On Dec. 12 Kazakhstan celebrated the 15th anniversary of its independence. Today this country is one of the world’s largest energy suppliers. The international community is taking an increasing interest in the “Kazakh option” of development. What has this largest Central Asian country achieved in the past 15 years? What is the secret of its success and stability? Below Amangeldy ZHUMABAEV, Ambassador Extraordinary and Plenipotentiary of Kazakhstan to Ukraine, shares his views on the subject.
Zhumabaev: Fifteen years are a brief moment in history. However, according to our president, these 15 years can be compared to one century. This is not an overstatement, considering the results we have achieved in this short period of developing our country. We have formulated a foreign policy concept that can ensure sufficiently favorable conditions for building up our statehood and carrying out economic reforms. I believe that these efforts have been crowned with great success. In addition to our economy being recognized as a market one, Kazakhstan is regarded as an indisputable leader in the Central Asian region.
There is more than one billion dollars’ worth of direct foreign investment. At the same time we have reached a level where domestic investments are outstripping foreign ones. This is an indicator that the economy is becoming healthy and that its growth is constant. In terms of macroeconomic indices, we are even with Eastern European countries. In the international financial aspect, Kazakhstan has become a net creditor. Our living standard has increased significantly: according to the World Bank’s classification, Kazakhstan ranks with above- average per capita income countries.
Our country is a supplier of resources. Kazakhstan entered its new era of development by switching from privatization and introducing market mechanisms to developing innovative technologies. We are proceeding from the resource component in the economic sphere and are entering a new and better quality phase of economic progress.
In the foreign political domain, our main achievements are the security guarantees we have received from the five permanent members of the UN Security Council. Kazakhstan has unilaterally closed the Semipalatinsk nuclear testing ground and adopted a historic decision on rejecting the nuclear legacy; in this sense the reputation of my country is rather high all over the world.
What do you think secures Kazakhstan’s stability and economic progress? A strong president or something else?
Zhumabayev: There is a very good Kazakh saying: “In a country without dreams, there is no intellect; without a united people, there is no well-being and happiness.” All our people are keenly aware of the wisdom behind this saying. We really treasure this perception. All our achievements, our every success, our support of the efforts and course being undertaken by the head of our state — all this is the undeniable result of stability.
When we talk with our colleagues from developed European countries, we always agree that a strong government helps overcome a crisis during a transition period, if this government has been conducting correct policies and when laws are upheld, which compel everyone to respect each other’s rights.
We are constantly aware that we are a multinational state, and we respect the culture, language, and religion of the representatives of all nationalities (more than 130). We are strengthening peace and accord in our common home, thereby providing conditions for further economic growth and a rising living standard. If we think hard about what is happening around us, it becomes clear that there are many threats and challenges to our stability — suffice it to recall the civil war in Tajikistan.
The peace and quiet that Kazakhstan has enjoyed all these years did not come just like that. It was necessary to adopt special laws that ensure equality for all people, nationalities, religions, and cultures. This was the first stage. But it is not enough to adopt laws. These laws must be made to work, so that the people can become convinced that yes, in Kazakhstan this is really being upheld and equal rights for all are ensured. It is precisely on this basis and for such reasons that stability, friendship, and mutual trust are being upheld in our country. In every public address our president always says that preserving stability rests in the hands of all the people of Kazakhstan; that what we have in Kazakhstan is a gift from God. We hold all this sacred, for herein lies our future, the future of our children, and the well-being of our Motherland.
During the previous CIS summit the president of Kazakhstan proposed initiatives concerning CIS reforms. How does Kazakhstan see its future and that of the Eurasian Economic Commonwealth and the Single Economic Space?
Zhumabaev: The CIS is a priority for Kazakhstan, especially since we are presiding over this organization. This commonwealth has a potential that is far from exhausted. Moreover, cooperation within the CIS framework should be recognized as fruitful because it is instrumental in the implementation of many progressive ideas and joint projects. Problems relating to trade and economic cooperation as well as interethnic relations have accumulated on the CIS territory. Therefore, this organization must be made more attractive to all participants; we must discard everything that is ineffective and add what will be mutually advantageous. This is a difficult task and we have to work on it.
