KAZAKHSTAN: OPTIMISM IN EAST KAZAKHSTAN OBLAST

UNCLAS SECTION 01 OF 02 ASTANA 002127

SENSITIVE
SIPDIS

STATE FOR SCA/CEN, G/TIP

E.O. 12958: N/A
TAGS: PGOV PHUM ECON EINV KWMN KCRM CH KZ
SUBJECT: KAZAKHSTAN: OPTIMISM IN EAST KAZAKHSTAN OBLAST

REF: ASTANA 1867


1. (U) Sensitive but unclassified. Not for public Internet.


2. (SBU) SUMMARY: Poloff visited Ust-Kamenogorsk, the
capital of East Kazakhstan oblast, September 10-13. In
addition to attending a Global Initiative to Combat Nuclear
Terrorism exercise (see reftel),poloff also conducted a
series of meetings with representatives of industry,
educational institutions, and non-governmental organizations.
East Kazakhstan oblast has a strong industrial base,
particularly in metallurgy and mining. While per capital
income in East Kazakhstan is below the national average,
poloff's interlocutors expressed satisfaction with local
economic conditions. Two NGO representatives described good
cooperation with local authorities on trafficking in persons
issues. Though the oblast borders China, there was no
evidence of a significant Chinese presence in
Ust-Kamenogorsk. END SUMMARY.

STRONG INDUSTRIAL BASE


3. (U) East Kazakhstan oblast is located in Kazakhstan's
northeastern corner, more than 1,000 miles from Astana. The
oblast, which borders both Russia and China, is Kazakhstan's
third largest in both territory and population. In contrast
to Kazakhstan's western oblasts, East Kazakhstan has no major
hydrocarbon deposits, but it does have a well-developed
industrial base. Industry, especially non-ferrous
metallurgy and mining, dominates the oblast's economy,
accounting for 31.2% of its GDP. The once top-secret Ulba
Metallurgical Plant, which currently produces uranium,
beryllium, and tantalum byproducts, is the oblast's most
well-known industrial concern (see septel). Kazzinc, a
mining conglomerate, is a second notable East Kazakhstan
enterprise. The Asia Auto Joint Stock Company has invested
$2.15 million in East Kazakhstan to begin the first phase of
a project to assemble up to 9,000 General Motors automobiles
per year.


4. (U) East Kazakhstan's most famous local product is honey.
While in Ust-Kamenogorsk, poloff stopped into a honey store,
where prices ranged from $2 for 200 gram bottles with
run-of-the-mill honey to $40 for 1000 gram wooden containers
with specialty honey. The store also sold elaborately
packaged, honey-infused medicinal products, some designed
"for men" and others "for women," which ranged in price from
$40 to over $120 per one liter bottle. Several local
enterprises have established joint ventures with Chinese and
South Korean firms to export honey products to Asian markets,
the honey store's salesperson explained to poloff.

UPBEAT ON ECONOMIC OPPORTUNITIES


5. (SBU) According to Kazakhstani government statistics, per
capital GDP in East Kazakhstan oblast is $4,464, somewhat
below the national average of $6,870. Despite these numbers,
poloff's various interlocutors in Ust-Kamenogorsk without
exception expressed satisfaction with the current economic
situation. Managers from the Ulba Metallurgical Plant and
Eastern Mining Institute, as well as students from the
Kazakh-American Free University, all said they were
optimistic about opportunities for economic development,
employment, and career advancement in East Kazakhstan (see
septels).

NGOS REPORT GOOD COOPERATION WITH LOCAL AUTHORITIES


6. (SBU) NGO representatives Nazigul Akhmetkaliyeva and
Yulia Natarova explained to poloff that they have had good

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cooperation with local authorities. The two run NGOs which
provide assistance to victims of trafficking in persons and
legal consultation services on a number of issues. The
anti-trafficking NGO operates an information hot-line,
provides training to those who assist trafficking victims
(including police and lawyers),and conducts public education
campaigns. Akhmetkaliyeva said that local authorities even
allowed her NGO to conduct training at government-run
orphanages. She described other examples of successful
cooperation with the authorities on specific trafficking
cases, including repatriating and rehabilitating a group of
Kazakhstani women who had been trafficked to the UAE,
returning a young man who had been a victim of forced labor
in Kazakhstan to Russia, and returning several
sex-trafficking victims from Kazakhstan back to Uzbekistan.
According to Akhmetkaliyeva, local authorities
rendered various types of assistance, from helping to
coordinate the repatriations with other government entities
to providing shelter and financial support to victims.
Akhmetkaliyeva noted that local authorities even provided her
with transport to travel to neighboring Pavlodar oblast to
assist with a case that occurred there. Akhmetkaliyeva
praised East Kazakhstan officials for their willingness to
confront, rather than try to conceal, trafficking problems.
Both Akhmetkaliyeva and Natarova contrasted the good
cooperation of East Kazakhstan authorities with reports they
have heard that the authorities in Kazakhstan's southern and
western regions are less constructive.

OPTIMISM ABOUT RELATIONS WITH CHINA


7. (SBU) Despite the fact that East Kazakhstan oblast shares
a long border with China, poloff saw surprisingly few visible
signs of Chinese influence in Ust-Kamenogorsk. Local
residents told poloff that there is a "Chinese bazaar" on
Saturdays, and that local grocery stores stocked more Chinese
products than in Kazakhstan's capital, Astana, but there were
no signs of a large Chinese trader or migrant worker
community. In addition, Akhmetkaliyeva said that her
anti-trafficking NGO had dealt with just one or two cases of
trafficking across the Kazakhstani-Chinese border, which she
attributed to the fact that the border between Kazakhstan and
China remains heavily fortified.
HOAGLAND