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Cablegate: Kazakhstan - Nazarbayev Discusses Russia-Georgia

VZCZCXRO4168
OO RUEHAST RUEHBI RUEHCI RUEHFL RUEHLA RUEHLH RUEHMRE RUEHPOD RUEHPW
RUEHROV RUEHSR
DE RUEHTA #1647/01 2470953
ZNR UUUUU ZZH
O 030953Z SEP 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3168
INFO RUCNOSC/OSCE POST COLLECTIVE
RUCNCLS/SCA COLLECTIVE

UNCLAS SECTION 01 OF 02 ASTANA 001647

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL PGOV KDEM ECON KZ GG RS
SUBJECT: KAZAKHSTAN - NAZARBAYEV DISCUSSES RUSSIA-GEORGIA
SITUATION AND MADRID COMMITMENTS IN SPEECH TO PARLIAMENT

1. (U) Summary: In a September 2 speech to Parliament,
President Nazarbayev called for negotiations on the Georgia
conflict based on Sarkozy's six points and fundamental
principals of international law. He publicly discussed
Kazakhstan's Madrid commitments for just the second time,
promising that amendments to Kazakhstan's election, political
party, and media laws would soon be introduced to Parliament.
Nazarbayev devoted the bulk of his remarks to socio-economic
issues, explaining that the proposed new tax code would
significantly reduce the corporate income tax rate and
pledging major increases in pension payments and salaries for
government employees. End Summary.

2. (U) President Nazarbayev delivered an address to
Parliament on September 2, opening its latest session. He
began his speech by discussing the situation in Georgia.
Nazarbayev explained that in circumstances of a "one-sided
assessment" of events by the West," Kazakhstan had declared
its support for the measures taken by Russia to "ensure
stability in the region and stop the bloodshed." At the same
time, he called upon the parties to move to negotiations on
the basis of the six points affirmed by Presidents Medvedev
and Sarkozy. Nazarbayev also appealed to the West and Russia
to "refrain from mutual rebukes and threats" and to negotiate
based on "the supremacy of the fundamental principles of
international law." (Note: During a September 3 press
conference following a meeting in Astana with German
President Horst Koehler, Nazarbayev said he was convinced the
conflict could not be resolved by talks just involving Russia
and Georgia or Russia and Europe. Rather, a multilateral
organization would need to be involved, with participation
from the EU, U.S., Russia, and Georgia. Nazarbayev said that
Kazakhstan is also ready to participate, if necessary, as a
country acceptable to all sides. He described the latest EU
statement on the situation as "balanced." Nazarbayev added
that Kazakhstan would not support unilateral criticism of
Russia, as Kazakhstan viewed "with understanding" the
measures taken by Russia to stop the bloodshed in the region.
End Note.)

3. (SBU) In his address to Parliament, Nazarbayev publicly
discussed Kazakhstan's Madrid commitments on democratic
reform for just the second time, to an extent repeating his
June 29 remarks to the OSCE Parliamentary Assembly session in
Astana. He explained that it is necessary to establish a
legal mechanism that would allow for the formation of a
two-party Parliament, even if a second party does not reach
the seven percent threshold for winning seats. Nazarbayev
maintained, however, that the domination of Parliament by his
Nur Otan Party is a "decision of the people" and "recognition
of the results of our work during the years of independence."
He said that it is necessary to "remove excessive
bureaucratic barriers regulating the media," but stressed
that the government must ensure that media activities "do not
interfere with human rights." He argued that freedom of
speech is "the right to speak the truth" and that no kind of
political slogans should be used as a cover for "lies, libel,
or the promotion of inter-ethnic or social discord."
Nazarbayev promised that bills amending Kazakhstan's laws on
elections, political parties, and the mass media would all be
introduced to Parliament in the "nearest time." (Note: Prime
Minister Masimov told visiting SCA Assistant Secretary
Boucher on September 2, and repeated to the Ambassador on
September 3, that all the legislation would be passed by
year's end -- which is a very ambitious schedule. End Note.)
Nazarbayev said that the passage of this legislation would
become "an important step in the framework of political
reform in our country."

4. (U) Nazarbayev devoted the bulk of his speech to
socio-economic issues. He stressed that the global economic
crisis was still ongoing and warned that Kazakhstan would
likely continue to suffer from its effects. Turning to the
issue of the "dolshiki" (i.e., individuals who paid money to
construction companies for apartments that were not built or
completed), Nazarbayev said that while the government did not
bear direct responsibility for the problem, it could not
leave its citizens in misfortune. The government has already
allocated 157 billion tenge (over $1.3 billion) just to
complete construction projects in Astana and Almaty.

5. (U) Nazarbayev outlined several priorities in the economic
sphere, including proposed new tax and budget codes, as well
as new legislation on competition. He explained that the new
tax code would decrease the tax burden on the non-extractive
sector, while maintaining the government's revenue base
through increased output from the extractive sector.
Nazarbayev said that the new tax code would reduce the
corporate income tax rate from its present 30 percent level
to just 15 percent in 2011. He promised that pension

ASTANA 00001647 002 OF 002


payments would rise 25 percent in 2009 and 2010, and 30
percent in 2011 -- as would salaries for state employees.
Explaining that all the proposed socio-economic measures had
been part of Nur Otan's electoral platform, he argued that
Nur Otan has once again demonstrated that it is a party of
real deeds, whose words do not deviate from its deeds.
ORDWAY

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