KAZAKHSTAN: PRESIDENTIAL ENTREPRENEURSHIP SUMMIT

UNCLAS SECTION 01 OF 05 ASTANA 002099 SIPDIS STATE FOR SCA/CEN, S/P, R/PPR, EEB E.O. 12958: N/A TAGS: PREL ECON EINV EAID KZ SUBJECT: KAZAKHSTAN: PRESIDENTIAL ENTREPRENEURSHIP SUMMIT REF: STATE 112495 ASTANA 00002099 001.2 OF 005 ¶1. (U) SUMMARY: This cable responds to reftel request for nominees from Kazakhstan for the Presidential Entrepreneurship Summit in ¶2010. It also summarizes Mission plans to conduct a series of public diplomacy events and business roundtables to highlight the importance of fostering entrepreneurship and creating jobs in Kazakhstan. END SUMMARY. ¶2. (U) The U.S. Mission to Kazakhstan is pleased to respond to the Department's request to prepare for the Presidential Entrepreneurship Summit. We believe that this event will demonstrate that the United States is a full partner in advancing economic opportunity in Kazakhstan and will provide public support and a lasting social network to the business and community leaders who attend. INTERAGENCY ENTREPRENEURSHIP WORKING GROUP ESTABLISHED ¶3. (U) Together with USAID Mission Director for Central Asia Andy Sisson, Ambassador Hoagland has established and will oversee an interagency working group on expanding economic opportunity. The working group currently includes representatives from USAID, the U.S. Commercial Service, and the Political-Economic and Public Affairs sections of the Embassy. We are committed to the advancement of local entrepreneurship and economic opportunity, in particular through a unique partnership with USAID and the government of Kazakhstan, which co-finances the Program for Economic Development (PED). WORKING WITH LOCAL PARTNERS AND KEY STAKEHOLDERS ¶4. (U) The PED program funds several activities in support of entrepreneurship, including projects to promote policy dialogue, strengthen the commercial law framework, streamline administrative processes, and promote operational improvements for the benefit of small and medium enterprises (SMEs) in Kazakhstan. ¶5. (U) The Mission will conduct a roundtable in December to engage key stakeholders in entrepreneurship and economic opportunity, and will submit a plan of relevant activities separately. Together with local partners such as the American Chamber of Commerce (AmCham), Eurasia Foundation, Forum of Entrepreneurs, and the New University, we will also conduct a series of events in 2010 to promote the goals of the Summit. PUBLIC DIPLOMACY ACTION PLAN ¶6. (U) The U.S. Embassy's public diplomacy plan for the Presidential Entrepreneurship Summit will consist of three major components: -- Entrepreneurship Roundtable: The Embassy plans to organize a roundtable to discuss entrepreneurship in the lead up to the Summit. This will be an opportunity to introduce the Summit to critical Kazakhstani audiences. The Embassy will issue a press release quoting President Obama's Cairo speech and linking this initiative directly to that of the President. We will also organize media coverage of the roundtable and look for an opportunity for a one-on-one interview with a business weekly in which the Ambassador can explain the goals of the Summit. -- The Public Private Enterprise Partnership Initiative (PPEPI): The Ambassador and Deputy Prime Minister co-chair this initiative, which engages business leaders from the United States and Kazakhstan to identify policy reforms that will improve the investment climate in Kazakhstan. As the Summit approaches, the Embassy will encourage executives of the project's Secretariat, AmCham, to speak with the Kazakhstani press to describe the importance and anticipated impact of the Summit. Through PPEPI, the Embassy will also contact Kazakhstani business leaders who can speak to the press about the Summit. Not only will this outreach be good for PPEPI, but it will give an authentic, local voice to the Presidential Summit. -- Returning Summiters: After the summit ends, the Embassy will plan an event to welcome Summit participants home and give them the opportunity to discuss their experiences. This event could take the form of a roundtable discussion or a press conference panel, and it will be co-sponsored by the U.S. Embassy and PPEPI. Press will be invited to cover the event and conduct side interviews with returning participants. THE NOMINEES FROM KAZAKHSTAN ASTANA 00002099 002.2 OF 005 ¶7. (U) We are pleased to recommend the following outstanding Kazakhstani entrepreneurs for participation in the 2010 Presidential Entrepreneurship Summit. In addition to being successful entrepreneurs, they are also community leaders dedicated to the long-term development of Kazakhstan. Please note that Mission Kazakhstan has nominated 12 candidates, listed in priority order, to participate in the Summit, because it was exceedingly difficult to select only 10 entrepreneurs from Kazakhstan's deep talent pool. All nominees speak fluent English, except as noted. ¶A. Nurlan Smagulov, 43, Almaty. President of Astana Group, 2008 Ernst & Young Entrepreneur Of The