VZCZCXRO3812
OO RUEHBI
DE RUEHTA #0425/01 0651209
ZNR UUUUU ZZH
O 061209Z MAR 09 ZDK
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 4855
INFO RUCNCIS/CIS COLLECTIVE 1325
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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RUEKJCS/SECDEF WASHDC 0799
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RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHNO/USMISSION USNATO 2527

UNCLAS SECTION 01 OF 02 ASTANA 000425 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN 
 
E.O. 12958: N/A 
TAGS: PGOV ECON EFIN SOCI KZ
SUBJECT:  KAZAKHSTAN'S PRESIDENT NAZARBAYEV FOCUSES SOLELY ON 
ECONOMY IN ANNUAL ADDRESS TO PARLIAMENT 
 
REF:  08 ASTANA 280 (NOTAL) 
 
ASTANA 00000425  001.2 OF 002 
 
 
¶1. (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2. (U) SUMMARY:  President Nazarbayev delivered his annual address 
to Parliament on March 6.  The entire address was devoted to the 
economy and overcoming the global economic crisis.  He claimed that 
many governments have come to understand the necessity of a "guiding 
hand" for the economy, and that "regulation is becoming the most 
important means for exiting the crisis."  Nazarbayev justified the 
February 4 devaluation of the Kazakhstani tenge as necessary to 
maintain the competitiveness of domestic Kazakhstani producers.  He 
detailed the government's on-going program to overcome the economic 
crisis and announced that an additional 600 billion tenge ($4 
billion) will be allocated for modernizing the economy for the 
post-crisis period.  Nazarbayev said that high-ranking officials 
will bear personal responsibility for implementing anti-crisis 
measures.  END SUMMARY. 
 
ADDRESS DEVOTED ENTIRELY TO ECONOMIC ISSUES 
 
¶3. (U) President Nazarbayev delivered his annual address to 
Parliament on March 6.  The entire address -- entitled "Through the 
Crisis toward Renewal and Development" -- was devoted to the economy 
and the government's program to mitigate the effects of the global 
economic crisis.  Unlike last year (see reftel), Nazarbayev made no 
mention of foreign policy or domestic political reforms. 
 
¶4. (U) Nazarbayev told Parliament that the economic crisis had 
arrived in Kazakhstan from "the outside."  He said that the world's 
leading economies had already devoted ten trillion dollars to 
overcome the crisis, and noted that many analysts say the global 
economy has not yet hit bottom.  Nazarbayev predicted that the 
crisis would lead to changes in the world financial system -- and 
possibly to changes in the political systems of various countries. 
He claimed that many governments have come to understand the 
necessity of a "guiding hand" for the economy, and that "regulation 
is becoming the most important means for exiting the crisis." 
According to Nazarbayev, "A profound and radical approach will help 
the world community find those paths which will protect us during 
future zigzags of the world market economy.  For that reason, the 
radical measures I have proposed" -- an apparent reference to his 
recent suggestion to replace the dollar with a new global currency 
-- "will be discussed by the world community." 
 
¶5.  (U) President Nazarbayev noted that in recent months, world 
prices for Kazakhstan's principal exports -- crude oil and metals -- 
have fallen dramatically, and that Russia and Ukraine have devalued 
their currencies by 40 to 45 percent.  He justified the February 4 
devaluation of the Kazakhstani tenge as aimed at protecting the 
interests of the country's producers, explaining that a failure to 
devalue would have damaged their competitiveness -- and would have 
forced the country to continue burning through its gold and currency 
reserves.  Nazarbayev argued that Kazakhstan will emerge from the 
crisis a stronger and more vibrant state -- and will preserve its 
position in the global community. 
 
¶6.  (U) Nazarbayev described the decision to establish Kazakhstan's 
National (Oil) Fund as a "well thought-out" policy that has allowed 
the government to use money saved up in good times to support social 
spending through the current crisis.  He noted that Kazakhstan was 
one of the world's first countries to react to the global economic 
turbulence and implement measures to counteract it.  Nazarbayev 
described some of the details of the government's ongoing 
anti-crisis plan, pointing out that over 2.7 trillion tenge 
(approximately $18 billion) has been allocated for all its 
components -- including support for the financial sector, 
residential construction, small- and medium-sized enterprises, and 
agriculture. 
 
¶7.  (U) Nazarbayev announced a new 2009-2010 program --involving an 
additional 600 billion tenge (approximately $4 billion) taken from 
 
ASTANA 00000425  002 OF 002 
 
 
the National Fund -- for further economic modernization and an 
employment strategy which will "ensure the country's post-crisis 
development." 
 
¶8.  (U) At the end of his speech, Nazarbayev argued that sufficient 
means have now been allotted from the government's reserves for 
anti-crisis measures.  He said the Cabinet and the Prime Minister, 
as well as the heads of state bodies and akims (governors and 
mayors) "will bear personal responsibility for implementation of the 
measures for exiting the crisis."  He said that those who had voted 
for the ruling Nur Otan party "showed great confidence in us."  "We 
have to justify that (confidence) and lead a large-scale anti-crisis 
movement in society."    He appealed to state officials to better 
explain the government's anti-crisis measures to the population, and 
said law enforcement bodies must decisively fight crime, corruption, 
and fraud.  He also appealed to the media to be more active.  "It's 
not by coincidence that they call you the Fourth Estate," said 
Nazarbayev.  The media needs to be an "advisor" to the population on 
how to overcome difficulties and how to survive these trying times, 
he added. 
 
¶9.  (SBU) COMMENT:  This was a sober and responsible speech.  While 
it lays the groundwork for greater government intervention in the 
economy, it was not in any way out of the mainstream of the current 
thinking of other world capitals.  It also seems to imply confidence 
in the current managers of the economic and financial leaders of the 
government, despite press speculation that Nazarbayev is preparing a 
broad reorganization of the government.  We'll see.  The bottom line 
is that this speech and its policy implications are in line with 
what we have been hearing and reporting from the international 
financial institutions and from the private-sector international 
financial interests based in Kazakhstan.  END COMMENT. 
 
HOAGLAND