Identifier
Created
Classification
Origin
08ASTANA2179
2008-11-04 11:46:00
CONFIDENTIAL
Embassy Astana
Cable title:  

KAZAKHSTAN: ECONOMIC CRISIS AND AFGHANISTAN

Tags:  PREL ECON EPET AF KZ 
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C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002179 

SIPDIS

STATE FOR SCA/CEN, EUR/RUS, EAP/CM

E.O. 12958: DECL: 11/04/2018
TAGS: PREL ECON EPET AF KZ
SUBJECT: KAZAKHSTAN: ECONOMIC CRISIS AND AFGHANISTAN
DOMINATE SCO HEADS-OF-GOVERNMENT MEETING

Classified By: Ambassador Richard Hoagland, Reasons 1.4 (b) and (d)

C O N F I D E N T I A L SECTION 01 OF 03 ASTANA 002179

SIPDIS

STATE FOR SCA/CEN, EUR/RUS, EAP/CM

E.O. 12958: DECL: 11/04/2018
TAGS: PREL ECON EPET AF KZ
SUBJECT: KAZAKHSTAN: ECONOMIC CRISIS AND AFGHANISTAN
DOMINATE SCO HEADS-OF-GOVERNMENT MEETING

Classified By: Ambassador Richard Hoagland, Reasons 1.4 (b) and (d)


1. (C) SUMMARY: The Shanghai Cooperation Organization (SCO)
held a meeting of SCO heads of government in Astana on
October 30. All four SCO observer states, as well as
Afghanistan, also sent high-level representatives to the
event. The SCO heads of government called for greater
coordination in dealing with the effects of the global
financial crisis, increased cooperation on energy, stronger
transportation and communication links, and effective water
management. In remarks to the attendees after the session
ended, President Nazarbayev stressed the need for greater
economic cooperation and praised the "Shanghai spirit."
Kazakhstani MFA SCO Department Counselor Nadezhda Kim told us
on November 3 that the global economic slowdown and
Afghanistan were "burning questions" at the meeting. She
also predicted that energy will become an increasingly
important priority for the SCO. END SUMMARY.

CALL FOR GREATER COOPERATION


2. (U) The Shanghai Cooperation Organization (SCO) held a
regular meeting of SCO heads of government in Astana on
October 30. The five SCO member states were represented by
Russian PM Putin, Chinese Premier Wen, Kazakhstani PM
Masimov, Kyrgyz PM Chudinov, Tajik PM Oqilov, and Uzbek
Deputy Prime Minister Azimov. The four SCO observer states
were represented Indian Energy Minister Shinde, Mongolian PM
Bayar, Pakistani Defense Minister Mukhtar, and Iranian Vice
President Davoodi. Afghanistan was also invited to attend,
sending Vice President Masood.


3. (U) The Kazakhstani press reported that the heads of
government discussed several priorities for the SCO,
including ways to combat the effects of the global financial
crisis, increased cooperation on energy, stronger
transportation and communication links, effective water
resource management, and cooperation in disaster response.
The session's final communique touched on many of these
points. Kazakhstani PM Masimov proposed that SCO finance
ministers gather for a meeting in Almaty in the near future

to come up with a joint strategy for dealing with the global
financial crisis. He also suggested that the SCO create a
permanent economic forum in order to give SCO government
officials, businessmen, bankers, and international economic
institutions a platform for an exchange of views. On energy,
Masimov reiterated Kazakhstan's long-held position on the
need to create a single energy market, stressing that "the
SCO has all the necessary components to set up an energy
community" and urging members to take this issue up in the
upcoming meeting of SCO energy ministers.


4. (U) Other member states seconded the call for greater
cooperation and integration. Chinese Premier Wen made a
four-point proposal for increased cooperation which included
creating special economic zones in border areas; increasing
joint projects in the energy, transport and telecommunication
spheres; coordination of financial policies; and increasing
agricultural cooperation. Kyrgyz PM Chudinov called for a
joint strategy on food security, infrastructure, and water
use. Tajik PM Oqilov focused on poverty issues and the
environment, while Uzbek Deputy PM Azimov raised the issue of
cross-border rivers and transport.

OBSERVER STATES WANT TO EXPAND TIES


5. (U) Observer countries called for expanding ties with the
SCO and asked for inclusion at working-level meetings of SCO
members, rather than just at high-level meetings. Iranian
Vice President Davoodi told the participants that expanding
cooperation with regional and Asian countries is a top
priority for his government. He stressed Iran's

ASTANA 00002179 002 OF 003


"geographical and historical closeness" to SCO members and
highlighted the benefits members could derive from its oil
and gas resources and technological knowledge. Mongolian PM
Bayar expressed a readiness to join the SCO Business Council
and offered to host its next session. Both Bayar and Davoodi
expressed strong support for setting up a single energy and
transport space.

NAZARBAYEV PRAISES "SHANGHAI SPIRIT"


6. (U) President Nazarbayev met with the attendees after the
session had concluded. In his comments to them, Nazarbayev
noted the adverse effects of the global financial crisis and
called for greater economic, financial, and security
cooperation. The SCO has what it takes "to make the
organization a powerful economic force," he said, "but
economic development cannot proceed without assuring security
in the region." He said that "serious threats to stability"
continue to exist and stressed the SCO's "important role as
the engine of cooperation in Eurasia." "Kazakhstan is
committed to the Shanghai spirit," he maintained, "and will
continue to work for deeper cooperation within the SCO."

"BURNING ISSUES": ECONOMIC CRISIS, AFGHANISTAN


7. (C) Kazakhstani MFA SCO Department Counselor Nadezhda Kim
gave us her assessment of the heads of government meeting on
November 3. In the course of an informal and frank
conversation, Kim told us that the global financial crisis
and Afghanistan dominated the closed-door discussions. The
global financial crisis has affected all SCO members, she
said, and member states "are determined to find a joint
solution." She ventured that one such solution is
Kazakhstan's initiative to host a meeting of SCO finance
ministers and central bank heads. Masimov's offer to host
this event in Almaty at the beginning of next year was
"wholeheartedly supported" by the participants, but getting
members to follow through will "take lots of work," said Kim.
On the question of a common economic zone, in particular
China's proposal to create special economic zones in border
areas, Kim said that "such proposals have been put forward
before," by both China and Kazakhstan, but "it's unlikely
that they'll gain momentum any time soon." "Our economies are
far too disparate, and the smaller economies are not yet
ready to open up to the giants," she assessed.


8. (C) Afghanistan was the second "burning question" for the
heads of government meeting, said Kim. She reminded us that
President Nazarbayev has frequently highlighted the dangers
that extremism and narco-trafficking from Afghanistan pose to
the region, and this meeting was no exception. She said
Kazakhstan plans to hold an international conference on
Afghanistan sometime next year, and will invite participation
from the Central Asian states, the European Union, and the
United States. Kim promised to keep us updated as plans for
the conference develop.

RUSSIANS NOT ON BOARD ON COMMON ENERGY MARKET


9. (C) On energy, Kim said that Kazakhstan's idea of a
common energy market "hasn't gained everybody's support."
"The Russians have different ideas," she remarked without
further elaboration. She repeated Masimov's words that "the
SCO has all the necessary components for a common energy
market -- suppliers, buyers, and transport corridors." She
added that "certain supplier countries" are reluctant to give
up their "independence of decision-making, especially when
prices are as high as they are." The Kazakhstanis plan to
raise the issue of a common energy market at the SCO energy
ministers meeting, which will take place at the beginning of

2009. She predicted that energy will soon emerge as the top
priority for the organization.

ASTANA 00002179 003 OF 003


HOAGLAND