Astana Calling#290

Astana Calling

ISSUE No 290 FRIDAY, 08 FEBRUARY 2013 WWW.MFA.KZ A WEEKLY ONLINE PUBLICATION OF THE MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF KAZAKHSTAN

Economic Development of Kazakhstan Review of progress on Kazakhstan 2050 priorities

12th OIC Summit Convenes in Cairo Foreign Minister Idrissov leads Kazakh delegation

President Nazarbayev visits Spain Partnership agreement signed with Airbus Military

Government Reviews Renewable Energy Progress 12 renewable projects planned for 2013

Foreign Minister Addresses Munich Security Conference Focus on South-Eastern Europe and the Caucasus

Also in the News

President Nazarbayev meeting with senior officials to discuss Kazakhstan’s economic development

Economic Development of Kazakhstan On February 4, President Nazarbayev chaired a special meeting of Government to discuss the economic development of Kazakhstan, with particular focus on three areas: the banking sector, pension reform and the oil and gas industry.

The meeting reviewed progress on implementation of tasks outlined in the national strategy “Kazakhstan 2050”.

Participants included Prime Minister Serik Akhmetov, Head of the Presidential Administration Karim Massimov, Deputy Prime Minister Kairat Kelimbetov, Deputy Head of the Presidential Administration Bakhyt Sultanov, President of the Samruk-Kazyna National Fund and Minister of Oil and Gas Sauat Mynbayev, and Chief Executive of the National Fund Umirzak Shukeyev.

The Kazakhstan 2050 strategy aims to elevate Kazakhstan to the ranks of the 30 most developed economies in the world by 2050.

Setting out the strategy for the nation last December, President Nazarbayev stressed that the fundamental approach remained “Economy first, then politics” and that ongoing political reform would therefore be dependent on sustained economic development.

Accordingly, Kazakhstan 2050 sets out clear and detailed steps for economic development, based on the overarching principle of “universal economic pragmatism”, according to which all decisions must be both in harmony with the long term goals of Kazakhstan and based on the criteria of profitability, competitiveness and return on investment.

In the banking sector, President Nazarbayev said at this week’s meeting that Kazakh banks have taken a range of measures to cut foreign debt and that this process must be continued. The President ordered the sale of state stakes in BTA Bank, Alliance Bank and Temirbank during 2013. The three banks restructured about USD 20 billion in debt after the global financial crisis hit in 2009, using their share of the USD 10 billion in financial aid which was allocated over several years from the National Fund. Last December, BTA restructured its debt for the second time and the National Fund has been considering a merger of Temirbank and Alliance Bank.

The oil and gas industries have been the powerhouse of the Kazakh economy since independence, driving average annual GDP growth of 7.6% since 1999 and accounting for 26% of GDP in 2011. Oil and gas revenues have been channelled into the National Fund reserves, which the Kazakhstan 2050 strategy recommends should be built up and maintained as a support for social stability and a protection against future economic and financial crises. The strategy also highlights the need for the state to effectively manage its assets and to invest in new industries and technologies and stimulate private companies to engage in research and innovation, in order to drive economic growth across a diverse range of sectors.

The President recently announced that the private pension funds of Kazakhstan will be merged and a portion of their assets invested in economic growth. The dual aim is to ensure increased transparency and accountability of pension fund management, and to eliminate the need to tap National Fund reserves to fund economic growth. At December 31 2012 the reported combined assets of ten private and one state-run pension funds amounted to KZT 3 trillion (USD 21 billion), while the National Fund reserves amounted to KZT 8 trillion (USD 57.8 billion).

Global energy supply and the exhaustion of natural resources are two of the ten key global challenges in the 21st century, outlined

by President Nazarbayev as the context for Kazakhstan 2050. The strategy sets out a new system for strategic management of the natural resources of Kazakhstan. The pace of extraction and delivery to world markets of hydrocarbons and minerals must be accelerated, enabling Kazakhstan to accumulate resources to provide against a collapse in commodity prices, a technology-driven change in commodity consumption, or a new global financial crisis.

The Kazakh oil and gas sector is tasked with building on the modern, efficient industry base which has been constructed over the last two decades, to ensure that it continues to act as a fundamental support to economic growth across all sectors. Continued diversification of export markets and international strategic partnerships remain key elements of the strategy, while another is the lifting of the moratorium on issuing new mineral exploration licenses, so that investors can develop Kazakhstan’s abundant untapped reserves.

At this week’s meeting, the President said that it was necessary to define further measures to address the pressing issues in the oil and gas sector.

