Identifier
Created
Classification
Origin
05ALMATY2283
2005-06-17 06:29:00
CONFIDENTIAL
US Office Almaty
Cable title:  

ASIA SOCIETY KAZAKHSTAN CONFERENCE

Tags:  ECON PGOV PREL ECONOMIC 
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C O N F I D E N T I A L ALMATY 002283 

SIPDIS


E.O. 12958: DECL: 06/15/2015
TAGS: ECON PGOV PREL ECONOMIC
SUBJECT: ASIA SOCIETY KAZAKHSTAN CONFERENCE


Classified By: Ambassador John Ordway. Reasons: 1.5 (B, D)

C O N F I D E N T I A L ALMATY 002283

SIPDIS


E.O. 12958: DECL: 06/15/2015
TAGS: ECON PGOV PREL ECONOMIC
SUBJECT: ASIA SOCIETY KAZAKHSTAN CONFERENCE


Classified By: Ambassador John Ordway. Reasons: 1.5 (B, D)


1. (SBU) Summary: The Asia Society's Kazakhstan Business
Conference in Almaty was a smashing success. Highlights
included a strong exchange of views between George Soros and
FM Tokayev; multiple appearances by opposition politicians
including on panel presentations; a major restatement of
Kazkhstan's foreign policy and reform orientation by
President Nazarbayev; private one-on-one meetings between
Nazarbayev and conference participants Richard Holbrooke,
George Soros and Zeyno Baran; and frank, open discussion of
the economic and security challenges Kazakhstan faces in
diversifying their oil-based economy.

A Highly Successful Conference
--------------


2. (SBU) The June 14-16 Asia Society business conference
grew out of a meeting between the Society's chairman, Richard
Holbrooke, and President Nazarbayev in April 2004. The
Society's organizers began to organize the conference in the
fall of 2004 with very low expectations. By the end of the
conference, however, they were ecstatic about the outcome --
and virtually every participant we talked to was saying that
it was one of the best such conferences they had ever seen.
There were several factors that contributed to that success.

-- High level commitment: The conference had President
Nazarbayev's full backing, which was implemented principally
through his Economic and Foreign Policy Assistant, Kerim
Masimov. The conference got extremely strong representation
from the GOK, including an opening night speech by
Nazarbayev, opening remarks by FM Tokayev, and a series of
ministers and presidential staffers participating in panels.

-- Strong organization: Asia Society, which has a depth of
experience in similar conferences, teamed up with Dariga
Nazarbayeva's Eurasia Media Forum, which brought strong local
organizational skills and the contacts needed to secure an
excellent slate of Kazakhstani speakers and panelists.

-- Opposition participation. The presence of the opposition
at the conference, including questions from the floor and
participation in panel participations, provided a real spark
to the proceedings. When the opposition first approached

Asia Society about participation, the Kazakhstani reaction
was immediately negative. At Asia Society's request, the
charge discussed the matter with FM Tokayev, who immediately
gave his support for the concept. Holbrooke then called
Masimov, who quickly agreed to the opposition's participation
(except at the opening dinner, which was the only event in
which Nazarbayev participated.)

-- Well-designed program. The conference format was very
conducive to informal exchange of views, and allowed for
questions from the audience. The topics also covered all
major issues of concern.

The Bottom Line
--------------


3. (U) The following is synthesized from Asia Society
Chairman Richard Holbrooke's closing remarks summing up the
results of the conference.

-- Kazakhstan matters because of its energy resources, its
role in ensuring stability in Central Asia, and its economic
potential.

-- Kazakhstan lives in a dangerous neighborhood with
uncertainties and instability in all the other Central Asian
states.

-- Development of the non-energy sector will be critical for
Kazakhstan's future.

-- Russia still matters in Kazakhstan, but within ten years
China will have closed the gap. The U.S. will remain a vital
player.

-- The U.S. cares about Kazakhstan.

-- Economic liberalization and economic reform, already far
advanced, need to proceed at even faster tempos. There is a
dichotomy between plans and reality. Expensive and
unreliable telecoms monopolies, and capacity restraints and
lack of competition in air transport, are just two examples
of practices that will stifle economic diversification.

