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Oil-Rich but Misunderstood, Kazakhstan Reaches Out to World
The Washington Diplomat / April 2008

By Larry Luxner

Sacha Baron Cohen's satirical, vulgar film "Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan" was no more about Kazakhstan than Steven Spielberg's kiddie flick "Madagascar" was really about Madagascar or Paul Mazursky's 1988 comedy "Moon Over Parador" was about Paraguay.

But "Borat" — Cohen's portrayal of a bumbling Kazakh TV journalist who rants against Jews, horrifies elegant Southern ladies with his conversation about genitalia and lusts after porn star Pamela Anderson — has sure helped put Kazakhstan on the world map.

"The mockery and humor in that movie describes America, not us," says Erlan Idrissov, Kazakhstan's ambassador to the United States. "The good thing was that because of Sacha Cohen and the movie, many people became curious about Kazakhstan, and they're starting to visit."

And that can only be a plus for Idrissov, who arrived in Washington last July with the objective of improving Kazahstan's visibility and profile in the United States.

"Our relationship with the U.S. is long-term and strategic, and I see my role here as enhancing that relationship. But I also want to expand Americans' knowledge about Kazakhstan and its history," said the ambassador, who has traveled to Alabama, Florida, Louisiana, California, Colorado, New York and half a dozen other states in the last five months. "My mission is to offer Kazakhstan to a broad American public."

Considering its vastness, it shouldn't be that hard to find Kazakhstan on a map in the first place.

The ninth-largest country on Earth, Kazakhstan covers just over one million square miles —making it nearly four times the size of Texas. But it has far fewer people than the Lone Star State, and its population is falling. As of last year, the former Soviet republic had only 15.2 million inhabitants, down from 16.4 million at the time of independence in 1991.

Like Texas, Kazakhstan is rich in oil, leading some experts to conclude that this remote, nearly empty multiethnic nation stretching from the Caspian Sea to the Chinese border will become the world's next Kuwait.

In 2000, a vast offshore field was discovered in the Caspian, and today petroleum accounts for 30% of the country's GDP and over half its export revenues. The National Oil Fund of Kazakhstan — a mechanism created by the government ro reduce Kazakhstan's exposure to energy price fluctuations — has doubled in value over the last year to nearly $20 billion.

"We are one of the top 10 countries in world oil reserves, and we plan to be within the top 10 producers by 2015," said Idrissov, estimating that current reserves are at 32.5 billion barrels — twice as much as the North Sea — and that projected oil reserves will exceed 100 billion barrels by 2015.

Buoyed by rising oil prices, Kazakhstan's GDP will grow by 9.2% this year — making it the world's sixth fastest-growing economy, according to The Economist. That ranks it behind only Angola, Azerbaijan, Equatorial Guinea, China and Qatar. That follows annual growth of 10.6% in 2007 and annual GDP growth of 9% or more in each of the four years preceding 2007.

"Nursultan Nazarbayev has transferred some of his presidential powers to the legislature, but this is dominated by loyalists, so he faces no threat," notes the magazine. "With presidential term limits lifted and plans for a dynastic succession on hold, Mr. Nazarbayev seems to be settling in for the long term. Disaffection among a growing entrepreneurial class is on the rise, but is unlikely to threaten the incumbent."

Nazarbayev, in fact, has been the incumbent ever since Dec. 1, 1991 — two weeks before Kazakhstan declared independence from the USSR (a statue commemorating that declaration of independence graces the entrance to the Kazakh Embassy on 16th Street; it's a replica of a similar statue overlooking the main square of the former capital, Almaty).

In 1994, Nazarbayev dissolved parliament and called for a referendum in April 1995, in which a reported 95% of voters supported the extension of his term until December 2000. A second referendum in August of that year — which was boycotted by the main opposition parties — approved a new constitution strengthening the powers of the presidency.

Since then, Nazarbayev has won every election, the last one in 2005. And last year, the constitution was amended to reduce the presidential term of office from seven to five years, while increasing the powers of parliament so that the government will be accountable to it. But the amendment also allows the 67-year-old Nazarbayev to run for re-election a third time when his current term expires in 2012.

