Identifier
Created
Classification
Origin
08ASTANA617
2008-03-21 12:17:00
UNCLASSIFIED
Embassy Astana
Cable title:  

KAZAKHSTAN - SCIENCE AND TECHNOLOGY - ADDITIONAL AREAS FOR

Tags:  TSPL KSCA PREL PGOV KZ 
pdf how-to read a cable
VZCZCXRO1355
RR RUEHLN RUEHVK RUEHYG
DE RUEHTA #0617/01 0811217
ZNR UUUUU ZZH
R 211217Z MAR 08
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC 2118
INFO RUCNCIS/CIS COLLECTIVE 0454
UNCLAS SECTION 01 OF 03 ASTANA 000617 

SIPDIS

DEPARTMENT FOR OES/STC, SCA/RA, AND SCA/CEN

SIPDIS

E.O. 12958: N/A
TAGS: TSPL KSCA PREL PGOV KZ
SUBJECT: KAZAKHSTAN - SCIENCE AND TECHNOLOGY - ADDITIONAL AREAS FOR
COOPERATION

-------
Summary
-------

UNCLAS SECTION 01 OF 03 ASTANA 000617

SIPDIS

DEPARTMENT FOR OES/STC, SCA/RA, AND SCA/CEN

SIPDIS

E.O. 12958: N/A
TAGS: TSPL KSCA PREL PGOV KZ
SUBJECT: KAZAKHSTAN - SCIENCE AND TECHNOLOGY - ADDITIONAL AREAS FOR
COOPERATION

--------------
Summary
--------------


1. EST officer's January 20 - February 19 TDY visit to Kazakhstan
provided a timely opportunity to discuss the Kazakhstani
government's Science and Technology (S&T) infrastructure,
particularly in light of continued negotiations on a bilateral
Science and Technology Agreement. This is one of a series of four
cables summarizing EST officer's meetings in Kazakhstan, and focuses
on additional areas, ministries, and organizations with potential
for S&T cooperation. End Summary.

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Ministry of Education
--------------


2. EST officer met with Mr. Bakhyt Kutubayev, head of the Division
of Science and Technology Administration, Ministry of Education and
Science. Kutubayev explained that the Ministry of Education
coordinates the arrangement of science and technology activities.
According to Kutubayev, the ministry already coordinates 36
international bilateral science and technology focused agreements
aimed at grants management, joint research, and lab construction.
Kutubayev described the ministry's coordination with an
international expert council comprising 19 members (including five
from the United States). The ministry uses the advice from the
council to formulate future strategy, policy, and focus areas.
Kutubayev stated he would greatly support expanded S&T cooperation
with the United States. The Ministry of Education has allotted
funding for 92 joint research projects during 2007-2009. Kutubayev
explained that Kazakhstan is in the process of constructing five
national labs, two of which will be international labs. Foreign
experts will be invited to work in the labs and to conduct research
with the best equipment available. Kazakhstan also has plans to
expand and improve laboratories at 10 universities so that they meet
international standards. Kutubayev stated he hoped that a bilateral
S&T agreement would have provisions under which joint research and
exchanges could be arranged.

--------------
Ministry of Industry and Trade
--------------


3. EST officer met with Kanysh Tuleushin, head of the Division of

Innovation Policy in the Ministry of Industry and Trade. Tuleushin
stated the Ministry of Industry and Trade is a line ministry which
conducts its own research programs that focus on innovation and
industrial policy. (Note: Line ministries identify priority
investments in their annual infrastructure strategies and asset
management plans. End Note.) Currently, no defined border exists
between the research areas covered by the Ministry of Education and
his ministry. This has caused a problem of competing structures and
competition for funding between the ministries. Both ministries are
tasked with supervising innovation policy. The Ministry of Industry
provides grants for research which they have determined have a
likely success rate at commercialization. The ministry focuses on
such areas as metallurgy, machinery, and chemistry, and provides
grants to university labs, private labs, and labs at other
ministries.

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Samgau: Government Holding Company
--------------


4. On January 25, EST officer met with Marat Nurguzhin,
vice-chairman of Samgau. Nurguzhin explained that Samghau was
created in part to support R&D. Samgau also focuses on ITC, media,
and postal services. Nurguzhin stated Samgau has a budget
allocation for R&D totaling KZT 20 billion ($166 million) in
addition to KZT 2 billion ($15 million) set aside for
commercialization of newly developed products. He added that Samgau
is currently cooperating with the Civilian Research Development Fund
(CRDF) as well as American companies including Microsoft, Sysco,
Motorola, and Hughes. Much of this ITC cooperation is done through
Samgau's subsidiary, Kazakhsatnet. For more information on
Kazakhsatnet, EST officer met with its president, Assan Dossayev.
Dossayev explained Kazakhsatnet's mission to expand internet access
and e-government across Kazakhstan and his desire to include
international private companies in the process. Kazakhsatnet is
currently doing research in the area of cryptography.