Year. Mr. Smagulov is the founder of Astana Group holding company, which comprises automotive sales, grain production and trading, and real estate development. In the early 1990s, he founded a car dealership that sells international automotive brands. Today, the company is a national leader with dealerships throughout the country. In the mid-1990s, Mr. Smagulov launched a new business and developed a vertically-integrated structure for grain production, processing, and trading on domestic and international markets. The company is now a leader in flour and pasta production in Kazakhstan, and one of the largest grain exporters in the country. Mr. Smagulov then invested in real estate development. The first Mega shopping mall began operations in 2006 in Almaty. Since then, the brand has expanded to other cities in Kazakhstan and provides an international standard shopping experience for domestic consumers. Mr. Smagulov has said, "Kazakhstan is a young country which is steadily developing toward a market economy. The Entrepreneur Of The Year Award is recognition not only of our company's strategy and our past achievements, but also our daily determination during times of uncertainty. And this award is a strong motivation to work further and contribute to the community." ¶B. Raimbek Batalov, 39, Almaty. Founder and Chairman of Raimbek Group, a diversified food products company founded in 1992. In 2002, Mr. Batalov was elected Chairman of the Board of the Forum of Entrepreneurs, a position he continues to hold today. As a successful businessman and Chairman of the Forum, he strives to create a favorable investment climate in which small and medium-sized enterprises in Kazakhstan can operate profitably, deliver quality consumer products, create jobs, and diversify the economy. Mr. Batalov has been a member of the Presidential Council of Entrepreneurs since 2006. In 2005, he was appointed Chairman of Kazakhstan's delegation to the Business Council of the Shanghai Cooperation Organization, a multilateral organization promoting security, economic, and cultural cooperation between China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan, and Uzbekistan. ¶C. Yerzhan Mandiyev, 37, Ust-Kamenogorsk, East Kazakhstan. President of Asia Auto since November 2003, shortly after the company was established in December 2002. Mr. Mandiyev joined the automotive industry after working in Kazakhstan's banking sector. He began with an ambitious plan to establish a domestic automobile industry capable of producing competitive vehicles locally, to meet consumer demand in Kazakhstan and neighboring countries. At first, Asia Auto only assembled cars, but under Mr. Mandiyev's leadership, the company began producing ornamental rings and harnesses, and opened branch offices throughout Kazakhstan. Mr. Mandiyev also rapidly expanded the range of cars assembled by Asia Auto, starting with the Niva in 2003, the Skoda Octavia in 2005, and a range of Chevrolet products in 2007. Today, Asia Avto assembles the Chevrolet Lacetti, Epica, and Captiva automobiles, and has produced sample units of the Cadillac Escalade, Cadillac CTS, and Hummer H2 and H3 vehicles. Mr. Mandiyev plans to build a new plant with a design capacity of 120,000 cars a year, which will provide jobs to 4,000 residents in East Kazakhstan Oblast. The development of Kazakhstan's domestic automobile industry under Mr. Mandiyev's supervision has had a multiplier effect, as it promotes adjacent industrial sectors that manufacture auto components, spare parts, tires, auto glass, and electronics. Mr. Mandiyev is an active promoter of entrepreneurial values and represents the interests of domestic entrepreneurs as a member of the management board of the Atameken Union of Entrepreneurs and the Presidential Council of Entrepreneurs. ¶D. Alexander Deriglazov, 40, Ust-Kamenogorsk, East Kazakhstan. Founder and CEO of Meloman, Kazakhstan's leading distributor of movies, music, and other copyrighted material. With an unwavering commitment to the protection of intellectual property rights (IPR), Mr. Deriglazov has become one of Kazakhstan's most prominent advocates for strengthening IPR protection. He maintains a strong working relationship with the Ministry of Justice's IPR Committee and has made significant contributions to developing IPR legislation in Kazakhstan. In July 2009, his efforts paid off when the ASTANA 00002099 003.2 OF 005 Copyright Law of the Republic of Kazakhstan was amended to allow for the protection of phonographic media rights, which secured regional distribution rights for licensed audio and video media. This has greatly improved the ability of both law enforcement and licensed media distribution outlets such as Meloman to pursue and prosecute businesses and individuals selling pirated media. With U.S products comprising a significant portion of his retail business, Alexander has been a reliable Embassy contact for several years, always taking the time to provide valuable input to IPR reporting. In January and