Kazakhstan: Keystone of a Fast-Emerging Central Asia

Bolstered by last September’s parliamentary elections, President Nursultan Nazarbayev continues to lead the drive to open up Kazakhstan’s economy and political spectrum since his country claimed independence in 1991. Former Deputy Minister for Foreign Affairs and current Kazakh Ambassador to France, H.E. Dulat Kuanyshev, describes Kazakhstan’s strategic role in efforts to stabilize Central Asia and spur regional development.

The Diplomatic Letter: Mr. Ambassador, President Nursultan Nazarbayev called Kazakhstan’s September 2004 parliamentary elections a test of the country’s “political maturity.” How would you assess Kazakhstan’s political transition thus far? As your country moves forward with plans to widen the parliament’s powers and pursues its bid for the 2009 OSCE presidency, could you describe the key challenges that must be overcome to firmly entrench democratic values in Kazakhstan?

H.E. Doulat Kuanyshev: Looking back, we see that all the reforms carried out to date in Kazakhstan have been very systematic, progressive, and pragmatic. President Nursultan Nazarbayev deserves wide credit for these accomplishments, and for greatly strengthening our republic’s sovereignty.
Thirteen years after claiming independence, Kazakhstan has become a country with a solid market economy that is making its voice heard within the international community. We have managed to overcome numerous social and economic crises over this period. We have also taken the “painful step” of moving from a Soviet-style planned economy to a free-market economy. Our country, like other countries in the Community of Independent States (CIS), has tackled the problem of economic stagnation by launching tough reforms. This difficult and painful transition has upset the way the Kazakh people live, which is why we are working hard to ensure that these new values and democratic practices take strong root in our society.
The very positive headway made in Kazakhstan in recent years confirms that our government is able to implement even the most difficult reforms, for the good of our country and society. Our economic policy has been very successful thus far, with GDP growing over 9% for the fourth consecutive year, and GDP per capita climbing to $1,954.60 in 2003. When it comes to attracting foreign investment, Kazakhstan has taken the “pole position” ahead of all other CIS and Eastern European countries (drawing $27 billion in 2003). We have overhauled our financial system, aligning it with standards in developed countries. International experts say that the Kazakh tax code enacted in 2001 takes the best interests of both the state and taxpayers to heart. The reforms carried out in Kazakhstan have enabled thousands of people to start their own businesses as well as bringing down unemployment. Thousands more businesses have been modernized. The Kazakh people’s standard of living has also improved. The average retirement benefit received by our citizens is the highest in any CIS country. We have also paid back our debt to the International Monetary Fund (IMF) and the European Union by $US 750 million. We expect our budget revenues to reach the symbolic bar of one trillion tenges (some 6.33 billion euros) in 2004.
Thanks to our hard efforts, the World Bank now ranks Kazakhstan among the developing countries with higher than average revenues. Both the EU and the United States now consider our country a market economy. They also deem it the undisputed leader in the Central Asian region, as the initiator of all key regional integration processes in the Post-Soviet Space.
Despite the great strides Kazakhstan has made, we must not allow ourselves to be lulled by flattery or smugness. The Kazakh government is working hard to implement an ambitious development program that focuses on the industrial, innovation, agricultural, and construction sectors. We realize that there is still a long, hard road ahead of us, riddled with obstacles. All the same, it is now unanimously acknowledged that Kazakhstan has managed, in record time, to preserve its political stability while spurring the economic growth without which its long-term development would simply be unthinkable.
Our country’s success is all the more remarkable when we consider the fragile balance that now reigns in Central Asia. Indeed, Kazakhstan lies near several major sources of instability, including Afghanistan, the Middle East, and even Iraq. What’s more, our region has become a highly strategic zone, one in which all the world’s major powers have a vested interest. In view of the current geopolitical situation, we have bolstered our state institutions, to protect our country’s political stability and economic growth and enable it to surmount the challenges and threats to its security.
Making the concepts of economic freedom and free political choice a reality in Kazakh society is our top strategic objective. The only way to reach this goal is to ensure that Kazakh society takes a brand-new approach to development, one founded on the universal values of democracy and respect for human rights and freedoms. This is our most firmly held belief. All the economic reforms that have been made in our country are interdependent, and go hand-in-hand with the political democratization process. At this stage of the process, now that the economic reforms have become irreversible, it is only logical for us to begin implementing a new program that will overhaul the country’s political system.
The new electoral law enacted this past April is the cornerstone of the campaign to reform our country’s political system. In accordance with international standards, this new law calls for strengthening the role of political parties and creating conditions under which their candidates will be eligible to run and to be elected to office in Kazakhstan. President Nursultan Nazarbayev outlined these measures at the congress of the Otan Republican Party (Fatherland) on June 15th of this year, when he also proposed strengthening the role of the Kazakh parliament. We are firmly convinced that the Kazakh parliament should not be restricted to merely approving the budget, but should have wider monitoring powers and even play an active role in monitoring the government. Our president has also called for changing the way governments are put together, by introducing the concept of a parliamentary majority. The September 19th parliamentary elections were an important step forward, in that the new parliament will be responsible for implementing these political reforms. Finally, I would like to stress that twelve different political parties participated in the elections, in a period of strong economic growth. We thus believe that these elections were indeed a true “test of Kazakh society’s political maturity.”

