Astana calling no 322

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 322 / FRIDAY, SEPT 20 2013

President Nazarbayev Addresses SCO Leaders Proposes range of measures

An Ethical Approach to State Service Kazakhstan to introduce new Code of Business

Minister Outlines Priorities for Developing Natural Resources Aim is oil self-sufficiency by 2020

News from the Government in Brief

Astana bids to host World Petroleum Congress Vote to take place on October 23

Also in the News

Things to Watch

President Nazarbayev Addresses SCO Leaders The latest meeting of the heads of state of the members of the Shanghai Cooperation Organization (SCO) took place last week in Kyrgyzstan’s capital, Bishkek. The leaders of each of the six member states – China, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, as well as Kazakhstan – took part and were joined by the leaders of Afghanistan, Iran and Mongolia, as observers. For the full session of the meeting, representatives from international organizations joined the member states. The participating international organizations included: the United Nations; the Commonwealth of Independent States; the Collective Security Treaty Organization; and the Eurasian Economic Community.

In a speech to member states, President Nursultan Nazarbayev expressed his gratitude to member states for their support for his plan to develop a Strategy for the Development of the SCO up to the year 2025.

When speaking to the wider audience of the member states and observers, President Nazarbayev stressed that the security not only of the SCO countries but of the wider region was a crucial question. In particular, the situation in and around Afghanistan, he said, represented an urgent issue for the whole region, especially as the country enters a new phase after the withdrawal of foreign troops in 2014. The President continued: “We consider it essential that the decision to grant Kabul the status of SCO observer is supported by concrete economic steps.”

President Nazarbayev with President Atambayev of Kyrgyzstan

Speaking about security in the region, President Nazarbayev highlighted another issue involving one of the other observer countries: Iran’s nuclear program. He underlined that this issue could only be resolved by peaceful, diplomatic means. The President noted that the last two rounds of international talks on this issue, known as the “5+1” talks, had been held in Almaty and had given a positive impetus to the issue. He said that Kazakhstan was ready to assist in any way to help regulate issues related to Iran’s nuclear program.

The question of the region’s security inevitably involves the situation in Syria – a topic made more complicated by the alleged use of chemical weapons in the conflict. “I am convinced,” said President Nazarbayev, “that the possibility of finding a diplomatic solution to the conflict has not passed. Kazakhstan supports the initiative to transfer Syria’s chemical arsenal to international control.”

Among the other items on the agenda were trade and economic relations between the member states; regional transport and logistics; water and energy issues; cultural and humanitarian matters; and investment into the region.

President Nazarbayev said that economic cooperation between the SCO countries would be greatly increased by the creation of the Development Fund and the SCO Development Bank. The Business Council and the Inter-Bank group would also be important for economic development. For transport, the Inter-Governmental Agreement on transporting cargoes internationally by road was important. The President said that it was important to create an SCO Energy Club, and a mechanism for ensuring the safety of food supplies. There must also be an open forum for dialogue about water resources.

At the conclusion of the meeting, the President of Kyrgyzstan, Almazbek Atambayev, handed over the Chairmanship of the SCO to Emomalii Rahmon of Tajikistan. The next meeting of the heads of state of the SCO will take place in Dushanbe in 2014.

“It is important to achieve the maximum benefits and minimize the risks for our further integration into the world economy, taking into consideration the security of the member-states of the SCO in terms of economics, energy and food supply.”

President Nazarbayev ASTANA CALLING / ISSUE 322 / 2

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Minister Outlines Priorities for Developing Natural Resources By the year 2020 Kazakhstan should be self-sufficient in oil and able to supply all of the country’s oil needs without the need for imports. This is the assessment of the Minister of Oil and Gas, Uzakbai Karabalin, who this week presented the government with a plan for the efficient use of the country’s natural resources within the Strategy “Kazakhstan-2050”. Yet at the same time, the Minister emphasized that by the year 2025 Kazakhstan will be exporting more than 90m tons of oil per year.

