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 305 / FRIDAY, MAY 24 2013
Foreign Investors’ Council Meets in Astana Development of innovation tops agenda
VI Astana Economic Forum Takes Place World Anti-Crisis Conference runs in parallel
Samruk-Kazyna Holds Meeting with its Non-Executive Directors
Government to Improve Road Transport System
Sovereign wealth fund discusses ways to improve country’s welfare and its corporate governance
Plan covers road-building, road-usage, road services
News from the Government in Brief
Also in the News
President Nazarbayev and Minister Issekeshev examine an innovative technology project
Foreign Investors’ Council Meets in Astana The 26th Plenary Session of the Foreign Investors’ Council (FIC) took place in Astana on May 22, chaired by President Nazarbayev. The FIC is an advisory body established in 1998 to promote direct dialogue between the Government of Kazakhstan and foreign investors, aimed at improving Kazakhstan’s investment climate and addressing key issues related to foreign investment activities in the country. The focus of attention at this session was on the investors’ contribution to innovative-technological development in Kazakhstan. Participants were welcomed by the Deputy Prime Minister and Minister of Industry and New Technologies, Asset Issekeshev, and the President of the European Bank for Reconstruction and Development (EBRD), Sir Suma Chakrabarti. President Nazarbayev then gave his address. The President pointed out how the idea for the FIC had been discussed by the government of Kazakhstan and the EBRD before being approved 15 years ago. Since then, the number of participants has grown to include 35 representatives of many of the foreign companies now working in Kazakhstan. Of special note and relevance during this time has been the adoption by the government of the Concept of Innovative Development up to 2020; the decision to move towards a “green economy”; and the awarding to Astana of EXPO-2017. To put these plans into practice, a number of measures must be taken, the President said. In the first place, it is essential to reform the education system so that it produces properly qualified specialists who are able to take advantage of the opportunities presented by innovation. Next, it is essential to unlock the scientific potential of Kazakhstan. Progress has been made in recent years. If in 2010 only one third of all scientific projects in higher educational establishments were being completed, that number has now doubled. It is to be hoped that the inauguration of the Al Farabi State Prize for Scientists, which will be awarded annually in seven different categories, will help to encourage this.
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President Nazarbayev meets with the President of the European Bank for Reconstruction and Development (EBRD), Sir Suma Chakrabarti
It is also necessary to create demand from industry – both domestic and foreign – for innovation in Kazakhstan. The President suggested a way to do this, what he called the “triple seven initiative”: “Firstly, we should bring to Kazakhstan at least seven worldrenowned scientists. Then, we should ensure that seven companies from Kazakhstan are given hi-tech orders. Thirdly, we should support the creation of seven innovation start-ups.” Among the foreign investors who spoke at the meeting were the heads of the Asian Development Bank; the Eurasian Natural Resources Corporation (ENRC); the law firm, Baker & McKenzie; Sberbank; BG Group Plc; General Electric; Exxon Mobil; Cameco; and Shell.
“The first thing to do is to organize the system of education in such a way as to create the necessary specialists in innovation. Many of the investors here present have come across the problem of a shortage of suitably qualified labour. We need to ensure that there is the demand for engineers and technicians who are qualified to international standards. This has to be done jointly with business.” President Nazarbayev
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President Nazarbayev and delegates at the VI Astana Economic Forum this week
VI Astana Economic Forum Takes Place The VI Astana Economic Forum took place this week under the title “Ensuring Balanced Economic Growth within the G-Global Format”. This is an indication of the strength which the G-Global online platform has achieved since it was set up by President Nazarbayev in December 2011. Another first for the Forum was that the World Anti-Crisis Conference, another initiative of President Nazarbayev, ran alongside the Forum. This ensured that many of the world’s leading experts in a variety of fields were among the 10,000 delegates who came to Astana. Sessions at the Forum, which was supported by the United Nations (UN), were divided into five key topics, or “tracks”: Perspectives of Global Economic Growth; Infrastructure and Innovative Technologies; Competitiveness in International Markets; Social Aspects of Economic Growth; and Financial Systems, Global Risks and Countermeasures. In his opening speech, President Nazarbayev thanked the UN for its support of the Forum and the Anti-Crisis Conference. He said that there was still a need for such a conference, even though some had declared the global financial crisis to be over. The experience of Cyprus this year showed that this was not the case. Furthermore, the International Labour Organization is predicting that global unemployment will be over 200 million people this year. In Europe, for example, there were 26 million unemployed at the start of this year, which is one and a half times higher than five years ago. A major factor in the global crisis, according to President Nazarbayev, is a lack of trust: “There is no trust between the international financial institutions; between states; between those who participate in the financial sector; or between countries,” he said. Speaking of Kazakhstan’s own standing in the financial world, the President noted that some years ago he had set the task for Kazakhstan to be among the 50 most competitive countries in the world; and that in 2012 they had achieved this when the World Bank rated Kazakhstan 49th for “Business Dealing”. What is more, the World Bank now places Kazakhstan tenth in terms of “protecting investors”. And the World Economic Forum has put Kazakhstan 51st for its competitiveness rating. The next stage, the President added, under the Strategy “Kazakhstan-2050”, is to transform the country into one of the 30 most developed countries. The Minister of Economy and Budget Planning, Yerbolat Dossayev, picked up on this theme in one of the Forum sessions. “In order to enter the top 30,” he said, “we shall have to increase our GDP per capita by six times in the next 37 years.” At the same time, he added that Kazakhstan had reached the peak of its production in the past 20-25 years, underlining that the country must not limit itself to using its natural resources, but must diversify the economy, developing new technologies and growing its human capital. The main results of this year’s Forum will be sent in an open letter to members of the G20 with recommendations for revitalizing and developing the world economy.