T.D.L.: Kazakhstan has posted an average annual growth rate between 9 and 10% since 1999, becoming a Central Asian economic powerhouse. Could you summarize the broad lines of the Kazakh development strategy, as laid out in the “Strategy 2030” plan? Now that the standard of living in your country is on the rise, what is the government doing to spur similar advances in the education and health sectors?

H.E.D.K.: The “Kazakhstan-2030” strategic action plan was first put forward by President Nursultan Nazarbayev, then approved in 1997. It identifies several priority objectives: spurring sustainable development, creating an independent and active citizenry, making the Kazakh people aware of our responsibility to future generations, championing the principle of Eurasian integration, ensuring respect for private property, and strengthening the vertical power structure. This development strategy is being implemented in projects funded by several national financial institutions and the Kazakh government. We began to see positive results as early as 2003. For the first time in our country’s recent history, output from our processing industries surpassed that of the mining sector. The mechanical engineering industry has also grown a full 20%. On a broader level, we hope that the successful implementation of this plan will enable Kazakhstan to join the ranks of the developed countries by the year 2030. With that in mind, we have set the following medium-term objectives:
– diversifying the national economy by creating high-tech industries that meet the standards of the modern global economy;
– using investments in our mineral industries as the locomotive of growth for our processing industries;
– making our food industry more efficient, and improving the standard of living in rural areas;
– gradually increasing investments in the social arena, to enhance the country’s human potential.
Kazakh authorities also launched a new development plan for the industrial and innovation sectors earlier this year, with the aim of ensuring steady economic growth and tripling GDP by 2015. This plan is absolutely essential to the successful completion of our country’s industrialization process. In one of the plan’s key measures, a free-trade zone called the “Innovation Technology Park” has been created to boost the country’s innovation potential. A national biology center as well as a nuclear technology center are also in the works.
The Kazakh government has approved a new strategy for building low-cost housing that will go into effect at the start of 2005. The goal is to provide housing to large segments of the population by lengthening loan repayment periods and reducing initial down payments as well as loan rates. What’s more, we expect this policy to have a trickle down effect, leading to the creation of over 40,000 new jobs.
The Kazakh government set aside 905 million euros in 2003-2005 for the revival of the country’s rural zones. Various state programs have been launched to this end, many of them focused on bolstering the agriculture sector. Thanks to these measures, Kazakhstan’s agricultural output rose 9.5% in 2003, with our wheat exports climbing to over 5 million tons. In addition, some 90,5 million euros were invested in 2004, and again in 2005, to improve the educational and health institutions and drinking-water supply in rural areas.
Rising state revenues will enable us to begin launching new social programs targeting specific objectives such as developing rural zones, fighting poverty, and building low-rent housing. But our extremely healthy macroeconomic indicators will mean very little if they do not improve our citizens’ well-being. We are thus setting aside as much funding as this steady economic growth allows, and using it to gradually spur a real increase in the people’s standard of living. This year marked the end of our three-year program for reducing poverty and unemployment. We managed to reduce the number of low-income Kazakhs by 25%, and cut the number of people living under the poverty line in half. To give you a better idea of the great strides we have made: Kazakhstan is the only CIS country that has managed to rebuild the savings its people lost when the USSR collapsed and their deposits in Soviet banks were wiped out.
With regard to our country’s social policy, let me add that the Kazakh government intends to set aside 90,5 million euros to meet the country’s public health needs. We plan to build some 90 new medical facilities and renovate more than 450 others over the next three years. Kazakhstan’s reform policy will affect 1,900 educational institutions all across the country, and has already led to the construction of 68 new schools in 2003. Last February, the government took a new approach to national education that calls for overhauling Kazakhstan’s education system. Higher education degrees will be aligned on the integrated Baccalaureat-Master’s-Doctorate system. We will also open new Ph.D. programs in cooperation with internationally renowned foreign universities. The overall goal of this reform is to bring the Kazakh education system in line with international standards. To that end, Kazakhstan signed the 1997 Lisbon Convention on the Recognition of Qualifications Concerning Higher Education in the European Region. We have also opened colleges, vocational training institutes, and universities where the courses are taught in English, such as the Kazakh-British Technical University, the Kazakh-German University, KIMEP Business School, and many others. The Miras International School, for example, now offers examinations for University of Cambridge diploma programs. Finally, Kazakhstan is the first CIS country to have fully computerized all of its secondary schools. As President Nursultan Nazarbayev underscored in his 2004 address to the Kazakh people, if we want to make our economy competitive at the international level, then our nation itself must first be made competitive.

