.

The Nazarbayev University, as well as the intellectual schools built around the country now, will also be instrumental in further educational reforms. By 2020, at least two universities in Kazakhstan should join the rating of the best universities in the world.

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What is more, according to Nazarbayev, the people in Kazakhstan should have ―an opportunity to save for education of their children, with interest bonuses added from the government.‖ Additionally, a National Council on Vocational Personnel Training will be set up, while free vocational training is to be ensured.

Budget financing for healthcare now stands at 3.2 percent of the GDP. The continued attention to this sphere had led to a 25 percent growth in birth rate, an 11 percent decrease in death rate, and the speeding of the population growth by 1.7 times.

By 2013, the Unified National Healthcare System will be fully introduced, with the ultimate goal of extending the average longevity to 72 years by 2020.

The Government will also heavily promote a healthy lifestyle, and the new facilities, specifically built for the Asian Winter Games from January 30 through February 6, 2010, will have to be fully used afterwards, the President underscored.

Another top priority is the development of languages. ―Peace and harmony are our common achievement,‖ the President underscored, as he outlined plans to promote the study of the Kazakh, the Russian and the English languages.

Already, more than 60 percent of the population speaks Kazakh, the state language which 20 years ago was almost on the brink of extinction due to suppression from the Soviet authorities. Plans are afoot to have 80 percent of the ethnically diverse population speak Kazakh by 2017, and 95 percent by 2020. ―In ten years, 100 percent of school graduates will speak the state language,‖ the President said.

The government would also promote the study of the Russian and other languages of more than 130 ethnic groups in the nation. English, though, will be a continued priority, and ―by 2020 20 percent of the population should speak English freely‖, the head of state said.

Among other priorities listed by the President were housing, water supplies and providing employment. ―By May 2011, I instruct the Government to develop a new employment programme,‖ Nazarbayev said, adding that free vocational training and microcredits to support small entrepreneurs, especially, in the rural communities, should be a top goal. ―This year, we are also raising pensions, scholarships and budget wages by 30 percent. For two years, we have been raising them by 25 percent each. As planned, by 2012, average pensions, salaries and scholarships will grow twice compared to 2008. We had promised that, and we are delivering on that promise,‖ Nazarbayev said.

20th anniversary to be a major celebration The year of 2011 will be a major opportunity to celebrate the 20th anniversary of Kazakhstan‘s independence, achieved on December 16, 1991. ―Throughout the years of independence fundamental values of the Kazakhstan Way have been crystallized: Freedom, Unity, Stability and Prosperity,‖ the President stressed.

To arrange proper commemoration, a state commission has now been set up and a nationwide plan approved.

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Celebrating the 20th anniversary is a ―common affair‖ for the whole nation, Nazarbayev said as he asked the Government to bring together the efforts of investors, business community and all the people. ―The motto of our jubilee will be ‗20 Years of Peace and Creation‘,‖ the President said.

Full text of the address is accessible at http://www.kazakhembus.com/uploads/Nation2011.pdf .

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KAZAKHSTAN – ECONOMIC OVERVIEW GENERAL BACKGROUND After ten years of remarkable economic growth, Kazakhstan was able to withstand the shock of the 2007-2009 global liquidity crisis. Appropriate measures by the Government helped Kazakhstan overcome the deepest financial crisis in its history. The economy did not suffer from rapid deposit outflows, national currency fluctuations, economic recession or depletion of international reserves.

The main priorities of the Government‘s 10.7 9.7 9.6 9.3 8326.4 strategic economic policy in the 8,514 8.9 7852 upcoming two years are: financial 7 6,772 6780 sector stabilization, support for small 5,290 4 and medium enterprises, development 3.3 3,771 2,870 of agribusiness and real estate, further 2,068 1.2 diversification of the economy and support for socially vulnerable layers of 2003 2004 2005 2006 2007 2008 2009 2010 2011П society.

GDP, % GDP per capita, USD Table 1. GDP growth, %, and GDP per capita Sources: Ministry of Economic Development and Trade

In the meantime, Kazakhstan's fiscal position is strengthening due to restoration of budget discipline. During the crisis an increased budgetary deficit was financed mostly by exceptional uses of the National (Oil) Fund resources, both on and off-budget. Starting in the beginning of 2010, the Government took actions aimed at increasing efficiency in public spending and better budgetary management at both national and local levels. According to the new Fiscal Code that was adopted in 2008, the three-year budget has been introduced for better harmonization of economic and budget planning.

As per the new state budget for 2011-2013 0 (50) 2007 2008 2009 2010 2011 2012 2013 that has been approved by the Parliament, (150) -1 -1.8 (250) the budget of Kazakhstan in 2011 is -1.5 -2.1 (350) -2 -215.3 projected to have a moderate deficit, (-)696 -3.1 (450) -333.2 -3.1 -2.5 -382 bln. tenge or (-)2.9% of GDP. In 2012 and (550) -3 -2.9 -492.7 -527 (650) -582 2013, the budget deficit is forecaste to be ((750) -4 -696 )582 bln. tenge or (-)2.5 of GDP and (-)382 Budget deficit, bln. tenge % of GDP bln. tenge or (-)1.5 of GDP respectively.

Table 2. Budget deficit in tenge and in % of GDP (2007-2012) Sources: Ministry of Finance

Revenues in the state budget are projected at the level of 4.9 trln. tenge in 2011, 5.2 trln. tenge in 2012 and 5.6 trln. tenge in 2013. Expenditures are expected at the level of 5.7 trln. tenge in 2011, 5.7 trln. tenge in 2012 and 6.0 tlrn. tenge in 2013 accordingly. Exchange rate: 150 tenge = $1.

Kazakhstan has been successful in reducing the ratio of government debt to GDP in recent years. In 2001, total governmental debt was $3.8 bln, which amounted to 19.7% of GDP and in 2010 total government and government guaranteed debt equalled $4.5 bln, which amounted to 3.1% of GDP.

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Starting in 2009, government debt increased 21% since after several years of active external borrowing by private banks and their aggressive lending practices, which contributed to an overall liquidity and credit crunch. The government stepped in to bail-out the financial system. Total external debt (public and private) increased dramatically from $15.2 bln (2001) to Table 3. Government and private debt in bln $ (2001-2009) $112.8 bln (2010), which is equivalent to Sources: National Bank 87% of GDP. The official inflation rate based on the consumer price index (CPI) in 2009-2010 increased slightly. As of February 2011, the year-to-date inflation rate rose by 1.7% up from 1.4% in February 2009. The year-on-year inflation rate rose by 8.1% up from 7.3% in February 2010. Food prices and non-food items in the CPI were up by 2.0% yoy and 0.2% yoy respectively, whereas prices of services rose by 2.2% yoy.

The consolidated balance of payments in 2010 was positive due to overall improvement of trade and financial accounts. According to the preliminary estimate of balance of payments by National Bank of Kazakhstan, the current account surplus in 2010 was $4.9 bln. (in comparison with deficit (-)$4.2 bln. in 2009). Trade balance was positive, $29.0 bln. up from $15.2 bln. in 2009, with exports on a secular rising trend, $59.7 bln. up from $43.9 bln., and slightly increased imports, ()$30.7 bln. up from (-)$28.8 bln. The capital and financial account (including errors and omissions) was negative, (-)$0.2 bln. down from $6.7 bln. in 2009, with substantially decreased net direct investments, $1.2 bln. down from $10.5 bln., and increased net portfolio investments, $8.3 bln. up from $2.9 bln.

As a result, the external liquidity position of Kazakhstan has strengthened. Total international reserves (including assets of the National Fund) as of January 1, 2011, amounted to $62.6 bln., which is 23% more than $50.9 bln. as of January 1, 2010. Total foreign-currency and gold reserves made up to $31.2 bln., which is 18.6% more than $26.3 bln as of January 1, 2010.

Assets of the National Fund made 31.4 35 27.5 up to $31.4 bln., which is 27.6% 30 23.4 22.3 25 more than $24.6 bln. as of January 24.2 22.3 21.3 20.6 20 14.7 18.1 1, 2010.

15 14.2 8.1 Thus, despite the fact that the 11.5 11.4 10 4.9 3.5 Government spent about $20 bln 5 0 (14% GDP) for anti-crisis measures, 2003 2004 2005 2006 2007 2008 2009 2010 the foreign-currency and gold bln. $ % of GDP reserves of the country as well as the funds of the National Fund were Table 4. Assets of the National Fund, in $ and % of GDP Sources: Ministry of Finance restored and increased by several billion dollars.

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KEY ECONOMIC INDICATORS

Table 1. Macroeconomic indicators Sources: National Bank, Ministry of Economic Development and Trade 2003

2004

2005

2006

2007

2008

2009

2010

9,3

9,6

9,7

10,7

8,9

3,3

1,2

7,0

2068,0

2874,0

3771,0

5292,0

6772,0

8514,0

6732,1

8326,2

Current account (% GDP)

(0,9)

(0,8)

(1,8)

(2,5)

(7,9)

(4,7)

(3,2)

3.8

Trade balance (% GDP)

11,9

15,7

18,1

18,1

14,4

25,1

14,1

22,3

Exports (%)

32,0

55,7

37,4

37,0

24,7

48,8

(39)

45,9

Gold and foreign-currency reserves ($ bln.)

5,0

9,3

7,1

19,1

17,6

19,9

23,2

31.2

Foreign direct investments (% GDP)

7,2

12,6

3,7

8,2

7,6

11,1

8,9

7.5

Sovereign debt (% GDP)

15,0

11,4

8,1

6,7

5,9

6,4

13,0

2.8

National Fund, including assets in national currency (% GDP)

11,5

11,4

14,2

18,1

20,0

20,5

27,9

24,2

GDP growth (%) GDP per capita ($)

Table 2. Economic Structure (2010) Source: Agency of Statistics of Kazakhstan Origins of gross domestic product

% of GDP

Components of gross domestic product

% of GDP

Agriculture Industry Services

4.4 32.3 63.3

Private consumption Government consumption Gross fixed investment Exports of goods & services Imports of goods & services

47.5 12.9 29.6 43.6 37.3

Total exports Exports growth

$ 59.2 bln.

37.1%

Total imports Imports growth

$29.8 bln.

4.8%

Structure of exports

%

Structure of imports

%

Mineral products including oil and gas

74.9

Machinery, equipment, transport vehicles

43.2

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Metals and metal products Animal and plant products Chemicals and chemical products Machinery, equipment, transport vehicles

13.3

10.9

0.8

Mineral products including oil and gas Metals and metal products Chemicals and chemical products Animal and plant products

Main destinations of exports

% of total

Main origins of imports

% of total

China Italy Russia France Netherlands

17.1 16.2 8.1 7.5 7.0

Russia China Germany Italy Ukraine

37.0 13.3 6.1 5.3 4.6

3.4 5.1

11.3 14.3 9.7

*** OUTCOMES OF THE GOVERNMENTâ€&#x;S ANTI-CRISIS PACKAGE In his Address to the Nation on March 6, 2009, "Through Crisis to Renovation and Development," President Nazarbayev pledged to the Kazakhstan people that the state had the resources it needed to overcome the world financial crisis. "You have to be confident we are not simply ready to face these challenges. We will overcome tough calls and avoid recession as a strong and prosperous state," the President said.

The anti-crisis efforts cost the country more than KZT 3 trillion (USD 20 bln). The Government of Kazakhstan, the National Bank and Agency for Regulation and Supervision of Financial Market and Financial Institutions concentrated their activities on stabilization of financial sector, settlement of real estate market problems, support of small and medium businesses, development of agriculture, encouragement of innovation and the maintenance of industrial and infrastructure projects.

The Government managed to prevent an economic recession in 2009 and provided stable growth in 2010.

The GDP growth in 2009 was 1.2%, while in 2010 it was 7%. Industrial production increased by 10% in 2010.

Food market stability was maintained and inflation was kept in the planned corridor of 6-8%.

The unemployment rate fell to 5.5% in 2010 compared to 6.3% in 2009.

In 2010, the measures stabilized the financial sector. The banks' foreign debt totaling USD 46 bln as of mid 2007 decreased by USD 29 bln. in 2010. The total gold and foreign exchange reserves of the National bank and National Fund rose by USD 17 bln to USD 60 bln. (early in 2009 it made USD 43 bln) The situation in the banking sector improved due to an inflow of public funds and government actions. Fulfillment of this part rescue plan ensured further growth of finance industry stability.

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Anti-crisis efforts to support small and medium business were especially effective. More than 10,000 small and medium enterprises got financial support from the state. The number of the ongoing small and medium enterprises increased by 5,3% and 1.3% percent in 2009 and 2010 respectively.

About 60 investment projects worth KZT 56.3 bln were approved for further financing. 27 investment projects worth KZT 30.1 bln were implemented.

KZT 342.7 bln were allocated for repair works and modernization of transport infrastructure facilities. 392 000 new jobs were created.

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KAZAKHSTAN‟S ENERGY SECTOR: GLOBAL IMPACT Energy Overview Minister of Industry and New Technologies (for nuclear energy, alternatives and renewable, energy efficiency and electric power): Deputy Prime-Minister – Minister; Minister of Oil and Gas: Mr. Sayat Mynbayev President, KazMunayGas (National Oil & Gas Company): Mr. Kairgeldy Kabyldin Other organisations: KAZENERGY Association; Kazakhstan Electricity Grid Operating Company (KEGOC); Kazatomprom (National Atomic Company) Major Oil and Gas Fields: Tengiz (oil), Karachaganak (natural gas and condensate), Kashagan (off-shore, oil), Uzen, Kumkol, Korolev, Tenge, Uritau (oil, natural gas), Zhanazhol Major Oil Ports: Atyrau, Aqtau, Bautino and Kuryk on the Caspian Sea Oil Export Pipelines: Caspian Pipeline Consortium (CPC) – Tengiz-Novorossiisk (Russia); Uzen-Atyrau-Samara (Russia); Kenkyak-Orsk (Russia), Kenkyak-Atyrau (Kazakhstan), Atasu-Alashankou (China) Major Oil Refineries (crude oil refining capacity): Pavlodar (162,666 bbl/d); Atyrau (104,427 bbl/d); Shymkent (160,000 bbl/d) Major Power Plants (capacity): Ekibastuz no. 1 (4000 megawatts, MW), Yermak (2400 MW), Zhambyl (1230 MW) Current Oil Reserves: 32.5 billion barrels (twice as much as the North Sea) Projected Oil Reserves: 100-110 billion barrels by 2015 (would be in top 5 of the world) Oil Production (2010): 79.5 million tonnes Oil Consumption (2010): 13.7 million tonnes Net Oil Exports (2010): 71.2 million tonnes Crude Oil Refining Capacity: 14.5 million tonnes (17.5 million tones by 2015) Current Gas Reserves: 3 trillion cubic metres Projected Gas Reserves: 5 trillion cubic metres by 2015 Natural and Crude Gas Production (2010): 37.4 billion cubic metres Natural Gas Consumption (2010): 9.0 billion cubic metres Natural Gas Export (2010): 9.1 billion cubic metres International Transit of Gas (2010): 82.1 billion cubic metres Coal Reserves 35.8 billion tons (or 3.6% of the world reserves) Coal Production (2010): 110.8 million tons Coal Consumption (2010): 61.2 million tons Coal Export (2010): 27.8 million tons Electric Generation Capacity: about 19.5 gig watts (GW) Electricity Generation (2010): 82.3 billion kilowatt-hours (kWh) Electricity Consumption (2010): 83.8 billion kilowatt-hours (kWh) Uranium Reserves: 1.5 million tonnes (or 20% of the world reserves) Uranium Production (2010): 17,803 tonnes Kazakhstan is rich in oil and minerals. Industry analysts believe that a planned increase in oil production and the development of new oil fields will enable Kazakhstan to produce as much as 3 million barrels (477,000 tons) per day by 2015, lifting the country into the ranks of the world's top 5 oil-producing nations. Major oil and gas fields and their recoverable oil reserves are Tengiz with 7

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billion barrels (1.1 bln. tons); Karachaganak with 8 billion barrels and 1.35 trillion mі of natural gas; and Kashagan with 7 to 9 billion barrels (936 mln. to 1.2 bln. tons).

One of the country‘s top priorities in the extractive sector is the efficient development of its Caspian off-shore energy resources. Recent developments in this area give hope that further development of North Caspian oil and gas fields will start in the not-to-distant future.

Originally, the status of the Caspian Sea was regulated by the bilateral treaties of 1921 and 1940, made between the former Soviet Union and Iran. With the break-up of the Soviet Union, offshore territorial rights have generally become more complex. In 2002, Kazakhstan signed bilateral agreements with Russia and Azerbaijan on delimitation of the Northern Caspian seabed and the joint development of the Khvalynskoe, Tsentralnoe and Kurmangazy off-shore oilfields with Russia.

In 2003, Kazakhstan adopted a State Programme of development of the Kazakhstan sector of the Caspian Sea, the main target of which is to boost environmentally safe oil and gas production to generate revenues to help diversification and modernization of the economy. In 2006, Phase II of the Strategy was commenced.

With the launch of the State Program of Accelerated Industrial-Innovative Development for 2010-2014, Kazakhstan‘s O&G sector is entering a more advanced value-added phase. The following multimillion pioneer projects have laid the foundation for overall diversification of the country‘s O&G sector and development of relevant infrastructure: $6.3 bln. Construction of Integrated Gas Chemical Complex in Atyrau Region (Western Kazakhstan) - 2015 $1130 mln. Construction of Aromatic Hydrocarbons Production Complex – 2013 $290 mln. Construction of Road Bitumen Plant based on existing Aktay Plastic Plant - 2012 Modernization and Technological Upgrade of Existing Refineries (Atyrau, Pavlodar and Shymkent) Kazakhstan has an abundant supply of accessible mineral and fossil fuel resources. The country has some 3% of the world‘s raw materials and natural resource base of over $300,000 per capita (among the highest in the world, twice the level of Russia, higher than Australia), 4% of the global iron reserves, 8% of the world‘s total zinc reserves and 4% of the world‘s total chrome reserves accounting 15% of global production. According to estimates, Kazakhstan has the second largest lead reserves, the third largest manganese reserves, the fifth largest copper reserves, and ranks in the top ten for coal and gold.

The demand in the world for quality uranium fuels increases year by year. Forty new power generating units are being constructed in fifteen countries of the world. Kazakhstan has been an important source of uranium for more than fifty years. In 2009, it became the world's leading uranium producer, with almost 28% of world production.

Kazakhstan has the second largest uranium reserves. Total resources and reserves of uranium are over 1.5 million tonnes, over 1.1 million tonnes of which can be mined by the in-site leaching method. Some 50 uranium deposits are known, in six uranium provinces. Between 2001 – 2010, uranium production in Kazakhstan rose from 2000 to over 17,800 tonnes per year, and further mine development is underway with a view to reaching a production rate of 30,000 tonnes/year by 2018.

State owned National Atomic Company Kazatomprom is the sole organization for uranium mining, reprocessing, export & import operations in Kazakhstan (President – Mr. Vladimir Shkolnik).

Having abundant natural energy resources, the Government and the country‘s energy sector keep an attentive eye on global energy trends. In 2006, Kazakhstan produced its first wheat-based bioethanol and this private sector programme is expanding further. There are also plans to set up wind farms in the mountainous region of Almaty. The law on using renewable energy has already

49

come into force. Kazakhstan has numerous opportunities for cooperation with the U.S. in this area and welcomes participation of the most advanced companies in alternative energy projects. At the 7th Annual Kazakhstan-US Energy Partnership Meetings in Washington, D.C., in November, 2010, Minister of Oil and Gas Sauat Mynbayev and U.S. Deputy Secretary of Energy Daniel Poneman agreed to work together to address environmental concerns. Energy transportation and infrastructure are key elements of a varied energy policy. The EU wants to cooperate with Kazakhstan in this area, particularly on trans-continental gas and oil transportation issues. The country's oil and gas reserves and its pivotal location make it of strategic importance to the U.S. and its western allies in terms of providing global energy security. *** Hydrocarbons The proven, large reserves of oil and gas (about 3% and 1% respectively of the world‘s total) and significant forecast reserves (13-18 billion tonnes of standard fuel) in Kazakhstan, make investing in the fuel and energy sector a priority. Oil reserves per capita in Kazakhstan are 5 times as high as in Russia and higher than in Iran Hydrocarbons are being developed at 241 fields. As of December 31, 2010, the number of hydrocarbon subsoil use contracts is 206. A total of 142 companies are operating in the sector: 20 joint ventures, 48 foreign companies and 74 local companies. As of December 31, 2010, total number of hydrocarbon subsoil use contracts amounts to 206.

The limit of O&G production has not yet been reached. With the current production of 79.7 mln tons, the country will extract up to 85.0 million tonnes of oil by 2014 and about 120-130 million tonnes of oil by 2015.

Kazakhstan occupies the eighth place in terms of proven oil reserves in the world and second place in the CIS. The proven reserves will ensure extraction for 50 years for oil and 75 years for gas, which is in line with the world average figure for oil-extracting countries. The future development of the domestic oil sector mainly depends on developing the Kazakh sector of the Caspian Sea, where the forecast reserves are quite promising.

The Northern Caspian Project alone is expected to attract more than USD 136 bln.

Oil and Caspian off-shore development strategy and pipelines policy Some estimates say that the offshore Kashagan field alone may contain up to 50 billion barrels of oil. Kazakhstan‘s vast natural resources are projected to provide 2-3% of the world‘s expected oil demand within the next decade.

By 2002, most O&G fields under development had reached peak levels of production.

Further growth of ashore production was linked to intensified development of such oilfields as Tengiz and Karachaganak. At the same time, research has shown that major gains in explored reserves and in hydrocarbons production are “Being a dynamically expected to take place in the Caspian aquatic area. It normally takes 8-10 years to get to the commercial developing exporter of energy resources, whose role will production stage. The main targets of the State-run Program of Development of the Kazakhstan‘s Sector of the continue to grow, Kazakhstan is fully aware of its Caspian Sea include: gains in explored hydrocarbons responsibility for resources and bringing of production to a stable high level; hydrocarbon deliveries to the development of multimodal system of hydrocarbons world market” transportation; Marat Tazhin Former Minister of Foreign Affairs of Kazakhstan 50

reprofiling and modernization of domestic machine-building enterprises; development of the maritime fleet and sea ports; build-up of the local engineering capabilities; training of domestic specialists; enforcement of health protection and environment protection measures; development of petrochemistry enterprises.

The Government will be in charge of defining blocks to be offered for tenders and of defining the order and conditions of setting them forth for tenders.

At the present time, there are about 23 undistributed blocks, exploration of some of them is planned to be financed out of the state budget. To define the most suitable subsoil users for both exploration and development, the plan is to offer for tenders at least 3 blocks per annum. At the same time, there will be blocks offered for additional exploration.

The Kazakh Government‘s commitment in cooperation with partners from abroad is to respect contracts signed with foreign companies but the contracts must be honoured by both sides.

According to preliminary estimates, the Program implementation will allow bringing production at maritime oilfields to 100 million tons per annum by 2015 and maintaining this level for 25-30 years.

Kashagan

Kashagan is a momentous project not only for Kazakhstan‘s energy sector, but for the entire world. In 2008, Kazakhstan‘s Ministry of Energy and Mineral Resources and KMG signed the final agreement with all co-venturers in the international Consortium (Eni, ExxonMobil, Shell, Total, ConocoPhilips and INPEX).

Under this agreement, KMG acquires a major participation level in the project going from 8.33% to 16.81%. Given the size and complexity of the Kashagan project and other NCSPSA developments, the Kazakh government the Kazakh government and Agip KCO have agreed to consolidate their efforts and resources and implement the project with the following division of responsibilities: Exxon Mobil - offshore drilling; Shell offshore development (except drilling); Eni and Agip KCO – onshore development; ConocoPhilips – audit.

KMG will take on an increasing role in the project and will be involved in each phase of its development.

According to the agreement, a new joint operating company for Kashagan project has been established

51

which includes all the co-venturers in the NCSPSA Consortium. This joint operating company is named North Caspian Operating Company (NCOC) BV., Commercial oil production at Kashagan should be started no later than December 31, 2013.

But the target date for non-commercial oil production is December 1, 2012.

75,000 barrels a day are expected to be extracted at the beginning of oil production with following increases up to 370,000 barrels a day. 2-3 years later the 3rd tranche of oil production increase is expected – up to 450,000 barrels a day. By the end of the next decade, Kashagan oil production is expected to reach 1.5 million barrels a day.

Block “N” The agreement on ―N‖ Block, reached in 2008, is another important step forward in the development of mutually beneficial cooperation between Kazakhstan and foreign energy corporations. On October 6, 2008, KMG, ConocoPhillips and Mubadala Development Company, PJSC (Mubadala) announced the signing of a Memorandum of Understanding (MOU) to negotiate terms for the exploration and development of the ―N‖ Block.

The MOU was signed by Mr. Kabyldin, the KMG President, Mr. Mulva, the ConocoPhilips CEO and Mr. Al Mubarak, Mubadala‘s CEO, and was witnessed by Mr. Sayat Mynbayev, the Minister of Energy and Mineral Resources of Kazakhstan.

The agreement on the principles of cooperation on the Block N shelf project was signed by KMG, ConocoPhilips and Energy & Industry Holding Co., a wholly owned subsidiary of UAE-based Mubadala Development Company, in Almaty on December 5, 2008. The parties agreed that the project would be managed by a joint operating company, in which KMG will own 51% and the other two companies will own the remaining 49%. During the production period, KMG will be the sole owner of the operating company. ―In accordance with this agreement, KazMunayGas will transfer 24.5% stakes in the contract for the subsurface use to each ConocoPhillips and Mubadala," Mr. Kabyldin said.

On June 11, 2009, ConocoPhillips, KMG and Mubadala Development Company PJSC (Mubadala) signed project agreements allowing the joint exploration and development of the N Block. ―The rise of our cooperation with ConocoPhillips and Mubadala to a new level indicates foreign investors‘ great interest in developing Kazakhstan‘s offshore fields in the Caspian and reaffirms the potential of our country‘s oil and gas sector. This project will enable us to use new

52

technology and international expertise in developing offshore oil and gas resources of Kazakhstan,‖ said Kairgeldy Kabyldin, president, KazMunayGas. The parties are planning to launch commercial production around the start of 2016 if all the forecasts for raw hydrocarbons there are confirmed.

The ―N‖ Block is located 30 kilometers southwest offshore of Aktau, Kazakhstan‘s port in the Caspian Sea. The Block covers approximately 8,100 square kilometers and is considered highly prospective for both oil and gas. This field has some 630 million tons of geological resources with recoverable resources estimated at about 270 million tons. Under the agreement, the KMG‘s foreign partners will pay a signing bonus of $100 million.

Global energy security is being significantly contributed by Kazakhstan’s multi-vector pipeline policy As KSCS oilfields get developed, the need for diversification of export routes keeps growing. Proximity to such dynamically developing nations as Russia and China opens wide opportunities for Kazakhstan‘s hydrocarbons exports. To ensure entering into the markets of the two countries, it is vital to develop and enhance trunk pipelines system.1 Enhancement of export routes implies multimode transportation of hydrocarbons, with efficient combination of capabilities of pipe, railway and sea transport.

The Caspian Pipeline Consortium (CPC) and “Attention should be focused on Atyrau - Samara pipeline system are currently diversification and securing stable traditional routes for Kazakhstan‘s oil exports. routes for future energy supplies.

Significant volumes of Kazakh oil (about 50 million We will stick to the principle of tons a year) are exported through the Russian territory. pursuing a multi-vector policy in Under the pipeline diversification policy this regard.”

Kazakhstan is actively developing the following Nursultan Nazarbayev projects: President of Kazakhstan Kazakhstan‘s Caspian Transportation System is being developed to meet increasing oil production at Tengiz and Kashagan oil fields through the Caspian Sea to global markets via Baku-Tbilisi-Ceyhan system (BTC). Transcaspian oil exports through the Baku-Тbilisi-Djeihan system. Kazakhstan‘s approach to this project has been confirmed by the KCTS. Kazakhstan – China oil pipeline. Phase I of the project which includes Atasu-Alashankou pipeline and Kenkiyak-Kumkol pipeline (to connect western and eastern parts of Kazakhstan) were put into operation in 2006 and 2010 respectively.

Expansion of Caspian Pipeline Consortium from its current 32.9 mln. tonnes to 67 mln. tonnes. Of this amount 52.5 mln tonnes will be Kazakhstan‘s oil. Memorandum of Understanding on CPC Expansion Principles was signed by the project‘s shareholders on December 17, 2008. The entire project will be finalized by 2015.

1

www.government.kz

53

Kazakhstan’s Long-distance Oil Pipelines

Atyrau-Samara

Omsk-Pavlodar

Кенкияк

CPC Новороссийск

Атырау

2nd Phase Kazakhstan-China

Eskene Тенгиз

Атасу

Uzen-Atyrau

Kazakhstan-China

Alashankou Актау

Kuryk

KCTS Кумколь

BTC

Баку

Kazakhstan Caspian Transportation System, KCTS

Atyrau-Samara

Kazakhstan-China

Caspian Pipeline Consortium, CPC

54

Omsk-Pavlodar

BTC

Gas pipelines of Kazakhstan

Slide 2

СХЕМА ГАЗОПРОВОДОВ РК Челябинск

Russia Россия Петропавловск Кустанай

Orenburg МГ ОренбургNovopskov GP Новопсков

Рудный Оренбург КС Домбаровское

Новопсков

КС Кр. Октябрь

Лупинг МГ Союз

Актобе

МГ ЖанажолАктобе

КС Джангала

МГ БухараУрал Жанажол-КС13

МГ САЦ МГ МакатСеверный Кавказ КС Редут КС Тайман КС Акколь Атырау

КС Шалкар

КС Кульсары КС Бозой Ш огы рл ы-Шо мы шт ы

ПХГ Бозой

КС-7 КС Бейнеу

Тенгиз

и сп Ка

е мар О к еу МГ Бе йн

А мангельды

КС Каракалпатское

КС Кунград

йс

КС Ташауз

е ко

1

Дарьялык

Uzbekistan Узбекистан

КС Самсоновка (Акбулак)

МГ ГазлиШымкент

КС Ургенч

КС Бегдаш

м ор е

Туркменбаши

Стихийное Хаз арли Беурдешик

Эрдекли

КС Газли КС Зирабулак КС Ильялы

Ок арем

А шхабад КС Шатлык

Кыргызстан

Ферг анс

Китай China

КС Галля-Арал

КС Каган

КС Каракумское Кели Уг рапли

Условные обозначения:

КС Сокулук

ПХГ Полторацкое

Ташкент

КС Сазакино

КС Хива

Туркменист ан Turkmenistan

Алматы КС-5 Тараз

КС Полторацкое

КС Чиназ

Хоргос

3

ПХГ Акы р-Тобе

Кызылорда МГ БГР-ТБА

Тулей

КС Жана-Узень

BGR-TBA GP

Ку мко ль А к шабул ак

Аральское море

Жетыбай

Актау

Дост ык

2

ДКС Бозой

КС Опорная

То лк ы н

Active gas pipeline: (Gas main pipeline – GP) Middle Asia -Centre GP Оkаrеm-Beineu GP Макат-North Caucasus GP Orenburg - Novopskov GP Bukhara -Ural GP Zhanazhol - Oktyabrsk GP BGR-TBA GP Азербайджан Gazli-Shymkent GP Аmangeldy - КС-5 GP Аkshabulak-Kyzylorda GP Zhanazhol-КС-13 GP Аksai-Krasny Oktyabr-Astana GP Иран Turkmenistan-Kazakhstan-China GP

Kazakhstan Казахстан

КС Сев. Устюрт

КС Макат

К аша га н

Planning gas pipeline: 1 – Caspian gas pipeline GP 2 – Beineu - Shymkent GP

КС Талды к

КС Индер

КА Ш АГ АН

Middle Asia Centre GP

АСТАНА

Bukhara -Ural GP

Аксай

КС Чижа

КС Ал. Гай

ASTANA

МГ Карталы-Рудный

КС Уральск Саратов

Кокшетау

КС Карталы

Мубарек

Душанбе

Tajikistanан Таджикист Иолотань Legend

Компрессорные станции Compressing station Подземные хранилища газа Underground storage facility

Месторождения газа Gas field ГПЗ Gas-transfering factory Существующие газопроводы Маршрут Прикаспийского газопровода

55

Прикаспийский Caspian gas pipeline газопровод Туркменистан-Казахстан Turkmenistan –Kazakhstan – -Китай China GP

Бейнеу-Бозой Beineu-Shymkent -Самсоновка Active gas pipeline Существующие газопроводы

The Burgas-Alexandroupolis pipeline is a trans-Balkan project conceived to reduce the cost of hydrocarbon deliveries to European and possibly U.S. and Asian markets. The project is the logical continuation of the CPC expansion and an economical way to bypass the risky Bosporus strait and the Dardanelles. The viability of the pipeline depends on Kazakh oil production, which is expected to reach 120-130 million tons by 2015. As Russian oil alone is not sufficient for the trans-Balkan pipeline, contribution of Kazakh oil is vital to ensure economic efficiency. For Kazakhstan, the trans-Balkan pipeline is an alternative route to transport its crude oil to global markets. The CPC expansion and the Burgas-Alexandroupolis pipeline are important to the fast growing Kazakh oil industry. Kazakhstan is among the world‘s top 20 net exporters of crude oil.

For the European Union, the Burgas-Alexandroupolis pipeline is an important step to decrease dependence on OPEC countries.

Construction of Pre-Caspian Gas Pipeline, according to the agreement signed by Kazakhstan, Russia and Turkmenistan. The Mazhilis (Lower House of the Kazakhstan‘s parliament) approved a draft Law ―On ratification of the agreement between the government of Kazakhstan, Russia and Turkmenistan on cooperation in construction of Pre-Caspian Gas Pipeline‖ on April 22, 2009.

Construction of Kazakhstan – China gas pipeline was finalized in October 2010. On December 2010, construction of the Beineu-Shymkent gas pipeline was started. It is considered Phase II of the Kazakhstan-China gas pipeline.

Kazakhstan‟s Oil Export (major routes) 2010 CPC (Kazakh share)

28.6

2015 likely 52.5

Atyrau-Samara

15.3

30

Atasu-Alashankou

10.1

20

KPO-Orenburg

2.0

-

Aktau Port (via Caspian Sea) Rail

9.2 6.0

(15)

Totals:

71.2

201-228 (241)

Source: Kazakhstan’s Ministry of Oil and Gas Europe is an important partner of Kazakhstan in implementation of its energy policy. This interaction includes expansion and increase of transit opportunities for hydrocarbon supplies from Kazakhstan to European markets, including cooperation under TRACECA international project, ТАCIS INOGATE Program «International transportation of oil and gas in Europe» and The Energy Charter Treaty (ECT).

56

The main criterion for decision by the Kazakh Government on projects aimed at diversification of exporting routes is their economic effectiveness.

Kazakhstan welcomes the active U.S. involvement into activity for development of alternative export routes in Eurasia, particularly, from the Caspian basin to Europe. This approach fully corresponds to Kazakhstan‘s national security priorities.

The Kazakhstan International Oil & Gas Exhibition (KIOGE) KIOGE 2011, the 19th International Oil & Gas Exhibition and Conference will be held on 5th - 8th October 2011 at the Atakent Exhibition Centre and Intercontinental Hotel in Almaty, Kazakhstan.

KIOGE is Central Asia‘s largest and most influential trade event for the oil and gas industry. It is the focal point for the sector in Kazakhstan and the highest profile event in the calendar for the region.

KIOGE comprises an exhibition and conference and has helped to introduce more than 5,000 companies into the market, a great many of which now have well-established businesses in Kazakhstan.

The KIOGE Conference is Kazakhstan‘s leading forum for debating the key issues affecting the oil and gas industry in the country. The conference will gather together in excess of 1,000 oil and gas professionals and provide a high-level forum for open, balanced and independent discussions and an in-depth analysis of the current oil and gas market trends in the Kazakh and Caspian region.

The KIOGE Exhibition is the premier showcase of products and services for the oil and gas industry in Kazakhstan and the wider Central Asian region. The exhibition covers a total area of almost 10,000mІ with over 500 companies from 30 countries promoting their goods to over 8,000 professionals from Kazakhstan‘s energy sector. The KIOGE exhibition covers all areas of upstream and midstream oil and gas technologies and services. It is a place where people meet face-to-face, where companies demonstrate their products and debate the practical applications of their technologies and service solutions. It is also a place to discuss contracts, take orders, boost sales, learn about new projects, cement existing relationships and build new ones. For the oil and gas industry, KIOGE is Kazakhstan‘s key marketplace for business.

KIOGE benefits from the official support of the Ministry of Oil and Gas of Kazakhstan and the national oil company, KazMunayGas. Official event support is also provided by the Almaty City Akimat, the Chamber of Commerce and Industry of Kazakhstan and a number of diplomatic missions from participating countries. The event is ‗Approved‘ by the Global Association of the Exhibition Industry (UFI) and is organised by one of Kazakhstan's leading trade event organisers, Iteca (part of ITE Group plc) together with partners from the UK, Russia, Germany, Turkey and China.

Coal Coal is one of the largest industries in Kazakhstan. According to the 2010 BP Statistical Energy Survey, as of beginning of 2010 Kazakhstan‘s coal reserves were 31300 million tons, 3.78% of the world total.

Kazakhstan ranks eighth in the world in coal production after the U.S., Russia, China, Australia, India, South Africa and Ukraine. Kazakhstan‘s 2009 coal production was 101.52 million

57

tons, 1.51% of the world total. Kazakhstan‘s 2009 coal consumption was of 33.04 million tons oil equivalent, 1% of the world total.

The coal sector is also a priority investment area. Kazakhstan has Central Asia‘s largest recoverable coal reserves. The state register includes 142 closed mines and 55 open-pit mines. Most mines are located in the central part of Kazakhstan (the Karaganda and Ekibastuz coal basins and the Shubarkol mine) and north Kazakhstan (the Torgay coal basin). Recoverable reserves account for 45% and unrecoverable 55%.

Approximately 30% of Kazakhstan‘s coal production is exported, mainly to Russia and Ukraine. The remainder is used in the domestic power generation industry (80% of Kazakhstan‘s power requirements are coal based) as well as the iron and steel industries. Kazakhstan is the former Soviet Union‘s 2nd largest producer, after Russia. According to the Kazakh Ministry of Industry and New Technologies, the country aims to be producing 134 million tons annually by 2015 and increasing this number by 150 million tons annually by 2020.

The country has more than 400 coal deposits of which a third is classified as brown coal or lignite deposits. Most coal production is sourced from two main basins, the Karaganda Basin, which supplies coking coal from underground mining operations, and the Ekibastuz Basin (the third largest coal basin in the FSU), which supplies coal to the power generation sector.

The Karazhir deposit is one of Kazakhstan‘s higher grade coal deposits containing more than 1 billion tons of reserves, with a large proportion being open pittable.

Mining is happening at 53 mines, including 15 in the Karaganda coal basin, by 34 companies (one joint venture, five foreign and 28 local companies). The major companies are: Bogatyr Access Komir, Shubarkol Komir, Mittal Steel Temirtau, the Eurasian Energy Corporation, Maykuben West, Karazhira Ltd, the Kazakhmys Corporation and Gamma.

Bogatyr Access Komir, LLP or BAK, the largest open cast mining company in Kazakhstan, which is wholly owned by the US' Access Industries Inc., owns the Bogatyr mine. The mine has a projected capacity of 50 Mt/y.

MMRC owns 32.8 % of the Eurasian Energy Corporation, with the remaining 24.3% by the government and the balance as public and corporate shares.

Ispat-Karmet, Kazakhstan's biggest steel producer, operates several coal mines to feed its steelworks, producing just over 7 Mt from the Karaganda region.

