[inspic=42,left,fullscreen,100]This blog relies on Norman Foster’s professional engagement in Kazakhstan. We previously reported about Foster’s contributions in making Astana a true architectural capital of the 21st century: The huge yurt-like tent structure, Khan Shatyry and the Pyramid of Peace are both rather unorthodox additions to the capital’s skyline.

Now Foster and Partners will add another landmark to the sprawling city, this time even more spectactular as I find. The Abu Dhabi Plaza will be:

…a staggered matrix of buildings with a retail and leisure podium and a hotel cluster at the base that rises to form a series of office and residential towers to the north – creating a new landmark on Astana’s skyline. The retail podium contains elements which are a reinvention of a traditional marketplace and also incorporate a light rail station and public square.

The name of the development derives from the building owners. The Guardian reports:

Foster’s latest addition will be called Abu Dhabi Plaza after Mr Nazarbayev gifted the site to Sheikh Khalifa Bin Zayed, president of the United Arab Emirates. It will be built by a corporation partly owned by the government of Abu Dhabi.

I think Ashgabad is slowly but inevitably loosing the title of “architectural capital of modern Central Asia”…

On top of that, the new and shiny buildings in Astana will also perform a function. The Pyramid of Peace promotes the understanding between the world’s religions, the Khan Shetyry will be a leisure complex providing shelter in the cold season, and the Abu Dhabi Plaza will be the ultimate reinvention of the region’s typical bazars:

Sections of the retail mall will draw on the historic legacy of Kazakhstan’s traditional Bazaars by recreating a bustling marketplace ambience. Light shafts between the blocks are infused with colour by the use of laminated glass panels that flood the spaces below with a dynamic play of light, shadow and patterns.

Below is the translation of Xxrock’s post from our Russian-language weblog.

The pompously advertised plans to turn Almaty into the Olympic city of dreams are jeopardized. Minister of Tourism and Sports Temirkhan Dosmukhamedov without any ado flew to Qatar and met with the President of Asian Olympics. He offered to move the Games – due to take place in 2011 – from Almaty to Astana.

The history of Olympic Games never knew such a trick [The nominees and winners to host the Olympiads are cities, not countries – and as soon as Almaty was the chosen one, the games are to be held in this particular city]. What is going to happen with the grandiose plans of building the ski-jumps, toboggan tracks and stadiums?

If the fatty Kazakh officials succeed in convincing the Steering Committee to move the Games, all of those plans will, most likely, vanish in history. I wonder, how will they explain that? That nobody wants to build anything in Almaty, except elite housing and trade centers? [It has been recently stated that the reason is actually a PR for the new capital, and the suggestion is to hold the Games in Almaty, Astana and Shuchye, a resort in the central Kazakhstan].

Unfortunately, along came a financial liquidity crisis, which has given a serious blow to the construction industry. In conclusion, the author of these lines sorrowfully sighs, recollecting how much money had been spent for the PR campaign for winning the right to host here the Winter Olympiad, and later – the Asian Olympics.

*additional reporting in [brackets] by Arseny.

The continuous trouble over the delay in the Kashagan development has seen a few new developments over the last week. The 22 October deadline after which talks between the consortium and the Kazakh government about the stalemate should have originally been resolved got extended.

“The parties agreed to continue negotiations beyond the 22nd of October in a spirit of positive and constructive cooperation,” the energy ministry said in a joint statement with Kazakh state oil company KazMunaiGas.

One big hurdle on the way to an initial settlement seemed to be US oil giant ExxonMobil, which blocked the expansion of state-owned Kazmunaigaz’s share. This would mean that the consortium members (ENI, RDS, XoM, Total, Conoco-Philips, Inpex) would see their shares in the mega-project dwindle.

So, what’s the story here? With costs rising beyond the $100bn threshold and their shares in the project falling, will the international supermajors still see a solid return on their investment while at the same time the Kazakh government is happy? Read the full story »

Below is the translation of Adam Kesher’s post on the Russian-language part of kazakhstan.neweurasia. 

This sum is the most popular one in Kazakhstan lately. The Kazakh banks have to return 4 billion dollars to their international creditors by the end of this year. The Almaty mayor said that 4 billion dollars will be necessary to pay compensations to the owners of illegal real estate in the national parks near the city. The president ordered to allocate 4 billion dollars for liquidation of the consequences of economic crisis, which — according to his words — is not present in Kazakhstan.

All of these things — especially the last point — provokes dissatisfaction and grumble in the society. The citizens believe that this is an ungrounded state support to the private institutions, bacause it was initially supposed that the money would go to the banks. Another government’s idea of buying out the slightly sinked shares of the banks on international stock markets is regarded as an attempt of the state to gain control over the banks, which have become quite autonomous structures having certain political interests.

