Transcript

The Day After: President Saakashvili on Post-Revolutionary Societies: 2/1/2012 - Prepared Remarks

Jason Harmala — Wed, 01 Feb 2012 13:06:29 -0600

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Atlantic Council/USIP Event

The Day After: President Mikheil Saakashvili on Post-Revolutionary Societies & What Comes After the Arab Spring

United States Institute of Peace
February 1, 2012

Prepared Remarks

Ladies and gentlemen,

I am honored to be here today.

The Institute is indeed a remarkable institution.

It stands as a testament to the American people’s commitment to build a safer, freer, and more peaceful world.

We are only steps away from monuments that bear witness to the sacrifices the United States has made acting on that commitment — in Europe, in Asia, and in other lands.

The leadership and scholarship of the US Institute for Peace stand in that noble tradition.

I owe a special debt of gratitude to J. Robinson West, the Chairman of the Institute, and to Richard Solomon, its President.

I understand Richard has just announced that he is stepping down after 19 years of extraordinary success.

Even from as far away as Georgia, we can see clearly that Richard has built the Institute into a global leader in conflict resolution—an area that has special meaning and importance to the people of Georgia—especially for our up to 500 000 IDPs and refugees expelled from the regions illegally occupied by the Russian Federation.

I am also very grateful to Damon Wilson of the Atlantic Council—for being our moderator today and—more important—for his profound commitment to understanding my country and its Euro-Atlantic path .

Ladies and Gentlemen:

I came here to talk about the wave of revolutions, changes, and protests that the world has witnessed over the past year and is still witnessing today.

The media dubbed these movements as “the Arab Spring,” but they span far beyond the Middle East and the spring season, respecting no limits—of time, geography, or culture.

These revolutions and protests remind all of us that freedom, democracy, and accountability matter and even that they matter more than anything else.

More than cultural, political, religious or social differences, more than fake stabilities and geographic borders.

They inspire citizens from the most diverse backgrounds to unite and to undertake the bravest of actions.

They move nations and reshape the security environment.

Ladies and gentlemen,

Today, we are barely one year past that historic moment in December 2010 when an unknown Tunisian citizen named Mouhamad Bouazizi set himself on fire in the remote town of Sidi Bouzid.

Thirteen months later, we note with amazement how this isolated act of despair has changed the course of history and our perception of the world.

Tunisia’s dictator Ben Ali was toppled one month later.

The fearless crowds in Tahrir Square defeated Mubarak’s regime.

Governments from Morocco to Saudi Arabia acceded at a diverse extent to public demands for reforms.

Muammar Gaddafi and his despotic regime were overthrown.

And the protests grew well beyond the Middle East, including to the streets of Moscow, Saint Petersburg, and so many other Russian cities.

We can barely grasp all that has happened over these past 13 months, nor can we know where these diverse events will lead.

We cannot foresee which of these movements will produce Jeffersons, and which Lenins; which will lead to democracy, and which to disappointment or tyranny.

Just beyond these windows, over on the Washington Mall, disoriented tourists can turn for guidance to maps that helpfully tell them, “YOU ARE HERE.”

Unfortunately, on this side of Constitution Avenue, where diplomats and scholars try to anticipate the flow of world events, there are no such markers.

Yet, even without a clear map, we can turn for guidance to a series of events that shared several common elements— from the velvet revolutions of the late 80s to the color revolutions of the early 2000s, including the one in my own country that CNN graciously baptized the Rose Revolution.

My dear friends,

Georgia’s experience does not provide a transferable model for the many countries that have known or will sooner or later know pro-democracy uprisings.

There was no “freedom textbook” for us, and there is no textbook for our friends in Tunisia, Libya, or elsewhere.

But, by reflecting on our own post-revolutionary experiences, we might well gain a better appreciation of the diverse challenges these societies in transition face.

Our own peaceful, popular revolution in 2003 brought to power a team of young people who wanted to change the fate of their country and whom I was privileged to lead.

Obviously, we had no clear answers for how to fix a country that turned out to be in even worse shape than we had thought.

In 2003, Georgia was an utterly failed state.

We found the treasury was literally empty and we had no ability to fund basic public services.

Electricity was sporadic and in short supply.

Corruption was the country’s leading industry and strongest institution.

Policemen were not paid and— - in order to finance their salaries - —they were expected to extort the public.

Regional warlords held more power than public officials.

Crime was literally at every corner of every street.

The educational system was crippled by corruption and aimed only to protect the privileges of a small elite.

To top it all off, we lived in a dangerous neighborhood, with an increasingly revisionist Russian Federation at our door.

Aware that half-mesures would be useless and that our windows for reforms would be small, we adopted a whole-of-government approach, seeking to radically transform multiple institutions simultaneously.

All at once, we undertook to change the police, the tax collection, the customs, the security services, the energy sector, and the education system.

Our overarching priority was a full frontal assault against corruption.

Corruption was a virus that had infected all of our institutions, rotting and crippling them.

Corruption was also the main focus of public anger.

Just yesterday, the World Bank issued a major new study—entitled “Fighting Corruption in Public Services-Chronicling Georgia's Reforms”—which details what our government did to fight corruption, and how Georgia's experience might inform anti-corruption efforts in other countries.

There are summaries of this study outside this hall, but let me quote to you what is perhaps the most heartening observation that the World Bank made: “Georgia’s success destroys the myth that corruption is cultural and gives hope to reformers everywhere who aspire to clean up their public services.”

The cliché that some cultures, people, or regions are inherently corrupt or allergic to transparency has been proven absolutely wrong in my country.

In one blow, we fired 16,000 traffic police, who had turned Georgia’s streets into boulevards of extortion, and gradually replaced them with a much smaller, professional, well-trained force that is today one of Georgia’s most respected institutions.

We fired corrupt tax collectors, hired young ones, simplified the tax system, and began applying our tax laws equitably. By doing so, we multiplied our tax revenues, which allowed us to begin providing real public services.

We created a single, nationwide, computer-scored, merit-based admissions test for university, to end a decades-long practice that made bribes the key entry qualification—the going rate had started at about $8,000, more than the average Georgian’s annual income.

Our ambition was clear: to give people the sense that they own their State.

And it could not succeed without a whole of society approach.

Any change of governance has to be accompanied by a radical social transformation in order to be efficient and sustainable.

Soviet Union and post-soviet regimes, like all authoritarian systems, based their survival by nurturing the divisions of the society.

People were artificially opposed to each other at every level and in every field. The different religious, social, and ethnic groups were made to be constant rivals, and politics was understood as an art of manipulation, fear, and hatred.

So our first task was to embrace multiculturalism and differences. We developed an affirmative action program that covered all spheres, from higher education to law enforcement bodies.

This approach is not always popular among certain social institutions, but we are determined to keep making it a core priority of our action.

Because at stake is the democratic identity of our nation.

Last year – unfortunately against the will of almost all political parties and NGOs - we passed a law that grants legal status to all faith communities in Georgia.

The Soviet Union and the post-soviet regimes had another characteristic—absolute centralization.

So we initiated a vast decentralization program, invested in regional development infrastructure, and spectacularly empowered local authorities.

As a result, regions that were once abandoned became the most striking examples of our development.

And people feel everywhere that they have a stake in their country’s fate. Not only dozens of thousands of privileged citizens in downtown Tbilisi.

Ladies and gentlemen,

The main achievement of the last 8 years—the key to all the other successes—was not so much a function of the Government but of the Georgian people themselves: Our institutional revolution was enabled by the “mental revolution” that took place in our country.

Only a mental revolution could lead to the Western transformation of our society.

Today, Georgians have totally changed the way they think—of themselves, of their prerogatives, of their responsibilities, and of their relationship to society and government.

Of course, many of our reforms have not produced the results we had hoped to achieve and we are still very much a work in progress.

But nobody can reverse or suppress the transformation that happened in Georgia. Neither us nor anybody else.

Ladies and gentlemen,

If I had to sum up the lessons I can draw from our own experience and share with our friends elsewhere, I would quote the following points:

1 - No matter how beautiful and moving popular uprisings are, the real revolution occurs after the cameras from CNN and BBC and Al Jazeera have left the country.
It consists in the long and difficult process of reform that follows.
2 - only a whole-of-government and whole-of-society approach to reform can bring tangible, enduring results.
The reforms of the judiciary, police, tax collection, customs, political class, electoral code, and education system should not be implemented individually, but as part of a complete project of social transformation.
If even one of these areas is left untouched, then the virus of cynicism will undermine the credibility of the entire effort.
3 - You need to put your popularity at risk right away.
When you attack interest groups, they bite back—and you will face difficult times.
We had our share of demonstrations and opposition; I had to resign before the end of my first term in order to win a new popular mandate to keep up the path of reforms.
But when you are carried to power by popular uprising, the greatest risk you face is your own inaction—the temptation to temporize in order to enjoy your original popularity.
After a revolution, people feel empowered and impatient. They want quick results. And once they become disillusioned and cynical, you have lost the opportunity for change.
4 – Because, in order to succeed, you need the people to be an active part of your reforms.
The citizens, after all, are the real motor of the transformation.
Woodrow Wilson had it right when he said: “Liberty has never come from Government. Liberty has always come from the subjects of it.”.
5—and critically important: The fight is never finished.
In Georgia, the biggest mistake we could make would be to contemplate our rankings by international organizations or read the World Bank book, feel smug about our successes, and conclude that we made it once and for all.
It would undermine all of our achievements. And it is why the reforms should never stop.
Governing is a process of constant learning, questioning, adaptation, and change. This is what every authoritarian regime always fails to understand.
We will not make this mistake in Georgia.

My dear Friends

Revolutions are fought and won by the citizens of these countries.

But all of us in the international community should do what we can to help.

In Georgia’s case, a wide range of international think tanks and NGOs, education programs or scholarships, helped sow the seeds of our revolution.

Ever since, we have done what we can to provide advice and assistance to those in other countries who are trying to forge a similar path, just as we have benefited greatly from the experience of others, especially NDI and IRI, which have shown such profound dedication to Georgia—and which continue to show vision and courage in other parts of the world, as we see today in Egypt.

We might have disagreements sometimes, but I want to ensure NDI, IRI and all the major actors of the democracy community of this town, the vibrant heart of Washington, that Georgia will always be like their home.

We know too much what we owe to their commitment and their dedication to freedom.

And, at a time when many major powers are struggling with sluggish economies and government deficits, when there is an understandable temptation to cut back on supporting such activities, I would like to remind what a high value investment the support for democracy is.

The movement toward democracy does not solve every problem or enhance security in every case. But on balance we will all be more secure with fewer dictatorships and more democracies.

When aspiring populations are free to live their lives, practice their trades, raise their children, voice their ideas, and press their grievances, the space shrinks for the kinds of leaders who sow ethnic hatreds, harbor terrorists, or wage aggression.

Ladies and gentlemen,

We can compare the sudden upheavals of 2011 and the ongoing protests to what Nassim Nicholas Taleb has called Black Swans—improbable, high-impact events which amaze us as outliers when they appear, yet in retrospect seem obvious or inevitable.

They take us by surprise and force us to recalculate our sense of the possible.

They are redefining the international arena, redistributing the cards between regional and global players.

Seen from our part of the world, two radically different attitudes emerge, embodied by two specific regional powers.

On the one hand, the Russian Federation reacted with panic and outrage to the Arab Spring and tries everything it can to prevent any international support to the democracy movement, anywhere.

On the other, Turkey asserts itself as a role model for the post-revolutionary countries and the main friend of freedom lovers from the muslim world.

On the one hand, the government of PM Putin that desperately tries to halt the progress of History.

On the other, the administration of PM Erdogan that decided to embrace the evolutions of the world.

And it is not a coincidence if Russian influence is decreasing while Turkish leadership is growing everyday.

This is a lesson and a message of hope: there is no future for global powers playing against the will of the people.

Ladies and gentlemen:

As most of you know it, on Monday, I had the honor to meet President Obama in the Oval Office.

I was impressed by his vision and his knowledge of the dynamics of my region.

Of course, I was pleased to hear him telling the media that Georgia had become “the role model of democracy and transparency” in the region and praising the institution building that has taken place.

These were humbling words to hear, and I am grateful to President Obama for his unwavering support.

But we could never have achieved so much without the United States, its leadership, its diplomacy and its NGOs.

On Monday, President Obama vowed deeper and continued engagement—in pursuing a free trade agreement, in shoring up our defense capabilities, and in pushing us forward on our path to NATO membership.

These kinds of commitments make our democracy safer and also explain why America is – and will remain - the indispensable leader of the free world.

As I stressed to President Obama, we are determined in return to be a security contributor to the Western community of nations we aspire to join, not just a security consumer.

That is why we have deployed over a thousand our soldiers fighting in the dangerous Helmand Province, including 12 who bravely paid with their lives; and we will nearly double our troop commitment in the coming months.

This is not easy for my country. It is not easy for any country. It is simply necessary.

But – and I will finish with this - the main message I wanted to carry with me to Washington is this one: there is no such thing as American decline.

Despite the economic problems and the doubts about the future, 2011 has shown that the very values on which America is based are on the rise.

People all around the world are ready to risk their lives for these values. This is a fantastic message of hope and this is what really matters at the end of the day.

It means that authoritarian models might look strong and present impressive growth rates but they propose no credible and universal alternative.

It was a mistake to proclaim the End of History after the Fall of the Berlin Wall and to think that the progress of liberal democratic values in the world would not be challenged anymore.

Let’s not make the opposite mistake now.

Let’s not give in to pessimism, depression or relativism.

Let’s not overlook the universal call for freedom that we are witnessing in the most diverse parts of our world.

Because in this call lies the true motor and the true meaning of History.

Thank you,

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Blake Prepared Remarks

Jason Harmala — Tue, 31 Jan 2012 21:30:26 -0600

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Remarks for the Atlantic Council Conference on Twenty Years of Kazakhstan's Independence and U.S.-Diplomatic Relations

Robert O. Blake, Jr.
Assistant Secretary, Bureau of South and Central Asian Affairs
Washington, DC
January 31, 2012

It is an honor and a pleasure to join you today for this discussion and celebration of Kazakhstan’s twentieth anniversary of independence and the wide-ranging and deep cooperation between the United States and Kazakhstan.

The United States and Kazakhstan have enjoyed twenty years of dynamic and growing partnership. We have worked closely and cooperatively together, starting on December 25, 1991 when then-Secretary of State James Baker visited Almaty to meet with President Nazarbayev and establish diplomatic relations between our countries.

Twenty years later, we have accomplished much, but see great scope to do more. When they meet tomorrow, Secretary Clinton and Foreign Minister Kazykhanov will discuss how our two nations can strengthen further our strategic partnership in the years to come.

Cooperation on Nuclear Nonproliferation and Energy

Many people feared in the collapse of the Soviet Union the potential for a new and increasingly dangerous era that could have triggered a wave of nuclear weapons proliferation, creating untold dangers, instability, and risks.

Thanks in part to our close cooperation that did not happen. Key to this outcome was President Nazarbayev’s firm decision to make Kazakhstan the first country voluntarily to relinquish nuclear weapons and protect stockpiles of other dangerous materials. Not only did Kazakhstan transfer those weapons out of Kazakhstan in a responsible way, but it ratified the Nuclear Non-Proliferation Treaty.

Since then, we have worked to reduce other risks of nuclear proliferation, including helping decommission the Soviet-era nuclear reactor in Aktau that produced weapons-grade plutonium, and moving tons of spent fuel, which could easily be used to produce nuclear weapons, to secure, long-term storage.

Today Kazakhstan remains a key player in non-proliferation cooperation as it meets the challenges of the 21st century, both bilaterally with the United States and increasingly multilaterally.

It serves as a model to the world of how a country can gain -- not lose -- security as a result of ridding itself of nuclear weapons.