Summary of Coal Industry Kazakhstan has registered 49 coal deposits in its state reserve balance (USGS, 2010). Table below summarizes Kazakhstan‘s historical annual coal production by regions.

Kazakhstan‘s coal production 2006

2007

2008

2009

2010

Coal, thousands tons Republic of Kazakhstan

96230.5

98383.9

111072.3

100 854.3

Akmola region Aktobe region Almaty region Eastern Kazakhstan region Zhambyl region

41.1 3.2 8.1 4469.4 20

41.1 6.2 10 4433.3 66

30.9 4.7 15.0 5431.5 324.0

245.4 4,9 15.1 5353.3 355.0

110805, 9 1478,6 2,5 16,7 5808,3 263,6

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Karaganda region Kostanay region Pavlodar region

26797.9 52.7 64838.1

31715.4 7.7 62104.2

32461.8 51.0 72753.4

30722.2 8,2 64150.2

32560,4 50,0 70625,8

The coal sector is said to have enough reserves to last over 100 years. In the future, the development of the raw materials base will be achieved through enriching and improving the quality of the coal and the deep processing of coal to obtain fluid fuel and synthetic substances. Developing shale is also timely. As an alternative source of energy, methane from coal mines in the Karaganda basin can also be used. The high concentration of methane in coal layers and the existence of a welldeveloped infrastructure and major gas consumers make it possible to extract it and utilize it on a large scale. This will also increase central Kazakhstan‘s energy potential and provide gas not only to enterprises in Karaganda, Ekibastuz and Pavlodar regions but also to the country‘s capital, Astana. ***

Kazakhstan’s Uranium and Nuclear Industries (based on World Nuclear Association’s reports) Kazakhstan has 15% of the world's uranium resources and an expanding mining sector, aiming for 30,000 tU annual production by 2018.

In 2009, it became the world's leading uranium producer, with almost 28% of world production.

A single nuclear power reactor operated from 1972 to 1999, generating electricity and for desalination.

Kazakhstan has a major plant making nuclear fuel pellets and aims eventually to sell value-added fuel rather than just uranium. It aims to supply 30% of the world fuel fabrication market by 2015.

The government is committed to increased uranium exports, and is considering future options for nuclear power.

Kazakhstan has been an important source of uranium for more than fifty years. From 20012010, production rose from 2000 to 18,000 tonnes. The uranium production output for 2010 totalled 17,803 tons and exceeded the targeted volume by almost 30%. For the period 2009-2010, the volume of uranium production in Kazakhstan increased two fold.

Kazakhstan has no national electricity grid, but a northern grid links to Russia and a southern grid links to Kyrgystan and Uzbekistan. Electricity consumption is 48 TWh/yr, from 17 GWe of plant, mostly fossil fuel fired and now privatised.

Kazatomprom is the national atomic company set up in 1997 and owned by the government.

It controls all uranium exploration and mining as well as other nuclear-related activities, including imports and exports of nuclear materials. It announced in 2008 that it aims to supply 30% of the world uranium by 2015, and through joint ventures: 12% of uranium conversion market, 6% of enrichment, and 30% of the fuel fabrication market by then.

The uranium sales volume of JSC NAC Kazatomprom, excluding subsidiaries and joint ventures, amounted to 9,000 t U in 2010 The revenue of uranium in 2010 increased by 30% compared to 2009.

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By the end of 2010, the portfolio of orders of JSC NAC Kazatomprom was about $17 billion.

Recent international collaboration. Kazatomprom has forged major strategic links with Russia, Japan, China and the U.S. It also has taken a significant share in the international nuclear company Westinghouse. Canadian and French companies are involved with uranium mining and other aspects of the fuel cycle.

In July 2006, Russia and Kazakhstan (Kazatomprom) signed three 50:50 nuclear joint venture agreements totalling US$10 billion for new nuclear reactors, uranium production and enrichment. The first JV with Atomstroyexport is JV Atomniye Stantsii for development and marketing of innovative small and medium-sized reactors, starting with OKBM's VBER-300 as baseline for Kazakh units. Russia's Atomstroyexport is expected to build the initial one.

The second JV with Tenex, confirmed in 2008, is for extending a small uranium enrichment plant at Angarsk in southern Siberia. (This will also be the site of the first international enrichment centre, in which Kazatomprom has a 10% interest.) It will eventually be capable of enriching the whole 6,000 tonnes of uranium production from Russian mining JVs in Kazakhstan. The uranium exploration and mining JV Akbastau with Tenex started with Budenovskoye in the Stepnoye area of south Kazakhstan, which commenced production in 2008. This will complement the Zarechnoye JV 250 km to the south, which was set up in June 2006.

In April 2007, a number of high-level agreements on energy cooperation were signed with Japan. These included some relating to uranium supply to Japan, and technical assistance to Kazakhstan in relation to fuel cycle developments and nuclear reactor construction. A further agreement on uranium supply and Japanese help in upgrading the Ulba fuel fabrication plant was signed in may 2008. Kazatomprom is keen to move from being a supplier of raw materials to selling its uranium as fabricated fuel assemblies. It said that it aimed to supply 40% of the Japanese market for both natural uranium and fabricated fuel starting in 2010 - about 4000 tU per year. Negotiations have commenced for a bilateral nuclear cooperation agreement between Kazakhstan and Japan.

In August 2006, the Japan Bank for International Cooperation signed an agreement with Kazatomprom to support and finance Japanese firms in developing Kazakh uranium resources to supply Japan's power generation. In March 2009, three Japanese companies - Kansai, Sumitomo and Nuclear Fuel Industries - signed an agreement with Kazatomprom on uranium processing for Kansai plants.

In December 2006, China Guangdong Nuclear Power Group Holdings (CGNPC) signed a strategic cooperation agreement with Kazatomprom, in May 2007 an agreement on uranium supply and fuel fabrication, and in September 2007 agreements on Chinese participation in Kazakh uranium mining joint ventures and on Kazatomprom investment in China's nuclear power industry. This is a major strategic arrangement for both companies, with Kazatomprom to become the main uranium and nuclear fuel supplier to CGNPC (accounting for a large share of the new reactors being built in China). In October 2008, a further agreement was signed covering cooperation in uranium mining, fabrication of nuclear fuel for power reactors, long-term trade of natural uranium, generation of nuclear electricity and construction of nuclear power facilities. A CGNPC subsidiary, SinoKazakhstan Uranium Resources Investment Co, is to invest in two Kazakh uranium mines, Irkol and Semizbai, through the Semizbai-U LLP joint venture.

A framework strategic cooperation agreement was signed with China National Nuclear Corporation (CNNC) in September 2007 and this was followed in October 2008 with another on "long-term nuclear cooperation projects" under which CNNC is to invest in a uranium mine. Late in 2007, Kazatomprom signed an agreement with both GCNPC and CNNC for them to take a 49% stake in two uranium mine joint ventures and supply 2000 tU per year from them.

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Early in 2009, Kazatomprom signed an agreement with CGNPC for the establishment of a specialized company for the construction of nuclear power plants in China, since Kazakh plans to work with Russia's Atomstroyexport developing and marketing innovative small- and medium-sized reactors had to be put on hold. As of mid 2009, a feasibility study on this joint CGNPC project was underway.

In January 2009, Kazatomprom signed an agreement with India's Nuclear Power Corporation (NPCIL) to supply 2100 tonnes of uranium to India and undertake a feasibility study on building Indian PHWR reactors in Kazakhstan. NPCIL said that the deal represented "a mutual commitment to begin thorough discussions on long-term strategic relationship." Under this agreement, 300 tonnes of natural uranium will be supplied by Kazatomprom in 2010-11.

In April 2010, Kazakhstan signed a nuclear cooperation agreement with South Korea, paving the way for export of Korean SMART 100 MWe nuclear reactors and for joint projects to mine and export Kazakh uranium.

In addition, Kazakhstan signed intergovernmental agreements on nuclear energy cooperation with the U.S. and Euratom.

In 2007, Kazatomprom purchased a 10% share in Westinghouse. Toshiba had bought the company from BNFL for $5.4 billion early in 2006, and the Shaw Group then took 20% and IHI Corp. 3%. The Kazatomprom link strengthened the company's upstream links for fuel supplies and should enhance its marketing of nuclear reactors. It also brought Kazatomprom more fully into the industry mainstream, with fuel fabrication in particular.

This led to a decision to set up with Toshiba a nuclear energy institute in the northeastern town of Kurchatov, near Semipalatinsk, which is already a centre of R&D activity. This was announced by Kazatomprom and the Kazakh prime minister in September 2008 and will focus on skills development in all aspects of the nuclear fuel cycle as well as reactor technology. Other Japanese companies such as Toyota and Marubeni are expected to support the institute, especially in its rare earth metals department, which aims to utilize present waste materials as the basis of a billion-dollar, high-tech export industry. Three research reactors are operated by the Institute of Atomic Energy at Kurchatov.

In May 2007 Canada's Cameco Corporation signed an agreement with Kazatomprom to investigate setting up a uranium conversion plant, using its technology, and also increasing uranium production at its 60% owned Inkai mine. In June 200,8 Cameco and Kazatomprom announced the formation of a new company - Ulba Conversion LLP - to build a 12,000 t/yr uranium hexafluoride conversion plant at the Ulba Metallurgical Plant in Ust-Kamenogorsk. Cameco will provide the technology and hold 49% of the project. A feasibility study is due to be completed mid 2009.

In June 2008, Areva signed a strategic agreement (MOU) with Kazatomprom to expand the existing Katco joint venture from mining 1500 tU/yr to 4000 tU/yr (with Areva handling all sales.In October 2009, the two parties signed another agreement to establish the IFASTAR joint venture to fabricate nuclear fuel at the Ulba plant and market it as an integrated fuel supply for Asian customers. IFASTAR would first undertake a feasibility study on building a 400 t/yr fuel fabrication line at Ulba. IFASTAR is to be based in Paris, with 51% Areva equity (though any resulting plant will be 51% owned by Kazatomprom).

In 2010 Kazatomprom implemented a number of large-scale industrial projects: - Inkai JV LLP: The facilities of industrial complex of geo-technological field were put into operation in Suzak District of South Kazakhstan Oblast. The Satellite 1 Plant at Site 2 of Inkai Deposit was put into operation.

- Karatau JV LLP: Expansion of Pilot Commercial Uranium ISL Mining Project at Budenovskoye Deposit, Site 2 61

- Katco JV LLP: Increase in production capacity at Moyinkum Deposit, Tortkudik Site 2.

- Baiken-U JV LLP: Housing estate of field camp designed for 245 people located in Baikenzhe Rural District, Zhanakorgan Region of Kyzylorda Oblast was commissioned.

In the area of uranium conversion, Kazatomprom and Cameco are working together on implementing the joint project for conversion facilities construction. In 2010, Rosatom State Company and Kazatomprom reached agreement in the area of uranium enrichment on further development of the project CJSC Center for Uranium Enrichment according to the alternative option.

On October 27, 2010, during the official visit of President Nazarbayev to France, the Agreement was signed between Kazatomprom and AREVA for nuclear fuel production. The company, which is 51% owned by Kazatomprom and 49 % by AREVA, will construct a new line for fuel assemblies production. The new plant with capacity of 400 tons per year is supposed to be put into operation in 2014.

In 2010, JSC UMP completed the certification process of fuel pellets made of uranium dioxide as per AREVA‘s specifications. Kazatomprom was awarded the right to produce fuel for reactors of AREVA design, used in many countries around the world.

In 2010, JSC UMP and Nuclear Fuel Industries Ltd. (NFI), Japan, implemented a certification of uranium dioxide powder, produced by JSC UMP for Japanese nuclear power plants, which allowed JSC UMP to supply the nuclear fuel components to Japanese market.

In addition in 2010 JSC UMP completed the certification of production for uranium fuel pellets at China Jianzhong Nuclear Fuel (CJNF), an entity of China National Nuclear Company (CNNC). Thus, a large scale project was launched for supply of uranium fuel pellets to China, which will be used in fuel production for largest nuclear power plant owner in China - China Guangdong Nuclear Power Corporation (CGNPC).

Kazatomprom continues active development of new directions in its activities: - SARECO JV LLP was established by Kazatomprom and Sumitomo Corporation, Japan - The establishment of the Joint Venture by Kazatomprom and Toshiba Corporation, Japan.

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map of KazAtomProm. Scale: Kyzlorda to Shieli/ Kokzhoky is about 100km.

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National Atomic Company «Kazatomprom» The Atomic Company KAZATOMPROM is the national operator of the Republic of Kazakhstan, for import and export of uranium, rare metals, nuclear fuel for power plants, special equipment and dual-purpose materials.

100% of the Company‘s stock is held by the Government under the National Welfare Fund SAMRUK-KAZYNA. At present, over 25,000 workers are employed by the Company.

KAZATOMPROM is a holding - managing six following core activities: uranium prospecting/exploration and production; output of nuclear fuel cycle products; construction of reactors and nuclear power plants; non-ferrous metallurgy and production of construction materials; power industry; science; social welfare and personnel training.

MISSION: Pursuance of the industry-oriented policy of the Republic of Kazakhstan aimed at establishment of a national industrial complex, competitive in both the domestic and overseas market; Development of a transnational vertically integrated Company holding key positions in the world nuclear power market; Participation in designing nuclear power plants; Development of science-intensive technologies.

Strategy To offer the customer a wide range of outputs and services and, to this purpose, to seek to achieve dynamic development of high production standards through the use of the latest advances in science, know-how and management.

Nuclear fuel cycle development strategy To support the nuclear renaissance worldwide and, whilst also pursuing a concept of large-scale international cooperation, KAZATOMPROM also aims to achieve the goal of becoming a top vertically integrated transnational company, with a complete service package – from uranium production to nuclear fuel manufacturing and construction of power generation units.

Contacts: 168, Bogenbai batyr St, Almaty city, 050012, Republic of Kazakhstan Tel.: +7 /727/ 261 54 25, 258 50 75, 258 50 95, 258 50 96 (reception) Fax: +7 /727/ 250 35 41 e-mail: nac@kazatomprom.kz http://www.kazatomprom.kz/

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Renewable Energy Biofuels. Kazakhstan has the necessary economic potential for the production and development of bio fuels. According to the Ministry of Agriculture of Kazakhstan, using common wheat for the production of bioethanol is most appropriate in Kazakhstan‘s climatic conditions.

Many experts are convinced that by using low-quality wheat (1 million tons) and unused grain leftovers (about 1.9 million tons) Kazakhstan can produce 1 billion litres (812,000 tons) of bioethanol by 2010.

Since 2009, the Law on Support of Using Renewables has provided a legal framework for commercial activities in this area.

In 2010, the Ministry of Industry and New Technologies signed a Memorandum of Understanding with the Samsung C&T. According to the Ministry of Industry and New Technologies, the Memorandum includes planning the construction of wind and solar power stations.

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MINING AND SMELTING INDUSTRY IN KAZAKHSTAN As the planet‘s ninth largest country, covering 2,717,300 km2, Kazakhstan dominates its Southern Central Asian neighbors both in terms of land mass and mineral wealth. Proven resource figures are truly staggering. Its mineral wealth has colossal potential for development.

Kazakhstan‘s mining industry accounts for approximately 27% of the Kazakhstan‘s GDP. About 90% of all MSS products are exported to more than 30 countries, making 35% of the total exports of the country. Mineral resources produced in Kazakhstan contain 76 elements of Mendeleev‘s table. The reserves of the country are rated 1st in uranium, zinc and lead in the world, 3rd in manganese, 4th in copper, 7th in cobalt and cadmium, 8th in gold.

After oil and gas, the mining industry in Kazakhstan is the second largest economic sector when evaluated in terms of revenues. In 2009, mining represented 19.6% of Kazakhstan‘s national GDP and US$21.3 billion worth of economic output. In 2009, investments in minerals amounted to US$21 billion (12 times higher than in 1996). Of that, $4.6 billion was invested into mining and conversion of solid minerals. The greatest volume of investments, next to hydrocarbons, goes to the polymetallic and ferrous metals industries. The investments were put into the technical modernization of mining companies and construction of new high added-value enterprises.

The government will approve the Mining-Smelting Industry Development Program in 2014.

The goal of the program is to provide raw materials for the production of high technology and science-intensive finished products (mechanical engineering, construction, aircraft, space and defense industry). Upon The government expects 107% growth of gross value added for metallurgy products.

Kazakhstan is one of the world's best-endowed states, possessing world-class deposits of minerals and raw materials. Vast quantities of base and precious metals have been discovered, with countless others waiting for discovery and development. Kazakhstan is the ultimate mining and metallurgical country producing 25 different kinds of ferrous, non-ferrous and precious metals.

Some 233 mining enterprises produce a wide variety of commodities: coal, iron ore, chromites ores and ferroalloys, alumina, copper, lead, zinc, steel, titanium sponge, uranium, barites and others.

Mining activities are currently being carried out at 2,000 mines in Kazakhstan, which consists of prospecting at 132 mines (7%), extraction at 1,213 (61%) and both activities at 641 (32%).

Kazakhstan has an abundant supply of accessible mineral and fossil fuel resources. According to some estimates, Kazakhstan has the first largest uranium, chromium, lead, and zinc reserves, the third largest manganese reserves, the fifth largest copper reserves, and ranks in the top ten for coal, iron, and gold. It is also an exporter of diamonds.

Precious Metals Gold. Kazakhstan has 4% of world deposits of gold. The country occupies eighth place after South Africa, the US, Australia, China, Russia, Canada and Indonesia.

Kazakhstan‘s two major gold deposits are in Vasilkovskoye (Kazzinc) with approximately360 mt and in Bakyrchik (Ivanhoe Mines Altynalmas) with approximately 277 mt.

Kazakhstan‘s gold deposits are complex poly-metallic ores often presenting significant challenges during processing stages of production. Much of Kazakhstan‘s gold is produced by copper and zinc producers such as Kazzinc and Kazakhmys as a byproduct of refining processes.

The Vasilkovskoye Zoloto joint venture, the Bakyrchik mining enterprise, the Kazakhmys Corporation, Kazzinc and the Kazakhaltyn mining company have large gold reserves (together accounting for 52% of the country's total reserves). Gold is being mined at 199 deposits.

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Most extraction (about a half) comes from composite sulphide deposits developed by Kazzinc and the Kazakhmys Corporation. A further 40% is extracted by Vasilkovskoye Zoloto, Altynalmas, Kazakhaltyn, Yubileynoye, Andas-Altyn, Altyn-Tobe and Dank companies, which are developing their own gold deposits.

These companies have gold reserves that will last between 10 and 80 years. Developing hard and complex ore will increase the ore base. As a result, according to forecasts, Kazakhstan will become a leading gold producer by 2015.

In 2009 Kazakhstan produced 10.3 thousand ton of refined gold, which is 26% up from 2008.

Silver. Silver reserves were discovered in 100 deposits of which 60% are cooper-lead-zinc deposits. Silver production is concentrated on affiliated companies of Kazakhmys i.e.

Zhezkazganzvetmet and Balkhashzvetmet. In 2009, Kazakhstan produced 673,3 thousand tons of silver, up 7.1% from the year 2008.

Nonferrous Metals Copper. Kazakhstan occupies fourth place in the world‘s copper reserves (5.5% of world deposits), behind Chile, Indonesia and the U.S. The state register records 93 copper deposits, half of which are being developed. The major enterprises operating in the sector are the Kazakhmys Corporation, Kazzinc, Aktubinsk Cooper Company, Maikainzoloto (in total, there are nine companies, including two foreign).

Copper production is estimated to be around 400,000 mt in 2010, which places Kazakhstan at No. 10 globally for copper output. The sector has reserves that will last from 20 to 30 years.

Kazakhstan‘s export of cooper concentrate varies between 100-200 thousand tons per year.

Main export markets are China, Russia and Uzbekistan. In 2009, Kazakhstan produced 400 tons of refined copper.

Lead, zinc. In terms of proven zinc (9,5% of world deposits) and lead (10% of world deposits) reserves Kazakhstan occupies the leading position in the world. The state register records 85 lead deposits and 79 zinc deposits. The mining of polymetals is being carried out at 32 deposits, consisting of extraction at twenty (63%), prospecting and extraction at nine (28%) and prospecting at three (9%).

Reserves are concentrated in Eastern Kazakhstan around Ust-Kamenogorsk as well as in Southern Kazakhstan in close proximity to Shymkent. Both zinc and lead production in Kazakhstan are dominated by major domestic firms Kazzinc and Uzhpolimetal. Kazzinc production for 2009 was 300,000 mt of zinc and 80,000 mt of lead. Kazzinc is driven by a strategy of advanced industrialization, employing some of the world‘s leading technologies to increasingly improve the efficiency and productivity with which Kazakhstan‘s complex poly-metallic ores can be processed.

The main raw material base is composite sulphide and polymetal deposits in Rudnyy Altay, which produces over two-thirds of the country‘s total lead and zinc outputs. Deposits are developed using underground methods. The main enterprise in the sector is Kazzinc. Kazakhmys is involved in collateral production and accounts for a third of the total lead and zinc ore outputs. In total, there are 14 enterprises operating in this sector (11 local, 2 foreign and 1 joint venture) and they enable Kazakhstan to occupy sixth place in the world in terms of lead and zinc production. A new zinc production plant with capacity of 30 thousand tons per year has been built by Uzhpolimetal. Another plant with production capacity of 100 thousand tons is under construction by metallurgical company Shalkiya.

The sector has reserves that will last about 25 years. Replenishing reserves is a timely issue at the moment. The prospects for developing the raw material base in this sector depend on 67

discovering new high-quality deposits, developing major deposits with complex and poor ores and reprocessing scrap metal.

85-88% of zinc production is exported with main destinations as Netherlands, Turkey, Italy, Ukraine and China.

Aluminium (bauxite). In terms of proven bauxite reserves, Kazakhstan occupies tenth place behind Guinea, Australia, Jamaica, Brazil, India, China, Guyana, Suriname and Venezuela. The state register lists 20 bauxite mines. Aluminium of Kazakhstan, which includes the Pavlodar Aluminium Plant and the Krasnooktyabrski and Torgay bauxite mining departments, accounts for the entire bauxite and marketable aluminium outputs.

Aluminum production in Kazakhstan was left relatively unaffected by the global financial crisis. Current bauxite output for 2010 stands at around 5 million mt from a relatively small total known reserve of 360 million mt.

The sector has sufficient reserves to last about 50 years. Adopting a new technological line at the Pavlodar Aluminium Plant has created conditions to produce alumina from low-quality bauxite, which makes it possible to increase the raw material base of the sector from the existing deposits.

Technology to extract gallium, aluminium sulphate and sodium-sulphate mixture has been improved to boost the deposits‘ productivity.

Kazakhstan does not yet produce metallic aluminium because the main consumers of our raw material are Russian enterprises. However, in December 2007, Eurasian Natural Resources Corporation announced the inauguration of the Kazakhstan Aluminum Smelter (KAS), the first state-of-the-art aluminium smelter in the Republic of Kazakhstan and CIS. KAS has achieved its initial production capacity of 62.5 thousand tons of primary aluminium a year.

KAS is a key element of a significant future aluminium cluster being developed by ENRC within the Republic of Kazakhstan. The $900 mln. investment project represents the largest private capital investment in the metals and mining industry in the Kazakhstan.

KAS‘s initial production capacity was 62,500 tons in 2007, 125,000 tons in 2008 and will rise to 250,000 tons by 2011. The smelter, which will work in close partnership with ENRC‘s Aluminium of Kazakhstan (AoK), is poised to service the growing demand for aluminium both in Kazakhstan and worldwide.

Nickel, cobalt. In terms of nickel and cobalt reserves, Kazakhstan occupies twelfth and seventh places in the world, respectively. The state register records 39 nickel deposits and 55 cobalt deposits. Kazakhstanskiy Nikel, Kyzyl Kain Mamyt and the Sokolov-Sarbay Ore-enrichment Production Association own major deposits. Five companies, two foreign and three local, are operating in the sector.

Almost the entire Kazakh nickel output is exported.

Ferrous Metals Iron, manganese. In Kazakhstan occupies sixth place in the world in iron reserves (behind Russia, Australia, Ukraine, China and Brazil) and third place (behind South Africa and Ukraine) in manganese reserves. The iron and manganese sector is a major sector in the country‘s raw materials industry. The state register records 47 iron deposits and 31 manganese deposits. Orken, the SokolovSarbay Ore-enrichment Production Association, the Zhayrem Ore-enrichment Combine and the Kazkhrom transnational company have largest raw material bases (accounting for 98% of the entire industrial reserves). Mining iron and manganese is being carried out at 32 deposits, with prospecting at seven (22%), extraction at 10 (31%) and both activities at 15 (47%). There are 23 companies operating in the sector, of which 3 are foreign and 20 are local.

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Kazakhstan is expected to produce 55-60 million tons of iron ore and 4-5 million tn of manganese ore in 2010 and 80 million tn and 7 million tn, respectively, in 2015. The current output levels will provide the enterprises with reserves for over 80 years in terms of iron ore and over 100 years in terms of manganese ore. This is enough not only to satisfy the demands of domestic ferrous metallurgy, but also to allow for efficient export activities.

Chromium. At 300 million mt, Kazakhstan‘s chromium reserves are the second largest in the world behind South Africa‘s. Chromium extraction increased by 25% from 2009, reflecting sustained increases in global demand. The state register lists 23 deposits with almost all industrial reserves owned by the transnational company, Kazkhrom. Mining is being carried out at nine deposits owned

by Kazkhrom and one by Voskhod-Oriel. Kazakhstan is currently producing about 7 million tn of chromium ore and this figure is expected to grow to 9 million tn by 2015.

The chromium reserves are enough to last for over 90 years.

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TRANSPORT AND COMMUNICATIONS Kazakhstan‘s Government is pushing forward with its Strategy of Transport Sector Development of up to 2015, which calls for the investment of up to USD26 billion on infrastructure projects over 10 years.

The Strategy covers 2006-2015 and is supposed to be implemented in two stages: 1st stage – 2006-2011, 2nd stage – 2011-2015.

The Strategy is designed to bring the national transport system to a higher level. Transport infrastructure is supposed to be brought in compliance with the worldwide standards.

The core of the effort involves container traffic. Improvements will ensure substantial revenue for the central budget and transport companies.

The Strategy covers railways, automobile, in-city passenger, air and water carriage.

The Strategy is intended to facilitate growth of trade ties between the West and the East by means of reliable and accessible transit routes.

The Strategy provides for modernization of already operating infrastructure and construction of new routes, with all transport fleets being renewed.

Economic and geographic features of Kazakhstan (its vast territory, land-locked position, uneven distribution of population clusters and natural resources) make the transportation component of the economy challenging.

But being sandwiched between Europe and Asia, Kazakhstan boasts great transit potential, as there are no alternatives for Asian states to link to Russia and Europe.

Automobile and railways routes account for a major share of the total above-ground transport routes (about 88.4 и 14 thousand km, respectively). Total length of navigable waterways is 3.9 thousand km, and the total air routes makes up 61 thousand km. Density per every 1000 km 2 stands at 5,1 km for railways, at 32,4 km for automobile routes with hard surface, and at 1,5 km for in-land navigable waterways.

The share of transportation costs compared to the cost of goods is 8% and 11% for in-land railways and automobile traffic respectively, while in industrialized countries these are normally in the range of 4-4,5%. Four international transport corridors cross Kazakhstan: • Northern Corridor of Trans-Asian Railway Main (TARM): Western Europe – China, Korean Peninsula and Japan via Russian and Kazakhstan (section Dostyk – Aktogai - Sayak – Mointy – Astana – Petropavlovsk (Presnogorkovskaya)).

• Southern Corridor of TARM: South-Eastern Europe – China and South-Eastern Asia via Turkey, Iran, Central Asian states and Kazakhstan (section Dostyk – Aktogai – Almaty – Shu – Arys – Saryagash).

• TRACECA: Eastern Europe – Central Asia via the Black Sea, Caucasus and the Caspian Sea (section Dostyk – Almaty – Aktau).

• North-South: Northern Europe – Gulf States via Russia and Iran, with Kazakhstan‘s participation in the following sections: sea port Aktau – Ural regions of Russia and Aktau – Atyrau.

Kazakhstan, Russia and other CIS countries believe that cargo transit between the EU and Asia is worth more than $ 600 bln. a year, according to the IMF. Infrastructural investment requirements through 2030 are expected to total more than $25 billion - and of this, 40% will be needed for railway transportation, 23% for highways and motor transport, 25% for telecommunications, and 12% for the air and water transport systems.

Railway services play a significant role in the transport-communications network. They carry up to 70% of cargo and 50% of passengers in the overall transport operations in Kazakhstan.

Total mileage of the railways in Kazakhstan exceeds 14 thousands km .

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A transit route with great potential is the Trans Kazakhstan Route project from China to Europe through Kazakhstan, Turkmenistan, Iran and Turkey. One of the advantages of this route is that the width of railroad track will be in line with the international standards so it will be unnecessary to change railroad wheels on borders. The length of the Kazakh part of the Route is 3070 km. When completed, the $4 bln. project will allow cargo to move from the ports of China to the port of Rotterdam within 18 days resulting in significant cost savings for cargo transportation from Asia Pacific Region to the Western Europe. The two stage project with 15 years of implementation period is set to convey up to 110 mln tons of cargo a year through Kazakhstan.

New and existing railway lines will strengthen the transit potential of the country. For example, a new route from Chromtau to Altynsarino, 402 km, which was finished in 2004 will shorten the existing route through the Russian territory for cargo shipments from the West and East Siberia, the Ural region of Russia to the Aktau Seaport and further to Iran and through the NorthSouth transport corridor to the ports of the Indian Ocean. This route will cut the length of the freight transportation route by 2000 km, saving 48 hours of shipment time and up to US$18 per per ton ton of cargo. Since the opening of Chromtau-Altynsarino route almost 15 mln tons of cargo were transferred with the possibility to increase the volume of transit by 25 mln. tons a year after realisation of the second stage of the project.

Motor transport. Kazakhstan possesses a motor roads network with total length of more than 88,9 thousand km. What‘s more, 13 thousand km of the network have international significance linking the Asian and European motorways. For the last years great attention has been paid to major repair and reconstruction of existing roads. At least 14,4 thousand km of roads were repaired.

The total amount of financial resources for the implementation of the Program is US$ 8.5 billion.

International transit corridors received their further development as 579 km of highways of national importance have been launched.

Construction of a new transport corridor between West Europe and West China will increase deliveries by trucks almost four fold, from the current 900 thousand tons to 3.5 million tons.

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AGRICULTURE Agriculture is considered to be one of the key sectors of the Kazakhstan economy.

Kazakhstan is rich in land resources: more than 74% of the country's territory is suitable for agricultural production, representing 5.5% of GDP and employing over 20% of the labour force with 43% of population living rural areas.

Kazakhstan is one of the world‘s major wheat and flour exporters. It is among the 10 largest wheat producers. It also exports large amounts of cotton, leather and wool. In seven years, agricultural exports may reach the level of Eastern European countries.

The total area of agricultural land resources in Kazakhstan is 222.6 mln. hectares (ha), 24 mln. ha of them are covered by tilled fields (10.8%), 5 mln. ha (2.2%) by hay-fields and 189 mln. ha (85%) by pastures. The rural population is 7.3 mln people, which represents 47.2% of the population. Meanwhile, according to the World Bank, Kazakhstan‘s labour efficiency in agriculture is 5 times lower than in the Eastern Europe, even lower than Russia and Ukraine. The main grain crop is milling wheat, which is typically high in quality and protein. There is a growing trend for Kazakhstan to export its grain internationally. In 2010, Kazakhstan produced 12.2 million metric tons and exported 5 million metric tons of grain (net weight).

Other food crops include barley, maize, rice, potatoes, soybeans, sugar beets, cotton, tobacco, sunflower, flax, soybean and mustard. Cotton is the most important industrial crop grown on the irrigated land of southern Kazakhstan. Orchards and vineyards are widespread. The rich soil and climate provide ideal conditions for growing wheat, barley, rice, corn, millet and buckwheat.

In 2011, the total crop area is planned to reach 21,3 million ha. Corn and beans will be sown on 16,5 million hectares while oilseeds will occupy 1,7 million ha. To satisfy the demands of the livestock industry, forage cultures are to be expanded by 95 thousand ha; areas for fruit and vegetables will grow by 2,5 thousand and by 1,7 thousand ha for sugar beets.

Effective methods of cultivation will be employed more actively in 2011. Crop areas with application of moisture -and resource-saving technologies will reach 11,2 million hectares, which amount to 68% of the total sown area. That is more than the previous level by 650,000 ha, or 6%. In addition, 8,1 million ha of grain, or nearly half of the cultivated area, will be planted with modern crops.

For a country with a long nomadic history, it is not surprising that stockbreeding is the traditional and dominant agricultural sector. No less than three quarters of all agricultural land is used for grazing. Sheep breeding is predominant, while cattle breeding and the raising of pigs, horses and camels are also well developed. Animal husbandry typically accounts for about 45%50% of the production value in agriculture in Kazakhstan. Primary meat products include beef, veal, chicken, horse, lamb, pork and rabbit.

The livestock sector is gradually growing. During 2010, the output of meat rose by 3.0%, egg production went up by 12.6% and milk output rose by 1.4%. Similarly, herd sizes are recovering after a period in the 1990s in which livestock were being slaughtered for meat but not replaced. As of January 1, 2011, in comparison with the previous year the number of head of cattle increased by 1,1 %, sheep by on 3,5 %, horses by 3,1 %, hogs by 2,3 %, birds by 1,1 %.

In 2010, National Holding ―KazAgro‖ allocated 94.3 billion tenge (640 million USD) for 86 projects including construction of greenhouses and poultry farms, feedlots, meat-packing factories, milk farms, infrastructure for grain exports and development of processing industry. As of January 1, 2011, 32 projects worth 29 billion tenge (200 million USD) were completed, which created 2,000 jobs.

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One such project is a joint venture established between by Global Beef Consultants LLC (Bismarck, North Dakota) and the Kazakh government. In 2010, the joint-venture imported 2,040 Angus and Hereford cattle from North Dakota. Ultimately the number of cattle is planned to reach 40,000. The $50 million project also includes construction of two 2,500-animal breeding facilities and a feedlot. Kazakhstan is already the fourth-largest importer of North Dakota products, mostly farm machinery. The state exported $40.3 million in goods last year, up from $25 million in 2005.

The government of North Dakota opened a trade office in Kazakhstan.

The Kazakhstan Government is looking for agricultural investors from the United States. The Government has allocated land to be rented by foreign investors for as long as10 years. Also, modern technologies are being brought to Kazakhstan from the United States.

In order to support this industry, the Government is implementing several programs to improve the investment climate for farming in Kazakhstan. In 2011, in government subsidies for agriculture will amount to 58 billion tenge (400 million USD), which is greater than 13.6 billion tenge (95 million USD) allocated in 2010. To support seed production, the Government will allocate 2.2 billion tenge (15 million USD), which is higher than 108 million tenge in 2010. More than 4,2 billion tenge (30 million USD) will be budgeted for livestock breeding programs,which is higher than 740.4 million tenge in 2010. Almost 13.1 billion tenge (90 million USD) will be spent on improving productivity and quality of livestock production, which considerably exceeds the level of subsidies in 2010 - 76 million tenge.

NATIONAL HOLDING «KAZAGRO» Purpose Stimulation of agro industry development by effective management of agrarian joint-stock companies.

Basis principles of activity -compliance with priorities of agricultural policy; - concentration and directing investments to solving priority tasks of the agro industrial complex; - improving economic effectiveness of the companies' activity; - application of innovative international experience in the sphere of corporate management.

Functions - elaborate strategic plans for development, mid-term plans for the Companies' financial activity, investment programs and the budget of the year; - ensuring achievement of purposes, including maximization of the Companies' financial results; - participation in realization of financial and administrative management of the companies' projects; - assistance in attraction of external and internal investments; - development and monitoring indicators of the companies' activity efficiency; - taking correcting measures in case of the companies' failure in achieving their purposes and efficiency parameters; - introduction of international principles of corporate management; - selection and motivation of the Companies' top managers; Companies of “KazAgro” National Holding JSC ―Food Contract Corporation‖ 73

JSC ―KazAgroFinance‖ JSC ―Agrarian Credit Corporation‖ JSC «Mal Onimderi Corporation» JSC ―Foundation for financial support of agriculture‖ JSC ―Kazagromarketing‖ JSC ―KazAgroGarant‖ Contacts: Chairman of the Board Mr. Berik Beissengaliev Astana, 36 Kenesary Str., office № 605 PO 010000 Tel./Fax: (7 7172) 555 973, 391 696 email: kazagro07@mail.ru; http://www.nhkazagro.kz

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BANKING AND FINANCING On the left is a symbol for national currency, Tenge Banking sector After the financial crisis of two years ago, three banks (BTA Bank, JSC; Alliance Bank, JSC; and Temirbank, JSC) were successfully restructured. As a result, the total foreign indebtedness of those banks has decreased by more than USD11.0 billion. The banking sector is sounder as a result. In particular, the share of banks‘ foreign liabilities in as compared to their total liabilities has been reduced to 23.9% as of January 1, 2011, versus 33.6% as of January 1, 2010.

In 2010, deposits from individuals and legal entities grew by 13.7% to KZT 6825.3 billion compared to 2010.

However, the lending activities of banks remain low. The reasons: the high credit risk of the economy and the lack of high quality borrowers. The banks‘ loan portfolio decreased by KZT 572.8 billion, or by 5.9% over the year 2010 to make up KZT 9066.0 billion as at January 1, 2011. As at January 1, 2011, loans that banks had made in foreign currency were 50.2% of the aggregate loan portfolio, or KZT 4553.2 billion (57.2% as at Jan 1, 2010).

One of the major problems in the banking sector remains the quality of the loan portfolio.

Non-performing loans remain at a high level -- 32.5%, though this is a decrease of 4 percentage points compared to the beginning of the past year (36.5%).

2010 saw a reduction in provisions (reserves) in Kazakhstan‘s banking sector. The aggregate amount of provisions (reserves) in banks decreased to KZT 2802.2 billion, which is 30.9% of the loan portfolio, and is enough to cover loans more than 90 days in arrears 1.3 times. However, the proportion of loans more than 90 days in arrears keeps is still high at 23.8% as of January 1, 2011.

Stock exchange On January 1, 2011, total capitalization of KASE was KZT 13967.2 billion or 56.8% of the GNP. The number of issuers that had defaulted in the organized securities market was 29. Of them, the number of issuers whose outstanding debt has been repaid in part is 9. The number of issuers whose outstanding debt has been repaid through debt restructuring is 2. The number of issuers whose securities have been delisted from KASE is 19.

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Kazakhstan‟s Sovereign Ratings Ratings Foreign currency: BBB National currency:

Standard & Poor‘s

Outlook

Stable

BBB+ Moody‘s Investors Service

Foreign currency: Baa2 National currency: Baa2

Stable

Foreign currency: Fitch Ratings

BBBNational currency: BBB

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Positive

NATIONAL FUND OF KAZAKHSTAN National Fund of Kazakhstan (the Fund) was established according to the Decree of the President of the Republic of Kazakhstan dated August 23, 2000. The Fund is managed by the National Bank of the Republic of Kazakhstan.

The Fund has 2 basic functions: saving: guaranteeing sustainable socio-economic development of the country and savings for future generations; and stabilizing: reduction of economy dependence on unfavorable external factors.

The Fund‘s assets are being invested into fixed income securities, money market instruments and equities issued by top-rated foreign and national companies. Stabilizing portfolio includes investments in highly liquid instruments of money markets and reliable Eurobonds with high credibility rating. Saving portfolio, aside from debt and money market instruments, is comprised of equities. This approach favors safe diversification and stable long-term revenues.

