Official Statements:

Interview with Foreign Minister of the Republic of Kazakhstan Mr. Kassym-Jomart Tokayev

(“New Europe”, October 1-7, 2006)

NEW EUROPE: What is the main purpose of your visit to Brussels?

TOKAYEV: The main purpose of my visit is to discuss the current state and prospects of Kazakhstan’s cooperation with the European Union, NATO and Belgium ahead of the upcoming visit by President Nursultan Nazarbayev to Brussels this December. In this respect I shall have talks with the EU Foreign policy chief Javier Solana, several members of the European Commission, including its Vice-President in charge of Enterprise and Industry Günter Verheugen, Commissioner for External Relations and European Neighborhood Policy Benita Ferrero-Waldner, and Commissioner for Trade Peter Mandelson as well as NATO Secretary General Jaap De Hoop Scheffer and Belgian Foreign Minister - OSCE Chairman-in-Office Karel De Gucht. I also plan to visit the European Parliament to address honorable members of the Foreign Affairs Committee and deliver a speech on Kazakhstan’s role in Central Asia and its relations with the European Union at the Royal Institute of International Affairs.

NEW EUROPE: Your country has become the leading destination for foreign investment in the CIS. While most foreign investment still focused on the oil sector or Kazakh authorities have managed to lure investors towards other economic sectors?

TOKAYEV: Indeed, bold structural reforms and over billion inflow of foreign investments, mostly in oil and gas sector, have transformed Kazakhstan into one of the most dynamic economies of the world which records an average 10% growth over the last 7 years. Based on this remarkable achievement the World Bank includes Kazakhstan in the ranks of 20 most attractive economies for investment. Let me also note that President Nursultan Nazarbayev has specified an ambitious goal of joining the 50 most competitive countries of the world.

While over third of FDI is still being attributed to the extracting industries, the Government of Kazakhstan conducts sound economic policy aiming at the diversification of national economy.

To this end, we have developed an industrial innovative economic program, finance relevant projects through a set of national development institutions. Programs are being implemented to encourage the growth of high-tech industries, utilize country’s immense transport and transit potential, develop SME’s, and services sector.

As a result, we note a stable growth of FDI in our non-extracting industries, which grew by 74.5 % last year. Negotiations on the accession to the World Trade Organization are in the final stages and Kazakhstan’s eventual membership would create even greater investment opportunities.

Fighting corruption is another important area of consolidating foreign investors confidence in our economy. Kazakhstan endorsed “Extractive Industries Transparency Initiative (EITI)” thus increasing the transparency of revenue flows from the extractive industry.

NEW EUROPE: Is energy cooperation is the core of your dialogue with Europe?  

TOKAYEV: The EU is Kazakhstan’s biggest trading partner, accounting for 1/3 of country’s foreign trade turnover. According to the Eurostat data, the overall trade between Kazakhstan and 25 EU member-states climbed over €12.7 billion last year, a 60% increase from 2004. More remarkably, Kazakhstan is the EU’s principal economic partner in the region, outpacing combined trade turnover of other seven states of Central Asia and Caucasus.

Today hydrocarbons make 85% of Kazakh export to Europe. Currently Kazakhstan is referred to as the third largest non-OPEC oil supplier to the EU. While majority of oil producing countries, including 6 out of 11 OPEC member-states has decreased or at best only maintained their output, Kazakhstan has doubled its oil production since 1999. By 2010 Kazakhstan is expected to reach over two million barrels of oil per day, and over 3.5. mln barrels per day by 2015. Based on European Commission’s Green Paper on “A European Strategy for Sustainable, Competitive and Secure Energy” European experts believe the Caspian Sea basin might secure up to 25 percent of the EU energy demand in the future.

In view of the increasing global energy demand against a background of limited build-up capacities in oil industries worldwide and taken the EU endeavors to diversify energy supplies to domestic market, Kazakhstan appears to be one of the very few countries capable of boosting its oil production thus being an important alternative supplier for the European market.

The European Commission supports Kazakhstan’s policy of diversifying its export pipeline routes while a number of EU member-states actively invite Kazakhstan to invest in regional transport and oil-processing infrastructure.

The establishment of the special Kazakhstan-EU Subcommittee on Energy, Transport and Environment is under consideration. During the upcoming visit of President Nazarbayev to Brussels we intend to sign Memorandum on energy cooperation and bilateral Agreement on peaceful use of nuclear energy.

Obviously, there’s much more to Kazakhstan-EU relations than just simple trade. Without much of details, I would highlight just a few areas of cooperation:

- Investment in both directions. The EU has been a leading investor in Kazakhstan for over the last decade, while Kazakh investment in the EU (mainly in Germany, UK, Netherlands) recorded .5 billion;

- Transport dialogue. We are working together with the EU High level group on extension of the major Trans-European transport axes to Kazakhstan;

- Combating terrorism and drug-trafficking, in particular from Afghanistan (participation of Kazakhstan in the EU BOMCA / CADAP initiatives) as well as tackling other global issues, such as dialog of civilizations, peacekeeping etc.

- Intensive dialog on democratization and political transformations in Kazakhstan and a wider region.

There’s a genuine effort by the upcoming German Presidency and the Commission to streamline EU policy towards Central Asia and by mid-2007 have a joint vision on EU strategic goals in the region. We are committed to further develop our partnership with the EU based on common values as well as pragmatic and balanced policy considerations. We see strong and stable Europe as our reliable strategic partner and an important factor of maintaining regional peace and security.

NEW EUROPE: What will be on the agenda of your forthcoming discussions at NATO Headquarters?

TOKAYEV: The main topic to be discussed is the implementation of the Kazakhstan’s Individual Partnership Action Plan with Alliance agreed in January 2006. It is the first enhanced cooperation instrument between the NATO and a Partner nation in Central Asia. IPAP establishes a new level of cooperation and provides for enhanced political dialogue between NATO and Kazakhstan. It is in conformity with the ideology and aims of the political, economic and democratic reforms carried out in our country. NATO Secretary General Jaap de Hoop Scheffer in his letter to the President Nursultan Nazarbayev reaffirmed full support of Allies for the implementation of the IPAP.

Under IPAP we focus on strengthening political and military cooperation in security area, namely in combating terrorism, proliferation of weapons of mass destruction, as well as promoting practical aspects of defense cooperation as defense reform, military interoperability and peacekeeping, civil emergency planning, science and environmental problems.

Kazakhstan considers NATO as an important factor in maintaining global peace and security. Having adjusted to the challenges of current world it increasingly contributes to the stability and sustained development worldwide. Namely we highly appreciate NATO’s role in securing the success of peace-building and reconstruction efforts in Afghanistan.

Kazakhstan continues supporting the efforts of the international community in that country, including the NATO-led ISAF operation. As we stand ready to be more involved in the international reconstruction efforts a special mission of Kazakhstan’s economic ministries and leading national companies works in Afghanistan to make an in-field practical assessment of Kazakhstan’s contribution.

We are also determined to continue our humanitarian involvement in support of the stabilization efforts in Iraq. We are also ready to work with our neighbors to strengthen security in Central Asia through promoting genuine economic integration.

Consistent with its objective to be a part of global and regional security systems, Kazakhstan remains committed to a broad partnership with NATO and its member states.

Date of issue: 2006-10-18