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ASTANA CALLING

ISSUE NO 276 FRIDAY, 26 OCTOBER 2012 WWW.MFA.KZ A WEEKLY ONLINE PUBLICATION OF THE MINISTRY OF FOREIGN AFFAIRS OF THE REPUBLIC OF KAZAKHSTAN

President Nazarbayev Visits Austria Energy and technology high on the agenda

First Official visit by President to Czech Republic

Dominican Republic Supports EXPO-2017 Bid Kazakh delegation visits Santo Domingo

Commercial agreements signed

Germany and Kazakhstan Strengthen Ties Prime Minister Akhmetov joins Berlin celebration

World Bank “Doing Business 2013” Report

2012 Football Premier League Final

Kazakhstan advances seven places in global rankings

Shakhter Karagandy the new champions

Things to Watch

Also in the News


President Nazarbayev and Federal President of Austria Heinz Fischer

President Nazarbayev Visits Austria On October 22-23, President Nazarbayev paid his fourth official visit to Austria since diplomatic relations were established between Austria and Kazakhstan in 1993. President Nazarbayev held talks with Federal President of Austria Heinz Fischer, which led to the signing of several agreements, including one on international trucking and one on cooperation in the energy sphere between KazMunaiGas and Austria’s OMV. Closer cooperation in the cultural sphere was also on the agenda, with the announcement that in 2013 Austria will host the Days of Kazakhstan Culture event.

“ Economic cooperation between the two countries is developing progressively and especially close partnership was registered in the area of energy. In particular, today we spoke about Kazakhstan’s readiness to expand oil supplies to Austria” President Heinz Fischer

President Fischer emphasized the strong ties between Austria and Kazakhstan and said the two countries would continue to support each other in the international arena. He thanked Kazakhstan for supporting Austria’s candidate to the UN Human Rights Committee and pledged Austria’s support for Kazakhstan’s candidacy to the UNESCO World Heritage Committee, adding that Austria is very positive in relation to Kazakhstan’s candidacy to host EXPO 2017.

Austria’s experience in the renewable energy sector is of particular interest to Kazakhstan, and the leaders announced plans for the transfer of advanced energy technologies from Austria to Kazakhstan. During his visit, President Nazarbayev also met with EU experts on scientific and technological innovation. At the opening of the Kazakh-Austrian Business Forum, President Nazarbayev expressed his belief that the forum will provide a useful platform for dialogue between the two business communitities. He said that Kazakhstan’s focus on the development of export-oriented industries with high added value could open up further possibilities for cooperation, given Austria’s leading global position in the engineering sector. The President urged Austria’s business community to avail of the opportunities arising in Kazakhstan as a result of the state program for industrial innovation. Over USD 70 billion is being invested within the program framework, of which USD 15 billion is set aside for the development of 400 new enterprises. Bilateral trade between Kazakhstan and Austria amounted to over USD 4 billion in 2011, a 50% increase on the previous year. Kazakhstan supplies over 37% of the oil consumed in Austria and Austrian investors have entered the Kazakahstan market in increasing numbers. There are now more than 100 successful Austrian-Kazakh joint ventures in Kazakhstan. The principal areas of cooperation are mechanical engineering, telcommunications, education, healthcare and tourism and there are several ambitious joint projects in the pipeline. While in Austria, President Nazarbayev also met members of the International Advisory Board, established in 2010 to promote Kazakhstan’s image internationally and give support and recommendations to the Government of Kazakhstan. The meeting covered a wide range of issues, including Kazakhstan’s relations with the EU and the development of the Common Economic Space and Customs Union. ASTANA CALLING / ISSUE 276 / 2

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President Nazarbayev and President of the Czech Republic Vaclav Klaus

First Official visit by President to Czech Republic On October 23-24 President Nazarbayev made his first official visit to the Czech Republic since diplomatic relations were established in 1993. The President met with his Czech counterpart Vaclav Klaus and Prime Minister Petr Necas in Prague to discuss the development of Kazakhstan-Czech relations as well as opportunities for mutually beneficial cooperation in the economic, scientific, cultural and humanitarian spheres. “We consider Kazakhstan a dynamically growing, stable country. I am confident that our relationship will only grow”. President of the Czech Republic, Vaclav Klaus

“Complicated processes are underway in Europe and despite the negative effects of the global crisis, Austria and the Czech Republic have maintained economic stability and soundness. It is important and essential for Kazakhstan to develop cooperation with European countries.” President Nazarbayev

At a Kazakh-Czech Business Forum the following day, agreements were signed on commercial projects worth over USD 250 million. President Nazarbayev said that the projects would further stimulate trade between the two countries, which has considerable potential for further growth. President Nazarbayev highlighted the complementary economic strengths of the two countries, Kazakhstan’s resources providing a good match with the technological and engineering capabilities of Czech companies. He encouraged the well-developed small and medium Czech business sector to establish direct contact with their counterparts in Kazakhstan, many of whom are seeking to expand with the benefit of funding from the state program for industrial innovation. The dynamic growth of Kazakhstan’s economy, which saw GDP increase by 7.5 per cent in 2011 and the ambitious state targets of a 50% growth in GDP from 2008 – 2015, along with an increase to 40% in the level of total exports comprised of non-oil products, will provide many more opportunities for Czech companies with expertise and technology to offer, the President said.

