Before we start
talking about bilateral trade agreements and
relations between Russia and Kazakhstan I
would like to talk a little bit about your
membership of the CIS. Mr. Nazarbayev indicated
many times that he sees great economic prospect
for CIS countries as a group. How do you see
this? Which particular benefits do Kazakhstan
and Russia derive from this membership?
You are quite right about the membership
in the CIS of both countries. I can assure
you that Kazakhstan is probably one of the
most active members of the CIS, promoting
the integration. However, like Russia, Kazakhstan
felt the deficiencies of the CIS in the
field of economic integration, because as
you know not all members of the CIS are
eager to work hard, if I can put it that
way, for the economic co-operation. That
is why Kazakhstan was the initiator, and
Russia supported it, of the creation of
a smaller group within the CIS, which we
know under the name of 'Eurasian Economic
Community', where besides Russia and Kazakhstan
as members are Kyrgystan, Tajikistan and
Byelorussia. These countries see themselves
as a nucleus of the integration process
in the CIS, because a lot of achievements
in their mutual trade and economic relations
are due to the fact that the integration
process within this organisation is more
advanced than in the CIS as a whole. We
can see very fruitful co-operation in this
economic grouping, in the Eurasian Economic
Community, I think with every meeting of
such bodies as InterState Council, headed
by the President and the meetings also at
the level of the Prime Ministers twice a
year. The next meeting by the way should
be in Astana this fall. I think, you can
find the documents of the last meeting very
easily also in the Internet or on the web
site that is called "The Integration
Committee", headed by the Deputy Prime
Ministers of the member countries. The next
meeting, by the way, will be this July,
here in Almaty.
What is also playing a big part in the successful
course of the integration process within
the Eurasian Economic Community is actually
the political will of the leadership and
the fact that the Presidents of the member
states are very keen to see the decisions
they take to be implemented effectively
and rather quickly, which, in my opinion,
differs to a great extent from what sometimes
is taking place with the decisions within
the CIS. They are approved, adopted, but
not very effectively implemented.
For historic reasons, there are very
close ties between Kazakhstan and Russia.
With this in mind could you explain to our
reader how over the last ten years the diplomatic
and economic relations have developed?
You are right about the very long and very
close historic tie between, I will not say
Russia and Kazakhstan, but I would say Russians
and Kazakhs. They live together for hundreds
years, almost a millennium. I mean the Slavic
people and Turk peoples. Of course, this
plays a great role without saying that at
least part of Kazakhstan was a part of the
Russian Empire for the last three hundred
years. And back in the 20th century in the
Soviet Union's time Kazakhstan was a Republic,
a member Republic of the Soviet Union, like
Russia. For the last ten years, you mentioned,
of course the situation was different, but
I can see now that there is a new dynamic
process in economic relations also. You
can see in statements by officials of Kazakhstan
that there is a same feeling, same sense
of recognising the necessity to restore
what was probably lost in the early 90s
in the economic field - links, established
relations, co-operation between concrete
enterprises, big enterprises. The results
are in fact that the volume of trade for
the last year between Russia and Kazakhstan
reached US$4.6bn, which is not probably
the record figure. I think it was around
this figure already in 1996 or 1997, but
then the default, which occurred in Russia,
and the problems here with the exchange
rate of Tenge put it down. But, now it recuperated
completely. Another figure I can give you
is that, for example, the number of Russian
- Kazakh joint ventures last year reached
more that 700. It almost doubled in one
year. That is the biggest number. Besides,
there are something like around 200, if
I am not mistaken, enterprises or companies
with pure Russian capital. The Russian investments
last year reached a figure of almost US$1,5bn.
Of course, it is not very close to the figure
of, for example, the US investments, which
is, if I am not mistaken, something like
US$6bn, but still a very respectable figure
in my opinion, because if we compare the
investments of the companies, we can see
that here a lot of transnational giants,
US oil companies are working. From the Russian
side at least for the moment only LUKOIL
is rather active in the oil field of the
Kazakh economy.
Quite recently also GazProm and RosNeft
started their business here. They created
a joint venture with KazMunaiGaz, called
KazRosGas. Could you indicate Russian investments
in Kazakh oil?