T.D.L.: Foreign capital is a key ingredient in Kazakhstan’s economic development strategy. Your country has become the second leading destination for foreign investment in the Community of Independent States (CIS), behind Russia. With most foreign investment still focused in the oil sector, what are Kazakh authorities doing to lure investors towards other economic sectors? In view of the debatable effects of the new “Investment Law” enacted in January 2003, what steps is the government taking to improve your country’s business climate?

H.E.D.K.: Investments are the cornerstone of a growing economy. This is equally true for developed countries, including the United States, the uncontested leader in this area. Investments in Kazakhstan are governed by the pertaining judicial and legislative frameworks, along with our bilateral agreements on the promotion and mutual protection of investments. Generally speaking, Kazakh investment laws are designed to foster a more diversified national economy, by promoting our most promising economic sectors outside of the raw materials sector.
The drive to draw greater investments to our country is a key part of Kazakhstan’s Industrial and Innovation Strategy. These efforts are focused primarily on the processing and mechanical engineering industries, along with the agricultural sector. We have set up a variety of new institutions to make these sectors more enticing, including the «Kazinves» investment center, the Development Bank, the Engineering and Technology Transfer Center, the Investment Fund, and the Innovation Fund.
Our laws are, clearly, far from perfect. But the key thing is that they are steadily improving, thanks to the experience we have gained in this arena. In the 1990s, Kazakhstan made wide concessions to foreign firms looking for new investment opportunities. From now on, however, we will be subjecting them to more stringent requirements as concerns environmental protection, labor contracts, and working conditions.
In addition, the Kazakh government’s fiscal and budget policies are designed to spur the creation of SMEs and help diversify our economy. The National Bank’s official rate has been cut back to 7%. Our VAT has fallen from 21% to 16%, while the social tax rate has dropped from 26% to 21%.
International economic and financial circles have labeled Kazakhstan a promising market, reassuring us that our country is indeed moving in the right direction. We have created favorable conditions for investments, foreign direct investments included. Moody’s Investors Service and Standard & Poor's confirmed the growing confidence in the Kazakh economy in September 2002, upgrading the country’s investment grade status to BBB+.
Since 1993, investors have poured a total of $US 27 billion into the Kazakh economy. The number of partially foreign-owned joint stock companies has steadily risen. According to the National Statistics Agency, on 1 November 2003 there where 5,300 joint-venture companies and 8,100 foreign-owned firms in Kazakhstan.

T.D.L.: Kazakhstan became a key player on the Central Asian stage with the discovery of the Kashagan oil field, the world’s biggest oil find over the last thirty years. Your country’s participation in the Baku-Tbilissi-Ceyhan (BTC) project is uncertain, and plans to build pipelines to China and Iran are still in the study phase. What are Kazakhstan’s key objectives in the energy sector? What are your thoughts on the new “Big Game” in Central Asia? As your country pushes forward with building multifaceted ties, how will it maintain the balance it has struck with the key players in the region, namely Russia, the U.S., and China?

