Wednesday, 03 February 2010

3 February 2010 News Digest

Published in News Digest

By Alima Bissenova (2/3/2010 issue of the CACI Analyst)

Kazakhstan to use Finland as example to spur development – Nazarbayev 22 January Kazakhstan needs to adopt practices used by Finland to develop in areas such as business, education and science, Kazakh President Nursultan Nazarbayev said. "Previously, we learnt from the "Southeast Asian tigers" [Singapore]. And our choice was right at that time.

Kazakhstan to use Finland as example to spur development – Nazarbayev 22 January Kazakhstan needs to adopt practices used by Finland to develop in areas such as business, education and science, Kazakh President Nursultan Nazarbayev said. "Previously, we learnt from the "Southeast Asian tigers" [Singapore]. And our choice was right at that time. We copied their strategy and developed. But this stage has come to an end. Now we need to learn from Finland," Nazarbayev said in Astana on Friday, addressing the government's session on the country's socioeconomic development in 2009. "We have visited [Finland] and studied processes there. We have all the necessary documents," he said. Kazakhstan should use Finland's experience of maintaining "high education standards, competition during the distribution of funds among scientific research institutions and sophisticated national infrastructure," Nazarbayev said. Kazakhstan should also borrow Finland's ability to "unite the efforts of the state, science and business," he said. "In the past, we studied and applied the experience of Southeast Asia. But today we will learn from Finland. It would be good if we managed to do even better than them," Nazarbayev said. (Interfax)

Gazprom secures major Azeri gas deal 22 January Russian energy giant Gazprom announced an agreement to double its natural gas purchases from Azerbaijan in 2010 and again in 2011. Gazprom announced it plans to purchase 35 billion cubic feet of natural gas from Azerbaijan in 2010 and 70 billion cubic feet in 2011. The agreement came during a Moscow meeting between Gazprom chief Alexei Miller and Rovnag Abdullayev, the president of the State Oil Co. of Azerbaijan Republic. "The meeting addressed the issues relevant to the launch of Azerbaijani natural gas supplies to Russia for the first time in the history of cooperation between the countries," the Russian gas giant said. Miller added there was no upper limit on the amount of Azeri gas purchases, which he said showed Gazprom was ready to buy as much gas from Azerbaijan as it was able to supply. Azerbaijan has emerged as a regional energy giant. Europe eyes Azeri gas for its lauded Nabucco pipeline, which is intended to break the Russian grip on the regional energy sector. Nabucco enjoys widespread political support but lacks firm commitments from supplier nations. Gazprom signed a purchase and sale contract for more than 1.7 billion cubic feet of gas from SOCAR in October. Azerbaijan holds as much as 45.9 trillion feet of recoverable gas reserves. (UPI)

Pakistan ‘Reaching Out’ To Afghan Taliban In Reconciliation Bid 23 January Pakistan is reaching out to "all levels" of the Afghan Taliban in a bid to encourage reconciliation in its war-torn neighbor, Pakistan's Foreign Ministry said today. "We are trying to reach out to them at all levels and all of us would like that our efforts should bring some results, but at this point in time it is very difficult to say," ministry spokesman Abdul Basit said of Pakistan's efforts. The Afghan government is preparing a reintegration plan with the Taliban that targets lower to mid-level Taliban fighters but has not focused on more senior leaders of the insurgency. Basit said it was important that there be reconciliation at all levels and that Pakistan was helping in this regard. He declined to give any details. "Whether or not our efforts will yield results, we will see," he told Reuters in an interview. "We don't want to discuss the specifics. There are efforts being made and we are trying to win over those Taliban or forces who are 'reconcilables.' Let's see," he added. Asked specifically whether Pakistan was targeting top-level leaders, he said: "We are trying at all levels but where we succeed is another matter." Analysts say Pakistan is well-placed to mediate in Afghanistan, where it nurtured the Taliban in the 1990s. Afghan Taliban fighting U.S. and NATO troops operate from Pakistan's largely lawless border areas with Afghanistan. U.S. Defense Secretary Robert Gates this week urged Pakistan to root out Afghan Taliban factions based in its northwestern border enclaves, from where they have been orchestrating an intensified insurgency in Afghanistan. (Reuters)