He described an economic hub comprised of Kazakhstan, Russia and Belarus, forming a Customs Union market with almost 170 million people, within which trade barriers will be eliminated, transit cargo costs minimized and access to infrastructure simplified. The President encouraged the active participation of Czech business in the implementation of these ambitious plans for the industrial modernization of Kazakhstan. In 2011 Kazakh-Czech bilateral trade amounted to USD211.7 million, of which USD48.4 million comprised Kazakh exports and USD163.3 million imports from the Czech Republic. In January-August 2012 bilateral turnover reached USD 208.3 million, a 38 per cent increase on the comparable 2011 period. Direct investment by Czech companies in Kazakhstan amounted to over USD 220 million between 1994 and March 31, 2012. There are now 76 Czech-funded companies operating in Kazakhstan, along with 20 representative offices of Czech companies. The Czech government included Kazakhstan in its 2009 list of the 12 most important prospective trade partners for the Czech Republic. Trade links between the two countries are facilitated by direct flights between Almaty and Prague.

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Kazakhstan’s Prime Minister Serik Akhmetov

Germany and Kazakhstan Strengthen Ties On October 25 Prime Minister Serik Akhmetov visited Berlin for the 60th anniversary celebrations of the Committee on Eastern European Economic Relations. The Prime Minister was invited to participate by Committee Chairman Dr. Eckhard Cordes, when he visited Astana on September 27. The Committee on Eastern European Economic Relations is the longest-standing regional initiative of the German business community. Managed by the Federation of German Industries, the Committee represents the interests of German companies doing business in Central and Eastern Europe, South-East Europe, Central Asia, the Caucasian Republics, Russia and the Baltic States. During his visit to Berlin, the Prime Minister met with Chancellor Angela Merkel, who had herself made two visits to Kazakhstan during 2010. He also met Vice Chancellor and Federal Minister of Economics and Technology, Dr. Philip Rosler, the Vice President of the Federal Association of German Industry and Transport, Ulrich Grillo and leaders of major German companies including Bosch, BASF, Siemens and ThysenKrupp. Prospects for increasing bilateral and economic cooperation were the focus of discussion. Trade between Germany and Kazakhstan has grown significantly in recent years, with a 20 per cent increase in 2011 to a total of 6.2 billion euros. In 2011 Germany ranked eighth among Kazakhstan’s trade partners. Trade growth is expected to continue in the wake of the landmark agreement on granting German firms greater access to Kazakhstan’s strategic raw materials in exchange for technological know-how, which was signed during President Nazarbayev’s visit to Berlin in February this year. The German Business Delegation for Central Asia in Almaty represents some 120 German company offices and branches in Kazakhstan. German companies have also invested capital in a further 170 small and medium-sized companies in Kazakhstan. Developing cooperation at this level is a priority and potential has been identified in a number of sectors including metalmaking, the chemical industry, mechanical engineering and tourism. The two countries have also expanded relations well beyond trade and economics, into the culture and educational spheres. The Goethe Institue in Almaty operates a wide range of cultural and language-teaching activities across Kazakhstan. School exchange programs, university scholarships and research partnerships such as that which exists between the Munich Institute of Technology and East Kazakhstan State Technical University, all serve to forge strong ties between Germany and Kazakhstan. On October 20-21 the Deputy Prime Minister of Kazakhstan, Yerbol Orynbayev, visted Berlin to further the implementation of agreements signed during President Nazarbayev’s February visit, including developing a dual system of professional-technical education in Kazakhstan, based on the German model. At the Berlin Dual Education College, German experts shared their experience on developing and implementing varoius international projects on professional-technical education. The Deputy Prime Minister also met with the principals of the German Academy for International Cooperation to discuss expanding the successful management training program which has included Kazakhstani participants since 2003. He went on to discuss cooperation on technology transfer and the development of applied sciences with experts at the FraunhoferGesellschaft research institute and the Steinbeis University.

