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Cablegate: Kazakhstan Preparing for Greater Involvement In

VZCZCXRO6630
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #1544/01 1570509
ZNR UUUUU ZZH
P 060509Z JUN 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 9681
INFO RUCNCIS/CIS COLLECTIVE 0195
RUEHC/SECSTATE WASHDC//SCA COLLECTIVE/ 9682
RUEHVEN/USMISSION USOSCE 1757
RUEHAST/USOFFICE ALMATY
RUEHBUL/AMEMBASSY KABUL 0332
RUEKJCS/SECDEF WASHDC 0043

UNCLAS SECTION 01 OF 03 ASTANA 001544

SIPDIS

DEPARTMENT FOR SCA/CEN (M. O'MARA)
SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV PREL AF KZ
SUBJECT: KAZAKHSTAN PREPARING FOR GREATER INVOLVEMENT IN
AFGHANISTAN

ASTANA 00001544 001.2 OF 003


1. (U) Summary: On May 25, SCA Special Envoy for Assistance to
Afghanistan Ambassador Ronald Neumann briefed key government and
business officials on the current situation in Afghanistan with the
aim of encouraging greater Kazakhstani involvement in reconstruction
and stabilization efforts. The Kazakhstani officials acknowledge
the importance of a stable Afghanistan to their own interests, and
are in the process of developing an aid program for Afghanistan and
encouraging Kazakhstani businesses to invest in projects in
Afghanistan. The Government of Kazakhstan requested additional
information on potential projects in Afghanistan, and appears open
to guidance from the international community. End summary.

--------------------------------------------- ---------
KAZAKHSTAN: "CONSENSUS HERE TO DO MORE" IN AFGHANISTAN
--------------------------------------------- ---------

2. (U) On May 25, Ambassador Neumann met with Vice Minister of
Foreign Affairs Nurlan Yermekbayev, Vice Minister of Industry &
Trade Kuandyk Bishimbayev, Vice Minister of Defense General Bolat
Sembinov, and the Prime Minister's international relations section
head Serikbay Zhumabayev to discuss potential Kazakhstani
involvement in Afghanistan. In addition, he met with Ulf Wokurka,
deputy chairman of the Samruk state holding company, and Maksat
Mukhanov, managing director of the Kazyna Sustainable Development
Fund, to discuss business and investment opportunities in
Afghanistan. Ambassador Neumann described the current political,
economic, and military situation in Afghanistan, the importance of
success in Afghanistan for the whole region, and the priorities for
reconstruction and infrastructure development in Afghanistan.

3. (SBU) Ambassador Neumann's interlocutors consistently reported
that the Government of Kazakhstan knows the importance of
stabilizing Afghanistan and is prepared to step up its involvement
there, both through development/humanitarian assistance and business
investment. Vice Minister Yermekbayev headed a Kazakhstani
delegation to Afghanistan in April, and said that there is a
"consensus here to do more" in Afghanistan. He also noted that the
Afghans were openly expecting assistance and investment from
Kazakhstan, given Kazakhstan's proximity and economic success. Vice
Minister Bishimbayev also participated in the April delegation to
Kabul, and agreed that stability in Afghanistan is crucial to
stability in the whole region. Zhumabayev of the Prime Minister's
office said that Kazakhstan's relationship with Afghanistan is a
priority, and that Kazakhstan supports all initiatives aimed at
stabilizing Afghanistan, particularly initiatives made through the
Conference on Interaction and Confidence Building Measures in Asia,
the Shanghai Cooperation Organization, and the Collective Security
Treaty Organization.

--------------------------------------------- ---
KAZAKHSTAN CURRENTLY CRAFTING ASSISTANCE PACKAGE
--------------------------------------------- ---

4. (SBU) Bishimbayev heads the Kazakhstani side of a joint
Kazakhstan-Afghanistan commission established to study Kazakhstani
assistance and investments in Afghanistan and develop an aid program
for Afghanistan. Bishimbayev reported that Kazakhstan is considering
an aid program in the range of $25-50 million, and is currently
focused on the construction of a hospital and the renovation or
construction of schools. He also said that Kazakhstan would
eventually like to provide technical training to Afghans at
Kazakhstani educational institutions. According to Bishimbayev and
Yermekbayev, Kazakhstan hopes to finalize its assistance proposal in
June, circulate it for interagency approval, and then host an Afghan
delegation in August to discuss the program.