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Spanish Prime Minister Mariano Rajoy receives President Nazarbayev

President Nazarbayev visits Spain President Nazarbayev made a working visit to Spain this week. Meeting with King Juan Carlos I, he discussed bilateral cooperation in the area of culture, tourism and international politics. The President awarded the King the Order of Altyn Kyran (Golden Eagle), the highest honor of Kazakhstan, for his special contribution to the strengthening and development of relations between Kazakhstan and Spain.

On February 6, President Nazarbayev met with the Spanish Prime Minister, Mariano Rajoy Brey. They discussed a wide range of questions concerning bilateral trade, economic and investment cooperation and also exchanged views on current international issues.

The President also met with representatives of a number of Spanish corporations, including the CEO of the passenger trains manufacturer Patentes TALGO to discuss joint development and manufacturing of trains. He also met with the head of Airbus Military, Domingo Urena Raso, to discuss further cooperation. The meeting led to the signing of a partnership agreement between the national company Kazakhstan Engineering and Airbus Military.

President Nazarbayev also met with the heads of other leading Spanish companies to discuss cooperation in the production of explosive systems for civilian use in the construction and mining industry, and in the construction of infrastructure.

Spain and Kazakhstan established diplomatic relations in 1992. To date, Spain is one of Kazakhstan’s key strategic European partners and has become the second European country with which Kazakhstan signed an agreement on strategic partnership. In addition, Spain is the first EU member state with which Kazakhstan signed several agreements on cooperation in the area of crime.

Commercial and economic ties between the two countries are intensifying. Kazakhstan’s main exports to Spain are oil and its derivatives, base metal products, hard metal and lead. Imports from Spain include equipment for the industrial, agricultural and medical sectors, vehicles and chemical products. To date, a number of small and medium-sized businesses with Spanish capital are registered in Kazakhstan and large Spanish corporations are successfully operating in Kazakhstan.

A Spanish-Kazakh intergovernmental commission for economic and industrial cooperation has been set up and the Spanish-Kazakh Business Council seeks to promote interaction between Kazakh and Spanish businesspeople.

The bilateral relationship is one of mutual understanding and trust and the two countries’ positions on important international political issues are closely aligned. Spain considers Kazakhstan to be a stabilizing factor in Central Asia and a role model for religious and ethnic tolerance. It fully supports Kazakhstan’s economic and democratic reforms. The special partnership between the two countries can be seen in the dynamics and contents of the meetings at the highest level. Official visits at the highest level have taken place since 1994 and the heads of state are in regular contact.

Spain has consistently supported Kazakhstan’s bid to become an OECD member and has also provided assistance to Kazakhstan in all areas of its OECD membership application.

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Prime Minister Akhmetov chairing a government meeting on renewable energy policy

Government Reviews Renewable Energy Progress On February 5 the Government met to discuss progress on development of the renewable energy sector in Kazakhstan.

The Kazakhstan 2050 national strategy plan sets as an objective the generation of over half of the country’s total energy consumption from alternative and renewable energy sources by 2050, while Kazakhstan is also gearing up to host the “Future Energy” themed EXPO-2017 in Astana, ensuring strong momentum in developing the renewables sector.

The renewable energy plan for 2013-2020 targets the generation of 1,040 MW of renewable energy annually, from a total of 13 wind farms, 14 hydroelectric stations and four solar stations to be constructed over the period.

Deputy Prime Minister Asset Issekeshev told Tuesday’s meeting that over the course of 2013, Kazakhstan will implement 12 renewable energy projects, among them two hydrocarbon plants in the southern region of Almaty, two hydropower plants in Zhambyl, a solar plant in Kapchagay and a wind farm.

It was also announced that responsibility for renewable energy projects will move to the Ministry of Environmental Protection, from the Ministry of Industry and New Technologies which has until now overseen such projects. Minister for Environment Protection Nurlan Kapparov said that bringing the renewable energy projects under the aegis of his ministry is a logical step and in line with current practice in Germany.

Renewable energy is a key area of focus of the “Future Energy” development plan for 2013-2017, which will ensure that Kazakhstan is fully prepared to host EXPO-2017. The intention is for Astana to showcase the latest global developments in renewable energy and become a hub for developing alternative energy solutions across Central Asia.

A dedicated EXPO-2017 Assistance Fund is already up and running, with the dual remit to support research into future energy and to train professionals from developing countries at Nazarbayev University in the development and introduction of renewable energies.

The Future Energy theme for the EXPO was a natural choice for Kazakhstan, reflecting its commitment to developing a green economy and promoting international cooperation on sustainable energy. Kazakhstan’s global “Green Bridge” initiative, endorsed at the Rio+20 conference in 2012, aims to bring together governments, international organizations and private business to fund transnational solutions for sustainable growth. The Kazakhstan 2050 national strategy launched last December envisages the creation of an international “Green Bridge” organization in 2013 and a “Green4” project based in four satellite cities around Almaty.