The Fund has been very sizeable financial cushion making the country‘s budget much less dependent on price fluctuations for energy and commodity exports during the recent global financial turmoil. Apart from reducing the country‘s exposure to external shocks, the Fund‘s assets have been used to overcome consequences of the global financial crisis. Kazakhstan has allocated $19 bln (14% of GDP) for the local anti-crisis measures from the Fund, which helped to create 400 thousand new workplaces, put into operation 170 new industrial objects, render support to small and medium business, financial institutions and real estate market.

As of March 1, 2011, the Fund‘s assets rose 26% to 6.11 trillion tenge ($41.9 billion) from 4.5 trillion tenge ($31 billion) in 2009 on higher revenue from oil-industry taxes. Previously, the Fund had been kept in dollars, but now its currency structure is diversified. The Fund‘s benchmark portfolio for bonds comprises 40% U.S. Treasuries with maturities of 1 to 5 years, 35% euro-area debt rated AA or AAA with maturities of 1 to 10 years, 10% each of 1- to 10-year U.K. gilts and Japanese bonds, and 5% 1- to 10-year Australian bonds. Stabilizing portfolio constitutes about 25% of the Fund‘s assets in foreign currency, whereas the saving portfolio – 75%.

Notwithstanding the negative impact of the global financial crisis on the market conditions and especially on the Euro-zone debt capital market, due to diversified investment policy as well as a timely response to changes in the situation on world financial market the Fund has significantly improved its investment performance in both stabilizing and saving portfolios well above their benchmark portfolios. For instance, sales of Greek, Spanish and Portuguese sovereign bonds helped the Fund to earn about $900 million on its investments in 2010. As a result, after losing money on investments in the 1st half of 2010, the Fund turned a profit through three quarters as the value of its securities and assets increased.

Advanced world experience as ground for the National Fund of Kazakhstan. Taking into consideration many features Kazakhstan and Norway have in common as oil exporting nations Kazakhstan has based its National Fund establishing experience on the example of the Norway Oil Fund.

KAZAKHSTAN NORWAY The National Fund The Norway Pension Fund Goals: Goals: 1. Ensure stable social and economic 1. Smooth short-term variations in oil development of the country revenues 2. Accumulate financial resources for 2. Cope with long-term challenge of funding future generations pensions in the face of declining oil revenues 77

3. Reduce the economy‘s susceptibility to unfavourable external factors Income sources: taxes and non-tax revenues from oil companies, return on invested capital

Income sources: cash flow from petroleum activities and return on invested capital

Management: Operations require annual approval by the Parliament; Assets are managed by the National Bank of Kazakhstan and/or appointed asset management companies according to the Ministry of Finance guidelines; Oversight by the Management Council formed by the President and members of the Parliament and Government.

Management: Transfers to a government fiscal budget require approval of the Norwegian Parliament Assets are managed by the Norwegian Central Bank according to the Ministry of Finance guidelines; Oversight by the Norwegian Government and Advisory Council on Ethics.

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THE STATE PROGRAM OF ACCELERATED INDUSTRIAL-INNOVATIVE DEVELOPMENT OF KAZAKHSTAN FOR 2010-2014 Important Milestone in “Avoiding the Oil Course” Kazakhstan had to rely on rich energy resources and spared no effort to ensure speedy development of this sector of the economy. But there was an early understanding that the oil could become a curse unless proper policies are developed -- that oil is an opportunity, not a guarantee of economic success. The goal is to build a modern, diversified, highly-technological, service-based and value-added economy.

The State Program of Accelerated Industrial-Innovative Development of Kazakhstan for 2010-2014 (SPAIIDK) reflects Kazakhstan‘s new economic philosophy, which initially was introduced by the Innovative Industrial Development Strategy for the years 2003-2015 (New Industrial Development Strategy).

The SPAIIDK is aimed at maintaining a steady and balanced economic growth through diversification.

SPAIIDK indentifies seven areas to serve as a basis for overall economic diversification: agriculture; construction; refining and O&G infrastructure development; metallurgy; chemical and pharmaceutical industry; news sources of energy (including nuclear and renewables); transportation and telecommunications.

Implementation of this program will lead to a $47.6 bln increase of the economy‘s total value added.

SPAIIDK opens wide opportunities for foreign investors. For example, in 2010 Kazakhstan launched 152 projects worth KZT 800 billion ($ 5.5 bln) that created 23,500 jobs. By 2014, Kazakh officials plan to implement 294 investment projects worth KZT 8.1 trillion ($ 55.1 bln). In total, 161,000 new permanent jobs will be created for the period of the program.

In March 2010, the Ministry of Industry and New Technologies was established to coordinate diversification development. It has a Deputy Prime-Minister-ranked Minister – a sign of its importance.

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Program of Accelerated IndustrialInnovative Development for 2010-2014 Agriculture 2015 – 8% export share of agricultural products Gross Value Added+16% 10000 new jobs Metallurgy 2015 – twofold production and export Gross Value Added+107% Transport and Telecommunications boost for new production across all sectors Gross Value Added+63%

Construction and Construction Materials 2015 – 80% of demand by domestic production Gross Value Added+76% Chemical and pharmaceutical Industry 2014 – 50% of demand by domestic production

логотип

Refining and O&G Infrastructure Development

2014 – 100% of demand by domestic oil products Gross Value Added+30%

Energy including renewables 2015 – 10% decrease of economy’s energy intensity

Total Gross Value Added+over KZT 7 trn. ($47.6 bln.) 134 projects are scheduled for 2010 and already distributed but…

2011-2014 are still ahead

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Official

Points

of

Contact

to explore investment opportunities логотип

Ministry of Industry and New Technologies (www.mit.kz)

„Samruk-Kazyna‟ National Welfare Fund (www.samruk-kazyna.kz)

National Innovation Fund www.nif.kz

„KazAgro‟ National Holding (www. nhkazagro.kz)

Development Bank of Kazakhstan www.kdb.kz

National Export and Investment Agency „KAZNEX INVEST‟ www.kaznex.kz

Export credit Investment Portal Investment Fund of Kazakhstan Insurance Corporation „Kazinvest‟ „KazExportGarant‟ www.kazinvest.kz www.ifk.kz www.kecic.kz

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SME Development Fund „DAMU‟ www.damu.kz

“NATIONAL WELFARE FUND “SAMRUK-KAZYNA”, JSC

Contacts: Address: Kazakhstan, 010000, Astana, Kabanbay Batyr av., building 23 Blocks А, С, Е.

Mr. Timur Kulibayev CEO Sir Richard Evans, Independent Director, Member of the Board of Directors

Tel.: (+7 7172) 79-0486, 79-04-87, 79-0488 and 97-94-42 Fax.: (+7 7172) 79-0400 and 97-94-45 The ―Samruk-Kazyna‖ was established to increase competitiveness and sustainability of the national economy and to prevent a potential negative impact of world market changes to the country‘s economic growth.

The core aim of the Fund activities is to manage share holdings of national development institutions, national companies and other legal entities for maximization of their long-range value and enhance of competitiveness on international markets.

1.

2.

3.

4.

5.

6.

7.

8.

9.

Fundamentals of the Fund Activity: Observance of state interests as the sole shareholder of the Fund; Transparency, efficiency and flexibility of activity of the Fund and companies; Consistency and operational efficiency in decision making and realization; Responsibility and accountability.

Main Directions of the Fund Activity: Assistance in modernization and diversification of national economy; Assistance in stabilization of national economy; Increase of activity efficiency of companies.

The key direction of activity of the Fund and companies is modernization and diversification of national economy The Fund is designated to extend maximum assistance to the Government of the Republic of Kazakhstan taking prompt and operative decisions on attraction of investments to real sector of the economy, stirring up the activities in the regions, strengthening of intersectoral and interregional ties utilizing to maximum extent the existing advantages and potential.

82

Efficient diversification and modernization of national economy are implemented through realization of intensive investment activity, especially in priority sectors of the economy such as oil and gas, electric energy, metallurgy, chemistry, petrochemistry and infrastructure.

-

Main Objectives of the Fund: To elaborate and provide the realization of investment projects of regional, national and international scale; To support and modernize existing assets of Fund group companies; To assist the development of regions and realize social projects; To support national commodity producers, domestic goods and services.

Functions of the Fund within aforementioned objectives: - To elaborate and (or) realization, and (or) financing of investment projects of regional, national and international scale, including the real sector of the economy, using its own resources and (or) with participation of the companies, as well as jointly with strategic foreign and (or) domestic investors, through equity financing and loan extension; - To act as an operator for realization of the Programme ―30 Kazakhstan corporate leaders‖ and other programs and plans based on the decisions of the Government of the Republic of Kazakhstan; - To develop new sectors of economy and to purchase economically attractive assets both in the country and abroad; - To ensure cooperative and active investment policy; - To attract domestic and foreign, state and private investments; to introduce innovations in different spheres of economy; - To raise balanced debt capital on foreign and domestic markets; - To finance SME projects; - To establish efficient complex system of financial and investment instruments group companies; - To develop interregional economic ties through the realization of projects on the territory of the Republic of Kazakhstan; - To ensure break-through development of regions through the actions of social and entrepreneurial corporations.

Functions of the Fund: - To participate in stabilization programs of the Government of the Republic of Kazakhstan; - To purchase of authorized voting shares of second-tier banks; - To allocate tied funds in second-tier banks in order to promote social and economic development, including completion of construction sites, financing of SME and agroindustrial complex; - To assist in development of mortgage loan market and housing construction holdings system; - To define, approve and carry out monitoring of procurements order of the Fund and companies, that set the mechanisms for increase of domestic component in procurements of the Fund and companies got from Kazakhstan producers of goods and services, for provision of localization of production, assembly, repair and service of imported equipment in Kazakhstan only when the equipment is purchased in large volume by the companies; 83

-

Asset management of JSC ―Stress Assets Fund‖.

Activity of Samruk-Kazyna Fund for stabilization of the economy of the Republic of Kazakhstan: 1. Stabilization of financial sector 2. Problem solving on real estate market 3. Support of SME 4. Development of agro-industrial complex 5. Realization of innovation, industrial and infrastructure projects “NATIONAL WEALTH FUND “SAMRUK-KAZYNA”, JSC, SUBSIDIARIES AND DEPENDENT ORGANIZATIONS About 40% of the national GDP is within the realm of the Fund

1.

JSC “Kazmunaigas” – 100% subsidiary

Total amount of the Holding Company employees is more than 260 thousand, including 205 employees of the Management Company 21. JSC “Kazakhstan Export Credit Insurance Corporation” – 100% subsidiary

2. JSC “Kazakhstan Temir Zholy” – 100% subsidiary JSC “Investment Fund of Kazakhstan” – 100% subsidiary 3. JSC “KEGOC” – 100% subsidiary 22. «KazExportGarant» Export credit insurance 4. JSC “Kazakhtelecom” – 45.9% corporation» JSC – 100% subsidiary ownership 23. JSC “Engineering and Technology Transfer 5. JSC “Kazmail” – 100% subsidiary Center” – Trust management 6.

JSC “Air Astana” – 51% ownership

7. JSC ownership

“Samruk-Energo”

–

24. JSC “Astana – Finance” – 26% ownership

94.01%

8. JSC “Kazakh Research and Development Institute of Energy” – 50+1% ownership

25. JSC “Kazakhstan Mortgage Company” – 100% subsidiary 26. JSC “Kazakhstan Mortgage Fund” – 100% subsidiary

Guarantee

27. JSC “Zhylstroisberbank” – 100% subsidiary 9. JSC “Kazakh Operator of the Electrical Energy and Power Market” – 100% subsidiary 10. JSC “Pavlodar subsidiary

Airport”

–

100%

11. JSC “Aktobe International Airport” –

84

28. JSC, “Real Estate Fund Samruk-Kazyna” – 100% subsidiary 29. National Mining Company Samruk” – 100% subsidiary

“Tau-Ken

100% subsidiary 30. JSC “Halyk Bank” – 20.91% ownership 12. JSC “Atyrau International Airport” – 100% subsidiary

31. JSC “BTA Bank” – 75.1% ownership

13. LLP “Repairs Corporation “Kamkor” – 100% subsidiary

32. JSC “Kazkommertsbank” ownership

14. LLP “Samruk-Kazyna Invest” – 100% subsidiary

33. JSC “Alliance Bank” – 67.07% ownership

15. LLP “Samruk-Kazyna Contract” – 100% subsidiary 16. JSC “Development Bank of Kazakhstan” – 100% subsidiary 17. JSC “Kazyna Capital Management” – 100% subsidiary 18. JSC “Entrepreneurship Development Fund “Damu” – 100% subsidiary 19. LLP “SK-Pharmacy” – 100% ownership 20. JSC “Distressed Assets Fund” – 100% beneficial ownership

–

21.26%

34. JSC “TemirBank” – 79.9% ownership 35. LLP “United Chemical Company” – 100% subsidiary 36. Kazakhstan Growth Fund Management – 100% subsidiary 37. KGF SLP – 100% subsidiary 38. KGF IM – 100% subsidiary 39. JSC “Maikainzoloto” – 25% ownership 40. JSC “Kazatomprom” – 100% subsidiary 41. JSC “Pavlodar Oil Chemistry Refinery” – 42% ownership 42. JSC “Kazakh British Technical University” – 1.67% ownership

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PEOPLE‟S IPO In a speech at Nur Otan Party Congress on February 11, 2011, President Nazarbayev asked the Government to develop a program for initial public offerings of the national companies owned by the sovereign welfare fund Samruk-Kazyna, which controls around $70 billion of assets in banks, state energy companies and other major industries.

Samruk-Energy, KEGOC and KazPost will put their shares up for an initial public offering (IPO) by the end of the year. National companies such as KazMunaiGas, Kazakhstantemirzholy railways and Kazatomprom will follow up with initial public offerings in 2012-2013. Later on, the metal producers Eurasian Natural Resources Corp. (ENRC), Kazakhmys, Kazzinc, and Arcelor Mittal‘s Karmetkombinat will also offer some of their shares. ―People‘s IPO‖ shares will be sold directly to the public. Shares that remain unsold to individuals will then become available for purchase in Kazakhstan‘s pension and investment funds. ―We are now in the tight process of engaging consultants, and I think that in the 2nd half of this year people‘s IPO will enter into full force,‖ said Prime-Minister of Kazakhstan Mr. Karim Massimov.

"In the sale of shares we do not aim at maximizing profits for the Government. We think more about the investors – citizens and the pension funds… Revenue sharing and the establishment of average investors in the country is very important not only in economic terms, but also from political and social point of view. Not everyone can become an entrepreneur. But having small savings to the tune of USD 100, 200, 500 you can take part in the equity. I think that this is a reduction of social tension. This first stage we must pass and later we can talk about the full-scale IPO for a wide range of investors," the Prime Minister said.

The Ministry of Finance has proposed to limit the equity offering up to 10% of each company‘s shares. Finance Minister Bolat Zhamishev said that "it would be correct if the market proposed only minority stakes up to 10% of all the national companies, except for JSC Exploration and Production KazMunaiGas." Some companies are planning to place their shares ahead of schedule. Thus, JSC "Exploration and Production KazMunaiGas" is going to sell 5% of its shares this year at an estimated value of $500 million. Kazakh Citizens willing to become shareholders of the national companies can acquire no more than 50 shares each. Public offerings will be sold through the offices of KazPost, the national postal service.

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DEVELOPMENT INSTITUIONS With a view to implement innovation policy in the Republic of Kazakhstan, the system of state development institutions has been established. Such institutions are recognized by the native and foreign partners as a reliable tool for the establishment of new high-tech industries.

Mission of the institutions is in implementing and enhancing capacities for domestic business to accomplish important national tasks with regard to modernizing and diversifying economy as well as bringing the country to a new level of socio-economic development.

Through the development institutions, the state participates in the projects focused on creation of entire industries system, producing competitive products, developing technological and economical value chain step by step. It will enable to create multi-activity enterprises, working for final product meeting all competitive product requirements.

To further increase efficience of implementation of diversification programs since April 2011 control over development institutions has been transferred from the National Welfare Fund ―Samruk-Kazyna‖ to Ministry of Industry and New Technologies and Ministry of Economic Development and Trade.

Investment Fund of Kazakhstan

Chairman Tel.: Fax: e-mail: Web-site: Postal address:

Investment fund of Kazakhstan was formed in May 2003. It has an authorised capital of 37,9 billion KZT (Approx. 296 million USD).

Mr. Timur Zhaksylykov (+7 727) 258 83 33, 259 81 31 (+7 727) 258 37 99 ifk@ifk.kz www.ifk.kz Kazkhstan, 050010 Almaty, Zenkov St. 80.

―Investment Fund of Kazakhstan‖ JSC was founded on May, 30th, 2003 by Government Resolution of the Republic of Kazakhstan № 501 within realization of the Strategy of Industrial and Innovative Development of the Republic of Kazakhstan 2003-2015. 100 percent of shares of "IFK" JSC belong to Sovereign Welfare Fund "Samruk-Kazyna", JSC. Goal of the Fund. The goal of the Fund is assistance in realization of industrial and innovative policy of the Republic of Kazakhstan through realization and attraction of investments into attractive projects and financial support to initiatives of a private sector in nonprimary sectors of the economy.

Objectives of the Fund: equity investments into newly organized and operating organizations dealing with profound processing of raw materials, producing competitive production using new technologies, and also rendering industrial services to the perspective organizations in the industry field; promotion of private investments into non-primary sector of the economy through cofinancing by the Fund of investment projects (equity financing) and participation in management of these projects.

87

A decision on providing financial support is made after a comprehensive analysis on the value added concept (VAC), and finding more significant elements of the chain. If the results of VAC analyses show the necessity and viability of the project then it is given encouragement.

One of the main criteria for projects‘ evaluation is their commercial viability.

While considering a project the experts take into account whether the project leads to creation of an enterprise which produces products competitive in the external markets and capable of replacing imported goods. The analyses mainly focus on the initiatives of the private sector with respect to the economy‘s non-mineral sector.

In order to make the projects‘ financing easier in case of finance shortage in the private sector IFK makes co-financing by taking part in the authorised capital (purchase of shares), but without acquiring a control package. Moreover, it should be stipulated that the state package will be sold once the project has been realised.

It gives IFK opportunity to facilitate not only to the creation of new industries, including high tech enterprises, but also development of the securities market.

The Fund is currently searching opportunities for establishing relations and developing ways for enhancing partnerships with highly reputable strategic investors and private equity funds interested in emerging markets.

National Innovation Fund The Innovation Fund of Kazakhstan was formed in May 2003. It has an authorised capital of KZT (tenge) 9.5 bln. (approx. US $ 68 mln.).

Chairman Tel.: Fax: e-mail: Web-site: Postal address:

Mr. Aidyn Kulseitov (+7 727) 259 98 16, 259 98 17, 259 98 19 (+7 727) 259 98 39 info@nif.kz www.nif.kz Kazakhstan, 050013 Almaty, Nauryzbay Batyr str., building # 154-A, floor 5

The Innovation Fund is to stimulate the venturing function of the market economy which does not exist even in all of the developed countries. This function is important for the creation and development of high tech fields of economy such as IT, electronics, biotechnology and others. Thus the main aim of the Fund‘s activity has to be facilitation of the growth of innovative activities, development of high tech industries in the Republic of Kazakhstan. The efforts of IF are aimed at encouraging and development of infrastructure for innovations.

The main tasks of the Fund are: - participation in creating the elements of infrastructure for innovations (technical policies and science parks, informational and analytical centres, etc.); - creation of venture funds together with domestic and large international venture investors; - participation in the authorised capital of new or existing enterprises with the aim to manufacture high tech products and develop new technologies; - financing of certain types of Research and Development aimed at creating new technologies, products, services which are commercially viable and may have a positive impact on the technological advancement of the country.

A decision on issuing grants by IF is taken after holding an independent scientific and 88

technical expertise with involvement of foreign experts. Scientific researches, which have been selected for financing, have to be up to the projects within the framework of financing via the Investment Fund of Kazakhstan and Development Bank of Kazakhstan.

The innovation infrastructure development is operated by a branch enterprise of the NIF — «Center of engineering and transfer of technologies«JSC . Since 2005 NIF is a member of European Venture Capital Association (EVCA) and Singapurian Venture Capital Association (SVCA).

Creation of venture funds facilitates involvement of private capital in innovation activity, reduces risks, and forms a mechanism of effective co-operation between government and private sector in the sphere of commercialization of innovative ideas. In present, National Innovation Fund has initiated foundation of six venture funds together with Kazakhstani private partners. Investment policy of these funds is addressed to search and attract projects in the areas of ICT-technologies, new construction materials, pharmaceutics, and other prospective exportoriented areas.

Today, the authorized capital of the six venture funds created in Kazakhstan is equal to 130 million US dollars. Venture Capital is investors‘ capital created to finance new, developing, or competing for a market share enterprises and firms, and therefore, it is associated to a high or relatively high level of risk; long-term investments into venture securities or enterprises with an expectation of high profits. Venture investments are usually risky investments with profitability higher than average level.

Export Credit Insurance Corporation KazExportGarant (State Insurance Corporation for the Insurance of Export Credit and Investment) «KazExportGarant» Export credit insurance corporation» JSC was formed on August 8, 2003. It has an authorised capital of KZT (tenge) 7.7 bln. (approx.

US $ 63 mln.).

Chairman Mr. Galym Amerkhodzhaev Tel.: (+7 727) 250 00 21 Fax: (+7 727) 293 88 37 e-mail: info@kecic.kz Web-site: www.kecic.kz Postal address: Kazakhstan, 050010 Almaty, Zenkov str., building # 80 The main task of the Export Credit Corporation is facilitation of export of goods and services produced by Kazakh companies and insuring from political and regulatory risks. The Corporation holds marketing researches for the development of Kazakh goods export, analyzes and distributes information on potential export markets. Such an export promoting tool is widely recognised in the world to facilitate export transactions. Within domestic insurance market growth it is ready to cover risks related with export and import operations, the Export Credit Corporation is focusing its activity on insuring from political risks and providing commercial information on the international markets.

In August 11, 2007 credit agency «Moody‘s Investors Service» upgraded financial reliability rating of the Corporation up to the sovereign one «Ваа1», with stable rating outlook.

The rating was upgraded due to the financial performance, well-implemented investment policy in the area of asset management as well as the full compliance of the Corporation‘s activity in 89

the area of commercial and political risks insurance to the international standards used by the world export credit agencies.

Chairman Mr. Nurlan Kussainov T. (+771712) 792606 E-mail: Aliyaaid@kdb.kz , aaidarbekova@mail.ru Web-site: www.kdb.kz Postal address: Kazakhstan, Astana, Esil district, Orynbor Street, building 10 (Kazyna Tower) Established in 2001 the Development Bank of Kazakhstan is currently one of the main providers of the state investment policy in Kazakhstan.

Through financing estabkishment of competitive productions in non-primary sectors of the economy and developing the country‘s infrastructure, the Bank directly contributes to the sustainable development of the national economy.

Investment activity of the Bank is represented in all the regions of Kazakhstan and in all key sectors of the processing industry. The new and modernized enterprises commissioned with the help of the Bank‘s financing make a solid contribution to strengthening Kazakhstan‘s industrial and export potential.

Being one of the main participants of the economy diversification, the Development Bank of Kazakhstan will further establish itself as the leader in implementing breakthrough and cluster projects. The main principles on its way are Professionalism, Credibility, and Transparency.

All these processes are united in the ENGINEERING OF THE NEW ECONOMY, the economy which is being built today.

Chairman Tel.: Fax:

National Agency for Development and Promotion of Export and Investments “KAZNEX INVEST” In early 2008 Corporation for export development and promotion was formed. After announcement of State program for accelerated industrial-innovative development in 2010 it was reorganized into the National Agency for Development and Promotion of Export and Investments ―KAZNEX INVEST‖. It is now in charge of organizing road shows and business forums that are aimed at attraction of foreign direct investments. The Agency is working now on creation of web portal that will match local and foreign investors. The Agency is also partnering with large foreign investors to attract new technologies within the realization of investment projects that are aimed to produce high value added goods in Kazakhstan.

Mr. Yerlan Arinov (+7 7172) 79 17 18 (+7 7172) 79 17 19

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e-mail: Web-site: Postal address:

info@kaznex.kz www.kaznex.kz Kazakhstan, 010000 Astana, Sygynak str., building # 10/2, block Б, Business Center ―Nomad‖, floors 6-7

The key objective of the Agency is to be a driving force to build the institutional network, stimulate and maintain export growth, develop trade competence through improvement of national competitiveness. The Agency is working closely with both private and public sectors to develop export promotion.

Activities of the Agency will be aimed at: Promotion of an enterprise export capacity development (training, technical assistance, data bases, trade financing information , logistics, custom clearance, packing, etc.); Organizing business forums and trade shows to increase awareness of business opportunities in Kazakhstan; Promotion of the Kazakhstan‘ goods export(establishment and maintenance of business relations with other countries; exhibitions; missions of exporters and importers, assistance in assessing external markets); Development of the institutional capacity (recommendations on trading improvement, interaction between participants of trade support network, development of trade competence, publications to support exporters, etc.); Consulting (study of sectors and potential markets, analysis of current legislation, etc.); Kazyna Capital Management ―Kazyna Capital Management‖ was formed on March 2007

Chairman Tel.: Fax: e-mail: Web-site: Postal address:

Mr. Abay Alpamysov (+7 727) 334 14 17 (+7 727) 334 14 18 info@kcm-kazyna.kz www.kcm-kazyna.kz Kazakhstan, Almaty, Dostyk avenue, building # 291/3a, floor 2

The mission is to provide an additional incentive to private businesses of the country through a direct participation in the authorized capital; grant loans, warranties and other investment instruments. The main objective is making a significant contribution in the structural and sustainable economic development of the country and gaining, jointly with the private sector, income compatible by a degree of risk. One of the main goals of KCM JSC in the market is providing investments in the priority sectors of the economy.

The key objective of ―Kazyna Capital Investment‖ is foundation of Private Equity Funds (PEF) jointly with overseas funds to finance different projects especially in Kazakhstan and Central Asia region.

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Entrepreneurship Development Fund “Damu” EDF ―Damu‖ started operating on August 18, 1997 Chairman Tel.: Fax: e-mail: Web-site: Postal address:

Ms. Lyazzat Ibragimova (+7 727) 244 55 56, 244 55 77 (+7 727) 244 83 41, 278 07 76 frmp@fund.kz www.fund-damu.kz Kazakhstan, 050004 Almaty, Gogol str., building # 111

The major goal of the Fund is to encourage the establishment and economic growth of the Kazakh small businesses and distribute government funding to support small and medium enterprises.

Until November 2007 the Small Entrepreneurship Development Fund accomplished its major goal by undertaking the following actions: Developing project financing: Direct loans to small businesses operating in priority sectors to diversify small businesses taking into account social and economic situation in certain areas; Developing financial leasing; Establishing a network of microfinancing institutions; Developing a system to guarantee liabilities of small businesses to commercial banks; Consulting to small and medium enterprises within the program implemented by the Fund.

The Fund is currently part of the Sustainable Development Fund Kazyna. New principles and priorities of management and communications include transparency and partnership.

Since late 2007 conceptual changes have been occurred in the Fund: The Fund has changed from the Small Entrepreneurship Development Fund into Entrepreneurship Development Fund Damu. Now it has greater authority to support small and medium-sized businesses; the Fund is turning from a financial institution into operator to manage funds allocated by the government; new approaches are being taken to provide financial support to small and medium-sized businesses, assisting in collecting and analyzing data and providing consulting services to small and medium-sized businesses.

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TAXATION2 Due to political and economic stability in Kazakhstan, abundant natural resources and high annual economic growth over the past decade, foreign investors continue to view Kazakhstan as a favourable place to do business. One of the most important issues to foreign investors is taxation.

The existing Tax Code was adopted on December 10, 2008, with the latest amendments made on January 1, 2011 and is aimed at fostering the process of further diversification of the economy of Kazakhstan and stimulation of its development. All previous amendments and interpretations as well as International Financial Reporting Standards (IFRS) have been taken into account and incorporated in the Tax Code. The new Tax Code aims to achieve a reduction of tax burden on sectors not related to natural resources extraction and improve tax administration.

What is taxation for companies that operate in Kazakhstan through permanent establishment?

Foreign investors can operate in Kazakhstan through either a local branch of a foreign company or a local subsidiary established as an independent legal entity. Income of foreign companies represented in Kazakhstan is subject to corporate income tax (CIT) at a rate of 20%.

CIT was lowered in 2009 from 30% to 20%. While plans to further reduce the rate to 15.0% in 2011 have been postponed, the government remains committed to easing the overall tax burden in order to stimulate new business ventures.

The Tax Code also introduced a number of changes to the regulation of CIT. For example, an advance payment of CIT was cancelled for small-sized business entities and the period of net operating loss carry-forwards was extended from 3 to 10 years.

What is taxation for companies that earn income in Kazakhstan without permanent establishment?

Foreign companies which earn income from sources in Kazakhstan without a permanent establishment or branches are subject to various income taxes. The following income tax rates apply to income paid by non-resident companies with no taxable permanent establishment in Kazakhstan: Income (except income as per clauses 2)-6) of article 192) Income of an entity registered in tax-havens Premiums paid for insurance coverage Premiums paid for reinsurance Income from international transportation services Other income (royalty, fees for other types of services)

15% 20% 15% 5% 5% 15%

What is the taxation regime for oil companies?

Energy companies pay the Mineral Extraction Tax (MET), the Excess Profit Tax (EPT), the signature bonus, the commercial discovery bonus and historic costs. The MET is a volume2

The information contained in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

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based royalty type tax applicable to crude oil, gas condensate and natural gas. Rates escalate depending on volume. Different tables of rates apply depending on what is produced and whether it is exported or sold domestically. The rates are applied to production valued at world prices. MET rates vary from 0.25% to 20%. EPT is assessed using a sliding scale at the specific rate stipulated in the Tax Code and based on the ratio of the aggregate annual income to the income deductions. The size of the non-taxable net profit has been increased from 20% to 25%.

Are there any tax treaty benefits?

Yes, there is a procedure for claiming treaty relief in Kazakhstan that depends on the type of income for which treaty benefits are claimed. For passive income and income from services provided entirely outside of Kazakhstan, a non-resident of Kazakhstan who is a resident of a country that has a tax treaty with Kazakhstan can claim treaty benefits simply by providing to the payer a copy of a certificate from the non-resident‘s home-country tax authorities confirming that the non-resident is a tax resident of that treaty-partner country. Likewise, a nonresident with a branch office in Kazakhstan can claim a treaty-reduced branch profit tax rate by obtaining from its home-country tax authorities a certificate confirming that the non-resident is a tax resident of that treaty-partner country.

Can I use investment preferences?

Acting enterprises are granted the right to deduct the cost of fixed assets entered to exploitation for a period not less than 3 tax periods (years). Newly commissioned enterprises are given exemption from CIT on revenues of investment activity for a period from 3 to 10 years.

There is an exemption from property tax on fixed assets purchased within the framework of the investment project for the period not less than 3 tax periods (years). Exemption from land tax for plots is used for implementing investment project for the period not less than 3 tax periods (years). There is flexibility in terms of custom duty payment when investor imports equipment or parts to implement the investment project. State grants in kind can be granted as a plot of land, building, construction, machines and equipment.

What are the social tax and value-added tax (VAT) rates?

The Social tax changed from 13% to 5% to a fixed rate of 11%. The VAT rate was lowered from 13% to 12% and it has to be paid through refunding of debit balance. Tax benefits are available to enterprises that are making investments. The flat rate of the individual income tax is kept at 10%.

What changes have been introduced in relation to value added tax (VAT) in 2011?

According to new amendments into taxation legislation the list of zero rated turnover and turnover which is exempt from VAT has been extended starting from January 1st 2011.

Zero-rated turnover Sales turnover of petroleum-oil lubricants (POL) carried out by airports fuelling aircraft of foreign air companies conducting international transportation is taxed at the zero rate.

Exemption does not apply if the shipment point and destination point are located in the territory of the Republic of Kazakhstan.

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The list of documents confirming zero rated turnover from sales of POL to the aircraft of foreign air companies conducting international air transportation is determined.

Turnover and import which are exempt from VAT Sales of investment gold are considered to be turnover which is exempt from VAT under the conditions established by the Tax Code.

Investment gold is added to the list of imported goods which are exempt from VAT. The conditions under which import of investment gold shall be exempt from VAT are determined.

Has the Customs Union made any impact on the taxation regime in Kazakhstan?

Kazakhstan, starting January 1, 2010, became a member of the Customs Union with Russia and Belarus. The Customs Union is a market of more than 170 million people and has combined GDP that exceeds 2 trillion US dollars. Being a member of the union hasn‘t affected the tax regime of Kazakhstan, which is considered one of the most liberal tax regimes among the countries of the CIS. For example, the CIT in Russia and Belarus are 20% and 24% respectively, whereas in Kazakhstan CIT is 20%. VAT in Russia and Belarus are 18% and 20% respecitvely, whereas in Kazakhstan VAT is 12%.

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TRADE REGULATION Trade growth is a primary component of Kazakhstan‘s successful development. There are new players in the market, and the extension of trade with Kazakhstan is becoming a priority for an increasing number of foreign companies. What follows is an overview of the main regulatory mechanisms for trade in imported goods into Kazakhstan. The main requirements of customs control, licensing and certification are described.

Organizational and Legal Form of the Trade Enterprise Kazakh law does not distinguish between resident and nonresident legal entities.

Therefore, a foreign company may carry out activity in Kazakhstan as a Kazakhstan legal entity, with charter capital fully established by a foreign company, in the form of a joint venture or through the establishment of a branch.

Tariff Regulatory Measures of the Foreign Economic Activity From the moment that goods are conveyed across the customs border of Kazakhstan, they fall within the scope of the legally established rules on conveyance and customs clearance, i.e. tariff regulatory measures. These rules are established by the Customs Code of the Customs union and the Customs Code of the Republic of Kazakhstan. The customs payments depend on customs procedure chosen and include customs duties, customs fees and payment for a preliminary decision.

In order to pass customs clearance, the customs value of the goods must be determined.

There are several methods that have been established to determine the customs value: transaction value of imported goods; transaction value of identical goods; transaction value of similar goods; deduction of costs; computed value and the reserve method.

The customs valuation of imported goods is often based on the price of the transaction with these goods. The declaring person independently determines the customs value of the goods and the customs authority controls the correctness of such determination.

A person importing goods has to pay customs duties and taxes, comply with non-tariff regulatory measures and conduct a customs clearance. Under the procedure of processing goods for internal consumption, foreign goods undergo processing under customs controls without payment of customs duties or taxes and without application of non-tariff regulatory measures.

The free customs zone procedure envisages that goods placed and used within the relevant territorial special economic zones are exempt from customs duties and taxes, except for excise tax on imported goods, and from non-tariff regulatory measures being applied to them, except for safety requirements. This category of goods consists of the articles included in a list composed specifically for the purpose of the creation of special economic zones. For example, the Decree of the President ―On the creation of the ‗Ontustik‘ special economic zone‖ contains the list of goods including vehicles, equipment and goods necessary to conduct construction work on the territory of the economic zone, as well as goods and materials necessary to conduct scientific and development work.

Kazakhstan grants tariff preferences to certain countries either in the form of release from or reduction of the rates of customs duties, or in the form of allocation of quotas for the preferential import of goods. Customs duties are not collected when goods are imported from countries that are members of the Customs union or have free trade agreements with Kazakhstan. The Commission of the Customs Union approves the list of developing countries 96

that are subject to the common system of tariff preferences of the Customs union. The listed goods imported from developing countries to the common customs territory of the Customs union are granted tariff preferences.

The law envisages that the customs value is declared by a declarant when submitting a customs declaration of goods. However, the final decision concerning accuracy of methodology application on customs value determination is made by the customs authorities.

In order to avoid delays in customs clearance, declarants should carefully review all requirements with regard to the list and contents of the documents to be submitted. It is possible to request a preliminary decision from customs authorities on classification of goods and to undergo a periodic declaration of goods.

Non-Tariff Regulatory Measures Apart from the customs payments, the import of goods is also subject to the non-tariff regulatory measures, including licensing, quotas, certification and other protective measures established by law.

Licensing The purpose of import licensing of certain goods is to monitor and control imports of goods that are classified as sensitive for national security reasons, protection of life or health of citizens and the environment. Licensing of imports and exports is regulated by the Agreements of the Customs union. Not all goods must be licensed, only those that are included in the special list approved by the Commission of the Customs union. The list includes such goods as ozonedepleting substances and products containing ozone-depleting substances, medicine and pharmaceutical substances, medicine applied in veterinary, radio-electronic devices and (or) high-frequency devices, ethyl spirits and alcohol products, cryptographic devices.

Obtaining a license is a mandatory for every imported category of goods, whether such goods are imported by a legal entity registered in Kazakhstan or a foreign legal entity (or its structural subdivision). In order to obtain a license, an applicant needs to submit the documents regulated by the legislative acts to the authorized body.

One-time licenses are issued on the basis of a foreign trade contract related to goods subject to import licensing. The license grants the right to import certain types of goods subject to licensing in the quantity determined by the license and is valid up to 1 year from the date of issuance of the license. At the request of an applicant, the duration of a one-time license can be extended by making additional entries into the license by the authorized body. An import license is issued within 15 business days from the date of submission of all necessary documents. The authorized body of Kazakhstan has the right to terminate or suspend the license in the case of a change in the constituent documents of the licensee registered as a legal entity (a change of the organizational-legal form, name, or its location) or a change in the passport information of the licensee being a physical person. In such circumstances, the licensee can ask the authorized body to terminate the existing license and register a new license.

Certification of Compliance with Technical regulations and Standards Within the framework of formation of the Customs Union that started its operation January 1, 2010, the basic legal framework for technical regulations of Kazakhstan could be found in the EurAzEC Agreement on Implementation of Coordinated Policy in the Field of Technical Regulation, Sanitary and Phytosanitary Measures of January 25, 2008, signed by the Republic of Belarus, the Republic of Kazakhstan, Russian Federation, Republic of Tajikistan 97

and Kyrgyz Republic.

Technical regulations are mandatory for application by all EurAzEC member-states and are enforced in the manner provided by member-states‘ national legislation. Products covered

by EurAzEC technical regulations are allowed on the common market only if they pass the appropriate conformity assessment procedures within the territory of any member-state in compliance with EurAzEC technical regulations. Conformity assessment is a process that determines whether products and processes conform to technical regulations or standards.

Conformity recognitions can be (i) mandatory – by a certification of an accredited certification body or a producer's declaration of conformity (for products subject to technical regulation requirements); and (ii) voluntary – by a certification or a conformity declaration of the producer/seller indicating that the requirements of standards, other documents or special requirements were met (for products not subject to mandatory conformity recognition).

For assessment of products‘ conformity to technical regulations, EurAzEC memberstates upon mutual agreement and on a voluntary basis apply international and regional standards and in the absence of thereof, national ones. Conformity assessment documents issued by a certification body of one member-state are equally valid within the territory of any other member-state without carrying out of additional procedures.

Guided by EurAzEC Agreement, the CU member-states established a legal framework for technical regulations within the CU in the Agreement on the Common Principles and Rules of Technical Regulating of November 18, 2010, (hereinafter – the CU Agreement on Technical Regulating). The CU technical regulations have the status of direct application. Products could be released for circulation within the CU territory only upon results of a conformity assessment.

In accordance with CU Agreement on Technical Regulating the CU member-states formed a Common List of Products Subject to Mandatory Requirements within the Customs Union (hereinafter – Common List), products included on the Common List, for which no technical regulations of the CU or EurAzEC came into force, should be governed by the relevant national legislation of CU member-states. Currently, mandatory requirements are applied to 35 product groups. The product has to be excluded from the Common List once the CU technical regulation for this product comes into force. The effect of CU technical regulations for certain products is terminated once the EurAzEC technical regulations for these products come into force.