Energy is another important building block of our bilateral relationship. As the Soviet Union began to dissolve, U.S. energy companies took what, at the time, was an economic and political risk by investing in oil and gas development in Kazakhstan. The risk paid off, producing a partnership between a stable, responsible government and international energy firms with the necessary capital and expertise to help unlock Kazakhstan’s energy resources.

Early Reforms Spur Economic Growth and Investment

Again, President Nazarbayev recognized the challenge and opportunities for his young country and initiated macro-economic reforms that set the country firmly on the path toward a market economy. The decision was not an easy one, and the country went through a painful period of adjustment in the 1990s. However, these reforms created what is today one of the strongest economies in the former Soviet Union.

The Kazakhstani government’s wise decision to create a National Oil Fund has served to protect the country against the effects of the financial crisis and to help ensure oil revenues are invested for the future of Kazakhstan’s people.

To further diversify its economy and stimulate further economic reforms, Kazakhstan soon hopes to join the World Trade Organization and recently announced it will adhere to the principles of the Organization for Economic Cooperation and Development’s (OECD) Declaration on International Investments and Multinational Enterprises.

WTO accession and participation in the OECD will help and encourage Kazakhstan to make the structural changes necessary for it to take advantage of regional and global integration efforts, and to spur its own domestic output and exports.

The Bolashak Generation

The academic success of these young Kazakhstanis and Kazakhstan’s growing economic and regional weight made it of interest to American universities. It was no surprise, then, that the newly established Nazarbayev University in Astana has partnered with top- tier international universities, including Duke, Rensselaer and other U.S. institutions, to provide students in Kazakhstan with education that meets international standards.

The close partnership that both Nazarbayev University and the Kazakhstan Institute of Management have with top-ranked U.S. universities as well as with two Department of Energy national laboratories speaks volumes about the robust nature of the ongoing cooperation and government focus on investment in education and the development of Kazakhstan’s youth. The planned opening of a Carnegie International Institute for Peace program at Al Farabi University represents yet another example of advanced scholarly cooperation.

The United States has been fully supportive of Kazakhstan’s commitment to international education. We are pleased to host Kazakhstani students at our many excellent colleges and universities, and we look forward to Kazakhstan’s continued considerable investment in international education to complement the large investment we have made through our own professional and educational exchange programs, such as the Fulbright, Muskie, Future Leaders, and International Visitor Leadership programs.

A focus on education, technology, and innovation continues to be a priority in Kazakhstan. Kazakhstan was the first country in Central Asia to sign a bilateral science and technology agreement with the United States. Our bilateral science working group held its first meeting in 2011, and is now developing ideas for cooperation.

Kazakhstan Emerges as Leader in International Community

Progress on education and innovation are part of Kazakhstan’s welcome efforts to position itself as a leader in the international community. Kazakhstan has assumed a much more prominent role on the world stage as the 2010 Chairman-in-Office of the Organization for Security and Cooperation in Europe and the Chair in 2011 of the Organization of Islamic Cooperation.

Kazakhstan increasingly is assuming an important role as a donor with considerable assets and expertise. It made a very significant contribution to stabilizing Iraq by sending troops to assist the coalition’s efforts with demining. Today, Kazakhstan is supporting ISAF in Afghanistan by facilitating ground transportation and over-flights. It is also contributing to U.S. and international efforts to stabilize and rebuild Afghanistan through its investment of $50 million dollars to educate in Kazakhstani universities Afghanistan’s next generation of leaders.

Additionally, last October, Kazakhstan delivered over 5,000 tons of food and other supplies to Turkey after the devastating earthquake in that country. We look forward to working with Kazakhstan as it develops its work through KazAID and other mechanisms.

At the Istanbul Conference last November, Foreign Minister Kazykhanov affirmed Kazakhstan’s commitment to improving regional cooperation, especially in support of Afghanistan’s stability. Regional leaders agreed on a set of ambitious confidence building measures and a process of regular consultation to ensure implementation.

At Istanbul, Kazakhstan also took a lead in supporting the New Silk Road vision, with projects such as constructing the Central Asia Regional Economic Cooperation transportation corridor across Kazakhstan that will link China with Europe, and a north-south highway linking Central and South Asia.

We welcome Kazakhstan’s ratification of an agreement with the Asian Development Bank January 16 to finance reconstruction of 790 kilometers of the CAREC transportation network that will connect Kazakhstan with its Central Asian neighbors, Russia, Azerbaijan, and Turkey, across the Caspian Sea.

Such transport and other networks will help spur the trade and investment that can catalyze the regional integration everyone agrees will be essential to helping Afghanistan move to a trade -- rather than aid -- based economy and expand opportunities for the citizens of Central Asia.

Political Reform

Despite’s Kazakhstan’s undeniable progress over the last 20 years, there remain important steps that must be taken to fully ensure Kazakhstan’s long-term stability and prosperity. President Nazarbayev has often spoken about the three goals he set for the country when Kazakhstan became independent: to build a truly sovereign and independent state, to jump start the economy, and to liberalize the political system.

At the OSCE Ministerial in Vilnius December 6, Secretary Clinton stated that even as the United States seeks cooperation with Kazakhstan and other Central Asian nations on Afghanistan, energy, and trade, we will continue to encourage our Central Asian partners, both governments and civil society, to pursue democratic reforms and improve respect for fundamental human rights.

We believe a prosperous, peaceful future for Kazakhstan – and an increasingly deep bilateral relationship between our two countries – will benefit from meaningful progress to institutionalize democracy and ensure respect for the human rights of all Kazakhstan’s citizens.

A more open and dynamic political system would reflect the maturity of the country, and provide the institutional basis for long-term stability, predictability, and development that the people of Kazakhstan deserve.

We hope that Kazakhstan’s newly-elected multi-party Mazhilis will shape a legislative process that reflects the needs and desires of all Kazakhstani people. Through transparency, lively debates, and public hearings, the Mazhilis can take bigger steps toward political openness by considering the opinions of all political factions and segments of society. Respect for freedoms of expression, association assembly, and religious belief is necessary to undergird social dialogue and vibrant democratic as well as economic development.

We also hear and support important voices from within and outside of the government of Kazakhstan calling for greater independence of the media and the judiciary, space for civil society to operate without undue hindrance, and an electoral system and laws to ensure fair elections that fully meet international standards.

President Nazarbayev has the opportunity today to demonstrate the same far sighted leadership to build democracy that he showed in renouncing nuclear weapons and initiating market reforms. The people of Kazakhstan will be the first beneficiaries, but Kazakhstan would also be a powerful example for the wider region.

Conclusion

In conclusion, over the past twenty years, the United States and Kazakhstan have developed a genuine and increasingly strategic partnership. President Obama and President Nazarbayev reaffirmed that strategic partnership in April 2010, declaring our two nations’ commitment to a shared vision of stability, prosperity and democratic reform in Central Asia and the broader region. A partnership is an ongoing process. I am confident that our foundation is solid, prospects are bright, and that it will continue far into the future.

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Poneman Prepared Remarks

Jason Harmala — Tue, 31 Jan 2012 21:08:35 -0600

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U.S. Deputy Secretary of Energy Daniel Poneman

Atlantic Council Conference on the 20^th Anniversary of Kazakhstan’s Independence

Ritz-Carlton in Washington, DC

January 31, 2012

Remarks as prepared for delivery

Thank you, Ambassador Wilson, for the kind introduction. Thanks also to you and your colleagues at the Atlantic Council for organizing today’s conference. I appreciate this opportunity to join Minister Kazykhanov and Ambassador Idrissov to celebrate the 20^th anniversary of Kazakhstan’s independence. It is an honor to share the room today with so many of the distinguished leaders from both Kazakhstan and the United States who have contributed to the partnership our two countries enjoy today.

Choosing a Future Free of Nuclear Weapons

Not every generation has the opportunity to build a new nation. Twenty years ago, that opportunity came to the people of Kazakhstan. With the end of the Soviet Union, the world turned its attention to a set of concerns about what would happen when one of the two global nuclear superpowers ceased to exist. Now that we know what happened, it is all too easy to forget the danger that we faced.

In his final address as President of the Union of Soviet Socialist Republics, Mikhail Gorbachev said, “The threat of nuclear war has been removed.” But that was not exactly true, and the truth was not so simple. With the Soviet Union’s nuclear weapons, expertise, and facilities scattered among the newly independent, former Soviet Republics, we faced the prospect of not one but four nuclear weapons states.

At such moments in history, difficult choices must be made and decisions must be taken. One has to follow one’s principles and one’s conscience. President Nazarbayev took that opportunity – having inherited more than 1,400 nuclear weapons – and turned toward peace. He decided to relinquish those weapons, to shut down the Semipalatinsk test site, and to end nuclear testing in Kazakhstan.

Last October, along with many others in the room, I had the opportunity to travel to Kazakhstan and visit ground zero at Semipalatinsk to commemorate that historic moment. That decision for peace -- that decision for nonproliferation of nuclear weapons -- has rightly earned Kazakhstan international respect and established a pathway forward for the rapid development of the nation.

As Kazakhstan progresses down that pathway, we at the United States Energy Department are committed to building on two decades of mutually-beneficial cooperation across a broad range of shared strategic interests – from nuclear security and nonproliferation to Kazakhstan’s energy production and economic diversification.

In 2001, former Secretary of State Colin Powell and Ambassador Idrissov convened the first meeting of the United States-Kazakhstan Energy Partnership. It is now my honor to share the chairmanship of this Energy Partnership with Kazakhstan’s Minister of Oil and Gas, Sauat Mynbayev.

I am proud to report that this Partnership has enabled remarkable progress on many issues of strategic importance to each of our nations. Today, I will focus on a few key areas of that cooperation that give ample reason to believe that progress will only gain momentum.

Cooperating to Promote Nuclear Security and Nonproliferation

Given Kazakhstan’s prominent role as a supplier of uranium for nuclear power plants, as well as the large nuclear weapons infrastructure it inherited after the breakup of the Soviet Union, nuclear security and nonproliferation are bedrock issues of our partnership. In the 20 years since President Nazarbayev’s dramatic decision, the United States of America and the Republic of Kazakhstan have worked closely together to achieve our shared nuclear security and nonproliferation goals.

These efforts have included a comprehensive campaign to safely shut down the BN-350 reactor and secure 775 nuclear weapons worth of used fuel at the facility. They have included projects through the International Science and Technology Center to engage former Kazakh weapons scientists in peaceful pursuits, and so to prevent the spread of expertise in nuclear weapons development and production.

Most recently, these efforts resulted in a milestone achievement in our work to eliminate the remaining stocks of highly-enriched uranium in Kazakhstan. Our two nations partnered with the International Atomic Energy Agency to blend down 33 kilograms of highly enriched uranium from the Kazakh Institute of Nuclear Physics in Almaty. The resulting low-enriched uranium cannot be redirected for use in nuclear weapons. Instead, it will be returned to the Institute for future scientific work that will support the safe, secure and peaceful use of nuclear energy.

And together, Kazakhstan and the United States can continue to work to realize the ultimate vision that President Nazarbayev and President Obama share – the vision of a world without nuclear weapons.

Developing Energy Resources to Fuel Global Growth

Just as Kazakhstan has been a global leader on nuclear issues, so too can the country play an expanded role in promoting energy security and fueling global growth.

The country has been endowed with prodigious natural resources, including some of the world’s most impressive oil and natural gas fields. The rapid growth of hydrocarbon production in Kazakhstan since the country’s independence is largely a result of cooperation between the Government of Kazakhstan and international oil companies.

Within the framework of the U.S.-Kazakhstan Energy Partnership, we have worked together to promote this kind of public-private cooperation. Many of America’s largest private companies have made significant investments in the production and transit of oil and gas in Kazakhstan. In turn, these investments have enabled some of the largest and most technically-challenging oil production projects anywhere in the world, at places like Tengiz, Karachaganak, and Kashagan. They have also generated significant employment opportunities for the Kazakhstani people.

And yet we have only just begun to get a sense for Kazakhstan’s importance to global energy markets and energy security. Kazakhstan has tremendous potential to develop further its hydrocarbon resources. In the coming years, the country can play an important role in helping to meet the world’s increased demand for energy. Full development of its major oilfields could make Kazakhstan one of the world's top five oil producers within the next decade.

However, that outcome is not a foregone conclusion. Many of Kazakhstan’s oil and gas fields present engineering challenges that require significant investments in capital, technology and expertise. Our two nations can and should continue to work together to promote safe and effective development of these resources in the years ahead.

Investing in a 21st Century Diversified Economy

At stake is much more than efficient extraction or even the monetary wealth it provides. As the first twenty years of Kazakhstan independence have shown, investing wisely in energy production can also provide the Kazakhstani people with an important source of employment, as well as revenues that can in turn be reinvested in other sectors to help diversify the economy.

For example, oil and gas revenues were central to the creation of the country’s sovereign wealth fund, Samruk-Kazyna. During the financial crisis, this fund in turn provided a critical source of strategic support for the nation’s financial system, enabling Kazakhstan to avoid recession and to emerge quickly from the worldwide downturn.

Since achieving independence, Kazakhstan has pursued macroeconomic reforms that have attracted substantial international investment in new or expanded industries like mining, chemical production, and agriculture. Kazakhstan has demonstrated its ability to develop strong economic opportunities for investors, and we look forward to seeing new areas for potential investment expand over the next few years – both inside and outside of the energy sector.

Oil and natural gas are not Kazakhstan’s only energy resources. The nation’s geography and landscape also provides it with great potential for renewable electricity generation from solar and wind power. We are encouraged by Kazakhstan’s interest in working with private sector companies to develop wind energy infrastructure.

Through the U.S.-Kazakhstan Energy Partnership, we are engaged in efforts to train the workers and engineers who are pioneering clean energy and energy efficiency technologies in Kazakhstan. This sort of expert-to-expert collaboration between our academic institutions and laboratories is equal in importance to the formal cooperation that occurs at levels high within our respective governments.

Just as it is liberalizing its economy, we continue to hope that the Government of Kazakhstan also follows through on its stated goal of strengthening the overall conditions necessary for genuine political pluralism. As we look to the future, we want to deepen the engagement of our civil societies and private sectors in trade and investment, science and technology, education, the arts, and much more.

By wisely developing its natural resources, a strong, prosperous and democratic Kazakhstan can energize the global transmission of learning, trade and freedom across the steppes of Central Asia.

We congratulate Kazakhstan on this momentous anniversary of its independence and we look forward to continuing to work with Kazakhstan in the pursuit of nuclear nonproliferation, regional energy security, and prosperity in the years to come.

Thank you.

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Final Session

Jason Harmala — Tue, 31 Jan 2012 12:22:12 -0600

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The Atlantic Council of the United States

Twenty Years of Kazakhstan Independence

Session III: U.S.-Kazakhstan Relations

Chair:
Sean Roberts

Speakers:
Kenneth Derr,
Former Chairman and CEO, Chevron

Bolat Nurgaliev,
Special Representative of the OSCE Chairperson
for Protracted Conflicts and
Former Kazakh Ambassador to the United States

Jackson McDonald,
Vice President of Jefferson Waterman International and
First Interim U.S. Chargé d’affaires for the Republic of Kazakhstan

Richard Jones,
Deputy Executive Director,
International Energy Agency

Richard Morningstar,
Special Envoy of the US Secretary of State for Eurasian Energy,
U.S. Department of State

Ariel Cohen
Senior Research Fellow,
The Heritage Foundation

Location: Washington, D.C.

Date: Tuesday, January 31, 2012

Transcript by
Federal News Service
Washington, D.C.

SEAN ROBERTS: (Welcome, everyone, to our final panel of the day, last but not least – we have quite a large and prestigious panel.

