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Cablegate: Kazakhstan's Views On Its Neighbors

VZCZCXRO3683
OO RUEHIK
DE RUEHTA #2202/01 3570507
ZNR UUUUU ZZH
O 230507Z DEC 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 7067
INFO RUCNCIS/CIS COLLECTIVE 2281
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1644
RUEHKO/AMEMBASSY TOKYO 2345
RUEHUL/AMEMBASSY SEOUL 1273
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 2639
RUEHNO/USMISSION USNATO 2934
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1839
RUEKJCS/SECDEF WASHDC 1689
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL

UNCLAS SECTION 01 OF 02 ASTANA 002202

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, SCA/AF

E.O. 12958: N/A
TAGS: PGOV PREL ETRD ECON OSCE AF CH IN IR KZ
SUBJECT: KAZAKHSTAN'S VIEWS ON ITS NEIGHBORS

REF: (A) ASTANA 2090
(B) ASTANA 2161
(C) ASTANA 2198
(D) ASTANA 607
(E) ASTANA 2200
(F) ASTANA 281

ASTANA 00002202 001.2 OF 002


1. (U) Sensitive but unclassified. Not for public Internet.

2. (SBU) SUMMARY: Assistant Secretary of State for South and
Central Asian Affairs Robert Blake thanked State Secretary-Foreign
Minister Kanat Saudabayev and President Nazarbayev's foreign policy
advisor Kairat Sarybai for Kazakhstan's assistance in Afghanistan
and noted that it complements the civilian component of the U.S.
strategy. He suggested that Kazakhstan could strengthen the
counter-narcotics and border-management expertise of the
Organization for Cooperation and Security in Europe (OSCE). Sarybai
encouraged further dialogue with Iran, stressing that "sanctions are
not effective." Kazakhstani officials emphasized efforts to
carefully manage the country's growing economic relationship with
China and to increase its trade links with India. END SUMMARY.

SUPPORT FOR AFGHANISTAN STRATEGY

3. (SBU) In separate December 15 meetings with State
Secretary-Foreign Minister Kanat Saudabayev and the President's
foreign policy advisor Kairat Sarybai, Assistant Secretary for South
and Central Asian Affairs Robert Blake thanked Kazakhstan for its
assistance in Afghanistan. He noted particularly Kazakhstan's
support for the Northern Distribution Network and the
recently-announced Afghanistan-Kazakhstan agreement to provide
university education for 1,000 Afghan students in Kazakhstan (ref
A). Sarybai told Blake that Afghanistan will stop being a source of
instability in the region when Afghans see that "good governance is
the necessary building block" for democracy. Blake highlighted that
Kazakhstan's initiative complements the civilian component of the
U.S. strategy in Afghanistan. Sarybai commended "the dual-prong
approach" of President Obama's strategy. Separately, Saudabayev
said that reinvigorated U.S. engagement is "added incentive" to
organize a 2010 OSCE summit, likely on Afghanistan (ref B).

4. (SBU) Blake told Sarybai that Kazakhstan's expertise with
counter-narcotics and border management could prove useful for the
OSCE. He lauded Kazakhstan's offer to train Afghan police at the
Central Asian Regional Information and Coordination Center (CARICC).
Blake noted the need for increased logistical support due to the
U.S. troop surge in Afghanistan, and he expressed hope to both
interlocutors that Kazakhstan will approve an additional north-south
overflight path under the existing overflight agreement (ref C).

IRAN -- FURTHER DIALOGUE NEEDED

5. (SBU) A/S Blake solicited Sarybai's views on likely prospects to
seek strengthened sanctions against Iran. Sarybai stressed that a
peaceful resolution is "highly, highly important" to Kazakhstan. He
encouraged the United States to continue the dialogue and send
positive signals, "perhaps at different fora. Sanctions are not
effective," he argued. He encouraged the United States to continue
signaling a readiness for a bilateral relationship. "The mullah
regime is still strong." Sarybai told Blake that President
Nazarbayev has told Iran to be open with and fair to the
international community, deal with the International Atomic Energy
Agency (IAEA), and give up nuclear weapon ambitions (ref D).
Nazarbayev holds up Kazakhstan as an example Iran should follow,
Sarybai noted, which makes a prominent position for Nazarbayev at
the Global Nuclear Security Summit especially relevant.

CHINA -- "LESS TALK, MORE ACTION"

6. (SBU) Asked about China's role in Kazakshtan, Sarybai said China
is actively engaged in securing hydrocarbon supplies from
Kazakhstan. He noted the recently-inaugurated

ASTANA 00002202 002.2 OF 002


Turkmenistan-Kazakhstan-China pipeline and China's $10-billion loan
to Kazakhstan. "They are less talk, more action," he said.
According to Sarybai, the China pipeline will help Kazakhstan link
its Western oil-rich regions with other parts of the country. "But
Kazakhstan knows its limits" and carefully manages the type and
scope of Chinese investment, he emphasized. Chinese goods are
popular with the lower-income stratum of society, he said, but
Korea, Japan, and Europe dominate the markets for more expensive
goods. Trade with China is comparable to U.S.-Kazakhstan trade
volumes. Sarybai welcomed initiatives to diversify U.S. investment
in Kazakhstan.

7. (SBU) In a separate December 15 meeting (ref E), Prime Minister
Karim Masimov told Blake that Kazakhstan's traditional markets of
Russia and Europe fell because of the economic crisis while China's
importance grew in 2009. "The lesson of 2009 was that China is an
obvious market for Kazakhstani products," he plainly stated.
Masimov also asserted that "the reality of 2009 was that only China
helped financially, providing a $10 billion loan and an additional
$3.5 billion program to assist extractive and non-extractive
industries." Masimov recounted that when Russian Prime Minister
Vladimir Putin asked why Kazakhstan accepted China's money, he said
he held out his hand and responded, "What do you have to offer?"
Masimov, ever cautious, asserted that Kazakhstan must carefully
watch its borrowing, taking only as much as necessary.

INDIA -- HIDING IN PLAIN VIEW

7. (SBU) Sarybai told Blake that India's economic role in
Kazakhstan equals that of China, but it is less conspicuous because
"the Indians are less suspicious. Everyone has doubts about the
Chinese, but no one has doubts about the Indians." Indian companies
invest in the uranium, agricultural, and petro-chemical markets.
Kazakhstani construction companies are active in India. The
bilateral trade is poised to grow as the two countries explore
possible cooperation in the production of pharmaceuticals, said
Sarybai.

8. (SBU) COMMENT: While Kazakhstan's commercial relations with
India are strong, and various Kazakhstani government officials have
previously called for increased trade with India, Post is skeptical
that Kazakhstani-Indian commercial relations will take off any time
soon. According to official statistics, the bilateral trade
relationship between Kazakhstan and India is nowhere near the volume
of Kazakhstani-Chinese trade (ref F). Although Kazakhstan's
bilateral trade balance with India reached $367 million in 2008, it
amounted to only 0.3% of Kazakhstan's 2008 total trade turnover. In
contrast, according to President Nazarbayev's statements to the
media during Chinese President Hu December 12 visit to Astana, the
bilateral trade turnover between Kazakhstan and China in 2008
reached $17.5 billion. By emphasizing the Kazakhstani-India
relationship, Sarybai might have been, consciously or unconsciously,
downplaying China's rapidly increasing importance to Kazakhstan, a
trend that concerns many Kazakhstani officials. END COMMENT.

9. (SBU) A/S Blake cleared this cable.

HOAGLAND

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