Afghan Ban On Farm Chemical With Bomb-Making Potential 24 January The Afghan government has imposed a ban on the agricultural use of ammonium nitrate -- a chemical that is also suitable for making powerful bombs, RFE/RL's Radio Free Afghanistan reports.  The Ministry of Agriculture is advising Afghan farmers to strictly avoid employing that specific chemical in farming and to contact local agriculture officials if they have any of it stored.  Officials say serious action will be taken against violators. Afghan Deputy Home Minister Mohammad Munir Mangal told reporters that Taliban militants use this kind of chemical as much as they can in producing explosives, because of its easy availability. Officials estimate that more than 80 percent of suicide attacks and roadside car bombings involve ammonium nitrate. The move could anger some people in the country's already beleaguered rural areas, where the lucrative opium trade encourages many frustrated farmers to turn to opium poppies despite government and international efforts to curb the crop. (RFE/RL)

Blast Hits Near U.S. Military Base In Afghan Capital 26 January A suicide car bomber has blown himself up near a U.S. military base in the Afghan capital, wounding six civilians, an Afghan security official said. Violence across Afghanistan last year reached its worst levels since the war began in late 2001, despite significant increases in foreign troops. The latest attack came little more than a week after brazen assaults in Kabul killed five people. The suicide bomber struck on a road leading east from the city center near the main entrance to Camp Phoenix, a base used mainly by U.S. forces. Abdulghaffar Sayedzadah, a spokesman for Kabul's criminal investigation department, said six Afghan civilians were wounded. Most had been working nearby, he said, but could not confirm if the base was the attacker's intended target. U.S. and NATO-led forces said they were investigating an explosion outside the main gate of Camp Phoenix and initial reports indicated the cause of the explosion was a car bomb. A man describing himself as a Taliban spokesman, Zabihullah Mujahid, said in a text message to Reuters the attacker was a member of the Islamist group and had been in a car. Mujahid said the target had been a convoy of foreign troops. U.S. soldiers were blocking access to the scene on the Jalalabad road, the main highway leading east out of the capital. An Afghan soldier at the scene told Reuters a suicide bomber had blown himself up as a U.S. military convoy drove by. (Reuters)

Moscow sees progress on Nagorno-Karabakh 26 January Azeri and Armenian negotiators in the Nagorno-Karabakh conflict have agreed in principle to the terms of a draft preamble agreement, Moscow said. Russian Foreign Minister Sergei Lavrov welcomed Armenian President Serzh Sargsyan and Azeri President Ilham Aliyev to the Russian resort town of Sochi to take part in closed-door meetings with the Russian president. Lavrov said both sides agreed to move forward with independent amendments to a series of political solutions for the 20-year conflict, the Interfax news agency reports. "The main result today is that both sides will prepare their tangible ideas of how to formulate the text where there is no agreement," said the Russian foreign minister. The Minsk group of the Organization for Security and Cooperation in Europe, led by France, Russia and the United States, is leading peace negotiations aimed at settling the conflict of the disputed region of Nagorno-Karabakh. Armenia and Azerbaijan went to war over Nagorno-Karabakh in the early 1990s following the collapse of the Soviet Union. Ankara and Yerevan, however, signed protocols aimed at repairing diplomatic relations at an October summit in Zurich, Switzerland. Talks first began in 1993 with Russia, Kazakhstan, Azerbaijan and Armenia all taking part. (UPI)

Shavkat Mirziyev re-elected as Uzbekistan’s Prime Minister 27 January Shavkat Mirziyev has been approved as Uzbekistan's Prime Minister at a joint session of both houses of the country's parliament on Wednesday. Members of the Legislative Chamber and Senators examined and granted a petition from the Cabinet of Ministers to step down before the newly-elected Oliy Majlis (Parliament), said an Interfax correspondent who attended the session. Then President Karimov spoke before the MPs and put forward Mirziyev's candidature for their consideration. After some discussion the MPs approved the premier's candidature and passed relevant resolutions. Mirziyev, born 1957, graduated from the Tashkent Institute of Irrigation and Mechanization of Agriculture. He served as the head of the administration of the Mirzo-Ulugbek district of Tashkent, led the administration of the Dzhizak and Samarkand regions. He has worked as the country's Prime Minister since 2003. The elections to the country's Legislative Chamber and Senate were held in December 2009 and in January 2010. (Interfax)