RosNeft was appointed as a representative
of the Russian government in the future
joint ventures with Kazakhstan to explore
and to work on the Caspian Sea bed, but
LUKOIL is also a participant. Hopefully,
we will see the increase in Russian investments
in Kazakhstan with the capital of RosNeft,
because GazProm is already present de facto
also recently. I think it was in early June
this year, they created a joint venture
with KazMunaiGas, called KazRosGas, which
serves to work together on the pipeline
system and to transport Kazakhstani natural
gas to the Europian market mostly via GazProm
pipeline system. From those US$1,5bn of
investments more than 1,2 billion belongs
to LUKOIL of course. Nevertheless, the figure
of the joint ventures I mentioned with something
like US$300 millions of investments means
that it is mostly small and medium enterprises,
which are working closely together and proving
by sheer number that the people did not
lose their contacts, their relations, their
business relations and are easily establishing
them, meaning that the cultural and historic
background for Russian businessmen here
is, probably, very easy for their businesses.
I think, I have answered your second question,
if we do not go into details, what companies,
etc.
One of the most significant joint projects
has been the Caspian Pipeline Consortium
(CPC) in which Russia has a 24% and Kazakhstan
a 19% stake. Could you indicate the importance
and details of this project?
CPC is, of course, very important for Kazakhstan,
because the capacity of this pipeline at
the first stage next year or by the end
of this year will reach, I think, 28 million
tons per year and it will increase gradually
within ten years up to 67 million tons of
oil. The volumes are quite important and
important not only to Kazakhstan, but to
Russia also, because a large part of this
capacity will be filled with Russian oil
according to the signed documents - the
contract and the share holders agreement
on the CPC. So this was a very important
project not only to Kazakhstan, but also
to Russia. Taking the Russian part of the
pipeline itself it was the biggest investment
project in Russia.
It was absolutely in our interests, but
one should not forget that the CPC is not
the only outlet for the Kazakh oil. Besides
it there are existing routes like Atyrau-Samara
pipeline, the capacity of which has recently
increased from 11 to 15 million tons per
year. This pipeline was always in use before
the CPC was actually launched and recently,
last year actually inaugurated. There is
another route, which is being used by Kazakhstan:
Aktau - Makhachkala and then the existing
pipeline Makhachkala - Novorossiysk. I think
it was in mid-May this year in Moscow the
Presidents of two countries signed the long
term agreement on the transit of Kazakh
oil via the Russian territory, in which
the volumes of such transit where fixed
at not less than 15 tons on Atyrau-Samara
pipeline and 2.5 million tons on Makhachkala-Novorossiysk.
Counting the CPC, in my opinion which is shared
by some experts, at least for the mid-term
or long term future Kazakhstan does not need
another outlet, another export pipeline. This
does not mean that Russia hopes to keep this
monopoly, because with the increase of volumes,
probably, there would be a need for one or
two new routes for Kazakh oil. |
Certainly,
it is also because of the huge deposits that
people expect from the Caspian Sea. And talking
about the Caspian Sea, Russia and Kazakhstan
quite recently signed the agreement on the
division of that part of the Caspian sea,
which has been a long-term discussion within
the Caspian issue. Could you indicate to our
readers the specifics of this agreement and
how it will affect the future?
Actually, it is not an agreement. It is
only a protocol to the agreement signed
previously back in 1998 on the 6th of July,
which was called "The agreement on
the delimitation of the Northern Caspian
sea bed for the purpose of subsoil use"
- briefly. This protocol provides for the
actual delimitation, the modified median
line, which is used as a line delimiting
the jurisdiction over the mineral resources,
oil, the jurisdiction of both countries
in the Northern Caspian for the subsoil
use only. It provides also for the conditions
for the companies on both sides taking part
in the exploitation of these concrete deposits
or in the further exploration of the known
prospective structures, which can become
deposits, or may not. Hopefully, all structures
we know will become very important oil deposits.
Northern Kazakhstan, operating within the
Common Energy System (CES) of Russia, has
been able to operate at peak capacity using
power form Siberian hydroelectric stations.
Furthermore, Kazakhstan and Russia have
far-reaching economic projects and joint
ventures coming in the electricity sector.
With this in mind could you indicate to
our readers the importance of these and
other energy related projects to Russia
and Kazakhstan?
You just mentioned the importance of these
projects to Kazakhstan. It is in the fact
that Kazakhstan cannot consume all the electric
energy it is producing. And of course, the
natural outlets will be the markets either
in the CIS or in Europe. Whatever is the
market, the transit will be via Russia.
There is no other way to transport the electric
energy from Kazakhstan. And there will be
an agreement, which we are expecting something
like by August this year, which will actually
create a joint venture of both sides, based
on the Ekibastuz Two Electric Power plant.
