KAZAKHSTAN - WHEAT EXPORTS AN IMPORTANT ISSUE IN

C O N F I D E N T I A L SECTION 01 OF 02 ASTANA 001808

SIPDIS

E.O. 12958: DECL: 09/17/2018
TAGS: PREL EAGR PTER KZ EG
SUBJECT: KAZAKHSTAN - WHEAT EXPORTS AN IMPORTANT ISSUE IN
RELATIONSHIP WITH EGYPT

Classified By: Pol-Econ Chief Steven Fagin, Reasons 1.4 (b) and (d)

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Summary
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1. (C) According to the Egyptian Embassy, Kazakhstani wheat
exports to Egypt are an important issue in Kazakhstan-Egypt
bilateral relations and were a main topic of discussion for
the August 29 visit to Astana of Egyptian Trade and Industry
Minister Rachid Mohamed Rachid. Egypt is interested in
increasing pharmaceutical exports to Kazakhstan, but faces
bureaucratic hurdles. Egypt expects to send Religious
Endowments (Awqaf) Minister Zakzouk to the October 17 Common
World Forum ministerial meeting. The Egyptians are only
"passively" participating in Nazarbayev's Conference on
Interaction and Confidence Building Measures in Asia (CICA).
Several hundred Kazakhstanis are studying in Egypt; some have
been deported back to Kazakhstan for alleged involvement with
Wahabi groups. End Summary.

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Wheat: A Key Issue in Kazakhstan-Egypt Relations
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2. (SBU) In a September 8 meeting, Egyptian Embassy Second
Secretary Mohamed Salah Keshtah discussed with poloffs the
Kazakhstan-Egypt bilateral relationship, as well as the
August 29 visit to Astana of Egyptian Trade and Industry
Minister Rachid Mohamed Rachid. Egypt-Kazakhstan bilateral
trade rose significantly in 2008 -- exceeding $233 million
for the first five months of the year, in comparison with
trade turnover for all of 2007 of just $76 million. Keshtah
explained to poloffs that Egypt's imports of Kazakhstani
wheat are the most important component of bilateral trade,
and securing more wheat from Kazakhstan had been a principal
aim of the visit of Minister Rachid, who had meetings with
President Nazarbayev, Prime Minister Masimov, and Foreign
Minister Tazhin.


3. (SBU) During the Rachid visit, Nazarbayev said publicly
that with the lifting of Kazakhstan's wheat export ban,
Kazakhstan would export 1,000,000 tons of wheat to Egypt in
2008 -- up from 329,000 tons in 2007. However, according to
Keshtah, the exact amount for 2008 is still under negotiation
and will depend on Kazakhstan's overall wheat harvest. He
expects that in the end, the actual amount will be between
500,000 and 700,000 tons, not 1,000,000 tons. Poloffs asked
Keshtah about reports that some countries -- for example,
Saudi Arabia -- are trying to secure arable land for growing
agricultural products in countries such as Kazakhstan.
Keshtah admitted that such an arrangement had been discussed
between Egypt and Kazakhstan, but said that the logistical
issues proved so overwhelming that no agreement could be
reached.

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Registration Process Hampers Pharmaceutical Exports
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4. (C) Keshtah told poloffs that Egypt is exporting
approximately $4 million of pharmaceuticals to Kazakhstan
annually and sees this as a potential growth area, especially
given that pharmaceutical production costs are much lower in
Egypt than in Kazakhstan. However, Kazakhstan's complex
pharmaceutical registration process is a barrier to
increasing Egyptian exports. Egyptian Health and Population
Minister Hatem Mostafa El-Gabaly may visit Kazakhstan soon to
discuss, among other things, pharmaceutical trade issues.
(Note: El-Gabaly's potential visit is also connected to an
upcoming conference in Egypt on avian influenza. Kazakhstan,
which has a biotechnology center that claims to have
discovered a vaccination for avian influenza, is expected to
be an active participant at the conference. End Note.)

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Late Notice on Common World Forum
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5. (C) Keshtah noted that Foreign Minister Tazhin has asked
for high-level Egyptian government representation at the
October 17 ministerial meeting of the Common World Forum, a
Nazarbayev initiative aimed at encouraging dialogue between
the West and the Muslim world. According to Keshtah, the
Egyptian plan is to send Religious Endowments (Awqaf)
Minister Mahmoud Hamdy Zakzouk, as well as a deputy minister
of culture. Keshtah voiced frustration that the Egyptian
Embassy had received very late notice about the August 28-29
Common World Forum senior officials meeting, which overlapped
with Rachid's visit. He said he had not had enough time to

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have Egyptian government legal experts review the proposed
text for the Common World Forum's final communique (the
so-called "Astana Declaration.") Keshtah said Egypt hoped to
find compromise language, particularly for the two paragraphs
still in brackets (regarding the Alliance of Civilizations
and women's rights) about which the United States has
expressed concerns.

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Concerns Regarding CICA
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6. (C) Poloffs asked Keshtah about Egypt's role in the
Conference on Confidence Building Measures and Interaction in
Asia (CICA),another Nazarbayev initiative, which held a
ministerial meeting in Almaty on August 25. (Note: Egypt is a
CICA member state; the United States holds CICA observer
status. End Note.) Keshtah said that India is far more
active in CICA than Egypt, and maintained that the countries
most active in CICA are each using the forum to pursue their
own independent objectives. Several years ago, Egypt raised
objections regarding some of the issues under consideration
by CICA, but the Kazakhstanis did not take these concerns
into account, Keshtah claimed. As a result, Cairo had
instructed the Egyptian Embassy in Kazakhstan to attend CICA
activities, but to "participate passively."

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Plans for Egyptian Culture Week
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7. (SBU) Education and culture are also important issues in
the Kazakhstan-Egypt bilateral relationship, according to
Keshtah. As an example of strong cultural and educational
ties between the two countries, Keshtah mentioned the
Egyptian-Kazakh Nour Mubarak University in Almaty, which
teaches secular subjects and "religion in a moderate way."
The university is currently in the process of opening a large
new building. The Egyptian Embassy, which recently moved to
Astana from Almaty several months ago, is also planning to
hold an Egyptian Culture Week. Activities, including
Egyptian movie screenings, folk-dance performances and
exhibits by Egyptian artists, will take place for three days
each in Astana and Almaty. President Nazarbayev has great
respect for Egyptian culture, Keshtah maintained, and had
once sent his personal airplane to Egypt to fly the head of
the Al-Azhar foundation to Kazakhstan for a visit. Keshtar
also noted that Kazakhstan and Egypt had co-funded activities
connected to Sultan Baibars. (Note: Baibars, a Kipchak Turk
from the Kazakh steppe, was a Mameluke Sultan of Egypt and
Syria in the 13th century. Following Nazarbayev's March 2007
visit to Egypt, the press reported that Kazakhstan was also
considering spending one million dollars to help complete the
restoration of the Sultan Baibars Mosque in Cairo. End Note.)

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Kazakhstani Students Deported from Egypt
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8. (C) Keshtah told poloffs that at present, approximately
400 students from Kazakhstan are studying at Egyptian
universities on scholarships. He said that the Egyptian
government has deported some Kazakhstani students, along with
students from other Central Asian universities, because of
their purported involvement in Wahabi-style groups. While
Keshtah maintained that none of the Kazakhstani students had
been linked to terrorist cells, he noted that some
Kazakhstani students were susceptible to Wahabi-style groups,
whose activities the Egyptian government does not find
acceptable.
MILAS