AstanaCalling #302

ASTANA CALLING

Ministry of Foreign Affairs Republic of Kazakhstan

Central Communications Service for the President of Kazakhstan

A WEEKLY ONLINE PUBLICATION / WWW.MFA.GOV.KZ ISSUE NO 302 / FRIDAY, MAY 3 2013

Kazakhstan Celebrates Day of National Unity President joins in the celebrations in Astana

United Nations Examines Desertification in Kazakhstan UN special envoy visits Kazakhstan

Government Prepares Second Stage of Industrialization Program Encouraging progress made

Upper House Debates Pension Reform Minister calls for approval of new pension fund

News from the Government in Brief

“Apples are from Kazakhstan” Christopher Robbins remembered

Also in the News

President Nazarbayev and Prime Minister Akhmetov enjoy the celebrations of the Day of National Unity

Kazakhstan Celebrates Day of National Unity On May 1, Kazakhstan celebrated the Day of the Unity of the Peoples of Kazakhstan, a day for strengthening the ties which bind together all the different nationalities and all the different ethnic groups and confessions in Kazakhstan.

President Nazarbayev joined the festivities on the central square in the capital, Astana, to celebrate the national holiday. He strolled among the crowds and visited the ten tents which had been set up on the square, each one housing representatives of two or three of Kazakhstan’s different ethnic groups and cultures. Dressed in their national costumes, the people displayed examples of folk-art, musical instruments, and traditional items for the home or which showed off the skills of their craftsmen. The President also attended a grand concert, where over one thousand dancers, musicians and singers provided entertainment.

May 1 has long been a holiday in Kazakhstan. In Soviet and immediate post-Soviet times it was marked as Labor Day. But in the autumn of 1995 at the suggestion of President Nazarbayev it was decided to switch the focus of the holiday to make it a celebration of Kazakhstan’s multi-ethnic and multi-confessional make-up.

Astana is a shining example of the cosmopolitan nature of Kazakhstan society. In the capital alone there live representatives of over 100 different ethnic groups. There are 28 ethno-cultural associations in operation, and 11 Sunday schools catering for 568 students of different nationalities.

In addressing the crowds in Astana, President Nazarbayev spoke of the value of “unity”. “Unity has been treasured throughout mankind’s history,” he said. “Thanks to unity, states and nations have risen to great heights, life has got better, mankind has developed. In the years of independence, Kazakhstan has lived as a united family. Thanks to this, we have already reached the heights, we have created a successful state, we have improved people’s lives and we have made our country known all over the world. We have one Motherland, one fate and one land.”

In other parts of Kazakhstan the holiday was marked in particular ways. In Pavlodar Region two new ethno-cultural associations were created in honor of the day: for the Romanian and Georgian minorities living there. There are now 21 ethnic associations in the Region. And in the centre of Pavlodar itself, a “Friendship Wreath”, three meters in diameter, was displayed on the central square, where representatives attached ribbons and flowers.

The South Kazakhstan Region prides itself on being the most multi-national region of Kazakhstan. In the capital, Shymkent, an exhibition was held of the different ethnic groups of the South Kazakhstan Region. There was also a festival on the city’s main square, where crowds were entertained by songs in a multitude of languages: Kazakh, Russian, Mordovian, Ukrainian, Korean and Uzbek.

“All the aspirations of our people are as one. They have one ultimate goal: to make the state strong and the people happy, so that they can look into their own future and that of their children with confidence.”

President Nazarbayev

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Minister for Industry and New Technologies, Asset Issekeshev, addressing government on April 30

Government Prepares Second Stage of Industrialization Program The Minister for Industry and New Technologies, Asset Issekeshev, reported to the government this week on the progress of the first five years of the Program for the Rapid Development of Industry and Innovation in Kazakhstan; and talked about preparations for the next five-year period.

Mr Issekeshev spoke about positive and negative sides of the work so far carried out, the aim of which is by the year 2020 to ensure that Kazakhstan’s industry is competitive on the world stage; and to encourage the continuing growth of innovation in the country.

The Minister pointed to one very encouraging fact: for the first time in Kazakhstan’s post-Soviet history industry – and not simply natural resources – has contributed to the growth of the country’s GDP. In 2012, Kazakhstan’s GDP grew by 5%; 1.3% of this is thanks to new production which has been brought about by the industrialization program. In the three completed years the program has been running, 2010-2012, 537 new industrial projects have been implemented.

Over this period, 57,000 new jobs have been created.