February 2008, Alexander participated in the International Visitors Leadership Development program on Protection of Intellectual Property Rights. A native of Zyyanovsk, East Kazakhstan, Alexander graduated from Ust Kamenogorsk Technical University in 1992. ¶E. Andrei Chagai, 38, Almaty. Co-owner and managing partner in a Kazakhstani-U.S. joint venture that operates coffee shops in Almaty under the Coffeedelia brand. Mr. Chagai was on a SABIT internship from June-December 1998 with Statco International in Seattle, focusing on general business training, operational excellence, and Good Manufacturing Practices. After several years of hard work and detailed negotiations, he and Statco established a joint venture (Marco Polo) in 2005, and opened a network of coffee shops. When he returned to Kazakhstan in 2005, Mr. Chagai established a joint venture with Statco to open a network of coffee shops. Their first enterprise employed 30 Kazakhstanis and introduced a new business culture and management standards for Kazakhstan. Today, Coffeedelia is one of the most stylish and successful coffee shops of Kazakhstan. In February 2008, the company opened its second coffee shop, and hired an additional 35 people. Mr. Chagai and his partners are now considering expanding their business by registering Coffeedelia as a franchise. ¶F. Nurlan Kapparov, 39, Almaty. Chairman of the Board of Directors of the Lancaster Group. In 1990, Mr. Kapparov founded Accept Corporation, where he was President from 1991-97. He served as President and CEO of Kazakh national companies KazTransOil from 1997-98 and KazakhOil from 1998-99. Mr. Kapparov was appointed Deputy Minister at the Ministry of Energy and Mineral Resources in 1999, where he worked until 2001 and was responsible for monitoring the oil and gas sector. In 2000-01, he served as Chairman of the North Caspian Operating Committee (Kashagan) and also led the team negotiating delimitation of the Caspian Sea between Russia and Kazakhstan. In 2003, Mr. Kapparov became Chairman of the Lancaster Group and served as Independent Director of PetroKazakhstan from 2003-05. Currently, Mr. Kapparov is Chairman of the Board of Trustees of the Jambyl Foundation. He is also co-founder of the Harvard Club of Central Asia (HCCA) and was its first President, and is co-founder of the Republican Physics and Mathematics School Alumni Fund. Mr. Kapparov is a member of the Belfer Center for Science and International Affairs at the Kennedy School of Government at Harvard University. He was born in 1970 in Almaty, and is a graduate of Almaty Technological Institute and the Kennedy School of Government. ¶G. Janat Berdalina, Almaty. President, KPMG Kazakhstan and Central Asia. Ms. Berdalina manages one of the most successful international tax and audit firms in Kazakhstan. Since 1993, when she started her own consulting firm, Ms. Berdalina has been an active and influential advisor to international businesses and government officials in Kazakhstan. She was just the seventh auditor to receive a license to practice in Kazakhstan, and was instrumental in developing the new Tax Code and Law on Auditing. As an official with the Ministry of Finance, she helped to draft the regulations leading to the adoption and implementation of International Standards on Auditing. From 1998 to 2002, Ms. Berdalina served as co-chair of the tax working group under the Foreign Investors' Council, the most exclusive business association in Kazakhstan, headed by President Nazarbayev. Ms. Berdalina has a degree in international business from Bristol University (UK) and an MBA from the Ecole Nationale de Ponts Chaussees, (France). ¶H. Marina Kim, 51, Almaty. Since graduating from Almaty Medical University in 1982 with a degree in pharmacology, Ms. Kim has been a pioneering leader of Kazakhstan's pharmaceutical sector. In 1988, she was named assistant director of the Semipalatinsk pharmaceutical production association Pharmacia. Ten years later, in 1998, she helped to found Romat, one of Kazakhstan's first private pharmaceutical companies. Today, Romat is a vertically integrated pharmaceutical holding company with business lines in research and development, drug production and product distribution. Romat owns and operates three modern manufacturing facilities, 18 branches throughout Kazakhstan, and more than 30 drug stores around the country. Under Ms. Kim's leadership, Romat has established business relationships with more than 90 of the world's most successful ASTANA 00002099 004.2 OF 005 pharmaceutical companies, including Pfizer (USA),Eli Lilly (Switzerland),Glaxo Smith Kline (Great Britain),and Nestle (Switzerland). Romat's researchers recently patented a new anti-tuberculosis medicine and Ms. Kim has ambitious plans to license and market the drug globally. For eight consecutive years, Romat has been nominated for an award as Kazakhstan's best pharmaceutical company, and in 2009, the company was honored as the best distributor of pharmaceutical products in Kazakhstan. Romat