Pursuant to the CU Agreement on Technical Regulating, activity related to conformity assessment should be carried out by the accredited certification bodies and testing laboratories included into the Common Register of Certification Bodies and Testing Laboratories.

Recognition of results issued by accredited certification bodies and testing laboratories should be carried out in accordance with the CU Agreement on Mutual Recognition of Accreditation of Certification Bodies and Testing Laboratories Performing Conformity Assessment of December 11, 2009. Results of products conformity assessment for which no technical regulations of the CU came into force have to be recognized in accordance with the CU Agreement on Circulation of Products Subject to Mandatory Assessment of Conformity on the Customs Territory of the Customs Union.

The legislative framework on technical regulation, standardization, certification and accreditation in Kazakhstan is based on Law No. 603-II "On Technical Regulation of 9 November 2004. The two main objectives of the Law is (i) to ensure the safety of products through the application of mandatory technical regulations; and (ii) to enhance product competitiveness through the application of voluntary standards.

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A conformity declaration can be prepared on the basis of evidence collected by the applicant alone or on the basis of evidence obtained with the participation of a conformity assessment organization. The declaration of conformity is to be registered with the relevant accredited conformity recognition organization and is valid – similar to a conformity certificate – in the entire territory of Kazakhstan. Any domestic or foreign organization can act as a conformity assessment organization or a test laboratory as long as it has received accreditation in accordance with established rules.

Foreign conformity certificates, test protocols, accreditation certificates and other documents issued by foreign accreditation bodies are recognized in accordance with mutual recognition agreements. In the absence of international mutual recognition agreements, test results issued by foreign authorized bodies will only be recognized through the accreditation of these foreign bodies in Kazakhstan's national accreditation system.

Kazakhstan has concluded a number of international agreements under which the conformity certificates of some foreign states are recognized in the territory of Kazakhstan.

Recognition of the foreign states‘ certificates is carried out by means of their re-issuance in the form established in Kazakhstan. In case there is no international agreement with an exporting country, the certification of imported products is conducted according to the rules established for Kazakhstani producers.

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STATUS REPORT ON KAZAKHSTAN‟S WTO ACCESSION PROCESS

Status of multilateral and bilateral negotiations Kazakhstan submitted its official application for WTO membership in 1996. Negotiations are taking place around four key issues: - Multilateral negotiations on systemic issues, in which Working Party members review the existing regulatory framework for Kazakhstan‘s economic and trade policies and make recommendations on how to bring them into conformity with WTO agreements.

- Multilateral negotiations on agriculture, in which Working Party members review the types and volumes of state support to the agricultural sector, and negotiate on the specific amount of the so-called ―amber box‖ measures, which are considered as ―trade distorting‖ and impacting on the price of agricultural products.

- Bilateral negotiations on market access for goods, as a result of which Kazakhstan will bind its import duty rates for both agricultural and non-agricultural goods imported from WTO memberstates.

- Bilateral negotiations on market access for services, as a result of which Kazakhstan will undertake specific commitments in terms of market access for foreign suppliers of services, such as financial, construction, telecommunication, legal and other types of services.

Kazakhstan has signed protocols concluding bilateral negotiations with 24 WTO member-states including Oman, Pakistan, Turkey, China, Georgia, Kyrgyzstan, South Korea, Cuba, Mexico, Japan, Norway, Honduras, India, the Dominican Republic, Bulgaria, Switzerland, Egypt, Israel, Brazil, Malaysia, Canada, Australia, Mongolia and Ecuador.

Bilateral negotiations with the United States are at their final stage. Kazakhstan‘s Delegation headed by the First Deputy Prime Minister of Kazakhstan Mr. Umirzak Shukeyev visited Washington D.C. in September 2010 to meet with the United States Trade Representative Ron Kirk and high-level officials from the White House. As a result of the meetings, Kazakhstan and the United States finalized negotiations on Kazakhstan's goods market access. The bilateral negotiations were officially concluded after Minister of Economic Development and Trade of Kazakhstan Zhanar Aitzhanova signed a document with the United States Representative to the World Trade Organization Michael Punke in Geneva in November 2010. There are a few issues remaining in services market access and Kazakhstan plans to finalize bilateral negotiations.

Kazakhstan‘s team reassured its American counterparts that the accession to the WTO has always been and stays a top priority for Kazakhstan.

The United States welcomes progress achieved by Kazakhstan in bringing its legislation in compliance with the WTO rules and supports its continuous trade liberalization process. In particular, such issues as sanitary and phytosanitary measures and intellectual property rights are in the final stages of negotiations.

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The United States is one of Kazakhstan's main trading partners and completion of the bilateral negotiations on goods market access is an important step in the process of Kazakhstan's accession to the World Trade Organization.

Progress made in addressing systemic issues Within the framework of multilateral negotiations on systemic issues, the following steps were undertaken. a. In accordance with the new Law of the Republic of Kazakhstan ―On Currency Regulation and Currency Control‖ of 13 June 2005, the currency regime has been significantly liberalized. Most notably, as of 1 January 2007, the licensing requirement for capital account transactions has been removed. It should be noted, however, that Kazakhstan has never applied any limitations with regard to capital inflow to the national economy.

As an alternative mechanism replacing the licensing requirement, as of 1 January 2007, Kazakhstan is applying registration and notification requirements for currency transactions with the sole purpose of maintaining accurate balance of payment, foreign investment, and foreign debt statistics. Hence, the registration and notification requirements will not be of a ―permission requirement‖ nature.

As for further liberalization of currency market Kazakhstan removed licensing requirement for licensing requirements on currency operations related to capital transfer as of 1 January 2007. b. In accordance with the WTO Agreement on Technical Barriers to Trade (TBT), the Technical Regulations Law of November 2005 introduced the mandatory nature of technical regulations and voluntary nature of standards, providing the legislative basis for developing an international system of technical regulations and standards. According to the Law, both technical regulations and standards are applied equally, regardless of the origin of a product or service. In December 2006 the Law adding amendments to the existing 33 laws on technical regulations in various sectors (fire safety, construction safety, and others) was signed by President Nazarbayev.

In 2007, within the framework of further implementation of laws on technical regulations, laws on Food Safety, on the Safety of Machinery and Other Equipment, On the Safety of Chemical Products, and On Toy Safety were passed. The main purpose of implementing the laws is to provide production safety, people‘s health and environmental protection safety as well as the establishment of technical requirements of safety. c. In accordance with the WTO Agreement on Sanitary and Phytosanitary Measures (SPS), amendments were made to national legislation on veterinary, plant quarantine and sanitaryepidemiological measures. For example, Kazakhstan ensured that its veterinary measures were based on an assessment of risks to human and animal life or health, taking into account available scientific evidence. Where relevant scientific evidence was insufficient, Kazakhstan could provisionally adopt sanitary or phytosanitary measures on the basis of the available information, including from relevant international organizations.

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d. In 2010 in order to bring national legislation into compliance with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) amendments were made to the Customs Code of the Republic of Kazakhstan.

According to the new amendments customs authorities were entitled to act upon their own initiative and to suspend the release of goods in respect of which they have acquired prima facie evidence that an intellectual property right is being infringed (ex officio action).

In 2005 amendments were made to 11 laws regulating intellectual property rights protection.

Amendments to the Criminal and Administrative Codes of the Republic of Kazakhstan introduced the new concepts of ―selection achievements‖ and ―integrated circuits‖ and provided criminal and administrative responsibility for illegal acquisition, storage or transportation of counterfeit copies of works and phonograms. The minimum threshold for bringing criminal cases involving unlawful use of copyright and related rights was decreased to 100 MCI while the term for imprisonment was increased for up to 5 years. Administrative responsibility for infringement of copyright and related rights was strengthened with the provision of higher penalty sanctions and introduction of such measure as confiscation of equipment used in production of counterfeit goods.

In 2004 Kazakhstan acceded to the World Intellectual Property Organization‘s (WIPO) Copyright Treaty and the Performances and Phonograms Treaty (so-called ―internet treaties‖).

Besides, amendments were made to the Law on Copyright and Related Rights to ensure retroactive protection of intellectual property rights in accordance with the Berne Convention for the Protection of Literary and Artistic Works. e. In accordance with the General Agreement on Tariffs and Trade (GATT) provision of the WTO to gradually eliminate quantitative restrictions and other measures: -A quota on imported ethyl spirit and alcoholic beverages products was eliminated in June 2004; -Export bans on aluminum and nickel waste and scrap was abolished in December 2004; -and as of March 2006, export prohibitions on mazut and diesel during the agriculture season in support of local farmers was discontinued.

As of 1 July 2010 the following groups of goods were no longer subject to import licensing: armament and defense technology, special complementary parts for their production, works and services in the sphere of military-technical cooperation, nuclear materials, technology, equipment and settlements, special non nuclear materials, sources of active radiation, based on application of X-ray, alpha-, beta- or gamma- radiation, X-ray equipment, medical equipment with use of radio-active substances and isotopes, Gunpowder, explosives, means of exploding and pyrotechnics, rare metals, rare ground raw materials, alloy, combinations and articles, sources of ionizing radiation and isotopes, equipment based on the use of X-ray, alpha-, beta-, gamma- or neutron radiations. f. As of 1 July 2010, Kazakhstan applies rules of origin to imports in accordance with the Customs Code of the Customs Union. Non-preferential rules of origin and their application are governed by the Agreement on Common Rules for Determining the Country of Origin of Goods of 25 January 2008. These instruments closely follow the work of the World Customs Organization (WCO) and the WTO regarding the application and harmonization of non 102

preferential rules of origin. The principles for determination of the country of origin of goods are based on international practices and implemented the recommendations of the revised Kyoto Convention. The determination of the origin of goods originating from developing countries and eligible for the system of preferences maintained by Kazakhstan is governed by the Agreement ―On Rules of Origin of Goods, Originating from Developing and Least Developed Countries of 12 December 2008 concluded by Kazakhstan within the framework of the customs union being formed with Russian Federation and Belarus.

As of 1 July 2010, customs valuation in Kazakhstan is carried out in accordance with the Agreement of the customs union ―On Customs Valuation of Goods Transferred through the Customs Border of the Customs Union‖ of 25 January 2008, the Customs Code of the Customs union and the Customs Code of RK. The relevant provisions of the Agreement of the Customs union and the national legislation are based on the provisions of the WTO Agreement on the Implementation of Article VII of the GATT 1994 and are drafted to fully implement the WTO Agreement on Customs Valuation. g. In order to bring into compliance with WTO Agreements on safeguards, anti-dumping, subsidies, and countervailing measures, the necessary amendments to national legislation on trade remedy measures have been introduced. In particular, the definitions of ―subsidy‖ and ―domestic industry‖ have been modified, and the meaning of normal value in conducting antidumping investigations has been introduced. Investigation procedures have been brought into conformity with WTO norms to ensure transparency and mechanisms for consultations with the concerned parties.

It should be mentioned that at the moment the provisions of the ―Agreement on Application of Safeguard, Anti-dumping and Countervailing Measures to the Third Countries‖ of 25 January 2008 between the Republic of Belarus, the Republic of Kazakhstan and the Russian Federation concluded within the framework of the customs union, that entered into force on 1 July 2010 provide the principles for application of trade remedies by the Customs Union Members with regard to third countries. The provisions of the Agreement comply with the principles of the WTO Agreements. The provisions of the national laws and regulations apply to the extent they do not contradict the CU Agreement on Trade Remedies. h. The new Tax Code was adopted as of December 2008 (entered into force 1 January 2009) to align government policy to develop priority sectors of the economy with WTO norms. In addition, current excise tax regime for alcoholic beverages and tobacco products will be unified to conform to WTO non-discrimination and national regime principles. i. Lastly, in accordance with a key WTO principle - transparency in developing and implementing economic and trade policies, Kazakhstan has adopted a new methodology for calculating fees for services applied to customs escort, import licensing and registration of legal entities. The new methodology will ensure that these fees reflect the real cost of services rendered.

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Liberalization of key service sectors The gradual liberalization of key sectors of the economy is proceeding together with Kazakhstan‘s bilateral negotiations on access to the services market. For example: Amendments made to Kazakhstan‘s legislation on licensing and consolidated supervision of financial services envisage eliminating existing requirements that: -the total paid-up capital of banks with foreign participation not exceed 50 percent of the aggregate paid-up capital of all banks in Kazakhstan; -the total paid-up capital of insurance companies with foreign participation, providing general and life insurance services shall not exceed 25 and 50 percent of the aggregate paid-up capital of general and life insurance companies respectively; -at least seventy percent of employees of a bank shall be residents of Kazakhstan; and at least one member of the Board of Directors of a bank with foreign participation shall be a resident of Kazakhstan.

The Program to develop the telecommunications sector provides for creation of a competitive framework for the telecommunications market. The exclusive license for a national operator was eliminated on January 1, 2006. The 49% foreign-capital restriction for joint ventures supplying architectural, urban-planning, construction and engineering services has been eliminated. Legal entities of Kazakhstan with 100% foreign ownership will be allowed to provide those services.

Steps taken by the Government to liberalize the energy and transport sectors have also contributed to Kazakhstan‘s negotiations on access to the services market.

Conclusion The process of Kazakhstan‘s accession to the WTO represents a set of comprehensive reforms aimed at building sustainable market economy policies and institutions in the country. One of the major challenges still being addressed by the Government within the framework of the multilateral negotiations with WTO member-states is how to balance effective implementation of Kazakhstan‘s key economic priorities, economic diversification and development of processing industries with the country‘s commitments arising from WTO accession. We are carefully reviewing the policies and mechanisms applied by WTO member-states to facilitate development of ―infant‖ industries, which supply new types of services and produce high valueadded goods, in a WTO-consistent way.

Enhancement of customs administration and support to agricultural development are also among our key priorities. We fully recognize that we need to pursue further liberalization reforms in a systematic stage-by-stage manner in order to promote national economic interests. However, we also need to ensure that Kazakhstan‘s economic and trade policy and regulatory changes are backed by strong institutional and human capacity.

Working Party deliberations are focused on a draft Working Party report, and Kazakhstan submitted draft legislation to implement WTO agreements in many key areas, including customs practices, sanitary and phytosanitary (SPS) regulation, technical barriers to trade (TBT), and licensing.

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Kazakhstan has completed accession negotiations with 24 WTO members and is close to completion with 4 more, the United States, European Union, Saudi Arabia and Taiwan.

After careful consideration of pros and cons, Kazakhstan has made an economically prudent decision to pursue WTO accession through the framework of the Customs Union, together with Russia and Belarus – neighboring economies which fully comply with Kazakhstan‘s economic and trade interests. Since WTO accession as a united three-nation-strong market is an unprecedented case, the members of the Customs Union have agreed to continue its individual track and coordinate among each other the issues related to the Customs Union.

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Center for Trade Policy Development under the Ministry of Economic Development and Trade of the Republic of Kazakhstan ―Center for Trade Policy Development‖, JSC was established in June 30, 2006 to strengthen the negotiations process of Kazakhstan‘s accession to the WTO Director General: Mr. Ruslan Sultanov

Tel.: Fax: e-mail: Web-site: Postal address:

(+7 7172) 74-38-94 (+7 7272) 74-38-94 ctpd@ctpd.kz www.ctpd.kz www.wto.kz 35th Street, 7th Entrance, The House of Ministries 010000 Astana, Kazakhstan

―Center for Trade Policy Development‖ (100% shares owned by the Government) is affiliated with the Ministry of Economic Development and Trade.

The main tasks of the Center are: Conducting analysis of economic implications of Kazakhstan‘s WTO accession; Providing consulting support in determination of Kazakhstan's position in international trade negotiations; Developing recommendations to private and public sectors on improvement of Kazakhstan legislation in the sphere of international trade taking into account WTO standards; Providing informational support to the Ministry of Industry and Trade of the Republic of Kazakhstan on current system of international trade and regulation; Developing recommendations to the Ministry of Industry and Trade of the Republic of Kazakhstan on general trade regime taking into account WTO standards; Developing suggestions and recommendations on creation of general trade regime and free trade areas with neighboring countries, in particular, within the framework of Eurasian Economic Community, WTO and other regional associations; Disseminating information and knowledge concerning current system of international trade, commercial policy measures and its regulatory principles, as well as improvement of professional standards for key personnel in private organizations and government bodies.

Employees of the Center have studied at well-known universities, such as Oxford, Cambridge, Colombia, the London School of Economy and Political Sciences, the World Trade Institute, the Moscow State University and others.

High proficiency of the team allows the Center qualitatively perform the work connected with analytical support for negotiations of Kazakhstan‘s accession to the WTO and with consultations of private companies.

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KAZAKHSTAN‟S POSITION ON THE WTO AFTER CREATION OF THE CUSTOMS UNION The Customs Union was formed on January 1, 2010. Its goal was to strengthen integration among three countries and to facilitate trade and investment.

Elimination of internal customs borders and harmonization of legislation of the Customs Union members is already creating additional benefits for the trading partners by insuring free circulation of goods between the Customs Union countries. Traders and investors get a bigger economic space and a more attractive market for potential investors.

1. Accession to the WTO Remains a Priority Accession to the WTO has always been and remains a foreign policy priority for Kazakhstan.

Negotiations on the country‘s WTO accession have been on-going for more than 14 years.

Kazakhstan has also worked to create the Customs Union, which is viewed as a practical realization of the Kazakh President‘s idea.

It is well known that a unified customs territory is an integral step towards that high level of economic integration. Neither in negotiations on the WTO, nor in negotiations on the Customs Union did Kazakhstan ever renounce its interests. The country considers both processes to be mutually complementary rather than mutually exclusive. Therefore, the processes of Eurasian integration and WTO accession have always been in parallel.

2. Creating Customs Union Protects Kazakhstan‟s Economic Interests Kazakhstan‘s decision to create the Customs Union together with Russia and Belarus was based solely on the country‘s economic interests including the following factors: Mineral Reserves. Kazakhstan has the sixth largest mineral reserves in the world and is a major player in the energy markets. A major portion of mineral and energy resources produced in Kazakhstan is exported to external markets. One of the main tasks of the Government of Kazakhstan is development of nonextractive sectors and diversification of the economy and export promotion of highly marketable products. A unified customs tariff within the Customs Union would expand the regional market and promote Kazakhstan‘s exports. Future customs tariff policy within the Customs Union will allow the import of raw materials and equipment under low custom duties within the development of investment projects. Establishment of the Customs Union would entail creation of a unified commodity market with a total GDP of about $2 trillion (2008) and a population of 170 million people, as well as create preferential conditions within the Customs Union. Such a large market within a unified customs territory would make Kazakhstan even more attractive for foreign investors who have considered Kazakhstan as one of the most attractive markets in our part of the world.

Geopolitical Realities. Kazakhstan is the largest land-locked country in the world and much of its foreign trade depends on the routes that go through the territories of neighboring states. Membership in the Customs Union will provide Kazakhstan‘s businesses with domestic (non-discriminatory) transit tariffs, taking into consideration that almost all the trading relations, particularly with the European Union, are implemented through the transit of the territory of Russia.

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Global Financial Crisis. The crisis has thinned down the flow of FDIs, decreased trade turnover, led to the introduction of protectionist mechanisms by some trade partners, and seriously damaged the economies of neighboring states. This harsh reality, therefore, demanded a more active and joint approach to further integrate and modernize the regional economy. Creation of the Customs Union will allow for more efficient use of the limited financial resources due to the global economic crisis.

It will also provide a rationale for companies to use available resources to increase their production capacity.

Accession to the Customs Union. This will provide sizable benefits for Kazakhstan and serves its long-term economic priorities. The decision was based on the need to meet Kazakhstan‘s national economic interests including:   

Unimpeded access to global markets Expanding trade with large neighboring economies, such as Russia and China Accelerated economic diversification by moving towards service and technology based economy.

Therefore, any speculations suggesting political motivation behind the decision are baseless.

3. WTO and Customs Union Negotiations Moved in Parallel Negotiations on Kazakhstan‘s accession to the WTO and efforts to join the Customs Union were moving in parallel. The idea of establishing a single customs territory was initiated earlier and had been moving at a much better pace, which was in full compliance with Kazakhstan‘s economic interests. The process of harmonizing tariffs within the creation of the Customs Union demanded flexibility from every member and a transition period was introduced for some major commodities sensitive for Kazakhstan. It is also important to understand that the pace for creating the Customs Union has been, to a large extent, dependent on the political will from the Governments of the three states. Therefore, promotion of trade and economic cooperation with the neighboring countries has become the most important priority.

4. Kazakhstan‟s Decision to Join Customs Union Was Not Sudden Speculations about Kazakhstan‘s ―unexpected‖ and ―sudden‖ decision to join the Customs Union with Russia and Belarus are groundless. Kazakhstan‘s Special Representative for WTO accession negotiations, Ms. Zhanar Aitzhanova, regularly briefed American counterparts on this issue, as she was also directly involved in negotiations on the Customs Union. Moreover, in February 2009, Kazakhstan at a very senior level informed U.S. Ambassador to Kazakhstan Richard E. Hoagland that the country, together with Russia and Belarus, would soon announce its decision to create the Customs Union. Astana noticed certain constructive reaction on behalf of Washington, however, our American partners seemingly failed to conceive, in all its depth, our signal toward a significant growth of dynamism in the process of creating the Customs Union.

5. Expansion of Global and Regional Trade The Central Asian Trade and Investment Framework Agreement (TIFA) provides a useful background for a regular dialogue between U.S. and Kazakhstan trade authorities on the issues of mutual interest. We share the U.S. vision that the expansion of global trade should proceed through

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creating opportunities for regional trade, and Kazakhstan stands ready to work with the United States on the implementation of this vision.

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ASTANA ECONOMIC FORUM

The Astana Economic Forum has emerged as a platform for prominent scholars, economists, senior government officials, corporate chieftains and civil society leaders to discuss global challenges and prospects for development in the run up to the G20 summit.

On May 3-4, 2011, the 4th Astana Economic Forum was attended by more than 3,500 participants from 75 countries, including Nobel laureates James Mirrlees, Robert Mundell, John Nash, Yisrael Aumann, Finn Kydland and Roger Kornberg. Also attending were leaders of the UN World Tourism Organization, the UN Economic and Social Commission for Asia and the Pacific (UNESCAP), the Madrid Club and the UN Food and Agriculture Organization (UNFAO).

Other co-organizers: the World Islamic Economic Forum, United Nations Economic Commission for Europe, Islamic Development Bank and the Reinventing Bretton Woods Committee. Media partners were International Herald Tribune, Euronews and Economist. The Forum received wide coverage by 100 foreign and 350 local journalists.

They discussed reforming the international monetary system, food security and renewable energy, better communication between the government and private sectors and regional economic integration, green growth, tourism, small and medium sized entrepreneurship, multinational corporations.

In his welcoming remarks, Kazakh President Nursultan Nazarbayev talked about the lessons learned from the global financial crisis, the current imbalance in world trade and the state of the international monetary system. ―The existing monetary system does not adhere to the principles of legality and democracy. It mitigates the growth, distorts macroeconomic principles and prevents us from resolving global issues. To correct that, one needs to take fundamental actions, which have never been taken before,‖ he said.

He highlighted the need for a new reserve currency: ―The defects of the international monetary system are now making some countries take practical steps to use alternative currencies. For instance, the Bolivarian Alliance member states are considering transactions using a notional unit called Sucre. The BRICS nations signed a memorandum to use reserve currencies for mutual financing.‖

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Nobel Laureate Robert Mundell indicated that the IMF needs to determine two currency zones and make an ―anchor‖ for a stable currency. The professor advised the group to pay special attention to the Yuan and generally to the Chinese economy, because today‘s global currency-related issues depend on financial stability of the most populous nation.

Participants attended many side events organized by local business alliances and the government authorities. These included the Innovative Congress and Eurasian Business Congress organized by the National Innovation Fund and Atameken Union National Economic Chamber hosted by the mayor‘s office.

By tradition, the Forum was concluded with the issuance of an open letter to the leaders of the G-20 member states called ―The Astana Consensus.‖ It will be released shortly. Its key messages are based on recommendations about how to reform the world economy, develop the global currency, enhance the monetary system, reform international financial institutions, support international investments and trade, improve food security and develop the ―green economy.‖ It was also decided to set up Astana club of the Nobel Prize laureates. Its goal would be to encourage their meeting in Astana. Currently the Club includes seven Nobel laureates and its membership is set to expand.

The 5th Astana Economic Forum will be held in Astana on May 23, 2012.

Kazakhstan is turning into a popular venue for international discourse on world economic matters, as its economy was among the first to recover from the world financial crisis and is predicted to grow by 6-7% this year.

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EXPECTATIONS ABOUT KAZAKHSTAN‟S ECONOMY: OUTLOOK BY INDEPENDENT EXPERTS The following is based on Q1 and Q2, 2001 “Kazakhstan and Central Asia Business Forecast”

by Business Monitor International, Ltd (BMI)

Business Environment Kazakhstan was the world‘s top business reformer over the course of the last year according to the World Bank‘s 2011 Doing Business Report, an accolade which is expected to help facilitate higher domestic and foreign investment. Kazakhstan rose 15 places up the world rankings in 2011, coming in at 59th out of 183 countries up from 74th in 2010. As such, Kazakh President Nursultan Nazarbayev‘s pledge last year to develop Kazakhstan‘s business environment to become one of the 50 best in the world by 2020 now seems easily achievable.

Kazakhstan already enjoyed a relatively robust and transparent business environment, particularly compared with other CIS countries. The World Bank‘s recent recognition of the country‘s ongoing efforts to liberalize and reform the economy will help cement the country‘s position at the forefront of frontier markets.

Kazakhstan made specific strides toward making it easier to start a business, with the country rising 38 places in the world rankings. The cost (as % of per capita income) and minimum capital required to start a new business are now significantly lower than the OECD and emerging European regional averages. Furthermore, the government helped realize improvements in the levels of protection awarded to investors, with Kazakhstan scoring particularly strongly on the rights of shareholders to sue.

Tax Burden Easing The government has acted to considerably reduce the tax burden on corporations operating in Kazakhstan over the past few years. The corporate income tax rate was cut to 20.0% in 2009 from 30.0%. Plans to further reduce the rate to 17.5% in 2010 and 15.0% in 2011 have been postponed for now, tbut he government remains committed to easing the overall tax burden in order to stimulate new business ventures. This pledge was exemplified by the government‘s decision not to raise mineral resource rents this year. The only business reform category in which Kazakhstan performed worse in this year relative to 2009 was access to credit. However, BMI believes this is the temporary result of the pressures facing the country‘s banking sector. With asset quality improving in recent months and government restructuring of troubled banks nearing completion, firms will begin to find access to credit more readily going forward.

Development Of Non-Hydrocarbon Sectors BMI View The Kazakh government‘s drive to diversify the non-oil sector and invest in developing strategic industries, as well as the national infrastructure, helps the long-term outlook for the economy. The growing integration of Kazakhstan into global markets will help to reduce the impact of external shocks and put the economy on a more sustainable growth path.

According to BMI, reforms being implemented by the government in Kazakhstan will not only serve to improve the competitiveness of domestic and foreign firms already operating in the

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country, but will also act to draw in higher levels of foreign direct investment over the coming years.

Kazakhstan has already enjoyed large inflows of foreign capital and expertise into its oil and gas sectors. BMI‘s Oil & Gas team calculates that exports of oil and gas products alone accounted for almost 40% of GDP in 2008 and this industry is expected to remain the main economic sector in Kazakhstan for some time to come.

However, as a result of the volatility in global oil prices, the Kazakh government has been stressing the importance of developing other sectors of the economy, namely mining, metallurgy, retail and infrastructure, in order to reduce the economy‘s dependence on energy exports. Reports suggest that some funding for investments into these sectors will come from the country‘s Sovereign Wealth Fund.Foreign direct investment will likely make up the lion‘s share. In particular, BMI believes the mining and infrastructure sectors have huge potential going forward. Indeed, while total productive activities from mining and quarrying accounted for just under 20% of total GDP in H110, according to the Kazakh Statistics Agency, reports suggest Kazakhstan is home to huge deposits of gold, uranium and copper that have yet to be developed and foreign mining giants such as Rio Tinto are eager to develop this industry further.

Despite notching a stellar 9.3% average annual rate of economic growth over the course of 2000-2008, the severity of 2009‘s recession, combined with a protracted period of deleveraging, BMI forecasts annual growth to average 7.5% through to 2020. Coming from a higher base, and investing heavily in developing the national infrastructure and non-oil sectors, Kazakhstan will further consolidate its position as the regional powerhouse in Central Asia over the long term.

Moreover, for the less-developed economies in Central Asia, this will mean more employment opportunities, cross-border investments and demand for primary and processed exports for Kazakh industries.

Since the government is likely to continue working towards reducing the economy‘s dependence on oil over the long term BMI expects to see further diversification away from the oil sector. Key industries are likely to include retail, manufacturing, construction and finance. As a result of this diversification drive, investment in fixed capital will continue to buoy economic growth over the long term. Moreover, in much the same way that increased credit availability will spur consumer spending, a broader and more sophisticated array of financial products are expected to come to the market. It will facilitate investment (particularly with regard to hedging risks, leveraging and gaining exposure to new markets) and business transactions.

Kazakhstan‘s ever-growing prominence in Central Asia will also facilitate investment into the wider region. Indeed, the ongoing development of the country‘s physical and financial infrastructure will attract more foreign investors wanting to increase their exposure to frontier markets such as Tajikistan and Kyrgyzstan without having to base operations in these countries.

Similarly, the economic development of these countries (as well as Turkmenistan and Uzbekistan) will see demand for imported capital grow, allowing Kazakhstan to become an export platform to these countries.

Driving Forces of Growth The major drivers of growth this year are set to be industrial production (IP) and export volumes, which will be well supported by a sustained pick-up in global trade conditions and elevated commodity prices. Indeed, global oil prices, in particular, have picked up strongly on account of ongoing political ructions in the Middle East and North Africa region and, while commodity prices are expected to come off the boil slightly in the second half of the year, they are likely to remain well supported by high levels of global liquidity and improving demand conditions.

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Similarly, BMI expects IP volumes to post stronger growth this year. Owing to improving domestic demand conditions and efforts by the government to speed up the development of non-hydrocarbon sectors, production levels are expected to enjoy a more robust pick-up in 2011 and 2012.

While 2010 growth exceeded BMI‘s original forecast of 6.0%, its hold to their view that growth in 2011 will come in at 6.3%. We see Kazakhstan‘s economic upturn continuing over the medium term, with growth reaching 7.5% by 2013. This dynamic will be well supported by higher oil prices, increased export volumes, a rapidly improving business environment and the government‘s economic diversification programme.

In the longer term with population forecast to reach around 17.5mn by 2020 and GDP per capita reaching US$28,367, the consumer will become instrumental in driving growth dynamics over the long term. The opportunities available for retailers to exploit are likely to see foreign retail operators from Russia, and potentially China, starting to build up a market presence in Kazakhstan.

Moreover, with the government keen to develop its banking and financial sectors, BMI‘s experts expect to see an increase in credit availability for the consumer, particularly credit cards and overdraft facilities, which will extend to the poorer sectors of the retail market and thus allow for an expansion in consumption possibilities for Kazakh households.

As a result of these dynamics, consumer spending is expected to contribute around one-third of economic growth.

Although domestic demand will increasingly become the driving force of growth, oil and gas will nonetheless remain an important export earner, helping to bolster domestic demand. Indeed, it will be the recycling of energy export revenues to the non-oil sectors that will be key to broadening the economy. Moreover, although BMI believes that Astana will remain reliant on Moscow to purchase its energy output over the medium term, Kazakhstan‘s growing economic and political clout may allow it to expand export routes away from Russia further down the line. In this respect, we believe Kazakhstan is the most likely of the Central Asian states to supply energy to European markets over the long term. While BMI does not believe this will mean a shift in Kazakhstan‘s foreign policy agenda towards euro-Atlantic institutions, new trade relations are expected to emerge, with the EU likely to take a greater share of Kazakh exports.

FDI will support strong growth trajectory. The government‘s economic diversification strategy, and ongoing improvements to the country‘s business environment are likely to attract further foreign direct investment flows into the country over the coming years. These two factors are expected to help support increased foreign direct investment flows into the economy over the long run, as Kazakhstan‘s position at the forefront of frontier markets is cemented further. As such, BMI sees economic growth continuing to pick up over the coming years rising to 7.8% by 2015 and 8.6% by 2020.

Following the successful restructuring of Kazakhstan‘s most troubled banks Kazakh banking sector is now on the slow road to recovery, with overall confidence and stability set to continue improving over the coming quarters. Data released by the National Bank of Kazakhstan confirm this view that conditions in the banking sector are tentatively improving, with loan growth picking up to 4.9% y-o-y in October from a trough of - 1.7% back in February.

In Search Of International Finance Kazakhstan is seeking greater access to international capital markets this year on both the sovereign and corporate levels – a process which will be well supported by ongoing development of the country‘s Islamic financial industry. Given the country‘s long-term economic potential and rapidly improving business environment credentials, BMI believes financing will come relatively 114

easily for Kazakhstan, and will ultimately help bolster the country‘s long-term economic diversification and investment strategy.

Kazakhstan is on course to boost its utilisation of international capital markets this year at both the sovereign and the corporate level. This process will be well supported by ongoing development and growth of the country‘s Islamic banking sector, which will help to boost the potential for greater sukuk issuance. Ultimately, we believe that these dynamics should aid the government in its long-term strategy of boosting foreign investment and diversifying the nonhydrocarbon sector of the economy. BMI noticed that Kazakhstan‘s sovereign wealth fund, SamrukKazyna, (which currently holds in the region of US$70bn worth of assets) is looking to tap both local and international markets for a combined US$1bn in funds this year, which will be used to finance a raft of industrial and financial investment projects. Making a reference to the SamrukKazyna‘s top-management BMI expects that the national welfare fund will also draw on a further US$2bn worth of funds from a bilateral loan package agreed with China back in 2009.

At the same time, according to government officials, in line with the ongoing development and expansion of the Islamic finance industry in Kazakhstan, some corporates are expected to begin issuing Islamic sukuk bonds by the middle of this year. Under current legislation, only SamrukKazyna and Islamic banks in Kazakhstan can issue sukuk bonds. However, a new law that would allow resident companies with a firm credit rating to engage in sukuk financing is currently being discussed in parliament. If passed, this new legislation will give corporations (and the government albeit further down the line) increased scope for attracting foreign financing, in our view, in particular, from regions such as the Gulf Cooperation Council. To be sure, owing to the country‘s long-term growth potential and the country‘s rapidly improving business environment, external financing should come relatively easily, as evidenced by the country‘s already massive foreign direct investment inflows of recent years.

If you are interested to learn more about “Kazakhstan and Central Asia Business Forecast Report” or any Country/Industry reports by BMI please contact Matthew Thompson, Business Development Manager, “Business Monitor International” T:+44 (0)20 7246 1433 M:+44 (0)7983 473 767 Email: mthompson@businessmonitor.com) Business Monitor International - DISCLAIMER All information contained in this publication has been researched and compiled from sources believed to be accurate and reliable at the time of publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained.

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KAZAKHSTAN'S FOREIGN POLICY: MAIN ACHIEVEMENTS AND NEW GOALS BRIEF OVERVIEW Many American and European experts believe that Kazakhstan has done a remarkable job establishing an independent foreign policy in the 20 years since it gained independence from the Soviet Union.

Kazakhstan's foreign policy is based on the understanding that it is a large country with roots in both Europe and Asia; its interests are many. . Kazakhstan‘s location has helped define its foreign policy priorities and diplomatic activity. Kazakh President Nursultan Nazarbayev believes that by enacting strong political and economic reforms, Kazakhstan will be in a better position to build its relationships with other nations.Kazakhstan is an impartial nation – one that has worked hard to reform its military, political and economic policies as it advances toward a full democracyinternational and regional events. Its foreign policy underscores the nation‘s commitment to create strong long-lasting alliances and partnerships. One of Kazakhstan most important decisions since gaining independence was to gain the status of a non-nuclear state and to pursue the policy of non-proliferation. Kazakhstan set an example - demonstrating its desire for peace, internal stability and sustainable economic and political development.

Kazakhstan has good relationships with the United States, Russia, and China as well as inCentral Asia and in many other European and Asian countries. With Russia, Kazakhstan has longstanding historical ties and a vast shared border.. Kazakhstan also shares a border with China.

China's pursuit of energy security and new markets has strengthened its ties to Kazakhstan and its economy. That will only continue.

Kazakhstan also has strong alliances with its Central Asian neighbors. Globalization is gaining momentum and creating new regional alliances in every corner of the world. Many countries have realized, that their national goals can be realized through regional cooperation. Since its independence, Kazakhstan has worked to create regional economical alliances including with the Commonweath of Independent States, Eurasian Economic Association, Central Asian Economic Association and the newly founded Shanghai Cooperation Organization.

By strengthening its relationships with its neighbours, Kazakhstan has built a ―security belt‖ around its borders. And it continues to build alliances with other states such as India, Iran, Japan, South Korea, Turkey= and numerous European states.

Extending its influence beyond Central Asia, Kazakhstan has worked to develop confidence building measures throughout the region –in 2000 the idea was adopted by the Conference on Interaction and Confidence-Building Measures in Asia (CICA). CICA demonstrated that Kazakhstan is part of a larger Asian universe; its presidency of the OSCE in 2010 underscores its ties to the European world. In addition, Kazakhstan has relationships with several global and regional organizations that promote peace and economic prosperity including the Collective Security Treaty Organization (CSTO), NATO's "Partnership for Peace" program (PFP), the European Union (EU), the Shanghai Cooperation Organization (SCO), the Organization for Security and Cooperation in Europe (OSCE), the Economic Cooperation Organization (ECO), the United Nations, and the Organization on Islamic Conference (OIC).

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KAZAKHSTAN-U.S. STRATEGIC PARTNERSHIP Kazakhstan is one of the most progressive nations in the region and since its independence has proven to be the most reliable U.S. partner in Central Asia. The two countries established their ―strategic partnership‖ in 2006.

Astana and Washington are time-tested partners who have worked together on issues such as nonproliferation of nuclear weapons, the fight against terrorism, energy reform and democracy.

Kazakhstan and the United States have entered a new stage in their relationship . President Barack Obama‘s phone conversation with President Nursultan Nazarbayev soon after the 2008 U.S. elections instilled confidence that, under the new Administration, relations between the countries would continue to grow. The two leaders discussed further cooperation on important international issues such as non-proliferation, the fight against terrorism and stabilization of Afghanistan.

Later, in April, 2009, U.S. Vice President Joseph Biden called President Nazarbayev to express his gratitude for Kazakhstan's efforts to promote regional cooperation. He assured Nazarbayev that the U.S. would support Kazakhstan‘s OSCE Chairmanship in 2010. He alsocommended Kazakhstan‗s contribution to nuclear non-proliferation and affirmed President Obama‘s commitment to nuclear non-proliferation throughout the world. President Nazarbayev and Vice President Biden also discussed prospects for the development of Kazakhstan-US relations.

They agreed to look for new ways to expand bilateral cooperation with a focus on the economy.

After President Obama‘s historic address in Cairo on June 4, 2009, President Nazarbayev commended Obama‘s vision for the Islamic world. President Nazarbayev stressed that Obama's remarks demonstrated his commitment to a new beginning with Muslim world. "In his speech in Cairo, President Obama demonstrated his willingness to build understanding and rapport with Muslim nations. I am encouraged by this constructive engagement and Kazakhstan looks to continue its efforts on strengthening political, economic, and cultural cooperation with the United States of America‖, - President Nazarbayev said then.