And we’re going to start first with a – some keynote words from Kenneth Derr, former chairman and CEO of Chevron and honorary consul of Kazakhstan in San Francisco. And, as we heard earlier today, he’s been involved in Kazakhstan even before it became an independent country, and he was instrumental in a lot of Chevron’s early work in the country. So with no further ado, I’ll –

KENNETH DERR: Well, thank you, Sean, for your introduction. I also want to congratulate Chuck Hagel and Ross Wilson and the council for having recently been ranked as one of the top think tanks by the University of Pennsylvania. And after attending the session this morning, I think I understand why you got that very high rating.

I think it’s important that we are here celebrating the 20th anniversary of Kazakhstan. There’s certainly a lot to celebrate. And as one of those who was involved in Kazakhstan in those early years, it is a celebration to see what the country has – see what has occurred in the country over those past 20 years.

Under President Nazarbayev’s extraordinary leadership, Kazakhstan is now independent, secure and extremely prosperous. Its independence and security are clear in all of its dimensions of statehood. Its political development is evident in the multiparty parliamentary elections held two weeks ago. And finally, its prosperity can be measured in a number of ways: As mentioned this morning, GDP per capita of 11,000 compared to 5,000 in the year 2000, a GDP growth rate at 7 ½ percent, and I think a hundred – over $120 billion in direct foreign investment speaks for itself.

As recognized in a lot of the panels this morning, Kazakhstan’s achievements have not just been felt by its own people, but are manifested on a wider regional and global stage. As we’ve heard a lot about, it took early actions to show to the whole world the advantage of becoming a non-nuclear weapons state.

This panel this afternoon will try to pull together the past and future themes of the previous panels and consider the evolution and future of U.S.-Kazakhstan relations during a tumultuous period in world history. A few broad points can perhaps set the framework for the discussion.

First, I think we should recognize that the national achievement that we’ve all mentioned were by no means coincidence or certainly self-evident 20 years ago. They’re a function of farsighted leadership by the president and a highly capable team of government, industry and education. They’re also the result of President Nazarbayev’s ability to forge strong relations with countries throughout the world.

The second point is Kazakhstan’s use of the revenue from its natural resources. They’re blessed, as we’ve heard, with vast oil, gas, mineral and other resources. They could have experienced this so-called oil curse that has visited other countries, or it could’ve chosen to develop and reinvest these resources for the broader national good. Wisely, it made the second choice. And the consequence is a plan to diversify its economy to make it one of the most competitive in the world and to create – or already has created – a national fund, which is now over $40 billion, to help it weather future economic storms and provide for future generations.

The third point is partnership. Achieving results with partners is the theme of President Nazarbayev’s introductory message in the publication “Kazakhstan: 20 Years of Peace and Creation.” He recognized that Kazakhstan needed a participation to help his new country develop its vast oil and gas resources. And he also recognized that a strong U.S.-Kazakh relationship would be important to this new country.

In 1993, in Almaty, President Nazarbayev and I signed the documents forming Tengizchevroil, a partnership to develop the huge Tengiz oil field in Kazakhstan. This had been discussed and negotiations had gone on initially with the former Soviet Union. This oil field had been discovered, actually, in the 1980s by the Soviets. And as an aside, they weren’t too happy when they lost their biggest new oil field at the breakup of the Soviet Union and Kazakhstan got Tengiz. Perhaps that may indicate a little bit why their cooperation level in the early days was quite low.

This signing that – in 1993 took place after several long and difficult years of negotiations directly with the Kazakhs. The signing received a lot of worldwide publicity. Many questioned why Chevron was willing to commit large sums of capital investment to this new country. Many questioned why Kazakhstan needed to bring in outside partners to develop its natural resources.

The U.S. government was a strong supporter of this agreement. Both Presidents Bush 41 and Clinton personally supported and gave a lot of strength to the joint venture. General Scowcroft, as he indicated this morning, was also very helpful. I think it was clear the U.S. government recognized the importance of developing new oil supplies outside the Middle East, and the importance of increased oil production to the economic growth of Kazakhstan was clearly recognized by all.

In 1993, when Chevron became a partner, the production at Tengiz was 30,000 barrels per day. Transportation, logistics were difficult. The venture had very, very hard times in those first few years, operating in the red. But we all stuck with it. We developed shipping alternates, actually shipping a lot of the oil as far as Finland by rail car. I think we cornered the rail car market for the entire Eurasia-Western Europe. But that did allow us to expand production.

Finally, after many long years of negotiations, a Caspian pipeline was approved and built through Russia to the Black Sea coming onstream early 2000. This allowed production to expand. Today, production at Tengiz is over 650,000 barrels, an over 20-fold increase from the early days from 1993.

The pipeline will be expanded over the next few years to a million and a half – more than double its current capacity, which will allow further expansions of Tengiz, hopefully at some point in time, up to a million barrels a day, which – we used to quote when we signed the original deal that ultimately this field would produce a million barrels a day. I hope we are correct and I think we will be.

I think now Tengizchevroil stands out as one of the oil industry’s most successful public-private partnerships anywhere in the world. And to the credit of all parties involved, the joint venture follows basically the same contractual terms today that were laid out in 1993.

Fourth point is to recognize that it’s not just about resources, but about the wider economy and communities, and above all, as many people referred to this morning, the people of Kazakhstan. As part of the diversification program, just one small example: Chevron, after much pounding on the backs of its former chairmen, decided to build a petrochemical plant in Atyrau to manufacture polyethylene and metal-plastic bonded pipes. This plant now is a great success, 100 percent run by Kazakhstan employees.

Resources can be used to help develop communities. Tengizchevroil, for example, spend over $10 billion on Kazakhstani goods and service since 2005 and has invested over $650 million to benefit the inhabitants of the Atyrau province.

Here again, at TCO, it has been predominantly run and managed by Kazakhstan personnel. Seventy-six percent of the managers and supervisors are Kazakhs; 85 percent of the total employees are Kazakhs. And of particular note is the safety culture that has grown up with TCO, where workers and operators are delivering world-class performance, protecting the people and the environment of Kazakhstan. TCO has been one of the best safety records of any part of the Chevron family in recent years.

All these things that I’ve just outlined happened as a result of that first original partnership.

As I said at the beginning, we should all celebrate the 20th anniversary of Kazakhstan. When the U.S. was the first country to recognize this new country less than two weeks after it declared independence, it forged a partnership that has remained strong for these 20 years and, I’m sure, will continue well into the future. When Chevron formed TCO with the government in 1993, it set the stage for economic growth in the country, growth that I’m sure will follow indefinitely.

There have been challenges – there will be challenges ahead. But I’m confident that Kazakhstan will meet them. In fact, President Nazarbayev recognized these challenges in his state of the nation address last week when he set forth an ambitious 10-point program for Kazakhstan’s development.

In closing, I had the good fortune last December 16th, your anniversary day of – the 20th anniversary day, to – acting as Kazakhstan’s honorary consul general in San Francisco – to go out to City Hall and fly the Kazakh flag. This is a tradition that the city of San Francisco has. On your – on your national day, the consul general can go out, raise the flag.

And as it – (inaudible) – as it was there next to the American flag and I took a look at it, I couldn’t help but feel proud of what had been accomplished between these two countries in the last 20 years, and a little bit of feeling that maybe I was just a small piece of this historic partnership. Thank you very much. (Applause.)

MR. ROBERTS: Thank you very much. That’s a good way to begin this panel, which is focused on U.S.-Kazakhstan relations. And I hope we’ll get into the past, present and future of those relations.

And I couldn’t have a better panel to do that with. We have five people who were – who have been very much involved in U.S.-Kazakhstan relations over the years. And I’ll introduce them in the order that we’ll hear them speak.

First, Honorable Richard Morningstar, who is the special envoy for Eurasian energy at the U.S. Department of State, and is a former ambassador-at-large and special adviser to the president and the secretary of state on assistance for the newly independent states of the former Soviet Union.

Secondly, we have the Honorable Bolat Nurgaliev, who has an illustrious diplomatic career that goes back to the Soviet foreign ministry and has extended into the foreign ministry of the Republic of Kazakhstan. He has been an ambassador to the U.S. and ambassador to South Korea and Japan. And he’s also worked in the capacity as secretary-general of the Shanghai Cooperation Organization and presently works as the special representative of the OSCE chairperson in office for protracted conflicts.

Following Ambassador Nurgaliev, we will hear from the Honorable Jackson McDonald, vice president of Jefferson Waterman International and former U.S. ambassador to The Gambia and Guinea, and the first interim U.S. chargé d’affaires for the Republic of Kazakhstan. So he will help us learn more about those early days of U.S. presence, diplomatic presence in Kazakhstan.

And following that, we’ll hear from the Honorable Richard Jones, presently deputy executive director for the International Energy Agency and former U.S. ambassador to the Republic of Kazakhstan in a slightly later period.

And finally, we will hear from Dr. Ariel Cohen. We’ll hear the analyst’s voice. Dr. Cohen is a senior research fellow at the Kathryn and Shelby Cullom Davis Institute for International Studies at The Heritage Foundation. And he has – he’s a very prolific writer and has written quite a bit about Eurasia, and in particular energy issues in Eurasia, and I’m sure we’ll hear much about that today.

So with that, if we could start with words from Ambassador Morningstar.

AMBASSADOR RICHARD MORNINGSTAR: Thank you very much. And Ambassador Idrissov, Minister Omarov (ph), Ambassador Nurgaliev, it’s good to see – good to see all of you. I have many fond memories of my visits to Kazakhstan and experiences with Kazakhstan. I will take the liberty of maybe telling you a couple of the more humorous ones.

When – I first came into the government in 1993, and I was at OPIC – the Overseas Private Investment Corporation. And the first trip that I took as part of the U.S. government was when I led a business delegation to Kazakhstan in September of 1993. And this was very exciting for me – you know, the very first trip. And we – it was long. We, I guess, must have gone through Frankfurt and then flew to Almaty, which, needless to say, is – has to be one of the most beautiful cities in the world. I mean, I couldn’t believe the mountains coming out of the city and all of that.

But it was about – oh, God, I don’t know what it was U.S. time when we finally got there. But Bill Courtney, who was our ambassador then, picked me up. And I was really excited; I didn’t know many ambassadors at that time. So, you know, Bill picked us up at the airport. And he said, you’re not going to believe what we’re going to do tonight. And I said, what’s that? And he said, we’re going to the Miss Kazakhstan contest. (Laughter.) And – I swear. And Bill said that he was a judge. (Laughter.) And I said, can I be one too? (Laughter.)

In any event, we went to the Miss Kazakhstan contest. I won’t regale you with what went on there – (laughter) – but it was – but it was – but it was quite – it was quite an experience, my very first experience on a foreign trip for the U.S. government, very first thing.

Then the other thing that was also quite humorous, on that very same trip, I had my very first press conference that I ever did. And the first question that the reporter asked me was, quote/unquote, “Are you an American Indian?” (Laughter.) And I – and I said, OK, no, but why are you asking? Well, your name – (laughter) – you know, you must be Native American. But he said – he used the term “American Indian.”

Anyway, I also – I also remember – I also remember very fondly President Nazarbayev’s trip, I believe in – it was either in – maybe December of 1993. And there was a, quote – a state dinner at the State Department. And I remember when President Nazarbayev and his wife and – how many of his children? Two of them, maybe?

MR. : Daughter.

MR. MORNINGSTAR: Daughter – certainly his daughter. I do remember his daughter – got up to sing –

MR. : That’s adorable.

MR. MORNINGSTAR: – and sang. And some – many – probably a lot of you were there that time. I then got into the assistance area after that. And you know, on a serious note, I think probably the most important thing that I worked on during that time was working with Minister Shkolnik and coming up with the assistance package that would be – that was put together in connection with Kazakhstan basically releasing its highly enriched uranium and sending it out of the country, which was tremendously important and – given Kazakhstan’s history as a – with the nuclear test site. And so I was really – it was, I think, a – I think, a remarkable accomplishment.

Coming up to the present day, I think Kazakhstan is more important today than ever. And I say that because it’s one of the few non-OPEC countries that has the potential to substantially increase its oil production over the coming 10 years and longer. And that’s going to be tremendously important. And when we look at tightening oil supplies, issues coming up, you know, relating to, you know, sanctions and other things – that it’s going to be increasingly important for Kazakhstan to develop its production.

And the projects – I think anybody who’s been involved in the energy area – many of you, obviously, here today – (chuckles) – know that the projects in Kazakhstan are tremendously complex, whether it be Tengiz or Karachaganak or Kashagan. And with all of the difficulties involved, it’s really important that these fields grow. And this also means that decisions have to be made as to how to deliver these volumes to the rest of the world, and the expansion of the CPC pipeline is critical to that.

And I think over the years that Kazakhstan has been an extremely good example as to how countries and companies can work together to develop energy resources. And Kazakhstan has a history of having an attractive – having an attractive investment climate. And all of this will obviously help the – bring economic benefit to Kazakh citizens.

Having said that, you know, there are always going to be ups and downs. And there were some ups and downs over the last couple of years. I think some of them have been – some of them have been resolved with respect to treatment of individuals working for companies; still problems with respect to work permits, different kinds of things that – but these are issues that have been and need to be – need to be dealt with.

I’ve – I’m encouraged from what I’ve heard in recent weeks, that the Karachaganak issues, which – in which there were some very legitimate issues that – you know, causing concern to both Kazakhstan and to the companies involved – that that’s been – that those issues have been resolved. And I think that’s a tremendously positive signal. As I understand it, progress is being made with respect to Kashagan, and hopefully, that will continue, because it’s in everybody’s interest that that happen.

So I think I’ll just leave it at that, and hopefully, there’ll be time for some discussion, questions. But overall, it’s been – hard to believe it’s 20 years. I mean, I can’t believe it’s 19 years since I went to the Miss Kazakhstan contest. (Laughter.) But it’s certainly something that’s permanently embedded in my mind. (Laughter.)

MR. ROBERTS: Thank you very much.

Now Ambassador Gringoly (ph).

AMBASSADOR BOLAT NURGALIEV: Thank you, Mr. Roberts.

I would like to use this opportunity to express our gratitude to the Atlantic Council, which, in cooperation with the embassy here in Washington, organized this very informative, useful, timely conference. And I believe the discussion – the panel discussions at the previous sessions proved that there are many people who really care about what happened in our relations and what is going to be with Kazakhstan in the years to come. And I’m delighted to see among the audience so many good friends with whom we can share good memories of the things we did for the benefit of the development of relations and which we legitimately can be proud of.

I have several general and specific remarks, borne out of what I heard from the previous speakers at the opening session and at the two sessions before lunch. I am very thankful for the positive assessments of Kazakhstan’s undeniable achievements in political, economic, social development. And we know that the – we – our country’s developing would have been different if it were not for the partnership with the United States of America.

Several speakers referred to the statecraft of President Nazarbayev, and this is truly so. I remember early ’90s when the then-capital, Almaty, was frequented by visitors, high-level delegations, including from the United States. President Nazarbayev was taking his time to lecture on the geopolitical position of the republic, the way it is seen from the perspective of Almaty, using the map and explaining different things, the – in terms of the challenges, the opportunities, from the security point of view, from the point of view of the development of energy resources, and so on. And that was with – (inaudible) – with Ambassador Sestanovich, with Secretary Christopher, with Secretary Perry and – just to mention these people.

A lot was said about the responsible behavior of Kazakhstan in dealing with the nuclear legacy of the former Soviet Union. And of course, as any other young state, Kazakhstan, in its diplomatic practice, was motivated by desire to secure its sovereignty and independence, territorial integrity. And we were after the security assurances from the major powers once we relinquished nuclear weapons. And of course, that decision was firmly there, and at the same time, for understandable reasons, President Nazarbayev was insisting in his discussions with the visitors from Washington that Kazakhstan needs security assurances and large-scale economic support, especially at the initial stage, because that will be laying the foundation for further development.