Kazakhstan eager to win back energy assets 29 January Kazakhstan is trying to extract more cash from domestic oil and gas fields developed by Western companies in a move some observers fear is part of a greater strategy to win back influence over key industries. The Central Asian energy powerhouse announced that it might raise additional budget revenues by levying taxes and export duties on Western multinationals running several oil and gas fields in the country. Kazakh Energy Minister Sauat Mynbayev warned this week that foreign companies should prepare to no longer remain exempt from domestic taxation. Companies that could be affected include Chevron, involved in the Karachaganak gas project, and Exxon Mobil, part of a consortium developing Kashagan, the biggest oil find in 40 years. Mynbayev threatened a rewriting of their contracts, most of them drafted in the late 1990s, when Kazakhstan's economy was in shambles. At the time, Western multinationals moved in and invested billions of dollars into the Kazakh energy sector in exchange for very favorable business conditions. Kazakhstan profited, too: The country's national energy fund, which accumulates the revenues from the oil and gas sector, currently holds nearly $25 billion. Chow, a senior expert on the region, said Kazakhstan is not interested in throwing out Western multinationals."Kazakhstan is different from Russia or Venezuela," Chow told UPI. "Forcing completely new terms would spoil the investment climate and Astana knows that." "Some of these projects are terribly complex, and that's why you need companies like Exxon Mobil," he added. "The Kazakhs don't want control, just a better economic deal." Nazarbayev's government has in the past years managed to balance cooperation with its powerful neighbors, including China and Russia, and with the West. Kazakhstan, for example, is one of the main suppliers of a key pipeline to Europe bypassing Russia, the Baku-Tbilisi-Ceyhan pipeline, but it nevertheless managed to keep relations with Moscow strong. It has been courted many times by the West and the East but has always resisted swinging one way or the other. It now seems like Kazakhstan is emancipating itself, both from the Western multinationals and powerful former protector Russia. When neighboring Belarus was entangled in a dispute with Russia over oil prices, Kazakhstan stepped in and offered its own oil to Belarus. Astana even said it was ready to purchase a stake in a key Belarusian refinery, which Russia's largest oil companies have coveted. Such a direct undermining of Russian muscle-flexing was unprecedented. Yet to remain powerful down the road, Nazarbayev needs to raise more money for his key plan -- modernizing and diversifying the Kazakh economy. The president Friday unveiled plans to spend some $8 billion per year on industrial development starting this year. The money will be drawn from the country's national energy fund, which is due to grow to $90 billion by 2020, Nazarbayev said. More cash from the Western multinationals would further that plan. (UPI)

Kazakhstan increased gold and forex reserves 25 times of 10 yrs – Nazarbayev 29 January Kazakhstan's gold and forex reserves increased 25 times over ten years, Kazakh President Nursultan Nazarbayev said in his annual address to the republic. "Gross international reserves and assets in the National Fund exceeded $50 billion and increase over 25 times in the past 10 years," he said."Thanks to the fund, we not only carried our anti-crisis measures but also returned very important assets to the state, which had been forced into sale when we had difficulties - Ekibastuz GRES-1, Mangistaumunaigaz and a stake in Kashagan," Nazarbayev said. It was earlier reported that the assets in Kazakhstan's National Fund at the start of 2010 came to $24.368 billion, down for 2009 by 11.34%. The National Bank of Kazakhstan's gold and forex reserves increased in 2009 in 16.8% to $23.218 billion. Total assets in hard currency increased by 15.9% to $20.718 billion while assets in gold went up by 25% to $2.5 billion. (Interfax)

Six die in military base attack 29 January The Azerbaijani Defense Ministry opened an investigation Friday into a shooting rampage on a military base that left six dead, officials said. It was the second such incident reported at the base this month. In Thursday's assault, military sources said two Azerbaijani soldiers opened fire with automatic weapons at the Dashkasan base in central Azerbaijan. Four officers were slain and the alleged gunmen then killed themselves. Two other soldiers were injured.  Details were lacking and it was not known what had led up to the attack, RIA Novosti reported. Previously this month, at the same base, six officers were killed in similar fashion, an Azerbaijani newspaper said Friday. (UPI)

