Rizvana Sadykova

GOVERNMENT Weekly REVIEWOfficial visit of Kazakh President Nazarbayev to Uzbekistan was very successful. Astana hosted Islamic Finance conference.

The main political event of the week was the official visit of President of Kazakhstan Nursultan Nazarbayev to Uzbekistan at the invitation of his Uzbek counterpart Islam Karimov, which is awarded great attention of both domestic and foreign politicians, political analysts and the media. The Kazakh leader was accompanied by Secretary of State – Minister of Foreign Affairs Kanat Saudabayev, First Deputy Prime Minister Umirzak Shukeyev and President’s Aide Kairat Sarybai.

Taking into account the complex nature of new threats and challenges faced by Central Asian region today, the necessity of negotiations is dictated by time. The diplomatic relations between Kazakhstan and Uzbekistan were established on November 23, 1992. The Eternal Friendship Agreement and Agreement on Enhancement of Economic Cooperation are the fundamental documents in the countries’ relations. The trade turnover between the states amounted to USD 1 billion 196 million last year. The Presidents of the two states signed their Joint Statement. The agreement on mutual allotment of land plots for the construction of diplomatic missions was signed between the two governments. The programs of cooperation were inked between the ministries of foreign affairs of Kazakhstan and Uzbekistan for 2010-2011 and between the Ministry of Culture of Kazakhstan and Ministry for Cultural and Sports Affairs of Uzbekistan for 2010-2012.

An issue of water resources usage had made the two leaders to search for an united approach on a rational use of hydro power resources in Central Asia   have been clearly voiced in the course of current negotiations. There were discussed also problems of construction of new hydro power facilities in transborder rivers of Central Asia, joint actions on prevention any attempts of outside forces to lobby theirs political interests in the region due to current disagreements between our countries on usage water resources .

Presidents of Kazakhstan and Uzbekistan stated the necessity of mandatory international expertise of the projects of construction of new hydroelectric  power facilities in the region. President Nazarbayev said it at a press conference following the negotiations with his Uzbek counterpart Islam Karimov in Tashkent. “Today we have confirmed our mutual interest in soonest development of mutually beneficial mechanism of joint usage of water-energy resources in Central Asian region and activation of work of the International Fund for Saving the Aral Sea”, the Kazakh Leader noted. “We note readiness of our partners for cooperation and appeal our distinguished colleagues – President of Tajikistan Emomali Rakhmon and President of Kyrgyzstan Kurmanbek Bakiyev to set to such expertise and start construction only after receiving its results”, N. Nazarbayev said. “Our friends and colleagues should understand us. We realize their economic needs and the opportunity of receiving this electric power. We admit importance of this economic category for them. However, we raise these questions not to infringe their rights for construction of hydroelectric power stations. This is done for objective assessment of the projects”, the Head of the State resumed. “Our countries have developed strong contractual-legal base which includes 140 documents. The most important of them are the Treaty of Eternal Friendship and the Treaty of Friendship and Cooperation signed at the dawn of our independence”, the Head of the State said. “Kazakhstan and Uzbekistan act within the Strategy of Economic Cooperation till 2016 and we agreed on its further realization”, the Kazakh President resumed.

Head of the State Nursultan Nazarbayev expressed gratitude to his Uzbek counterpart Islam Karimov for support of Kazakhstan’s chairmanship in the OSCE. “We are grateful to Uzbekistan and personally Islam Katimov for support of our OSCE chairmanship and the idea of holding the Summit of the OSCE Leaders this year. We should use this opportunity as a good platform for discussing stabilization of Afghan situation”, Nazarbayev said after the negotiations with I. Karimov in Tashkent. According to the Kazakh President, the talks focused also on the situation in Afghanistan and provision of international support to this long-suffering country. “We agreed on cooperation and coordination of our positions regarding this issue”, N. Nazarbayev noted. “Kazakhstan provides all possible assistance to Afghanistan in rehabilitation of economy, construction of social and humanitarian facilities. In addition, we have launched an educational program for teaching the Afghan students and we will continue this work”, N. Nazarbayev stressed. President Nursultan Nazarbayev has invited Uzbek Leader Islam Karimov to pay an official visit to Kazakhstan. “I have invited Mr. Karimov to pay an official visit to Kazakhstan at a convenient for him time in order to check how the governments and corresponding state bodies fulfill our tasks”, the President said. In turn, Uzbek President accepted the invitation and said it would a pleasure for him to visit Kazakhstan