Mr Karabalin stated that there are three fundamental principles on which the future use of Kazakhstan’s natural resources should be based. Firstly, according to the Constitution of Kazakhstan all natural resources are the property of the state, therefore it is up to the state to determine how they are developed. Secondly, natural resources are the foundation upon which social and economic changes are being made in Kazakhstan. So their efficient use needs to take into account a balance between the interests of the relevant sector and the overall interests of the state. Thirdly, the natural resources sector is influenced by global markets, so when deciding on their use, the state has to consider a number of external as well as internal factors.

Minister for Oil and Gaz Uzakbai Karabalin

The Minister acknowledged that the state faces advantages and disadvantages in developing its natural resources. Among the advantages, Kazakhstan is one of the ten leading oilproducing countries in the world, with reserves which will last for at least another 50 years.

It is also possible that in the future Kazakhstan will discover new, so far untapped, reserves.

On the other hand, among the factors which are not in Kazakhstan’s favor are the high cost of oil; the complicated nature of transporting oil; and the fact that the high price of oil makes exporting the commodity very attractive, which hinders attempts to make the country self-sufficient in oil.

Mr Karabalin outlined eight priorities for the future exploitation of Kazakhstan’s natural resources. There should be continued research into natural resources and the exploration of new sources. Global markets should be studied carefully so that Kazakhstan can react to oil demand. Thirdly, Kazakhstan should supply its internal market using the country’s own resources, at the same time taking into account new ecological standards.

The next aim is that foreign investment should be encouraged only if it is with the use of modern exploration technology for extraction and refining and also opens up new production. The fifth aim is that the production of alternative energy sources should be pursued. The next aim is that all exploration should be carried out using only methods and equipment which do not damage the environment. A strategic reserve of hydro-carbons should be created. And finally, the profits from the natural resources sector must be managed in the best possible way.

The plan was adopted by the government.

“We must minimize the import of oil. We will reach a point in the year 2020 when we can fully satisfy our internal demands.

The maximum level for the export of oil from Kazakhstan, over 90m tons, we expect to reach in 2025.”

Uzakbai Karabalin, Minister of Oil and Gas

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Alikhan Baymenov, Head of the Agency for Government Service

An Ethical Approach to State Service International specialists have often applauded the way in which Kazakhstan has begun to reform its government service. Reform in this area is now being taken a step further, with the introduction of a new Code of Business Ethics for those in state organizations. The code aims to stamp out corrupt practices and cultivate ethical behaviour among state officials. The Code will be based on three main principles: public accountability; transparency; and promotion on merit. The pilot program for the “Institution of the Ethics Advisor” was launched this week.

The Code lays out a seven-point plan which describes in detail what is expected from all those engaged in the service of the state.

The first point is the most detailed, and contains many of the principles on which the new system is based, under the heading, “Innovation Policy”. This starts with, “Transparency in the competition process”. Under this policy, journalists and representatives of social organizations can observe how government contracts are awarded.

Another point under “Innovation Policy” is aimed at preventing the practice of the head of a department moving roles and taking his or her own people with them. State employees should be qualified to work in the correct department, and not put there simply through favoritism. This policy introduced in March this year is already delivering results in two ways. In 2012, 3,500 state employees moved departments – since March this year there have been just 70 transfers. The policy has led to fairer competition for places from suitably qualified people. On average the competition for places has doubled, from 4.7 candidates for each vacancy to 8.5 candidates.

Government employees are now given annual assessments on the effectiveness and quality of their work. In addition, in order to encourage state workers to progress, a system of mentoring and internships has been introduced. Employees who perform consistently well over a 15-year period will be rewarded with a badge – as a reward for them and as encouragement to others to follow their example.

State employees will be encouraged to work towards belonging to “the A stream”. Those who achieve this status through consistently high standards will sign a four-year contract. But being a member of “the A stream” will also bring increased responsibility.

