20 June 2005
The Kazakhstan Country Update provides information about recent developments, decisions, and civil society activities related to International Financial Institution (IFI) involvement in Kazakhstan.
By Jelena Kmezic
Also Available [Pусский]
The Kazakhstan Country Updates provide information about recent developments, decisions, and civil society activities related to International Financial Institution (IFI) involvement in Kazakhstan including that of the World Bank (WB), International Finance Corporation (IFC), International Monetary Fund (IMF), European Bank for Reconstruction and Development (EBRD) and Asian Development Bank (ADB). If you would like to be included or removed from the distribution list, please email the moderator, Heike Mainhardt-Gibbs at . Correspondence with BIC may be conducted in Russian.
I. IFI Project Activities
WB approves Agricultural Competitiveness Project
On April 28, 2005 the World Bank has approved Agricultural Competitiveness Project in the amount of US $24 million which is supposed to increase competitiveness of the agricultural sector. The stated goal of the project is to facilitate access to markets by supporting measures to improve the quality and safety of agricultural products, enhance access to information, and harmonize standards. All related project documents can be obtained at the following website:
WB approved funding for the Central Asia AIDS Project
On May 14, 2005 the World Bank approved a US$25 million grant for a Central Asia AIDS Control Project. The project aims to minimize the human and economic impact of the HIV/AIDS epidemic in four Central Asian countries – Kazakhstan, Kyrgyz Republic, Tajikistan and Uzbekistan. The project is a part of the Central Asia AIDS Control project organized by governments, NGOs and partner organizations initiated during the Central Asian Conference on HIV/AIDS, held in May 2001. The Central Asia AIDS Project has three main goals: reduce the growth rate of the HIV/AIDS epidemic in Central Asia in the period 2005-10; establish a Regional AIDS Fund to finance HIV/AIDS prevention and control activities in the Region beyond the end of the project; and contribute to better regional cooperation in Central Asia. For further information visit the following site:
EBRD published PSD for KSBP III – Rural Facility
On June10, 2005 the EBRD released the project summary document (PSD) for the KSBP III Rural Facility. The proposed project is the third phase of EBRD’s small business programme in Kazakhstan, which started in 1998. KSBP III is supposed to assist banks with dedicated Technical Assistance (TA) to build up the necessary institutional capacity for mass scale lending to rural and agricultural medium and small enterprises (MSEs). Total project cost is $160 million. The estimated Board date is June 26, 2005. To view project summary please click on the link below:
II. IFI Consultations and Policy Updates
World Bank approves new Indigenous Peoples policy
The World Bank Board of Directors voted to approve the Revised Draft Operational Policy on Indigenous Peoples (OP 4.10) during their May 10th meeting. This Draft had been developed over the last six years, taking into account inputs from numerous consultations with external stakeholders, including indigenous leaders, civil society organizations, and borrower governments. Operational Policy 4.10 will replace the existing Operational Directive 4.20 on Indigenous Peoples, effective July 1, 2005. More background on the process of drafting OP 4.10, is available here:
EBRD released Transport Operations Policy
On April 19, 2005 the EBRD Board of Directors approved the new Transport Operations Policy which replaces the document approved in February 1997. Transport Operations Policy sets out the general strategic and operational role of the Bank in this sector and establishes the overall framework for the Bank's activities.
The CEE Bankwatch Network finds that the new EBRD transport policy lacks clear objectives and commitments for the promotion of sustainable transport across the region. In order to promote environmentally sound and sustainable development, the EBRD should reverse the current transport trends in Central and Eastern Europe where the development of road transport is outstripping the development of sustainable public transport modes, in particular rail. The new EBRD transport policy fails to address these damaging trends which are impacting heavily on social welfare, helping to accelerate climate change and causing irreversible damage to Europe’s biodiversity.The full policy and public comments were published on April 27 and are available on the EBRD website and here:
ADB Board Approves new Disclosure Policy
On April 22, 2005, the ADB's Board of Directors approved a new policy on access to information at the ADB. With the new Public Communication Policy, the public will have access to decisions by ADB's Board of Directors; Draft Country Strategies and Programs (CSPs); and a clear information request process including an internal complaint mechanism for information refusals. The new policy will be effective as of September 1, 2005.