In 2010, Kazakhstan and the United States launched the ―Annual Bilateral Consultations‖.

The first round of talks was held in Washington, D.C., on March 8-10. The two working groups chaired by Kazakhstan‘s Deputy Foreign Minister Kairat Umarov and U.S. Assistant Secretary of State for South and Central Asian Affairs Robert Blake reviewed the state of bilateral cooperation.

They covered a full range of issues: political cooperation, security, including counter-narcotics and counter-terrorism, Afghanistan, non-proliferation, OSCE, human dimension, including democratic reform, rule of law, human rights, and NGOs. They also discussed economic development issues, including energy cooperation, trade and investment, health, and education. The working groups agreed to continue their work in accordance with the Action Plan adopted at the first round of the Kazakhstan – U.S. Annual Bilateral Consultations.

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On March 24-25, 2011, Asistant Secretary Blake led an interagency delegation of representatives from the departments of State, Energy and Defense as well as the National Security Council to Astana to hold the second round of the Kazakhstan-US Annual Bilateral Consultations (ABC). The discussions covered a range of bilateral initiatives including cooperation in Afghanistan, nuclear non-proliferation, energy, trade and investment, science and technology, and the advancement of democratic and human rights reforms. Speaking afterward, Blake said: ―These discussions showed that the United States relationship with Kazakhstan is perhaps the deepest and broadest in Central Asia, and it shows the progress that we‘ve made in our relations over the last 20 years.‖

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2010 PRESIDENT NAZARBAYEV‟S VISIT TO THE U.S. On April 10-13, 2010 President Nazarbayev visited the U.S.to participate in the Nuclear Security Summit and to meet with President Obama and representatives of his administration. The visit opened a new stage in the relationship between Kazakhstan and the U.S..

Leaders of both countries had a comprehensive exchange on global security, including non-proliferation, the unstable situation in Kyrgyzstan, stabilization in Afghanistan, democratic development, economic ties and investment opportunities, energy partnership and Kazakhstan‘s chairmanship of the OSCE. The leaders also reiterated their commitment to strengthening bilateral cooperation.

According to the Special Assistant to the President/National Security Council Senior Director for Russian and Eurasian Affairs Michael McFaul, President Obama praised President Nazarbayev as ―one of the model leaders in the world. We could not have this summit without his presence.‖ President Nazarbayev also met with U.S. Secretary of Energy Steven Chu, heads of several American companies, leaders of Amercan Jewish organizations. In addition, hereceived the EastWest Institute Peace and Preventive Diplomacy Award for championing diplomacy and promoting interfaith dialogueacross the globe. .

Beyond the agreement struck between Kazakhstan and the U.S. on Cooperation in Science and Technology, agreements were met between Kazakhstan‘s National Railway Company and General Electric on Transportation for the Commonwealth of Independent States Shunter Locomotive Program and between Air Astana company and the Pilot Training College in Florida to train an additional 24 pilots by the end of 2010.

After their meeting the two Presidents issued the Joint Statement on some of the most important topics they discussed. Among them are the following major pririties.

Nuclear Security and Non-Proliferation: The Presidents underlined the 15-year track record of close cooperation between Kazakhstan and the United States and success in reducing nuclear threats in Kazakhstan and around the world. They share the vision of a world without nuclear weapons. The U.S. appreciates the leadership of President Nazarbayev and the contribution of Kazakhstan to nuclear disarmament and non-proliferation. The leaders hailed the successful implementation of the Cooperative Threat Reduction program and other efforts such as the decommissioning of the BN-350 nuclear reactor at Aktau and the construction of a central reference laboratory in AlmatyProgress is also being made atthe research reactor in Alatau to eliminate the highly enriched uranium stored there, as called for in the Nuclear Security Summit Communiquй.

President Obama thanked President Nazarbayev for offering to host an International Nuclear Fuel Bank and said he supports Kazakhstan's e‘forts to become member of the IAEA Board of Governors.

Kazakhstan is eager to speed up the mutually agreed work at the former nuclear test site in support of President Obama‘s speech in Prague, which called for accelerated action to secure vulnerable nuclear materials.

Afghanistan: The Presidents highlighted their shared understanding of the threats and challenges in Afghanistan.

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President Obama expressed appreciation for Kazakhstan‘s humanitarian, economic and educational support of the Afghan people, including the decision Kazakhstan‘s decision to contribute $50 million dollars to a new program to educate Afghans at Kazakh universities. The Presidents discussed ways to enhance Kazakhstan‘s critical role in the Northern Distribution Network and welcomed a new bilateral agreement enabling U.S. cargo flights across Kazakhstan.

Investment and Trade: Recognizing Kazakhstan‘s achievements in social and economic development the United States will continue to support the development of a diversified economy in Kazakhstan through the Program for Economic Development and the Kazakhstan-U.S. Public Private Economic Partnership Initiative.

The Presidents positively assessed the current state of bilateral economic relations. They agreed to redouble efforts to complete Kazakhstan‘s WTO accession and support the work of the Central Asia Trade and Investment Framework Agreement.

The Presidents reconfirmed the importance of the long-term energy partnership between the two countries. The United States welcomed Kazakhstan‘s emergence as the top global uranium producer as an important development for diversification of global energy supply.

The United States and Kazakhstan expressed their intention to enhance cooperation on nuclear energy and development of alternative energy resources. The leaders hailed the signing of the bilateral Science and Technology Agreement, which will increase scientific cooperation and exchanges.

The parties will encourage large-scale bilateral commercial cooperation in agriculture that can make a significant contribution to the U.S. and UN initiatives on global food security.

U.S.-Kazakhstan Bilateral Consultation: The Presidents welcomed the first session of annual bilateral consultations on March 8-9, 2010, in Washington D.C. The purpose of the new forum is to advance all the dimensions of the bilateral relationship, including security and nonproliferation cooperation, universal values and our economic and energy partnership.

Democracy: The United States encouraged Kazakhstan to implement its forward looking 2009-2012 National Human Rights Action Plan and 2010-2020 Legal Concept. The United States will continue to support the Kazakhstan‘sefforts to liberalize its media and democratize its political system, including through legal reform.

Enhancing Contacts between Our Societies: President Obama and President Nazarbayev underscored the importance of strengthening relationships between American and Kazakh civil societies, including NGOs, religious groups and educational institutions. Nazarbayev welcomed President Obama‘s Cairo Speech and outreach to the Muslim world. The Presidents emphasized the important role of religious freedom and tolerance in developing stable societies and declared their support of Kazakhstan‘s relevant efforts as 2010 OSCE Chairman and 2011 Chairman of the Council of Foreign Ministers of the Organization of the Islamic Conference.

Organization for Security and Cooperation in Europe (OSCE): President Obama highlighted the historic significance of Kazakhstan‘s OSCE Chairmanship _ the first time a former republic of the Soviet Union has chaired the OSCE. The Presidents discussed Kazakhstan‘s OSCE Chairmanship and its proposal to host an OSCE Summit. They noted positively Kazakhstan‘s initiative to promote greater OSCE engagement in Afghanistan, to hold a Review Conference in Kazakhstan on Implementation of Commitments in the Human Dimension, and to advance the Corfu process. The United States and Kazakhstan agreed to work on developing a substantive agenda for an OSCE Summit.

President Nursultan Nazarbayev invited President Barack Obama to visit Kazakhstan at his convenience. The invitation was received with appreciation.

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In November 2010, President Nazarbayev met with President Obama during the NATO Summit in Lisbon to discuss a number of international security issues.

KAZAKHSTAN AND NONPROLIFERATION Nonproliferation has been the cornerstone of relations between two countries that traveled a long way from newly born cooperation to mature strategic partnership between Kazakhstan and the United States.

Kazakhstan‘s adherence to building peaceful world resulted in open and constructive Kazakh-US cooperation in nuclear nonproliferation based on the Nunn-Lugar Initiative ―Cooperative Threat Reduction Program‖.

2011 is the year of celebrating the 20th anniversary of the closure of Semipalatinsk nuclear testing ground; In August 1991, President Nazarbayev signed a historic decree to close the Semipalatinsk nuclear test site. Kazakhstan dismantled its infrastructure, and signed agreements concerning nuclear armaments. Now Kazakhstan is implementing the proposals made by the President Nazarbayev during the Disarmament Conference to include Kazakhstan‘s seismic stations in the International Monitoring System.

On Dec. 29 1991, the leaders of Belarus, Kazakhstan, Russia and Ukraine signed the Almaty Declaration in which they agreed on nuclear control mechanisms for the former Soviet Union; they affirmed their international obligations to strategic arms reduction.

On May 23 1992 in Lisbon, the representatives of Kazakhstan, Belarus, Ukraine, Russia and the U.S. signed a five-party Protocol to the Strategic Arms Reduction Treaty. At the same time Belarus, Ukraine and Kazakhstan - as the states possessing nuclear weapons - committed to the Non-Proliferation Treaty.

In accordance with the Lisbon Protocol, Kazakhstan, Belarus and Ukraine, as successor states to the USSR in terms of the Strategic Arms Reduction Treaty, have agreed to participate, along with Russia and the U.S., in the joint Commission on observance and inspection. The nations also agreed to the limits and restrictions specified by the Treaty. Kazakhstan ratified the Treaty and the Lisbon Protocol on July 2, 1992. In 1994,Strategic Arms Reduction Treaty paved the way to disarmament and the elimination of more than 9,000 nuclear warheads.

Kazakhstan was the first among the participants of the Lisbon Protocol to implement provisions related to the removal of nuclear warheads. On April 21, 1996, Kazakhstan completed the removal of 1416 nuclear warheads . On May 30, 1995, the last nuclear test warhead- located in a gallery on the Semipalatinsk test site - was destroyed. Kazakhstan had gotten rid of its nuclear inheritance.

During the Soviet era, Kazakhstan was the site of the world‘s fourth largest nuclear arsenal with more than 1000 deadlyweapons. . Fortunately, President Nazarbayev ordered the dismantling and removal of Kazakhstan‘s entire nuclear weapons system. In 1994, Kazakhstan transferred more than a half-ton of weapons-grade uranium to the U.S. In 1995, Kazakhstan removed its last nuclear warhead and, with U.S. assistance, completed the sealing of 181 nuclear test tunnels in May 2000.

Kazakhstan signed the START Treaty (1992), the Nuclear Non-Proliferation Treaty (1993), the Chemical Weapons Convention, and the Comprehensive Test Ban Treaty (2001).

On March, 21, 2009, the Treaty on Nuclear Weapon Free Zone in Central Asia (signed on September, 8, 2006 in Semei, Kazakhstan) took effect. . Kazakhstan believes the Treaty will contribute to global non-proliferation and promote regional and international security. The new denuclearized zone in Central Asia has a number of unique features. First, it includes Kazakhstan, which in the past possessed the forth largest nuclear arsenal. Second, for the first time, the denuclearized zone is in Northern hemisphere. Third, the Treaty brings together all five Central 121

Asian countries. And finally, the zone was created in a region that borders on two nuclear states.

The Protocol on negative security assurances is an integral part of the Treaty. Under the Protocol, the nuclear weapon states pledge not to use or threaten to use nuclear weapons against any other member states.

On June 18, 2009, more than 25,000 Kazakhs, local dignitaries and world media gathered in Semey city to celebrate the 20th anniversary of Kazakhstan's decision to end nuclear tests at the Semipalatinsk Test Site. The meeting was held in Semey, where President Nazarbayev appealed to the international community to support the nation‘s efforts to promote peace.. In his speech, President Nazarbayev credited the Kazakh people for helping the ending nuclear testing.He said then: ‖Starting from the first days of the country‘s independence, Kazakhstan did not leave its citizens alone with their problems. The work on social rehabilitation of the population and the territories suffered the harm of the nuclear tests is being constantly carried out. For these purposes the state utilized nearly KZT 34 billion (approximately $215 million)‖.

In December 2009, the UN General Assembly unanimously accepted a resolution by Kazakhstan proclaiming Aug. 29 - the day when in 1991 President Nazarbayev signed a decree on the closure of Semipalatinsk Test Site - as the ‗International Day against Nuclear Tests‘.

Recognizing the negative impact of nuclear testing on human life and the environment, as well as the importance of of achieving a nuclear-weapon-free world, the Resolution was designed to commemorate an importantdate in Kazakhstan‘s history.

The international community has fully appreciated Kazakhstan‘s contribution to this nuclear disarmament programm.

Paying a visit to Kazakhstan in April 2010, U.N. Secretary General Ban Kim-moon said, ―I highly commend the extraordinary leadership of president Nazarbayev of Kazakhstan, who courageously closed this nuclear test site and initiated the nuclear weapon-free zone in Central Asia.

That‘s a big milestone‖.

During the Nuclear Security Summit in Washington, D.C., in April, 2010, Obama praised President Nazarbayev "as really one of the model leaders in the world on nonproliferation and nuclear-safety issues". President Obama and other leaders also heralded President Nazarbayev's proposal to establish an International Nuclear Fuel Bank in Kazakhstan. President Nazarbayev credited President Obama‘s anti-nuclear initiatives and achievements including the Global Nuclear Security Summit, signing the New START Treaty with Russia andadoption of the new U.S. nuclear posture review,.

In November 2010, Kazakhstan joined with the U.S. and other nations to provide secure long-term storage for more than 10 metric tons of highly enriched uranium and three metric tons of weapons-grade plutonium in Kazakhstan – enough material to make 775 nuclear weapons. Under the operation, 12 spent fuel shipments were safely and successfully secured, the largest and most complex nuclear transport campaign ever. The operation is an example of the international cooperation envisioned by Presidents Nazarbayev and Obama at the April 2010 Nuclear Security Summit in Washington, D.C.

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KAZAKHSTAN‟S OSCE CHAIRMANSHIP IN 2010 Kazakhstan began its chairmanship of the Organization for Security and Cooperation in Europe (OSCE) on Jan. 1, 2010. It was a historic achievement given that Kazakhstan was the first former Soviet Union Republic to lead the OSCE. The primary focus of the OSCE, with its 56 member states, is to promote economic and security cooperation. Kazakhstan took its responsibility very seriously; itworked with its fellow member states to build on the progress achieved by former chairs and to develop viable solutions to pressing challenges.

Kazakhstan set out on a challenging and exciting journey as Chairman of the OSCE. . Kazakhstan was committed to enhancing the Organization‘s credibility and efficiency. The first POLITICAL VISION AND PRINCIPLES were formulated by President Nazarbayev in his video address to the OSCE Permanent Council on the occasion of Kazakhstan‘s assumption of its Chairmanship in the OSCE on January 14, 2010. ―Kazakhstan is assuming the extremely important mission of the Chairmanship of the Organization for Security and Co-operation in Europe (OSCE) with a sense o great responsibility. Our country will embark on its Chairmanship during one of the most complicated periods in modern history.

Because of the global financial and economic crisis, tectonic shifts are taking place in the global order, and this process is still far from completion,‖ Nazarbayev said. ―The erosion of the regime of non-proliferation of weapons of mass destruction, terrorism, humanitarian and ecological disasters, famine, poverty, epidemics, depletion of energy resources, conflicts based on interethnic and interreligious differences—such is a far from complete list of the challenges faced by modern civilization that call for maximum efforts by multilateral institutions of high standing like the OSCE.‖ The motto of Kazakhstan‘s Chairmanship was four Ts, namely, "trust", ―tradition‖, ―transparency‖ and ―tolerance‖. The first T refers to the trust. The second one refers to Kazakhstan‘s commitment to the fundamental principles and values of the OSCE. The third one conveys maximum openness and transparency in international relations, free from ―double standards‖ and ―dividing lines‖, as well as a focus on constructive co-operation in order to address challenges and threats to security. Finally, the fourth T reflects global trends towards a strengthening of intercultural and intercivilizational dialogue, which is gaining major importance in today‘s world. Kazakhstan considered expanding and strengthening the consensus base on fundamental issues of development to be one of the key tasks for the OSCE. Later in January 28, President Nazarbayev articulated the philosophy of Kazakhstan‘s chairmanship.

In the article ―OSCE AND GLOBAL POLITICS,‖ published in Izvestia on Jan. 28, 2010, he outlined Kazakhstan‘s vision and explained how Kazakhstan planned lead the Organization through its challenges. ―We, as the chair of the OSCE, recognize the unrelenting challenges facing the world and are keenly aware that one year limits our ability to address every aspect of OSCE activities. While we are not in favor of fostering any kind of revolutions in the institution, we are not going to be deterred from pursuing our aggressive agenda either. As the head of a sovereign state, I view our chairmanship not only as a national project of strategic value but as evidence of the country‘s

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increased international prestige. And I relish the opportunity to inject renewed inspiration into the OSCE and give it a new impetus,‖ he wrote.

The U.S. was supportive of Kazakhstan‟s role in the OSCE. On Jan. 20, 2010, in his remarks on ―The Occasion of the Commencement of Kazakhstan's OSCE Chairmanship,‖ Assistant Secretary of State on South and Central Asian Affairs Robert Blake said: ―As Kazakhstan begins to serve as the Chairman-in-Office of the Organization for Security and Cooperation in Europe this year, it is charting a course for a bright and promising future. It is a future in which the United States and Kazakhstan together seek peace, security, economic development and prosperity. We seek democratic values and human rights that unite free nations in trust and in respect. We seek a region in which relations are good between neighbors, between Russia and China and Afghanistan and all others in the region and of course with the United States.

Kazakhstan has been a leader in international security since its earliest days of independence. After the end of the Cold War, the world applauded as Kazakhstan renounced its nuclear weapons, closed the nuclear test site at Semipalatinsk, and freely transferred over half a ton of weapons-grade uranium to secure sites outside the country under Project Sapphire. This past December, we marked the sixteenth anniversary of the landmark Cooperative Threat Reduction Program in Kazakhstan and we continue to work in partnership with Kazakhstan to advance our common non-proliferation goals. In April President Obama will welcome President Nazarbayev and other world leaders to the Global Nuclear Security Summit he will host.

Since its independence, Kazakhstan has also set an example in the region with economic reforms that have attracted investment and created jobs. The Government of Kazakhstan is also making wise choices to develop multiple energy export routes and to diversify its economy to ensure that its vast oil wealth can become a source for social mobility, not social stagnation.

As Kazakhstan‘s economy continues to recover from the global economic downturn, it should again be an engine for growth within Central Asia. Afghanistan, Kyrgyzstan and Tajikistan would benefit immensely from Kazakhstani investment and energy supplies to stimulate growth and create jobs.

And Afghanistan needs the full partnership of Kazakhstan to overcome the destitution that extremists, warlords, and civil war have compounded over several decades. Kazakhstan is providing vital logistical support to the International Security Assistance Force through the Northern Distribution Network. We welcome Astana‘s decision to invest in Afghanistan‘s next generation of leaders by generously allocating $50 million to fund scholarships for a thousand Afghan students to study in Kazakhstan.

Kazakhstan‘s OSCE Chairmanship is highly symbolic. The OSCE had long prided itself for stretching from Vancouver to Vladisvostok. Now, for the very first time, a major international organization is headed by a new country east of Vienna. It is a recognition that the OSCE draws its strength not only from Europe and the United States, but also from Central Asia, the Caucasus, and the Balkans. The challenges facing the OSCE and the international community are real but our strength comes from facing those challenges collectively and with a common purpose. The United States looks forward to working with Kazakhstan this year to meet these challenges and achieve the goal of modernizing and strengthening the OSCE, for the benefit of all participating States.

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Kazakhstan has successfully navigated the early stages of statehood. It has achieved a position of leadership on international security and economic development. And now, Kazakhstan, as the OSCE Chairman-in-Office has an unprecedented opportunity to lead Central Asia towards a future of democracy and to advance its own reform agenda to unleash the creative energy of its people. With continued reform, Kazakhstan can become the nexus of Eurasia in the 21st century, the point where all roads cross. For thousands of years, along the ancient Silk Road, the communities of Central Asia facilitated the global exchange of ideas, and trade, and culture. In the process, they made historic contributions to our collective human heritage.

Today, as Kazakhstan assumes the OSCE mantle, it is poised and ready to break a fresh path for a new Silk Road, a great crossroads of reform linking the provinces of northern Russia to the ports of South Asia, the republics of Western Europe to the democracies of East Asia.

A strong and prosperous and democratic Kazakhstan can energize the global transmission of learning, trade and freedom across the steppes of Central Asia. Kazakhstan has a glorious past and can seize a hopeful future. The United States will continue to be Kazakhstan‘s steadfast partner.‖ Since then, the brainstorming over how to reenergize the OSCE had begun. U.S. VicePresident Joseph Biden in his op-ed ―ADVANCING EUROPE‟S SECURITY‖ published in The New York Times on May 6, 2010 defined the OSCE as global security player along the lines of NATO. Biden wrote: ―The Russia-Georgia crisis in August 2008 reminded all of us that we cannot take security in Europe for granted or become complacent. To prevent such events from recurring, we support the creation of an O.S.C.E. Crisis Prevention Mechanism that, in situations of tensions between O.S.C.E. states, would seek to prevent crises before they start. And in the case that they do, it would empower the organization to offer rapid humanitarian relief, help negotiate a cease-fire, and provide impartial monitoring. We also believe that the O.S.C.E. should facilitate consultations in the case of serious energy or environmental disruption and dispatch special representatives to investigate reports of egregious human rights violations.‖

The OSCE Chairperson-in-Office, Kazakhstan's State Secretary and Foreign Minister Kanat Saudabayev said that based on the results of preliminary consultations, Astana could be the location of the next OSCE summit. OSCE participating States are expected to discuss this proposal in the near future. ―Today's meeting is a possibility to enter a new level of our dialogue and to raise ourselves to a higher stage in ensuring united and indivisible security.‖ Saudabayev told meeting participants.

President Nazarbayev also announced that Kazakhstan would give $10 million dollars in emergency aid to Kyrgyzstan, including fuel and house-building materials.. The President of the OSCE Parliamentary Assembly, Petros Efthymiou, stressed the important role that OSCE Parliamentarians can play in crisis situations such as that in Kyrgyzstan. ―The Corfu Process was an excellent start to bringing relevance back to the OSCE through dialogue. It is very important that focus has rightly moved toward strengthening the Organization's capacity for early reaction to evolving crisis situations,‖ he said.

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The Corfu Process is an OSCE-anchored dialogue on the future of European security. It was launched at the OSCE's first informal ministerial meeting, which was held last June on the Greek island of Corfu. OSCE Secretary General Marc Perrin de Brichambaut said the Almaty meeting and the proposed summit were opportunities to renew the participating states' commitment to the OSCE, to address problems dividing them, including protracted conflicts and arms control, and to act on common challenges such as transnational threats, the situation in Afghanistan and Kyrgyzstan. ―The participating States, under the guidance of Kazakhstan, have worked hard to identify problems and gaps of understanding. Steps have been taken to restore a sense of trust. The time has come to move to concrete action and step up the pace,‖ Nazarbayev said.

Some 50 ministers and deputy ministers participated in the meeting. After almost a yearlong debate, they reached a consensus andagreed to hold an OSCE summit in Astana by the end of 2010. . ―This is the success of our Organization, this is the success of our chairmanship‖, K. Saudabayev said,.

President Nazarbayev welcomed the decision: ―The decision adopted is a sign of the high level of respect on the part of the international community for the successes achieved by the people of Kazakhstan during the years of independence,‖ he said on Aug. 5.

Prior to the OSCE Summit, meetings were held in Warsaw, Vienna and Astana to prepare the agenda.. The most important element of the process was THE PARALLEL OSCE CIVIL SOCIETY CONFERENCE that brought together hundreds of the OSCE representatives to come up with ways to promote good governance, human rights and democracy. The Forum was held Nov.28-29, 2010.

The goal was to re-affirm respect for human rights and fundamental freedoms, democracy and the rule of law,. The final Outcome Document contained more than 100 recommendations. Despite noting several important achievements, such as the work done by the OSCE Representative on Freedom of the Media, NGO delegates pointed to the ―shrinking space wherein civil society can operate, an obvious erosion of human rights, and the inability of participating states to effectively resolve protracted conflicts‖ as proof that the OSCE needs to re-affirm its fundamental values and principles. Representatives saw the Astana Summit as a unique opportunity to reinvigorate the Organization, with civil society playing an important role in shaping the outcome. They provided the following recommendations as part of their resolve to protect and promote human rights and fundamental freedoms: Strengthening implementation of the human dimension as a core principle of comprehensive security; Strengthening the OSCE‘s operational functions, including its relations with civil society; Strengthening the OSCE‘s effectiveness in responding to political and humanitarian crises; Addressing human rights violations in the post-Soviet era, including in Central Asia.

More specifically, they recommended creating a mechanism for NGOs to participate in sessions of the OSCE Permanent Council and the Human Dimension Committee. They urged the creation of an official review process to evaluate candidates for OSCE Chair based on their record implementing

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human dimension commitments. Along similar lines, representatives promised to work toward strengthening engagement and oversight of OSCE field operations and institutions. Delegates also called on the OSCE to endorse the Extractive Industries Transparency Initiative (EITI) - a revenue transparency standard in the oil, gas and mining sectors that provides for regular public disclosure of payments by extractive industries to governments.

Furthermore, civil society representatives highlighted their concern for the ―growing tendency of using the legitimate goal of fighting terrorism as a pretext for laws that seek to curb legitimate speech.‖ They strongly advocated that such practices be brought to an immediate end. They called upon participating states to do more to protect journalists and civic and political activists from physical attacks, harassment and intimidation. With regard to intolerance, the representatives urged that OSCE commitments to end discrimination be upheld by all member states. Civil society representatives noted their disappointment in Kyrgyzstan for failing to accept the OSCE Police Advisory Group in a timely manner, though they did welcome the launching of the Community Security Initiative. Additional recommendations focused on the need for the OSCE to strengthen cooperation with other international institutions, most notably the Council of Europe and the Venice Commission. Representatives also called on OCSE members to maintain, if not increase, their financial contributions to the OSCE. ASTANA SUMMIT The first OSCE Summit in 11 years concluded today with Kazakhstan's President Nazarbayev welcoming the work of Heads of State from the 56 OSCE participating States, saying their adoption of the Astana Commemorative Declaration affirmed the Organization's comprehensive approach to security based on trust and transparency. The United States was represented Secretary of State Hillary Rodham Clinton.

"We have reconfirmed our support to the comprehensive approach to security based on trust and transparency in the politico-military field, on rational economic and environmental policy and on the full-fledged observation of human rights, basic freedoms and the rule of law," Nazarbayev said. "We intend to raise the level and quality of security and understanding between our states and peoples."

Nazarbayevdescribed the two-day Summit as "an historic event for the entire OSCE community" that had been characterized by "the spirit of Astana".

While in Astana, Clinton set up a Town Hall Meeting at the Eurasian University in Astana to meet Kazakhstan‘s human rights advocates and female NGOs and discuss issues of democracy building, freedom of speech, women‘s rights and other human rights issues. On Dec. 1, she met President Nazarbayev and Foreign Minister Saudabayev. After the meetings, she said: ―The United States is committed to the OSCE, and we and our partners are working to empower it to take an even more effective role, including the encouragement of more transparency and cooperation between and among militaries, helping resolve long-standing conflicts, and standing up against

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attacks on civil society and journalists. Our discussions here in Astana have been constructive and substantive,‖ Clinton stated.

She also said that ―Last night, I met with many of the participants who took part in the independent conference of non-governmental organizations that ran parallel with the summit. I was impressed by their effort and energy on crucial challenges, including protecting fundamental freedoms. They know what we all know, that a thriving civil society is a vital building block of democracy, and that disparate, diverse voices must be heard and supported. In the discussion that I had with both the president and the foreign minister, I thanked Kazakhstan for your support of the international mission in Afghanistan, and for all you are doing to help the Afghan people, particularly the very kind invitation for 1,000 students to continue their education here, in Kazakhstan. This will enable these young people to contribute to Afghanistan's development. I also thanked Kazakhstan for the recently concluded air transit agreement that will help ensure the delivery of critical resources to Afghanistan, and I welcomed Kazakhstan as the newest member of the International Security Assistance Force, which now includes 49 countries.

We discussed our shared interest in curbing nuclear proliferation, and safeguarding vulnerable nuclear material. Kazakhstan has long been a leader on this issue, and the United States deeply values our partnership. Along with the United Kingdom, our nations recently secured more than 10 metric tons of highly-enriched uranium, and 3 metric tons of weapons-grade plutonium here in Kazakhstan. That is enough material to have made 775 nuclear weapons. And now we are confident it will never fall into the wrong hands. This is a milestone of our cooperation, and a major step forward in meeting the goals set at this year's Nuclear Security Summit of securing all nuclear material within four years.

I also shared with the minister and the president the discussions that I have had with civil society leaders. I expressed our continued interest in Kazakhstan's national human rights action plan, and reforms to electoral, political, and libel laws. I assured him that America's commitment to working with Kazakhstan and the other nations of Central Asia to advance democracy and human rights will not end when the summit is over. On all of these and other fronts, Kazakhstan and the United States are making progress together. The bonds we are forging between our governments and our peoples are making both of our countries -- and, indeed, the region and the world -- more secure and prosperous. And surrounded by the energy and optimism that one feels in this new dynamic city, I look forward with confidence to a positive future for Kazakhstan and its people‖.

The OSCE Summit was a historic event for the organization, its membership and Kazakhstan. Amid all the assessments of Kazakhstan‘s chairmanship, the best was presented by the Center for Strategic and International Studies in its report ―Kazakhstan‘s OSCE Chairmanship 2010.‖. The report provided an end-of-year assessment of the 2010 Kazakh chairmanship of the OSCE and focused on the events of the last few months of 2010, especially the Summit in Astana and the preceding review conferences.

The report concluded that Kazakhstan provided capable and energetic leadership for the organization at a difficult time. A major achievement of the Kazakh chair was to showcase the OSCE to Central Asia and emphasize its Eurasian dimension—highlighting security problems related to Afghanistan, potential failed states, economic and environmental problemsand human rights violations. The crisis in Kyrgyzstan helped focus OSCE member states on the region. In addition, Kazakhstan provided bilateral assistance to Kyrgyzstan during and after the crisis; other 128

states also helped. The report says that the Astana summit was the major achievement of Kazakhstan‘s OSCE chairmanship. The summit concluded with a commemorative declaration outlining the road ahead for the organization (for more detailed info on the report visit http://csis.org/publication/kazakhstans-osce-chairmanship-2010-0).

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ASTANA COMMEMORATIVE DECLARATION TOWARDS A SECURITY COMMUNITY 1. We, the Heads of State or Government of the 56 participating States of the OSCE, have assembled in Astana, eleven years after the last OSCE Summit in Istanbul, to recommit ourselves to the vision of a free, democratic, common and indivisible Euro-Atlantic and Eurasian security community stretching from Vancouver to Vladivostok, rooted in agreed principles, shared commitments and common goals. As we mark the 35th anniversary of the Helsinki Final Act and the 20th anniversary of the Charter of Paris for a New Europe, we reaffirm the relevance of, and our commitment to, the principles on which this Organization is based. While we have made much progress, we also acknowledge that more must be done to ensure full respect for, and implementation of, these core principles and commitments that we have undertaken in the politico-military dimension, the economic and environmental dimension, and the human dimension, notably in the areas of human rights and fundamental freedoms.

2. We reaffirm our full adherence to the Charter of the United Nations and to all OSCE norms, principles and commitments, starting from the Helsinki Final Act, the Charter of Paris, the Charter for European Security and all other OSCE documents to which we have agreed, and our responsibility to implement them fully and in good faith. We reiterate our commitment to the concept, initiated in the Final Act, of comprehensive, co-operative, equal and indivisible security, which relates the maintenance of peace to the respect for human rights and fundamental freedoms, and links economic and environmental co-operation with peaceful inter-State relations.

3. The security of each participating State is inseparably linked to that of all others. Each participating State has an equal right to security. We reaffirm the inherent right of each and every participating State to be free to choose or change its security arrangements, including treaties of alliance, as they evolve. Each State also has the right to neutrality. Each participating State will respect the rights of all others in these regards. They will not strengthen their security at the expense of the security of other States. Within the OSCE no State, group of States or organization can have any preeminent responsibility for maintaining peace and stability in the OSCE area or can consider any part of the OSCE area as its sphere of influence. We will maintain only those military capabilities that are commensurate with our legitimate individual or collective security needs, taking into account obligations under international law, as well as the legitimate security concerns of other States. We further reaffirm that all OSCE principles and commitments, without exception, apply equally to each participating State, and we emphasize that we are accountable to our citizens Astana commemorative declaration towards a security community and responsible to each other for their full implementation.

We regard these commitments as our common achievement, and therefore consider them to be matters of immediate and legitimate concern to all participating States.

4. These norms, principles and commitments have enabled us to make progress in putting old confrontations behind us and in moving us closer to democracy, peace and unity throughout the OSCE area. They must continue to guide us in the 21st century as we work together to make the ambitious vision of Helsinki and Paris a reality for all our peoples. These and all other OSCE documents establish clear standards for the participating States in their treatment of each other and of all individuals within their territories. Resolved to build further upon this strong foundation, we reaffirm our commitment to strengthen security, trust and goodneighbourly relations among our States and peoples. In this respect we are convinced that the role of the OSCE remains crucial, and should be further enhanced. We will further work towards strengthening the OSCE‘s effectiveness and efficiency.

5. We recognize that the OSCE, as the most inclusive and comprehensive regional security organization in the EuroAtlantic and Eurasian area, continues to provide a unique forum, operating on the basis of consensus and the sovereign equality of States, for promoting open dialogue, preventing and settling conflicts, building mutual understanding and fostering cooperation.

We stress the importance of the work carried out by the OSCE Secretariat, High Commissioner on National Minorities, Office for Democratic Institutions and Human Rights and Representative on Freedom of the Media, as well as the OSCE field operations, in accordance with their respective mandates, in assisting participating States with implementing their OSCE commitments. We are determined to intensify co-operation with the OSCE Parliamentary Assembly, and encourage its efforts to promote security, democracy, and prosperity throughout the OSCE area and within participating States and to increase confidence among participating States. We also acknowledge the Organization‘s significant role in establishing effective confidence- and security-building measures. We reaffirm our commitment to their full

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implementation and our determination to ensure that they continue to make a substantial contribution to our common and indivisible security.

6. The OSCE‘s comprehensive and co-operative approach to security, which addresses the human, economic and environmental, political and military dimensions of security as an integral whole, remains indispensable. Convinced that the inherent dignity of the individual is at the core of comprehensive security, we reiterate that human rights and fundamental freedoms are inalienable, and that their protection and promotion is our first responsibility.

We reaffirm categorically and irrevocably that the commitments undertaken in the field of the human dimension are matters of direct and legitimate concern to all participating States and do not belong exclusively to the internal affairs of the State concerned. We value the important role played by civil society and free media in helping us to ensure full respect for human rights, fundamental freedoms, democracy, including free and fair elections, and the rule of law.

7. Serious threats and challenges remain. Mistrust and divergent security perceptions must be overcome. Our commitments in the politico-military, economic and environmental, and human dimensions need to be fully implemented. Respect for human rights, fundamental freedoms, democracy and the rule of law must be safeguarded and strengthened. Greater efforts must be made to promote freedom of religion or belief and to combat intolerance and discrimination. Mutually beneficial co-operation aimed at addressing the impact on our region‘s security of economic and environmental challenges must be further developed. Our energy security dialogue, including on agreed principles of our co-operation, must be enhanced. Increased efforts should be made to resolve existing conflicts in the OSCE area in a peaceful and negotiated manner, within agreed formats, fully respecting the norms and principles of international law enshrined in the United Nations Charter, as well as the Helsinki Final Act. New crises must be prevented. We pledge to refrain from the threat or use of force in any manner inconsistent with the purposes and principles of the Charter of the United Nations or with the ten Principles of the Helsinki Final Act. 8. Conventional arms control and confidence- and security-building regimes remain major instruments for ensuring military stability, predictability and transparency, and should be revitalized, updated and modernized. We value the work of the Forum for Security Cooperation, and look forward to the updating of the Vienna Document 1999. We value the CFE Treaty‘s contribution to the creation of a stable and predictable environment for all OSCE participating States.

We note that the CFE Treaty is not being implemented to its full capacity and the Agreement on Adaptation of the CFE Treaty (ACFE) has not entered into force. Recognizing intensified efforts to overcome the current impasse, we express our support for the ongoing consultations aiming at opening the way for negotiations in 2011.

9. At the same time, in today‘s complex and inter-connected world, we must achieve greater unity of purpose and action in facing emerging transnational threats, such as terrorism, organized crime, illegal migration, proliferation of weapons of mass destruction, cyber threats and the illicit trafficking in small arms and light weapons, drugs and human beings.

Such threats can originate within or outside our region.

10. We recognize that the security of the OSCE area is inextricably linked to that of adjacent areas, notably in the Mediterranean and in Asia. We must therefore enhance the level of our interaction with our Partners for Co-operation. In particular, we underscore the need to contribute effectively, based on the capacity and national interest of each participating State, to collective international efforts to promote a stable, independent, prosperous and democratic Afghanistan.

11. We welcome initiatives aimed at strengthening European security. Our security dialogue, enhanced by the Corfu Process, has helped to sharpen our focus on these and other challenges we face in all three dimensions. The time has now come to act, and we must define concrete and tangible goals in addressing these challenges. We are determined to work together to fully realize the vision of a comprehensive, co-operative and indivisible security community throughout our shared OSCE area. This security community should be aimed at meeting the challenges of the 21st century and based on our full adherence to common OSCE norms, principles and commitments across all three dimensions. It should unite all OSCE participating States across the Euro-Atlantic and Eurasian region, free of dividing lines, conflicts, spheres of influence and zones with different levels of security. We will work to ensure that co-operation among our States, and among the relevant organizations and institutions of which they are members, will be guided by the principles of equality, partnership co-operation, inclusiveness and transparency. Drawing strength from our diversity, we resolve to achieve this overarching goal through sustained determination and common effort, acting within the OSCE and in other formats.

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12. To this end, we task the incoming Chairmanship-in-Office with organizing a follow- up process within existing formats, taking into consideration ideas and proposals put forward by the participating States, including in the framework of the Corfu Process and in the preparation of the Astana Summit, and pledge to do all we can to assist the incoming Chairmanships- in-Office in developing a concrete action plan based on the work done by the Kazakhstan Chairmanship. Progress achieved will be reviewed at the next OSCE Ministerial Council meeting in Vilnius on 6 to 7 December 2011.

13. We express our deep gratitude to Kazakhstan for hosting our meeting, and for the energy and vitality the country has brought to the challenging task of chairing the OSCE in 2010. We welcome Lithuania‘s Chairmanship of the Organization in 2011, Ireland‘s in 2012 and Ukraine‘s in 2013.

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CONFERENCE ON INTERACTION AND CONFIDENCE–BUILDING MEASURES IN ASIA (CICA) The idea of convening a Conference on Interaction and Confidence-Building Measures in Asia (the CICA) was first proposed by President Nazarbayev on Oct. 5, 1992, at the 47th Session of the United Nations General Assembly.

Today, in the age of globalization, CICA activity has become particularly significant. In 2006, CICA member-states established the International Secretariat on the CICA with offices in Almaty.

Regular meetings among the Senior Officials Committee and Special Working Groups improved the organization‘s effectiveness. Organizing the CICA III Summit for June 2010 in Istanbul (Turkey) was a top priority on the group‘s agenda. During the Summit, Turkey assumed the chairmanship of the CICA from Kazakhstan for a two-year period (2010 to 2012). This represented the first-ever chairmanship succession in the history of the Conference (Kazakhstan has chaired the Conference since 2002).