Daulet Sembaev, a former bational bank governor and a “godfather” of the Kazakhstan’s banking system and national currency, currently working for the largest bank – KazkommertzBank – has elucidated in the recent interview to the local popular – though somewhat yellowish – newspaper:

“The government’s 4 billion dollars will be funnelled to the economy’s real sector, not to the banks. We don’t need these money, and do not count on them. The funds will enter the economy in two ways – through the state-owned Kazakhstani Mortgage Company and state Development Bank, both of which will use the money to credit SMEs, mortgage and innovative projects”.

It’s amazing that the Kazakhstanis learn about the government’s true intentions from tabloids.

As reported on this site, one of the many casualties of August’s fraudulent Parliamentary election may have been Kazakhstan’s chances of chairing the OSCE in 2009.

Thus, the Kazakhstani Embassy’s latest press release is puzzling. Two articles topping the release are entitled “USA Optimistic about Kazakhstan’s OSCE Chairmanship Bid” and “Germany backs Kazakh OSCE, WTO Bids as Investors are Reassured”.

From the first article, posted on Eurasianet:

At a meeting with the Kazakh Secretary of State, Kanat Saudabayev, the US permanent representative to the OSCE, Julie Finley, has said that the USA views Kazakhstan’s application for the OSCE chairmanship in 2009 with great optimism, a report released by the president’s press service says.

During the meeting in Astana today, Saudabayev and Finley discussed priority areas for Kazakhstan during its chairmanship of the OSCE in case the country’s application is approved by 56 members of the organization at a meeting of foreign ministers in Spain at the end of November.

Ambassador Finley has been working in Vienna for two years, and one would assume is aware of both the Kazakhstani election and the subsequent self-postponing of the Kazakhtani chairmanship bid to 2011 (during a recent meeting in Warsaw). Does she now really believe Kazakhstan has a chance at the chairmanship in 2009? Or does the Kazakhstani embassy just assume that most readers will be unaware of the actual state of the bid, and will accept the statement at face value?

The second article might be even more significant. According to a Bloomberg dispatch, German Economy Minister Michael Glos met with Prime Minister Masimov in Astana, then told reporters in Almaty that Germany would back Kazakhstan’s bid to head the OSCE and join the WTO. It continues:

The German position defies bodies including the International Helsinki Federation for Human Rights, which oppose Kazakhstan’s bid to head the OSCE, the world’s largest regional security organization, which is involved in election monitoring.

Glos’s comments were made after a meeting in which Masimov provided assurances that Kazakhstan, holder of about 3 percent of the world’s oil reserves, would not implement the provisions of a new law that enables the Kazakh authorities to reclaim natural resources from foreign companies.

So is Germany backing the Kazakhstani bid for 2009 or 2011? And do Masimov and Nazarbayev now intend to connect the OSCE bid with the recent strong-arming in Kashagan? The news release and Minister Glos’s comments are unclear. But these two developments at least cast new doubt on the idea that Kazakhstan will quietly back out for two years and allow Greece to head the OSCE in 2009.

Cross-posted on Global Voices Online (1, 2)

Immediately after the parliamentary elections, which were deemed undemocratic by the international monitors, the prices went crazy in Kazakhstan. The ruling party “Nur Otan”, led by president Nursultan Nazarbayev – who rules the country already for 17 years – had been building its campaign on socio-economic achievements and promises of better life for every citizen. Eventually, it won all seats in the legislature, but the very first days of triumph were marred by the unprecedented devaluation of the successes and disenchantment with the promises.

Xxrock reviews [RUS] recent official reports on the socio-economic situation, and the conclusion is not an optimistic one – the government seems to be embarrassed concerning the ways to solve the crisis:

October 10. Prices for agricultural products have increased by 10.4 per cent, comparing to 2006.
October 15. Minister of Trade Orazbakov says that the prices boom is stopped and the government fully controls the situation.
October 16. The price for vegetable oil and sugar increased two-three times. The prices for eggs, pork, macaroni and vegetables went up also.

In Karaganda, the people are shocked by uncontrollable inflation, which may also be a consequence of conspiracy between the monopolists. Gulnaz reports [RUS] from the second largest city of Kazakhstan: “It is impossible to buy sugar, salt and flour in Karaganda. People sweep these products away. Prices are still rising – and this process somehow cools down the demand. The local television channels heat up the agiotage by broadcasting rumors without any referrals to official information, while the local authorities don’t show up on TV at all. It seems like the officials don’t care about the people”. Read the full story »

Translation of an excerpt of Adam Kehser’s post on Russian-lnaguage kazakhstan.neweurasia blog

Against the background of the Kazakh banking system’s liquidity and the overall atmosphere of uncertainty in this sphere, a new bank – MasterBank – is entering the market after the financial authorities have issued a license for its activity. Some observers believe that problems in local banks can be an advantage for the new player, although the authorized capital stock is not quite correspondent to such ambitions – it barely amount to a Kazakh average provincial banks’ one.

A glance at the personality behind this bank gives an interesting food for thought. 100 per cent of the bank is owned by Igor Kim, the main stakeholder and CEO of the Russian URSA-Bank.