The president of Kazakhstan is confident that Ukraine is also moving in this direction and supporting this association. The similarity of our countries’ stances was confirmed during the last summit in Minsk. According to its proposals, the new model of cooperation within the CIS framework primarily envisages trade and economic cooperation based on the principle of varying-level and -rate integration. Matters relating to national security, stability, territorial integrity, inviolability of national borders, joint counteraction to new challenges and threats, like international terrorism, transnational organized crime, and drug trafficking, remain the focus of attention. The program “Ten Simple Steps toward Ordinary People,” proposed by Nuzarbaev and later adopted by the Eurasian Economic Commonwealth is awaiting its turn to be deservedly employed by the CIS. We have all the preconditions to do this, primarily the good will and desire on the part of the political leadership and people in our countries.
In terms of cooperation dynamics and strategic guidelines, the Eurasian Economic Commonwealth (EEC) is probably reminiscent of the EU model. However, the historical, cultural, and mental commonality of the members of the EEC makes their contacts even closer and mutually advantageous. It is necessary to find a maximum degree of integration within its framework and then proceed to form a joint market. As for the SES, it is necessary to secure the free movement of commodities, services, capital, and manpower within its framework. Here it is important for the EEC and SES to act as complementary structures.
Many former countries of the socialist camp and the CIS have joined, or are determined to join, NATO, so that they can have security guarantees on the one hand, and European living standards, on the other. How is Kazakhstan resolving issues relating to its national security and living standard?
Zhumabaev: The expansion of NATO, which is carrying out missions outside its zone of responsibility, including in Afghanistan, has determined its growing role in world politics. However, after being admitted to NATO, a country will not see an automatic rise in its living standard. My country does not aim to join the alliance, but it is an active partner. Kazakhstan is taking part in the Partnership for Peace Program; cooperation with NATO is necessary for the development of the Kazakh armed forces, so we will continue to work in this direction. During our president’s recent visit to Brussels, NATO Secretary General Jaap de Hoop Scheffer noted that Astana is the alliance’s key partner in Central Asia and said he was sure that Nuzarbaev’s visit would give fresh impetus to Kazakhstan-NATO cooperation.
Kazakhstan has expressed its desire to chair the OSCE in 2009. This is not a matter of political ambition but a desire to demonstrate to the European Union and the Western world that Kazakhstan seeks progress and universal human values, and wants to live as part of the developed world. Ukraine is supporting our intentions.
Addressing the UN Millennium Summit in New York, the president of Kazakhstan declared that globalization, on a par with positive changes taking place throughout the world, is also bringing about a number of negative consequences. Despite its numerous achievements, the UN has not always coped effectively with its tasks of maintaining peace and security. Therefore, using regional security systems, like the Shanghai Cooperation Organization (SCO), Collective Security Treaty Organization (CSTO), and Conference on Interaction and Confidence- Building Measures in Asia (CICA) appears very promising. With their help as well as support from the UN Security Council, it would be possible to settle conflicts without interfering in the internal affairs of sovereign states. Kazakhstan is an active participant in these organizations.
Is Kazakhstan interested in diversifying energy supply routes, particularly in building a gas or oil pipeline to transport the blue and black gold from Ukraine to Europe across the Black Sea?
Zhumabayev: Kazakh companies are showing interest in the Odesa-Brody-Plock oil pipeline project, as evidenced by the Kazakhstan-EU energy supply cooperation memorandum signed in Brussels on Dec. 5, 2006. As for concrete ways for Kazakhstan to participate, they depend on a great many factors, particularly the investment climate in Ukraine. This is subject to negotiations between officials representing competent authorities and business structures in both countries.
To this end, desire and the factor of historical closeness and shared mentality are not enough. In the current conditions of harsh competition, countries that are interested in increasing commodity turnovers and loading their seaports and carrier companies are willing to lower their through rates considerably and establish a most-favored regime. A purposeful policy aimed at providing such conditions for investors and bringing these conditions as close as possible to national procedures is another tangible argument in favor of investment and transit competitiveness.
If Ukraine creates completely competitive tariff conditions and an attractive taxation, investment, and customs duty climate for Kazakh investors — bankers and entrepreneurs — and applies the national system to their business activities in Ukraine, then transits of Kazakh commodities and services, particularly energy supplies to Europe across the Black Sea, will receive the proper impetus and will evolve.