“Many states reduce their outlays on education, health care and human development. These are all characteristics of the global crisis which threaten to undermine people’s standard of living, even in developed societies. According to the calculations of Oxford experts, half of all those living in poverty are in the G20 countries. 250 million people are forced to migrate, searching for a better life, which also creates many social problems.” President Nazarbayev ASTANA CALLING / ISSUE 305 / 4
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Government to Improve Road Transport System The Minister of Transport and Communications, Askar Zhumagaliyev, reported to the government this week on current progress in the road transport sector. In his presentation, he spoke about the construction of new roads and the upkeep of existing highways; the problem of overloaded freight transport and the potential for corruption in this area. He also outlined plans to improve the service infrastructure for road users. The last ten years have seen a boom in road-building in Kazakhstan. No other country in the CIS has built as many roads as Kazakhstan. Throughout the country new roads are being built to link major population centers. Major highways are planned between Astana and Almaty and Astana and Pavlodar; and work is beginning on the Astana to Ust-Kamenogorsk road; the Almaty to Khorgas route; and the road from Almaty to Kapchagay. And the first toll road in the country is to be introduced this year on the Astana to Borovoe motorway. There is also the major project of the “Western Europe-Western China” highway. This was started in 2009 and is expected to be finished in 2015. When finished, this will cover 2,787km, which includes 2,452km of reconstructed roads. The highway enters the territory of Kazakhstan a little way to the north of Aktobe, in the north-west of Kazakhstan, then goes south-east through Kyzylorda to Shymkent. At this point, the road turns east, towards Almaty, and enters the north-western corner of China. The project is gathering pace. In 2011, 215km were constructed; last year this increased to 700km; and in 2013 it is expected that 806km of the highway will be finished.
Minister of Transport and Communications, Askar Zhumagaliyev
The Prime Minister, Serik Akhmetov, made it clear to Minister Zhumagaliyev that he expects that the work on the “Western Europe-Western China” highway, as well as on the Astana-Almaty route and Astana-Pavlodar will be completed according to schedule and to the highest standards. The Prime Minister and the Transport Minister both emphasized to the meeting that the construction programme is about quality as much as quantity. As Mr Zhumagaliyev pointed out, the Ministry has identified 3,500km of roads throughout the country in need of repair. The plan is to have 2,000km completed by the time the construction season closes. All construction and repair work is now being carried out according to the principles laid down by the International Federation of Consulting Engineers, FIDIC. Foreign specialists have been brought in to inspect the work to ensure that these standards are being met. Applying FIDIC standards is also a way of combatting corruption in the road construction sector. This can involve not only the way in which roads are built, but also the loads that are carried on them. Overloaded lorries are a threat to the condition of the country’s roads. Now, an automated system is being brought in to weigh vehicles, which removes the possibility of giving bribes. The pilot system is already uncovering 400 violations per month. Minister Zhumagaliyev also drew attention to the question of the development of service infrastructure on the roads. By 2020 the plan is to have built 261 service centers. Of these, 229 will be built by the private sector, and 32 will be paid for out of the state budget.
