VZCZCXRO6732
PP RUEHDBU RUEHLN RUEHVK RUEHYG
DE RUEHTA #0594/01 0650957
ZNR UUUUU ZZH
P 060957Z MAR 07
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 8670
INFO RUCNCIS/CIS COLLECTIVE 0049
RUEHVEN/USMISSION USOSCE 1689
RUEHAST/USOFFICE ALMATY

UNCLAS SECTION 01 OF 02 ASTANA 000594 
 
SIPDIS 
 
DEPARTMENT FOR SCA/CEN (M. O'MARA, T. PERRY), DRL/PHD (C. 
KUCHTA-HELBLING) 
 
SENSITIVE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL OSCE KDEM KZ
SUBJECT: KAZAKHSTAN: PRESIDENT DELIVERS STATE OF THE NATION ADDRESS 
 
REF: Astana 515 
 
ASTANA 00000594  001.2 OF 002 
 
 
¶1. (SBU) Summary: On February 28, President Nursultan Nazarbayev 
delivered his annual state of the nation address before a joint 
session of parliament.  The address, entitled "New Kazakhstan in the 
New World," was intended primarily for domestic consumption, with a 
heavy focus on modernizing social and economic development in the 
country.  Nazarbayev emphasized the need to meet global competitive 
challenges, and to utilize international standards.  The president 
listed political reform as one of the 10 major tasks facing the 
nation in the coming decade, but he did not reveal any significant 
new details concerning the plan for reform.  End summary. 
 
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THE PRESIDENT CELEBRATES PROGRESS, PROMISES MORE 
--------------------------------------------- --- 
 
¶2. (U) On February 28, President Nazarbayev delivered his annual 
state of the nation address before a joint session of parliament. 
The president's speech, entitled "New Kazakhstan in a New World," 
stressed the themes of modernization and development, with a strong 
focus on social and economic issues.  The president reviewed 
Kazakhstan's progress to date, declaring that Kazakhstan "has chosen 
its own way of development," and has "achieved wide renown and its 
standing in the international community is rising year after year." 
He reiterated Kazakhstan's goal of joining the world's 50 most 
competitive nations, acceding to the WTO, and fulfilling 
Kazakhstan's 2030 development strategy, which was adopted by the 
parliament in 1997.  For the first time in recent years, the speech 
was not broadcast live.  President Nazarbayev departed from his text 
on several occasions to scold ministers - and on one issue the press 
- for not carrying out their tasks properly.  The impromptu remarks, 
in both Kazakh and Russian, showed a greater level of frustration 
and dissatisfaction in specific areas than in his prepared remarks. 
 
------------------------- 
SOCIAL SPENDING WILL RISE 
------------------------- 
 
¶3. (U) In terms of bread and butter social and economic issues, 
President Nazarbayev pledged, among other things, that pensions 
would grow and would be indexed for inflation; employees in 
educational, social, health, culture, and sports institutions would 
be paid health allowances; employees working in harmful or difficult 
labor conditions would receive additional allowances; and that 100 
high schools and 100 hospitals would be built over the next three 
years in impoverished rural areas.  In addition, Nazarbayev 
encouraged Kazakhstanis to have more children, and promised to 
double the payment that families receive upon the birth of a child, 
to increase monthly childcare allowances, and to introduce mandatory 
maternity social insurance.  (Note:  According to the president, 
290,000 children were born in Kazakhstan in 2006, an improvement 
over the 220,000 that were born in 2000. End note.) In all, the 
president planned to allocate 108 billion tenge ($864 million) for 
social welfare improvement in the country. 
 
 
------------------------------------ 
10 MAJOR TASKS FOR THE COMING DECADE 
------------------------------------ 
 
¶4. (U) In keeping with the theme of further modernizing and 
developing Kazakhstan, the president outlined 10 major tasks for the 
country in the coming decade: 
 
1) Maintain and grow Kazakhstan's economy, including by decreasing 
natural monopolies, strengthening the financial system, creating an 
efficient stock market, and ensuring Kazakhstan's accession the 
WTO. 
 
2) Further Kazakhstan's role as the "regional locomotive" of 
economic development in Central Asia, and make it a successful 
player in the global economy.  Nazarbayev indicated that the primary 
focus should be on markets in Russia, China, Central Asia, and the 
Caspian and Black Sea regions, and he proposed establishing a 
Eurasian Economic Union. 
 
3) Increase the effectiveness of the country's extractive 
industries, in part by implementing a responsible and mutually 
beneficial energy policy and by insisting that foreign partners 
respect the needs of the country and play a role in the 
diversification of its economy. 
 
4) Diversify the economy by promoting the development of 
non-extractive sectors. 
 
 
ASTANA 00000594  002.2 OF 002 
 
 
5) Develop a modern infrastructure to sustain the country's new role 
in the regional and global economy, including by exploring new 
approaches to development and management of electricity and energy 
resources and laying the foundation for nuclear energy use in 
Kazakhstan.  The president called for the completion of a thermal 
electric power station near Lake Balkhash as soon as possible. 
 
6) Provide modern education and professional re-training to help 
develop an innovative economy. 
 
7) Target social protection and social welfare development to those 
who really need protection, such as the disabled, large families, 
and low-income families, and end support for those who are reluctant 
to find a new job or update their specialty.  Nazarbayev also 
pledged further progress in developing affordable 
(government-subsidized) housing, particularly in the capital of 
Astana, to ensure that Astana can attract a new "intelligentsia" -- 
highly qualified doctors, teachers, and technical and engineering 
professionals.  The president criticized government corruption in 
this sphere, and called on his Nur Otan Party to oversee the 
distribution of subsidized housing and ensure that it goes to those 
it was intended to help, as opposed to corrupt local government 
officials. 
 
8) Modernize the political system by implementing the conclusions of 
the State Democratization Commission (reftel). 
 
9) Accelerate administrative reforms to meet international 
standards, with the goal of creating a modern, professional civil 
service. 
 
10) Promote Kazakhstan's achievements in Central Asia and the 
world. 
 
----------------------------------- 
NO NEW DETAILS ON POLITICAL REFORMS 
----------------------------------- 
 
¶5. (U) President Nazarbayev praised the work of the Democratization 
Commission and reviewed the direction that future political reforms 
would take, including a more powerful parliament, more powerful 
political parties, judicial reform, and more powerful local 
representative bodies.  He did not reveal any significant new 
details concerning these previously-announced reform plans (reftel). 
 However, he stressed that the reforms must not be "a copy of 
foreign experience or abstract theory," and that they should "take 
into account the needs of our society and realities in Kazakhstan." 
 
 
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COMMENT 
------- 
 
¶6. (SBU) Comment:  President Nazarbayev focused on his domestic 
constituency, reviewing the many positive developments under his 
leadership, directing social spending to key constituencies, and 
promising great things to come.  Given the target audience, he did 
not elaborate significantly on foreign policy issues.  Nonetheless, 
his modernization agenda tracks closely with several U.S. policy 
goals, including regional integration, economic diversification, and 
political reform.  As always, Nazarbayev framed the debate 
carefully: saying all the right things about the need for further 
reform, while caveating that the country must develop in its own 
way, in response to the "realities in Kazakhstan."  End comment. 
 
ORDWAY