H.E.D.K.: Our country is in a rather contradictory position right now. The Caspian Sea is believed to contain a wealth of energy resources, at a time when the international community’s hydrocarbon needs are steadily rising. But our country does not have direct access to maritime routes, which means it needs to use every means of export available, starting with oil pipelines that allow us to get our hydrocarbon resources to international markets. The development of the Caspian's resources is part of a global process in which all of the world’s great powers have a vested interest, making the situation all the more complex.
Under these circumstances, Kazakhstan has taken a firm stand on the Caspian region: since this area is a highly promising source of wealth, it must not be used as a pretext for sparking geopolitical clashes. And while this region is far from the breaking point, it does have a particularly high potential for conflict. We believe that the EU, the U.S., China, Russia, and countries neighboring our region should look at the Caspian as a single common market. The development of regional resources could be explored in a multilateral dialogue that brings together all the concerned parties, national governments and investors alike. Building a global partnership in the Caspian region could help bring stability and security to Central Asia, a key region in the ongoing battle against terrorism and religious extremism.
On a broader scale, Kazakhstan’s foreign policy objectives are intimately linked to our national interests, requiring us to maintain friendly, balanced and stable ties with the United States, Europe, Asia, and the Middle East, as well as nearby countries. Kazakhstan thus has no choice but to pursue a “multifaceted” diplomatic policy. Our country’s dynamic economic growth and continued domestic stability are the direct outgrowth of Kazakh foreign policy. We are already seeing the positive impact of this approach, which has led to a heavy inflow of investment, several promising economic projects, and wide international support for Kazakhstan.

T.D.L.: Kazakhstan and Russia continue to maintain close ties, as reconfirmed by President Vladimir Putin’s state visit to Astana in January 2004. How would you describe current Russian-Kazakh relations, as Russia pushes forward with its efforts to expand cooperation between CIS countries? Does the large Russian minority living in the northern part of your country directly affect these ties?

H.E.D.K.: Strengthening our bilateral ties with Russia is a top priority for Kazakhstan. Firstly, because Russia is one of our country’s strategic allies. We share a border over 7,000 km long. Our two peoples share a wide array of close direct contacts in both the cultural and economic arenas. Over 30% of Kazakhstan’s population is of Russian origin. Inversely, more than one million Kazakhs live in Russia. Their legal status was settled in 1994-1995, with the signing of an agreement making it easier for immigrants from nearby countries to obtain Russian nationality.
Kazakhstan and Russia signed a Treaty on Friendship, Cooperation and Mutual Assistance that reflects the fundamental changes in their ties since the collapse of the Soviet Union. It was completed in 1998 with a declaration on mutual eternal friendship and alliance orientad towards the XXIst century. Our two countries are pushing forward with synchronous development. The international community now recognizes both Kazakhstan and Russia as market economies. We are running up against very similar problems as we try to spur steady economic growth. We are also facing the same destabilizing forces, namely: international terrorism, religious extremism, drug trafficking, and organized crime.
What’s more, Russian policy toward the CIS is very similar to Kazakh policy. We believe that close cooperation between CIS member countries is of utmost importance, given the escalation of tensions in the region and the constant clashes up and down CIS borders. Resolving these conflicts is a top priority. We must all work together to this end, in order to overcome the threats to our countries’ stability and prosperity. It is, nonetheless, true that our economic ties are far weaker than our political ties.
The European Union holds out a convincing example of the advantages of regional integration founded on the principles of free participation, respect for national sovereignty, equal rights, and the firm will and duty to meet all commitments. These same principles form the foundation of the CIS as well.
Kazakhstan wants to heighten integration and build a stronger partnership between CIS countries. This should include the creation of a customs’ union in the Eurasian Economic Community as well as the implementation of the Collective Security Treaty, a brand-new tool for guaranteeing security in the region.
You mentioned that Kazakhstan is home to a large Russian minority. Let me underscore the fact that our country is a multiethnic state whose citizens come from 130 different nations. Our Constitution identifies Kazakh as the “state” language, while Russian is officially used. Kazakh television broadcasts in 12 languages, while our radio stations use 6. Our daily press is published in 11 languages. Our elementary school children are taught in seven different languages: Kazakh, Russian, Uzbek, Uighur, Tajik, Ukrainian, and German. National inter-ethnical interfaith unity is the bedrock of our country’s political stability. It should also be noted that during the years immediately following Kazakhstan’s independence, several thousand people of diverse descent left our country to return to their historic homelands. This led to a drop in the number of Kazakhs of Russian, Ukrainian, and German origin. Kazakhstan’s economic revival and improved standard of living have since prompted many of them to move back to our country.