“The regional mayors and the mayors of Astana and Almaty, together with the Ministry of Transport, must ensure that all the conditions are in place for high-quality construction of our roads.” Prime Minister Serik Akhmetov
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Chairman of the Samruk-Kazyna fund, Umirzak Shukeyev
Samruk-Kazyna Holds Meeting with Its Non-Executive Directors The “Samruk-Kazyna” sovereign wealth fund of Kazakhstan held a regular meeting in Astana this week with its non-executive directors The Chairman of the Fund, Umirzak Shukeyev, spoke of the importance to Kazakhstan of “Samruk-Kazyna” that controls more than half of the country’s GDP. “Samruk-Kazyna” was created in October 2008 by decree of President Nazarbayev. It involved the merger of two funds, “Samruk” and “Kazyna”. It is a joint stock company, in which the state is the sole shareholder. “Samruk-Kazyna” owns (either in whole or in part) many important companies in Kazakhstan. These include full ownership of the national rail and postal services; the electricity grid operating company; the state oil and gas company, KazMunaiGaz; the state uranium company, Kazatomprom; the National Innovation Fund; SK Pharmaceuticals; and others. There is a smaller holding in other companies, such as a 51% stake in the national airline, Air Astana; and a 45.9% stake in KazakhTelecom. The Fund also controls numerous financial groups. The sovereign wealth fund’s assets are expected to be worth USD 100 billion by 2015. Mr Shukeyev emphasized to the non-executive directors that they must not lose sight of the fundamental mission of the Fund: to raise the level of the welfare of the people of Kazakhstan. The Fund should do this by increasing its long-term value and carefully managing the shares of the companies under its control. The opening session of the two-day meeting of the Fund was led by the recently elected Managing Director, Nicholas Malone, and entitled, “Synergy within the Fund’s group”. Mr Malone stressed the importance of the Fund utilizing the latest technologies, notably cloud technology. The meeting agreed that attracting and developing expert knowledge was going to be a critical factor in taking advantage of synergies. The human factor was not forgotten; indeed, the Fund does a great deal to develop human capital in Kazakhstan, within the framework of its “Personnel Policy, 2013-2022”. Here, the emphasis is on raising the quality of labor resources; long-term personnel planning; strengthening qualifications and professional standards; and modernizing the education system as well as places of education. A new program was presented, too, “The Top-100”, which includes the most promising members of staff of the Fund’s companies. The Chairman urged the non-executive directors to meet the “Top-100” and monitor their progress. The non-executive directors were encouraged also to play their part in stimulating the development of corporate governance in Kazakhstan, including giving their recommendations to improve the legal basis for this in the country. This was just one example where the Chairman, Mr Shukeyev, urged the non-executive directors to make real efforts to improve the performance of the companies making up the Fund.
“It is very important that those of us gathered here around this table look closely at the questions around the development of our companies, and that we make every effort to raise their value and their competitiveness. Despite the fact that you all work for different companies, we all make up one group.” Umirzak Shukeyev ASTANA CALLING / ISSUE 305 / 6
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News from the Government in Brief Kazakhstan could join WTO in 2014 Kazakhstan expects negotiations to be concluded within the next six months for the country’s entry into the World Trade Organization (WTO), the Deputy Minister for the Economy and Budget Planning, Timur Zhaxylykov, told this week’s Astana Economic Forum. “We hope to finalize these questions in the near future, as they are not problematical,” the Deputy Minister said. “We reckon that the negotiations should be completed within the next six months, and that we could enter the WTO next year.” Negotiations are continuing about the state’s involvement in oil and gas companies and also companies in the mining sector. The agricultural question is also a particular one; Kazakhstan will be asking for special state help for this sector. But talks on bilateral access to markets and services have been completed. Agreement has been reached with 30 members of the WTO on markets, and with 15 countries on services, including the European Union (which for the purposes of negotiations acts as one country) and the US. Agreement has been reached, too, on a transition period for import tariffs up to July 1 2018.
Hi-tech and internet reach growing in Kazakhstan By the end of this year almost 97% of the rural population of Kazakhstan will have access to the internet, the Deputy Minister for Transport and Communications, Saken Sarsenov, told the Astana Smart Technologies Exhibition (ASTEX-2013) this week. Furthermore, Mr Sarsenov promised that every village of more than 50 inhabitants will have internet access this year. More good news for the rural population was that the price of connection to the internet in the countryside has fallen nearly 30% in 2013. Mr Sarsenov assured his audience that Kazakhstan is committed to the introduction of new technology. As an example, he said that the government is committed to introducing 3G and 4G throughout the country. The 4G system is already operating in Astana and Almaty, and by the end of 2013 it will be installed in all regional – oblast – centres. By the end of 2018 4G will also be in all district centres.
Kazakhstan’s state services to be accessed by apps Kazakhstan’s citizens who need to access state services will soon be able to do this via apps on their mobile devices, the Chairman of “National Information Technologies”, Ruslan Yensebayev, has announced. He pointed out that around ten million citizens now use mobile internet; and that more than 15 million state services were provided to the population last year. Being able to access services via apps will be of particular advantage to those living in remote parts of the country. Furthermore, as of next year Kazakhstani citizens will be able to access services even if they are in an area where they are not registered as living. “Any citizen in any region or town will be able to access services, Mr Yensebayev explained. “They won’t have to return to the region where they live.”