Yesterday Head of the State Nursultan Nazarbayev started his working visit to South Kazakhstan oblast. He took part in inauguration of Koksarai water reservoir which was built in Arys municipality on the river of Syrdarya. “Every year we spend huge funds for building dams and restoration of houses. Due to construction of Koksarai counter-regulator Kyzylorda oblast is protected from floods”, the President said.

President Nazarbayev participated in opening of Asia Ceramic LLP, a new plant on ceramic granite production, in the city of Shymkent.  The cost of the project is around USD 35 mln, the majority of the funds were provided by the Development Bank of Kazakhstan. Over USD 4 mln were invested by Turkish companies carrying out this project. After the ceremony the President talked to the heads of the plant – investors from Turkey, and wished them success. The production capacity of the plant is 2.5 mln of sq m of ceramic granite tiles per year. Up-to-date Italian equipment was installed at the plant.

This week Astana hosted International Islamic Finance Conference, the first event on Islamic Finance in Kazakhstan since the new law on IF was signed on February 12, 2009. Stable financial condition of Islamic financial institutions and resistance to the global crisis has led that many countries are making changes to existing legislation to implement the principles of Islamic finance. The conference was devoted to discussion of the current situation, tendencies and prospects of local market and the way towards Islamic finance and banking.

In his welcome address Mr. Asset Issekeshev, Kazakh Ministrer of Industry and New Technologies said that “while determining the development of Kazakhstan for the new decade President of Kazakhstan Nursultan Nazarbayev in his annual address to the people of Kazakhstan “New Decade – New Economic Growth – New Opportunities of Kazakhstan” defined foreign direct investments as the main source for diversifying our economy”. This strategic plan determines such goal as “Kazakhstan must become a regional center for Islamic banking in the CIS and Central Asia, and enter the top ten leading financial centers of Asia”. The Kazakh Government is a proactive supporter of Islamic finance in a ready-made market with 60% of Muslim population. In his welcoming address Mr. Prasad Abraham, CEO, Chairman of Al-Hilal Bank confirmed that Al Hilal Bank has opened the first Islamic bank in our country. He told that it was a number of questions raised about the wisdom of launching a new bank while the major economies of the world including Kazakhstan are still in the midst of one of the most severe financial crisis. However, prior to this Al Hilal Bank successfully launched in 2008 and later established 14 branches in the UAE within a span of 18 months, the bright orange bank has taken its first strides in spreading Islamic Banking to international territories. The mission of the bank is to raise the profile of Islamic banking globally while contributing to the national growth and prosperity of Kazakhstan. He also told that Al Hilal Bank has ambitious plans for its operations in Kazakhstan but it will adopt a prudent approach to meet longer term objectives for the country. As it is known Kazakhstan has set up the Regional Financial Centre of Almaty (RFCA) which includes the first academy in the CIS to offer education and training in Islamic finance. During conference Director of Islamic instruments of “RFCA” Aibek Bekzhanov spoke on activity of the RFCA on development of Islamic finance instruments in Kazakhstan.  Mr. Gany Iskaliyev COE of the Development Bank of Kazakhstan pointed out in the light of issues which were set by the Head of state on becoming Kazakhstan as the regional center of Islamic banking in the CIS and the Central Asia and entering into ten leading financial centers of Asia by 2020, necessity of development of Islamic financing especially increases. With introduction of its standards a new investment capital of large international financial institutions will be attracted to Kazakhstan