Identifier
Created
Classification
Origin
09ASTANA238
2009-02-10 10:25:00
UNCLASSIFIED
Embassy Astana
Cable title:  

KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, JANUARY 18-31

Tags:  PGOV PINR ECON EFIN ELAB EPET RS KZ 
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E.O. 12958: N/A
TAGS: PGOV PINR ECON EFIN ELAB EPET RS KZ
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, JANUARY 18-31

ASTANA 00000238 001.2 OF 002


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STATE PLEASE PASS TO USTDA FOR DAN STEIN

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E.O. 12958: N/A
TAGS: PGOV PINR ECON EFIN ELAB EPET RS KZ
SUBJECT: KAZAKHSTAN ECONOMIC AND ENERGY UPDATE, JANUARY 18-31

ASTANA 00000238 001.2 OF 002



1. SUMMARY: The information in this Kazakhstan economic and energy
update is drawn primarily from the Kazakhstani media and has not
been further verified for accuracy.

-- Banking Sector News
-- Labor Market Update
-- Energy Ministry Asks Government to Support Subsoil Users
-- Prime Minister Calls for Review of Gas Prices
-- Kazakhstan and Russia to Sign Oil Transit Agreement

END SUMMARY.

BANKING SECTOR NEWS


2. The Board of Directors of Halyk Bank appointed Umit
Shayakhmetova as the new Chairman of the bank's Management Board --
a position equivalent to CEO. She replaces Grigoriy Marchenko, who
was recently named to head Kazakhstan's National Bank.
Shayakhmetova graduated from Patrice Lumumba People's Friendship
University in Moscow in 1993 with a bachelor's degree in economics.
She earned an MBA from Rutgers University in New Jersey in 1996.
From 1997 to 2004, Shayakhmetova held various positions at ABN-AMRO
Bank Kazakhstan. In 2004, she joined Halyk Bank as Deputy Chairman
of the Management Board.


3. According to a statement from the Financial Supervision Agency
(FSA),Kazakhstan's commercial banks earned a net profit of 15.4
billion tenge (approximately $126.6 million at the January 29
exchange rate) in 2008, marking a 92.9% decrease in profits
year-on-year. During the same period, the revenue of second-tier
banks totaled 2,934.7 billion tenge (about $24.1 billion),marking a
63.5% increase compared to 2007. Loan portfolios, including
inter-bank loans, increased by 4.2% in 2008 to 9,238.4 billion tenge
(about $75.9 billion). As of January 1, 2009, the banking sector's
overall loan portfolio was divided as follows: 43.3% standard loans
(compared to 39.7% as of January 1, 2008),52.3% doubtful loans (vs.
58.8% for the previous year) and 4.4% bad loans (vs. 1.5% for the
previous year).

LABOR MARKET UPDATE


4. Minister of Labor and Social Protection Berdybek Saparbayev

reported on January 28 that 5,785 social projects to be funded by
federal and local budgets will be launched in 2009, creating an
anticipated 348,000 new jobs.


5. In response to increased unemployment and concerns about rising
crime rates, Prime Minister Karim Masimov instructed local
authorities and ministries to ensure all migrants obtain required
temporary residence permits, to deport illegal immigrants, and to
provide more Kazakhstani citizens with jobs.


6. According to Labor and Social Protection Minister Saparbayev,
the Government of Kazakhstan may introduce a moratorium on seasonal
foreign agricultural workers allowed into the country in 2009. The
Minister did not, however, specify the date and the duration of this
moratorium.

ENERGY MINISTRY ASKS GOVERNMENT TO SUPPORT SUBSOIL USERS


7. Speaking at a government meeting on January 21, Minister of
Energy and Mineral Resources Sauat Mynbayev asked Prime Minister
Masimov to lift the moratorium on the issuance of subsoil use
licenses and reduce mineral extraction tax rates because of the
global financial crisis and the low price of crude oil. Mynbayev
also requested that the government not annul the contracts of
subsoil users who meet at least 50% of their contractual
obligations. According to Mynbayev, as of January 1, 887 subsoil
use contracts are currently active, and 80% of operators are meeting
their contractual obligations. In 2008, the Energy Ministry signed
104 new contracts and issued 153 warnings regarding violations of
contractual obligations and license requirements.


ASTANA 00000238 002.2 OF 002


PRIME MINISTER CALLS FOR REVIEW OF GAS PRICES


8. On January 21, Prime Minister Masimov ordered the Ministry of
Energy and Mineral Resources to calculate the impact of Russia's
anticipated shift to European pricing for gas. "We need to be very
well prepared for this transition. We need to know what it will
cost us," he said. Masimov added, "I took part in the gas dispute
between Russia and Ukraine and there is one very important
conclusion we must draw: Russia will move to European prices at
home and in its exports to Ukraine and other countries in 2011." On
January 22, KazMunayGas agreed with Gazprom on a 21% increase in the
transit fee for gas transported across the country, raising the fee
from $1.40/tcm per 100 km to $1.70/tcm per 100 km in 2009.

KAZAKHSTAN AND RUSSIA TO SIGN OIL TRANSIT AGREEMENT


9. Interfax reported on January 22 that Russia's Energy Ministry
plans to resume preparation of an intergovernmental agreement with
Kazakhstan on crude transit through 2020, and hopes to sign it
within next six months. The agreement would cover the increase of
the throughput capacity of the Atyrau-Samara oil pipeline to 20
million tons, the expansion of the Caspian Pipeline Consortium (CPC)
pipeline, and the construction of the Bourgas-Alexandroupolis
pipeline.

HOAGLAND