“We must develop the production of alternative energy sources, actively seeking to introduce technologies using solar and wind power. By 2050 alternative and renewable energy sources must account for at least half our country’s total energy consumption” Kazakhstan 2050 strategy document

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Foreign Minister Idrissov at the OIC Summit in Cairo

12th OIC Summit Convenes in Cairo A delegation from Kazakhstan, led by Foreign Miniser Erlan Idrissov, took part in the 12th summit of the 57-member Organisation of Islamic Cooperation (OIC) which opened on February 6 in Egypt’s capital, Cairo.

The summit was attended by 26 heads of state and government representatives from countries including Iran, Indonesia, Malaysia, Nigeria, Pakistan, Saudi Arabia and Turkey, who discussed the full range of issues and challenges facing the Islamic world.

Minister Idrissov presented a report and held bilateral meetings with OIC Secretary General, Ekmeleddin Ihsanoglu and with colleagues from other OIC member states.

In a central working session on “New Challenges and Opportunities of the Islamic World”, delegates discussed conflicts in countries within the Muslim world and how to cooperate in overcoming the severe humanitarian consequences, as well as ways of advancing multi-faceted cooperation among OIC member states, within the framework of the 10-year Program of Action which covers the period to 2015.

The current conflicts in Mali and Syria were a particular focus, while delegates also discussed ongoing threats to regional security in Afghanistan, Sudan, Yemen and other OIC member countries. At the opening of a meeting of Foreign Ministers which preceded the Summit, Secretary General Ihsanoglu reiterated the OIC’s solidarity with Mali and support of its efforts to preserve its sovereignty on all its territory. The OIC leaders called for a negotiated end to Syria’s prolonged civil war. The Palestinian issue was also highlighted by the Secretary General, who called for the adoption of a clear strategy in support of the Palestinian claim.

Mr Ihsanoglu warned against the growing phenomenon of extremism and violence in a wide region of the Muslim world. Stressing the importance of solidarity at this critical time for the Muslim community, he called on member states to work together to eradicate extremism, reminding them of the commitment to moderation under the OIC charter and Plan of Action.

The Summit also addressed the problem of Islamophobia and ways to overcome it globally. Participants examined the idea of greater participation by the OIC in intercultural and interreligious dialogue within the context of developing cooperation with the UN initiative “Alliance of Civilizations”.

Addressing the current and future role of the OIC, the Secretary General said that it has become an active participant in international discussions and an important player on Islamic issues, and expressed the belief that with greater support from member states, the OIC could assume an even more important role and add to its already considerable achievements.

Strengthening the capacity of the OIC was one of the three key priorities for the future defined by Kazakhstan at the close of its 20112012 Chairmanship of the OIC Council of Foreign Ministers; the others were working towards regional stability and gradual political modernization. Kazakhstan remains an active advocate of OIC efforts to maintain a bold and purposeful agenda reflecting new priorities, while further strengthening its international role both through its own initiatives and interaction with organizations such as the G20, the EU, the OSCE and the Shanghai Cooperation Organization.

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Foreign Minister Idrissov speaks at the Munich Security Conference

Foreign Minister Addresses Munich Security Conference At the Munich Security Conference on February 2, Foreign Minister Erlan Idrissov addressed the panel session on “Security and Stability in South-Eastern Europe and the Caucasus”. The Minister highlighted the strategic importance of the region and its position on key transit routes between East and West, and pledged Kazakhstan’s ongoing support in strengthening regional stability and trade.

The Munich Security Conference was established in 1963 as an independent forum to debate worldwide security policy. Each year, it brings together leading figures from around the world to engage in intensive debate on current and future security challenges.

Among this year’s speakers were US Vice President Joe Biden, European Commission Vice President and High Representative for Foreign Affairs and Security Policy Baroness Catherine Ashton, and Germany’s Foreign Minister Guido Westerwelle.

Mr Idrissov recalled that it was at the OSCE Summit hosted

by Astana in 2010 that heads of state and government agreed to work together to achieve a Euro-Atlantic and Eurasian security community, based on common interests and values and integrated with the global security community. However, the realization of this community depends on stability in South-Eastern Europe and the Caucasus, which occupies a pivotal position between the two halves of the European continent; instability in these countries could instead drive a wedge between the EuroAtlantic and Eurasian areas, the Minister said.

“Kazakhstan embraces the vision of a Euro-Atlantic and Eurasian security community because we see ourselves as the pivot between Europe and Asia. We look East and West and have a multi-vector foreign policy. As Herman Hesse said: “In the wisdom of East and West we do not see hostile, conflicting forces, but the poles by which life swings in between”.