And I remember that during the October ’93 visit of Secretary Christopher, the expectations were that the signing by Kazakhstan of the – accession to the NPT will happen during this one-day visit. And President Nazarbayev was explaining that while we are going to do this, we still would like to see stronger indication, stronger signal from our American partners that while we get rid of the nuclear weapons, we will have our security assured, and that is how things were done.

Ambassador Courtney may remember that on a hot July afternoon in ’93 at the courtyard of Hotel Dostyk in downtown Almaty, we finished lunch and cleared the table, put away the plates and started, together with Deputy Foreign Minister Gizatov – (inaudible) – drafting the first lines of the Charter on Democratic Partnership. So that was the major document which was signed during the visit of President Nazarbayev to Washington on Valentine’s Day, February 14, 1994. This was the romantic times, so many things were new for us. But we can be happy, proud that at least if we look back at the language of this Charter on Democratic Partnership, that the formulations are as relevant now and as important as they seemed to us that time.

We were having this discussion about quid pro quo, and sometimes in the discussions, there was the expansion of the carrots in the form of, say, invitation – visit – to visit Washington as the recognition of the responsible behavior vis-à-vis the nuclear weapons. And if carrots will not play the intended role, then it might be the time for the sticks. Fortunately, there was never the – (chuckles) – the chance, the necessity to use the sticks, because these 20 years of relations were harmonious. Of course, there were sometimes, problems, difficulties. But given the good will and trust which were developed as the result of our close partnership on – in dealing with the nuclear weapons legacy, we were quite effectively going through all the rough waters.

Bill Courtney, my friend, mentioned in his presentation that the construction in Astana is causing some disbalance in the budget allocation to other regions because of that. But I believe that it is maybe not – maybe not exactly the case, because the development of Astana is used as an incentive for other regional centers to modernize their infrastructure and to follow the example. And the long-term strategy of our government is to make other cities in Kazakhstan as modern and good-looking as is the capital.

And when the – since Ambassador Sestanovich mentioned my name when he was telling you his – well, his conversation with General Tom Franks about the mare milk – I don’t remember what I told him that time, but thinking – sitting over there, I came to the conclusion that most probably, General Franks was hosted by our military, and they being straightforward and insistent guys, just to impose that mare milk on him. (Laughter.) While we hosting Ambassador Sestanovich and his colleagues, we are more considerate and decided to spare him this experience, though I would say that those who tasted mare milk more than once will acknowledge that this is indeed rather tasty and – (inaudible). (Laughter.)

Thank you.

MR. ROBERTS: And Ambassador McDonald.

JACKSON MCDONALD: Yes – (coughs) – excuse me. Thank you very much. I’d like to thank Ross Wilson and the Atlantic Council for inviting me to participate in this excellent conference. It has been a real pleasure, after so many years, to renew acquaintances with so many friends and colleagues, both Kazakhstani and American.

I guess Ross invited me to participate in order to – without getting too nostalgic, to talk about some of the things that transpired in the very, very early days of U.S.-Kazakhstani relations.

In late 1991, I was minding my own business as a political officer at the American Embassy in Moscow, comma, the Soviet Union, and the Soviet Union unraveled under our feet.

I had already applied for – or, in the foreign service parlance, bid on – a new position of consul general in Alma-Ata, which we had planned to create in the days of the Soviet Union. But history overtook us, and so I raised my and volunteered to lead the small team to open the embassy in Alma-Ata, as it was still known at that time.

Secretary Baker, as Larry Napper mentioned this morning, indicated that he wanted six of these new embassies opened by January 30th, and the remainder opened by March 15th. So we were working on a very tight timeline.

So I had the honor of leading this team to Alma-Ata. We arrived exactly 20 years ago last night. We flew from Moscow to Alma-Ata via Aeroflot. Currencies were a little screwy in those days. The ticket cost Uncle Sam $3.17 each – (laughter) – for a five-hour flight. (Laughter.) I thought that was a pretty good investment of taxpayers’ money. (Laughter.)

MR. : Wow.

MR. MCDONALD: We arrived at night. We were picked up by Foreign Ministry protocol – it was dark; it was cold, which is normal in January – (chuckling) – and normal at night – and found our quarters at the Hotel Kazakhstan, this large tower of a hotel in downtown Alma-Ata.

Very tired, we all went to bed, very excited. We woke up the next morning and looked out the window and we saw what a magnificent place the city of Alma-Ata is, with this wall of mountains to the south, the Tien Shan Mountains. And as a flatlander from Florida, I said: This is my kind of place. What a great change!

And that very day we made our way down to the Foreign Ministry and presented a diplomatic note that was addressed, which is rare, from the departments of State of the United States of America to the Foreign Ministry of the Republic of Kazakhstan. Normally it’s from the embassy to the Foreign Ministry. But this was the very first diplomatic note, and by that act 20 years ago today, the embassy existed.

Twenty years ago Friday, this coming Friday, we raised the flag over our first little embassy building and became the first diplomatic mission from any country present in the Republic of Kazakhstan. We were closely followed by Turkey, China, Iran, Pakistan, North Korea; there was a slight pause, and then Germany; and then a long pause, Great Britain, France, et cetera. But the United States established the first diplomatic mission in the newly independent Republic of Kazakhstan.

As I said, we raised the flag, and Ambassador Idrissov was present for that occasion. And we raised the flag thanks to two great American icons.

The first is Betsy Ross, who sewed the first flag, and so we were – we were, in effect, raising the flag that she had – she had crafted, but also another great American icon, Eddie Bauer.

You see, we had an embassy building. The city of Alma-Ata had installed a flagpole with a halyard. But the evening before, we realized that we had the flag, we had the flagpole, we had the halyard, but we had no way to attach the flag to the halyard. So we took a razor blade and cut off the snaps from my Eddie Bauer travel bag – (laughter) – and used that to raise the American flag.

Bill Courtney arrived a few days later, and in those early, early days we had a visit from a journalist from The Wall Street Journal, and Bill recounted that story, which wound up on Page 1 of The Wall Street Journal. And it was probably the best free publicity that Eddie Bauer ever got. (Laughter.)

As I said, Bill Courtney came out within a week or 10 days after we raised the flag. He became a – not only a colleague but a friend and a mentor, to this day.

He came out first – and this is – I’m saying this for a reason. He came out first as chargé, not as ambassador. And the reason for that was, we have this thing called the Constitution, which requires, you know, Senate confirmation of ambassadorial appointments, but with the agreement of Senate leadership, ambassadors going out, designated to go out to these various new republics, were allowed to go out to the field without confirmation, with the title of chargé d’affaires and came back in a number of months, once the whole cycle worked, and testified, had their hearings, and were confirmed and sworn in. That just shows you how fast-paced these openings were.

We had two distinct missions. One was to set up the American embassy – not an easy task when you’re that far away from home base, when logistical lines were very long and difficult, at least to begin with – they got better later – but finding property, finding office space, hiring local personnel, cars, drivers, oh – and oh, yes, we had to live somewhere. And after, frankly, nine months, my room at the Hotel Kazakhstan became a little confining, and we were able to find – by the time I left two and a half years later, we found adequate lodging for all of our diplomats.

We were pleased and a little bit surprised at the quality of Kazakhstani citizens who were available to work for us at the embassy. We found some great people, and I think some of those people are still working at the embassy today. That was really one of the best parts of the whole experience, was getting to know these local employees.

Our second mission was, at the same time, as if that wasn’t already a full-time job, to conduct some critical diplomacy at a crucial time in world history. As a successor state to the Soviet Union, Kazakhstan had to – played – a role to play in arms control, and working with Ambassador Nurgaliev and others, Kazakhstan – we were able to encourage Kazakhstan to adhere to the CFE Treaty, START treaty, the NPT.

Along those same lines, we had a number of codels, one of which was none other than Senators Nunn and Lugar. And they were just conceiving of the whole Nunn-Lugar program for denuclearization. And so in that regard, those of us who were privileged to work in Kazakhstan in those days were sort of present at the creation of that very, very successful program.

There were other things that went on in the security realm. Ambassador Morningstar has already mentioned the removal of unsecured radioactive materials under something called Operation Sapphire.

MR. MORNINGSTAR: That was – we weren’t even supposed to use that term back then.

MR. MCDONALD: Well, it’s – I have in a –

MR. MORNINGSTAR: (Chuckles.) Nineteen years later.

MR. MCDONALD: Nineteen years later, yeah.

Originally it was called Operation Peace Pipe, Bolat Nurgaliyev told me at lunch.

MR. MORNINGSTAR: (Chuckles.)

MR. MCDONALD: I’d forgotten that, yes.

And then there’s something else that hasn’t been mentioned today, and that is in December 1993, we received another codel – there were many – this one by the chair of the House Committee on Science, Technology and Space. And we went up to Baikonur , the cosmodrome, and met with the head of the Russian space agency, who a few weeks before – or a few months before had been the head of the Soviet space agency, and basically, I think, our congressional delegation wanted to check out Baikonur and to see whether we could continue cooperated – cooperation there. And so U.S.-Soviet space cooperation developed into U.S.-Russian space cooperation, which has become essential for the launching of the International Space Station and other missions. But all of that took place on Kazakhstan territory, and it took some interesting diplomacy and agreements among the three parties to make all of that work.

A trip to Baikonur – you know, Kazakhstan gets cold in the winter, but I think the trip to Baikonur broke all the records. (Chuckling.) It’s the coldest place I’ve ever been in my life. Yes.

We also worked on economic liberalization, business facilitation for U.S. firms, and Bill Courtney was particularly intrepid in doing what I would call business exploration, because, frankly, Americans didn’t know how much or – and really what was available in Kazakhstan in terms of an industrial base and an energy base and minerals and such, and you made many, many trips to the hinterland, I remember, to manganese factories and tungsten places and such. And we also worked on political liberalization and democratization, with IFUS (ph) and IRI playing key roles.

To conclude, you know, what were the results of these first, in my case, two and a half years? And I think Bill stayed another year.

One, we had at the end of that period a fully functioning embassy that served as both a bilateral embassy and also a regional platform for other U.S. diplomatic activities, including USAID.

Two, we had handled 4,000 visitors, official visitors, from the United States, everyone from the vice president, secretary of state, secretary of defense, former President Carter, numerous codels, et cetera, et cetera, et cetera. That was a lot for a little embassy of a handful of people to handle.

Third, we went from essentially zero American companies to 67. And that goes from mom-and-pop operations all the way up to Chevron.

Four, as I mentioned earlier, we helped lay the basis for U.S.-Russian space cooperation using the facility at Baikonur.

And five – and I think this is the one I personally am most proud of, although I had a – only a small part to play in it – we moved from, if my memory serves me correctly, 1,024 nuclear warheads on Kazakhstan territory to zero.

Thank you.

MR. ROBERTS: Thank you.

Ambassador Jones.

AMBASSADOR RICHARD JONES: Wow. A lot of good stories. I’ll tell a few myself.

But before – I mean, Ken Derr mentioned partnerships, and I think that’s something that’s important, because a relationship between two countries is a series of partnerships, and you need – and in a relationship, you have to move forward or it dies. And I think what you need to build good, strong relations is to have a series of partnerships. And we heard from Dan Poneman about the leadership that President Nazarbayev showed, particularly in the nonproliferation area, the energy security area. And I certainly agree with everything that Dan said, but there are a lot of other areas where we had partnerships too. I mean, economic reform and development was a major partnership. Sean was involved with that. I worked on that while I was there. We had partnerships on strengthening human rights and democracy in Kazakhstan, particularly on religious freedom. I think we were quite successful there. And we had other partnerships in the nonproliferation area besides nuclear.

Nobody has heard – has said the word Stepnogorsk here today. Stepnogorsk was one of those cities that was never on a map during the Soviet period. We literally didn’t know it existed. In fact, as I – as the story was told to me, the Kazakhs – Kazakhstani government didn’t know it existed until the collapse of the Soviet Union – the people that were in charge – that were in charge afterwards.

And what was the purpose of Stepnogorsk? It was a bioweapons facility. They had successfully in the Soviet Union weaponized anthrax, and Stepnogorsk was the city that was built to produce anthrax for the Soviet military.

They had a factory, and I visited the factory, and I was told that the capacity of the factory was such that it could produce enough anthrax every six months to kill everybody on the planet. Now if that’s not a weapon of mass destruction, I don’t know what is.

And just like they didn’t want to have nuclear weapons, the Kazakhstani government didn’t want to have a bioweapons facility, either.

And this is – the reason I’m telling this story is because the weapons never existed, thank goodness. It was a new factory. But the important things about the proliferation is not only the removal of the weapons, the destruction of the weapons; it’s also the destruction of the infrastructure that’s used to build the weapons. In the nuclear area, probably as important as sending the weapons back to Russia was destroying the infrastructure, so that no future government could change the policy easily. And in the period that finished when I was the ambassador, we – I – we – I don’t know how many boreholes we destroyed, but I know we destroyed over a hundred test tunnels. A test tunnel is a big deal. It’s a tunnel that’s dug way back into the side of a mountain, where – so you can do underground testing. And it’s instrumented and all these things that you need for nuclear weapons tests. And they had a hundred of them, or over a hundred, in Kazakhstan, and we systematically began destroying them. In fact, the destruction had been going on already for quite a while before I became ambassador. But I had the honor of being there when we destroyed the last one. And so that was one of my enduring memories.

But what I remember is not so much the explosion. I couldn’t even feel the explosion; we were far enough away. And you just saw a little bit of puff of smoke come out the front of the – of the tunnel. And it wasn’t the CNN press coverage and, you know, being interviewed on something that was shown all over the world. And it wasn’t the grasshoppers – of which there were probably a trillion, I estimated. (Laughter.) I’m not joking. It’s just like Kansas. (Laughter.) It’s just like Kansas. But what I remember is the party we had afterwards.

And this was not a planned party. This was an impromptu thing. There were about 10 or 12 of us from the U.S. Embassy and the delegation there, the experts that had come for the destruction. We went out to a local restaurant – bar. And, you know, this is a very depressed town. They had lost – I don’t know – 80 percent of their population because of the discontinuation of the nuclear industry. And we started – we ate and we had some beer, vodka and so on. And there were some locals in the restaurant. And anyway, to make a long story short, after two or three hours, we were all dancing with each other and having a very, very nice time.

And I just – you know, it could have been a completely different atmosphere where, you know, the Americans were celebrating because, you know, we put the spike in the – in the remains of the Soviet nuclear program and the people whose livelihood depended on that program would maybe be there in the corner, you know, remorseful or something. But, no, we were all celebrating together. And why were we celebrating? Because we realized it was the end of the Cold War, in my opinion. That was it. It was over.

But that’s – you know, I think what I take from this is that people are what count, relationships among people. And you can have good leadership, but partnerships aren’t self-executing; they depend on the people that are involved with them. And we had a lot of good people. Many of them are in this room – or at least they were; some of them have left. But, you know, I just, you know, want to talk a little bit about the people, I mean, everything from the people that worked at the embassy – we had really good people at the embassy: our political assistant was a Ph.D. physicist; my gate guard was a colonel in the Red Army; our gardener was a Ph.D. biochemist. I mean, these were people that were well educated. My kids’ piano teacher was a concert pianist.

I learned that, you know, and I was – I was surprised, because I thought, you know, former Soviet Union; I’m not sure how I will be received. But the friendliness of the people; the openness of the people, in the government, outside of the government; and the level of education – and they were willing to work. And that was something that belied everything that I’d heard about the former Soviet Union. And it’s – you know, I’ve talked about the thing at – (inaudible) – Stepnogorsk. We were – we were actually paying the scientists – under the Nunn-Lugar program, we were paying the scientists that had built the factory to dismantle it.

