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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