Other points of the Code are: strengthening ethical and anti-corruption control in government service; raising the level of education and training of state employees; improving the quality of the work of state employees; and improving international cooperation in the sphere of business ethics. In acknowledgement of Kazakhstan’s leading place in the CIS on ethics, a center for business ethics has been established in Astana, for CIS countries and for Georgia and Afghanistan. This center has already established links with similar organizations in Finland, Hungary, South Korea, Turkey and the US. Last but not least, the Code recognizes that government service is a part of society and as such is judged by society. Consequently, plans are underway to sign memoranda of understanding with business and journalists, and to hold lectures and seminars on topics such as, “State service through the eyes of business”, and “State service through the eyes of the media”.

“We are creating in government service the ‘Institution of the Ethics Advisor’. These will be state employees who will undergo special courses and receive a certificate to show this; and who will, as well as their normal work, help to educate their colleagues.”

Alikhan Baymenov, Head of Kazakhstan’s Agency for Government Service

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Kazakhstan’s capital Astana has hosted many high-profile international events

Astana bids to host World Petroleum Congress The World Petroleum Council will meet in Calgary on October 23 to consider Kazakhstan’s bid to host the 2017 World Petroleum Congress (WPC) in Astana. As a major energy producer with world-class reserves of oil and gas, Kazakhstan is one of a number of candidate countries bidding to be the venue for this prestigious event. Astana has based its bid on Kazakhstan’s increasing role in ensuring secure supplies of oil and gas as well as its development of energy infrastructure.

Since 1933, the WPC has served as a respected global forum for the discussion of issues in the oil and gas sector. The WPC currently takes place every three years and has 66 member states representing over 95% of the global production and consumption of oil and gas. Alongside Astana’s candidacy, bids are also under consideration to hold the event in Houston, Istanbul and Copenhagen. Previous Congresses have been held in Europe, the US, Japan, China and Qatar. The next WPC will be held in Moscow in June 2014.

Kazakhstan has built its bid on strong foundations as well as on prior experience in organizing and hosting high-profile global events.

Both the KazEnergy Association and the National Committee of Kazakhstan are working together to organize the country’s bid for WPC. For Kazakhstan, Astana’s candidacy to host the event highlights the country’s commitment to the energy sector and its status as an ‘energy bridge’ between Europe and Asia. Forecasts suggest that by 2020, Kazakhstan will be one of the top five largest global oil producers. Oil production is due to increase significantly with the start of production this month at the Kashagan offshore oil field in the north Caspian Sea. Kashagan represents one of the largest discoveries of oil in recent decades, and annual production at Kashagan is expected to reach 656 million barrels in 2014 rising to 869 million barrels in 2018.

Kazakhstan’s credentials as an active member state of the WPC are strong. On the initiative of the country’s Ministry of Oil and Gas, Kazakhstan joined WPC in 1997 and participated in the fifteenth Congress in Beijing. Eleven years later the country renewed its membership in the WPC under the auspices of KAZENERGY – Kazakhstan’s national energy company. Astana subsequently became a host city for a World Petroleum Council meeting in 2012. WPC Executive and Program Committee meetings also took place in Astana as part of the Seventh KAZENERGY Eurasian Forum. Previous Congresses have included Kazakhstan-related sessions and special exhibition stands.

Kazakhstan’s overall commitment to the development of global energy resources is reflected in its chosen theme for EXPO-2017.

The event, to be held in Astana, is entitled ‘Future Energy’ and will be dedicated to examining practical solutions to securing new supplies of energy.

“The possibility of Astana holding the 22nd World Petroleum Congress is a significant reputational project for Kazakhstan – one of the key producers of liquid hydrocarbons in Eurasia. The Republic of Kazakhstan plans to become the first country from Central Asia and the second from the CIS group of countries, able to facilitate a forum of this level.”