Iran gas sanctions worry Azerbaijan 29 January A U.S. Senate bill authorizing Washington to sanction gas sales to Iran could target the State Oil Co. of Azerbaijan Republic, the Baku government said. A U.S. Senate measure passed Thursday gives U.S. President Barack Obama the authority to sanction persons or other entities that sell gasoline or refined petroleum products to Iran. "The U.S. Senate passed a law potentially fraught with sanctions in respect to SOCAR," the Azerbaijan Business Center notes. The report from Baku on Friday said SOCAR and its affiliates "occasionally" sell oil and other products to Iran. Western powers look to Azerbaijan as a major player in emerging energy dynamics in Central Asia. Europe looks to the vast gas resources in Azerbaijan as a potential source for their Nabucco pipeline, which would ease the Russian grip on the regional energy sector. (UPI)

Turkey warns deal with Armenia could fall through 29 January Efforts to reconcile Turkey and Armenia and open their common border could fail unless the process is carried out "properly," Turkey's foreign minister said today. "If we are not convinced that the process is being carried out properly, there is no possibility to carry it forward," Ahmet Davutoglu told Turkish journalists in London. Davutoglu's warning is the strongest response yet from Turkey to an Armenian court ruling this month that has cast doubt over accords signed in October. The Constitutional Court reaffirmed the Armenian government's obligation to seek recognition of the World War I mass killings of Armenians by Ottoman Turks as genocide -- a term vehemently rejected by Turkey. Turkey has accused Armenia of trying to rewrite the protocols that launched the reconciliation three months ago. The opening of the Turkish-Armenian border has been seen as a way to increase stability in the South Caucasus, an area crisscrossed by oil and gas pipelines. Reaching a deal with Armenia would also help to support Turkey's flagging EU membership bid. The peace efforts, which have been supported by the European Union, the United States, and Russia, are also in danger of deadlock due to a simmering territorial conflict in the Caucasus that has pitted Armenia against Turkish ally Azerbaijan. Turkey closed its border with Armenia in 1993 in solidarity with Azerbaijan during the height of the Nagorno-Karabakh war, which saw ethnic Armenians clash with Azeris over the disputed territory in violence that killed some 30,000. (Reuters)

Interpreter kills two U.S. soldiers in Afghanistan 30 January An interpreter in Afghanistan shot dead two U.S. soldiers, a U.S. military official said toay, adding that the attacker appeared to be a disgruntled employee rather than a militant. The NATO-led force in Afghanistan said earlier that two U.S. service members and one "U.S. employee" had been killed in an incident in the east of the country on January 29, without giving further details. "Initial indications are this was a case of a disgruntled employee," said the U.S. military official. The incident took place in Wardak Province southwest of Kabul, which was also the scene of a clash between Afghan troops and NATO-led forces overnight in which the foreign troops called in an air strike that killed four Afghan soldiers.  There was no indication that the two incidents were linked. An Afghan provincial official, who also asked not to be named, said the interpreter had quarrelled with the soldiers over pay and treatment, before opening fire. The interpreter was shot dead by other soldiers after killing the two. (Reuters)