In addition, significant improvements in the volume of Kazakhstan’s exports can be seen as a direct result of the industrialization program. Overall exports rose last year by 5.3% compared to the previous year, totalling over USD92 billion. Of this, the export of processed goods accounted for USD25.5 billion and of finished goods, USD4.2 billion. Finished goods from Kazakhstan could be found on the market in 111 countries around the world.

The Minister reported that much is being done under the Development Program to improve the investment climate in Kazakhstan, bringing the standards up to those demanded by the Organization for Economic Co-operation and Development (OECD). In an aside, the Minister pointed out that from 1993 to 2012 over USD171 billion had been invested in the country. Currently, Kazakhstan is working with 413 investors from 88 countries on a total of 228 investment projects.

However, as Mr Issekeshev pointed out, some serious problems still remain with the industrial development program. Some of those enterprises which have started up under the terms of the plan have yet to achieve their potential, which raises doubts about whether they can fulfil their objectives within the first five years of the plan. The Minister identified 19 projects in particular which are working under their capabilities.

The Prime Minister, Serik Akhmetov, picked up on this point, and instructed the relevant state bodies as well as the mayors of the regions concerned (as well as the cities of Almaty and Astana) to pay serious attention to this issue and carry out close monitoring of progress. He said that some projects have already had to close down, which was a waste of the investment that had been made. The Prime Minister insisted that there must be greater control of individual projects; as he put it, “Without control over the way in which these projects are carried out you will never get a quality finish”.

The Prime Minister went on to emphasize that a key sector for development in the next phase of the program was transport infrastructure. And he questioned why he was constantly hearing the phrase, “the state should”. Progress will be much more effective, he said, if employers, technicians, managers and the state all work together.

“The draft of the second five-year part of the program is a very important document when you take into account the huge changes on world markets and the President’s instructions for creating clusters in the economy.

All this is being taken into account as we work on the draft of the new part of the program.”

Minister for Industry and New Technologies, Asset Issekeshev ASTANA CALLING / ISSUE 302 / 3

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Upper House Debates Pension Reform Deputy Prime Minister Kairat Kelimbetov left members of the upper house of the parliament of Kazakhstan in no doubt as to the urgency of reforming the pension system. He wants a Unified Pension Fund to be in operation on July 1 this year.

The pensions bill has already been passed in its current form by the lower house, the Majilis. It has three basic aims: the creation of a Unified Pension Fund; the introduction of compulsory pension contributions from employers of workers engaged in dangerous or physically difficult labour; and a single pension age for women.

“We must put in place the legal basis as soon as possible, so that from July 1 we can transfer people’s savings into a Unified Pension Fund. There are a lot of legal matters to be sorted out with private pension funds,” the Minister told the senators. Another matter which Mr Kelimbetov believes gives an added urgency to the passing of the bill is the question of pension payments from employers to workers in dangerous areas of production. “It is important,” the Deputy Prime Minister said, “that we pass this law in the first half of this year.”

Mr Kelimbetov went on to talk about the government’s responsibility to the people for ensuring that their pensions are safe. And once again he urged senators to acquaint themselves thoroughly with the terms of the bill. The Minister acknowledged that reforms will not be easy, and may even be painful.

But, he added, these reforms are essential. Senators should understand, too, that the members of the lower house have already debated the bill at length.

Deputy Prime Minister Kairat Kelimbetov

The pensions bill provoked a great deal of discussion, with senators asking many questions and raising a number of criticisms and suggestions for improvements. The next stage is that the bill will be discussed in the permanent committees of the Senate, before being returned for a plenary session of the upper house on May 16.

At the end of 2012, combined pension savings accumulated by ten private and one state-run Kazakh pension funds were worth KZT3.177 trillion (USD20.7 billion), according to central bank data. The state-run pension fund, GNPF, accounted for 19.3 percent of the sum.

Kazakhstan launched its pension reform in 1998 giving its citizens the opportunity to accumulate savings for their future pensions in funds of their choice.

Minister for Labor and Social Protection, Serik Abdenov, addresses journalists after the Senate meeting.

“I ask you to acquaint yourselves thoroughly with the terms of this bill.

I think that we all understand that there has already been a great deal of discussion.

We want to receive the senators’ approval.”

Deputy Prime Minister, Kairat Kelimbetov

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Executive Secretary of UN Convention to Combat Desertification, Luc Gnacadja

United Nations Examines Desertification in Kazakhstan The Executive Secretary of the United Nations Convention to Combat Desertification, Luc Gnacadja, visited Kazakhstan this week to discuss how the problem of desertification affects Kazakhstan and what measures are already being taken to deal with it. Although the Convention was established in Paris in 1994 primarily with Africa in mind, it has particular relevance also for Kazakhstan, where two-thirds of the territory of the country is affected to a greater or lesser degree by the problem.