employs more than 1400 people, 70% of whom are women. In addition, women hold 80% of the company's management positions. ¶I. Aigul Solovyeva, 57, Atyrau. Member of the Mazhilis (Lower Chamber of Parliament) since 2007, and Chair of the Civic Alliance Movement since 2006. She has been honored with several public service awards, and serves on the Anticorruption Council. Ms. Solovyeva began her career as a sole proprietor in the dairy processing industry, and is an alumnus of the Special American Business Internship Training (SABIT) program (1999, Standards in Food Processing and Packaging). She began her public life as head of the Union of Business Women of Kazakhstan in 2002. Since then, she has become a well-known activist for greater accountability, transparency and openness in Kazakhstan's business environment. Ms. Solovyeva is a member of the government's Expert Council for Small and Medium Enterprise Development and is on the Presidential Council of Entrepreneurs. Ms. Solovyeva speaks Kazakh and Russian, and will require English interpretation during the Summit. ¶J. Meruert Kazbekova, 48, Kokshetau. President of the Union of Business Women of Kazakhstan. Widely considered one of the most influential women in Kazakhstan, Ms. Kazbekova leads a well-developed network of business women's organizations throughout Kazakhstan and is a tireless supporter of increased training on women's leadership issues. As a SABIT alumnus (2001, NGO development),Ms. Kazbekova applied the knowledge and networks she gained to set up a regional non-government organization, the Union of Business Women. Through this network, she was able to teach 200 business women from remote regions in Kazakhstan on the basics of starting and running a successful business. She also conceived and received U.S. Embassy funding for a project to establish a new school for women's leadership. As a result of this project, several recent graduates have started their own businesses in the southern regions of Kazakhstan, where women have historically been dependent on their husbands. Ms. Kazbekova is an adjunct professor at the Academy of State Service, where she delivers lectures on support to small businesses. Ms. Kazbekova speaks Kazakh and Russian, and will require English interpretation during the Summit. ¶K. Yergali Begimbetov, 37, Almaty. Chairman of the Management Board of the private insurance company London-Almaty since July ¶2003. Previously, he completed an internship at U.S. insurance companies Nationwide and Grange Insurance, as well as insurance training conducted by Arthur Andersen and Ernst &Young. After Mr. Begimbetov's arrival, London-Almaty placed new emphasis on service quality and began to grow rapidly. In 2004, the company opened 18 branch offices throughout Kazakhstan and became a leader in the domestic insurance market. In 2006, the company received the ISO 9001 quality certificate and introduced a new management system based on the philosophy of Edwards Deming. In 2007, the company's website was recognized as one of Kazakhstan's best corporate sites by National Business magazine. Mr. Begimbetov is a member of the Association of Financiers of Kazakhstan, the non-governmental organization Underwriters Club, based in Khabarovsk, Russia, and a member of the UN Global Compact. London-Almaty sponsored the 2009 Eurasia International Film Festival, and has helped local disabled children receive medical treatment abroad. ¶L. Serzhan Zhumashov, 43, Almaty. Founding Chairman of the Supervisory Board of Capital Partners. After graduating from the Almaty Institute of Economy, Mr. Zhumashov worked in the Auditing Department of the Ministry of Finance. In June 1996, together with U.S. investment fund New Century Holding, he founded Capital Real Estate, now a market leader in the sale and rental of office space in Kazakhstan. Mr. Zhumashov also established a network of modern movie theaters in Kazakhstan, established the successful World Class fitness clubs, and, with Russian partners, launched a popular chain of restaurants in Kazakhstan, including the American Bar and Grill, Patio Pizza, and Planet Sushi. As founder of Capital Partners, Mr. Zhumashov has led a number of world class real estate projects, such as the Renaissance (Marriott) hotels in Aktau and Atyrau, the Ritz Carlton and five-star Marriott hotels in Almaty, and various industrial projects in Moscow. Mr. Zhumashov has generously contributed to a number of social projects, such as the British Haileybury school in Almaty, which he founded. Mr. Zhumashov is an avid defender of the entrepreneurial spirit, as he demonstrated in ASTANA 00002099 005.2 OF 005 May, when he signed a letter to President Nazarbayev, expressing support for the former President of KazAtomProm, Mukhtar Zhakishev, who was arrested on corruption charges in April. ¶8. (U) The Embassy's primary contact for the Presidential Entrepreneurship Summit is Kevin Covert, Deputy Pol/Econ Chief, who may be reached at covertkt@state.gov, or 7 7172 70 24 97. SPRATLEN