VZCZCXYZ0001
PP RUEHWEB

DE RUEHTA #1022/01 1540947
ZNY SSSSS ZZH
P 020947Z JUN 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 2516
INFO RUCNCIS/CIS COLLECTIVE 0516
RUEHIN/AIT TAIPEI 0023

S E C R E T ASTANA 001022 
 
SIPDIS 
 
STATE FOR SCA/CEN M. O'MARA, H 
 
E.O. 12958: DECL: 05/29/2018 
TAGS: PGOV PREL KZ
SUBJECT: CODEL RAHALL DISCUSSES ENERGY, SECURITY, DEMOCRACY 
WITH KAZAKHSTANI LEADERSHIP 
 
 
Classified By: AMBASSADOR ORDWAY FOR REASONS 1.4 (B) AND (D) 
 
¶1. (C) Summary: Codel Rahall traveled to Astana on May 28 for 
meetings with President Nazarbayev, Prime Minister Masimov, 
Foreign Minister Tazhin, State Secretary Saudabayev, and 
members of both houses of Parliament.  The delegation's 
Kazakhstani interlocutors praised U.S. - Kazakhstan 
relations. President Nazarbayev and Foreign Minister Tazhin 
both said that the U.S. should stay the course in Iraq and 
Afghanistan.  Tazhin and Saudabayev told the delegation that 
Kazakhstan is making progress on democracy but conditions in 
the region must be considered when assessing the pace of 
development.  Codel Rahall consisted of Representatives Nick 
Rahall (D-West Virginia); Darrell Issa (R-California); Jack 
Kingston (R-Georgia); Ray LaHood (R-Illinois); Charles 
Melancon (D-Louisiana); and John Linder (R-Georgia).  End 
Summary 
 
Nazarbayev Addresses War on Terror, Iran, World View of U.S. 
--------------------------------------- 
 
¶2. (C) President Nazarbayev begin his meeting with the 
delegation by praising U.S. - Kazakhstan relations. 
Responding to Representative Rahall's thanks for Kazakhstan's 
contributions in Iraq and Afghanistan, Nazarbayev said that 
the U.S. is moving in the right direction in both countries 
and that each conflict affects Kazakhstan. The U.S. must 
finish what it started in Iraq, he said.  If there is a 
retreat, he added, terrorist attacks will increase. 
Nazarbayev said, however, that it is "funny" to hear 
President Bush say that democracy is being established in 
Afghanistan and Iraq.  After the coalition leaves, the 
countries will be Islamic countries which are hopefully "at 
least as good as Pakistan." He also told the delegation that 
Kazakhstan's more religious-minded southern neighbors, 
Uzbekistan and Tajikistan, are susceptible to more radical 
positions. 
 
¶3. (C) According to Nazarbayev, if force is used against Iran 
it will cause chaos and an increase of terrorism, a view 
which he said many leaders of Moslem countries share.  He 
told President Ahmadinejad last year that Iran should abandon 
its nuclear program in exchange for an end to the embargo and 
the opportunity to create a peaceful nuclear program. 
Ahmadinejad replied that Iran's current program is peaceful, 
and that the United States will accuse Iran regardless of its 
intentions. Nazarbayev said that he also met at that time 
with Ayatollah Khamenei, and believes that Ahmadinejad was 
only reflecting the views of the Ayatollah. Nazarbayev opined 
that Saddam Hussein, while "not a good guy," at least helped 
to achieve balance in the region.  Now, the Shias are 
increasing their power and Iran is a threat to the other Gulf 
states. 
 
¶4. (C) Nazarbayev told the delegation that western oil 
companies are in Kazakhstan and are flourishing. He would now 
like to see western companies become more involved in 
Kazakhstan's economic diversification and the development of 
the services sector.  Nazarbayev expressed displeasure with 
the pace of progress at Kashagan.  He noted problems with oil 
transportation and said that Kazakhstan is now developing 
options across the Caspian and to China. 
 
¶5. (C) Nazarbayev informed the delegation that Kazakhstan 
does not have any major unsettled issues with the United 
States.  He did request the delegation's assistance with 
Jackson - Vanik, saying that Kazakhstan is the second best 
country in the world for Jews to live.  He also asked why the 
U.S. has not endorsed Kazakhstan's WTO candidacy, instead 
grouping it with "bad" countries. Finally, Nazarbayev 
reminisced that in Soviet times people believed that the U.S. 
was fair and good.  Now, he said, the mood has changed.  The 
U.S. needs to demonstrate its moral potential with  "good 
acts," and not just military acts. 
 