The UN Convention to Combat Desertification came into force in December 1996. It has been ratified by 195 countries.

Kazakhstan was one of the first to sign up to the Convention, at its inauguration in 1994, and the government of the country ratified the Convention in 1997.

The aim of the Convention is to combat the growth of deserts and address the consequences of drought. This frequently requires a country to adopt new approaches to coping with ecological issues. It can be difficult for a country to tackle these problems on its own; hence the UN can help countries to share their experiences.

Since ratifying the Convention, the government of Kazakhstan has passed a number of measures aimed at protecting the country’s natural resources. Laws have been passed to protect the soil, water, forests and the country’s ecology. The first phase of a project to preserve the Aral Sea has been completed. The Aral Sea shrank drastically in the Soviet period, leaving vast dry areas of salt and dust. Now, the northern part has been increased once again to a depth of 42 meters, and much of the biological variety of the Sea, including the flora and the fauna, has been restored. Some of the negative effects on the surrounding area have been reversed, and the socio-economic situation around the Sea has been improved.

It is now planned to create a National Center to Combat Desertification. The idea is that non-governmental organizations, international organizations, local communities and business will play a role in the Center. It is hoped that this Center will then become a part of a wider Central Asian Center to Combat Desertification. Kazakhstan will feature in the UN’s 10-year Strategic Plan on the Convention to Combat Desertification. This also ties in with Kazakhstan’s plans to create a “green” economy.

In 1994, the UN General Assembly declared June 17 the World Day to Combat Desertification and Drought to promote public awareness of the issue, and announced the implementation of the United Nations Convention to Combat Desertification (UNCCD) in those countries experiencing serious drought and/or desertification.

“Through bold political decisions and with the knowledge now available, we do have the means to successfully address desertification, land degradation and drought. Through this process, hunger, poverty and famine can become history. We can do this and we must.”

Executive Secretary of the United Nations Convention to Combat Desertification, Luc Gnacadja

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“Apples are from Kazakhstan” Christopher Robbins, author of the modern classic of the travel-writing genre “Apples are from Kazakhstan” died in December 2012 at the age of 66.

Mr Robbins became fascinated by Kazakhstan after a chance encounter on an airplane with an Almaty-bound American who told him, among other things, that apples came from Kazakhstan. This intriguing fact captured the imagination of the veteran journalist and writer, who, two years later, would journey to Almaty to begin the research for his book. “Apples are from Kazakhstan” vividly chronicles his encounters with a wide cross-section of Kazakhstanis, from major cultural figures and elderly survivors of some of the tragic events of the 20th century, to the ambitious, ethnically diverse and outward-looking generation that came of age at the turn of the 21st century.

Christopher Robbins and Foreign Minister Erlan Idrissov (then Ambassador to the US) at the 2008 launch of “Apples are from Kazakhstan” in San Francisco

The complex history of Kazakhstan is recounted in a riveting, whistle-stop narrative, ranging from the Cimmerian nomads who first mastered the horse around 1,000 BC; to the 19th century colonization by Russia and the tragic consequences of enforced collective farming and massive-scale nuclear testing in the Soviet era; and finally, the regeneration of Kazakhstan since independence was declared in 1991.

Travelling the length and breadth of Kazakhstan, Mr Robbins reveled equally in the unspoiled beauty of much of the landscape and the modern architecture of the new capital, Astana. Highlight of his travels included the “fantastic, wind-sculpted towers and arches” of the 100-mile Red Canyon in the Tien Shan mountain range, and Astana’s “jewel in the crown”, the Palace of Peace and Reconciliation, designed by British architect Norman Foster to realize President Nazarbayev’s concept of a meeting-place for the world’s religious leaders to promote tolerance and understanding.

Mr Robbins was granted several interviews with President Nazarbayev and accompanied the President on a trip around southern Kazakhstan, including a visit to the Aral Sea to review progress on reversing the environmental destruction of the Soviet era. He surveyed the desolate plains surrounding Aral City, once a thriving lakeside port with a fishing industry supplying 30 per cent of the fish consumed across the entire Soviet Union, and described how the Aral Sea was systematically depleted by the network of canals built to irrigate the vast, collective cotton farms imposed upon the region.

By the time the Soviet Union collapsed, the Aral Sea water volume had fallen by three-quarters and Aral City was left stranded 45 miles from the water. In his damning account of the far-reaching environmental consequences of the Aral Sea tragedy, which he described as “an ecological disaster on the magnitude of the destruction of the Amazon rain forest”, Mr Robbins provided a lasting testament to the need for responsible management of the global eco-system.

