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A WEEKLY ONLINE PUBLICATION / WWW.MFA.GOV.KZ ISSUE NO. 350 / FRIDAY, APRIL 18 2014

Bahraini King Visits Astana, Advances Political and Commercial Ties

PM Massimov Discusses Draft Treaty

on Eurasian Economic Union During Visit to Russia

Latest Kazakh WTO Accession Talks Held in Washington

Talks Focus on Plant and Animal Health

British Minister Visits KazakhstanCountries Sign Agreements for Cargo

Through Afghanistan

Also In The News Things To Watch

Bahraini King Visits AstanaAdvances Political and Commercial Ties

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Bahrain’s King Hamad bin Isa Al Khalifa paid his first official visit to Kazakhstan on April 13-15.

King Hamad and a delegation of more than 200 officials and business leaders were welcomed on arrival in Astana by Kazakhstan’s Deputy Prime Minister and Minister of Industry and New Technologies Asset Issekeshev, Ambassador to Bahrain Bakhyt Batyrshayev and other senior officials.

President Nursultan Nazarbayev and King Hamad met on April 14 to discuss trade and investment and strengthening bilateral relations. Opening the meeting, President Nazarbayev noted that Bahrain is one of Kazakhstan’s most important partners among the Arab states. “Within a short period of time, Bahrain has turned into an advanced industrial state. Your country is known around the world as one of the biggest financial centres in the world and the homeland of the Islamic Bank,” he said during the meeting.

The king stressed the importance of the two countries’ close cooperation and expressed satisfaction with memoranda of understanding signed in the fields of diplomacy, food security, agriculture, finance, investment and education.

Easing the current visa regime was also a major topic of the talks. “Today, we’ve discussed launching direct flights between our countries,” the President said at a joint press conference after their meeting.

King Hamad also met with Prime Minister Karim Massimov and took a sightseeing trip around Astana.

On the sidelines of the king’s visit, the Kazakhstan-Bahrain: Strategic Partnership business forum took place in Astana, attracting more than 40 of Bahrain’s biggest companies in the banking, food, oil and gas, petrochemistry, metallurgy and aluminium production, engineering, transport and tourism fields. Bahrain wants to expand its presence in Central Asia said Kamal Muhammed Ahmed, minister of transport and chief of the executive power of the Bahraini Council of Economic Development, at the opening of the forum. As Kazakhstan and Bahrain both play key roles in their regions, close cooperation will benefit both nations, he said. Ahmed noted that the two countries are similarly blessed with natural resources and also similarly interested in diversifying their

Bahrain and Kazakh officials discuss bilateral relations in Astana

economies. The $1 million annual trade between the two countries is far below its potential, he said. “We know that extraction and processing of oil and gas, aluminium, as well as its financial and banking sector, agriculture, tourism and food industry are among the strongest in Bahrain’s economy,” Deputy Prime Minister Issekeshev said at the forum. Kazakhstan has enormous potential to export wheat, barley and forage wheat to Bahrain, as well as to establish joint halal meat production. These areas could be the foundation of joint enterprises in both countries, he said.

The aluminium industry has real prospects for creating enterprises to meet domestic demand, Issekeshev said. Bahrain, today, processes around 800,000 tonnes of aluminium, according to Issekeshev, while Kazakhstan, despite vast ore reserves, processes far less.

“That is why we are ready to establish a special zone to process aluminium in Pavlodar to expand its production from 250,000 tonnes to 500,000 tonnes annually,” Issekeshev said.

Oil and gas production, transportation and the banking sector also offer prospects for cooperation. Bahrain is a regional financial centre and Kazakhstan, aiming to become a regional centre of alternative financing, is interested in Bahrain’s Islamic finance experience, Issekeshev said.

Representatives of the Bahraini business community said bilateral economic cooperation would be especially welcome in boosting food security and providing access to Kazakh metals.

As a result of the business forum, a memorandum of cooperation between the Kazakhstan’s Baiterek National Holding and Bahrain’s Mumtalakat Holding was signed. The forum also saw the announcement of a new Kazakhstan-Bahrain Business Council.

“Within a short period of time, Bahrain has turned into an advanced

industrial state.”

PM Massimov Discusses Draft Treaty on Eurasian Economic Union During Visit to Russia

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Kazakh Prime Minister Karim Massimov travelled to Moscow to discuss ongoing Eurasian economic integration with his Customs Union (CU) and Common Economic Space (CES) counterparts on April 15.

