VZCZCXRO8861
OO RUEHAG RUEHAST RUEHBI RUEHCI RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK
RUEHKW RUEHLA RUEHLH RUEHLN RUEHLZ RUEHNEH RUEHNP RUEHPOD RUEHPW
RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG
DE RUEHTA #0594/01 0931221
ZNR UUUUU ZZH
O 031221Z APR 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5100
INFO RUCNCIS/CIS COLLECTIVE 1454
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0832
RUEHKO/AMEMBASSY TOKYO 1535
RUEHUL/AMEMBASSY SEOUL 0519
RUCNDT/USMISSION USUN NEW YORK 2250
RUEHNO/USMISSION USNATO 2580
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1017
RUEKJCS/SECDEF WASHDC 0930
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1390

UNCLAS SECTION 01 OF 02 ASTANA 000594 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EUR/ACE, EEB, F 
STATE PLEASE PASS TO USAID 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAID SOCI KZ
SUBJECT:  KAZAKHSTAN COMMITTED TO PUBLIC PRIVATE ECONOMIC 
PARTNERSHIP WITH THE UNITED STATES 
 
ASTANA 00000594  001.2 OF 002 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  On April 1, the initial Coordinating Committee 
meeting of the Public Private Economic Partnership Initiative 
(PPEPI) was held in Astana.  While the initiative has been slow 
getting off the ground since it was launched in June 2008, all the 
partners remain committed and eager to see real progress and results 
that promote economic policy reform, and ultimately lead to 
increased investment in Kazakhstan.  Five working groups consistent 
with PPEPI's pillars were established which will develop substantive 
policy reform recommendations.  The Ambassador and Deputy Prime 
Minister Yerbol Orenbayev, representing their respective 
governments, stressed the importance each government accords the 
initiative and its high-level support.  END SUMMARY. 
 
PPEPI MEANS PARTNERSHIP FIRST 
 
¶3.  (U) First launched with the direct participation of Prime 
Minster Karim Masimov in June 2008, PPEPI will harness the expertise 
of the U.S. and Kazakhstani public and private partners to foster 
dialogue and prepare policy recommendations designed to facilitate 
business and improve the overall investment climate in Kazakhstan. 
The initiative's partners include the Governments of the United 
States and Kazakhstan, the American Chamber of Commerce in 
Kazakhstan (AmCham), the U.S.-Kazakhstan Business Association, the 
Forum of Entrepreneurs, and the Atameken Union.  The latter two 
organizations are both Kazakhstani business associations that 
represent the private sector of the country. 
 
¶4.  (U) The PPEPI is administered by AmCham, which received funding 
from USAID and from the Government of Kazakhstan (through the 
Program for Economic Development, in which the costs for the USAID 
Economic Growth program are shared by the two governments), and 
through financial and in-kind contributions from AmCham and the 
other partners to the initiative.  The agreement calls for a 
one-year pilot program, which will then be reviewed and considered 
for extension and additional funding. 
 
WORKING GROUPS TO PROVIDE EXPERTISE, POLICY RECOMMENDATIONS 
 
¶5.  (U) The Coordinating Committee meeting, which gathered the 
partners of PPEPI, is the first of three such meetings planned over 
the course of the first year.  This managing body sets overall 
policy and the strategic goals of PPEPI and, during this first 
meeting, established the several working groups that will be 
responsible for producing the economic policy recommendations, or 
white papers.  Five substantive working groups were formed: 
 
--Anti-Corruption Measures and Rule of Law 
--Transparency and Economic Efficiency 
--Regional Economic Integration - Trade and Customs 
--Cooperation in Science and Technology 
--Economic Diversification/SME Development 
 
¶6.  (U) U.S. Government participants in the working groups are 
expected to include representatives from USAID, the Political and 
Public Affairs Sections of the Embassy, the Foreign Commercial 
Service, and the U.S. Center for Disease Control and Prevention 
(CDC). 
 
HIGH-LEVEL SUPPORT FROM THE KAZAKHSTANI GOVERNMENT 
 
¶7.  (SBU) The Coordinating Committee meeting included the 
participation of Deputy Prime Minister Yerbol Orenbayev, who was 
assigned responsibility for the government's implementation of the 
initiative by Prime Minister Masimov.  Orenbayev is part of the 
up-and-coming "new guard" in the government and his rise bodes well 
for the future leadership on the country.  Just 37 years-old, 
Orenbayev is English-speaking, and a Muskie program alum who 
received his master's degree from Duke University.  Unassuming and 
 
ASTANA 00000594  002.2 OF 002 
 
 
soft-spoken, his leadership in PPEPI is indicative of the importance 
the Kazakhstani government places on the success of this 
partnership.  It also indicates the political willingness of the 
government to consider real economic policy reform, with the further 
understanding that such reforms can be part of the answer to the 
country's current economic woes. 
 
AZAT PERUASHEV, A POTENTIAL POPULIST LEADER? 
 
¶8.  (SBU) Azat Peruashev is the 40-year old Chairman of the National 
Economic Chamber of Kazakhstan "Atameken" and one of the founding 
partners of PPEPI.  Peruashev and Atameken have been dismissed by 
some as the "tame" business group responsive to the government.  Our 
experience has indicated, however, that Peruashev can be quite blunt 
in his criticism of government policies, particularly when they 
interfere with the interests of his constituents, the private 
entrepreneurs of small- and medium-size businesses.  Peruashev likes 
to depict himself as an outsider, "I am a simple village person." 
When the various representatives made their comments at the PPEPI 
press conference, only Peruashev spoke in Kazakh (to the obvious 
discomfort of most of the journalists who could not understand his 
untranslated remarks).  Peruashev is not quite the country rube that 
he pretends to be.  When we first met him several years ago, he did 
not speak any English.  In the meantime he has become reasonably 
fluent.  His desire to improve his ability to communicate in English 
is derived from his belief that the United States' experience is the 
most relevant to Kazakhstan.  He professes his admiration for 
American entrepreneurship.  "We must learn innovation from the 
Americans.  The Europeans have nothing to teach us." 
 
¶9.  (SBU) Peruashev is also more ambitious then he would let on.  "I 
would like to leave the leadership of Atameken, but no one else can 
step forward to represent the small businessman."  He is a 
passionate advocate of the free market including denying the 
government's right to regulate for social purposes though also 
favoring a nationalistic style of protectionism.  He strongly 
criticized the government's decision to ban alcohol and tobacco 
advertising on Kazakhstani television. "Businesses, even alcohol and 
tobacco, should be able to act as they need.  The result of this ban 
is not a decrease in drinking and smoking but rather an increase in 
the sales of Russian cigarettes and vodka since Kazakhstanis see 
their advertisements on Russian television."  Peruashev used to lead 
the now defunct Civic political party.  This party later merged with 
the ruling Nur Otan.  If he returned to a more active political 
life, he could represent the interests of those raised at the end of 
the Soviet era, the rural population and mid-level businessmen. 
 
¶10.  (SBU) COMMENT:  PPEPI has been slow getting off the ground for 
reasons other than the commitment of its partners.  With 
administrative obstacles overcome and the initiative now funded, it 
will be incumbent on the several working groups to produce 
substantive economic policy recommendations in the form of white 
papers within the next six months to build on the momentum of the 
Coordinating Committee meeting and maintain the confidence of its 
partners.  END COMMENT. 
 
HOAGLAND