Mr Robbins also travelled to Semey (formerly Semipalatinsk), the site of over 450 nuclear bomb tests during the Soviet era, with catastrophic consequences for the local population. He described the impression made by these events on the young Nursultan Nazarbayev – a steel mill worker in an adjacent region during the early years of testing - and the dramatic unfolding of Kazakhstan’s resistance to more nuclear test sites in the final years of the Soviet era, leading to the first official act by President Nazarbayev, the 1991 closure of the infamous Semipalatinsk site, and the subsequent voluntary dismantling of the fourth-largest nuclear arsenal in the world.

When taken to task by some of his younger Kazakh friends, who were apprehensive that in retelling tragic historical events his account would obscure the positive aspects of modern-day Kazakhstan, Mr Robbins assured them that an understanding of all that Kazakhstan had endured would only enhance his readers’ comprehension of both the extent of Kazakhstan’s achievements since independence, and the depth of its commitment to nuclear non-proliferation and the protection of the environment.

“Unless people understand where Kazakhstan has come from”, he said, “they won’t be able to appreciate what it has become”.

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Any lingering doubts that his friends may have had were laid to rest when the book was published. “Apples are from Kazakhstan” manages to encapsulate the rich and sometimes troubled history of Kazakhstan while also conveying the transformation of the country since independence, how oil and gas revenues were used to fund economic growth and social progress, and the remaining challenges facing a rapidly-evolving society. First published in 2008, the book remains an essential and immediately engaging read for anyone interested in learning more about Kazakhstan.

Christopher Robbins will be remembered with affection by his friends in Kazakhstan.

“Few nations can have emerged so confident and optimistic from such an unhappy past as Kazakhstan” Christopher Robbins, “Apples are from Kazakhstan”, 2008

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News from the Government in Brief KazMunaiGaz reports on first quarter of 2013 The state-owned oil and gas company, KazMunaiGaz, has reported that across its whole range of business it has extracted 5.6m tons of oil and gas condensate in Q1 2013, which represents 101% of the amount planned for the period. Of this, 3,571 million tons of oil has been refined; 16,947 million tons has been transported by land-based pipelines (3% over plan); and 2,204 million tons transported by sea. 27,576 billion cubic meters of gas has been transported. These figures, which all show an improvement on 2012, can be expected to rise again in the years ahead, as many of KazMunaiGaz’ oil refineries are being modernized, work which should be completed by 2016.

There was a word of caution, however, from KazMunaiGaz Chairman of the Board, Lyazzat Kiinov, regarding the Karachaganak field, one of the largest oil and gas fields in the world. Mr Kiinov reported that the third phase of development of the field had been put on hold for the time being. The Karachaganak field holds reserves of 1.2bn tons of oil and 1.35bn cubic meters of gas.

Under an agreement signed in 1997, the field is being developed by an international consortium, Karachaganak Petroleum Operating, made up of BG Group, which owns 32.5%; ENI (also 32.5%); Chevron (20%) and LUKoil (15%).

There was encouraging news from Mr Kiinov on transportation capacity for oil. The Caspian Pipeline Consortium is currently being expanded and, when completed, its capacity will be doubled from the current 30-32 million cubic meters per year to 6067 million cubic meters. Mr Kiinov went on to say that the Kashagan oil field is expected to double its output from 1.5m to 3m tons. (primeminister.kz)

State Statistics Agency reports shortfall in labor market Figures released by the Kazakhstan Statistics Agency reveal that at the start of 2013 there were notable shortages of workers in a number of sectors of the economy and in a number of geographical areas. These shortages affect both the state and private sectors.

Overall, the main shortfalls were in industry (nearly 10,000 vacancies); construction (over 5,000); and health care and social services (3,000). At the same time, there are over 7,000 vacancies in industry, and nearly 4,500 in health care and social services. The demand for workers in the private sector is over 20,000 in 2013 (notably in industry, retail and automobile and motorcycle repair). In the state sector, the biggest demand is in health care and social services.

The locations with the biggest number of vacancies are the cities of Astana and Almaty and the East Kazakhstan Region; yet in each area the demand is different: health care in Astana; retail in Almaty; and industry in East Kazakhstan. The fewest vacancies in all sectors are in Zhambyl, Kyzylorda and Aktyubinsk Regions. (primeminister.kz)

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Automobile production on the rise By the year 2020, Kazakhstan will be producing 300,000 automobiles a year, the Minister for Industry and New Technologies, Asset Issekeshev, has announced. This would represent a six-fold increase on the number of vehicles produced in 2010.