Kazakhs Protest Against China's Growing Influence 30 January  Kazakh protesters scuffled with police today at a rally against their government's burgeoning ties with neighbouring China. Many in Kazakhstan, a vast but thinly populated nation, are suspicious of China's growing influence in resource-rich Central Asia and accuse the government of selling out oil riches to their giant, energy-hungry neighbour. President Nursultan Nazarbaev said last month China had proposed renting a million hectares of Kazakh land to grow soya and other crops. The government later denied any plans to lease land to China. Shouting "Down with Nazarbaev!" and carrying banners depicting China as a threatening dragon, hundreds of people gathered in the biggest city Almaty. "Handing over land to foreigners should be forbidden," opposition activist Marzhan Aspandiyarova told the rally. Dozens of people tried to stage a march across Almaty and clashed briefly with police who blocked their way. Police detained one protester and broke up the crowd. Nazarbaev has been in power since 1989 and enjoys sweeping powers in the former Soviet republic. He tolerates little dissent and public criticism of the veteran leader is taboo. Analysts say China now controls nearly a quarter of Kazakhstan's annual oil output of 75 million tons. Kazakh oil is shipped to China via a pipeline with capacity of 10 million tonnes a year and there are plans to expand it. In 2009, China invested more than $10 billion in projects in Kazakhstan. "They [the government] borrowed $13 billion from China and now they want to pay it back with our land," Bolat Abilov, a leader of the opposition party Azat, said at the rally. China has lent Kazakhstan about $13 billion in sectors ranging from oil to metals over the past year, a welcome infusion of liquidity for the Central Asian state's crisis-hit economy. A wary attitude towards China is deeply rooted among Kazakhs whose nomadic ancestors fought many wars against their eastern neighbour. Ties with China were also strained during Soviet times when Kazakhstan was under Moscow's rule. At the protest, anti-China sentiment ran high. "No Chinese soya beans on the Kazakh land!" shouted one protester. "Death to the Chinese panda!" (RFE/RL)

NATO, Afghan Government Troops Clash 31 January NATO troops have clashed with their Afghan allies in a so-called "friendly fire" incident.  Four Afghan soldiers were killed and six wounded after the U.S. called in air strikes.  The NATO-led International Security Assistance Force (ISAF) said its troops had come under fire and called in air strikes, without realizing they were engaging Afghan security forces. The clashes in Wardak Province came hours after an apparently disgruntled interpreter shot dead two U.S. soldiers at a nearby base.  NATO and Afghan officials have announced a joint probe into how their troops ended up fighting each other.  In a separate incident in nearby Ghazni Province, ISAF said its troops had shot dead two Afghan civilians and wounded a third when they failed to heed warnings to stop the vehicle in which they were travelling.   (RFE/RL)

Kyrgyz Protesters Seek Protection For Migrants In Kazakhstan 1 February About 100 protesters in downtown Bishkek today demanded that the government do more to protect Kyrgyz migrant workers' rights in neighboring Kazakhstan, RFE/RL's Kyrgyz Service reports. The protesters, who gathered in the Kyrgyz capital's Ala-Too Square, said that Kazakh city officials, migration officers, and police in the main Kazakh cities treat Kyrgyz labor migrants poorly and that they often work in "slave-like" conditions. Protesters told RFE/RL that Kyrgyz labor migrants are under constant pressure in Kazakhstan. The Kazakh and Kyrgyz governments have signed several agreements in the past to regulate labor migration. According to Kyrgyz human rights organizations there are about 100,000 Kyrgyz labor migrants working in Kazakhstan, where wages are much higher and there are more jobs available. (RFE/RL)

Kazakhstan Wants Stake in Karachaganak Field to Get More Profit 1 February Kazakhstan wants a stake in the BG Group Plc-led Karachaganak field to increase the country’s profit from the venture, the state oil company said. “At the time of the financial crisis, we need projects that are cash-generating,” Kairgeldy Kabyldin, the head of the Kazakh state energy producer KazMunaiGaz National Co., said in an interview in Abu Dhabi today. The company will try to reach an agreement this year, Kabyldin said, declining to comment on the size of the stake. The Karachaganak venture plans to spend about $14.5 billion on the expansion, called the third phase, KazMunaiGaz said last month. BG Group Plc and Eni SpA are the largest shareholders in Karachaganak Petroleum, each with a 32.5 percent stake, while Chevron Corp. has a 20 percent interest and OAO Lukoil 15 percent. The partners postponed a decision on the third phase of Karachaganak’s development last year until 2010 in anticipation of lower drilling costs. “We will try to bring costs down, which would let us use investments in a more efficient way,” Kabyldin said today, without elaborating on what he would consider as an optimal budget for the third phase. Kabyldin said he expects a decision on the third phase this year. BG and its partners are in talks to sell a stake in Karachaganak to the state to resolve a dispute over export duties, two people familiar with the matter told Bloomberg News in December. The government may buy a 10 percent interest in the company for about $1 billion, one of the people said. Karachaganak Petroleum has sought to recover more than $1 billion in export duties from the state, Energy Minister Sauat Mynbayev said on Sept. 22. Kazakhstan, holder of 3.2 percent of the world’s proven reserves, imposed export duties in May 2008 as it sought a higher share of the nation’s oil wealth amid record prices. (Bloomberg)