Kim is not a newcomer to Kazakhstan. He was born in Ushtobe (small town in Southern Kazakhstan), and in early 2000s he was believed to be connected to the so-called Korean grouping, allegedly lobbied by Nurtai Abykaev, one of the closest cronies of the incumbent president, currently – the ambassador of Kazakhstan to Russia. Kim owned 20 per cent in Bank Caspian, considered to be a banking service provider for the Korean group’s construction and metallurgy enterprises.

URSA is the largest regional bank in Russia, based in Novosibirsk. Its management underscores that MasterBank is Mr. Kim’s personal project, not linked to URSA. According to a number of Russian bankers, their penetration onto Kazakh market is rather problematic. VTB, one of the top Russian banks, in spite of repeatedly announced intentions, still has not been able to enter the Kazakh banking sector. Kim did it. If there was any protectionism mechanism or not – we don’t know, but the secrecy and speed of obtaining the license raise certain doubts.

One of the hypotheses among the local conspiracy theory fans is that the new bank was, perhaps, created in order to launder the money of higher officials and transfer the funds to Russia, whose banks are far less picky about the origin of money, than Western institutions. These observers allege that this may be taking place ahead of possible apocalyptic political cataclysms within the country in light of the looming trial over ex-adviser to the president, James Giffen.

A few people have already mentioned this, but I wanted to add a few thoughts on this as well. The sub-prime lending crisis in the US and its global repercussions hit Kazakhstan’s foreign capital dependent financial sector quite drastically. As the crisis is still looming in many parts of Western markets, this story is by no means over yet for the Central Asian snow leopoard either.

First, KZBlog ran a great story yesterday. He says that S&P has downgraded Kazakhstan to the lowest-possible investment grade, BBB-. The government is already taking steps to avoid a full-blown financial crisis:

Now the President has announced that the government may buy back shares in Kazakhstan companies. This will create an increase in demand, driving up prices and possibly allow for the government to subsidize Kazakhstan companies once they are owned by the government. A number of banks such as Kazkommerts, Halyk Bank, and Alliance Bank are listed on the London Stock Exchange, as are KazMunaiGas and KazMyz, the copper company.

Such a share purchase plan would in the end cost the taxpayer dearly, and doesn’t really seem to be a viable solution to the problem taking into account the budgetary constraints. With investment re-rating, however, comes in another option that could boost liquidity for the troubled banks: European banks, always keen to get a doorkey to Kazakh growth, might as well buy up those banks which are valued “realistically” thanks to the credit crunch.

Reuters carried a story on this topic yesterday, quoting Raiffeisen CEO Butler:

“We remain intrinsically interested in that market, although one has to recognize that it is a large country with a small population, so one would not want to overpay,” Butler said.

“There is a much more sober assessment of real value in Kazakhstan now,” he said.

neweurasia ran some posts on the instability in the banking sector previously that might provide some good background on the current situation. A more macroeconomic look at money growth is here, while this post here from February casted some light on the Kazakh banks’ over-exposure to foreign capital. More to come as the story develops.

This article was taken from the databank of one organization, which known for his grants to students. Applicants to the scholarship, according to apply conditions must contribute his opinions on the future of his native country and nation. So, read Kazakh student’s thoughts on the future of Kazakhstan. Is it so superficial? Your opinions please…

Future – the scene where the dream of humankind inhabits. We can compare it with the trunk, where our dreams are collected and where there are waiting their time to become materialized.Future is the platform, where the past meets with the present and prodding the “system” to refresh its memories with instigating new history. New history – the history of the future, is the product of the past “plus” the present and they are recognized as the main engineers of it.

The past of my country, Kazakhstan, was full up with oppressive actions executed to Kazakh people and mainly to its intelligentsia. Nation’s present was constrained by the authoritarianism, the regime which was declared as liberalistic and equalitarian by it’s architects. But in real, it was the regime of slavery and poverty for non-dominant cultures of the system. The past of my nation is the big concern on future and the main question of it was: Will it (the future) repeat the present whether will it become the sign of happiness? So, the last question was our motto to form the present we faced now as the sovereign country in Central Asia.

Our sovereign country was born from the ashes of Communism, and the anxieties disturbing our minds were still unsolved. Read the full story »

Kazakhstan.neweurasia announces launch of a new project “Ask the celebrity!”, analogous to “Ask the expert” series.

Our first guest is Zhantemir Baimukhamedov, 33, a Kazakhstani showman and musician. In 1990s he started as a leader and frontman of the Beatles-maniac band “Fridays”. Then Jantik studied diplomacy in London, and – upon comeback – returned to the business he believes is his calling. Today the “Jantik Band” is known not only across Kazakhstan, but also abroad, its concerts are scheduled for months head. His show is always a success, and his humor is very different from what the “massive” one. In a patriotic uprush, he challenged Borat Sagdiev, and now he finishes several art-house cinematographic projects. Your questions are welcomed — please, send your emails at adam@newewrasia.net until October 22!