AMBASSADOR ORDWAY MEETS WITH DPM AND TRADE MINISTER

UNCLAS ALMATY 000304

SIPDIS


DEPARTMENT FOR EUR/CACEN JMUDGE, EUR/ACE JMCKANE
TREASURY FOR CENTRAL ASIA DESK OFFICER MGAERTNER
COMMERCE FOR CENTRAL ASIA DESK OFFICER DSTARKS

SENSITIVE

E.O. 12958: N/A
TAGS: ECON EFIN PGOV KZ ECONOMIC
SUBJECT: AMBASSADOR ORDWAY MEETS WITH DPM AND TRADE MINISTER
MYNBAYEV



1. (U) Summary/Background: Ambassador Ordway called on
Deputy Prime Minister and Minister of Industry and Trade
Sauat Mynbayev January 25 in Astana. They discussed
Kazakhstan's WTO accession, the Minister's prospective
attendance at the inaugural TIFA Council meeting and his
possible trip to San Diego for the Kazakhstan Investment
Conference. Also, Mynbayev argued for Kazakhstan's
immediate graduation from Jackson-Vanik scrutiny.


2. (U) Sauat Mukhametbayevich Mynbayev, 42, was named
Minister of Industry and Trade in addition to being a Deputy
Prime Minister in December 2004 when Adilbek Dzhaksybekov
was appointed Head of the Presidential Administration.
Mynbayev had already been serving as a deputy PM since June

2003. He has served in a variety of senior government
positions, among them Minister of Finance and Minister of
Agriculture. His longest stint in the private sector was
from 1992-1995, when he worked as first deputy chairman of
Kazkommertsbank. End Summary/Background.


3. (SBU) Ambassador Ordway first raised the issue of
Kazakhstan's WTO accession, noting positively the progress
the GOK made in several key areas in 2004. Mynbayev did not
discuss substantive issues affecting accession. He did,
however, express concern that Kazakhstan's accession was
being overshadowed by the concurrent accessions of Russia,
Ukraine, Saudi Arabia and others. He expressed concern that
Kazakhstan was not getting enough attention from the USG.


4. (SBU) Mynbayev also brought up the United States'
continued application of Jackson-Vanik review to Kazakhstan.
Mynbayev said he could not see any justification for it, and
asked when the United States would stop the practice. The
Ambassador told him that while he understood this concern,
events in Russia are generally the main factor affecting
Congress' view of the Jackson-Vanik issue. The Ambassador
also pointed out that based on the experience of other
former Soviet states, Kazakhstan will be more likely to
graduate from Jackson-Vanik treatment once it joins the WTO.


5. (U) When the Ambassador inquired about Mynbayev's travel
plans, the minister responded that there was a tentative
plan that he would lead the government delegation to the
Kazakhstan Investment Conference in San Diego March 11.
However, according to Mynbayev, the government has not
decided yet who will travel. The Ambassador also told
Mynbayev that the USG would welcome his presence at the
inaugural TIFA Council, but the minister did not appear to
have considered it yet.


6. (U) The Ambassador also raised the cost-sharing
arrangement proposed by USAID to fund its economic policy
and SME development programs. Mynbayev responded that the
government's budgetary commission, which will start its work
on the 2006 budget in February, intends to appropriate funds
for the purpose of cost-sharing; however, he did not offer
any information on when the GOK might be ready to sign an
agreement formalizing the arrangement.


7. (SBU) Comment: Mynbayev's comments on WTO accession were
less sanguine than the GOK's public line and reflected a
realization that Kazakhstan will be at a definite
disadvantage should Russia join first. His remark that
Kazakhstan needs more attention from the U.S. side echoes
remarks made in December by WTO negotiator and Vice-Minister
Zhanar Aitzhanova. End comment.


8. (U) Minimize for Dushanbe considered.

Ordway


NNNN