And one of the things we had to do, we had to dismantle the culture vessels. And the final stage of a culture vessel for anthrax was a 20,000-liter stainless steel vessel, three stories high. And they had 10 of them in the factory, so they had 200,000 liters. And we were touring – I was touring the plant. And we’re walking on the floor, and the floor is breaking under us because it’s a linoleum floor and – (unlike new linoleum ?) – and it has been open to the elements for three years. And the heating and cooling – no heating. No heating. The cycle’s from being hot to being cold.

The floor had cracked like a mud flat cracks, into hexagonal patterns, and when you stepped on it, it cracked further. And we’re walking on the – and one of the scientists tells me, he says, “My poor floor.” He said, “This was a really – you have to understand, this was a special floor.” I said, “How so?” And he said, “No cracks. It was seamless. It was one piece, the entire floor.” And I mean, this was a room like – as big as this. And it was a – it was beautiful, because you can’t make cracks because you don’t want anyplace for the anthrax – if there’s a spill or anything, for the anthrax to get in the cracks. So you have to have a completely seamless floor. I go, “Uh-huh.” And he said, “It was just like the floor at Chernobyl.” So – go figure.

But when I left, one of the other scientists came up to me and gave me a flask, like a whiskey flask – a little bigger, maybe a liter size. And I looked at it and I – you know, “What’s this?” He says, “Anthrax culture vessel.” And I look at it, and my eyes bug out, and he looks at me and he goes, “Never used.” (Laughs, laughter.) And I still have that in a proud display in my home.

I could go on and talk about a lot of people. I could talk about Minister Shkolnik, for example, who was overseeing the BN-350 project, which got started on my watch – or actually, probably started beforehand, but we certainly moved it quite forward. One of the things I want to say about that is that it wasn’t just that we were packaging “ivory” grade plutonium in spent fuel from the BN-350 reactor – breeder-reactor – but the canisters that we were packaging it in were made by a former weapons factory in (Al Maadi ?). And I mean, think about it: They were making canisters. What did they make before they made canisters? Shkval torpedoes.

MR. : Torpedoes, yes.

MR. BLAKE: So, you know, we – there were so many levels how all this – these projects interconnect. And, you know, what amazed me was how these are people that a few years before were considered our enemies and we – and we were – they were working to build weapons to, you know, fight us, as our manufacturers do. And in a very short period, they had not only become our friends, but our partners in a whole new undertaking.

And that is something that I always bear in mind whenever somebody tells me such-and-such country is our enemy, or these people are this or these people are that. I think to myself: Uh-huh, and I know a lot of people who are our former enemies that are now our good friends. And it happened after World War II; it happened after the Cold War; and it can happen after the war in Afghanistan, after the war in Iraq, and the war on terror, in my view.

So – but what happens in the future? We’ve been reminiscing a lot about the past, but what happens in the future? How do you sustain this relationship moving forward? What are things that we can do to keep this alive? We can – obviously, we’ll continue to work on nonproliferation, but it won’t quite have the same urgency that it’s had in the past. Maybe it will, if we cooperate working to prevent Iran from getting weapons of mass destruction.

There are some things in the economic area: Kazakhstan has made great strides. I heard today the figure – what? – $11,000 for the GNP per capita. That’s getting up into the range of the OECD. I heard last night somebody mention that Kazakhstan might think about joining the OECD. It’s already prominent – has played a prominent role in the OSCE on the democracy front, so why not Kazakhstan joining OECD? And if it joins OECD, it could join my agency, the IEA, International Energy Agency.

So those are the kinds of projects that we might want to think about, moving forward. Kazakhstan is working with Russia on – the former Soviet Union, on economic cooperation. It’s working with China on the Shanghai cooperation. Maybe there are things that we can work with in those areas to help – use Kazakhstan to help promote reform in those countries.

And anyway, those are – those are just some thoughts. But I think we do need to discuss a little bit before we close what should we really work on in the future. Somebody mentioned space. Space is a, certainly, very good area for cooperation. I was – I had the privilege of being the ambassador when we launched the first team of people to the space station from Baikonur. So there’s a lot of history, but there’s also a great opportunity in the future.

Thank you, Sean.

MR. ROBERTS: Thank you.

And finally, Dr. Cohen.

ARIEL COHEN: Thank you very much. And thank you to the Atlantic Council, Ambassador Wilson, for inviting me.

I think the panel did a terrific job of covering the achievements of the last 20 years. And indeed, 20 – a 20-year mark, in the life of a person, is somewhere between maybe one-third to one-fourth, on average, of a lifetime. In the life of a country, normally, 20 years is not that much. But 20 years – the first 20 years are formative. Think about the American Republic in the first 20 years, how much was achieved: the declaration of – from Declaration of Independence to the war, victory in the war. And laying base for our country, any country that we count the years of independence, we find out the first 20 years are very important. And in the case of Kazakhstan, we covered already the arms control, the disarmament, the building of independence and, of course, energy and economic development.

Today, Kazakhstan is producing about 1.5 million barrels a day, with plans to go to as much as 3 million by 2019. That puts Kazakhstan among prime producers in the Caspian and Central Eurasian Basin as an alternative – a smaller alternative, but a serious alternative producer, region – to the Gulf. And I don’t need to tell this crowd how unstable the Gulf currently is.

I was asked specifically to talk about oil and gas, and the energy geopolitics. And suffice to say that in addition to all the oil that Kazakhstan produces, it produces a lot of gas. The majority of this gas is currently (reinjected ?), but Kazakhstan now is independent in terms of its own gas consumption. That wasn’t the case in the past.

In terms of pipelines, Chevron did a breakthrough job by building CPC, and we heard about that today from Mr. Kerr (sic) and from others. CPC is going to grow from the current figures of – what? – 700,000 barrels a day, to close to 1.5 (million). And most of that oil is going to be Kazakh oil. Some of it was going to be Russian oil. But what’s important for Kazakhstan is to capture the added value of the high quality of Kazakh oil. A lot of Kazakh crude, especially from Tengiz, is light sweet crude, with sulfur content about one-half of a percent; whereas some of the Ural brands, the Russian brands, are more sulfur intensive, more sour.

So a creation of an oil bank in Novorossiysk, that Transneft was – is cooperating, but not as fast as maybe Chevron and the Kazakhstan ownership would like, is indeed a challenge. In terms of other pipelines: the pipeline(s) that go north, the historic legacy pipeline to Samara in Russia, and then the new pipeline to China that also can be expanded. And what is really interesting is the trans-Caspian route that is – currently is serviced by tankers to Baku, and then through Baku-Tbilisi-Ceyhan, to the global markets.

As Kashagan 2 will come to being, doubling the production of oil in Kazakhstan, the question is whether 500,000 barrels a day in the trans-Caspian route, projected, is going to be sufficient. Or, as some of us, including General Scowcroft, suggested, maybe it’s time to consider yet again a trans-Caspian pipeline.

Maybe also, if there is enough gas, there is a way to bring this gas to the future southern corridor pipeline, be it Nabucco or some other project; but having another pipeline, not just to Russia and to China but also to the European markets. As the famous saying in this town goes: Happiness is multiple pipelines.

Now, Kazakhstan boasts not just tremendous hydrocarbon reserves, but also uranium. In fact, Kazakhstan is already the largest uranium producer in the world, with 17,000 tons of uranium ore per year production. The United States has been a little bit slow in jumping into this game of uranium production. In 2006, Kazakhstan signed three 50-50 joint ventures – agreements with Russia, for the total number of $10 billion. Kazatomprom has a strategic agreement with China, with the Guangdong Nuclear Group holding. And other countries have been working in Kazakhstan, including Japan, France and South Korea.

Now, the United States, of course, recognizing that in the post-Fukushima world, safety is important, nevertheless will recognize that low-emission electricity production will be important as well. It is not just an oil and gas market that is going to grow; it’s the electricity market. And nuclear will remain an important component of the electricity market in the future.

There are some problems in development of the energy sector in Kazakhstan and of the economy. Yes, terrific achievements – $11,000 a year GDP per capital; twice as much as Turkmenistan; six times more than Uzbekistan. However, consistently, Transparency International and other corruption watchers brought up the issue of insufficient safeguards for corporate investment in terms of corruption. For American companies, Foreign Corrupt Practices Act is real. And our Kazakhstani friends and partners need to understand that it is in the interests of our friendship and our partnership that the level playing field will be in place in Kazakhstan.

Moving forward, the United States is also clearly interested in Kazakhstan’s stability and independence. And stability comes from transparent and accountable ways the energy and raw materials income is allocated and spent. So in terms of audits, in terms of accountability, I do believe that the current political changes in the parliament – having a multiparty parliament; having a more free media – hopefully, will lead to more accountability. Although I must say, thinking comparatively, in many, many countries that have a fast natural resources boom, these growth pains – or as Lenin would say, infantile disorder – of occasional bouts of corruption are not unknown. So this is something the leadership of Kazakhstan can and should pay attention to.

And again, the level playing field not just in oil and gas – I mean, we know that the Chinese companies won time after time the available oil and gas bids. However, it’s also understandable, when you examine the prices they pay, that the Chinese companies are driven not just by market considerations. There is energy policy laid down by the Politburo since ’99 prioritizing oil and gas, and therefore they’re willing to pay the premium our market-oriented companies are not willing to pay. And we see it not just in Kazakhstan, we see it in Africa and other places where the Chinese companies are paying premium for reserves in the ground. And in terms of this building the energy transportation balance between China, Russia and the West, I think U.S. leadership and commitment is necessary.

And I’m going to wrap up with the following. We did a terrific job under Bush I, Clinton, and to a certain degree Bush II administrations, committing ourselves to Central Eurasia. Then it sort of was overtaken by events in Afghanistan, where all the focus of the administration became the supply line to Afghanistan. And in the wartime, I totally understand it. However, you cannot just build a relationship on dismantling the Soviet legacy.

You know, in the Soviet Union, they spent all their time bashing the old czarist regime and its horrible legacy. But the legacy of the Soviet Union now after 20 years is coming to the end and we need to lay the foundations for the next 20 years, the next 40 years. And the government of Kazakhstan, thinking strategically, understands that as well. And we can be great partners in that.

What I am referring to: For example, in the continuum of energy economies from Venezuela to Norway, Kazakhstan wants to be closer to Norway, not to the failing PDVSA of Venezuela. We can help Kazakhstan – with accounting, with investment knowledge, et cetera, although after 2008 and ‘9, I don’t know if I should say anything about our investment knowledge. We cannot and should not neglect this relationship. It deserves daily attention at the highest levels of the administration. We cannot take Kazakhstan for granted, especially taking into account its geopolitical location between Russia and China, and, I would add, the influence of transnational Islamist politics.

And finally, we cannot think about Kazakhstan and Central Eurasia only in terms of either a supply line to Afghanistan or oil and gas. We have to think about it multidimensionally in terms of the whole breadth of economy, human development and, yes, geopolitics. Only then we can have and build the next 20 years as successful (at least ?) 20 years have been so far.

Thank you very much.

MR. ROBERTS: All right, if we can have a round of applause for the panel. (Applause.)

We have a little extra time. I realize it’s been a long day. But I think that this very prestigious panel deserves some more prodding, some questions from the audience. And I would suggest, per Ambassador Jones’ suggestion, that we focus somewhat on the future of U.S.-Kazakhstan relations, and after Dr. Cohen’s last remarks.

Q: Josh Kucera, a freelance journalist. I’m interested in the future of U.S.-Kazakhstan relations. In particular after the recent elections, when the government of Kazakhstan -- after the OSCE gave a pretty negative review to these elections, the government of Kazakhstan kind of sought to delegitimize the OSCE’s report. It said, well, there’s all these other monitoring groups that found other things – you know, the Shanghai Cooperation Organization and the CIS and other groups that don’t have quite the reputation that the OSCE has. And it seems that the government has been working pretty hard, and that it’s been succeeding, this effort to kind of delegitimize the OSCE, a group that they just chaired, you know, a year ago.

So my question is, you know, how do you see this affecting the U.S.-Kazakhstan relationship in terms of political reforms, both, you know, in terms of the U.S.’s willingness to press Kazakhstan on that, given that now Kazakhstan looks more willing to press back, and on Kazakhstan’s willingness to, you know, go along with U.S. suggestions?

Anybody, I’d be interested in your thoughts, including Sean.

MR. ROBERTS: I mean, I think that’s a good question I can maybe pose more generally to the panel as well. I was asked as part of this conference to put together a policy brief on 20 years of U.S.-Kazakhstan relations, and one of the points I made was that one of the things that has prevented this relationship from really blossoming is tension on both sides over the issue of political reform and democratization.

I guess maybe framing this question in a kind of broader sense, how much do you think – I’m asking the panelists – how much do you think this issue will continue to perhaps prevent U.S.-Kazakh relations from blossoming, or how much it may have prospect for making those relations even better into the next 20 years?

MR. MORNINGSTAR: Maybe – maybe I’ll make a comment, and then unfortunately I have a – this was supposedly going to end at 3:30, and I’ve got a 4:00 meeting, so I’m going to have to leave.

Let me say a couple of things. One is that, yeah, I think that problems in the human rights area will have an effect overall on a relationship with any country. But I also think that we need to maybe do a better job in how we frame the issues when we’re – when we’re raising these issues with various countries. Countries don’t like to be preached at, whoever it is. And I think that the issues need to be framed in terms of what’s in their interest, and that all that any – whether it’s Kazakhstan or anybody else, all that they have to do is look at other places in the world and see what’s happened over the last few years and how to – how do you avoid that, and what steps can be taken to create a more open society that can avoid those kinds of situations. And I think that’s how we have to frame the issues.

Some people have – you know, for years people have said to me, why do you even deal with some of these countries? You know, I mean, is it just that all we care about is energy and so we don’t – you know, we don’t care about these issues? I don’t think that’s – I don’t think that’s the case at all. I think that by engaging – and we do have to engage on these issues – that incrementally things are going to be better than they would be otherwise, and that nobody’s ever convinced me that by pulling out, for example, in the energy area, that countries are going to be better off from the standpoint of human rights and democracy.

So, anyway, in a general way that’s how I see it. And having said that, I’m going to say so long, folks. (Laughter.)

MR. : I would like to echo what Ambassador Morningstar just said, not just specifically in relation to Kazakhstan, but to a number of partners around the world. I spent the majority of my diplomatic career as a field hand and have a pretty good idea what works and what doesn’t work in this area, as opposed to being a policy wonk in Foggy Bottom.

I think that the United States needs to remain true to its values, of course. We have to realize that we are not perfect, and we should not demand perfection from our partners.

What we should do is encourage our partners to come to the realization that it’s in their own self-interest to improve political liberties, democratization, human rights, et cetera. And it’s only when they internalize that, you can achieve change. And instead of perfection and immediate change, I think we should strive for a positive trend line and have the patience and the perseverance to pursue that in a quiet – a quiet way, without putting ourselves in the position of somebody who’s trying to give lessons to another sovereign country.

MR. ROBERTS: Any other comments?

MR. : I think I’d just repeat the same thing, actually.

MR. ROBERTS: (Off mic.)

Q: (Off mic) – Institute. A question on how the Kazakhs and the United States might work together as the United States and NATO withdraws from Afghanistan. Kazakhstan has some unique attributes, particularly since now most all – I believe – according to Josh (sp) over here, a hundred percent of the Americans’ supplies to our forces in Afghanistan now flow through Kazakhstan, so they might see a reverse flow. But more broadly, what about some kind of – working to develop some kind of regional architecture, working with NATO, Shanghai Cooperation Organization, et cetera, but with a more distant U.S. presence?

MR. : Richard, I hope that the administration recognizes that preparing for the landscape after Afghanistan, the planning and the implementation have to start way before 2014. And I very much hope that we won’t witness Afghanistan taken over by the Taliban. However, we have to hope for the best and prepare for the worst.