T.D.L.: The former Soviet republics of the eastern USSR still don’t cooperate very closely, despite the creation of a handful of regional organizations like the Eurasian Economic Community. What can be done to enhance unity in a region plagued by narcotics and weapons trafficking, as well as recurrent clashes over water issues? In view of the Aral Sea environmental disaster, what is Kazakhstan doing to protect the environment at the national and regional levels?

H.E.D.K.: Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Tajikistan have extremely strong and friendly relations, which is why expanding our ties with these countries is a key priority for us. We all face the same problems, brought on by the transition that followed the breakup of the USSR. It is absolutely essential for us to have stable and prosperous countries at our side.
In order to resolve the problems facing us right now, we must maintain friendly relations and work hand-in-hand whenever possible. This is especially true in our efforts to overcome the socioeconomic crisis engendered by the collapse of the Soviet economic system and deal with environmental problems like the Aral Sea disaster. Kazakhstan is also doing its utmost to turn the friendly ties between its neighbors into real regional unity. We cannot, however, deny that this unity is being blunted by our countries’ diverging economic interests and disparate levels of development. We are, all the same, determined to champion greater economic integration in Central Asian countries, based on the interdependence and complimentary nature of their economies. Not only will this help spur economic growth and social advances within these countries, it will also enhance security and stability throughout the entire region.
Finding a more rational way to use our water and energy resources remains the top objective in regional cooperation. We have not managed to put together a common judicial framework governing these areas. There are also lingering problems caused by non-respect for commitments on the use of water from cross-border rivers. Our second biggest priority is expanding regional trade, which has also run up against a multitude of technical roadblocks. Boosting cooperation in the transportation and communications sectors is our third objective. Since none of the countries in the region have maritime access, we are all eager to reactivate the ancient “Silk Route” as the new crossroads of trade exchanges.

T.D.L.: Kazakhstan and China have expanded their bilateral cooperation considerably in recent years. What are your thoughts on Beijing’s growing influence in Central Asia?

H.E.D.K.: Kazakhstan and China share a 1,500-km border. As next-door neighbors, it is in the best interest of both countries to maintain stable and balanced ties founded on mutual trust and respect.
In December 2002, Kazakhstan and China signed The Good-Neighborly Treaty of Friendship and Cooperation, which is the judicial base of our economic and trade ties.
Moreover, China is currently the world’s biggest economic market as well as its leading hydrocarbon consumer. As a country directly adjacent to this tremendous market, Kazakhstan is trying to use it to spur its own economic growth, with special focus on diversifying its oil export outlets. In 2000, the total volume of trade between our two countries was $US 1.5 billion. That figure had doubled in 2003! The Kazakh business community is hence keenly interested in exploring investment opportunities on the Chinese market, especially in northwest China.

T.D.L.: At this year’s annual summit of the Shanghai Cooperation Organization (SCO) in Tashkent, Uzbekistan, the presidents of the six member states officially opened the SCO’s new regional anti-terror structure (RATS). Could you tell us how terrorism and the rise of religious extremism has affected the region? As Kazakhstan prepares to take over the rotating presidency of the SCO in 2005, has it already identified the issues it believes should be given top priority?

H.E.D.K.: The Shanghai Cooperation Organization was born out of the 1996 Shanghai Treaty on Military Confidence Building Measures in Border Areas, and the subsequent 1997 Agreement on the Mutual Reduction of Military Forces in Border Areas. Both these treaties were aimed at helping resolve cross-border disputes between member countries. SCO members have also signed a cooperation agreement to battle terrorism, separatism and extremism, which is the very first international treaty to identify separatism and religious extremism as violent acts punishable by law. This judicial framework has made the SCO an effective structure, as witnessed by the resolution of the border dispute between Kazakhstan and China.
On a broader level, continued efforts by SCO member countries to resolve land disputes, reduce military forces in border regions, and strengthen their economic and trade ties have made the political climate in Central Asia more stable.
Kazakhstan took over the rotating presidency of the SCO in 2003, and has been working very hard ever since to achieve the principles laid out in the organization’s founding charter. The SCO has approved a program of multilateral trade and economic cooperation that will run until 2010. The SCO Secretariat and the SCO Regional Anti-Terror Center have also been opened, the former in Beijing and the latter in Tashkent.
Kazakhstan’s primary goal within the SCO is to help enhance cooperation between our regional partners, with special focus on the economic and trade arenas but also in the transportation and environmental sectors. The volume of trade between Kazakhstan and SCO member countries totaled $US 60.2 billion for the first seven months of 2004, a 68.7% increase over the previous year.