Foreign Minister Erlan Idrissov

Kazakhstan, which is situated in a similarly pivotal position between Europe and Asia, and has accordingly developed a foreign policy embracing strong relationships with both, has a ready understanding of the geostrategic significance of South-Eastern Europe and the Caucasus; this is why Kazakhstan has worked to promote greater cooperation and the resolution of conflicts in the region, notably during its 2010 OSCE Chairmanship.

But the Minister pointed out that the development of infrastructure and transportation corridors to facilitate trade across the region is of equal importance. Acknowledging that Kazakhstan, as the world’s largest landlocked country, naturally has a vested interest in opening up access and transportation routes for its goods and energy resources, he emphasized that developing infrastructure, logistics and trade in the countries of South-Eastern Europe and the Caucasus will promote regional and global security, as well as enabling the countries of this region to turn to their advantage their position between Europe and Asia.

Minister Idrissov highlighted the successful implementation by Kazakhstan of its “Road to Europe” program, which has resulted in the European Union becoming the country’s largest trade and investment partner; and to the strong economic ties which Kazakhstan has successfully fostered with both Russia and China, which have facilitated the movement of goods, services, capital and people between Europe and Asia. He emphasized that security and economic issues are closely intertwined and said that all countries must work together to promote security, trade and cooperation.

Minister Idrissov also addressed the current situation in Afghanistan, Iran and Central Asia. In April, Kazakhstan will host the next Conference of Ministers of the Istanbul Process, which seeks to achieve security and stability in Afghanistan. He reiterated Kazakhstan’s commitment to a peaceful and diplomatic settlement of the situation concerning Iran’s nuclear program and said that Kazakhstan is ready to facilitate dialogue between all interested parties.

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Also in The News…

• President Nazarbayev began a working visit to Moscow on February 7. He met with President Putin to discuss a wide range of issues related to economic and trade relations as well as co-operation in the Common Economic Zone and the Eurasian Economic Union. (akorda.kz) • Kazakhstan’s Ministry of Foreign Affairs has announced that the next round of talk on Iran’s nuclear program will take place in Almaty on February 26. This follows the decision by representatives of Iran and the six international mediators on Iran’s nuclear programme (China, France, Germany, Russia, UK, US) agreed to hold another round of talks. (bnews.kz) • The Vatican is a strategic partner of Kazakhstan, Kairat Mami, Head of the Secretariat of the Congress of Leaders of World and Traditional Religions, said after meeting with Cardinal Jean-Louis Tauran, President of the Pontifical Council for Interreligious Dialogue. Kazakhstan and the Vatican recently marked 20 years of diplomatic relations. (nur.kz) • Deputy Prime Minister, Kairat Kelimbetov, has given details of the establishment of a single national pension fund that will be managed by the National Bank. The investing of pension assets will be guided by the principles of diversification, security and moderate income growth. (bnews.kz) • Ernst & Young have noted the success of Kazakhstan’s system of tax administration. Peter Reinhardt, Tax and Law Leader, said that progress was being made in Kazakhstan, notably through electronic filing of tax returns and other innovative processes. (tengrinews.kz) • Kazakhstan’s Minister of Culture and Information has said that La Scala and the Mariinsky Theater will come on tour to Astana’s National Opera and Ballet Theater. (bnews.kz) • The young Italian singer Son Pascal has released a new song and video in Kazakh with an accompaniment played on the traditional Kazakh instrument, the dombra. Pascal is learning Kazakh and currently organizing a tour across Kazakhstan, from Semey to Aktau. He launched his debut album in Italy in 2008 and started his music career in Kazakhstan after winning the A-Tunes competition in 2011. (bnews.kz) • Kazakhstan’s national Ice Hockey team beat Austria 4:1 in Vienna on February 3. The teams were level at 1:1 after the first period with Maksim Belyaev scoring twice in the second period. (bnews.kz) • Kazakhstan won a bronze medal at the World Bandy Championships for the fourth time following the team’s 6:3 win over Finland in the third place play-off. (Bandy is a form of ice hockey played with a ball instead of a puck.) This was the second time Kazakhstan had faced Finland in the tournament as they had already beaten them 8:4 during the group stage. (newskaz.ru) • The Kazakhstan national judo team has won two silver medals at the European Judo Championships held in Georgia. The two Kazakhstani finalists, Eldos Smetov (60kg class) and Ertugan Torenov (73kg class) lost to competitors from Japan and Israel. (sports.kz) • Kazakhstan’s football team beat Moldova 3:1 in a friendly played in Turkey on February 6. Kazakhstan wet 2:0 up before conceding a goal. At one stage it looked as if Moldova might salvage a draw but Kazakhstan scored again shortly before the final whistle to seal the victory. (tengrinews.kz)

ASTANA CALLING is a weekly online publication of the Ministry of Foreign Affairs of the Republic of Kazakhstan Please send your requests and questions to pressa@mfa.kz

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