In that respect, we need to work bilaterally with all the countries of Central Asia and multilaterally to the extent we can. There is no Central Asian security force per se that is receptive to work with the United States. So probably the emphasis is bilateral, and to the extent we can work multilaterally, we should. And keep in mind that there are already the telltale signs that not everything is, as they say, hunky-dory, with the three terrorist attacks in Kazakhstan that we witnessed in 2011, with people on the ground, including in the government, saying that radical interpretations of Islam spilled over into violence. People in Kazakhstan are saying that.

And people are saying that the process of filtering of some extremists from places like Pakistan and Afghanistan into Kazakhstan, as well as, by the way, from northern Caucasus of Russia, that causes an increase in extremism in the area where extremism didn’t exist before. We should take it into account. People who are responsible for security of oilfields and energy infrastructure, pipelines, should also take it into account, not necessarily in a punitive and solely police-oriented way, but also in terms of education, soft power and prevention. And if it involves working with the muftiat, with the religious councils, they have to work with the religious councils.

But I think, as I said, the planning for the post-Afghanistan environment for us need to have started yesterday and continue full-speed, not skimpering (sic) on budgets, despite the hard budget environment that we’re in.

MR. WILSON: I think we’re about out of time. I want first to thank our distinguished panel, our ambassadors, Dr. Cohen and the honorary consul of Kazakhstan for this closing session that’s, I think, helped to illuminate a little bit through the – some of the recollections of people who were involved in particular in the historical events in the early days of U.S.-Kazakh relations, the human side and kind of how some of these developments actually worked as a practical matter from the point of view of people working them on the ground.

First, please join me in thanking our panelists. (Applause.)

Our goal in organizing this event was to convey a greater appreciation of the progress that Kazakhstan has made in its 20-year independent history and of some of the tough choices and issues that the country faces looking ahead for its leaders and for its citizens. We’ve had some good discussion of the – of high policy both past and in the future. We’ve had discussion of some of the tough choices and difficult decisions Kazakhstan will have to make and, as I noted a moment ago, the human face of all of this. I hope it’s been useful, and I hope that you agree with that.

Before we end, I want to thank a number of others. First, again to thank Ambassador Idrissov, who has had to step away to another meeting, and the Embassy of Kazakhstan, as well as Chevron for their generosity in helping to make this event possible. Second, I want to thank our own staff: Eurasia Center assistant director and my right hand, Anna Borshchevskaya; project officer Christina – Christine Canada (ph), who did a ton of the actual work to make this event happen; Eurasia Center interns Elise Barnes (sp) and Thomas Lyles (sp); and on the Atlantic Council staff, among many others, Christine Mahler, Rosanna Broadbent and Taleen Ananian.

Each of you should have received, in the packets that you got upon registering – if you didn’t, pick one up – three issue papers that look at key issues in Kazakhstan and in U.S.-Kazakhstan relations by Dr. Sean Roberts, the moderator of this last session, Katherine Hardin, as well as by former Australian ambassador to Kazakhstan Douglas Townsend, who unfortunately couldn’t be here due to a change in his work schedule. I’m very grateful for them – to them for their work here.

Finally, thanks to all of our speakers, our moderators, and especially to a lively and interesting audience. You had good questions.

With that, I think we are finished. Thank you all very, very much. (Applause.)

(END)

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Looking Forward

Jason Harmala — Tue, 31 Jan 2012 12:12:32 -0600

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The Atlantic Council of the United States

Twenty Years of Kazakhstan Independence

Looking Forward: Where Should Kazakhstan be by 2031 and
How Will It Get There?

Chair:
Ross Wilson,
Director,
Dinu Patriciu Eurasia Center,
Atlantic Council

Speakers:
William Courtney,
First US Chargé d’Affaires and then Ambassador to the Republic of Kazakhstan (1992-95)

Lorne Craner,
President, International Republican

Stephen Sestanovich,
George F. Kennan Senior Fellow for Russian and Eurasian Studies,
Council on Foreign Relations

Location: Washington, D.C.

Date: Tuesday, January 31, 2012

Transcript by
Federal News Service
Washington, D.C.

ROSS WILSON: (In progress) – with the past 20 years and some of the challenges that that presented. For this – for this session we have four distinguished people to be with us: the honorable Lorne Craner, president of the International Republican Institute, former assistant secretary of state for democracy, human rights and labor, a friend of mine, one of our most sensible, sober advocates on the importance of democratic institutions and values around the world.
William Courtney, who served as our first chief of mission in Kazakhstan, initially as charge d’affaires, a couple of weeks, I think, after our embassy opened in Almaty, and then as our first ambassador. I’ll just note, when I flew – I remember distinctly, Bill, flying into Kazakhstan in 1993 with Secretary Warren Christopher when a telegram came to the airplane from Ambassador Courtney advising on what exactly to do when sheep’s head was served. (Laughter.) Bill subsequently served as U.S. ambassador to Georgia, and is special assistant to the president and senior director at the NSC with responsibility for relations with the former Soviet states.
Fred Starr is one of America’s preeminent scholars on Central Asia; presently serves as chairman of the Central Asia Caucasus Institute in the Silk Road program at Johns Hopkins University’s Nitze School of Advanced International Studies.
And finally, Steve Sestanovich holds positions – senior positions at the Council on Foreign Relations and at Columbia University. I had the honor of serving as deputy to Steve when he was ambassador at large and special adviser to the secretary of state for the new independent states during the second Clinton administration. I can’t think of anyone that I worked with over my career who did more to make service in government both intellectually stimulating and also fun.
Our – each of our speakers will – I’ve asked each to sort of focus their opening remarks on some different sets of issues as we look out at the future, and then we will – we will take some questions. So without any further ado, let me turn to Lorne Craner.
LORNE CRANER: Great. Well, thank you for your introduction. I’ll tell my wife tonight I’m very, very (censed ?). She already knows I’m – (word inaudible). (Laughter.) Thanks again for the opportunity to be here.
And I come to – before you not as a Kazakhstan expert, though I did spend a good bit of time there, over the past 10 or 11 years, including while I was in government and working for the International Republican Institute. And I will tell you, as somebody that deals in human rights and democracy, that there’s a lot to praise in Kazakhstan. First of all, I would point to the notable economic success that the country has experienced, the rise in overall living standards, the fact that it has become not only an important player in the region but an important player on the global stage. We all know it relinquished its nuclear arsenal, and I think that was one of the first things it did that drew such attention to it; and as it also made great strides in the field of human rights. We do polling in Kazakhstan, and according to the polling that we do – and we’re able to do it freely – President Nazarbayev is viewed by many in Kazakhstan as a strong leader capable of preserving stability, fostering economic development and providing solutions to social problems. In fact, in a survey we conducted less than a year ago, 90 percent of respondents approved of the way he was doing his job.
Thanks in part to abundant national resources, Kazakhstan, as I said, has experienced great economic success and has begun to create a middle class. And in my business, that is one of the things that you look for when you begin to expect political change, political demands with any country. And indeed, President Nazarbayev has stated that the road to democracy is irreversible.
As I said, there have been clear improvements made. I think the January 2012 parliamentary election marked the first time that a second-place party gained seats in parliament, regardless of the 7-percent electoral threshold. And although both of the second- and third-place parties have been quite close to (Nursultan ?), it’s still an improvement and, I think, a blessing to see opposition parties in parliament. And I, looking forward 20 years, would encourage Kazakhstan to continue to create more open political space. If they do so for political parties, they will ensure that the government is truly represented and reflective of the diverse population of the country. The elections themselves, I think, were also noted as an improvement. And again, they should continue to strive to improve those to gain legitimacy.
One of the things I noticed in particular in the region, whenever I would visit Kazakhstan, was their pride – and I think rightly so – on being a tolerant, multiethnic and multireligious society. Their constitution guarantees freedom of worship. And it’s certainly the case that major religions are able to practice freely and openly. I would note some recently adopted legislation in Kazakhstan is not the only issue – the only country facing this issue, but some legislation intended to combat extremism which would provide the government with broad powers to restrict the rights of certain minority religions. Kazakhstan I think should continue to strive to keep its reputation for religious openness.
Similarly, I would – I would talk – and this is something that we dealt with when I was in the State Department – issues of freedom of association and assembly, and in particular the fact that Kazakhstan has numerous NGOs – there have off and on been issues of whether there will be a new NGO law that would be more restrictive. I would instead look to Kazakhstan to build upon their reputation to allow all NGOS, including those who deal with political issues, to operate freely and without interference.

The last couple of issues I would point to is, number one, the separation of powers – and I know this will be a sensitive issue – but the separation of powers between executive, legislative and judicial branches of government and freedom of the press. The constitution guarantees freedom of the press, but as we all know, there have been many issues with that over the years.

I would say finally, Kazakhstan obviously is in a very tough neighborhood with a lot of tough neighbors, and these things, as they look forward, have to be moved very, very delicately. But one of the things that has always struck me personally about Kazakhstan is the sophistication of the people. I think President Nazarbayev was very forward-looking in terms of the education of his people, both within Kazakhstan and sending them outside Kazakhstan. And within the region, certainly you see groups of people that you do not see elsewhere in the region. So again, it’s my great hope that by taking in diverse opinions of political parties, NGOs and the press, and ensuring full religious freedom, that Kazakhstan will be able to continue the kind of development it has had these past 20 years. Thank you.

MR. WILSON : Thank you very much, Lorne. (Applause.)
Let me turn now to Ambassador Bill Courtney.

BILL COURTNEY: Ross, thank you very much. I do remember writing that telegram, actually, about the – how to carve the sheep. I especially – I was a little squeamish. I remembered a former U.S. president in Japan who had had a squeamish moment, and so I was a little scared to be too courageous. And so my preference was to lop off one of the ears and give that to the most junior person at the table and say, you know, you should be listening to your elders – (laughter) – and then I would lop off the other ear and give that to the senior security and intelligence official at the table and say, we assume that you are already listening, and then I’d pass the rest of the After two decades of independence, Kazakhstan is at a strategic turning point. Economic growth has been remarkable, but political development and the role of the private economic sector have lagged. A competitive private sector is essential to make the economy more productive, and competitive political, judicial and media institutions are vital for the long-term stability that only a democracy can bring. In other words, economic and political competition, and the degree of competition, will do very much to shape Kazakhstan’s success in the years ahead.

This is certainly true in a society blessed with increasing incomes, educated people and rising political and social expectations. Suppressed political and economic freedoms create tensions in society. Resolving them peacefully will be a challenge, unless Kazakhstan changes course and allows more open debate, wide political participation and rule of law practices that protect private property.

A gap between rising expectations and frustrating realities could lead to instability and vulnerability. In many ways, Kazakhstan is blessed. It is larger than Western Europe and endowed with a minerals bounty. People tend to pragmatism. Ethnic differences are muted – regrettably in part because public expression is limited. Rulers encourage interethnic harmony, although some Kazakh advantages, such as political dominance, raise concern among minorities.

Kazakhstan is far wealthier than in Soviet times. In 2010, according to the World Bank, per capita gross domestic product in current U.S. dollars stood at $9,136 in Kazakhstan – slightly lower than Russia’s 10,440 (dollars), but three times higher than Ukraine’s $3,007. These data, however, do not tell the full story. Much wealth disappears into corruption. Construction of the extravagant new capital in Astana diminishes funding for the rest of the country. The economy is unbalanced. For example, the World Bank reports that labor productivity in agriculture, in Kazakhstan, is just 1 percent of agricultural productivity in America.

Several independent assessments offer insights into economic prospects. One is the World Bank’s ease of doing business indicator. In a 2011 ranking, Kazakhstan was 47 out of 183 countries. This ranking has improved dramatically in recent years and is a hopeful indicator for private sector activity. Of the former Soviet countries, only Georgia, Latvia, Estonia and Lithuania ranked higher. Their average ranking, however, was 22. Their strong performance suggests that Kazakhstan can make more progress.

Another salient assessment is the Transparency International Index of corruption perceptions. It also ranks 183 countries. In 2011, again, only Estonia, Lithuania, Latvia and Georgia ranked above Kazakhstan. The average rank of the top four performers was 50, whereas Kazakhstan came in at 120. Here, too, Kazakhstan has some distance to go.

The example of these four countries is instructive. Their circumstances suggest that a more open business environment, a greater role for private property, reduced corruption and a more democratic political system will be among the determinants of Kazakhstan’s future economic success. The statement by the IMF mission to Kazakhstan last October offers a positive picture. It said that economic recovery continued to be strong with real GDP likely to increase by 6 1/2 percent in 2011.

International reserves and oil fund assets are strong, amounting to 40 percent of GDP. The IMF cautioned, however, that nonperforming loans in the banking system were extremely high by international standards. I would add that several more recent developments hint at improved economic reforms.

Finally, let me comment briefly on several points in President Nazarbayev’s state of the nation speech last Monday. First, he spoke of returning to state ownership as substantial part of previously sold assets. This comment highlights the most troubling part of his economics message: the emphasis on state domination and direction of major economic sectors.

In a recent survey of the rise of state capitalism in emerging economies, The Economist magazine pointed out that studies show that, quote, “State companies use capital less efficiently than private ones,” end quote. Moreover, the world’s great centers of innovation are usually networks of small start-ups, The Economist magazine said. Small business in Kazakhstan makes up too little of the economy, and this is an inhibitor to employment.

Second, President Nazarbayev rightly highlighted the importance of finding an optimal balance in the production of private and public goods. In this regard, the IMF statement pointed out that Kazakhstan had scope for increasing public expenditure in health, education and infrastructure. I would add that transportation, infrastructure and border arrangements will be important for the expansion of surface transportation between China and Europe – what might be called the new northern Silk Road.

Third, President Nazarbayev correctly emphasized the value of “improving local self-government and increasing the participation of citizens in considering issues of local development,” end-quote. He did not, however, draw the logical conclusion – free and fair elections, free media, freely operating NGOs and checks and balances in governance are essential to achieving this outcome.

The tragedy at Zhanaozen, and the hardline response to it, are illustrations of failures that become more likely in authoritarian conditions. How will Kazakhstan take advantage of its strategic turning point? Will it shift more toward private-sector economic activity? Will it move away from autocracy toward democracy? No one yet knows, but Kazakhstanis appear to be ready for the changes, perhaps more so than its rulers realize.

Thank you.

MR. WILSON: Thank you very much. (Applause.)

We’ve had politics; we’ve had economics. Let me turn now to Fred Starr to talk about some of the other regional issues.

FREDERICK STARR: Well, first, like everyone else in this room, among the enthusiastic well-wishers of Kazakhstan at this 20th anniversary. It’s very nice to see many former members of the very effective Kazakh embassy back here in Washington for this event.

Now, I – it doesn’t seem to me that it’s my job, or our job, to sit here and define where we think Kazakhstan ought to be in 20 years. It will be in 20 years where it wants to be in 20 years. And that – they’ll be making the decisions. There are some things that I think are worth noting, though.

First of all, among the achievements of the last 20 years, I would place very high the concept of this so-called multivectored foreign policy – balance in the foreign policy. It’s been picked up by every other country in Central Asia, including now Afghanistan as well. It really is an important conceptual breakthrough, and it’s Kazakhstan’s invention.

Now, the question I would raise about that is: Is this just a political phenomenon or is it also extended to the economy? And if so, how do you propose to extend this to the economy? You do not have a multivectored economic policy yet – or, maybe a policy, but not the reality. It seems to me that’s one of the most important and difficult challenges that Kazakhstan will face.

I – the mention has been made about new areas in diversification and the economy. In that list, Kazakhstan, although it was among the first to take up the challenge of continental transport after 1992, 1993 with its new railroads, new roads going east and west – nonetheless, it’s going to have to move a lot faster if it’s going to have a real role in the new emerging transport networks.

Why? Because all the insurance, freight forwarding, logistics, et cetera, service industries of continental transport will be based elsewhere or they will be owned elsewhere. If Kazakhstan fails to move quickly on this right now, it won’t be in the picture; it’ll simply be a point where firms and industries based elsewhere bring their goods through.