III. Civil Society Activities
NGOs raise concerns on ADB communications policy
On a sign-on letter dated April 21, 45 civil society organizations from 17 different countries across the Asia-Pacific urged the ADB Board of Directors to recognize affected communities as one of the primary target audience of ADB’s Public Communications Policy (PCP), as done in initial drafts. NGOs expressed grave concern about the exclusion of affected peoples as one of the principle targets of ADB’s PCP, after finding out that the final draft which was going to the Board: (i) did not include affected peoples as its target audience, (ii) specifically mentioned that the strategy does not directly target the public in developing member countries, and (iii) aimed to instead strengthen partnerships with those who have “business links to the ADB.” Follow the links below to read the full sign-on letter:
Reports find BTC pipeline is unsafe
Reports produced by CEE Bankwatch Network, Friends of the Earth England, Wales & Northern Ireland, Les Amis de la Terre, France, and Green Alternative, Georgia, National Ecological Center for Ukraine reveal significant concerns regarding the environmental and social damage being caused by the World Bank and the EBRD backed project in Azerbaijan and Georgia. The Georgian report contains leaked documents detailing disputes between the Georgian Government, BP and International Financial Institutions regarding some of these safety concerns, and overall the two reports reveal a catalogue of unresolved problems with the BTC project such as environmental risks and compensation not being adequately addressed. An executive summary and full copies of the reports are available through the following links:
The leaked documents are available at:
IV. General News and Developments
Kazakhstan Parliamentarians accused KazMunayGas of non-transparency
Kazakhstani parliament’s lower chamber, Majilis, criticized national oil and gas company KazMunayGas (KMG) for non-transparency. Several parliamentarians sent a request to Kazakhstani Prime Minister Danial Akhmetov on Wednesday about KMG’s activities. The parliamentarians believe that “lack of independent audit, proper government’s and society’s control over activities of KMG and other national companies creates grounds for various abuses and corruption”. They also expressed concerns about lack of complete information about acquisition of a stake in North Caspian project by Kazakhstan. “This issue is interesting to the public- how much national company KazMunayGas paid for 8.33% in this project. Where did the funds come from? Is the transaction governed by the law on state procurement and if so, how were the law’s requirements observed in this transaction?” Kazakhstani Energy and Mineral Resources Minister Bladimir Shkolnik answered some of the questions and promised to report the details of the acquisition of BG stake in North Caspian project on April 27, when the transaction would “be finalized”. (Source: Eurasia news, www.eurasia.org.ru ; 21 April, 2005)
Kazakhstan announced participation in BTC pipeline
On May 25, 2005 the President of Kazakhstan, Nusultan Nazarbaev, announced that his country will participate in the BTC project and suggested that the pipeline will be renamed the Aktau- Baku-Tbilisi-Ceyhan pipeline. The day before, the President of Kazakhstan and the President of Azerbaijan Ilham Aliev signed an agreement on a strategic partnership between the two countries. According to official statements, Kazakhstan is ready to transport 309 million tones of oil through the BTC pipeline. The oil from Kazakhstan will in the beginning be shipped via tankers but plans are also under way to construct an undersea pipeline connecting the two countries. (Source: The Messenger, 31 May, 2005)
Western Oil companies find it harder to break into the Kazakh offshore
The BP-led BTC partners are actively seeking out Kazakh barrels: some could come from the Chevron-operated Tengizchevroil joint venture and some from the giant offshore Kashagan project due on stream in 2007-2008, operated by ENI, Total and ConocoPhillips, which have equity in both projects. Other Western majors are finding it harder to break into the Kazakh offshore. Royal Dutch/Shell and Repsol YPF, among others, say tough terms prevent them from signing long-term production sharing agreements. Companies’ biggest concerns are the tax regime and the absence of a proper fiscal framework. There are several reasons for the unpalatable terms such as that with presidential elections due in the next year or so, the authorities don’t want to be seen doing Western firms any favors. Another is that terms will be improved gradually until someone signs on the dotted line, after one firm signs the other will follow suit. But the most likely explanation is that with the giant Kashagan field due on stream in the next few years and negotiations progressing with Russian companies on developing four previously disputed fields in the North Caspian – Kurmangazy, Tsentralny, Khavlinskoye, and Tyub-Karagan- the Kazakhs are in no hurry to sign deals with Westerners. KMG, which has 50% of all four North Caspian blocks, is now getting down to work at Kashagan, after buying half of BG’s 16.67% stake following protected negotiations with the UK company and other Kashagan partners. (Source: Eurasia News, www.euraisa,org.ru; 27 May, 2005)
V. Additional Resources
Previous Updates and related reports can be found on BIC’s website on the Kazakhstan page. These reports are available in English and in Russian.