Kazakhstan has never been known for its automobile industry, so this is overall a new venture for the country. Last year, the local population bought 2,553 vehicles built in Kazakhstan, to the tune of nearly KZT12 billion. Automobile production facilities are now being developed in Ust-Kamenogorsk and Kostanai.

There is a marked growth, too, in the production of agricultural vehicles. The number of agricultural vehicles being produced, including tractors and combine harvesters, has risen more than two and a half times since 2010; in financial terms, from eight to KZT21 billion. (primeminister.kz)

Government tackles employment for the over-50s The government of Kazakhstan has adopted a plan to deal with employment issues for citizens over 50 years of age. The “50+ Initiative” has been devised by the Ministry of Labor and Social Protection as part of the modernization of the country’s pension system. One element of the plan is to encourage women over 50 to work as part of the Program for the Rapid Development of Industry and Innovation and the “Business Road-Map 2020” scheme.

Another area of government planning where senior citizens can play an active role is within the “Agrobusiness-2020” program. Under this scheme, older farmers will be given greater access to financial resources and new technology. They will be encouraged to help create rural cooperatives and family farms.

The government is looking at the experience of European countries in creating workplaces for the over-50s, including the provision of training and qualifications. (primeminister.kz)

President Nazarbayev meets Head of Kazakhstan’s railways President Nazarbayev held a meeting this week with the Head of Kazakhstan’s Railways, Askar Mamin. The President stressed that the success of the Industrial Innovation Program was dependent on the country’s transport infrastructure, and that the railway network had a crucial role to play. Acknowledging this and the responsibility it gives to the railway company, Mr Mamin reported that his company is currently involved in building a number of new railway lines within the country, including one which leads to the border with Turkmenistan. In total, 1,700km of new track is being laid.

Mr Mamin told the President, too, about discussions which are ongoing with China about the construction of a railway terminal with accompanying infrastructure in the Chinese port of Lianyungang.

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Also in The News…

• An exhibition has opened in the Museum of the First President of Kazakhstan in Astana of the life and times of Heidar Aliyev, the former President of Azerbaijan. The exhibition marks the 90th anniversary of Mr Aliyev’s birth. It is the second time such an exhibition has been held in the Museum. In June 2012 there was an exhibition, “The Life and Times of Boris Yeltsin”, marking 80 years since the former Russian President was born. (kazinform.kz) • The Upper House of the Parliament of Kazakhstan, the Senate, passed a number of acts this week of international significance.

A law was passed ratifying an agreement between Kazakhstan and the International Bank for Reconstruction and Development (IBRD), which will finance the road from Shymkent to the edge of the Zhambyl Region, a crucial part of the “Western Europe – Western China” highway. The senate also ratified an agreement with the IBRD on financing for other transport infrastructure projects. An agreement was ratified, too, with Spain on the extradition of wanted people. (zakon.kz) • A monument is to be unveiled in Astana next year to the Ukrainian poet and artist, Taras Shevchenko, to mark the 200th anniversary of his birth. This was announced in Kyiv by the Minister of Culture and Information, Mukhtar Kul-Mukhammed, who was in the Ukrainian capital to mark the Days of the Culture of Kazakhstan, which were held this week. The monument will be paid for by the Ukrainian state. (tengrinews.com) • A tradition with a difference was observed in the city of Aktau on May 1, when bikers rode in parade through the city to open the 2013 Motor Season. The bikers then parked up to show off their machines to the crowds. (zakon.kz) • The Zhetysu volleyball team – the champions of Kazakhstan – reached the quarter-final of the Asian club championship in Vietnam after winning all three of their group matches, including against the host team, Lienviet Postbank. In the quarterfinal to be played on May 3, they are due to play the tournament outsiders, Giti Pasand, from Iran. (sports.kz) • The Youth Water Polo team from Kazakhstan took second place in a four-team international tournament in the Georgian capital, Tbilisi, this week. The team – all 18 years old or younger – beat the Czech Republic 10-3 and Israel 10-5, but lost a close first match to the host nation, Georgia, 8-9. (zakon.kz) • Kazakhstan is to be represented for the first time on the well-known Ukrainian TV show, “Let’s All Dance!”. Batyr Abdullin from Aktobe has been chosen by a panel of judges to represent Kazakhstan. (zakon.kz) • An unusual record was set in Taldykorgan in Almaty Region this week. During celebrations to mark the Day of Unity of the People of Kazakhstan, sambo (a form of judo) expert Olzhas Kayratuli, picked up a camel and carried it on his back for 16 meters. (kazinform.kz)

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