-- Political development is critical. Political
institutions that will survive regardless of who is leader
are essential for stability and economic development.

-- Corruption is a cancer that will destroy everything else
that Kazakhstan is seeking to accomplish.

Meetings with Nazarbayev
--------------


4. (C) Holbrooke had a lengthy private meeting with
Nazarbayev on June 14, just before the conference opening.
Holbrooke told the Ambassador it was the most relaxed and
sincere of the meetings that he has had. Nazarbayev
responded positively to Holbrooke's outline of the need for a
clean presidential election -- which Nazarbayev strongly
hinted would be in December 2005. He committed to working
further with Asia Society, including an appearance at an
event in the U.S. if he attended the UNGA in September.
(Note: Holbrooke believes, and we agree, that Nazarbayev
would go to New York only if he can be assured of a meeting,
even a brief one, with President Bush. He would be
politically vulnerable to opposition criticism, especially at
the beginning of his election campaign, if he did not get
such a meeting.) Nazarbayev evinced considerable concern
about the USG's goals and intentions with regard to
democratization -- with particular emphasis on what he saw as
the potentially negative role of U.S. NGOs.


5. (C) George Soros also had a very lengthy, one-on-one
meeting with Nazarbayev on June 15. (Note: Soros provided
the Ambassador with a brief characterization of the meeting
by telephone before he left Almaty. Soros' visit was the
result of an invitation by Nazarbayev to visit Kazakhstan,
and the complete dropping of all criminal charges against
Soros's local organization, OSI Kazakhstan.) Soros said that
it had been a "very good, really frank" meeting. He said
that Nazarbayev wanted to establish a friendly relationship.
Soros said he had asked about how Nazarbayev viewed the
Giffen case. Nazarbayev said that he was "not really
bothered" about it because the money that had been received
from Giffen had become part of the oil fund in accordance
with the law. Soros also brought up corruption and the role
of the President's family, saying that Nazarbayev had to do
something about them. Nazarbayev responded, "I don't know
what they do." Judicial reform also came up, and Nazarbayev
asked Soros to provide advice. Soros said he would send a
team to see what kind of help they could provide. Responding
to a question by the Ambassador, Soros said that Nazarbayev
was quite critical of President Bush's message on
democratization, saying "the process has to be slower." On
the whole, Soros said, Nazarbayev had made a good impression.
OSI Associate Director Anthony Richter told the ambassador
that the GOK was looking to OSI as its "consultant on
democracy."


6. (C) Zeyno Baran, Director of International Security and
Energy programs at the Nixon Center, had a 30-minute
one-on-one meeting with Nazarbayev on June 15 that focused on
Islam and extremism. Baran told the ambassador that
Nazarbayev has a "good vision" for the development of
moderate, traditional Islam in the country and that he
recognizes the need to find effective, non-repressive methods
of combating more radical visions of Islam from other regions
of the world. He had a concept of joining with the leaders
of countries that share this vision to establish a visible
alternative to politicized and radicalized Islam.


7. (C) Comment: Kazakhstan abounds in contradictions, and
President Nazarbayev and his policies are no exception.
Strong macro-economic reform and encouragement of major
foreign direct investment contrasts with rapacious
robber-baron behavior toward foreign and domestic investors
-- exacerbated by insider dealing and corruption. Kazakhstan
has the most open society in Central Asia (admittedly not a
very high standard),and a strong ideological commitment to
further democratization, but also engages in strong-arm
tactics against the opposition and is setting the stage for a
crackdown on NGO's and civil society. The Asia Society
Conference, working with the more liberal and open elements
of Nazarbayev's inner circle, succeeded in highlighting these
and other contradictions and has strengthened the case for
moving in the right direction. It enhanced the visibility
and role of the U.S. in Kazakhstan and its future. And, it
established a firmer basis for the engagement of the Asia
Society, as well as the Open Society Institute and the Nixon
Center, in furthering our agenda or democratic development,
combating terrorism and extremism, and building free and open
markets. In these areas, we need all the help we can get.
End comment.
ORDWAY


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