Massimov, Prime Minister Dmitry Medvedev of Russia and Prime Minister Mikhail Myasnikovich of Belarus discussed deepening the economic integration of the three countries and reviewed the draft treaty on the Eurasian Economic Union (EEU). The parties discussed issues relating to the oil and gas industry, agriculture and road and rail communications in particular, Massimov’s office reported.

“Today, we have discussed all disputable issues and, after finalising the document, it will be ready for signing by the heads of state,” Massimov said at the press conference after the meeting. To finalise the document, a meeting of the presidents of the EEU member states and a session of the Supreme Council will be held in Minsk at the end of the month.

“Throughout the negotiation process we were acting on the basic principle … of meeting the economic interests of the participating countries,” he stressed.

“Our countries are moving toward the formation of this union,” said Medvedev in his opening remarks. “We’ve formed a common customs territory and introduced CES framework agreements. A substantial number of our national powers have been transferred to our partners from the organisation’s supranational body, the Eurasian Economic Commission (something we are still getting used to). Now we are proceeding to an even higher level of integration.”

“Our cooperation in this trilateral format has produced concrete results, such as fewer trade barriers, which can partially make up for the reduction of external demand and alleviate some of the consequences of the financial crisis,” he continued.

Trade turnover within the Customs Union exceeded $64 billion last year, Medvedev said, calling the amount impressive. Institutional changes are also important, he said.

Meeting of the heads of the governments of the Customs Union and Common Economic Space

“The terms of the CES have given businesses the opportunity to locate in places where there are fewer administrative barriers, and it is easier to do business. At first glance, this may not seem good for our national interests. However, in the context of the CES, this represents real competition between jurisdictions, which was our goal.”

“Throughout the negotiation process we were acting on the basic principle … of meeting the economic interests

of the participating countries.”

– Kazakh Prime Minister Karim MassimovMassimov also discussed developing Kazakh-Russian relations and CU and CES cooperation in a bilateral meeting with Medvedev. The prime ministers rated current bilateral cooperation highly and affirmed their interest in deepening ties across the board.

The treaty formally establishing the EEU should be ready for signing by President Nursultan Nazarbayev of Kazakhstan, President Vladimir Putin of Russia and President Aleksandr Lukashenko of Belarus in Astana in May, after the presidents meet in Minsk. The new union is expected to facilitate the free flow of capital, goods, services and labour, which is expected to boost the development of key industries in the member states.

Russia, Belarus and Kazakhstan are the founding members of the Customs Union, which is the basis for the upcoming EEU. The idea of a Eurasian Union was first broached by President Nazarbayev 10 years ago in a speech at Lomonosov Moscow State University.

The treaty on the establishment of the Eurasian Economic Union is due to come into force on Jan. 1, 2015. Talks on the accession of Armenia and Kyrgyzstan to the union continue.

British Minister Visits KazakhstanCountries Sign Agreements for Cargo Through Afghanistan

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British Senior Minister of State for Foreign and Commonwealth Affairs Baroness Sayeeda Warsi visited Astana on April 14-15 for high-level talks with Kazakh officials, resulting in bilateral agreements expanding the legal basis for British military-related transit from Afghanistan.

Following talks with Kazakh Foreign Minister Erlan Idrissov, Baroness Warsi and Deputy Foreign Minister Alexey Volkov signed agreements on the transit of British cargo through Kazakh territory. The documents, which still require ratification in Kazakhstan, are important for the withdrawal of British troops from Afghanistan this year.

According to the Kazakh Foreign Ministry, Idrissov and Warsi also discussed bilateral and international issues, including the dynamic development of bilateral relations U.K. Prime Minister David Cameron’s visit to Kazakhstan in July 2013 and the meeting between Kazakh President Nursultan Nazarbayev and the head of the British government in London the same month. The relationship has become much deeper, Warsi said in an interview with The Astana Times after the talks.

“The prime minister’s visit was a highlight moment, and I see it as one of my biggest achievements to ensure that the visit happened,” Warsi said.

Idrissov and Warsi stressed the importance of the intergovernmental commission on trade, economic, scientific, technological and cultural cooperation, which consists of specialised working groups and the Kazakh-British Trade and Industry Council (KBTIC). The next commission meetings are expected to take place during the Astana Economic Forum in May and at the traditional Kazakh business forum in London in October.