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World Bank “Doing Business 2013” Report Kazakhstan has moved up seven places to 49th position out of 185 economies reviewed in the World Bank annual survey: “Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises”. The tenth edition in the “Doing Business” series, the 2013 report compares business regulation across 185 economies worldwide, by assessing how domestic companies are impacted by regulation across ten key areas including starting a business, getting credit, protecting investors and enforcing contracts.

Kazakhstan is among the ten countries showing most improvement since last year. Poland gained the top position on this scale, for four regulatory reforms making it easier to register property, pay taxes, enforce contracts and resolve insolvency. The other economies showing the most improvement in ease of doing business were Burundi, Costa Rica, Greece, Mongolia, Serbia, Sri Lanka, Ukraine and Uzbekistan. In the regional listing for Central Europe and Central Asia, Kazakhstan ranked seventh out of 24 economies for ease of doing business. The highest ranking achieved by Kazakhstan on any of the ten measures was tenth place for the protection of investors (unchanged from last year), while most progress was made on the measure relating to starting a business, where Kazakhstan moved to 25th place from 55th, on the strength of abolishing the minimum capital requirement. Strong improvement was also registered on the ease of getting credit, where Kazakhstan advanced to 83rd position from 97th the previous year, as a result of a new law changing the regulation of the rehabilitation procedure under bankruptcy legislation and specifying several conditions under which secured creditors can apply for relief during the procedure. There was a marginal improvement to 80th place from 81st in relation to the ease of getting electricity, while Kazakhstan retained an unchanged 28th place on two other key parameters: registering property and enforcing contracts. Singapore topped the ranking as the easiest place in the world to do business for the seventh consecutive year, followed by Hong Kong SAR, China, New Zealand, the United States and Denmark. Georgia was a new entrant to the top ten. Over the ten years spanned by the series, 80 economies have implemented close to 2,000 business regulation reforms, two-thirds of which have aimed at reducing the cost and complexity of regulatory processes. Eastern Europe and Central Asia is the region which has implemented most improvements, to overtake East Asia and the Pacific as the world’s second most business-friendly region. The World Bank reports that a growing body of research has mapped the positive effects of simpler business regulation on a range of economic outcomes, such as job creation and a faster pace of new business growth.

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Dominican Republic Supports EXPO-2017 Bid A delegation from Kazakhstan visited the Dominican Republic on October 19 as part of the program to advance Astana’s bid to host EXPO-2017. National coordinator of the Astana EXPO-2017 bid and Executive Secretary of the Ministry of Foreign Affairs of Kazakhstan, Rapil Zhoshybayev, met in the capital, Santo Domingo, with the Secretary General of the Ministry of Foreign Affairs of the Dominican Republic, Axel Wittkop, and Ambassador at Large, Rafael Melo. It was the first visit to the Dominican Republic by a Kazakhstani delegation at this level since diplomatic relations were established in July 2011. A presentation on the Astana bid highlighted the proposed “Future Energy” theme, which is relevant to people around the world and reflects Kazakhstan’s many anti-nuclear and environmental initiatives aimed at resolving global issues in security, the environment and the search for new energy sources. Mr. Wittkop confirmed that the Ministry of Foreign Affairs of the Dominican Republic would send an official note of support for Kazakhstan’s bid. The two sides went on to discuss developing bilateral cooperation through expanding agreements and the possible formation of an intergovernmental commission, as well as organizing a visit to Kazakhstan by Dominican officials and business representatives. 2017 will mark 166 years since the first International Exposition was held in London’s famous Crystal Palace, specially constructed to showcase the goods of many different countries. Today, in keeping with its traditions, the Expo of the 21st century continues to offer a unique and fascinating insight into the values and priorities of different nations and how they interact. Astana has accumulated considerable experience in hosting major international events such as the OSCE Summit, the 7th Winter Asian Games and meetings of the World Islamic Economic Forum, the Organization of Islamic Cooperation, the Shanghai Cooperation Organization, the CIS and other international organizations. Kazakhstan would be the first post-Soviet state and the first Central Asian state to host an Expo. On 22 November 2012 delegates from the 160 member states of the International Exhibitions Bureau (BIE) will elect the host country for EXPO 2017.

