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

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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


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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

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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

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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

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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