Dzhambulat Sarsenov, Deputy Chairman of KAZENERGY

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News from the Government in Brief President Nazarbayev Visits South Kazakhstan Region President Nursultan Nazarbayev visited the country’s southernmost region this week, spending two days in the South Kazakhstan Region. In terms of territory, South Kazakhstan is one of the smallest of Kazakhstan’s regions. Yet, with around two and a half million inhabitants it has the largest population of any region in the country – more than 15% of the total population. In addition, with a birth rate of 80,000 births per annum – the highest in the country – the region’s population is growing and the population of the capital, Shymkent, could soon pass the one million inhabitants mark.

President Nazarbayev reviews plans for a housing complex in Shymkent

The President noted the Region’s stable development: “They didn’t suffer from the recession; there was no cutback in social spending; nor growth in unemployment. Because of its location, South Kazakhstan is a hub for transport and logistics. Major road and rail links go through the region, as does a major gas pipeline and electricity power lines.

The growth in the population means that matters of education are of great importance at all levels. President Nazarbayev said that it is vital that Kazakhstan – and especially a region such as South Kazakhstan – should have a competitive educational system and its own academic base. Global experience shows that centers of educational excellence tend to grow up around large cities. At the moment, the President continued, Kazakhstan has just two such cities, Astana and Almaty. But he sees no reason why Shymkent cannot be a third such center.

South Kazakhstan is already delivering encouraging results in the areas of development of agriculture and the growth of small and medium businesses – a key focus for the country as it moves away from an economy dependent on natural resources.

Since it was set up on September 1, 2013, the Center For Serving Entrepreneurs has helped over 16,000 entrepreneurs. The Shymkent Innovation Company, which was established to support innovation projects, helped attract USD 420m into the renewable energy sector, including building three solar stations, three wind farms and 15 small hydro-electric stations. (akorda.kz)

President Nazarbayev visits a plant producing submersible pumps

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Kazakhstan-Afghanistan Inter-Governmental Commission meets The 6th session of the Kazakhstan-Afghanistan Inter-Governmental Commission took place in Kabul, on September 16-17.

The meeting assessed the work of the Commission and concluded that the results were very positive. The opening of the new railway link between Kazakhstan and Turkmenistan presents opportunities for both Kazakhstan and Afghanistan to send goods through Turkmenistan. In July, Kabul hosted a meeting of businessmen from Central Asia and Afghanistan, which included representatives from Kazakhstan. In addition, 483 students from Afghanistan are now studying in Kazakhstan, including some specializing in construction and others in railways.

The meeting also looked ahead to the prospects for cooperation in the year ahead. Among the areas marked out for cooperation are government service; education; transport; agriculture; culture; standardization; mining; emergency situations; and legal matters. The seventh session of the Commission will meet in Kazakhstan in 2014. (ortcom.kz)

Encouraging news for investment and GDP Figures from the Statistics Agency of Kazakhstan for the first eight months of 2013 make for encouraging reading. Overall investment into the economy for this period stood at nearly KZT 3.4 trillion, an increase of 7.3% on the same period in 2012.

Industrial production for the same period was up by 2% on January-August 2012; mining by 2.9%; and manufacturing by just over 1%. Energy production rose by almost 1%.

Over the same period, from January to August, Kazakhstan’s GDP rose by 5.5%. The forecast for the year from the Ministry of Economy and Budget Planning is for an increase in GDP of 6%. According to the Head of the Statistics Agency, Alikhan Smailov, these figures show that this forecast is, “absolutely realistic”. (primeminister.kz)