Three presidents to celebrate Nowruz in Shiraz 1 February The presidents of Tajikistan and Afghanistan are expected to come to Iran to celebrate Nowruz, the Persian New Year, with Iranian President Mahmoud Ahmadinejad in the historic city of Shiraz. Ali Asghar Sherdoust, Iran's ambassador to Tajikistan, told the Mehr news agency on Monday that Emomali Rahmon and Hamid Karzai will visit Iran on March 21, in line with a previous agreement reached by the three Persian-speaking nations. The heads of state are holding the meeting in order to strengthen cultural ties and especially to promote the Persian language. Last year, the foreign ministers of Iran, Tajikistan, and Afghanistan held a meeting in the northern Afghan city of Mazar-i-Sharif on the eve of Nowruz. The ancient celebration of Nowruz was registered on UNESCO's Intangible Cultural Heritage list in May 2009. Nowruz, literally meaning New Day, is the start of the Iranian New Year. It occurs on the first day of spring in the northern hemisphere, which is March 21 for three years and March 20 in leap years on the Western calendar. Nowruz is celebrated in Iran, Afghanistan, Azerbaijan, India, Kyrgyzstan, Tajikistan, Pakistan, Turkey, and Uzbekistan. (

Kazakh Newspapers Seized For Alleging Corruption By President's Son-In-Law 2 February Kazakh officials have seized editions of at least five opposition and independent newspapers that contain an article alleging corruption by President Nursultan Nazarbaev's son-in-law, Timur Kulibaev, who is suing the newspapers, RFE/RL's Kazakh Service reports. An Almaty district court ordered the seizure of the newspapers after Kulibaev filed a libel lawsuit against the publications "Respublika," "Golos Respubliki" (Voice of the Republic), "Vzglyad" (Glance), "Kursiv," and "Kursiv-News." The court also banned any reports "damaging the dignity and honor of Timur Kulibaev." Kulibaev is an executive in many of Kazakhstan's energy-sector businesses. All of the impounded newspapers had printed a statement by former Kazakh businessman Mukhtar Ablyazov, who accused Kulibaev of corruption on several websites last week. Ablyazov, who left Kazakhstan for London in 2009 after his BTA Bank was taken over by the government, stated that he had sent open letters to Chinese President Hu Jintao, China's prosecutor-general, and the state security minister urging them to look into the companies involved in an allegedly corrupt deal with Kazakhstan. Ablyazov claimed in the letter that when the Chinese National Petroleum Corporation (CNPC) agreed several years ago to buy shares of Kazakhstan's AqtobeMunayGaz oil and gas company, Kulibaev made CNPC create an offshore company. Ablyazov said that 49 percent of the off-shore company's shares were sold to Darley Investment Services -- which is controlled by Kulibaev -- for $49. Ablyazov claims that CNPC and some of its branches then bought the shares back from Darley Investment Services for $165.9 million. (RFE/RL)

2010 year of Nabucco, Mitshcek says 2 February Despite concerns over contracts to fulfill the pipeline needs, 2010 could be the year of Nabucco, the managing director of the pipeline consortium said. Europe aims to break the Russian stranglehold on the European energy sector with its Nabucco natural gas pipeline. Despite political will for the project, it lacks firm commitments from non-Russian gas suppliers. Directors involved in the project said recently that the project may not move forward without significant backing. But Reinhard Mitschek, the managing director of the Nabucco consortium, told The Wall Street Journal he is as optimistic as ever. "You could say 2010 is indeed the Nabucco year," he said. Construction on the project is slated for 2011, though who will pay the estimated $11 billion price tag for the pipeline is in question. Mitschek brushed off financial concerns, saying the money would develop. "There are concerns," he said. "But they are not concerns that we share fortunately." Nabucco recently won agreements from Iraq for possible gas supplies, and Mitschek said he expects Azerbaijan to follow suit. (UPI)
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