It will be created on the terms of fifty-fifty
between CES of Russia and KEGOC, the national
electric company of Kazakhstan. It will
also serve the interest of Russia, because
we lack the electricity in Southern Ural
area and I think, it will be the first market,
where this energy will go. I cannot give
you all technical details, because it is
too specific, but it is very important endeavour
for both countries. And the fact that the
negotiations are going on already for the
third year, if I am not mistaken, means
that both sides pay a lot of attention to
every detail for the sake of efficiency.
There are still some differences on the
final text. I think, Prime Minister of Kazakhstan,
Mr.Imangali Tasmagambetov, mentioned that
it is only 1%. But they are about electric
grids and lines, which is a very specific
technical issue, so I will not comment on
it, because I do not have the deep knowledge
of these technicalities.
There is another very interesting sector
of co-operation in the energy field. It
is the nuclear sphere. With the Kazakhstan
national company, called Kaztomprom, our
Ministry for Atomic Energy is closely working
in the field of at least two projects, three
parties' projects. One involving Russia,
Kazakhstan and Ukraine provides for the
production of special tablets as a source
of energy for Ukraine nuclear power stations.
Another project with the participation of
Russia, Kazakhstan and Kyrgystan is for
the development of uranium deposits and
for production of final products as a source
of energy.
For a final analysis the sector of energy
as a whole is probably the most advanced
field of the economic co-operation between
Russia and Kazakhstan. Not the only one,
but the most visible, the most important
and the most advanced, in my opinion.
You can boast quite an international
career, which included for example a stay
in Madagascar. With this in mind, could
you give to our readers a bit of your professional
background? How do you use your previous
experiences while working here in Kazakhstan?
My appointment to Kazakhstan was due to
the fact that for three years since 1997
after serving in Madagascar, I was appointed
as Ambassador at large for the Caspian Sea
problems in the Russian Foreign Ministry.
So I dealt a lot with the Caspian Sea problems
at that time and probably that is the explanation
for this appointment. Back in the 1970s,
I was working for 5 years in the Russian
translation section of the UN Secretariat
in New York, but most of my experience was
in Africa. I started 22 years ago as a second
secretary at the Soviet Union Embassy in
Burundi. Then I was transferred to Tanzania.
That was my first shift of seven years.
The second shift was since 1990 to 1997
first as a Minister Counsellor in Ethiopia
and then I was send in 1993 as an Ambassador
to Madagascar.
Having all this international experience,
what is your personal vision of the relations
between Russia and Kazakhstan?
In my opinion, the future of bilateral
relations between Russia and Kazakhstan
is very promising, if not bright. Promising
in all senses. Now as I tried to show you,
we are working very closely together in
the bilateral economic relations. Political
relations are without any major problems,
in my opinion. All question which may arise,
they are rather quickly discussed on the
intergovernmental level and a quick solution
in most cases is found. The political relations
are really very good. I think it is explained
with the fact that the leaders of two countries
are on very good human terms. They meet
very frequently. To give you an example,
there were two meetings between the Presidents
during last three months. I think this frequency
of meetings is probably higher than average.
We have also, in my opinion, good prospects
to remain the major trade partner, I mean
Russia, for Kazakhstan, covering something
like more than 40 % of all of the import
of this country and receiving more than
20% of its export.
We are very interested in the continuation
of our co-operation in the field of space
programmes. Baikonur is very important to
Russian space programme and the rumours
that Russians are leaving Baikonur or are
thinking of doing that, have no foundation,
because all manned and commercial space
flights are and can be done only from this
launching site. We have a very important
agenda in the field of cultural, scientific,
sports and in general humanitarian relations.
You see, the Russian language plays a special
role in Kazakhstan - 86% of the population
can speak it and use it just on a routine
basis. We have a very close co-operation
in the field of education. We receive a
lot of graduates from Kazakhstan in our
universities. Because of the existing agreements
between our countries in this field, they
are received on the same basis as Russian
graduates, including the non-commercial
basis.
The readers of the Far Eastern Economic
Review and the World Investment News high
profile website form the international business
community. Knowing this, what would your
final message to them?
The message, I think, goes first to the investors
or possible investors in Asia mostly. I am
not in a position to give them an advice,
but they know, at least some of them, better
than me, what opportunities this country can
present to them. It is enough to look at Chinese,
Japanese, Korean companies, Indian and Malaysian
companies that already work here. I think
that for some of them the experience can be
mixed, but it is only natural. For any investor
there are risks, there are good results, there
are bad results, but it is up to them to decide.
The opportunities are great. The difficulties
are, I think, surmountable. I wish them luck
in their endeavour.
|
V.I.P. INTERVIEWS 