Trade and economic cooperation is a key component of bilateral ties. According to Kazakhstan’s Customs Control Committee, mutual trade reached $2.1 billion in 2013, including $1.5 billion in Kazakh exports and $0.6 billion in imports. Britain is the third largest investor in Kazakhstan, after the Netherlands and the U.S. and

British Senior Minister of State for Foreign and Commonwealth Affairs Baroness Sayeeda Warsi (center left) meets with Kazakh Minister of Foreign Affairs Erlan Idrissov (center right) during a recent visit to Kazakhstan

invested $10 billion in the country between 2005 and 2013, according to Kazakhstan’s National Bank of Kazakhstan.

“The economic relationship has hugely developed. The intergovernmental commission is a testimony of that. Already, well over a billion pounds’ worth of deals have been done [thanks to the work of the commission] and further needs to be done,” Warsi said. She added that her meeting with National Bank Chairman Kairat Kelimbetov on April 14 focused on Islamic financing, which she said could lead to more possibilities for cooperation.

During their talks, Idrissov and Warsi discussed improving the visa regime and facilitating the process of obtaining British visas for Kazakh citizens, prospects for cooperation in the legal sphere and Astana’s campaign for a non-permanent seat on the UN Security Council for 2017-18. They also noted their mutual desire for a diplomatic resolution of the situation in Ukraine.

Warsi, who is on a regional tour, also commented on the general view of Central Asia in London.

“One of the things that were important for me when I became responsible for Central Asia was to understand the uniqueness of each country,” she said. “It’s not just a bloc. [Each country] has its own strengths and weaknesses, its own challenges, and our relationship with each country is very unique and very different … Kazakhstan is increasingly playing its role as a serious international player and that’s why it’s important to have this strong relationship.”

Warsi is also minister for faith and communities at the Department for Communities and Local Government. When it comes to religion, she said, domestic policies have international implications and international actions affect the situation at home.

In Astana, host of the triennial Congress of Leaders of World and Traditional Religions, Warsi met with the head of the secretariat of the congress, Speaker of the Senate Kassym-Jomart Tokayev and Chairman of the Agency for Religious Affairs Marat Azilkhanov. She also met with Akim (Mayor) of Astana Imangali Tasmagambetov.

Latest Kazakh WTO Accession Talks Held in WashingtonTalks Focus on Plant and Animal Health

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Another round of negotiations on Kazakhstan’s accession to the World Trade Organisation (WTO), this time focused on harmonising measures regarding plant and animal disease control, took place in Washington, D.C. on March 4-6 with the participation of Kazakh Minister for Economic Integration Zhanar Aitzhanova.

The negotiations took place without the presence of the Russian delegation. Because of the ongoing crisis in Ukraine, the U.S. side considered the attendance of Russian experts unacceptable.

“We conducted the negotiations and consultations independently, and we are also consulting with our Russian and Belarusian colleagues. The consultations within the framework of the Customs Union (CU) are also underway. The issues are related to the Eurasian Economic Commission (EEC) and the competencies of the three countries, so in any case we must coordinate them with our partners in the CU. But since these negotiations concern Kazakhstan’s accession to the WTO, we will hold them independently,” Aitzhanova said.

The veterinary and phytosanitary measures discussed in this round of negotiations are one of three issues currently hindering Kazakhstan’s accession to the WTO. The other two hurdles are the harmonisation of import customs duties with Russia and the countries of the CU and subsidies and agricultural donations.

As Aitzhanova explained, regarding customs duties, Kazakhstan will join the WTO on its own terms. Until the completion of negotiations, customs duties with Russia will be different.

“The third issue that directly concerns the Kazakh economy is the volume of subsidies and agricultural donations. I know that many experts write that after WTO accession we will have a very difficult situation in agriculture and farmers will have no jobs. This thesis is incorrect. Currently, we are holding complex negotiations in terms of subsidies in agriculture that will meet our long-term plans to support the development of the industry,” she added.