Now, with regard to relations around the world, of course, it is a complex neighborhood. I think it’s fair to say that Kazakhstan, like its neighbors, has handled this, by and large, masterfully up to now – China, Russia, EU, India and so forth.

Of these relationships, looking ahead 20 years, I would propose that the one that’s likely to have the biggest surprises, in a positive sense, is with India. And it’s not a surprise that a year ago President Nazarbayev was the only international guest of honor at the New Year’s celebrations in Delhi of the India government. It’s extremely important. Both sides recognize it. I think the potential in this area is vast, not just in the economic side, but in the sort of geopolitical side. And anything that happens there is to the good and everyone benefits from it, by the way.

Now, just a word about a topic that is of great sensitivity, and that is succession. This is all – the process is spelt out in the – in the Kazakh constitution and so there’s really nothing to say. I – however, as a historian – not as a pessimist, but as a historian – I have to note that among Turkic people, succession, for 2,000 years, has been a uniquely complex, delicate matter. And even though it might be spelt out utterly clearly in the constitution, and you have hundreds of very sober, competent people watching over this in Kazakhstan, it is an extraordinarily complex and delicate process in Turkic societies.

I’m not going to list them all, where it’s – where it’s brought them down. Seljuks it brought down; it brought down the Timor’s successors and so forth. The list is a very long one. And I’m not saying this out of some – being a prophet of doom, but just to say, look, if you’re really a well-wisher, acknowledge how sensitive and delicate this process is, and be alert to it – possibility – and we hope it doesn’t happen – but possibility of it going off the rails.

Now, one other matter – and two other matters: One, I’d like to – I’d like to – I’d like to acknowledge the immense importance of the educational investment that Kazakhstan has made. I’ve been involved with the opening of the new Nazarbayev University. It’s very impressive. It’s the – (chuckles) – beginning with the building – but other initiatives as well. It’s not the only country in Central Asia that has invested very solidly in education.

But returning to Lorne Craner’s point, it – I think we vastly underestimate the relevance of education for the development of free institutions in society. And on this point, the question I would ask for the future is not whether Nazarbayev University or Farabi University will be great institutions – I think they will be. The question isn’t that. The question is, will the secondary education be at a similar level? That’s where the action is, it seems to me.

And on that level, it’s not just the question of getting people into college, as our president here keeps saying. No, it’s a question of are you going to educate people with the skills necessary to fill the professions, the technical fields and so on, in the diversified economy. And it’s not clear that that’s the direction things are heading yet. I – on this point I have to – I have to congratulate your neighbors Uzbekistan because of their investment in vocational, technical education. But this is an important area.

Now, just two quick points: regional relationship Uzbekistan. Everyone has personalized this and said, well, somehow the two presidents just never got on. I think this is grossly simplifying what is a much more complicated matter. We forget the existence of the Kokand Khanate. It ruled all of southern Kazakhstan for a century and a half, and not very gently. And it created a whole sort of cultural relationship that is not fully in the past. So don’t think that simply the retirement of either of the two presidents is going to immediately change that. This is very complex. I think the West has grossly underestimated the subtleties involved.

And final point that I would make: We have – kind of at these events we tend, in a very nice, jolly way, to assume a linear path of development. You know, well, they do this and now, you know – Kazakhstan’s and Kazakh history has been nonlinear. It has had many discontinuous points. And we have to be alert to these too. Kazakhs themselves, I’m sure, are. But discontinuous and unexpected developments are part of the expected now, and why we shouldn’t – the burden of proof lies on the side of anyone who thinks that they should not be included in ones projections and thinking about Kazakhstan.

MR. WILSON: Thank you very much, excellent and wide-ranging comments. (Applause.) Ambassador Sestanovich.

STEPHEN SESTANOVICH: Thank you, Ross. When Ross said we tried to make government fun, what he meant was getting out early – (laughter) – getting out of the office early, which not – most people in government don’t understand the importance of. Since everybody’s obsessed with (ternary ?) anecdotes, I’ll tell one.

I had a conversation with General Tommy Franks before he made his first trip to Kazakhstan as commander of CENTCOM, for some exercises with the Kazakhstan military. And I said – we talked about the region, and I said, you know, Tommy, after you come back, come over and see me and we can discuss your trip. He came back, sat down, and he said, that fermented mare’s milk is really the worst stuff I have ever had. (Laughter.) He said, how do you drink that? And I said, you know, it’s interesting, they’ve never served that to me. (Laughter.)

So a month later, I had lunch with Ambassador Nurgaliyev, who’s sitting here – old friend, and I’ll join with everyone who said it’s good to see old friends here – and I asked Ambassador Nurgaliyev, you know, General Franks complained about the fermented mares milk, and I realized you’ve never served that. Is that because you like me or you don’t like me? Ambassador Nurgaliyev had a very diplomatic answer.

I want to pick up on what Fred Starr has said about nonlinear development in this way: Kazakhstan is in an extremely interesting position, if you think about the company that it has catapulted itself into in the past 20 years. Ambassador Courtney mentioned the figures for per-capita GDP, which put Kazakhstan in the company of, roughly, other sort of lower-middle income countries – Turkey, Mexico, Brazil, Chile – a dynamic group, you know, some of the most dynamic countries, economies in the world.

Twenty years out, some of those countries are not going to be in the same company. Some will have done better, others will have done worse. Some will have grown over the next 20 years – and it makes a big difference over 20 years – at 2 percent, and others will have grown at 6 percent. And so the differences among them will be noticeable. And when we reconvene here 20 years from now, it’ll be interesting to see who’s in that – who’s in Kazakhstan’s company.

But it’s not just a question of solving economic problems. There are also challenges that these countries face in thinking about the traditional problems that states have to deal with – security. Some of them will solve their security problems better than others. Some will be deeply challenged by those. So I thought I might talk a little bit about what kinds of uncertainties Kazakhstan faces over the next 20 years.

There have been some allusions to a rough neighborhood and some allusions to the brilliant conception of Kazakhstan’s strategy. And maybe we should think about how those go together, because I think Kazakhstan faces a lot of uncertainty, if you look around its neighborhood. Twenty years from now, will Kazakhstan border a China that is the leading economy of the world and a continuing success story – 20 more years of success? Or will it border a China that is more fragmented, that faces a bigger problem of separatism in the West, that has actually got a serious problem that it has to deal with? Remember, the biggest part of the Uighur diaspora is in Kazakhstan. Bordering Russia, is Russia’s – is Kazakhstan’s neighbor to the north going to be a flourishing democracy in NATO, or is it going to be in the last years of Putinism? In 2031 – that’s our endpoint here – President Putin will be 79. A young man. (Laughter.)

MR. : And virile. (Laughter.)

MR. SESTANOVICH: All that fermented mare’s milk that he drinks, that’s served to him on visits to Kazakhstan.

The region – which countries in the region will have been at war with each other? Open question to my mind. Which ones will have been at war with Kazakhstan? You know, another open question: Will – which ones will be run by the IMU? What will be happening in Afghanistan? Will it be a scene of kind of further splintered order and great power intervention or not? Beyond the region, how significant will be the retraction of America’s global role? What will be the existence of the – what will be the status of the EU? Will it have restored its dynamism? Or will Kazakhstan’s largest export market have fragmented and stagnated?

This – so these are all big questions for Kazakhstan. And some of them can be answered with educational policies and with legal reforms. But others will be addressed through the measures that states take to address their security, and that is by providing for defense. And I think that the – the government of Kazakhstan agrees with me, because Kazakhstan, I would point out to you, has had, over the past five years, the world’s fastest growing defense budget –
not often mentioned in meetings like this, but it’s an important one. Even so, Kazakhstan – think of Kazakhstan in comparison to the company I mentioned earlier. Kazakhstan spends about 1 percent and change of its GDP on security. Turkey spends 3 ½ percent. No, I’m sorry; Turkey spends a little under 3 percent. Chile spends 3 ½ percent. Kazakhstan is more in the neighborhood of another middle income country, Latvia, in terms of the amount of its – with smaller borders – amount of – that it spends on GDP.

So my question is what are the security policies of Kazakhstan going to be over the next 20 years? Is there going to be a change in its – I mean, I would say, broadly, Fred is right. There will be – its strategy will be multivector. But are there going to be some adjustments to it? And I think you can imagine a number of adjustments. You could imagine, first of all, a more significant tilt toward either Russia or China. Either of those is problematic, because those are probably two of the countries that, being right up against them, Kazakhstan would most like to secure its independence against.

It could preserve – I mean, pursue – more significant self-reliance in a – in a military sense. That’s presumably why Kazakhstan hosted its first defense industry exposition a year and a half ago with countries from – companies from South Korea, Israel, the United States, India, Russia, China participating, eager for a share of the market. It could pursue a more significant regional block. But as people have said in a variety of contexts, that’s hard to do. And maybe the regional problems are the most immediate and uncertain and explosive and the ones that need to be dealt with. It can pursue a more significant kind of outreach toward the distant great powers and friends, toward the West – Fred has mentioned India – toward the countries whose companies I mentioned were present at its defense exposition.

Kazakhstan will probably have to ask itself over the next 20 years, but it could be asking itself right now, what part does it want to have in the Obama administration’s pivot to Asia? The Obama administration is pivoting to Asia as a consequence of downgrading its involvement in Iraq and Afghanistan. But for Kazakhstan, that’s a pivot that it can still have a part in. What part is that going to be? I think it’s right to say that Kazakhstan has been extremely subtle, extremely successful over the past 20 years in addressing issues of security, in enlarging its sovereignty and independence. But I think that if you think – if you look at over the next 20 years, you’ll see some problems that are worrying for any state and, in particular, a state in this tough neighborhood, with dynamic great powers on its borders, and with a history of nonlinear development. Now, I think that’s the agenda that will have to be addressed in the coming generation. Thank you. (Applause.)

MR. WILSON: Thank you very much, Steve. We have about a half an hour for questions and answers. Please try to catch my eye if you have a question.

And I’ll just start out the discussion. The four of you referred, obviously, to the relationship with Russia. A couple of you referred – and some of the previous speakers as well – to the customs union with Russia, the Eurasia union that President Putin has proposed and that Kazakhstan has responded relatively favorably to. There’s an economic aspect to this. Some think there may be a broader domestic political context. And then there’s the broader foreign policy context, both with Russia and also in the region. I’m wondering if you could just comment a little bit on how you see that relationship – not just with Russia, but the customs union and the Eurasia union – unfolding over the course of the coming 10 or 20 years. What are the issues – and what are the issues we should be thinking about as we look at and try to assess what Kazakhstan is doing and how and why? And I’ll – whoever would like to start.

Fred?

MR. STARR: The German poet Heine wrote about the union that was being created of states in the Rhineland in the 1830s and ‘40s. He wrote: (in German). Oh, union, you dog. You’re not – you’re not – you’re unhealthy. Not everything that proclaims itself a union is a glorious success. (Laughter.)

I’m not sure that both of these projects – I don’t – I’m not sure that both of these projects are not very backward-looking. I think – I think they have – are connected really with individuals, not with great movements of events, and worst of all, they are utilizing economics for basically political ends rather than the other way around. I think it behooves Kazakhstan, at this point, to say what it is not getting into, what it does not think the European – what the economic union – tell us what it isn’t, as well as what it is. And tell us what you’re not prepared to do with regard to other arrangements, as well as what you are prepared to do.

MR. WILSON: Steve?

MR. SESTANOVICH: Well, if I could just come back to security – I don’t mean to be the only person who talks about this, but somebody’s got to. If you think about the relationship with Russia, one distinctive element of it has been that the military of Kazakhstan has been almost entirely an inheritance of the Soviet Union. But over the coming generation, that will change more and more.

I read a quote recently from the former defense minister – whose name now escapes me – who’s working for Rosoboronexport – a defense minister of Kazakhstan. That’s a very cosmopolitan pattern. You know, defense ministers all over the world love to go and work for the defense industry of other countries. And he said, we understand that – he said this as a, essentially, a representative of Russian business – we understand that the monopoly that Russia has had over the way in which the military of Kazakhstan has constituted itself is going to end. And sure enough, it will.

Over the next generation, Kazakhstan will be carefully – and it’s already doing some of this – buying high-tech equipment from the kinds of countries that I mentioned (today ?), you know, electronics from South Korea and Israel, cast-off transport planes from the United States. You know, the United States invested a huge amount in the past 10 years in all kinds of military capabilities, and it’s going to sell it all – sell off some of it. But that’s going to involve a kind of careful dance. It’s going to be multivector. Kazakhstan is going to do that in the same subtle way that it has done everything. But it’s going to do it. And 20 years from now, I would predict you’ll have a – you’ll have a defense establishment that’s significantly bigger and has a different look, reflecting new partnerships.

MR. COURTNEY: Let me talk about the internal aspect of the Eurasian Union. When Kazakhstan became independent, almost 40 percent of the population was ethnic Slav – mostly Russian, but a lot of Ukrainians, Belarusians and others. The Kazakhstani leadership and Kazakhstani society had been very keen and quite successful in dealing with Russia throughout the last 20 years. It has not only this large ethnic Slav population, much of which is in the northern and western oblasts that border on Russian oblasts, but also the length of the border that Kazakhstan has with Russia and the vulnerability of that border if Russia were ever to show the kind of interest in Kazakhstan that it has shown, for example, in Georgia.

So I think Kazakhstan has done a tremendous job of dealing with Russia. It’s one of the factors that’s made President Nazarbayev a great statesman. But the Kazakhstanis, in addition, had the wisdom to understand that the soft power capacity of Moscow was quite low. And therefore, most of the various contraptions that Moscow would propose would never amount to anything. So Kazakhstan, very willingly and quickly, would agree with whatever Moscow proposed, whether it was the Commonwealth of Independent States or the Collective Security Treaty Organization or whatever. And the response to the Common Economic Space and now the Eurasian union falls into that pattern.

The Eurasian union is not likely ever to amount to anything. It is a speed bump right now, because the tariffs of the Eurasian union are higher than what Kazakhstan would have in WTO. So it’s going to hurt Kazakhstan economically. But Russia itself is going through political instability. And the long-term permanence of the Eurasian union is probably not something that one can count very much on now. So this said, I think really, again, we have to consider that from Kazakhstan’s perspective of manages – managing its own internal ethnic situation and managing Moscow, it’s done a tremendous job.

MR. WILSON: Lorne, if you want add.

MR. CRANER: Just to add, I think Bill raised a really good point. In terms of looking at a union or bilateral relations with these countries or communal relations with these countries, I think Kazakhstan’s going to have to be very, very flexible, because I think, you know, we heard for many, many years things could not change in the Middle East. We’ve heard that for many years in Russia, and now we’re seeing a little different. Those who study China are beginning to wonder about that. But I think Kazakhstan – it doesn’t want to get pinned down into a 20-year agreement on this that, or the other with a lot its neighbors, because a lot of things could change over the next 20 years – including with India, which is developing enormously.

MR. WILSON: Great. Let’s move on to questions and answers. We have two here in the front. If we could bring up – and if you’d please identify yourself and state your question.

Jan Kalitski (ph), please.

Q: Thank you. Does this work? Jan Kalitski (ph) with Chevron. (To the ?) panel, could I ask you to address two – (inaudible) – of Kazakhstan’s local reach? One is a move to join the WTO, and what that means in terms of economic reforms within the country. As much as some people feel WTO accession will have a positive impact on economic reform in Russia, is that the case in Kazakhstan? Secondly, the Islamic outreach. As mentioned by the foreign minister, Kazakhstan chairs the OIC. Whether it’s through the OIC or in other ways, does Kazakhstan have a role to play vis-à-vis the Islamic world in its relations to the West?

MR. WILSON: Bill, do you want to take the WTO piece?