But this doesn't mean that Nazarbayev will be president-for-life, according to a fact sheet entitled "Common Misconceptions in the West About Kazakhstan" given to the Diplomat by Idrissov.

"This is not an example of an autocratic leader propping up his power [but] the behavior of an increasingly stable and prosperous society seeking to bolster one of the main anchors upon which the security and welfare of millions depend," says the embassy fact sheet.

"President Nazarbayev's democratically bestowed right to stand for a third term provides, on the one hand, a strong incentive for the political parties to choose strong and effective presidential candidates. On the other hand, it offers the people of Kazakhstan a safety valve should the political parties fail to take this unique opportunity to display their maturity and fitness to govern."

At present,, 12 political parties exist in Kazakhstan, and one-third of them belong to the "radical opposition," says Idrissov.

Yet only Nazarbayev's Nur-Otan (Fatherland) Party seems to matter. In the 2007 election, Nur-Otan, with an official 88.05% of the total, captured all 98 seats in parliament — leading a top official of the Vienna-based Organization for Security and Cooperation in Europe to speak out.

I have never seen a democratic country with one political party in parliament," noted Ambassador Lubomir Kopaj, chief of the OSCE Office for Democratic Institutions and Human Rights, at a news conference in Astana.

Following the August 2007 vote, U.S. State Department spokesman Gonzalo Gallegos said "we take note of Kazakhstan's commitment to improve the election process and the central election committee's work to increase the transparency and integrity of the elections." But he cited some remaining difficulties, including legal provisions such as the high threshold of 7% for party representation in parliament, the process by which victorious parties chose deputies from their list, and the fact that an unelected body appoints nine of the 107 seasts in the lower house of parliament.

"We hope the government of Kazakhstan will address these shortcomings as it continues to reform the elections law, and promptly and fairly resolves any complaints and appeals related to violations of that law," Gallegos added.

Idrissov acknowledged that the results of the balloting might seem suspicious, but insists that's not how the Nazarbayev government planned things.

"Unfortunately, the last election produced a one-party parliament, but this isn't because we wanted it to happen," he told the Diplomat. "We were hoping for a parliament based on competition from political parties. But the opposition parties were very weak and couldn't get enough votes. They simply couldn't generate enough public support."

Organizations outside Kazakhstan don't buy that argument.

Freedom House, a Washington-based NGO, notes that Kazakhstan ranks 150th in Transparency International's 2007 survey of corruption perceptions in 179 countries.

"Corruption is widespread throughout all levels of government, and businesses are forced to pay bribes in order to deal with the government bureaucracy," says Freedom House. "While the constitution provides for freedom of the press, the government has repeatedly harassed or shut down many independent media outlets. Libel is a criminal offense, and the country's criminal code prohibits insulting the honor and dignity of the president."

Idrissov says such criticism "is a gross distortion of the overall picture and shows a lack of understanding of what it takes to develop new forms of social co-existence."

"We say to these critics: come and talk to us, live with us, and you will see that our achievements are enormous. We explain to them that it's improper to apply the measuring stick which you would apply to Great Britain or the United States or Denmark," he said.

"We never claim to be a full-fledged democracy. We understand that democracy is not about making declarations and putting articles in the constitution, it's about the habits of people. We came out of a completely different society. We had no culture of democracy. It was a Soviet culture. We had to build everything from scratch."

Now the country has over 5,000 NGOs, he said, noting that the government finances the growth of civil society.

Idrissov, who is originally from the eastern Kazakh city of Karkaralinsk, studied economics at the Moscow State Institute of International Relations. A former advisor to Nazarbayev on global issues, Idrissov served as foreign minister of Kazakhstan from 1999 to 2002 before being appointed the country's ambassador to Great Britain, Norway and Sweden, with residence in London.