5. (SBU) Bishimbayev indicated that Kazakhstan is very interested in
obtaining additional information from the Afghan government and the
international community about various projects under consideration
in Afghanistan, and responded with interest when Ambassador Neumann
discussed the importance of airport, road, and infrastructure
projects. He said that the Kazakhstani side has requested more
detailed and comprehensive information from the Afghan government on
the various ongoing and anticipated projects that Kazakhstan might
become involved in, but that he is still awaiting a response from
the Afghan side. He expressed some frustration that he does not
know the identity of his counterpart on the Afghan side of the
commission after his initial contact, former Deputy Commerce
Minister Hyder Reza, resigned. Bishimbayev said that the Government
of Kazakhstan currently communicates with the Government of
Afghanistan through the Ministry of Foreign Affairs. (Note: Post has
already compiled some of the information Bishimbayev requested, and
will forward it to him. End note.)

ASTANA 00001544 002.2 OF 003

--------------------------------------------- -------
KAZAKHSTANI BUSINESSES SEEK INVESTMENT OPPORTUNITIES
--------------------------------------------- -------

6. (SBU) Yermekbayev and Bishimbayev also reported that the
Government of Kazakhstan is attempting to facilitate Kazakhstani
business investment in Afghanistan. Yermekbayev said that a
Kazakhstani mining company is already bidding on a copper mining
venture in Afghanistan, and expressed hope that Kazakhstani
companies would find success in the bidding process for various
projects. Bishimbayev said that Kazakhstani companies were
exploring projects including the construction of electric
transmission lines from Tajikistan and railroad links from Central
Asia to Afghanistan.

7. (SBU) Mukhanov, managing director of the government-affiliated
Kazyna Sustainable Development Fund, said that Kazyna stands ready
to support private Kazakhstani companies interested in joint
ventures in Afghanistan. Kazyna supports private investment in
coordination with government policy, and offers support in the form
of co-funding, credit, and insurance. He said that a Kazyna
representative participated in the Kazakhstani delegation to Kabul
in April, and Kazyna has studied potential areas of cooperation
between Kazakhstan and Afghanistan, but has not yet been involved in
any Afghan projects. Mukhanov reported that Kazyna is interested in
additional information about doing business in Afghanistan,
including how to promote Kazakhstani companies, factors for
Kazakhstani companies to be aware of, and the legal framework for
business activities in Afghanistan.

8. (SBU) Wokurka, deputy chairman of the Samruk state holding
company, explained that the state companies under the Samruk
umbrella are not currently involved in any projects in Afghanistan,
though it is conceivable they may be interested in the future.
(Note: Samruk manages government-owned stock in Kazakhstan's major
business companies, including KazMunaiGaz, KazakhTelecom, the
KazTemirZholy railroad company, and the KEGOC transmission grid
company. End note.) Wokurka stated that in December 2006, Samruk
was empowered to undertake infrastructure-related investment
projects, though at this point investment projects are limited to
those in Kazakhstan and its immediate neighbors.

9. (SBU) Wokurka responded with interest to two projects described
by Ambassador Neumann: a possible project to increase the capacity
of Turkmenistani power transmission lines to Afghanistan, and a
project to extend a portion of the Uzbek power transmission grid to
Afghanistan. Wokurka requested additional information on these
projects, and promised to contact the appropriate officials at the
KEGOC transmission grid company to gauge their interest. (Note:
Post has already forwarded additional information to Wokurka
concerning the Uzbek power project. End note.)