--------------
Kazakhstan Science Fund
--------------


5. EST officer also met with Assel Nussupova, chief executive
officer of the Kazakhstan Science Fund (KSF). KSF is a branch under
Samgau and is headquartered in Astana. The stated purpose of KSF is
to fund higher risk research through loans. KSF has a budget of KZT

ASTANA 00000617 002 OF 003


20 billion ($165 million). Nussupova explained that KSF provides
zero interest loans to researchers to conduct research that has a
commercial focus. Under the current system, researchers applying to
KSF must rely on collateral to receive loans. Nussupova stated this
has been problematic because many of the researchers work in
government-owned labs and thus have no collateral for loans.
Nussupova stated that the KSF is attempting to move towards a grants
system. She also mentioned that if joint funding were an option for
a particular project, it would be possible to waive the collateral
requirement.

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Lessons from CRDF in Kazakhstan
--------------


6. EST officer met with Kanat Shakenov, director of CRDF's branch
office in Astana. Shakenov stated that the CRDF office was recently
opened in 2007 and plans to have three employees in Astana and two
in Almaty. Shakenov said that CRDF has had tax problems, despite
having taxation waiver status. According to Shakenov, the
government still tries to tax equipment originating from CRDF if
transferred to a Kazakhstani entity through a third party. He said
that on a number of occasions the government has tried to tax the
shipping company when equipment was being transferred. In every
case, CRDF was able to maintain its tax free status, but has had
numerous battles with the Kazakhstani taxation bureaucracy.
Shakenov believes that international cooperation is not a priority
for the short-staffed and underpaid bureaucrats in ministries. He
did not have a very high opinion of the KSF because of its
collateral requirement.

-------------- --------------
International Science and Technology Center
-------------- --------------


7. EST officer met with Natalia Tomarovskaya, head of the
Kazakhstan branch office of the International Science and Technology
Center (ISTC),which is located in Almaty. Tomarovskaya stated ISTC
has a budget of around $65 million and has partnered in the past
with USDA and DOE. Although the organization has a tax waiver in
place, ISTC continues to have tax issues with the Kazakhstani Tax
Committee. Occasionally ISTC runs into problems when using third
parties, but has been able to get the fees refunded. Tomarovskaya
noted that initially the United States contributed to the funding of
ISTC and she inquired as to why the USG has terminated its funding.
Tomarovskaya was hopeful a bilateral S&T agreement would increase
American involvement in the region and offered to help by including
American agencies in some of the proposals.

-------------- --------------
National Center for Scientific and Technical Information
-------------- --------------


8. EST officer met with Yerbol Suleymenov, director-general of the
National Center for Scientific and Technical Information,
headquartered in Almaty. Suleymenov described the center as an
analytical agency which develops S&T recommendations for the
government. Another task of the center is to review projects which
are submitted to the government for funding. Suleymenov stated that
the center coordinated the international team of experts currently
reviewing the status of S&T in Kazakhstan. He added that his center
currently has a cooperation agreement with the American Association
for the Advancement of Sciences (AAAS),and is hoping to sign an
agreement with the National Science Foundation (NSF) to understand
how NSF conducts its quantitative reports on the status of science
and technology. Suleymenov stated that although his center does not
supervise research, he can see where a bilateral S&T agreement would
be highly beneficial to Kazakhstan and hopes it will strengthen ties
with the American scientific community.

--------------
National Innovation Fund
--------------


9. EST officer met with Nurbek Rayev, chairman of the National
Innovation Fund (NIF),which is headquartered in Almaty. Rayev
described the NIF as a state-owned, venture capital institution
interested in investing in high-tech companies in Kazakhstan. The
NIF is currently working on a project with the National Technical
University to establish a techno park to conduct innovative research
in ITC that will eventually be able to commercialize. Although the
NIF may be a partner in future cooperation with the U.S., it would
be partnered through another Kazakh organization.

--------------
KazEngElectronics
--------------


10. On February 12, EST officer met with Viktor Adamov,
director-general of KazEngElectronics (KEE),in Almaty. Adamov

ASTANA 00000617 003 OF 003


stated that the main activities of KEE are not scientific, though
research is conducted on radio-electronics and industrial projects.
KEE is more focused on commercialization of radio-electronic
products than R&D. Adamov stated that in the past, KEE received
funding for R&D but has not had such funding for two years.

--------------
Academy of Sciences
--------------


11. EST officer met with Dr. Murat Zhurinov, president of the
Academy of Sciences, located in Almaty. Currently, Zhurinov is on
the Science Council which advises the President and Prime Minister
on science issues. Zhurinov stated that the members of the academy
include all directors of research institutions and universities in
Kazakhstan. He said that once a bilateral S&T agreement is
finalized, he would be interested in concluding MOU's with AAAS,
NSF, and the National Academy of Sciences (NAS) as a means to
increase communication and possible cooperation. Zhurinov also
lobbied for the establishment of a Kazakh-American University in
Kazakhstan similar to American universities in Europe, though this
would not be covered under the S&T Agreement.

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Comment
--------------


12. An interesting aspect to the Kazakhstani S&T scene is existence
of government-owned joint stock companies which play a vital role in
R&D. These JSC's are assigned to work on specific areas of R&D and
could be valuable partners for future R&D collaboration. End
Comment.

ORDWAY