"In the mid-90s, our inflation rate was 3,000%, and people's life savings completely disappeared. We were coming out of the throes of the collapsing Soviet Union," said Idrissov. "Per-capita income in those days was less than $400 a year. But today it's $7,000. There's a widespread belief that this is because of oil and gas, but it's not. It's a combination of persistent, well-thought economic policies on the ground, and the capacity and human resources to implement these policies."

Idrissov praises what he calls Kazakhstan's "excellent" relations with all of the five countries on its borders: China, Russia, Turkmenistan, Uzbekistan and Kyrgyzstan.

"We also have excellent relations with the European Union, with the United States, with the Arab world, Israel and Iran," said Idrissov, whose office is graced with photos of the ambassador posing with former presidents George H.W. Bush and Bill Clinton, as well as with Yasser Arafat and Pope John Paul II. "We don't have bad relations with anyone and we are happy about that. We do not accept divisions or confrontations, only engagement, talks and dialogue."

Regarding ties with Washington, Idrissov says "this is not just lip service. We have a multi-faceted, sophisticated network of cooperation that covers all imaginable levels. Our record in security and military-to-military cooperation is enormous. We provide overflights for thousands of coalition Air Force troops, and our air facilities are used as a backup for emergency situations. We are the only contributor to the coalition [in Iraq] from our part of the world."

Until last year, the United States was the No. 1 foreign investor in Kazakhstan, though the Netherlands now occupies that spot (led by Dutch banking conglomerate ABN Amro and energy giant Royal Dutch Shell). All told, U.S. companies account for $15 billion of the total $60 billion in cumulative foreign direct investment in Kazakhstan; other large sources of FDI include France, Germany, Britain, Italy, Switzerland, South Korea, China, Turkey and Japan.

In coming months, the embassy plans to launch a new public-private partnership, in addition to the Washington-based US-Kazakhstan Business Association and the Almaty-based American Chamber of Commerce in Kazakhstan.

Idrissov says bilateral trade is now around $2 billion a year. Major investors include General Electric, which is assembling locomotives in Kazakhstan, and FedEx, which is turning the country into a regional hub for Central Asia.

Kazakhstan's increasing economic and political muscle has landed it a coveted position as chairman of the OSCE in 2010 — even though debate continues over the country's commitment to democracy.

In the 2005 elections, Idrissov said the country hosted around 1,500 international observers — one-third of them from the OSCE.

"We have grown up enough to bring value to the OSCE in a number of ways. We are major contributors to global security," he said. "When we became independent, Kazakhstan ranked fourth in the world in nuclear strength. But we have taken a non-nuclear path of development and this was the best way to ensure our security."

Idrissov suggested that Kazakhstan's military cooperation with Washington is in some ways "much more sophisticated and active" than U.S. cooperation with "some new NATO member countries" he declined to identify by name.

Viewers watching "Borat" might conclude that Kazakhstan is a backward country (parts of it were actually filmed in primitive villages in Romania) — but they might never learn that Kazakhstan has a modern capital, Astana, built completely from scratch, or that this landlocked country boasts one of the world's most unique "oceanariums."

Or that cosmonauts are launched into space from Kazakhstan. Or that Kazakhstan is the world's third-largest producer of uranium — and will become the largest by 2010.

Idrissov said he saw "Borat" at a private showing in London and was more amused than anything.

"My hosts were expecting I'd refuse to see the movie," he recalled. "But I accepted their invitation, and was absolutely surprised how Borat has permeated the general culture."

Asked if he's actually met Sacha Cohen, who starred in his own satire, Idrissov said he hadn't — but he also discounted media suggestions that the government of Kazakhstan is suing Cohen for tarnishing his country's image around the world.

"There was no lawsuit at all. He's a very clever boy. He invested less than $1 million in the film and raised more than $100 million, and he didn't share a penny with us," said the ambassador. "All these techniques — pretending to be angry, trying to sue, etc. — these are all tricks of the trade to raise more money.

"We survived Stalin," Idrissov noted wryly, "and we will definitely survive Borat."

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