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2012 Football Premier League Final The Shakhter Karagandy team is celebrating this week’s victory over Kaisar Kyzylorda in the final of the Kazakhstan Football Premier League Championships. It was a hotly-contested match from the start, with a penalty against the Shakhter team just five minutes into the game. Goalkeeper Nemanya Džodžo successfully defended against Kaisar striker Roger Canas. Shakhter kept up the pressure throughout the first half and there was a nail-biting moment when Sergey Gridin managed to cut through the Kaisar defense but his shot was wide of the goal. Džodžo showed his prowess by keeping out several further attempts by Shakhter strikers in the first half. Kaisar also had a few chances to score after catching Shakhter on some counter attacks, but Shakhter goalkeeper Aleksandr Mokin ably kept out all attempts. After the half-time talk with coach Viktor Kumykov, Shakhter displayed renewed energy but initially failed to capitalize on some chances. The tide turned with a heart-stopping two goals in the space of two minutes from Maksat Bayzhanov. A third goal from Kukeev, just minutes before the final whistle, clinched a decisive 3:0 victory for Shakhter Karagandy. Football was brought to Kazakshtan by British merchants before World War I and by the early 1930s Kazakh club sides were playing in the Soviet leagues. A Kazakh SSR Football Federation was established in 1959 and in 1976 the Kazakhstan team triumphed in the Soviet First League. After independence was declared in 1991, the Football Association of Kazakhstan was set up and soon accepted into FIFA. The renamed Football Federation of Kazakhstan (FFK) went on to join UEFA in 2002. The FFK is now the main governing body of football in Kazakhstan, organizing men’s and women’s national teams.

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Also in The News… • At a government meeting this week, Minister of Finance Bolat Zhamishev presented a draft amended budget for 2012-2014, in which VAT on imports are expected to exceed the original targets by over 1.3 million tenge. The bulk of the extra revenue is a result of the agreement on VAT compensation signed in May between the Ministry of Oil and Gas and the Kashagan consortium. (Tengrinews) • On October 23, the Government of Kazakhstan approved an updated national budget for 2012-2014, which takes into account changes in the macroeconomic forecast for 2012-2016. An analysis of the economic situation and calculations based on actual income for the first nine months of 2012 have shown that overall revenue is expected to decline. The new budget aims to reduce costs and increase the budget deficit to cover these losses, according to the Minister of Finance. (Kazinform) • Kazakhstan’s foreign trade turnover increased by 13.5% in the first nine months of 2012, according to the Minister of Economic Development and Trade. Exports of goods increased by 9.3%, and imports by 24.1%. The trade surplus was 34.2 billion U.S. dollars. (Kazinform) • Kazakhstan’s gold and currency reserves amount to USD 85.5 billion according to the Minister for Economic Development and Trade Erbolat Dossayev, an increase of USD 12.5 billion since the beginning of the year. He also noted that real personal incomes since January have increased by 9.1% and real wages by 11.1%. (Kazinform) • During the first nine months of 2012, 4.5 million square meters of new housing have been built in Kazakhstan, according to Erbolat Dossayev, Minister for Economic Development and Trade. He also noted that 281.6 billion tenge have been invested in the construction of housing since January. (Kazinform) • According to the Prime Minister, GDP has grown by 5.2% since the beginning of 2012 compared to the same period last year. He also noted that the volume of industrial production was 0.5% higher than for the same period last year, at 12.1 trillion tenge, but that agricultural gross output was down by 8.4% on last year due to adverse weather conditions. The consumer price index, which determines the rate of inflation, stood at 103.9% in September 2012 compared to December 2011. (Kazinform) • Kazakh chess player Bolat Kabyzhanov came second in the World Deaf Chess Championships in Almaty. Sponsorship for the event was provided by the telecommunications company “Beeline” that has set up a special tariff plan for deaf people. (Kazinform) • The volume of capital investments in Almaty for January-September amounted to approximately 304 billion tenge; up 9.2 % from 2011. Around 146 billion tenge were spent on construction in the city during the same period; an increase of 15.6 % in comparison with 2011. (Kazinform) • Astana’s budget has grown to 4 billion tenge. The mayor of Astana said that there is an overall trend of stable economic growth in the city. (Kazinform) • As part of the “Western Europe-Western China” project, particular attention is being paid to the large number of populated areas along the route in South Kazakhstan. It is estimated that 50 bridges and viaducts will be constructed to improve transport links in this area. (Kazinform) • The city of Kyzylorda is to be the starting point for the “New Silk Road” information tour organized by the Ministry of Transport and Communications together with the Kazakhstan radio and television channel and the Drivers’ Association of Kazakhstan. The three-day coach tour will cover over 1000 km of Kazakhstan’s section of the international transport corridor, allowing tourists to see the new road and learn about the different phases of the construction process. (Kazinform)

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Things to Watch… • The third Kazakh-British oil logistics forum will be held in Atyrau on October 30-31. The aim of the forum is to promote long-term business relations between Kazakhstan and British companies and to increase the share of local content. The forum is jointly organized by the UK Department of Trade and Investment, Shell Kazakhstan, BG Kazakhstan, and Kazakhstan’s National Agency for the Development of Local Content with the support of the Ministry of Industry and New Technologies.

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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Astana Calling #276