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Future energy sources discussed at Forum The Minister of Education and Science, Bakytzhan Zhumagulov, told a session of the Astana Economic Forum that the government is starting a scientific program on clean energy sources, for the period 2013-2017. “Energy of the Future” is the topic of EXPO-2017, to be held in Astana, and it is essential that the country begins work on this now. In any case, this program is not seen as an end in itself, but is a part of the strategy for creating reliable energy for Kazakhstan up to 2050. That involves bringing together a number of components: a global ecological energy strategy; the partnership programme, “Green Bridge”; EXPO-2017; and ecological energy initiatives, which a number of companies are already implementing. During the same session at the Forum, the UN special adviser, Serge Martin, said that wind power in Kazakhstan could produce 25 times more energy every year than oil, gas and coal. There are 50,000 sq km of territory in Kazakhstan where the wind speed reaches seven meters per second. Potentially, this could produce enough electricity to export also to China.
Astana to receive huge birthday cake When Astana, the capital of Kazakhstan, celebrates its 15th birthday on July 6 this year, among the celebrations will be the cutting of an enormous birthday cake. The ceremony of the cutting of the cake will take place in the “Khan Shatyr” shopping mall. The actual ingredients, weight and size of the cake are being kept a closely-guarded secret. All that is being revealed so far is that this will be a “record-breaking” cake, and that there will be enough for everyone at the ceremony to have a piece. Other large cakes will also be divided up and handed out at different shopping malls throughout the city. Among other celebrations for the capital’s birthday will be performances by Moscow’s famous “Sovremennik” theatre and a concert by the operatic quartet, “Il Divo”.
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Also in The News… • 70 inhabitants of villages around the city of Kyzylorda have received loans from the state fund, “Employment-2020” to help them start up their own small businesses. So far, according to the Kyzylorda Mayor’s Office, KZT 142 million has been paid out. An example cited is the opening of a sewing shop that now employs five people. (bnews.kz) • In a survey conducted by the business journal, “Business Insider”, Air Astana has been ranked as one of the top 20 airlines in the world, coming in at number 18. Travellers were asked to judge airlines on value for money; overall impressions of their flight; and punctuality. They were also asked about details such as the comfort of the seats, the cleanliness of the cabin, on-board entertainment and the quality of the food. For pleasing its passengers, Air Astana scored 74 out of 100, and for punctuality 82 out of 100. Air Astana was rated higher than Lufthansa and Etihad Airlines. The top three places went to Singapore Airlines, Virgin America and Malaysia Airlines. (tengrinews.kz) • The European Union (EU) has opened a competition for journalists, called “The Reform and Modernization of State Service for the Government of Kazakhstan”, to find the journalists who are writing the most useful material about the reform of state service in Kazakhstan. The competition runs until October 1 2013. The prize for two winners will be to go on a tour with state officials from Kazakhstan to look at best experience of state service in Europe. (inform.kz) • The film, “Awakening”, opened the Second Eurasian Film Festival in New York. The film was made by the youngest daughter of President Nazarbayev, Aliya Nazarbayeva. It depicts an eco-village near Almaty, made up of 20 homes. People from different layers of society, and of different nationalities and beliefs come together, united by a common philosophy and turning away from the so-called benefits of civilisation. By taking up the baton of the ecological movement, Ms Nazarbayeva is continuing the work her father has begun with his “Green Bridge” program and encouragement of the use of green technologies. (tengrinews.kz) • The great Georgian jazz singer, Nino Katamadze, is to appear in concert for the first time in Almaty. Ms Katamadze has been appearing on stage since she was four years old. Along with the group, “Insight”, she gives sell-out performances wherever she goes. Together, they are famous for their “color” series of albums: “White”, “Black”, “Blue”, “Red” and “Green”. The concert in Almaty is to be held on May 25. (bnews.kz)
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• A gala concert given by the Kurmangazy Kazakh State Academy Folk Instrument Orchestra in the Grand Hall of the Vienna Concert House opened the “Days of the Culture of Kazakhstan”, held this week in the Austrian capital. The Minister of Culture and Information of Kazakhstan, Mukhtar Kul-Muhammed, gave a welcoming speech to guests. The Ministry was responsible for the organization of the event, along with the Embassy of Kazakhstan in Austria, the Austrian Federal Ministry for European and International Affairs and the Austro-Kazakhstan Society. (zakon.kz) • Two tennis players from Kazakhstan, Cecilia Karatancheva and Galina Voskoboyeva, made it through to the second round of the qualifying tournament for the French Open Tennis Championships. Ms Karatancheva beat the British player, Tara Moore, 6-3, 6-3; and Ms Voskoboyeva beat Karina Dentoni of Italy, 6-2, 6-3. (tengrinews.kz) • Kazakhstan’s ice-skating star, Denis Ten, brought a spectacular show to the Baluan Sholak Ice Palace in Almaty this week. The show, “Denis Ten and Friends”, featured some of the world-class stars of international ice-skating. The idea for the show came from Denis Ten himself, who was runner-up in the ice-skating world championships. (today.kz)
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