VZCZCXRO4156
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #0782/01 1130621
ZNR UUUUU ZZH
R 220621Z APR 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2270
INFO RUCPCIM/CIMS NTDB WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE 0493
RUEHAK/AMEMBASSY ANKARA 2162
RUEHBUL/AMEMBASSY KABUL 0394
RUEHNE/AMEMBASSY NEW DELHI 0502
RUEHAST/USOFFICE ALMATY 0389

UNCLAS SECTION 01 OF 02 ASTANA 000782 
 
SIPDIS 
 
DEPT FOR SCA/CEN (O'MARA) 
DEPT PASS TO OPIC - BALLINGER 
DEPT PASS TO TDA FOR STEIN, EXIM FOR GLAZER 
DEPT PASS TO AID - EE-PHILLIPS/RUSHING 
TREASURY FOR OASIA/VELTRI 
USDOC FOR 4231/ITA/MAC/MLONDON, 4201/BISNIS 
USDOC FOR 6110/ITA/TD/BI/RHALPERN 
ANKARA FOR CFC 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ENRG EPET EFIN KTDB KZ
SUBJECT:  KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, APRIL 5 - APRIL 18, 
2008 
 
 
ASTANA 00000782  001.2 OF 002 
 
 
¶1.  Summary:  This information is drawn primarily from the 
Kazakhstani local press, and has not been verified for accuracy. 
 
-- Temporary Ban on Wheat Exports 
-- First Hearings on New Competition Law 
-- Social Security of Bazaar Workers to Be Ensured 
-- Economic Statistics for January-March 2008 
-- Crude Export Duty Introduced 
-- Metals Export Duty Proposed 
-- National Sulphur Storage to Be Built 
-- Caspian Energy Hub to Be Built 
-- Energy Statistics for January-March 2008 
 
Temporary Ban on Wheat Exports 
------------------------------ 
 
¶2.  To better ensure the country's food security, the Government of 
Kazakhstan has banned wheat exports until September 1, 2008.  Flour 
exports are not affected.  In 2007, Kazakhstan harvested over 20.1 
million tons of wheat.  Of the 10 million tons of wheat intended for 
export this year, 7 million tons have already been exported. 
(Interfax-Kazakhstan, April 15) 
 
First Hearings on New Competition Law 
------------------------------------- 
 
¶3.  The recently formed Competition Agency presented the government 
with the first draft of a new competition law, which will be 
submitted to parliament in November 2008.  According to Competition 
Agency chairman Mazhit Yessenbayev, the new law stipulates the 
agency's statutory independence, a general reduction of state 
interference in market competition, and the substitution of regular 
inspections with market analysis to determine whether company 
practices can be considered fair.  (Kazakhstanskaya Pravda 
newspaper, April 14) 
 
Social Security of Bazaar Workers to Be Ensured 
--------------------------------------------- -- 
 
¶4.  Minister of Industry and Trade, Vladimir Shkolnik suggested 
amending the Law on Trade Regulation to add provisions imposing 
social taxes and pension payments on bazaar vendors.  According to 
official statistics, as of January 1, 2008, more than 1 million 
people, or approximately 15 percent of the Kazakhstani labor pool, 
are employed in bazaars.  Shkolnik, however, also made reference to 
TASIS survey results indicating that as many as 27 percent of the 
Kazakhstani labor force works in bazaars.  (TV Channel 31, April 8) 
 
Economic Statistics for January-March 2008 
------------------------------------------ 
 
¶5.  According to Economy and Budget Planning Minister Bakhyt 
Sultanov, Kazakhstan's GDP grew at an annual rate of 5.3% during 
January-March 2008.  The unemployment rate dropped to 6.9%. 
(Interfax-Kazakhstan, April 15) 
 
¶6.  According to the Financial Supervision Agency, Kazakhstan's 35 
commercial banks earned a net profit of 27.6 billion tenge ($229.1 
million) during January-March, a decrease of 46.8% year-on-year. 
Meanwhile, deposits grew 2.3% and loans dropped 0.1%. (Press Release 
of the Financial Supervision Agency, April 15) 
 
Crude Export Duty Introduced 
---------------------------- 
 
¶7.  Kazakhstan will introduce a $109.91 per ton crude export duty on 
May 17.  However, companies that pay rent tax will be charged just 
$27.43 per ton.  The new duty does not apply at all to projects 
enjoying a fixed tax regime under their subsoil use contracts (this 
includes TengizChevrOil, Kashagan, and Karachaganak).  Minister of 
Industry and Trade Vladimir Shkolnik said that he does not rule out 
the possibility of repealing the crude export duty in the new tax 
code that is expected to go into effect January 1, 2009.  In view of 
the new crude export duty, KazMunayGas Exploration & Production, a 
KMG subsidiary, will revise its production, finance, and investment 
 
ASTANA 00000782  002.2 OF 002 
 
 
plans.  (Interfax-Kazakhstan, April 17; Liter newspaper, April 9; 
Press Release of EP KMG, April 8) 
 
Metals Export Duty Proposed 
--------------------------- 
 
¶8.  Vice Minister of Finance Daulet Yergozhin announced that the 
Government of Kazakhstan will establish a new metals export duty by 
the end of April.  It will be lower than that of the new crude 
export duty.  (Interfax-Kazakhstan, April 18) 
 
National Sulphur Storage to Be Built 
------------------------------------ 
 
¶9.  In 2008, the Caspi Social Entrepreneurial Corporation, the 
Kazakhstan Oil and Gas Institute (KOGI), and TengizChevrOil (TCO) 
plan to launch a national sulphur storage project in Atyrau province 
(West Kazakhstan).  TCO and Caspi will provide technical support, 
and KOGI will design an economic model.  TCO, the largest producer 
of sulphur in the country, is currently maintaining approximately 9 
million tons of sulphur in open storage.  (Panorama newspaper, April 
11) 
 
Caspian Energy Hub to Be Built 
------------------------------ 
 
¶10.  The Gulf Finance House (a Bahrain-based Islamic investment 
bank), PFC Energy International, Dunie Stock Energy, the Samruk 
State Asset Management Company, the Kazyna Sustainable Development 
Fund, and the Mangistau Investment Company signed a memorandum to 
build in Aktau a center for training technical personnel for oil 
companies.  The center will include a science and technology park, a 
geophysical laboratory, a renewable energy center, and facilities 
for information technology development and environmental research. 
(Interfax-Kazakhstan, April 10) 
 
 
Energy Statistics for January-March 2008 
---------------------------------------- 
 
¶11.  According to the National Statistics Agency, Kazakhstan 
produced 29.45 million tons of coal during January-March 2008, an 
increase of 19% year-on-year.  Electricity generation grew 7.6% to 
22.85 billion kilowatt-hours.  (Interfax-Kazakhstan, April 17) 
 
ORDWAY