We know that your country has proposed that the Ukrainian side take part in oil and gas prospecting and extracting projects in Kazakhstan. So far, however, we haven’t heard anything about Ukrainian oil and gas prospecting or extraction companies doing business in Kazakhstan. What do you think is blocking this?
Zhumabaev: The topic of Ukraine’s participation in prospecting and extracting oil and gas deposits in Kazakhstan has been repeatedly discussed during formal and informal meetings between officials from both our countries. Ukrainian oil and gas companies started taking an interest in Kazakhstan comparatively recently, so it is difficult to assume that Kazakh legislation, taxation, and customs procedures are impeding the realization of these projects. Kazakhstan is open to investments, and even more so from a friendly country such as Ukraine. The question of Ukrainian oil and gas companies prospecting and extracting deposits in Kazakhstan, as well as supplying energy resources and unifying the tariff system, will be discussed during Prime Minister Viktor Yanukovych’s visit to Astana.
How would you describe the current trade and business situation between our two countries? Will the New Year bring about any changes for the better?
Zhumabaev: In terms of bilateral cooperation with Ukraine, Kazakhstan is placing major emphasis on advanced technologies. Ukraine’s military-industrial complex is of considerable interest, and the same is true of its space exploration potential and cooperation in this sphere. Active work is underway, aimed in all these directions in accordance with the intergovernmental treaty on military and technological cooperation. Ukraine’s experience and expertise are very important to Kazakhstan.
Your country has unique opportunities to offer Kazakhstan access to European commodity and services markets. Therefore, we are interested in using Ukraine’s transit capacities to our mutual advantage. As the oil extraction rate increases in Kazakhstan, so will the importance of countries with transit and processing capacities; eventually additional export routes will have to be developed.
Cooperation between our countries is showing dynamic rates in terms of transport, communications, agribusiness, air and space exploration, as well as in the military-technological and humanitarian spheres. Acting in keeping with the accords that were signed during our president’s visit to Kyiv last year, special production facilities are being created, and farm equipment and machinery parts are being supplied. The Kazakh side is prepared to purchase the AN-148 and take part in the production of this aircraft. Ukraine, whose industrial potential remains unmatched in the region, is instrumental in resolving matters relating to railroad, locomotive, and car maintenance (e.g., railroad car supplies). Together, the Kostanai Diesel Engine Works and the Kharkiv Tractor Plant are manufacturing Ukrainian tractors with Kazakh-made engines.
Kazakhstan does not have direct access to the world’s oceans. Nor did we inherit an aircraft industry from the USSR. However, in maintaining cooperation with Ukraine, the Kazakh side feels no discomfort in this sphere. You must be aware of our president’s warm feelings toward Ukraine, where he studied. Our countries have closely-related business environments and systems of human relations. Businesspeople and bankers in both countries speak the same language.
Seven years ago the newly formed bilateral Ukraine-Kazakhstan trade turnover amounted to zero million dollars. Summing up the first ten months of this year, we have nearly four billion. Provided we keep this bilateral trade turnover rate on an upward curve, Kazakhstan may be listed among Ukraine’s five or six biggest trade partners, just as Ukraine may become such a partner for Kazakhstan.
Are there plans for the presidents of our countries to hold meetings in the nearest future?
Zhumabaev: Ukraine is Kazakhstan’s strategic partner, so we are trying to maintain effective cooperation in all directions and on all levels. As for meetings between the presidents of our countries, there is an agreement that states that 2007 will be celebrated as the Year of Kazakhstan in Ukraine; 2008 will be the Year of Ukraine in Kazakhstan. I take great pleasure in mentioning these events because they are important actions aimed at furthering comprehensive contacts between our countries and boosting their image. Nursultan Nazarbaev will visit Kyiv in February 2007 to attend the ceremony of launching the Year of Kazakhstan in Ukraine. I am sure that arrangements will be made for Viktor Yushchenko to visit Astana to witness the festivities launching the Year of Ukraine in Kazakhstan. Our country considers these events to be of great importance, and we would like to stage them on the highest organizational and creative level. This is an extremely important landmark symbolizing the process of rapprochement of our countries.