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Also in The News…

• Prime Minister in Paris Prime Minister Serik Akhmetov visited Paris on September 19-20 at the invitation of the Secretary General of the International Exhibitions Bureau (BIE), Vicente Gonzalez Loscertales. The two men discussed Kazakhstan’s registration documentation for EXPO2017, which has to be submitted to the BIE Secretariat by the end of this year. During his visit, Mr Akhmetov went to the offices of the Organisation for Economic Co-operation and Development (OECD), to discuss the issue of Kazakhstan joining the Organisation. (government.kz) • UK simplifies visa regime for Kazakhstan’s business community Kazakhstan’s business community will now be able to obtain a British business visa in two to three days following an announcement made this week by the British Prime Minister’s Trade Envoy, Charles Hendry. Hendry made the announcement at the 17th Session of the Kazakh-British Trade and Industry Council. (primeminister.kz) • Military inspectors visit Kazakhstan Representatives from 30 different countries from the Organization for Security and Cooperation in Europe (OSCE) and the Conference on Interaction and Confidence Building Measures in Asia (CICA) visited Kazakhstan September 16-19 to inspect the country’s military facilities. Kazakhstan fully supports such military inspections. This was the first time that the CICA had been invited to join the OSCE on such an inspection. (government.kz) • Government delegation visits Hong Kong and Macao From September 16-19 an official delegation from Kazakhstan visited the Chinese special administrative regions of Hong Kong and Macao. The delegation was led by the First Deputy Foreign Minister, Rapil Zhoshybayev, who is also the Commissar of the EXPO-2017 Exhibition. An important subject of the talks was the possible participation of companies from the two regions in EXPO-2017. (government.kz) • Ministry of Foreign Affairs honors Kazakhstan diplomat The Foreign Minister of Kazakhstan, Erlan Idrissov, took part in a conference and the presentation of a book dedicated to the 85th birthday of one of Kazakhstan’s leading diplomats, Mikhail Isinaliev. Among his many official posts, Mr Isinaliev was Minister of Foreign Affairs of the Kazakh Soviet Socialist Republic from 1981-1989; Secretary of the Komsomol of Kazakhstan (1960-1961); Second Secretary of the Alma-Ata City Communist Party (1964-1969); Head of the Cultural Department of the Central Committee of the Communist Party of Kazakhstan (1969-1981); and Ambassador at Large of the Foreign Ministry of Kazakhstan from 1992 to 1999. (mfa.gov.kz) • Ministry of Foreign Affairs discusses modernization of foreign policy The Council on Foreign Policy of the Ministry of Foreign Affairs held a meeting on September 16 to discuss the modernization of Kazakhstan’s foreign policy within the structure laid out in the Strategy “Kazakhstan-2050”. The meeting was opened by the Foreign Minister, Erlan Idrissov. (mfa.gov.kz) • CIS Foreign Ministries’ press staff meet in Astana Representatives from the press services of the Foreign Ministries of eight CIS countries – Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia and Tajikistan – gathered in Astana with the Executive Committee of the CIS to discuss various aspects of the activity of the information services of the ministries. The participants agreed to hold such consultative meetings on a regular basis. (mfa.gov.kz) • Kazakhstan celebrates poet’s 70th anniversary Celebrations took place on September 16 in the village of Chingistay in the Katon-Karagay District of East Kazakhstan Region to mark the 70th anniversary of the birth of the poet, Oralkhan Bokai. A statue was unveiled to Bokai followed by a presentation of a collection of his work in seven volumes. A conference on the poet’s work was also held, and there was a dramatization of some of his poems. Oralkhan Bokai was born on September 28 1943. His works tell of the struggle between good and evil; about strength and bravery; about spiritual values. As well as the languages of the countries of the CIS, his poems have been translated into Arabic, Bulgarian, Chinese, English, German, Hungarian, Japanese and Slovak. He died in May 1993 while on a working visit to India. (inform.kz, pushkinlibrary.kz) • Kazakhstan woman is world arm-wrestling champion Olga Shlizhevskaya won the arm-wrestling world championship in the Polish city of Gdinya. Over 1,000 participants from 44 countries took part. Olga won in the under-65kg category. In 2012 Rustam Malikov from Kazakhstan won the men’s armwrestling event for the second time. (tengrinews.kz)

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Things to Watch • On September 27-28, President Nazarbayev will travel to Monaco and meet with Prince Albert II of Monaco. The President’s trip to Monaco builds on last year’s visit to Astana by Prince Albert when the Prince opened an honorary consulate of the Principality.

ASTANA CALLING A WEEKLY ONLINE PUBLICATION / WWW.MFA.GOV.KZ Please send comments and questions to pressa@mfa.kz

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