Before the CICA III Summit, all member states began work on implementing Catalogue of Confidence Building Measures (CBMs) (human, economic, environmental, military-political, fighting against new challenges and threats), as well as on the legal framework of the Forum. In accordance with the ―Cooperative Approach for the Implementation of the CICA CBMs‖ (the document was adopted in March 2007 at the meeting in Bangkok), CICA arranged workshops and field meetings dealing with four aspects of the CBMs—fighting against new challenges and threats, economic, environmental, and the human dimensions.

All member states worked on strengthening and broadening cooperation in the politicomilitary area to make it the central element in CICA efforts to implement provisions of the CBMs Catalog. During the meeting of Senior Officials Committee in Beijing on Oct. 29, 2009, member states approved Kazakhstan‘s vision on strengthening the military-political dimension. This vision was the starting point for the Concept and Action plan for the CICA military-political dimension.

Furthermore, on Jan. 18, 2010, at the tripartite consultations in Bangkok, the then CICA chair (Kazakhstan), new CICA chair, (Turkey), and current ASEAN and RFA chairman (Thailand) discussed opportunities for future development of the CICA‘s military-political dimension with the possible addition of the RFA experience.

CICA is expanding its influence in the region. It brings together 18 states occupying 90 percent of Asia 's territory with half the world's population and growing interest in the increasing dynamics of CICA processes. It has extended its geographic reach and representation—in 2009, Vietnam requested full CICA membership (this request was preliminarily considered by all member states at the Senior Officials Committee‘s meeting in Beijing on October 29, 2009). Moreover, the CICA was conferred observer status by the U.N.General Assembly during in 2007. All these achievements indicate that the Forum is in relevant and useful and responds to the needs of CICA member states and the broader region.

In preparation for the CICA III Summit in June 2010, member states workedhard to implement thecommitments and decisions made during the 2006 Summit and at the 2008 CICA Ministerial Meeting. The preliminary vision for the next Summit‘s agenda included: - adoption of the Summit political declaration - completion of the process of institutionalization of the Forum through the adoption of the Convention on the Privileges and Immunities of the CICA Secretariat - giving impetus to the implementation of the Catalog of Confidence Building Measures to initiate the first steps in the politico-military dimension - Elevating some Asian countries as full members and observers of the CICA

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Moreover, Kazakhstan, as the then OSCE Chairman-in-Office proposed having a separate meeting during the CICA Summit with participation of OSCE Asian partners to promote cooperation between the OSCE and the CICA. It has also proposed issuing the final statement or communiquĐš of all participants in the event.

Kazakhstan was the founding Chairman of CICA. It successfully held the Chairmanship since the first summit in 2002. Turkey, which has been one of the most active members of CICA, assumed the Chairmanship in June 2010 at the third Summit meeting in Ankara. It is expected that there will be regular rotation of the chairmanship every two years.

The original goal of Turkey‘s chairmanship was to enhance political and security dialogue in Asia. In the beginning of 2010, Turkey declared the following priorities for its work as chair: conduct a dialogue on cooperation for security; provide basis for mutual search toward common understanding; establish a bridge between security and dialogue; enhance dialogue for cooperative security in accordance with the principle of non-zero-sum game; establish more effective mechanisms of cooperative security; understand challenges to cooperative security; identify the road map for the future development.

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ORGANIZATION OF THE ISLAMIC CONFERENCE Kazakhstan became a member of the Organization of Islamic Conference in 1995. Cooperation with the Islamic world is one of the priorities of Kazakhstan‘s foreign policy. Our country is considered by the Islamic World as the integral part of the Muslim community. Since entering the OIC, Kazakhstan has gradually developed its interaction with the General Secretariat, subsidiary bodies and institutes of the Organization. Kazakh delegations have participated in the biggest OIC events such as Summits (Eighth OIC Summit in December 1997 in Tehran, Ninth OIC Summit in November 2000 in Doha, 10th OIC Summit in October 2003 in Putradjaya), Islamic Conferences of Foreign Ministers (since 24th ICFM in December 1996 in Jakarta, until 33rd ICFM in June 2006 in Baku) as well as Annual Coordination Meetings of Foreign Ministers within frameworks of the UN General Assembly.

Further intensification of Kazakhstan‘s relations with the Muslim countries meets long-term interests of our country mentioned in the Address of PresidentNazarbayev on March 1, 2006.

Nazarbayev described Kazakhstan as a multiethnic and multiconfessional state thatfully supports developing a dialogue among civilizations and religions. He said it was becoming increasingly important that Kazakhstan participate in the OIC as well as with other large regional and global organizations.

Participants at the 32nd Islamic Conference of Foreign Ministers in Sanaa, Yemen in June 2005,supported Kazakhstan‘s initiative on promoting inter-faith dialogue by convening the Congress of Leaders of World and Traditional Religions.

Special importance was given to cooperation with the Islamic Development Bank and other financial and consulting institutions and companies. Implementing earlier agreements were under development. The IDB Program, which includes several economic and infrastructure projects in Kazakhstan, was developed for the period, 2003-2006: Syzganov Institute– $10 million Highway Gulshat – Karaganda – $10 million Segment of the Osakarovka – Vishnevka Highway– $20 million Assistance to Small and Medium Enterprises Development– $15 million Development of cooperation with the OIC in educational, cultural-humanitarian, science and technology fields as also important. Close interaction with the Islamic Education, Science and Culture Organization (ISESCO) gave Kazakhstan an opportunity to implement national projects including preservation of cultural heritage monuments, language training and study of history, culture of Islamic Countries.

On Sept. 9-11, 2005, in Mekkah (Saudi Arabia), the Conference of Muslim Scholars and Thinkers was held with the participation of the Chairman of the Committee for Foreign Affairs, Defense and Security of the Senate of the Parliament of the Republic of Kazakhstan Zhabaikhan Abdildin. This activity was aimed at elaboration of recommendations and preparation of documents to be submitted to the Third Extraordinary Conference held in Mekkah, Dec. 7-8, 2005.

Representatives from the 57 Member States came together to consider the initiative of the King of Saudi Arabia Abdullah bin Abdulaziz Al Saud.

A 10-year OIC Action Plan was adopted during the Extraordinary Summit. Based on the proposals of the Kazakh delegation, provisions were included on political, economic and financial assistance to countries affected by environmental disasters as well as on religious dialogue. At its 33rd meeting in June 2006, the Islamic Conference of Foreign Ministers reiterated support for the Resolution initiated by Kazakhstan ―On the situation in the Regions of the Islamic world Affected

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Semipalatinsk Region.‖ Kazakhstan has worked within the OIC framework to participate in the activities of the OIC Parliamentary Union. With the aim of enhancing and intensifying its cooperation with the OIC, Kazakhstan has become more integrated in OIC inter-parliamentary relations. This demonstrates our goal of developing positive and mutually beneficial relationships with the Islamic countries. Kazakh parliamentarians took part in the sixth Conference of the Parliamentary Union of the OIC,April 12-13, 2006, in Turkey.

KAZAKHSTAN‟S OIC CHAIRMANSHIP In 2009, member states of the OIC decided that Kazakhstan would chair the Organization in 2011.. It is important to highlight that the decision was largely the result of the high trust and authority that President Nazarbayevcommands in the region and his active international stand on security and constructive East-West relations. . The focus of Kazakhstan‘s Chairmanship is to establish the effective and constructive ―dialogue of civilizations‖ between the East and West, one of the goals of the CICA, OSCE and OIC. As the 2010 OSCE Chairman-in-Office and 2011 OIC Chairman, Kazakhstan has focused strengthening the two organizations' cooperation. The goals and objectives of the OIC are not much different from those of the OSCE, as both organizations are devoted to international peace and security.

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KAZAKHSTAN‟S INTERNATIONAL INTERRELIGIOUS INITIATIVES Since achieving independence, Kazakhstanhas served as an international platform for the dialogue of cultures and religions. The initiative of the Alliance of Civilizations is accelerating its pace and the dialogue between individuals, governments, religious and public. Kazakhstan contributes to its interreligious, international efforts. At the 62nd session of the UN General Assembly, Kazakhstan initiated the resolution that has been adopted proclaiming 2010 as the ―International Year of Rapprochement of Cultures.‖ Kazakhstan also held the 3rd Congress of Leaders of World and Traditional Religions on July 1-2, 2009. The idea of promoting interreligious and interethnic tolerance was also included on Kazakhstan‘s OSCE agenda in 2010.

CONGRESS OF LEADERS OF WORLD AND TRADITIONAL RELIGIONS.Leaders of world and traditional religions met for the first time in Astana on Sept. 24, 2003, to condemn terrorism . They pledged to continue to work toward peace, harmony and prosperity. The Congress, held at the initiative of President Nazarbayev in Kazakhstan's capital, drew widespread support from leaders of both Western and Asian nations. Kazakhstan is a Muslim-majority country and is considered an example of interethnic and interfaith harmony. The Congress was a bold reminder to the world that people of different faiths and ethnic backgrounds can and should live together in peace.

At the end of the Congress, senior clerics from Islam, Christianity, Buddhism, Judaism, Hinduism, Taoism and other faiths adopted a Declaration stating that "extremism, terrorism and other forms of violence in the name of religion have nothing to do with genuine understanding of religion, but are threat to human life and hence should be rejected. The inter-religious dialogue is one of the key means for social development and the promotion of the well-being of all peoples, fostering tolerance, mutual understanding and harmony among different cultures and religions," the religious leaders said after the closing joint prayer.

President Nazarbayev, who chaired the conference, said, "It is unacceptable to attach ideological or political dimensions to existing cultural and religious differences." He countered the notion of the "clash of civilizations," saying it would be more appropriate to talk about "a meeting of civilizations." U.S. President George W. Bush said then in his message to President Nazarbayev, "The United States strongly supports the Congress' objectives of deepening inter-faith understanding to advance the cause of religious liberty, expand freedom, and eliminate the root causes of terrorism."

"For the United States, itself a multi-ethnic and religiously diverse nation, these meetings underscore the importance of working with our friends in Central Asia to advance the values of tolerance and respect that form the foundation of democracy," the President added. Leaders of the United Kingdom, France, Italy, Russia, China, Egypt and other nations, as well as then UN Secretary General Kofi Annan, also sent letters of support and commendation to the participants.

A bipartisan group of senior senators and congressmen from the United States, including Sens. Sam Brownback (R-Kansas), Conrad Burns (R-Mont.); Reps.George Radanovich (R-Calif.), Joe Pitts (R-Pa.), Robert Wexler (D-Fla.), Eni Faleomavaega (D-American Samoa), Edolphus Towns (D-N.Y.) and others sent a letter to President Nazarbayev saying the Congress was "timely."

At the religious level, the U.S. was represented by the President of the National Council of Churches Michael E. Livingston and Cardinal Theodore Edgar McCarrick (Archbishop of Washington). They thanked Kazakhstan "for taking consistent and concrete steps to bridge the growing divide between Muslims and Jews at a time when tension in the Middle East is at a fulcrum, and intolerance and anti-Semitism are rising worldwide."

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A total of 18 different religious delegations participated in the meeting from Belgium, the United Kingdom, China, France, India, Iran, Israel, Japan, Pakistan, Russia, Saudi Arabia, Switzerland.. Islam was represented by General Secretary of the Saudi Arabia-based World Muslim League Abdalla ben Abdel Muhsin At-Turki, President of the Islamic Knowledge University Ayatollah Sayed Mohammad Khamenei of Iran and others from Pakistan and India. Papal Envoy Cardinal Joseph Tomko led a delegation from the Vatican. The head of the Anglican Community, the Archbishop of Canterbury was represented by the Bishop of Croydon, the Rt. Revd. Nicholas Baines and Archbishop‘s Secretary for Ecumenism, Revd. Canon Jonathan Gough. Metropolitan Mefodiy represented the Russian Orthodox Church. Metropolitan Emmanuel of France led the delegation of the Constantinople Orthodox Church. Rev. Dr. Ishmael Noko, General Secretary of the Lutheran World Federation, represented the LWF. Losantsyumay Tudanzyuezinima, Living Buddha and deputy chairman of the All China Buddhist Association, Jian Ziyui, first deputy chairman of the All China Taoist Association, Dr. Shantilal Somaya, Director of Shinto Temples Directorate from Japan, represented their faiths. Jonah Metsger, the Chief Rabbi of Israel, and the chief rabbis of Belgium, Switzerland, and Russia led the delegation representing Judaism.

In the final declaration, the leaders said they would not "allow the use of religious differences as an instrument of hatred and discord." "We shall strengthen cooperation by promoting spiritual values and a culture of dialogue to ensure peace in the new millennium," the participants declared. The Resolution of the Congress requested Kazakhstan to make arrangements for the Secretariat to handle all inter-sessional activities before the next meeting of the Congress in 2006.

The UN General Assembly acknowledged the Congress of World and Traditional Religions held in September 2003 in Astana. The UN General Assembly adopted the Resolution on Promotion of Interreligious Dialogue on Nov. 12, 2004. The document stressed the commitment of all religions to peace and stability all over the world and appealed to the international community to promote the development of the interreligious dialogue. By adopting the Resolution, the community of nations supported Kazakhstan‘s initiative to promote a culture of peace and dialogue among civilisations.

Following the adoption of the Resolution, the Kazakhstan delegation to the UN informed the international community about its work leading up tothe Second Congress of World and Traditional Religions, held in Astana in 2006.

The Resolution invited UN Secretary-General Kofi Annan ―to bring the promotion of interreligious dialogue to the attention of all Governments and relevant international organizations and to submit a report thereon, including all views received, to the General Assembly at its sixtieth session.‖ The Secretary General‘s report also included information on the First Congress of World and Traditional Religions and further efforts of Kazakhstan to develop the interreligious dialogue.

On Oct. 13, 2004, Kazakhstan hosted the First Meeting of the Secretariat of the Congress of Leaders of World and Traditional Religions in the southern city of Turkestan, a city on the ancient Silk Road with 1,500 years of history and a spiritual center for Turkic people.

On April 25-26 2006, Kazakhstan hosted the Fourth Meeting of the Secretariat of the Congress in Astana. Participants approved the draft declaration, themes and agenda of the Second Congress. The main themes were: the freedom of conscience and recognition of leaders of other religions and the role of religious leaders in international security. Special envoy of the U.S. National Council of Churches Rev. Dr.Shanta Premawaradhana participated in the Secretariat‘s meetings.

On Sept. 12-13, 2006, Kazakhstan‘s capital Astana hosted the Second Congress of Leaders of World and Traditional Religions, gatheringmore than 40 religious leaders. At the Second Congress, the leaders of major world and traditional religions decided to take a more active role in denouncing intolerance, terrorism and the misuse of religion for political ends.

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Islam was represented by Dr. Abdullah bin Abdulmohsin Al-Turki, Secretary General of the Muslim World League (Saudi Arabia), Sheikh Muhammad Sayyid Tantawi, Grand Imam of AlAzhar, Dr. Mahmoud Hamdi Zaqzouq, Dr. Mahmood Ahmad Ghazi, President of International Islamic University (Pakistan) and other distinguished Islamic leaders. The heads of Christian delegations included Rt. Rev Nicholas Baines, Bishop of Croydon (United Kingdom), Cardinal Roger Etchegaray, Emeritus President of the Pontifical Council for Justice and Peace (Vatican), His All Holiness, Bartholomew, Archbishop of Constantinople, New Rome and Ecumenical Patriarch (Turkey), Cardinal Theodore Edgar McCarrick, Archbishop of Washington (USA), Reverend Dr. Ishmael Noko, Secretary General of the Lutheran World Federation (Switzerland/USA) and others.

Yona Metzger, Chief Ashkenazi Rabbi of Israel and Shlomo Amar, Sephardic Chief Rabbi of Israel have represented Judaism at the Second Congress. The representatives of Buddhism, Shinto, Taoism and Hinduism have also participated in the Second Congress. Among the invited guests of honor were UNESCO Director-General Koichiro Matsuura, the former Prime Minister of Malaysia Mahathir Mohammad, UN Under-Secretary-General (Geneva) Sergey Ordzhonikidze, Renй van der Linden, President of the Council of Europe Parliamentary Assembly, Alejo Vidal-Quadras, VicePresident of the European Parliament, Staf Nimmegeers, Vice Chairman of the Senate of Belgium and other distinguished political figures.

President Nazarbayev welcomed participants‘ agreement on a set of Principles of Interreligious Dialogue that he hoped would pave the way for a Declaration on the role of religion in promoting international security. "After the great loss of life in the first six years of the new century, the world is gradually beginning to understand one simple fact," he said. "The world‘s cultural and religious diversity is a reality that one needs to understand and accept as a given. Any other approach by politicians and the world may simply explode."

Representatives of each of the world‘s major religions spoke about the role of education in promoting tolerance as a long-term contribution to global security. Koichiro Matsuura, UNESCO Director-General, lauded Kazakhstan‘s "model for peaceful coexistence" among the country‘s 40some religious groups. French President Jacques Chirac, in a letter to President Nazarbayev, expressed hope that the gathering would improve global dialogue between cultures and civilisations.

"To counteract against the clash of cultures, to combat calls to violence, to achieve the victory of our vision of a unified world, these are the goals which people of all kind intentions, of all religions and views, must reach together," he wrote. At conclusion of the Congress, the religious leaders signed a solemn Declaration ―together to tackle and ultimately eliminate prejudice, ignorance and misrepresentation of other religions‖ to aid in the global fight against terrorism. The Declaration calls for ―placing a particular focus on what religions hold in common rather than what divides them.‖ It alsocondemned terrorism on the basis ―that justice can never be established through fear and bloodshed and that the use of such means is a violation and betrayal of any faith that appeals to human goodness and dialogue.‖ President Nazarbayev stated that the Declaration capped five years of work following the terrorist attacks on New York and Washington on Sept. 11, 2001. ―In the face of global threats the whole world has united in this goal: eradicate terrorism and confirm the values of humanism. An ideology of tolerance and dialogue must confront the ideology of terrorism,‖ President told to the delegates.

The Congress‘ participants agreed to meet again in Astana in three years. The Congress took place in a newly built Palace of Peace and Accord. Inaugurated in early September, the pyramidstyle building was designed by British architect Sir Norman Foster as a permanent seat of the interreligious dialogue forum. The place serves a museum of Kazakhstan‘s national culture, operahouse, civilizations‘ university, exhibition and concert hall, library, research center for major faiths

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and office for different religions. The hallwas designed after the Sitting Hall of the UN Security Council in New York. The building is 77 meters high and 25,500 square meters wide.

The Third Congress was held on July 1-2, 2009, in Astana under the title of ―The role of religious leaders in building a world of tolerance, mutual respect and cooperation,‖ with the following sessions: ―Moral and spiritual values‖; ―Justice, peace and security,‖ ―Environment and harmony,‖ ―Dialog and cooperation,‖ ―Solidarity and cooperation in the period of crisis.‖ In the first session, religious leaders discussed moral and spiritual values as a part of human culture and tried to find the unified approach to understanding and defining spirituality. Some people believe spirituality is a cultural heritage like language, art, music, literature, etc.; others believe that spirituality is closely linked to religion and religious values. They refer to secular and religious perceptions of the concept of "spirituality."

In the second session, participants discussed developments of the modern world. One group of religious leaders spoke about a lack of of understanding and tolerance. At the same time, the leaders said the interaction of religions, culture, and social development continues to affect interstate relations and international stability. At the third session, leaders discussed the global goal of solidarity. Differences provide opportunities to explore others values and their merits. Today the global community needs to be united and make active steps to develop new forms of international cooperation that will make it possible to ensure stable economic growth and overcome global imbalances.

At the Third Congress, the United States was represented by three different delegations: religious diversity included the Rev. Dr. Bernice Powell Jackson, the North American President of the World Council of Churches, Ms. Debbie Almontaser, Member of board of Brooklyn Borough President's New Diversity Task Force, Muslim Consultative Network, Women In Islam Inc., and others). The delegation was led by the President of the US Christian Churches Together, the Very Reverend Leonid Kishkovsky. The second group represented the level of American involvement in the global interreligious dialogue; itwas represented by Dr. William Vendley, Secretary General of the World Conference of Religions for Peace International and Mr. Stein Villumstad, Deputy Secretary General of the World Conference of Religions for Peace International. The third delegation represented the voice of Mormon community was led by Paul Bowen Pieper of The Church of Jesus Christ of Latter-day Saints (LDS Church) and was the first leader of the LDS Church in Kazakhstan.

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AFGHANISTAN Kazakhstan views the situation in Afghanistan as a priority of its foreign policy agenda.

Kazakhstan strongly supports a comprehensive and continued international effort to bring lasting peace and economic development in Afghanistan.

In 2001, Kazakhstan provided no-cost over-flight rights for the ―Enduring Freedom‖ operation. Similar arrangements were developed and adopted between Kazakhstan and Germany at the end of 2007. In 2002, Kazakhstan offered its emergency landing air fields for U.S. military and cargo planes. As one of the key parts of so-called Northern Distribution Network through which about 35% of all US cargo arrives to Afghanistan since 2009, Kazakhstan made its rail and motor roads available for transit of non-lethal shipments needed for NATO and U.S. forces in Afghanistan.

In accordance with Bonn Process, 2006 London Conference, 2008 Paris Donor Conference on Afghanistan,Kazakhstan has undertaken a number of steps to aid Afghanistan: $1 million in humanitarian assistance, scholarships for 1000 Afghan students and training programs for Afghan police and internal security service. It also paired with Government of Afghanistan the Protocol of Intentions to build railway road Termez (Uzbekistan) to Kabul (Afghanistan) with further access to the transport infrastructure of India and createdthe Kazakh-Afghan Intergovernmental Commission on Trade and Economic Cooperation.

Kazakhstan is the only Central Asian country that has the Assistance Program on Reconstruction of Afghanistan. Between 2007-2008, $3 million was provided to restore agricultural seed supply in Afghanistan, to build a school in Samangan province, a hospital in Bamiyan province and a road.

Under the next Governmental Action Plan on Assistance, Kazakhstan is allocating $5 million for projects related to water supply, infrastructure development and delivery of grains and other commodities. The Action Plan calls forthe delivery of commodities and materials as well as construction of four bridges crossing the river running through the town of Aibak and strengthening the river banks. According to the Action Plan, the Afghan government will receive two aircrafts from their Kazakh counterparts: a MI-171 (to use for humanitarian cargo and rescue operations) and an IL-76 (for transporting humanitarian aid cargo from the United Arab Emirates to Afghanistan as part of the UN World Food Program).

Another important step was the decision by the Government of Kazakhstan to allocate $50 million to implement the Agreement on Cooperation in Education with Afghan Government. Under the agreement, Kazakhstan will educate 1,000 Afghan people from 2010 to 2014. Education of Afghan people will be carried out in the universities of Kazakhstan in such specialties as healthcare, agriculture, police, border control, engineering, teachers and educators.

Kazakhstan fully supports the U.S. strategy on Afghanistan. Stabilization of Afghanistan was and continues to be one of the most important issues to discuss during high-level exchanges between Kazakhstan and the U.S.

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IRAQ Kazakhstan believes that UN should play an active and effective role in further political and economic rehabilitation in Iraq in close cooperation with the Iraqi Authorities and international community. Joint efforts should ensure full respect for the independence and territorial integrity of Iraq, as well as the sovereignty of the Iraqi people and their right to determine their own political future.

The Kazakh military engineers unit has been stationed in Iraq under U.S. command since 2003. It consisted of 25 people in the Engineer Battalion, four officers in the Multi-National Force in Baghdad and the Multi-National Division – Centre South.

During its mission in Iraq, the squad destroyed four million units of ammunition. Kazakh doctors, together with their foreign colleagues, rescued more than 500 Iraqi citizens, one third of whom were children.

In October 2008, Kazakhstan withdrew its peacekeepers from Iraq at the request of the Iraqi government. The security situation had improved and Iraqi security forces were now capable of taking over.

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KAZAKHSTAN – THE HEART OF EURASIA

USEFUL INFORMATION National holiday Dec. 16 – Independence Day State holidays Jan. 1-2 – New Year March 8 – International Womens‘ Day March 22 – Nauriz (traditional holiday of Spring - ancient Turkic (Kazakh) New Year), May 1 – Unity Day of Kazakhstan people May 9 – Victory Day July 6 – Astana Day Aug. 30 – Constitution Day

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Local time Kazakhstan is divided into two time zones Eastern zone, Western zone Eastern Standard Time + 11 hours (time in the capital of Kazakhstan – Astana) and + 10 hours when the United States switches to Daylight Savings Time Languages Kazakh, which belongs to a Turkic group, spoken by over 70.1% of the population, is the state language. Russian, spoken by 94.3%, enjoys an equal status under the Constitution and is a means of interethnic communication in Kazakhstan. English is spoken by 15.4%. There is the National Trinity of Languages Program which aims to ensure that all Kazakh citizens have full command of Kazakh, Russian and English to have an international competitive edge in the 21st century.

Newspapers, TV/Radio programs, school instruction are done in 11 languages (Kazakh, Russian, Uzbek, German, Korean, English, etc.)

Currency The national currency of Kazakhstan is Tenge (100 tiyn). There are banknotes of T 10 000, 5 000, 2 000, 1 000, 500, 200. The coins of T 1, 3, 5, 10, 20, 50,100.

Currency exchange Official exchange rate (June, 2010): US$ 1 = 146,4 KZT. The exchange of foreign currency to Tenge and back is carried out in any bank or official exchange offices. It is advisable to keep documents of exchange of large amounts before departure from the country.

Bank hours 09.00 a.m. to 06.00 p.m., Monday-Friday Lunch break 01.00 p.m. – 02.00 p.m.

Credit cards Almost all American and international credit cards, including Visa and Diners Club, are accepted in most large hotels in Almaty and Astana and in most shops and restaurants.

National dishes In general, Kazakhs prefer meat dishes. The favorite national dish of Kazakhstan is beshbarmak.

Beshbarmak is made with lamb, horse meat, beef and dough. Other favorites include kazy, karta, zhal, zhaya and, of course, kumys (mare‘s milk).. Kumys has healing qualities and is used to treat lung and intestinal-gastric illnesses. Taking into account that more than 130 different nationalities are represented in Kazakhstan, the country‘s cuisine is diverse. Kazakhs enjoy Russian, Uighur, Ukrainian, Uzbek, Korean and European cuisine. Throughout the country, restaurants and cafes are diverse.

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Other useful information Electricity: 220 volts AC, 50 Communications: Telephone: country code – 7, code of Astana city – 7172, code of Almaty – 727 / International calls can be made easily. Telegram facilities available from any post office. Full postal facilities are available at main post offices in the cities andare open 24 hours a day, seven days a week.

Useful links Travel and Visa information: www.kazakhembus.com Information on Kazakhstan: www.kazakhstanlive.com Tourism: www.kazakhstan-tourist.com; www.ecotourism.kz; www.kantengri.kz; www.kazakhstanbirdtours.com Most popular ski resort in Kazakhstan: www.chimbulak.kz

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NATURE & GEOGRAPHY The Republic of Kazakhstan is located in the central part of Eurasia, almost equidistant from the Atlantic Ocean and the Pacific Ocean.

Kazakhstan is located at the junction of two continents, Europe and Asia, between 45 and 87 degrees of the eastern longitude, 40 and 55 degrees of the northern latitude in Central Asia. It occupies a territory equal to 2724.9 thousand km2 and spreads to the east from the Caspian Sea and Volga valleys to mountainous Altai, from the foothills of the Tien Shan in the south and southeast to the Western Siberian lowland in the north. The length of its territory from the west to the east exceeds 3,000 km, and from the south to the north it exceeds 1,700 km. Kazakhstan borders Russia to the north, 6,467 km, China to the east, 1,460 km, andKyrgyzstan, 980 kmUzbekistan, 2,300 km, and Turkmenistan, 380 km, to the south. Kazakhstan is bordered by the Caspian Sea in the west.

Total length of the borders is 12,187 km including 600 km of borders along the Caspian Sea. By the territory, Kazakhstan is the ninth largest in the world and in the 4th on the continent.

Throughout history, Kazakhstan was ann arena for brisk commercial and political relations; itnow it serves an important role as a link between Europe, Central Asia and the rapidly developing AsianPacific region.

The largest part of the territory is occupied by the valley framed with mountains in the east and south-east. Mountains along the border with Kyrgyzstan rise almost up to 5,000 meters above sea level, and Karagiye (Batyr) depression in Mangyshlak is located at 132 meters below sea level. The Mangyshlak peninsula is in the southwest; Kazakh Low Hill Land is in the central part of the country, the southern part of Western Siberian lowland sits in the north, and the mountains of Altai, Tarbagatai, Zhungar Alatau and Tien Shan sit in the east and southeast.

Kazakhstan is home to 8,500 rivers. The length of seven rivers exceeds 1,000 km. The Ural and Emba, which flow into the Caspian Sea, and the largest; Syrdariya flows into the Aral Sea; Ili that flows into the lake of Balkhash; Irtysh, Ishim and Tobol cross the country and flow into the Arctic Ocean. Kazakhstan is also home to 48,000 lakes. The largest are the Aral Sea, Balkhash, Zaisan, Alakol, Tengiz and Seletengiz. The largest part of the northern shore and half of the eastern shore of the Caspian Sea (the largest lake in the world) belong to Kazakhstan. The length of the shore is 2,340 km. Twenty-six percent of Kazakhstan is occupied by steppes; 44 percent or 167 million is desert and 14 percent issemi-deserts. Forests occupy 21 million ha. There are several large mountain ranges on the territory. The highest peak is Khan-Tengri peak (Saryzhaz ridge) – 6,995 meters above sea level.

Kazakhstan has a unique and rich landscape.

Kazakhstan‘s fauna is also diverse. On its territory there are 853 species of vertebrate animals (178 species of mammals, 512 species of birds, 49 species of crawlers, 12 species of amphibious animals, 102 species of fish and cyclostomes). Fauna of invertebrate animals is also diverse: there are at least 50,000 species including 30,000insects. In the steppes, there are flocks of koulans and goitered gazelles (Atlantic antelope). Deserts are inhabited by gigantic lizards, snakes and spiders. Tops of the mountains are inhabited by snow leopards. In the precipices of mountains, one can hear the

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voice of whistling thrush – Indian thrush. There are birds, marmots, Ustyurt wild sheep, Turkestan lynx, Tien Shan brown bear, flamingo and swans in Kazakhstan. All of them are unique animals.

Flora is rich: . 5,754 species of higher plants grow on the territory of the Kazakhstan. High-level of endemism (up to 14%) is specific for Kazakh flora. The most peculiar is the flora in the Western Tien Shan and in the mountains of Karatau.

The Red Book of the Republic includes 125 species and subspecies of vertebrate animals, 96 species of invertebrate animals and 303 species of plants.

Protection of the biological and landscape diversity is carried out by 115 specially protected natural territories of national significance and 60 local natural territories.

Currently there are 10 reserves, eight national parks, two natural reservations and three natural parks operating in Kazakhstan.

Typical plants of Kazakhstan Blue Spruce: blue royal Tien Shan spruces are natural artistic decoration of mountain ridges of Ile Alatau. Like candles they can reach heights of 40-50 meters. Covered with fog, these giants rise above the deep precipices of the mountains. Their tolerant needles can survive cold alpine winters and can exist in bare rocks.

Saxaul (Latin: Passer ammondendri): You can meet a unique plant in the steppes of Kazakhstan - saxaul, a bush with soft leaves. During unusually dry periods, saxaul loses all its leaves and look like long curls. But as long as rain comes, the plant starts growing again. If there are several rainy periods in summer, it can form a small forest. The bush mainly grows in the desert and semi-desert areas.

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Typical animals of Kazakhstan Snow leopard (Pantera unique): In Kazakhstan people view the eopard as their strongest and proudest animal. A wild cat, its preferred habitat ison the mountain tops where glaciers are contiguous with the alpine belt. Although rare, it can sometimes be found in of the Tien Shan. Without natural enemies, snow leopards have a long life expectancy .

Saker falcon: In ancient times, Kazakhs used saker falcons for to hunt fowl. Kazakhs took baby falcons from their nests to train them to hunt. This tradition still exists. Falcons can be found in the wilderness in Altai, in north-eastern Kazakhstan, in Ile Alatau.

Koulan (Latin: Eglius hemionus): Strong, with a light gait, these Asian animals are elegant and beautiful. Scores of koulans used to roam in the steppes of Kazakhstan but overhunting rendered them extinct. Koulan were reintroduced to the at the right riverbank of Ili River from the Aral Sea.

ENVIRONMENT PROTECTION Kazakhstan was hit by two major disasters in the 20th century, 500 nuclear weapon tests at the Semipalatinsk test site and the drying up of the Aral Sea due to diversion of water from Amu Dariya and Syr Dariya rivers for irrigation.

The country has also been heavily industrialized in the second part of the last century, resulting in high levels of industrial pollution.

Against this background, the people in Kazakhstan have been particularly conscious of the need of greater efforts to protect and restore the environment. The Semipalatinsk nuclear test site was shut down in 1991, while joint projects with the World Bank helped restore water to the northern part of the Aral Sea. Other steps are being taken toward cleaner air and environmental protection at the national level.

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In March 2009, Kazakhstan ratified the Kyoto Protocol to the UN Framework Convention on Climate Change.

According to the document, the country must reduce carbon dioxide emissions in the atmosphere.

Since ratification, all major facilities are being monitored for environmental compliance with the protocol. Kazakhstan aims to reduce its greenhouse gas emissions by 15 percent by 2020, and by 25 percent by 2050, in full accordance with the Kyoto Protocol.

Since July 2009, the government restricted the import of automobiles not meeting the Euro-2 standard. From Jan. 1, 2011, Euro-3 standard was implemented, and the Euro-4 standard will be introduced in 2014.

Almaty, a city with one of the highest levels of pollution in Kazakhstan, introduced a program to reduce air pollution through 2018. Trucks are now restricted from entering the center of the city, many trees are being planted, transport interchanges are being built to reduce congestion. The city‘s department of natural resources noted an improvementin the pollution index from August 2008 to August 2009, with a drop of almost three percentage points.

Since 2009, Kazakhstan has participated in ―Earth Hour‖ meant to draw public attention to climate change. On this day, lights are switched off for one hour at Baiterek Tower (the symbol of Astana), the Ak Orda presidential palace and another 100 buildings in Astana. Initially the action was planned only in Astana and Almaty, but 88 other cities across Kazakhstan chose to participate.

All future efforts in environmental protection will be carried out in accordance with a new 10-year program, ―Ecology of Kazakhstan.‖. One of the program‘s objectives is to create a Zhasyl damu (green development) national center of environmental development for integrated management of waste production and consumption. Its main purpose is to construct factories to produce recycling equipment. Today, the country exports its persistent organic pollutants for recycling to Germany.

The program also incorporates a number of investment projects, which will be designed in accordance with today‘s requirements. The program‘s top prioritywaste production and consumption.

In June 2010 in Bonn (Germany), Kazakhstan recommended to the COP-16 to accept Republic of Kazakhstan in Annex B of the Kyoto Protocol.

The conference adopted a policy document that laid the groundwork for a future comprehensive, legally binding climate agreement to replace the Kyoto Protocol after 2012. A Kazakh delegation led by Minister of Environmental Protection Nurgali Ashimov participated in the debates.

To implement the Joint Implementation (Article 6) and emissions trade (Article 17), it is necessary to meet the requirements of articles of the Kyoto Protocol stated in the Marrakesh Agreement. t the international level, negotiations are held on the integration of Kazakhstan in Appendix B of the Kyoto Protocol with a commitment to voluntarily limit their anthropogenic emissions of greenhouse gases (GHGs) for the period from 2008 to 2012. Kazakhstan is commited to achieving 1992 emissions levels.

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In September 2009, Kazakhstan submitted a report to the UNFCCC Secretariat on inventory of GHG emissions.

After receiving a positive report on the audit led by international experts, Kazakhstan presented a national report on Assigned Amount Units (AAU / AAU) and registered with the Secretariat of the UNFCCC. All these activities contributed to positive solutions at the 32nd session of the Subsidiary Body for Implementation (May 31 - June 11, 2010, Bonn, Germany) and further at the KS/SS-6 in Mexico in December of 2010.

In November 2009 in Barcelona at a meeting of the AWG-LCA, Kazakhstan made a commitment to quantitative reductions in greenhouse gases after 2012.

Within the framework of the State program "Zhasyl Damu" for 2010-2014, there will be a general decrease in carbon intensity and increase of the share of renewable energy. Work is underway to develop strategies for low-carbon economy. These parameters helped Kazakhstan develop a legally binding agreement at COP-16 and KS/SS-6 in Mexico in December 2010.

In June 2009, in Bonn, the Kazakhstan submitted the Second National Communication at the Conference of Parties of the UN Framework Convention on Climate Change. Since the beginning of last year, negotiations on the development of the Third National Communication have been held to meet the requirements of Annex I. On Aug. 6, 2009, a Ministry of Environmental Protection was appointed to coordinate implementation of the Kyoto Protocol of the UN Framework Convention on Climate Change (DNA / DFP).

The Head of State gave an assignment to the Government to introduce national carbon trading platform in Kazakhstan. Work has begun to develop regulatory and legislative documents, amendments and changes to the Environmental Code.

The Ministry of Environment is considering the acquisition and establishment of a national register of units to reduce greenhouse gas emissions. It should result in the formation of a national system for estimating emissions of greenhouse gases, the rules on the approval, registration and monitoring of projects to reduce greenhouse gas emissions.

On Jan. 29, 2010, Kazakhstan sent a letter to the UNFCCC Secretariat expressing its intention to be associated with the Copenhagen Accord and requested to include the name "Republic of Kazakhstan" in the title of the Agreement.

Aral Sea in Kazakhstan - a rebirth of local environment?

Kazakhstan has refused to accept the so-called irreversible fate of the Aral Sea. The country‘s decision to reconquer the northern part of the sea nearly five years ago has released its first tangible results: rising water levels and the return of fish.

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Forty years of heavy irrigation by rice and cotton farmers took their toll on the Aral Sea, shrinking its surface by two thirds and its depth from 53m above sea level to a mere 30m.

Fish disappeared, salinity increased and large quantities of pesticides were released into the environment. Labelled an ―ecological disaster‖ by the international community, the results have had a profoundly damaging effect on local fishing communities.

But Kazakh President Nazarbayev has defied fate, launching a vast rescue programm for the Kazakh side of the Aral Sea in 2001. The two main goals were: the construction of the 13km Kok-Aral dam, dividing the sea into two halves, north (Kazakh) and south (Uzbek), and the development of the Syr Darya river banks to increase the volume of water being discharged into the northern part of the sea.

These two measures have been successful: ● Soon after the program was completed in August 2005, tests revealed that the surface of the northern half of the lake had risen 13% from 2850 square km in 2003 to 3250 square km in 2006. ● Over the same period, salinity dropped from 34 grammes/litre to 15 grammes/litre, encouraging the gradual return of marine life and several varieties of freshwater fish. The volume of fish catches, less than 1500 tonnes/year two years ago, is now 15000 tonnes/year – a ten-fold increase.

A significant climatic evolution has taken place. The inhabitants of the region, who are finally able to resume their livelihoods, have noted a considerable improvement in environmental conditions of the region in recent years. Above all, the increase of the sea‘s surface has encouraged evaporation, and thus the progressive return of rainfall, indispensable for agriculture and human and animal life.

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MILESTONES OF HISTORY Kazakhstan is located in the heart of Eurasia and on the intersection of ancient social, economic and cultural routes between many nations, ethnic groups and civilisations. During different periods in history many states with their unique cultures were established and developed on the present-day territory of Kazakhstan.

The Scythian nomad civilisation existed in the steppe regions of Central Asia during the first centuries of the first millennium B.C. Some artifacts of this civilization can still be found. The most impressive artifacts from this era are household goods and personal items made from bronze and gold in so called "animal style."The "Golden warrior-prince" tomb is well-known for its beauty and elegance. It was found near a settlement called Issyk, which is located very close to Almaty city.