TD.L.: In initiating The Conference on Interaction and Confidence-Building Measures in Asia (CICA), which held its first meeting in Almaty in June 2002, President Nursultan Nazarbayev put Kazakhstan at the heart of the drive to stabilize Asia through closer cooperation, especially on the issue of nuclear disarmament. Do CICA member states have the means to meet these ambitious objectives? Have the U.S. interventions in Afghanistan and Iraq had a significant impact on Central Asia? The Atlantic Alliance displayed growing interest in your region at last June’s Istanbul summit. Should we expect to see Kazakhstan and NATO tighten their ties in the future?

H.E.D.K.: The Conference on Interaction and Confidence-Building Measures in Asia (CICA) is, in effect, one of Kazakhstan’s most important foreign policy initiatives. The idea was first put forward by President Nursultan Nazarbayev in October 1992, during the 47th session of the United Nations General Assembly. It was brought up again during a series of planning meetings held in 1993 and 1994 that involved most of the countries in Southeast Asia as well as the Arab League. The Conference actually came into being in June 2002, when the first CICA summit was held in Almaty, which, by the way, resulted in the stabilization of Indo-Pakistani relations. The CICA is a brand-new multilateral system that is unique to the Asian continent. It collectively guarantees the integrity and security of Asian states, and fosters closer economic and cultural cooperation between member countries.
CICA’s priority concerns testify to just how important this organization really is: preventing nuclear proliferation in China, India, Iran, Israel, Pakistan, and other countries; addressing the economic and environmental aspects of security; conventional weapons; humanitarian cooperation; fighting terrorism and narcotics trafficking; immigration policy, etc. In the final documents adopted at the first CICA summit, the signatory countries confirmed their determination to make their cooperation a major force for fostering stability, security, and development throughout the entire Eurasian zone. We hope that as time goes by, CICA will become the Asian version of the OSCE. It is already an influential organization, given the wide territories it encompasses: nearly 40 million km2, or 90% of Asia and 72% of Eurasia. It brings together nearly three billion people, a full half of the world’s population. The combined GDP of CICA member countries now totals nearly $US 20 trillion.
Kazakhstan, for its part, has put a great deal of effort into organizing the CICA summit, which focuses on studying geopolitical trends within the global economy and gradually developing new mechanisms and structures that boost international security. Another reason why Kazakhstan was in a position to initiate the CICA is that it had voluntarily renounced nuclear weapons and joined the Nuclear Non-Proliferation Treaty.
Our country, along with the entire Central Asia region, considers the stabilization of the situation in Afghanistan and Iraq of utmost importance. But we are also acutely aware of the tensions between nuclear powers on our continent, and call on the international community to step up its efforts to allay them. We believe it is extremely important for these countries to join nuclear nonproliferation treaties as well as nuclear test ban agreements.
With regard to NATO, in 1995 Kazakhstan joined the Alliance’s multilateral forum known as the Partnership for Peace (PfP). Under this program, Kazakhstan’s Central Asian Peace Keeping Battalion (Centrasbat) has conducted joint military maneuvers with U.S. army forces every year since 1997. The Kazakh government considers the PfP a key forum for debating political issues linked to security, as well as a way to build effective and practical military cooperation with Western countries. In a bid to further strengthen our ties with NATO, President Nursultan Nazarbayev has proposed creating a center to train military staff in border security techniques. He has also suggested holding a regional conference in our country, under the aegis of NATO, to advance the fight against terrorism and narcotics trafficking.

T.D.L.: Your country placed a moratorium on capital punishment in December 2003, winning undivided praise from the European Union. Kazakhstan has also made great strides in ensuring respect for human rights. Do you think this will help your country build even closer ties with Europe? As the EU pushes forward with the TACIS and TRACECA (Transport Corridor Europe-Caucasus-Asia) programs, could it help to spur economic development and political advances throughout Central Asia, including in Kazakhstan?