Codel Rahall Discusses Energy, Security. Democracy with 
Kazakhstani Leaders 
--------------------------------------------- ---- 
 
¶5. (C) In a meeting with Prime Minister Masimov, 
Representative Rahall asked for an explanation of the 
situation with AES.  Masimov promised a just and fair 
solution, guaranteeing that the issue will be reviewed in 
accordance with the law and with the input of independent 
U.S. experts.   Masimov predicted that oil prices have not 
yet peaked and will continue to rise through the Beijing 
Olympics.  He believes that prices will rise to $155 a 
barrel.  The continued rise will create consumption issues in 
emerging markets such as India and China, leading to a 
 
reduction of prices next year. 
 
¶6. (C) Asked by Representative Issa about Kazakhstan's 
capital flow, Masimov answered that until last August, 
Kazakhstan had good access to global capital.  That time, he 
said, will not return in the near future.  The number one 
issue for Kazakhstan currently, according to Masimov, is 
risk.  Previously, Kazakhstan's banks were viewed as too big 
to fail.  Now, world banks are closely assessing the risks of 
Kazakhstani banks. 
 
¶7. (C) Masimov said interest in Kazakhstan's hydrocarbons and 
agriculture sectors remains strong.  Agriculture in 
Kazakhstan is very attractive because of rising food prices. 
Prices for land are also one-tenth those in Europe, said 
Masimov.  He added that Kazakhstan has attracted interest 
from GMO companies, but has not yet determined its position 
on the issue.  In other sectors, however, attracting capital 
is more complicated, he said. 
 
¶8. (C) State Secretary Kanat Saudabayev told the delegation 
that there are no major problems between the U.S. and 
Kazakhstan.  The support of the U.S. for Kazakhstan's bid to 
chair the OSCE in 2010 is a vote of confidence from the U.S. 
and recognition that Kazakhstan is moving towards true 
democracy.  There may be issues on the pace of democratic 
development in Kazakhstan, said Saudabayev, but others must 
remember that Kazakhstan has to take into consideration 
domestic and regional realities.  Saudabayev also questioned 
why "hotheads" in the U.S. Congress criticize Kazakhstan 
undeservedly. With each criticism, he warned, "some 
neighbors" tell President Nazarbayev that Kazakhstan should 
not bother with the United States. 
 
¶9. (S) On the OSCE, Saudabayev called the chairmanship not 
only a big honor but also a great responsibility.  Kazakhstan 
does not want some OSCE members states to feel like 
second-class citizens and wants to heighten the 
organization's focus on Central Asia, including Afghanistan. 
Saudabayev called Kazakhstan's commitment to Iraq and 
Afghanistan proof of the strength of U.S. - Kazakhstan 
relations.  As another example of partnership, Saudabayev 
pointed to the "active cooperation" of the secret services of 
the two countries. 
 
¶10. (C) The delegation asked Foreign Minister Tazhin how the 
U.S. can help Kazakhstan. Tazhin responded that the U.S. 
should lift Jackson - Vanik restrictions.  Representative 
Lahood asked Tazhin what the U.S. and its allies should do in 
Iraq.  Tazhin said that "if we begin the process, then we 
must be responsible for the results." To leave Iraq, he said, 
will create serious and dangerous consequences.  Looking at 
Central Asia, Tazhin said that change in the region cannot be 
"artificially forced." According to Tazhin, the U.S. should 
consider this when developing its policy for the region. 
 
¶11. (C) Nurbakh Rustemov, Chairman of the Mazhilis Committee 
for International Affairs, asked the delegation for U.S. 
support for Senate Speaker Tokayev's candidacy for Deputy 
Chairman of the OSCE Parliamentary Assembly, assistance with 
Jackson - Vanik, and help with efforts to integrate Central 
Asia and to establish a free trade zone.  Asked by 
Representative Rahall about the stability of the investment 
climate, Rustemov promised that there will not be deviations 
from existing agreements. 
 
¶12. (U) This cable has not been cleared by Codel Rahall 
ORDWAY