Centuries ago, a powerful tribe called the Huns established themselves in the steppe region of present-day Kazakhstan. They had a great influence on the political development of this area at the time. An army of Huns led by their great warlord Attila the Hun brought down the Roman Empire.

Later on Turkic tribes became the Huns‘ successors. They created some vast states named "kaganats" which means empire. These empires covered the territory from the Yellow Sea in the east to the Black Sea in the west. These nomad states had well-developed cultures for that era: there were several cities with advanced levels of commerce and trade. Step-by-step, the cities and caravan-sarais were established at Central Asian oases. It was a part of the historical route known as "The Great Silk Road,‖ which connected Byzantium with China. Other caravan routes were important as well. Among them were the roads leading along the Syr-Dariya River to the Aral Sea and the Urals and the so-called ―sable road‖ from Central Kazakhstan and Altai to southwest Siberia. Europe and the Middle East were supplied with very valuable furs by this route. Big cities and commercial centers were built along these trade routes, the most famous among them being Farab, Taraz, Kulan, Yassy (Turkestan), Sauran and Balasagun.

The Great Silk Road trade route played a major role in the development of commercial relationships and in the exchange of progressive scientific and cultural ideas. The great eastern philosopher AI-Farabi lived on the territory of the present-day Kazakhstan from 870 to 959 and was known as the Second Teacher after Aristotle for his research into philosophy, astronomy, mathematics and the theory of music. Hodja Ahmed Yassawi was a well-known Moslem bard who lived in the 12th century; he wrote a famous poem called the book of wisdom. A new form of city architecture developed at that time and became a major historical achievement. This new style was famous for its elegant proportions. At the same time a unique type of portable dwelling called "yurta‖ (nomad's tent) was invented. Yurta was a perfectly designed structure for the the nomads.

In 1221, nomadic tribes led by Genghis-khan occupied Central Asia. This invasion had a great influence on the development of the Kazakh nation.

Kazakhs had emerged as a distinct ethnic group about that time, forming a tribal confederation known as the Kazakh Khanate (or Orda) which comprised three tribal unions – Elder, Middle and Lesser Zhuzes each of which were led by Khans.

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The merger of different nomadic tribes began in the second half of the 15th century. These tribes had different cultures and traditions but had a similar lifestyle. The word ―Kazakh‖ is translated from the Turkic language as "free, independent."

The Kazakh khanate appeared at the time when there was a political crisis caused by the downfall and collapse of the huge nomadic empire. This caused a lot of small states to emerge and fight for control of the territory and parts of the Great Silk Road trade route. Subsequent dynasties of Genghis-Khan and their rivals also contributed to the political instability of the region.

Mausoleum of Alasha-Khan (XVI century)

Since the end of the 16th century the main goal of Kazakh khanate has been to promote the integrity and inviolability of its territory.

Certain events that took place at the beginning of the 18th century show that there was a lack of resources for the defense and development of Kazakh independence. A very powerful and aggressive neighbor called Dzhungar Khanate was on the border of the Kazakh khanate. This fact made Kazakh Khans reconsider their diplomatic relations with Russia and to change them not only for good trade relations but also for the military defense of the Kazakh khanate and Russia against Dzhungar aggression.

At the beginning of the 18th century, the political situation along Kazakhstan‘s borders and in the Kazakh khanate itself was incredibly unstable. The Khanate was under threat. That is why khans of the Lesser and the Medium zhuz Abulkhair and Sameke decided to accept Russia‘s protection as it was the only condition under which Russia would agree to defend it militarily.

This protectoin very shortly turned into the colonization of Kazakhstan by Russian military forces.

Abylai Khan made a successful attempt to resist this process of colonisation. He managed to do the impossible by gaining the independence of the Kazakh khanate under very unfavorable internal and

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external circumstances. He used the fact that China and Russia had a lot of disagreements at the time (the 18th century). Unfortunately, the independence of the Kazakh khanate did not continue after his death.

Some Kazakh intellectuals founded the national liberation movement in 1917-1918. The "Alash" party and the "Alash-Orda" government were established to defend Kazakhstan‘s independence.

They wanted to liberate the Kazakh people from colonization and to provide them real independence. The movement ended tragically.

Despite many uprisings, Tsarist Russia retained control over the Kazakh tribes until the Bolshevik Revolution. Incorporated into the emerging Soviet state, Kazakhstan was made an autonomous republic, and in 1936 attainedthe status of a full Soviet republic. With the collapse of the Soviet Union on Dec. 16, 1991,, Kazakhstan declared its independence .

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CULTURE & TRADITIONS Kazakhstan has been ―terra incognita‖ for the rest of the world for a long time. Kazakhstan is a huge country located at the heart of the largest steppe on Earth. For centuries, riders have strolled along this steppe linking Europe and Asia and mentioned a country where ―rage, attractiveness and charm are mixed up.‖ LITERATURE Before the 19th century, Kazakhstan had no written language of its own. Literature took the form of long oral poems, recited by bards (aquins) in a song-like chant and accompanied by traditional instruments like drums and a dombra, which is a mandolin-like string instrument. Recitals and poetry contests (aitys) are still very popular. The founder of modern Kazakh literature is said to be Abay Kunanbaev (1845-1904 - see illustration left), a 19th century poet and writer who translated Russian works into the Kazakh language. His main contribution to Kazakh culture and folklore is his poetry, which expresses strong nationalism and grew out of Kazakh folk culture. His most famous philosophic work, "Words of edification" is said to be a spiritual commandment to the Kazakh nation. Other notable writers and poets include Akhmet Baitursynov, Mirjaqip Dulatuli, Bukhar-zhirau Kalmakanov, Makhambet Utemisov and many others.

Chokan Valikhanov (1835-1865), from which Kazakhstan‘s Academy of Sciences takes its name, was the first Kazakh scholar, ethnographer and historian. A descendant of Ghenghis Khan, Valikhanov was one of the first Kazakhs to be educated in Russian and published books and articles devoted to the history and culture of Central Asia. Notable works include "Kirghiz (Kazakhs)," "Traces of shamanism in Kirghiz," "About Kirghiz nomads' camp" and others containing ethnographic data that have been used to date. He also wrote the Kazakh epic poems "Kozy-Korpesh and "Bayan-Sulu" and the Kyrgyz epic "Manas.‖ LIFESTYLE Astana, the Kazakh capital, and Almaty, the former capital, are modern cosmopolitan cities . Most Kazakhs live in urban apartment blocks, houses finished to international standards. The wealthy denizens of Astana have often occupy penthouse flats overlooking the city and the ever-receeding steppes. The latest important residential complex under construction - the Abu Dhabi Plaza - is designed by Norman Foster.

TRADITIONS The traditional dwelling of the Kazakh nomad is the yurt, a tent made from a framework of willow wood and covered in felt, with a hole in the top to allow smoke to escape. When correctly constructed, a yurt enables its inhabitants to stay cool in summer and warm in winter. Very few Kazakhs still maintain a semi-nomadic existence, moving their herds and flocks to summer pastures each year.

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MUSEUMS Most of Kazakhstan‘s museums are found in Almaty. The Central State Museum of the Republic of Kazakhstan was established in the 1930s and today hosts four large exhibition halls covering hundreds of unique Kazakh exhibits including spiritual and cultural material describing the history of the country.

The A. Kasteyev State Museum of Arts boasts over 20 thousand exhibits in its collection (painting, sculpture, decorative art). The Museum's acquisitions program began when the Russian Museum and the A.S. Pushkin Museum of the Fine Arts delivered 200 works by Russian and Western masters in the 1930s. The collection traces art history from ancient to present times.

The Archaeological Museum of the Kazakhstan National Academy of Sciences and The State Book Museum is also located in Almaty SPORTS As in other aspects of Kazakhstan‘s traditional culture, the horse plays a dominant role in athletics – kokpar is a wilder version of polo using a goat‘s carcass instead of a ball; and qyz quu, is a chase between girl and boy on horseback.

In contemporary terms, Kazakhstan is obsessed with football.

The Kazakhstan First Division is controlled by the Football Union and feeds into the Kazakhstan Super League, founded in 1994. Cyclist Alexander Vinokourov is perhaps the best-known Kazakh athlete. Tennis, boxing, gymnastics, swimming and golf are also popular.

At the 29th Olympic Games in Beijing, Kazakhstan‘s athletes won a total of 13 medals – two gold, four silver and seven bronze. Kazakhstan has consequently been ranked 29th among the 205 competing countries. Since its independence, the country has won an incredible 43 medals including 11 gold. Weight lifter Ilya Ilyin and welterweight boxer Bakhyt Sarsekbayev won gold medals. Judoist Askhat Jitkeev, female weightlifters Irina Nekrasova and Alla Vazhenina, and freestyle wrestler Taimuraz Tigiyev won silver medals. Bronze medals were won by N. Tenizbayev and A. Mambetov (Greek-Roman wrestling), M. Grabovetskaya (weightlifting), E. Shalygina and M. Mutalimov (free-style wrestling), E. Shynaliev (boxing), A. Chilmanov (taekwondo).

The Kazakh delegation for the Olympics in Beijing consisted of 70 female and 62 male athletes winning 132 qualifying licenses in 22 (out of 41) sports. The delegation included athletes from all 16 administrative territories of the Republic - and from 11 separate ethnic groups. Kazakhstan including President Nazarbayev led a delegation of 200 officials to Beijing.

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CINEMA Kazakhstan has a strong cinematic tradition: the first Kazakh films date back to the beginning of the 20th century and the first filming took place in 1928. These were mainly short propaganda films, created by Russian directors and known as ―agitfilms.‖ The first Kazakh full-length feature, ―Amangeldy‖ by Moisey Levin, was made in 1938 and was also the first film with sound. It has a narrative pattern typical of central Asian cinema, which focuses on strong and heroic characters.

Other notable early films include ―The Land of the Fathers‖ by Zemlya Ostov, ―The Balcony' by Kalykbek Salykov,‖ ―Gift to Stalin‖ and 'The Island of Rebirth‖ by Rustem Abdrashev.

In recent years, fast-growing Kazakh cinema is positively affected by economic growth. Kazakhstan has submitted six films to be considered for the Academy Awards. Since 2006, Kazakhstan has been submitting a film every year (Fall of Otrar in 1992, Nomad in 2006, Mongol 2007, Tulpan 2008 and Kelin 2009 and Strayed 2010). Mongol was an Oscar nominee and Kelin made a shortlist.

From June 27 through July 1, 2010 Astana hosted the 1st Astana International Action Film Festival, which was attended by many international stars and producers, including Dolph Lundgren, Hilary Swank, Harvey Weinstein and Mike Tyson. The event was organized by Timur Bekmambetov, a Kazakh Hollywood producer of internationally famous movies such as ―Night Watch‖ and ―Wanted,‖ which starred Angelina Jolie. Timur Bekmambetov is working on many noteworthy projects in the U.S. It is no coincidence that internationally famous producer, Mr. Steven Jaffe, was appointed as the Honorary Consul of Kazakhstan in Los Angeles – he is already making contributions to development of Kazakh cinema as a Hollywood director. His multifaceted career in film has included being producer, executive producer, writer, and/or second unit director on such films as ―Ghost,‖ ―Star Trek VI,‖ ―The Widowmaker,‖ ―Strange Days,‖ ―Time After Time,‖ ―Near Dark,‖ ―The Day After‖ and ―K19: The Widowmaker.‖ The Land of the Fathers (1966). A year after the end of the war, an old Kazakh man and his grandson go through all the country to retrieve the body of a soldier who was old man‘s son from a rural cemetery near Leningrad and to bury him in native Kazakh steppe. However as they reach a tomb, they learn that old man‘s son lies here with his friends‘ bodies. So, the old man and his grandson decide not to disturb him, understanding that the national grief and the national feat brought all the people closer together.

Revenge (Mest, 1989). In the beginning of the 1940s, hundreds of thousands of Koreans that had lived in the Russian Far East since the XIX century were forcibly displaced overnight by Stalin‘s orders. Women, children, the elderly, were sent away with no explanation. The Korean diaspora in Kazakhstan, with a population of more than 1 million, has been a forbidden topic for many years. Revenge is the first film telling the story of their tragedy.

The Road (1992) by Omirbaev Darejan. A film director takes a trip to visit his sick mother, leaving his wife and son in Almaty. The audience is exposed to his thoughts and encounters along the way.

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Highway (2001) by Sergei Dvortsevoy. Kazakhstan is seen through the eyes of a small traveling circus.

My Brother Silk Road (2001) by Marut Sarulu. Filmed in Kazakhstan/Kyrgyzstan, four village children embark on a difficult journey through the steppes to the railroad, which lies on the path of the ancient Silk Route. A train meanders down the mountain and, following an argument, an artist is unceremoniously thrown off a carriage and meets the children...

Leila's Prayer (2002) by Satybaldy Narymbetov. A powerful drama portraying a young girl living in the Semey region in the north of Kazakhstan, where the Soviet regime carried out 467 nuclear tests at a devastating cost to the local environment.

Little Men (2003) by Nariman Turebayev. Subtle comedy on the post-Soviet generation in Kazakhstan, full of up-tempo music and slapstick humor. Bek and Max, two slackers, share an apartment and the same bleak economic prospects.

When one of the two, the naive Bek, falls hopelessly in love, the incurable philanderer Max decides to teach him about women.

The Hunter (2004) by Serik Aprimov. An allegory about the tensions between the traditional and the new in Kazakh society. It featuresa young boy who is brought up by his stepmother and a nomadic hunter.

Schizo (2004),Writer/director Guka Omarova's debut. Acoming-of-age film about a 15-year-old boy (played by Oldzhas Nusupbayev) growing up in Kazakhstan in the early 1990s (see poster above).

Nomad (2006), which symbolizes Kazakh-US friendship, is a product of international cooperation of the Kazakh movie industry and Hollywood, among others. The epic film is about Kazakhstan‘s18th century fight for survival against jungar invaders.

Ulzhan (2007) by Volker Schloendorff. Driven by an inexplicable force, Frenchman Charles decides to leave his homeland and head east. When his car breaks down in Kazakhstan, he decides to travel on foot. Destitute but happy, he wanders the steppes of Central Asia.

Racketeer (2007). An action blockbuster set in the post Soviet 1990s, it is a story of a young boxer who decides to carve a new path for himself by diving straight into the underbelly of Almaty‘s mafia. The film follows him as he moves up the ladder until he realizes there‘s no going back and theres a price to pay for success.

Mongol (2008) is about the incredible destiny of Gengis Khan, or to give him his true name, Temudgin. This legendary chief of the Mongolian armed forces was one of the greatest conquerors in history.

Tulpan (2008) by Sergei Dvortsevoy. After having made its service in the marines, Asa returns in the steppes to live with her sister and brother-in-law, a stockbreeder of sheep. Asa dreams of a simple life. He sets his eyes on on a wife,Marie Tulpan. But she does not want him.

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The Gift to Stalin (2008) tells the story of a Jewish boy who in the late 1940s was saved from the horrors of Stalin‘s GULAG human grinder by a humble Kazakh war veteran. The story takes place in Central Kazakhstan, where the Stalin regime was preparing to test of the first Soviet nuclear bomb. The movie is about love, human courage and tolerance.

Native Dancer (Baksi, 2008) by Gulshat Omarova. Aidai the baksy, or folk healer, uses mysterious actions to cure the sick and to give infertile couples children. As capitalist forces begin to encroach on tradition, the first casualty is any culture's most fundamental inheritance - land. The healer has to leave her land because the mob thinks the location is suitable for a filling station. A harsh battle between supernatural good and earthly evil ensues. Native Dancer evokes the mysticism of fantasy and the thrills of a gangster film.

It features Neisipkul Omarbekova, a real-life Kazakh witch doctor, in the title role.

The Strayed (2009), a psychological thriller, is about a man who goes astray on the vast steppe of Kazakhstan. Through discussions with devil, he realizes that he went astray not only physically on the road, but also in his life, as he slowly got involved with drug trafficking. The movie sends a powerful message and could be seen as educational for youth about the consequences of crossing the red lines.

Kelin (2009). Told in beautiful and poetic images without a word of dialogue, a young love struggles to survive in the face of uncontrollable external factors. Short-listed for 2009 Academy Awards Best Foreign Language Film.

Liquidator (2011) tells the story of a bodyguard who uncovers foul play in his brother‘s untimely death. Actor Vinnie Jones plays a mute assassin on assignment in Kazakhstan. Jones brings solid credentials as an on-screen thug with appearances in Guy Ritchie‘s ―Lock, Stock and Two Smoking Barrels.‖

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ARCHITECTURE Kazakhstan is full of architectural masterpieces reflecting its varied history. Southern Kazakhstan is home to a number of important Islamic buildings, including the Arystanbab Mosque (built in the 12th century) located near the ancient city of Otrar and the villages of Talapty and Kogam, the Khoja Akhmed Yasavi Mausoleum (14th century) in the city of Tuumlrkistan and the Aisha-Bibi Mausoleum (10th century) in the city of Taraz.

Many new mosques have been built since independence. In the new capital, Astana, buildings were constructed or renovated specifically for the government‘s move there in 1997. They include a modern complex in the city‘s main square that serves as the government headquarters. The cities of Kazakhstan also contain examples of Russian architecture such as the Zenkov Cathedral (built in 1904) in Almaty. The architecture of the Soviet period mostly took the form of drab, functional buildings.

Khan Shatyr ("Royal Marquee") is a giant transparent tent in Astana, the capital city of Kazakhstan. The architectural project was unveiled by the President of Kazakhstan Nursultan Nazarbayev on 9 December 2006.

The 150m-high (500 ft) tent has a 200m elliptical base covering 140,000 square meters. Underneath the tent, an area larger than 10 football stadiums, is an urban-scale internal park, shopping and entertainment venue with squares and cobbled streets, a boating river, shopping centre, minigolf and indoor beach resort. The roof is constructed from ETFE-cushions provided by Vector Foiltec suspended on a network of cables strung from a central spire. The transparent material allows sunlight through which, in conjunction with air heating and cooling systems, is designed to maintain an internal temperature between 15-30°C in the main space and 19-24°C in the retail units, while outside the temperature varies between -35 to +35°C across the year.

After the Palace of Peace and Reconciliation (2006), a giant glass pyramid in Astana, this is the second national project designed by UK architect Norman Foster (of Foster and Partners), (Partners in Charge Filo Russo and Peter Ridley), and UK engineers Buro Happold led by Mike Cook Construction documentation architects are Linea and Gultekin. The construction of the tent-city is the responsibility of the Turkish company Sembol (source: Wikipedia).

The Palace of Peace and Reconciliation (also translated as the Pyramid of Peace and Accord) is a 77 m high building in Astana, the capital of Kazakhstan. The structure was built by Sembol Construction at a cost of 8.74 billion Kazakh tenge (about $58 million) and opened in late 2006.

It was designed by the British architects Foster and Partners (lead 160

design). The Pyramid was specially constructed to host the Congress of Leaders of World and Traditional Religions. A 1,500-seat opera house is built into the lower levels, with auditorium and performance equipment design by Anne Minors Performance Consultants and acoustics by Sound Space Design (source: Wikipedia).

Bayterek (tall poplar [tree), is a monument and observation tower in Astana, the capital of Kazakhstan. A tourist attraction popular with foreign visitors and native Kazakhs alike, it is a common symbol of the city and itself in turn symbolizes Astana's new status as the capital of Kazakhstan.

The monument is meant to embody a folktale about a mythical tree of life and a magic bird of happiness: the bird, named Samruk, had laid its egg in the crevice between two branches of a poplar tree.

The 105m structure consists of a narrow cylindrical shaft emeshed in flaring white branch-like girders, widening toward the top (the "tree"), where a gold-mirrored 22m-diameter sphere (the "egg") containing the observation deck is supported.

The altitude of the deck is 97m, symbolizing the year of the capital-transfer to Astana (1997). From its height it is possible to see much of the newly built city. In addition to the observation platform, the tower contains a large aquarium and an art gallery. Astana citizens jokingly refer to Bayterek as "Chupa Chups" because of its similarity to the popular lollipop (source: Wikipedia).

The Ascension Cathedral, also known as Zenkov CathedralďźŒis a Russian Orthodox cathedral located in Panfilov Park in Almaty.

Completed in 1907, it is the second tallest wooden building in the world. It survived the 1911 earthquake with minimal damage.

After the Russian Revolution the cathedral was used to house the Central State Museum of the Kazakh Soviet Socialist Republic.

From 1930 to 1940 it was used by important public organizations.

The first radio transmitters in Almaty were situated in the cathedral's belfry.

In May 1995 control of the cathedral was returned to the Russian Orthodox Church and it was reopened for religious services in 1997. (source: Wikipedia)

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The 28 Panfilov Heroes Memorial Park. Honours the men from Kazakhstan who died on the battlefields of the 2nd World War against Nazi fascism. The monument depicts 28 soldiers of an Almaty infantry unit who died fighting off Nazi tanks in a village outside Moscow in 1941. The unit was commanded by Gen. Panfilov. There is an 'eternal flame' by the war memorial where schoolchildren put flowers on the last day of school, and newlyweds also come to have their photos taken there. (sources: Wikitravel and www.almaty-hotels.net ).

Abai Kazakh State Academic opera and ballet theatre by musical performance "Aiman-Sholpan" on libretto of Muhtar Auezov. Its success left a longlasting impact on the cultural development and soon the entire country learned of a bright a new theatre. Presently, it is the largest theatre in Eurasia. Its artistic team includes glorified stage masters and young talents, winners of the various prestigious international competitions. It world recognition and guests from all overt the world, including the US, France, Germany, Italy, Japan and China frequent the theater. It also hosts an annual international festival of opera and ballet.

Hotel Kazakhstan is a famous landmark building in Almaty and serves as a symbol of the city. It is 129.8 meters tall. The building was erected in 1970. Located in downtown, in the heart of the cultural and business center of the city, it is ideally situated for sightseeing, nightlife, banking and the city administration. It is a 20minute drive from the airport. The 26-storey quake safe construction was recently granted listed status by the National Heritage Fund.

The hotel offers excellent view of picturesque Alatau mountain.

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CUISINE Traditional Kazakh food is similar to that of the Mediterranean in its use of rice, savory seasonings, vegetables, yogurt and grilled meats. The Nomadic diet is heavy in lamb, dairy products and bread, while in the northern cities cuisine is heavily influenced by Russia. A popular dish is qazy, a horsemeat sausage served up with cold noodles, or the sweet plov, made with dried apricots, raisins and prunes. Food in large towns and cities is similar to that of any Western urban area.

SOME OF THE MOST POPULAR TRADITIONAL DISHES IN KAZAKHSTAN INCLUDE: KUYRDAK (Kazakh equivalent of haggis) Kuyrdak is served in soup-plates and covered with greens. Usually kuyrdak is served with taba-nan or fresh bread.

MANTY WITH MEAT (Turkic dumplings with organic meat) The manty are served on a plate, covered with black pepper and served. Sometimes they are put in deep bowls. Portions are typically 3-4 piecesand covered with broth.

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DOMALAK BAURSAK (delicious Kazakh-style donuts) Before serving, baursaks are laid out on a plate, covered sour cream and castor sugar.

SAMSA (traditional Kazakh pasty) Samsa is usually laid out on hot forms and sprinkled with water and then baked in an oven at 300째C for seven minutes.

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MUSIC CLASSICAL Kazakhstan is home to the Kazakh State Kurmangazy Orchestra of Folk Instruments, the Kazakh State Philharmonic Orchestra, the Kazakh National Opera and the Kazakh State Chamber Orchestra.

The folk instrument orchestra was named after Kurmangazy, a famous composer and dombra player from the 19th century. Other Kazakh composers include Tattimbet, Sougur, Almaz Serkebayev, Tles Kazhgaliev, Makhambet and Bayserke.

Marat Bissengaliev, Janiya Aubakirova and Aiman Mussakhajaeva are famous musicians who put Kazakhstan on the musical map.

TRADITIONAL Kazakh music is nomadic and rural, and is closely related to Uzbek and Kyrgyz folk forms. Traveling bards, healers and mystics called akyn are popular, and usually sing either unaccompanied or with a string instrument, especially a dombra or kobyz. Akyn performance contests are called aitys; their lyrics are often social or political, and are generally improvised, witty remarks.

Traditional Kazakh music includes ensembles using instruments like the kobyz (qobuz) or dombra, as well as kyl-kobyz, sherter, sybyzgy, saszyrnay and shankobyz; the most common instrumental traditions are called kobizovaia, sibiz-govaia, and dombrovaia. Many songs are connected to ancient mythology and folk religious beliefs (kui), while others were composed after the rise of authored works (kuishi) by early songwriters (jirau) like Mahmud Kashgari, Kaztugan, Dospanbet, Shalkiiz and Aktamberdi. The kuishi tradition is said to have peaked in the 19th century when composers like Kurmangazy and Birjan and singers like Ahan were active. In the 20th century, the first major star was the singer Mayra Shamsutdinova.

MODERN Pop music in Kazakhstan has evolved since 2000. Local record labels are signing more young musicians than ever. Talent searches such as the project Anshi Balapan and Pop Idol spinoff SuperStar KZ broadcast weekly on Kazakh TV have always been an integral part of the Kazakh pop music industry.. Popular artists include Madina Sadvaqasova, Almas Kishkenbayev, Roman Kim, Makpal Isabekova, Kayrat Tuntekov, Rakhat Turlykhanov, NN Bek, Nurlan & Murat, A-Studio, Musicola, Rin'Go, Pะตrsy, Chine Town, Billy Sexcrime, SuperStar, and Urker.

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WASHINGTON KAZAKHSTAN FESTIVAL 2010 EXPOSING KAZAKH CULTURE TO AMERICAN FRIENDS

The Smithsonian Institution, with the Embassy of the Republic of Kazakhstan, has organized the Washington Kazakhstan Festival 2010 to celebrate Kazakhstan‘s rich cultural heritage through a series of events held in locations throughout Washington, D.C, April 14 through Dec. 31. The Festival, structured around the Chokan Valikhanov online exhibition, was generously sponsored by the Chevron Corporation.

ABOUT THE VALIKHANOV ONLINE EXHIBITION Kazakhstan Explored: The Expeditions of Chokan Valikhanov www.valikhanov.si.edu Chokan Valikhanov (1835-1865) is often considered the ―father of Kazakh historiography and ethnography.‖ This new Smithsonian online exhibition begins a multi-year project to present the scientific accomplishments, along with translations of expedition records, of this great 19th-century Kazakh geographer and ethnographer.

FESTIVAL OPENING EVENT PERFORMANCES AND EXHIBITIONS The Washington Kazakhstan Festival 2010 launch event on April 14, 2010, at the Smithsonian American Art Museum‘s Robert and Arlene Kogod Courtyard, featured a range of traditional and modern performances and events, including music performances by the Kazakhstan Presidential Orchestra, the Youth Jazz Ensemble from the Kazakh National Academy of Music and Ulytau folk-rock band, exhibitions of gold and traditional crafts of Kazakhstan, and contemporary art by Kazakh-born artist Marina Sharipova (MAKE).

Throughout 2010, the Festival featured exhibitions, musical performances, a week of Kazakh cinema, lectures on Kazakhstan and much more. Please follow the Embassy of Kazakhstan website (www.kazakhembus.com) and the Smithsonian newsletters for more information.

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EDUCATION After its independence from the Soviet Union, Kazakhstan was hit by a major economic depression that cut "public financing" for education in the country. It dropped from 6% of GDP in 1991 to about 3% in 1994, before rising to 4% in 1999. Elementary- and secondary-school teachers were severly underpaid; in 1993 more than 30,000 teachers (or about 1/7 of the 1990 teaching staff) left education, many of them to seek more lucrative employment.

In 1994, Kazakhstan had 8,575 elementary and secondary schools (grades one through twelve) attended by approximately 3.2 million students, and 244 specialized secondary schools with about 222,000 students. In 1992, about 51 percent of eligible children were attending some 8,500 preschools in Kazakhstan. In 1994, some 272,100 students were enrolled in the republic's 61 institutes of higher learning. Fifty-four percent of the students were Kazakh, and 31 percent were Russian.

Kazakhstan's 1995 Constitution provides mandatory, public secondary school education. Citizens compete for institutions of higher learning. Private education is increasing in the country, with about 5% of students enrolled in the private schools, which arelargely under arbitrary state control.

Primary school Primary school in Kazakhstan starts at age 6 and runs from one to five years. Classes typically run in two sessions, from 8 a.m. until 1 p.m. and from 1 p.m. until 5 p.m., with students either going to class in the morning or in the afternoon. All primary schools are state-owned; access to primary and secondary education is a constitutionally protected right.

Primary school is provided free to all citizens and residents of Kazakhstan and parents typically only pay for extra-curricular activities such as sports or music programs. Parentssometimes pay for lab equipment or other special equipment.

Lower secondary school Students continue in lower secondary school from grade five through nine. This roughly corresponds to junior high school, or middle school, in the U.S. Typically a student in year eight is 14-15 years old. The curriculum is a general education curriculum covering subjects like literature, students‘ first language, Russian or Kazakh language (depending on the language of the school in general), history, physics, mathematics, biology, chemistry, foreign language, and so on.

Higher secondary school Once leaving lower secondary school, there are three tracks available. Students are free to choose any track of higher secondary education but are required to pursue one track. Graduates of all three tracks are eligible to enter university.

The first track is a general secondary school which covers grades 10 -11 and provides general education on a variety of subjects.

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In addition, there are two curriculum tracks for vocational education: Initial vocational education, which is provided by training schools and lycees, and secondary vocational education provided by colleges and trade schools.

Initial training schools are designed to train students in a skilled profession. The program is usually two or three years in length, (typically ages 16 – 18), but for some professional training requires a four year program. Students who graduate can go on to college for advanced vocational training or attend university. The state provides costs of education from the budget.

Colleges provide both academic general education and advanced vocational education. Colleges, if licensed, can also provide initial vocational education. Programs last for three or four years (grades 10, 12, 13). Accelerated programs exist for students who have already completed both general secondary education and initial vocational training in the same field. Graduates may go on to university or may begin working. As of the 1999 Budget Law, colleges are state-owned and selffinanced. In principle, however, all compulsory education (primary and secondary) is provided free of charge.

The curriculum for both primary and secondary school is established by the Ministry of Education, with little choice left up to the individual schools. Textbooks are sold in bookstores throughout the country and are purchased by the students themselves.

Like primary school, secondary school is subsidized by the government and parents only pay for extra-curricular activities and sometimes lab equipment or other special equipment.

Tertiary Institutions The universities, following the Russian system, focus entirely on teaching and do not engage in research. Students who are accepted to university at any level apply under a specific major, and the curriculum is set by the university (according to State legislation) for each major. For example, economics majors will all study in the same courses in the same order, separate from English majors who have a different curriculum. Some courses are required. Students may switch majors but typically classes do not transfer so students are expected to reenter in the new major as a new first year enrolee. .

The government is currently pursuing a program to adopt a credit system that would allow students to studyabroad more easily. It is also consideringexpanding the curriculum to include electives and student-chosen courses.

There are four levels of tertiary education in Kazakhstan: - Bachelors degree, which is typically a four-year degree - Specialist degree , which istypically a five-year degree and more intensive than the bachelors - Masters degree,a two-year degree, roughly corresponding to the Western masters; - Doctoral degree, which istypically a five-year program.

Universities are usually headed by a rector, appointed by the President of Kazakhstan, who wields considerable authority over the institution, approving all decisions including curriculum, personnel and admission. Kazakhstan universities are more centralized than their Western counterparts.

The top two universities in Kazakhstan are al-Farabi Kazakh National University in Almaty and Eurasian National University located in Astana. Karaganda State University is also well-regarded.

In addition, there are a few international universities such as KIMEP, which is a joint program, 40% owned by the government of Kazakhstan, but education is based on the Western system. The

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Kazakh-British Technical University and the Kazakh-American University represent joint projects between Kazakhstan and the UK and the U.S., respectively. In all three institutions, the language of instruction is English. The University of Central Asia, founded jointly by the Governments of Kazakhstan, Kyrgyzstan and Tajikistan and by the Aga Khan, is affiliated with the Aga Khan Development Network. Private universities, typically for-profit institutions, are subject to the same regulations related to curriculum but are free to set tuition and salaries as they see fit. Public universities are subject to the same regulations as other government-owned institutionsrelated to fees and salaries, administrative structure, contracting and subcontracting, and ownership of property.

State-owned universities receive funding if their enrollment reaches 86,000 students or 34%. A small number of universities are financed through a budget line in the Republic budget, such as art academies or international universities.

KAZAKHSTAN‟S EDUCATION AND TALENT ON GLOBAL MAP  85% of the population ages 5-24 years are enrolled in education  30% of citizens are involved in the system of education and science, which includes: •

4.4 million students

•

405,000 employed teachers and scientists

 4,568 preschools and 7,576 secondary schools as of Nov. 1, 2009  From 2001 to 2008, 1,776 preschool education facilities were in operation  From 2004 to 2008, 263 new schools were built, including 170 in rural areas; (Source: Ministry of Education of the Republic of Kazakhstan)  At the beginning of 2009, 143 higher educational establishments were in operation in the country, including 51 state and 92 private educational facilities. The total number of students in 2008 was 768,000, 25.2% of whom received higher professional education, 73.8% received bachelor‘s degrees, and 1.0% received higher scientific and pedagogical education;  Kazakhstan was ranked 1st in Asia by the Education for All Development Index, 2008; (Source: Asian Development Bank)  Kazakhstan ranked 1st in the world out of 129 countries, followed by Japan, Germany, UK, according to the Norway by the Education for All Development Index (EDI); (Source: Education for All Global Monitoring, Report 2009, UNESCO)  Kazakhstan ranked 10th in the world in adult literacy (ages 15 and above) with 99.6%; (Source: Human Development Report 2009, UNDP)  The Trends in International Mathematics and Science Study, TIMSS 2007: (Project by International Association for the Evaluation of Educational Achievement, directed by the TIMSS & PIRLS International Study Center at Boston College, conducted every four years among 4th and 8th grade students) •

In Mathematics (4th grade) – Kazakhstan students ranked 5th in the world;

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•

In Science achievement (4th grade) – Kazakhstan students ranked11th in the world;

 The International Mathematical Olympiad (World Championship Mathematics Olympiad for High School students held annually): • Kazakh students team ranked 27th out of 104 teams at the 2009 Olympiad held in Germany; • The International Mathematical Olympiad of 2010 will be held in Astana, Kazakhstan.

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BOLASHAK (FUTURE) SCHOLARSHIP Reformation of the educational system by opening it up to the world knowledge and experience, scientific and technological achievements by training highly qualified professionals with the best managerial skills always helps to transform the society into a progressive and democratic one. Post World War II Japan, Turkey, Hong Kong are just some of the convincing historical examples of economically and politically viable states that have benefited from having advanced educational systems .

The leadership of the newly formed Republic of Kazakhstan recognized that in 1991 when it was faced with economic turmoil, social inefficiency and a legacy of environmental disasters left by the Soviet Union. With a huge stockpile of nuclear weapons, the leadership of Kazakhstan had a choice: empowerment through force and dictatorship, or prosperity through disarmament and democracy.

Kazakhstan President Nursultan Nazarbayev chose the latter, and today Kazakhstan is emerging as a player in the global economy, and an advocate of regional and world stability.

In 1993, Kazakhstan was the first Central Asian country to launch a presidential scholarship program "Bolashak" for international study. "Bolashak," which means "The Future" in Kazakh, peaks to the importance Kazakhstan puts on educating itsyouth at the best universities of the world.

The Decree of President of Nazarbayev on Nov. 9, 1993, says:"In Kazakhstan's transition toward a market economy and the expansion of international contacts, there is an acute need for cadres with advanced western education, and so, it is now necessary to send the most qualified youth to study in leading educational institutions in foreign countries."

The program is designed to train future leaders in business, international relations, law, science, engineering and other key fields. Upon completion of their programs, scholarship recipients return to Kazakhstan to perform government service for a period of five years.

The rigorous criteria for Bolashak scholars and the highly competitive nature of the selection process assure that only the best students, who represent Kazakhstan's most promising young leaders, are selected. The Bolashak program is fully funded by the Government of Kazakhstan and overseen by the Ministry of Education and Science.

This program is a top priority of President Nazarbayev' s as he looks to develop and modernize the country and move toward a full democracy . That is why it is not an accident that most Kazakhstan students are sent to be trained in the United States. "We are learning from the positive example of American democracy", President Nazarbayev says.. There was a clear understanding that the Kazakhstan nascent democracy would not be sustained without a strong educaton system. Currently, 50 "Bolashak" Scholars are successfully studying at leading U.S. universities and have proven to be excellent students and representatives of Kazakhstan.

Since 1994, hundreds of Kazakhstan students have successfully completed their Bachelor's and Master's degrees under the Bolashak Scholarship program at the best Western universities; more than 400 students are graduates of the leading U.S. universities includingas Harvard, Massachusetts Institute of Technology, Columbia, Duke, Georgetown, Emory, Carnegie Mellon, Indiana University, Vanderbilt and many others.

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NAZARBAYEV UNIVERSITY VISION To create a prestigious, highly regarded international university in the capital city of Kazakhstan employing the best local and foreign professors to develop the intellectual scientific, technical and engineering elite of the country MISSION Contributing to Astana goal of becoming the center of science, education and culture in Eurasia.

Advancing the science and educational system of Kazakhstan to international standards.

By the decision of the President of the Republic of Kazakhstan the New University of Astana will carry the name "Nazarbayev University."

History of the University ―The New University is a very important national project that will have global systematic effect on development of our country and will benefit all the citizens of our country.

The New University will be positioned to become the national brand by harmoniously combining national identity, best international model of education, science and research practice.

The international partners will assist the New University in developing degree programs and developing a quality assessment system of teaching.

Specialties taught at New University are determined by the priorities of the Kazakh economy. The University will prepare the best technical and engineering specialists for the industries already developed in Kazakhstan. A range of programs will prepare research specialists in new fields such as genetics, biochemistry and biophysics. We should have clear understanding of career development of each student for that.‖ From the speech of President Nazarbayev at the session of the Committee on Science and Research Politics in Kazakhstan. Sept. 4.

The strategy for the University development 2010-2012 was approved on October 17, 2009 at the first meeting of Board of Directors of JCS ―New University of Astana‖ chaired by Prime Minister of Republic of Kazakhstan K. Masimov The academic and research policy of the University presumes that each school within the University will have an international academic partner among the leading universities in the world with strong research, clinical and industrial base. This will allow Kazakhstan to integrate education, research, and industries and help to achieve the objectives for the development of the country.

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Realization of the ―New University of Astana‖ project will give young Kazakhs the opportunity to receive a superior education.. The highest standards apply to programs, academic staff, facilities and equipment, methods of teaching and level of research activities. ―Three research centers will be created within the ―New University of Astana‖ project.

Center of Life Sciences will undertake joint research projects with leading world research centers in the transplantation of organs, artificial heart and lungs, stem cells and age prevention medicine.

Center for Alternative Energy will focus on issues of renewable energy, physics and techniques of high energies.

International Instrumentation Center will be an engineering center, laboratory base and constructor bureau.‖ From the Address of President Nazarbayev to the nation. ―New decade –new economic growth – new opportunities of Kazakhstan‖ Jan. 29, 2010.

Strategic goals The goals for the University are: Formation of a new generation of professionals capable of creating and developing new trends in science and technology Create a model of integration of education, research and industry promote sustainable development of national economy and support knowledge-based economic diversification Build a culture of global awareness through an international curriculum and cooperative relationships with world institutions of higher education Create modern technological infrastructure to provide collaborative learning environment Deliver joint research projects with world-class universities scientific research centers Develop and maintain a strong professional community among faculty and enhance local capacity of teaching professionals Enhance the national and global prestige of the University Management Board of Directors is presided over by the Prime Minister whose members are national government and business leaders. It is responsible for long-term and strategic planning and overall development of the project. It supports and reviews the performance of the Executive Body and approves annual budgets. Members of the Board of Directors are appointed by the Government Decree.