10. (SBU) Poloff asked Wokurka about the possible future export of
excess electric energy capacity from southern Kazakhstan to
Afghanistan. Wokurka said that Samruk was involved in financing a
new coal fired power plant near Lake Balkhash and a new
hydroelectric plant, but these projects would be devoted to serving
the energy needs of southern Kazakhstan, and would not produce
sufficient energy for export.

-------------------------------------------
DEFENSE MINISTRY ENGAGES ON MILITARY ISSUES
-------------------------------------------

11. (SBU) In his meeting with General Sembinov, Ambassador Neumann
received an overview and Kazakhstani perspective on the bilateral
defense cooperation relationship. Sembinov noted that the
U.S.-Kazakhstani partnership had strengthened over the years and was
on the verge of becoming something more comprehensive. He
highlighted the success of the HMMWV program, but noted with
frustration the slowness of the Huey II program and the lack of
progress on C-130 aircraft. Sembinov closed his presentation by
stating that Kazakhstan had taken great political risk in going with
U.S. equipment, and that now it was the U.S.' turn to show its
commitment to the bilateral relationship by following through on
both the Huey II helicopter and C-130.

12. (SBU) Ambassador Neumann then provided a detailed briefing on
the current tactical situation in Afghanistan. Sembinov and his
staff were very interested in the threat level of each of the main
Afghan sectors (north, east, south, and west), as well as the role
of Provincial Reconstruction Teams (PRTs) in Afghanistan. Sembinov

ASTANA 00001544 003.2 OF 003


was also interested in Ambassador Neumann's assessment of Taliban
combat tactics and their success (or lack thereof) on the
battlefield. Sembinov provided no further details about possible
Kazakhstani participation in a PRT, but said he understood that a
KAZBRIG Peace Support Operation deployment somewhere in the
near-term was essential to the long-term health of the KAZBRIG.

----------------------------------------
KAZAKHSTAN CAUTIOUS ABOUT MANAS AIR BASE
----------------------------------------

13. (SBU) In his meeting with Yermekbayev, Ambassador Neumann
stressed the strategic importance to operations in Afghanistan of
the Manas Air Base in Kyrgyzstan, and encouraged the Government of
Kazakhstan to support continued operations at the base. Yermekbayev
said that Kazakhstan supports the ongoing anti-terrorist campaign in
Afghanistan, and promised to consider the United States government
viewpoint on Manas Air Base, including at the upcoming Shanghai
Cooperation Organization meeting. However, he cautioned that
Kazakhstan cannot interfere in another country's internal affairs,
and that perceived Kazakhstani involvement in Kyrgyz affairs was a
sensitive issue in Kyrgyz politics.

14. (SBU) Ambassador Neumann also discussed Manas Air Base with
Sembinov. Neumann thanked Sembinov for Kazakhstan's support to both
Operation Iraqi Freedom and Operation Enduring Freedom, and said
that the operations of Manas Air Base would be far less effective
without on-going Kazakhstani support (blanket overflight clearance
and Almaty airport emergency divert landing support). Ambassador
Neumann asked for Kazakhstan's support at the upcoming August
Shanghai Cooperation Organization summit in Bishkek in deflecting
calls for the removal of the airbase. Sembinov stated that while
the summit was a political matter, he understood the airbase's
importance to coalition operations in Afghanistan, noting that
Kazakhstan had proven its reliability as a partner in the War on
Terror.

-------
COMMENT
-------

15. (SBU) Comment: Kazakhstani officials are sincere in their
recognition that stabilizing Afghanistan is crucial to the region,
and the government appears poised to translate its verbal support
for rebuilding Afghanistan into concrete action. The planned $25-50
million aid package is larger than Post anticipated, and Kazakhstan
appears willing to tailor its involvement toward international
priorities, including infrastructure projects. Kazakhstan remains
understandably cautious about venturing into new territory as a
donor, in part due to lack of an assistance implementation
mechanism; lack of information and poor communication with their
Afghan counterparts may also hinder progress. Post will continue to
supply the government with information concerning Afghanistan and
encourage continued movement on their aid package and business
investments. End comment.

MILAS

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