Kazakh Minister of Economic Integration Zhanar Aitzhanova

By joining the WTO, Kazakhstan will become a full member of the global trading system and will be subject to all WTO fundamental principles and rules. These include nondiscriminatory conditions for the access of Kazakh products to foreign markets on the basis of most favoured nation treatment and national treatment; access to international mechanisms for resolving trade disputes; a more favourable climate for foreign investment; increased opportunities for Kazakh investors in WTO member countries; an increased flow of foreign goods, services and investments, creating conditions for improving the quality and competitiveness of domestic products; as well as the chance to participate in creating international trade rules that take into account Kazakhstan’s national interests.

It is hoped that this will enhance the country’s economic potential and ultimately increase Kazakh standards of living.

The negotiation process for Kazakhstan’s accession to the organisation has now lasted more than 10 years. This January, then-Prime Minister Serik Akhmetov said that the terms of WTO accession would be announced in March or April and that accession was imminent. While saying that it was important to “continue defending acceptable terms” for joining the organisation, Akhmetov also said that, “This year, we need to make every effort to complete the negotiation process.”

The process of Kazakhstan’s accession to the WTO began more than 18 years ago, on Jan. 26, 1996.

Also In The News...

• Kazakh President chairs session of National Investors’CouncilOn April 11, heads of government agencies and national companies, members of the National Chamber of Commerce and representatives of business circles attended a session of the National Investors’ Council chaired by President Nursultan Nazarbayev. The session reviewed issues of national business and investment development. The President of Kazakhstan noted that entrepreneurship is a driving force of the country’s economy. “Small and medium-sized business is the foundation of a strong middle class. We observe positive dynamics in this sector. The number of self-employed increased by 8 percent and reached 2.6 million last year. The volume of output produced by small and medium-sized business accounted for 9 trillion tenge (US$49.4 billion), with an annual growth of 3.3 percent,” the President told participants at the meeting. (akorda.kz)

• EurasianBusinessForumheldinAlmatyThe Eurasian Business Forum is being held in Almaty on April 17-18 and will continue in Astana within the framework of the Astana Economic Forum on May 21-23. The Eurasian Economic Forum is an important global platform for businessmen to exchange views and experience and develop solutions to enhance small and medium businesses in accordance with international standards. (inform.kz)

• Astanatohost21stAssemblyofthePeopleofKazakhstanOn April 18, the 21st session of the Assembly of the People of Kazakhstan will take place in Astana. According to Yeraly Tugzhanov, deputy chairman of the assembly, 406 delegates from all regions will attend the session. Among them are members of the assembly; chairmen of national and regional ethno-cultural associations; members of Parliament; heads of government agencies, political parties, religious organisations and nongovernmental organisations; representatives of diplomatic missions of foreign states; scientific and creative intellectuals and the mass media. The agenda for the session is “Kazakhstan 2050 Strategy: The Culture of Peace, Spirituality and Reconciliation.” (akorda.kz)

• AstanaDakarTeamsnavigateAbuDhabiDesertChallengeFor the first time in the club’s history, an Astana Dakar racing team has won a leg in the prestigious rally race, Abu Dhabi Desert Challenge. The race took place from April 3-10 in the United Arab Emirates. Drivers Aidyn Rakhimbayev and Anton Nikolayev won stage four of the race on April 9 in their BMW Mini. Three Astana Dakar teams took part in the race: Bauyrzhan Issabayev and Vladimir Demyanenko in a Toyota, Denis Berezovskiy and Ignat Falkov in a Nissan and Rakhimbayev

and Nikolayev. Rakhimbayev and Nikolayev finished the race in 10th place, almost four hours behind the winning team. The Astana Dakar team is now readying for the next world cup race, the Sealine Cross Country Rally, in Qatar on April 20-25. (astanatimes.com)

• MalaysianrunnerfollowingSilkRoadwelcomedinKazakhstanMalaysian former national long-distance runner Suwaibah Mohd Nasir entered Almaty on April 15, on her way from Beijing to Venice. Suwaibah started her mission to run from China to Italy in March 2014. Her more than 3,000-kilometre route will follow the ancient Silk Road, reversing the route of famed explorer Marco Polo. In Almaty, she was welcomed by the Malaysian ambassador. Her journey will also take her to Kyrgyzstan, Uzbekistan, Turkmenistan, Iran, Turkey, Slovenia, Bulgaria, Bosnia and Croatia. (thestar.com)

Things To Watch• The12thEurasianMediaForumwillbeheldinAstanafrom

April24-25More than 500 heads of media companies and representatives of the media and political and expert organisations from more than 50 countries are expected to attend the event.

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