H.E.D.K.: Kazakhstan signed a technical cooperation agreement with the European Union in 1992. In April 2004, we signed another multilateral treaty in Cholpon-Ata, creating a common economic space. It was expanded to include Kyrghyzstan and Uzbekistan and extended until 2000, with automatic renewal every five years, unless one of the parties pulls out. Kazakhstan’s Partnership and Cooperation Agreement with the EU was signed by President Nursultan Nazarbayev in 1995 and put into effect in 1999. It focuses primarily on trade, investments, and fostering democracy and justice. It is the bedrock on which Kazakh-EU ties are founded, in the economic, political, and cultural arenas alike. With this agreement, the European Community committed itself to helping create a market economy and firmly entrench democratic values in our country. It sketched out a framework for European investments in Kazakhstan, and helped Kazakh firms expand their activities in Europe. It also led to the creation of a Cooperation Council and a Cooperation Committee, made up of high-level Kazakh government officials. Finally, our ties with the EU are based on bilateral agreements we have signed with major European powers like France, Great Britain, Germany, Italy, and Sweden, as well as other countries.
Kazakhstan’s “multifaceted” diplomacy considers the EU a key pole in the international community. We are very pleased to see an increase in the number of dialogues on international issues in European bodies, such as the European Parliament and the OSCE. Kazakhstan remains determined to fulfill its OSCE commitments. While we are on this subject, let me say that we hope the upcoming ministerial meeting in Sofia will explore new ways to reform the OSCE to make it better adapted to the new challenges surfacing in our region. Finally, I would like to say that Kazakhstan is highly appreciative of its excellent ties with the EU, which help to counterbalance the particularly strong influence of the United States, Russia, China, and the Central Asian states.

TD.L.: Franco-Kazakh ties remain relatively weak, despite the two countries’ shared stands on a wide array of issues, as reconfirmed during President Nursultan Nazarbayev’s visit to France in June 2003. As Kazakhstan bolsters its position in Central Asia, can France help it build new partnerships with a wider range of countries? Franco-Kazakh bilateral trade is currently focused primarily in the mineral and oil sectors. What other industries have strong potential for expanding our economic exchanges?

H.E.D.K.: France and Kazakhstan established diplomatic ties in January 1992. They laid the foundations for bilateral cooperation during President Nursultan Nazarbayev’s first state visit to France in 1992, and during President François Mitterrand’s first official visit to Kazakhstan in September 1993. The Kazakh President has met with President Jacques Chirac on numerous occasions since 1995, helping to spur a dynamic expansion of our bilateral ties across the board.
President Nursultan Nazarbayev’s last visit to Paris, in June 2003, reenergized Franco-Kazakh political cooperation. During his visit, President Nazarbayev discussed several issues of great concern to the international community with President Jacques Chirac, such as the situation in Afghanistan and Iraq, and in other areas where there is tension. This meeting confirmed, once again, that French and Kazakh leaders have similar political stances on the key issues. In addition to our close political dialogue and interparliamentary cooperation, the Franco-Kazakh strategic partnership has also been strengthened in the education, cultural and scientific arenas, with space exploration leading the way.
This strong political entente is helping to steadily expand bilateral economic ties. Today over 40 French firms are working in Kazakhstan, carrying out major projects in a variety of sectors. We should mention the strong foothold carved out by the French firm Total, which has invested more than $US 400 million in the Kazakh economy in recent years. To give you a few more examples: in the mining industry, Cogema began building a pilot plant for processing uranium in southern Kazakhstan in March 2000, in the city of Moinkum. The French company Ciment (a subsidiary of the Italcementi group) has acquired a 65% share in the Chimkent cement works.
Generally speaking, our bilateral trade is comprised mainly of French imports of raw materials and oil, and Kazakh imports of French food products, consumer goods, and capital goods. In 2003, the total volume of goods traded between our countries was 3.5 times higher than in 2002, climbing to $US 472.2 million. Kazakh exports to France rose to $US 278.2 million, while our imports from France totaled $US 194 million. And while trade between Kazakhstan and France is steadily growing, France’s share of the Kazakh market is still too weak, especially considering that France always runs a trade deficit with our country. France has a relatively weak foothold in the Kazakh market, compared to the dynamic presence not only of Russia, the United States, Turkey, and China, but also of Germany, the United Kingdom, and Italy. France is our 12th trading partner, while Kazakhstan is France’s 24th trading partner. We hope to see this situation improve, particularly with President Jacques Chirac’s planned visit to Kazakhstan, which has been in the works for some time now.