VZCZCXRO4097
OO RUEHIK
DE RUEHTA #1983/01 3140633
ZNR UUUUU ZZH
O 100633Z NOV 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6780
INFO RUCNCIS/CIS COLLECTIVE 2128
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1498
RUEHKO/AMEMBASSY TOKYO 2199
RUEHUL/AMEMBASSY SEOUL 1133
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEAIIA/CIA WASHDC
RHEFAAA/DIA WASHDC
RHEHNSC/NSC WASHDC 1688
RUEKJCS/SECDEF WASHDC 1546
RUEKJCS/JOINT STAFF WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHAST/USOFFICE ALMATY 1993

UNCLAS SECTION 01 OF 02 ASTANA 001983 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB/ESC 
STATE PLEASE PASS TO USTDA, USAID 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAID ECON EINV KZ
SUBJECT:  KAZAKHSTAN:  DEPUTY PRIME MINISTER EVALUATES PPEPI 
 
REF:  ASTANA 1949 
 
ASTANA 00001983  001.3 OF 002 
 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY:  On November 6, the Ambassador, USAID's Mission 
Director for Central Asia, and the American Chamber of Commerce in 
Kazakhstan's Executive Director discussed the U.S.-Kazakhstan Public 
Private Economic Partnership Initiative (PPEPI) with Deputy Prime 
Minister Yerbol Orynbayev.  Orynbayev shared his concerns about the 
first draft of white papers, private-sector involvement, and 
communication from the PPEPI Secretariat.  For the next phase of the 
project, they agreed to establish goals and priorities, focusing 
less on reports and more on implementation.  END SUMMARY. 
 
GOALS AND PRIORITIES 
 
¶3.  (SBU) Arriving at the November 6 meeting with Deputy Prime 
Minister Yerbol Orynbayev, the Ambassador, USAID's Mission Director 
for Central Asia Andrew Sisson, and the American Chamber of Commerce 
in Kazakhstan's (AmCham) Executive Director Doris Bradbury greeted 
the Kazakhstani government's unusually large delegation, which 
numbered 11 and included the Deputy Foreign Minister Kairat Umarov. 
The Ambassador thanked Orynbayev for his serious involvement in the 
U.S.-Kazakhstan Public Private Economic Partnership Initiative 
(PPEPI).  This policy reform project is unique, he asserted, because 
it marries government and private-sector expertise in an effort to 
build Kazakhstan's economy.  The Ambassador also highlighted the 
four other projects in the U.S.-Kazakhstani co-funded Program for 
Economic Development (PED), emphasizing the importance of 
coordinated efforts. 
 
¶4.  (SBU) The Ambassador responded to the government's October 20 
PPEPI Action Plan, which relies heavily on exchanges, by noting 
existing U.S. exchange programs.  He recalled Orynbayev's October 30 
meeting with Deputy Assistant Secretary of State for South and 
Central Asian Affairs George Krol at which the Deputy Prime Minister 
had emphasized the need to "turn recommendations into results by 
setting annual priorities" (reftel).  The Ambassador suggested that 
PPEPI focus on recommendations to better implement Kazakhstan's 
current laws and regulations, many of which answer private-sector 
concerns, as well as identify and propose further legislation 
needed.  The Ambassador summarized the discussion with two words, 
"goals and priorities.  We need to know where we are going, and how 
we are going to get there." 
 
PPEPI -- MORE THAN JUST REPORTS 
 
¶5.  (SBU) Orynbayev responded by underscoring the existence of 
numerous international and local studies and proposals on economic 
development.  "We do not want PPEPI to become only a research 
project, which turns into another paper.  We have enough of those," 
he said.  Regarding PPEPI's white papers, Orynbayev stated, "Some 
were good, some were very good, but some were not so deep."  He also 
mentioned his dissatisfaction with the involvement of the private 
sector and asked to expand the pool of participants beyond the two 
business associations named in the project proposal.  He 
specifically recommended other business associations in Karaganda 
and Almaty, which have good reputations and energetic leadership. 
Finally, Orynbayev relayed complaints about the communication of the 
PPEPI Secretariat (i.e., AmCham), especially its reliance on 
relatively short-notice email rather than hard-copy correspondence. 
He said, "I know this works for you, but it's not yet part of our 
culture." 
 
¶6.  (SBU) Orynbayev concurred with the Ambassador's "focus on 
legislation, regulations -- more specifically on results" and annual 
discussion of priorities.  He illustrated his point by highlighting 
the Ministry of Finance's Action Plan priority to improve government 
procurement practices, which is also tied to the anti-corruption 
campaign.  Next year, he said, PPEPI could develop a practical 
recommendation, and the private sector could help monitor its 
implementation. 
 
ASTANA 00001983  002.3 OF 002 
 
 
 
¶7.  (SBU) Expressing his appreciation for Orynbayev's pragmatism and 
directness, the Ambassador recalled previous conversations on these 
points.  He acknowledged his awareness that Kazakhstani 
private-sector involvement has lagged.  He highlighted the addition 
of new businesses to the working groups, which remain under 
development.  The Ambassador pledged to consider seriously 
Orynbayev's recommendations on business associations, especially 
"because the name and definition of the program is public-private." 
He thanked Orynbayev for his ideas to improve the Secretariat and 
his focus on priorities and goals.  Noting the Ministry of Finance 
recommendation, the Ambassador agreed that "government tenders 
throughout the world, including in the United States, are one of the 
most open doors to corruption."  He termed the idea of using the 
private sector to help monitor the new process excellent, especially 
since all reform depends on implementation. 
 
PPEPI IMPROVEMENTS 
 
¶8.  (SBU) Amcham's Executive Director Bradbury highlighted her 
efforts to expand working group participation beyond the two 
original business associations, which has led to at least two 
private sector representatives per group.  She noted her concern 
about government representatives' inconsistent working-group 
attendance.  On the issue of communication, she asserted that AmCham 
emails and calls, but designated officials often fail to personally 
attend, sending representatives instead.  Bradbury asserted that 
their continued involvement would improve future white papers.  She 
explained her view of the current white papers as a "modest first 
effort to start a dialogue with the government, which was achieved 
even if the papers were not perfect," and noted that revised final 
versions are nearly completed. 
 
¶9.  (SBU) Orynbayev conveyed his appreciation for Amcham's input, 
asserting that his critique aimed only to improve the project.  He 
promised to convey his assignment of government officials to the 
working groups.  He welcomed the expanded list of private-sector 
participants, including a number of well-known, active businessmen, 
but again encouraged consideration of regional business 
associations.  According to Orynbayev, many such groups exist in 
Kazakhstan.  Because they do not hesitate to raise issues, they will 
enliven the project, he asserted. 
 
¶10.  (SBU) Orynbayev concluded by thanking the Ambassador for his 
active involvement in the project and quick response to the 
government's Action Plan.  He recommended that Amcham and the 
National Analytical Center work together on a specific proposal for 
PPEPI's next phase, an "Action Plan for 2010."  The Ambassador 
concurred with this proposal, thanked Orynbayev for his personal 
involvement, and pledged continued engagement on the project. 
 
¶11.  (SBU) COMMENT:  The Deputy Prime Minister's personal 
involvement in PPEPI continues to bode well for the future of the 
project, and we want to build on his personal commitment to achieve 
success.  AmCham has accomplished a good deal of work in a 
relatively short period, despite differing cultures and 
personalities.  As we move toward the end of the first year of 
PPEPI, we will evaluate closely the best way forward to continue to 
implement this important project.  END COMMENT. 
 
HOAGLAND