International Advisory Council The International Advisory Council (IAC) provides advisory support work. The IAC is composed of widely-respected scholars, researchers and academic leaders in addition to leaders from the public and private sector. Members of the Council will be selected on the basis of their leadership skills, expertise and experience in scientific, technical, business and academic domains. The Council will work on issues related to educational and research services provided at the initial stage, as well as other issues concerning the activities of the university.

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Faculty members Employment of faculty members will be determined by a joint hiring process with our partner university and the New University of Astana. The best national and international researchers will be invited to work at the university, where they will be provided with all necessary conditions for their creative activity.

There was a signing of cooperation agreement of the New University of Astana and University College London (UCL). The Foundation program is scheduled to begin in September 2010. More than 50 teachers of University College London will be delivering classes for our Foundation program at the university.

Finance Effective financial policies will provide stability for the university and will help the New University meet its future objectives. In the long-term, the financing of the university will be provided from the following sources: Financing the research and development by the state and industrial customer (specialized ministries and national companies) Investment income from the endowment fund Tuition payment Non-governmental and international organizations‘ scholarships for fundamental research Donor assistance from the private sector, including the university alumni Additional services payment, which is provided for other organizations Partners The New University of Astana cooperates with several leading universities globally ranked in the top 30 universities of the world.

Students will have the opportunity to study abroad at the university of our academic partner for one semester and up to 2 years in some of our programs.

The agreements on the development strategy of the New University of Astana were signed with the following partners: UCL (University College London) to set up the Foundation Program – first year of the undergraduate programs (basic education) PHMI (Partners Harvard Medical International Inc.) to set up the Medical School Duke University to set up the Graduate School of Business iCarnegie to set up the School of Natural Sciences University of Wisconsin-Madison to set up the School of Social Sciences and Humanities UPMC (University of Pittsburgh Medical Хenter) to set up the Center of Life Sciences UPenn (University of Pennsylvania) to set up the Center for Education Policy Infrastructure The architectural design of the New University is very modern and uses the latest in Information Techonologies (IT). A significant feature is that all educational buildings are connected by common axial atrium with internal passages, which creates the architectural unity of the complex. The service of the laboratories and other buildings will be done through a round road surrounding the entire building.

The New University building will come into operation in several stages.

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University Campus

Nine buildings are connected by a single atrium

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TOURISM The Republic of Kazakhstan pays special attention to the development its of tourism.

Kazakhstan has signed tourism agreements with Turkey, Iran, Xinjang Uigur Autonomous Area of China, Moldova, Hungary, the State of Israel, Kyrghyzstan and Egypt. In 1993, the Republic of Kazakhstan became a full member of the World Tourism Organization.

The agency that is in charge of state management of the tourism industry is the Ministry of Sports and Tourism. There is a Law ―On Tourism‖ enacted in 1992.

It embraces virtually all types of tourism and specifies legal, economic, social and organizational fundamentals of tourism activities. As a matter of fact, Kazakhstan provides for all varieties of tourism - cognitive, , ethnic, ecological, rehabilitative, youth-oriented; they also include entertainment and athletics such as hunting, equestrian activities.

There are more than 700 travel routes around the territory of Kazakhstan.

The Republic of Kazakhstan is well-known for its unique natural and geographic diversity.

South-Kazakhstan (Almaty, Jambyl, South-Kazakhstan and Kyzylorda regions) is an area rich with history and culture, featurefamous medieval monuments and mausoleums such as Aisha-Bibi, Karakhan, Babadzha-Khatun in Taraz and an architectural ensemble of Khodja Akhmet Yasavi in Turkestan. Other unique sights includeScythian burial mounds in Semirechje (Almaty region). It is also home to the world-famous space-vehicle launching site Baikonyr. The region also offers opportunities for recreation, rehabilitation, hunting, skiing and skating.

West Kazakhstan (Aktobe, Atyrau, Mangystau regions) sits at the crossroads of the European and Asian continents in the basin of the Caspian Sea, the Volga and the Ural. It is the location of the world‘s second deepest depression - Kargije lies 132 m below sea level. The area is rich good for hunting, angling andwater sports. It is also home to the monuments of ancient Mangyshlak and Ustyurt.

North Kazakhstan (Kostanay, North-Kazakhstan and Pavlodar regions). Everything here - landscape, climatic conditions favors recreation.

It features the health resorts of Kokshetau, Bayan-aul, Muyaldy and natural preserves of Kurgaldzhino and Naurzum

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Central Kazakhstan (Karagandy region) is home to one of the largest lakes of the world - the lake of Balkhash. The area features various archaeological and ethnographic relics.

East Kazakhstan is represented by the Altai and its wooded foothills, the river of Irtysh and such lakes as Zaisan, Markakol, Alakol, Sauskan. Its Semipalatinsk region is the birthplace of the great Kazakh poet Abay Kunanbaev and writer Mukhtar Auezov.

EXCITING OUTDOOR ACTIVITIES IN KAZAKHSTAN Spas: Kazakhstan has a wide range of spas offering various treatments. There are 98 sanatoria holiday hotels and 115 preventative medicine sanatoria. Many are also located in areas that feature sports, cultural events and historical and archaeological sites.. The most internationally renowned resorts include Sari Agach (in the south), Mujaldi (in the Pavlodar region), Arasan-Kapal (in the Taldikorgan region), Jani-Kurgan (in the Kzil-Orda region), Kokshetau and Zerenda (in the Kokshetau region) and those located in Zaili Alatau.

Zaili Alatau Moutains: The 4000m-high (1310ft) Zaili Alatau Mountains near Almaty offer numerous opportunities for sports and recreation. The Medeo ice rink is situated 15km outside the city in a stunning gorge. It attracts walkers and climbers in summer and skiiers in the winter.

The Tian Shan Mountains: Tian Shan, or "Heavenly Mountains," in the southeast of Kazakhstan, stretch for more than 1500km (932 miles). The highest peaks are Pobeda Peak (7439m/24,406ft) and Khan-Tengri Peak (7010m/23,000ft), a snow-white, marble-like pyramid. The huge Inylchek Glacier, spanning almost 60km (37 miles) in length, splits the summits and at its center lies the beautiful Mertzbakher Lake. The Kolsai Lakes are three blue mountain lakes, known as the ―pearls of the northern Tien-Shan,‖ that lie within the ridges of the Kungei Alatau range at heights of up to 2700m above sea level. The Khan-Tengri International Mountaineering Camp offers experienced mountain guides to take visitors on organized climbing and trekking programs. Horseback riding is also available.

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SAMPLE ROUTES OFFERED TO TOURISTS IN KAZAKHSTAN Explore the nature of South Kazakhstan

Mangystau Safari

This area is home to the Talass Alatau, southern steppes and lakes and sandy and clay deserts.

Visitors can enjoy 1 to 16day programs including an intensive program that features Aksu Canyon and Kishi Kaiyndy, the western Tien Shan and Karatau Mountains, Mashat, Sairamsu, steppe lakes and deserts. .

In addition to the Mangyshlak Peninsula, the Mangystau Region occupies a significant part of the Usturt Plateau and the southern Caspian Depression – Buzachi Peninsula. It is home to more than 16 million hectares of natural deserts and semi-deserts. There are several landscape zones here:

Aksu-Zhabagly National Park: Aksu River Canyon:a 500m deep tectonic fault that spans 700-800m across.

Kishi Kaiyndy Tract: an area featuring a largeforest, flowers and beautiful landscapes.

Steppe Lakes Bilikol Lake: a lake home to herons, bitterns, black and white storks, sandpipers, terns, gulls and many nearwater sparrow birds (rush bird, penduline tits, pipits and wagtails) Taskol and Darbaza Lakes: typical Central Asian lakes.

Mashat Gorge A favorite recreational area; a holy place for Kazakhs.

Madantal River Valley This vast valley features a full-flowing mountain river. The backdrop is a mountain range of 4,000-meters-high snow peaks. Alpine meadows and longtailed marmot colonies are can also be found there.

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Caspian shoreline with many canyons and ravines Karatau Mountain Range Chalk and limestone chinks (breaks) and residual mountains Sand massifs Clay and solonetzic dry lake floors and depressions, including Karakiya Depression – second deepest in the world Vegetation is rare here. The Mangyshlak Peninsula is a good area to study sedimentary rocks.

The Caspian Sea borders the Mangyshlak Peninsula from three sides. Here one can observe a slight increase in humidity in summer.The hottest period is between midJuly to mid-August. The autumn frost begins in late October and the spring frost ends in early April.

The Mangyshlak and Usturt snow cover is minimal (3 to 7 cm).. Humidity in the area is 40 percent to 60 percent.

AIR ASTANA Air Astana (airline code ―KC‖), the fast growing national carrier of Kazakhstan, began participation in the U.S. Airlines Reporting Corporation (ARC) in late July 2007. By joining, , all 22,100 ARC accredited travel agents across America can issue Air Astana tickets between the U.S. and Kazakhstan and beyond.

Air Astana, while not yet offering flights to the U.S. , has an extensive network of air services through its partner airlines – allowing it to offer service through cities such as New York, Washington, Los Angeles, Denver, Minneapolis, Chicago, Detroit, Atlanta, and Miami. This network connects the Air Astana hubs of Almaty, Astana, and Atyrau through numerous European, Asian and Middle-Eastern gateways, including London Heathrow, Amsterdam, Frankfurt, Hanover, Moscow, Bangkok, Seoul, Beijing, Delhi and Dubai.

Air Astana has extensive reciprocal ticketing agreements, allowing you to combine its services with more than 70 of the world‘s airlines, including Lufthansa, KLM Royal Dutch Airlines, Northwest Airlines, United Airlines, Virgin Atlantic, Asiana Airlines and Aeroflot.

The Air Astana fleet consists of 18 aircraft including Boeing 767s, Boeing 757s, Airbus A320s, Airbus A321 and Fokker-50 aircraft. Air Astana has plans to increase its fleet size to a total of 34 aircraft by 2014.

The average age of Air Astana‘s jet fleet is only six (6) years.

Air Astana Office Opens in New Jersey Air Astana recently opened an office in Jersey City, New Jersey to support travel agents and passengers.

Air Astana 285 West Side Avenue, Suite 277-278 Jersey City New Jersey 07305 USA Toll free: 888 855 1557 Email: usa.sales@airastana.com usa.reservations@airastana.com

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Air Astana Call Centres Astana: Almaty: Aktau: Aktobe: Atyrau: Karaganda: Kostanay: Kyzyl-Orda: Uralsk: Oskemen: Pavlodar: Shymkent:

+ 7 7172 210764 + 7 7272 703094 + 7 (7292) 511 565 + 7 (7132) 548 501 + 7 (7122) 255 340 + 7 7212 561208 + 7 7142 546875 + 7 72422 70392 + 7 (7112) 515 151, 507 079, 515 044 + 7 7232 243233 + 7 7182 320091 + 7 7252 549861

New Jersey: Amsterdam: Moscow: Dubai: Beijing: Germany: Bangkok: Seoul: London: Delhi: Frankfurt: Hanover: Istanbul:

1-866-8888-164 + 31-20 44 66 354 + 7 (495) 980 71 84/85 + 971 4 316 6572 + (8610) 646 510 30 + 06105-206022 + 66-2-251-4700 + 82-2-3788-0170\1\2 + 44 (01293) 596622 + 91-11 515 214 25 + 49-6105 20 60 22 + 49-511 977 2476 + 90-212 343 49 60

Air Astana Reservation and Ticketing Offices in Kazakhstan c\o OtrarAvia, General Sales Agents for Air Astana

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Astana

Aktau

9, Republic Ave., Astana, Kazakhstan Tel.: +7 (7172) 210 764, 210 765, 210 771 Fax: +7 (7172) 216 742 e-mail: otrartravel@mail.ru

39-A, Micro District 8, Aktau, Kazakhstan Tel.: +7 (7292) 512 767 e-mail: klmgsasco@nursat.kz Aktobe

Almaty 73, Gogol Str., Otrar hotel, Almaty, Kazakhstan Tel.: +7 (7272) 588 202, 58 206 Fax: +7 (7272) 588 215 e-mail: avia@group.kz http://www.group.kz Almaty International Airport Tel.: +7 (7272) 572 707, +7 701 318 0331

46, Abulkhair Khan Avenue, Nurdaulet Business Centre, Aktobe, Kazakhstan Tel.: +7 (7132) 548 503 Tel.\Fax: +7 (7132) 548 501 e-mail: otrar_aktobe@mail.kz Atyrau 2, Abay Str., Atyrau, Kazakhstan Tel.: +7 (7122) 255 345 Tel/Fax: +7 (7122) 255 340 e-mail: otrar_atyrau@nursat.kz

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MAJOR CITIES ASTANA – THE NEW CAPITAL FOR THE NEW MILLENNIUM Astana, the capital of Kazakhstan, is developing at an impressive clip: 1,700 cranes are in operation on 650 separate sites in a city which just a decade ago, had a population of only 280,000. Today it is home to about 700,000 residents.

Construction projects in Astana total KZT 1.5 trillion – dwarfing that being spent in Dubai, Brasilia and Canberra. All the new projects bear the mark of President Nazarbayev.

In 1994, the president decided the capital of Kazakhstan would be moved here from Almaty. In 1997, the city‘s name – briefly Akmola and before that Tselinograd - was changed to Astana — which means ―capital.‖ On the right bank of the city is the building site of Khan Shatyry – a spectacular and unique, fullyfunctioning indoor city for 10,000 people designed by Norman Foster (celebrated for Beijing‘s new airport and the transformation of the Reichstag). This immense structure – an area larger than ten football stadiums – will feature schools, hospitals, shops, sports and concert halls. Vehicle use will be prohibited; individuals can travel throughout the complex via its canals. . The upper floor of Khan Shatyry will feature a jungle, a beach and a body of water.

Foremost among the completed large-scale buildings is the Baiterek Tower or ―Tree of Life.‖ It stands midway down the length of a 1.5 km-long boulevard lined with flowerbeds, sculptures and fountains. Large buildings line either side of this thoroughfare: a national archive resembling a giant egg, a pair of 30-story cones in gold mirror glass and a trio of towers. The Baiterek Tower was completed in 2002. It is 97m high (a figure that reflects the year in which Astana became the capital). The Kazakhs have dubbed it ―The Big Chupa Chups‖ for its resemblance to a lollipop. A lift ascends to an observation deck with a platform that supports a triangular gold ingot featuring President Nazarbayev‘s handprint . The tower has become a symbol of Kazakhstan much like the Eiffel Tower in France.

In 1998, President Nazarbayev envisaged a permanent structure to house the Congress of World Religions (which takes place triennially in Astana). There was a site directly opposite the presidential palace- and a timeframe it had to be ready by 2006. The President had been thinking about the form that this ―Palace of Peace & Accord‖ should take. He decided a pyramid would be suitable and contacted Norman Foster to design it. The pyramid, 62m wide 62m long, includes 1,500-seat auditorium that functions as a performing arts venue. Blue and yellow light permeates the cathedrallike interior of the pyramid. On level six there is ahanging garden and a wide oculus. It also features stained glass windows by Brian Clarke.Nearly 2,000 workers and the Kazakh army constructed the building.

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In 2009, several new buildings were unveiled in Astana: a new bridge across the Ishim River, an outpatient medical facility, four monuments, a housing complex for veterans and senior citizens.

A number of overpasses and roads were also completed.

An additional two bridges are under construction, as well as 22 schools, a medical cluster, a 3,500-seat concert hall by the Italian architect Manfredi Nicoletti and a 3km-long Green Water Boulevard. Groundbreaking ceremonies were held to celebrate the start of construction onthe Nokian tires plant and theNissan and General Electric assembly facilities.

Also recently constructed were a light rail line (with a line to the airport). Landscaping work is also underway to make Astana greener: 400 hectares will be transformed into parks and squares and 40,000 hectares of forest have already been planted around the city..

Japanese architect Kisho Kurokauwa designed much of the city plan, carrying out President Nazarbayev‘s vision. ―Our plans for Astana are grand‖ the president said. ―The heart of the nation beats here. And I believe that the greater part of the city will be completed by 2012.‖

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New Horizons in Kazakhstan Christopher Robbins, Lonely Planet Magazine, in association with InArts & Architecture Photographs Eric Lafforgue March 17, 2011 ‗I hate this city, I hate this city, I hate this city!‘ For the first six months after moving to Astana – Kazakhstan‘s spanking new capital built by presidential decree in the middle of the country‘s vast empty steppe – Akmaral Aidarbekova complained bitterly about the place on a daily basis. The pavements were unfinished, forcing pedestrians to wade through deep puddles of melting snow, and there was nowhere to go and nothing to do. The weather was extreme too, with bitterly cold winters that dropped to -40°C and baking hot summers that soared to over 40°C. A young, single woman in her midtwenties working as a lawyer in the Ministry of Finance, Akmaral had been obliged to relocate north from the old capital Almaty, like thousands of other government employees. ‗I was not happy to come here,‘ she says. ‗I arrived on Valentine‘s Day in 2000 and it was so windy, I was nearly knocked over. And it was so cold. February is the month of the buran – snow blizzards which last for two or three days. I was worried that the whole winter was going to be the same.‘ The decision to make Astana the capital was taken in July 1994, and the move began three years later. As Peter the Great built St Petersburg on a swamp and Philip II of Spain turned a dusty village into Madrid, so Nursultan Nazarbayev, the president of Kazakhstan, decreed that a rundown steppe town bang in the middle of nowhere should be transformed into the nation‘s capital. The city chosen for the world‘s greatest architectural makeover had previously been in long decline, inhabited largely by a Russian population of impoverished agricultural workers. Its concrete tower blocks were crumbling, the peasant housing like slums, and the infrastructure chronically rundown.

Not to put too fine a point on it, the place was an absolute dump.

Suddenly, tens of thousands of government employees had to move north as various ministries transferred sections of their operation to the city over a period of two years. No capital has ever been relocated in such a short time. The president explained the rationale by saying that Almaty had grown from a manageable population of 400,000 to 1.5 million, and had simply run out of space to expand. The city‘s mountains, while providing a beautiful backdrop to the old capital, helped to trap pollution. On top of this, Almaty was prone to earthquakes. Geographically, the old capital was in the extreme southeast corner of the country, near the border with China, and cut off from the rest of the republic. The rich oil fields of the Caspian Sea lay over 1,800 miles to the west, while there were unstable neighbours less than a couple of miles to the south. Astana, on the other hand, was perfectly placed in the very centre of the country.

But even the president, when planting a tree in the early days of the city, conceded: ‗It is windy up here, isn‘t it? It certainly is windy.‘ Later, he would try to put a patriotic spin on the new capital‘s harsh climate: ‗This is normal weather for this place. It is the weather of our native land and of our forefathers.‘ ‗It took me about three years to change my mind about Astana as the city changed around me,‘ says Akmaral. She married and moved into a modern apartment. ‗Now it feels like a real city, with cafés and restaurants and parks, with lots of things to do,‘ she says. ‗I don‘t even mind the winter now – it‘s cold but also dry, and there are beautiful sunny days.‘

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‗I didn‘t mind coming here,‘ says Akmaral‘s husband Maghzhan – known to his Western friends as Mac. ‗I felt very good about being at the beginning of something, involved in building a new capital for my young country. It felt like being part of the future rather than the past.

Astana‘s architectural style can best be described as idiosyncratic.

The variety is a dizzying mix of clashing shapes and colours, yet is oddly suited to a nation made up of 100 ethnic groups following at least 30 different religions. The oriental post-modernism takes some getting used to, although the locals have domesticated all the thrusting modernity by giving many of the buildings homely nicknames according to their shape: a canary-yellow skyscraper is known as the Banana Building; seven squat cylindrical constructions are called the Seven Beer Barrels; and a pair of circular towers are the Ice Cream Cones. The Cigarette Lighter was socalled before it suffered an alarming fire. Inevitably, such an ambitious building project has had its failures: one building is known as the Titanic after a huge crack appeared in its foundations; another, threatened by a crumbling riverbank, has been dubbed the Kursk after the ill-fated Russian submarine.

The Ministry of Finance building gives the impression of a dollar sign, while the sweeping curves of the new stadium look, well, sporty. The National Archives are housed in a grey-green egg, the circus in a flying saucer, and there are now massive, California-style shopping malls, 24-hour supermarkets and numerous cafés and restaurants. But so far, no McDonald‘s or Starbucks. ‗We‘ll survive,‘ says Mac. New religious buildings stand among government ministries and banks – a spectacular mosque donated by Qatar; a big blue synagogue paid for by a Jewish Russian Orthodox cathedral built by public subscription. The miracle is that everything has been built in little over a decade.

In the centre of the city stands Baiterek Tower, a tall, spiky construction that cradles a glass and aluminium ball at its top. It‘s the symbol of Astana and independent Kazakhstan, people take its lift up 97 symbolic metres – 1997 being the date of the move to the capital – to the dome for a clear view over city and steppe in every direction. Once at the top, it‘s customary to approach the green malachite plinth that sits in its centre, upon which rests a disc made from five kilograms of solid silver bearing an imprint of the president‘s hand crafted from two kilograms of solid gold. Visitors then place their own hand in the president‘s palm before making a wish.

On my visit I am led to the plinth by a guide and dutifully place my hand in that of the president – and almost jump out of my skin. Before I can wish, and as I make contact with the presidential palm, the tower is filled with a roaring choir backed by a mighty orchestra belting out the national anthem at full patriotic throttle.

There is a panoramic view of the city from the tower and, in the distance, the vast wedding cake of domes and pillars of the Presidential Palace. The palace is a place of work and not a residence, designed to impress with its ostentation and size. Its interior, hung with crystal chandeliers the size of small buildings, has the proportions of a city square. Small armies parade there in winter when ceremonial occasions cannot be held outside.

Beyond the palace, a gigantic pyramid – the Pyramid of Peace – can be seen. Sixty metres high, it was designed by British architect Lord Foster and contains a 1,500-seat opera house. Another unique creation of Foster‘s is the giant, futuristic yurt known as Khan Shatyr – the Khan‘s Tent – which contains palm trees, beaches and even an artificial sea, allowing people to enjoy tropical conditions inside while blizzards rage outdoors.

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I‘d not visited Astana for four years and, having returned, I find the change simply astounding. The last time I was in the city I found it impressive but without soul. Now everything has changed. Astana has developed a personality. Not only has the skyline altered beyond recognition, but the place is alive. There is a buzz about it, an energy reflecting its youthful population. Astana has become human.

The average age in the city is 34, and young women from all over Kazakhstan flock here looking for husbands because of the army of single men working in its numerous ministries.

Construction continues apace, and there are so many new cultural centres, museums and stadia – football, bicycle and ice-skating – popping up, that even the official guides can sometimes become confused: ‗I‘m sorry – this is the National Museum and you wanted to see the President‘s Museum. Perhaps you would also like to see the Palace of Independence?‘ One of the more immutable disadvantages of Astana is that it is a long way from anywhere. It‘s like living on a remote island – there is a reason the steppe is referred to as a sea of grass.

In a country the size of Western Europe, distances are enormous.

People in the city resign themselves to three-hour drives to reach the closest resort areas.

Some 106 miles to the southeast is a network of salt lakes that are home in spring and summer to vast flocks of pink flamingos. Korgalzhyn State Nature Reserve, covering 915 square miles, is a bird-watcher‘s dream and a candidate as a Unesco World Heritage Site. But the most popular weekend location for Astana residents wishing to escape their city is Burabay National Park, an area of lakes, hills and forest billed as ‗the pearl of Kazakhstan‘ or even ‗Kazakhstan‘s Switzerland‘. Only steppe dwellers would consider its low granite hills to be Alpine; despite its undoubted beauty, it more resembles Finland‘s lakes and forests.

Mac and I set off on a Saturday morning for an overnight stay. As we leave the city limits, we drive through a wide girdle of forest, planted as a green belt designed to be both a lung and a windbreak. Stunted by wind, frozen earth and long winters, the forest has grown considerably slower than Astana itself. Beyond the green belt there is only the empty steppe. ‗Up here on the steppe you see natural phenomena you don‘t see anywhere else,‘ says Mac. ‗I‘ve seen a rainbow at a temperature of -35°C, which was absolutely beautiful. And it‘s big sky country, too – so you can see black clouds in one part of the sky and brilliant sunshine in another.‘ We buy beer and delicious smoked fish in a shop on the way to the park, then drive to a comfortable hotel that retains elements of a Soviet sanatorium – a course of leeches is on offer. It‘s the end of the season and almost no-one is around the lakes or forests, except for old ladies searching for mushrooms. Coloured ribbons have been tied in profusion to trees in certain ‗sacred‘ groves – shamanistic rather than religious – by wedding parties.

There are a number of lakes in the national park, but Burabay is the most beautiful. Surrounded by birch forest, its waters lap a strip of sandy shore. There are various inlets where visitors can rent a rowing boat or hire an oarsman to take them to the mysterious rock known as Zhumbaktas stone. A legend surrounds it, and it is said to resemble a beautiful woman from one angle and an old hag from another. I can‘t see it myself. But then neither can I make out the elephant, warrior and shoe that other outcrops are said to resemble. Zhumbaktas stone is covered in graffiti, dating back to 186

1905. My favourite is from 1949 and signed: ‗Nadia: Thank God for those husbands who send their wives alone for a vacation.‘ As we enter Astana on the drive back from Burabay, Mac remarks on all the young families out for an afternoon stroll. In the winter they go skating on the river and drill holes in the ice for fishing, while elaborate ice sculptures decorate the streets. ‗When I first came here, I barely saw any prams on the streets,‘ he says. ‗In a year, I started to see prams. And after two years, the whole embankment along the river was full of prams.‘ And two of them belonged to Mac and his wife Akmaral, who now have a couple of young sons. Back in the city, Akmaral cooks dinner for us while the boys wander in and out of the kitchen. It‘s a settled, happy domestic scene. ‗This is a young city built for young families, for a younger generation,‘ says Akmaral. ‗It‘s a city designed for family life, which is very important for Kazakhs. All the colleagues I came here with have now married and had children – they have become adults and personalities in this city.

Astana has become their home. And it has become my home.‘ The old complaints have been resolved. Akmaral no longer yearns to return to Almaty, and has no desire to move. ‗I have changed completely, one hundred per cent – I am very happy here,‘ she says.

Like its young population, Astana has finally come of age.

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ALMATY - FINANCIAL AND CULTURAL HUB Almaty, formerly known as Alma-Ata and Verniy, is the largest city in Kazakhstan with a population of nearly 1.5 million people. Thatrepresents nearly10 percent of Kazakh population..

Almaty was the capital of Kazakhstan from 1929 to 1998. Despite losing its status as the capital, Almaty remains the major commercial center of Kazakhstan.

The name Almaty comes from the Kazakh word apple (алма), and thus is often translated as "full of apples.‖ About 46 percent of Almaty‘s population is Kazakh but it is a diverse city:, 30 percent are Russian, 11 percent are Uyghur, 2 percent areTatar, 2 percent are Korean, 1 percent are Ukrainian and 1 percent are German.

HISTORY During the 10th and 9th centuries B.C., in the Bronze Age, farmers and cattle-breeders settled on the territory of Almaty. During the Saka period (from 7 B.C. to the beginning of the Common Era), the Saka tribes and later Uisun tribes inhabited the territory north of the Tian Shan mountains. Numerous burial tumuli and ancient settlements remain, including giant burial mounds of Saka tsars. The most famous archaeological finds are the Golden Man from the Issyk burial mound (a replica of the Golden Man crowns the Independence Monument on the central square of Almaty and another replica sits in front of the chancery of the Embassy of Kazakhstan in Washington), Zhalauly treasure, Kargaly diadem, Zhetysu arts bronze (boilers, lamps and alters). During the period of Saka and Uisun governance, Almaty became an important education center.

During the Middle Ages (8th–10th centuries) Almaty experienced its cultural development; a number of towns and cities developed on the territory. Between the 10th – 14th centuries, settlements became part of the trade routes of the Silk Road. Almaty became one of the trade, craft and agricultural hubs along the Silk Road.

The 15th through 18th centuries were marked by very important political events. It was a period of ethnic and political transformation. The battled Dzungar intervention forced a battle for freedom among Kazakhs seeking to protect their land and preserve independence.

In 1730, Kazakhs defeated the Dzungar 188

in the Anyrakay mountains, 70km northwest of Almaty.

On Feb. 4,1854, the Kazakhstan began work on the the Russian Fort Verniy near the Zailiysky Alatau mountain range (between Bolshaya and Malaya Almatinka rivers). The construction of the Verniy Fort was almost finished by autumn 1854. It was a fenced pentagon and one of its sides was built along the Malaya Almatinka.

In 1856, Russian peasants. founded the Bolshaya Almatinskaya Stanitsa (Cossack village) near the fort. The inflow of immigrants increased and led to the construction of the Malaya Almatinskaya Stanitsa and Tatarskaya (Tashkentskaya) sloboda. Tatar mechants and craftsmen settled there. In 1867 the Verniy Fort became a town called Almatinsk. However, its residentsrejected the name and settled on Verniy instead.

According to the first city plan, the city‘s southern border was 2 km in length and its western border spanned 3 km. At 4 a.m. on n May 28, 1887, an earthquake almost totally destroyed Verniy.

In 1921, the city‘s representative of government convened to change Verniy‘s name to Alma-Ata. In 1926, the Council of Labor & Defense approved the construction of the Turkestan-Siberia Railway, which was a crucial to Kazakhstan‘s development, specifically in the east and southeast. On March 2, 1927, the Central Executive Committee of the Kazakh Republic decided to transfer the capital from KyzylOrda to Alma-Ata. In 1930, the construction of the highway and railway to the Alma-Ata station was complete.

The Alma-Ata airport also opened in 1930; it allowedpeople to travel between Alma-Ata and Moscow. Alma-Ata became Kazakhstan‘s major hub for air transportation.. In 1936, the Architecture & Planning Bureau put in place plans to develop AlmaAta as the new cultural capital of Kazakhstan.

Between 1966 to 1971, 1.4 million square meters of public and cooperative housing were built. The focus was on constructing earthquake-proof, multi-storied buildings. Schools, hospitals, cultural and entertainment facilities - including Lenin‘s Palace, the Kazakhstan Hotel and the sport complex Medeo - were constructed during this period. The Medeu Dam, designed to protect the city of Almaty and the Medeo skating rink from catastrophic mudflows, was built in 1966.

The aircraft Tupolev Tu-144 went into service on Dec. 26 1975, flying mail and freight between Moscow and Alma-Ata. Passenger service between the cities began in November, 1977.

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The underground Almaty Metro project got underway in 1981. In 1991, Kazakhstan celebrated its independence from Russia.

In1993, the government decided to rename Alma-Ata to Almaty.

In 1997, President Nazarbayev approved the Decree to transfer the capital from Almaty to Astana.

On July 1, 1998, a law was passed designating Almaty as a scientific, cultural, historical, financial and industrial center.

ALMATY TODAY The 2030 General Plan of Almaty was developed in 1998. The main objective of the plan is to promote Almaty‘s image as a garden city. It also calls for the construction of multi-storied buildings , reorganization of its industrial territories, an improvement in the transportion infrastructure and the launching of the Almaty Metro. Almaty has developed an important regional financial centre RFCA. An aerial tramway line connects downtown Almaty with a popular recreation area on the top of Kцk Tцbe (Green Hill), a mountain just to the southeast. The city television tower, Alma-Ata Tower, is located on this hill, as well as a variety of attractions and restaurants.

According to the city's Department of Natural Resources & Resource Use Management, the city today has 125 fountains. Among them is the "Oriental Calendar" Fountain, which features 12 sculpturesrepresenting the 12 animals of the Kazakh 12-year animal cycle (similar to its Chinese counterpart).

Almaty is a university town – with the Almaty Institute of Power Engineering & Telecommunications, Kazakh-British Technical University, Kazakh National Technical University (KazNTU), Al-Farabi Kazakh National University (KazUU), Suleyman Demirel University (SDU), Kimep (Kazakhstan Institute of Management, Economics, & Strategic Research), Kazakh-American University (KAU), Kazakh Academy of Sciences, Almaty State University (named after Abay), Turan University, Kazakhstan University of International (Almaty Subway, to be unveiled soon) Relations & Languages, Central Asian University – all laying claim to providing international standards of eduction to students from across Kazakhstan and beyond (recently Kazakhstan was designated No. 1. in Central Asia for its education standards).

Almaty won the bid to host the 2011 Winter Asian Games and the city is working on future bids, including the 2018 Winter Olympics.

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RECOMMENDED PUBLICATIONS ON KAZAKHSTAN Odyssey Kazakhstan: “Nomadic Routes from Caspian to Altai” by Dagmar Schreiber. A guide to the Central Asian nation, with essays on history, culture, architecture and nature.

(ISBN: 978-962-217-789-5, $24.95, www.amazon.com).

Hedonist's Guide to Almaty and Astana by Lucy Kelaart and Summer Coish.

Whether it's sipping vodka cocktails in Almaty's lounge bars, admiring Astana's architecture, visiting the churches and mosques or venturing into the countryside to ski or explore the dramatic steppe, this guide explores Kazakhstan's and explores Soviet past and its independent present. (ISBN: 978-I-905428-21-2, $18.95, http://www.hg2.com/stores/Almaty-and-Astana).

Apples Are from Kazakhstan: The Land that Disappeared by Christopher Robbins. ―Robbins‘s travelogue enthusiastically and infectiously blends history, observation, and mini biographies … A captivating read notable for off-the-cuff candor and measured, eloquent prose.‖ — Kirkus Reviews (starred review).

(ISBN: 978-0-9777433-8-4, $17.47, www.amazon.com).

Kazakhstan (Bradt Travel Guide) by HE Paul Brummel, UK Ambassador to Kazakhstan. Located between Russia and China, the state of Kazakhstan is incredibly diverse and naturally beautiful. This guide includes information about visiting natural parks and reserves as well as features on the singing sand dunes and the Sharyn Canyon - Asia's equivalent of the Grand Canyon. (ISBN-10: 1841622346, $19.70, www.amazon.com).

Nazarbayev and the Making of Kazakhstan by Jonathan Aitken. ―Acclaimed biographer Jonathan Aitken tells the unknown story, sparkling with human and historical detail, of how the most brutally oppressed of the Soviet republics is being transformed by its first President, Nursultan Nazarbayev, into a modern, exotic and oil rich nation state of key strategic importance in the 21st century‖ (ISBN-978-1-44115-381-4, $34.95, www.amazon.com).

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Kazakhstan‟s Foreign Ministry Publishes Kazakhstan at Twenty: Fulfilling the Promise ―In 2001, a book by Martha Brill Olcott, Kazakhstan: Unfulfilled Promise, caused quite a stir as many people, myself including, were in disagreement with her. Today, ten productive and intensive years later, those same people have even more justification to state the case for Kazakhstan‘s progress towards fully grown market economy and participatory democracy. Yet, we in Kazakhstan are fully aware that we are not there yet, so to speak, and that much work remains to be done. Hence the title of the book, and I hope Dr. Olcott wouldn‘t mind our little wordplay,‖ Roman Vassilenko, Chairman of the Committee for International Information of Kazakhstan‘s Foreign Ministry said. (http://portal.mfa.kz/portal/page/portal/mfa/en/content/news/nws2011/2011-04-18).

Green Desert: the Life and Poetry of Olzhas Suleimenov is the first comprehensive translation of Olzhas Suleimenov's poetry in English. It provides a concise overview of the poet‘s rich literary heritage and serves as an introduction to the contemporary literature of Kazakhstan and Eurasia. The book is edited by Dr. Rafis Abazov, who is adjunct associate professor at Hunter College and Columbia University (New York).

The books are widely available (ISBN 978-1-60927-757-4, $46.95, http://www.cognella.com/titles/Green-Desert/).

Islam without a Veil: Kazakshtan‟s path of modernization.

Kazakhstan has proven that a mostly Muslim nation can be active on the international scene. Its leaders have worked fervently to bridge the ugly schism that has developed since the 9/11 attacks.

How has Kazakhstan been able to maintain its Muslim heritage yet remain on track toward modernization?

Claude Salhani examines the successful phenomenon of Kazakhstan today. He looks at the progress it has attained in just two decades since independence. While there is no doubt as to the Muslim identity of the country, Kazakhstan is living proof that there can be a ―kinder, gentler‖ mode of Islam, in which one can live at peace with oneself and with one‘s neighbors, despite their differences (ISBN 1597977314, $23.96, http://www.potomacbooksinc.com/Books/BookDetail.aspx?productID=279024).

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DID YOU KNOW THAT …

Kazakhstan is the world‘s ninth largest country with an area of 2.7 million square kilometers, roughly five times the size of France, four times the size of Texas, and more than 100 times the size of Israel.

Kazakhstan is a truly Eurasian country, and while the most of the country lies in Asia, 5 percent of its territory, roughly the size of Greece, is located in Europe.

Apples, tulips, and horses were first domesticated by the man on the territory of modern day Kazakhstan.

Astana is unique because it is a capital city right in the middle of the Eurasian continent.

Kazakhstan is home to the Baikonur space center – home to the first sputnik launch. It was also the site for the launch of the first cosmonaut (astronaut) Yuri Gagarin into space on April 12, 1961.

Kazakhstan‘s Altai Mountains and Mount Belukha are considered to be the homeland of Magic Shambala, the mystical Buddhist paradise.

Kazakhstan borders the Caspian Sea, which is the world‘s largest inland sea, famous for its caviar.

Kazakhstan is home to the Karagiye Depression at the Mangyshlak Peninsula islocated 132 meters below sea level, the second lowest point in the world after the Dead Sea. Recent Archeological excavations give rise to speculation that Kazakhstan is also homeland of the Amazons, the female warriors described 2,500 years ago by Greek historian Herodotus.

*** The Republic of Kazakhstan: has about 3% of the world‘s raw materials and natural resource base of over $300,000 per capita (among the highest in the world, twice the level of Russia, higher than Australia). has oil reserves per capita which are five times as high as in Russia and higher than in Iran. has tripled its oil production since 1990. more than tripled its gas production from 12 billion mі in 2000 to 39 billion mі in 193

2009. mined around 25 percent of the world‘s uranium in 2009, making it the world‘s largest producer. produced 20 million tons of grain in 2009, which made it the sixth largest producer and the seventh largest exporter of grain worldwide. has 4 % of the world‘s iron reserves. has 8 % of the world‘s zinc reserves. has 4 % of the world‘s total chrome reserves, accounting for 15 percent of global production. saw $50 billion of FDI over 1998-2008, as compares to the 43 billion invested in Russia (around $130 billion of FDI from 1993 to date). per capita GDP has grown twelve-fold since independence exceeding $ 10 thousand in 2010 (Malaysia – $ 8,423; Romania - $ 7,542; Bulgaria - $ 6,334; Thailand $4,992). has made major strides in the last coule of years in the in the Transparency International ratings, moving 30 places up the ranks. the country ranks well above Italy on ease of doing business, according to the latest study by the World Bank (Kazakhstan – 59, Italy – 80, Russia – 123, Ukraine – 145). ***

In addition, according to Britain-based Legatum Institute: - Kazakhstan is 42nd in education - Kazakhstan is 16th for the average workers acquiring secondary education - Kazakhstan is 8th for the number of doctors, nurses and hospital beds available per capita - 97% of the population has access to adequate sanitation systems.

Literacy rate is 99.7 percent.

Kazakhstan is a ―melting pot‖: more than 130 ethnic groups live in the country more than 40 religions are practiced, Sunni Islam and Orthodox Christianity being the prevailing ones.

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