MR. COURTNEY: OK, although I will actually defer to you, because you know more about it than I do. The WTO – the incentive of reform, if you will, to go into the WTO probably right now means less to Kazakhstan than to Russia, because Kazakhstan is proceeding fairly quickly on a range of economic reforms. And therefore, I don’t think, ultimately, it’s going to make quite as much difference. Russia is having greater challenges, including, for example, you know that Kazakhstan’s having to take on higher tariffs because of this Eurasian union. It’s a sign of, you know, economic situation in Russia probably needs a bit more reform, even though, of course, Russia had the greatest economic reforms at the beginning.

MR. WILSON: I think – just a couple of points to add on – from my point of view on WTO accession. One of Kazakhstan’s challenges, I think, today and over the past several years in looking ahead is attracting foreign direct investment outside of the resources sector. And WTO membership is one of those things that’s kind of a Good Housekeeping Seal of Approval about your rules, about your regime, about the trading arrangements and providing a certain amount of additional reassurance to a would-be investor that the general rules of the road that are accepted around the world, well, more or less apply here. It doesn’t solve all your problems, but it solves – it solves some. And so I think WTO accession can be – and certainly I hope – would be marketed by the government as a way to promote more foreign direct investment outside of those extractive ministries that Kazakhstan needs to diversify – to diversify its economy.

There’s obviously a second additional benefit, which is – which has to do with improved foreigner access to the Kazakhstan domestic market, and that’s called competition, which, in most countries, has had a powerful effect. I have a little bit more familiarity with Turkey. Turkey joined the WTO or GATT ages ago. But it joined into a customs union with the European Union in the mid-1990s. And that was a powerful sort of cold shower for Turkish firms about what’s required to compete effectively in the international market. And as you look back over the last 15, 16, 17 years in Turkish economic development, it’s – it kind of all starts there, as Turkish firms emerge from a protected cloister that had – that in which they had operated in and start to – start to function on the world scene, and have the world function in their market and impose different pressures. Kazakhstan’s in a different place, but I think WTO accession can be help – can be helpful.

And then the third point – and Bill kind of alluded to this – is the WTO is a kind of roadmap for reforms that you need to make. And I think that’s the – the process of accession has already been helpful in orienting the government – these are the things that you need to try to work on in order to get into the WTO, but they happen to be the things that will be helpful in making Kazakhstan competitive, in helping attract foreign investment, creating jobs, et cetera, et cetera.

Anybody want to take on the Islamist outreach? Fred?

MR. STARR: Well, who knows? I mean, it’s too early to say. It’ll take time. That said, there is a very specific genealogy and, if you will, morphology of Islam in Kazakhstan that’s worth pausing on. It really came in, really, quite late among the northern Turkic peoples in the –
basically in the 12th century, 13th century. And it came on the wave of a bunch of interesting Sufi mystics from the territory of Kazakhstan – including, most famously, of course, Ahmad Yasawi.

And these guys were anti – they were highly personalistic – the whole – the whole strain of Islam in Kazakhstan – highly personalistic, highly mystical, highly antitraditional, highly anti-institutional, and even pantheistic, which fit in nicely with the Turkic Tengriism, and finally, with a cult of saints that was very, very deeply developed.

Now, none of this fits either the mainstream orthodoxy of Central Asia as a whole that exists in Tajikistan and in southern Kyrgyzstan and Uzbekistan, but even less does it fit any of the more fundamentalist currents which would wipe away all these things that I just mentioned. So it seems to me that this has the makings of a real intraconfessional conflict – not a problem between – maybe less of a problem between Muslim – pious Muslims and the society as a whole than among themselves. So I would say that’s something to watch out for with concern.

MR. WILSON: Steve?

MR. SESTANOVICH: I have a much less learned comment on this, which is that as Kazakhstan looks out toward the Islamic world, it sees societies that are becoming politically more democratic and socially more conservative. That’s sort of what the – and that is the trend of the Arab Spring, but it’s also what has happened in Turkey in the past 10 years. And if you’re thinking about how Kazakhstan engages with that, that’s a more – maybe a more complicated process of interaction than we used to think it would be.

MR. CRANER (?): Let me pick up on Steve’s point, which I think is exactly right. In Kazakhstan, there has not been enough open political expression for institutions and habits of cooperation and settling differences, if you will, to develop to assist the society and the government to manage the increased interest in Islam in Kazakhstan. There is a risk here. This –
the greater desire for political liberty and social conservatism both will pose challenges to how Kazakhstan, as a society, manages this increased influence.

With regard to chairmanship of the OIC, I would also put that in the context of President Nazarbayev’s own personal ambitions. Remember in 2010 Kazakhstan chaired the OSCE, and in 2011 I think there was maybe another one as well. I think some of this is President Nazarbayev feels that Kazakhstan – in his own role as international statesman – has reached the point that Kazakhstan deserves the opportunity to chair those kinds of things. So I think that’s somewhat, a little bit, separate from the internal Islamic dynamic.

MR. STARR: I think just on reach-out to the Muslim world, you could imagine – you could imagine some countries to which Kazakhstan’s model would appeal, but it is – it is kind of particular with the resource issue. I think the second thing worth remembering is what we’ve seen in the Arab Spring, which is if you leave liberalization for too long, it will just come out clearly with a 90 percent approval rating. That’s not an issue any time soon in Kazakhstan.

But it’s something that I hope President Nazarbayev and others are looking at. Tunisia – I’ve pointed a lot of Chinese to Tunisia – coastal development, a relatively liberal situation for people within the country – the interior more backwards – a lot of economic development. But I think Tunisia in particular is worth examining for a country like Kazakhstan. How did it get to that point? How did it happen?

MR. WILSON: OK. Ambassador Idrissov, and then Rich Kauzlarich. (Pause.) I think it comes on automatically.

Q: OK, thank you, Ross. I was trying to resist asking the question, because any – (audio interference, inaudible) – would be interpreted as a biased one.

But just one fact – for the OIC, the Islamic conference, the Organization of the Islamic Conference, Kazakhs are about to make history. The OIC chairmanship is a one-year rotating chairmanship. And I tell you that we make history by taking a one-and-a-half year chairmanship because – (inaudible) – asked us for – (inaudible) – for six months. So we are the only country to have a one-and-a-half year chairmanship of OIC – (inaudible) – used the opportunities.

My question would be to Steve. And you gave the geography; you mentioned Russia and China. This is very symptomatic and very traditional. Why don’t you expand your geography to the south? I was waiting very attentively for you to go to the south, and you stopped there. You talked about China; you talked about Russia, and you never spoke about the south. The lifeline for Kazakhstan in Central Asia is south. My question to you: about the south.

MR. SESTANOVICH: Well, forgive me. When I said “the region,” what I meant was the rest of what we typically call Central Asia – and not just Soviet Central Asia, but Afghanistan. And when I talked about the uncertainties that Kazakhstan faces in security terms, and thinking about the region, I mentioned – I asked, you know, which country of Central Asia will be run by Islamists? Who will be running Afghanistan? Which great powers will have intervened in Afghanistan to deal with turmoil there?

But I agree with you in this way that the countries to the south are not just a problem for Kazakhstan, although they surely are that. They’re at least – they frame a security agenda. They also represent opportunities. If – and the further south one goes, the easier it is to identify the opportunities. So everybody always says, well, the New Silk Road and India. Good, good. But the more problematic areas to the south for Kazakhstan, it seems to me, are the closer – the ones closer at hand – the immediate neighborhood, and then the next tier, Afghanistan and Pakistan.

If you – if you start at Kazakhstan’s borders and go south, you don’t simply find stable countries eager for cooperation with Kazakhstan. You find countries with rather different views and rather different agendas and rather different prospects for cooperation. And what I wanted to say was I think that those prospects are a challenge for Kazakhstan in the next 20 years as well as an opportunity. Thank you for that correction.

MR. WILSON: Fred, do you want to –

MR. STARR: Very quickly. It seems to me that the – a lot of the gloom over this issue to the south arises from a misconception on our part. And that is that somehow, as U.S. policy has sought to do for 20 years, we have become the champions of, quote, “integration.” Integration, everywhere to the south, including in Kazakhstan, means something against sovereignty, because of the European model.

Why aren’t we talking about simply coordination or cooperation? You can have a closed border and an open, efficient corridor. You can have secure borders and fast corridors. The minute we change our vocabulary on this and start thinking in those terms, then the possibilities suddenly become far more attainable than they are when we think, oh, we can’t get there until we integrate.

MR. WILSON: One-sentence addition to that. You know this book by Steven Pinker that came out this year, called “The Better Angels of Our Nature,” I believe, which is about – as he sees it – the spread of peace in the past couple of centuries, or past millennium. The biggest factor, if you take out everything else – and he’s a real scientist, so he doesn’t want to take out everything else – but the biggest factor is sovereignty, is the rise of secure nation-states that can create peace.

So I think you’re right, Fred, that integration is a formula which doesn’t often work, and may not work in this case, certainly not prior to the creation of successful sovereign states. But my point would be you have contested sovereignty, or at least problematic sovereignty, as Kazakhstan looks to the south, and you have uncertainty about what the regional dynamics will be.

MR. STARR: We’re in a postcolonial situation, and sovereign – the protection of sovereignty is the highest priority. Accept it: That’s reality. In the United States in the 1780s, 1820s, all the way through, we weren’t – and France has been giving us advice to integrate with Canada. Well, we tried with an army and – or integrate with Mexico; we tried that with an army. Integration is something, as you say, that maybe comes later, on the basis of sovereignty. It’s not an alternative to sovereignty. And that’s where we have negatively affected reality, I think.

Q: Sorry I’m using my ambassadorial powers. But I think it’s, again, symptomatic. Our interpretation of the south is broader. It’s not only Afghanistan, but some other countries. What would be your answer to that?

MR. WILSON: Good. Why don’t we go on to Ambassador Kauzlarich, right behind –

Q: Rich Kauzlarich, George Mason University. I’d like to come back to Turkey a bit. You know, we went through this period in the early ’90s where Turkey was asserting a role throughout Central Asia and the Caucasus that, perhaps, didn’t fare well. But picking up on Steve’s point about regimes that are going to be politically more democratic but socially more conservative, I wonder if there may not be a new opening, looking out 20 years, for, if you will, the Turkish model in a country like Kazakhstan.

MR. SESTANOVICH: You know, I remember in the ’90s talking to people in Turkish, kind of, educational organizations, NGOs, about their activities in the former Soviet Union. Because there was a kind of missionary zeal there which was not completely approved of by the Turkish authorities at the time, but they thought in a way that is not completely foreign in, you know, other Muslim states – you know, let’s export the ideologues.

And they thought, great. You know, these guys can go off and start schools in Central Asia. You know, it turned out they weren’t terribly welcome there and they didn’t have enough resources, really, to make an imprint.

But now I think you have quite a different situation. You’ve got – the government of Turkey represents what those people, those little NGOs, were aspiring to – that is, the empowerment of a politically democratic and socially conservative idea of what it means to be a Muslim society.

And in the – you don’t even have to put a lot of resources behind it, if you’re Turkey. The power of the example is much more potent. Turkey is one of the most dynamic countries in this or any region. And the impact of that – I agree with you – we are going to be seeing wherever Turkish culture is strong, but I think beyond it as well.

MR. WILSON: Anybody else?

MR. STARR: I’m probably more skeptical. I think – I think the influence of the Fethullah Gulen movement in Turkey is extremely powerful. I think that the Central Asians, across the board, have figured this out and they have reacted against it. And as they’ve developed their own educational institutions, they don’t need the Gulen schools, and I think they’re gradually going to be going home. And I think on this point, Kazakhstan’s position, in the long run, will be much closer to that of Uzbekistan than it’s been in the past.

MR. WILSON: The one piece I would add there, as somebody who spent a little bit of time both in Turkey and working on Central Asia, I think you’re comment about the Gulen movement in Turkey is a little bit of an oversimplification. But the other piece that’s going on here is that over the course of the last decade, or maybe a little bit less, Turkey’s attention has been focused on other things.

In the early 1990s, they were very focused – and President Demirel spent a lot of time, as some of us will recall, visiting these countries, cultivating relationships, helping get Turkish firms contracts, helping them, you know, establish investments, trading relationships, and so on and so forth. And the efforts that Steve referred to – not just by Gulenist-affiliated organizations, but by others – I think kind of reflected that.

But that’s not where Turkey’s attention has been. Turkey’s attention, for some reasons that have to do with its own tough neighborhood, has been much more focused on Iraq, on Iran, Syria, the Middle East, the Caucasus – and the Armenia – the discussions with Armenia a couple years ago reflected that great deal of concern about developments in Georgia in 2008 and since then. But – and you’ve had much less Turkish activity in the region.

They have – they have established this Turkic Union or Union of Turkic Peoples that’s, you know, one of these organizations people meet and talk about stuff. But I don’t know that it has – it’s not like the British Commonwealth in its – in its importance in any way, shape, or form. President Gul, current Foreign Minister Davutoglu, paid a number of visits to this region. They look at it as – they’re interested, and may have had a little bit of a role in Kyrgyzstan, in helping the post-election parties sort of form a government after the voting a year or so ago. But it’s not been in the forefront of Turkey’s attention.

If and as you look ahead 20 years, if and as the region to Turkey’s immediate south becomes a little bit calmer – could happen – you may well see a different kind of Turkish influence in the region. I would worry – come back to where I started – I worry less about the Gulenists, or maybe even the socially conservative part, and focus more on the economic piece. For a region that desperately needs investment, desperately needs to increase and diversify its economic relationships and its – and its overall economy, Turkey can be a window through which – through which Kazakhstan and all the others, I think, can modernize and develop and connect with the rest of the world in different ways.

I think we’ve exhausted our time for this session. We will be reconvening in the next room, in that direction, in five, seven minutes – now, basically. And so let me – please join me in thanking all of our panelists. (Applause.)

(END)

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Looking Back

Jason Harmala — Tue, 31 Jan 2012 12:05:47 -0600

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The Atlantic Council of the United States

Twenty Years of Kazakhstan Independence

Looking Back: Kazakhstan’s First Twenty Years

Chair:
Ariel Cohen,
Senior Research Fellow,
Russian and Eurasian Studies and International Energy Policy,
Heritage Foundation

Speakers:
John Herbst,
Director,
Center for Complex Operations,
National Defense University

Larry Napper,
Senior Lecturer and Director,
Scowcroft Institute of International Affairs

Martha Brill Olcott,
Senior Associate,
Carnegie Endowment for International Peace

Location: Washington, D.C.

Date: Tuesday, January 31, 2012

Transcript by
Federal News Service
Washington, D.C.

ARIEL COHEN: Good morning, ladies and gentlemen. Everybody hear me? Yes? My name is Ariel Cohen; I’m a senior research fellow at the Heritage Foundation. Thank you, the Atlantic Council, for organizing this excellent conference and inviting us. I think that focusing on Eurasia in this town is both necessary and sometimes unthankful. But the quality of this conference will provide thanks to the council.

Twenty years since independence raises some fundamental questions in case of Kazakhstan and other new – newly independent states of Eurasia. How do you create a nation? What does it mean to achieve, accomplish and implement independence? We all know what the baseline was. The baseline was the post-Soviet collapse and the lack of experience of independent nationhood in Kazakhstan and most other countries of Eurasia.

The challenges were enormous. It was getting rid of the legacy of Soviet style of governance: top down, totalitarian or late authoritarian. It was getting rid of the skewed economic structure that was heavily tilted towards the military-industrial complex. We heard from the witnesses to history, from General Scowcroft and others, about nuclear disarmament.

And while the Kazakh nation existed for hundreds of years, the Russian-speaking population did not feel any loyalty to the newly established country. How do you create the national cohesiveness in a situation like that? How do you develop the tremendous hydrocarbon reserves which were deliberately neglected in the Soviet era in favor of West Siberia? How do you build a unique model of culturally predominantly Muslim and at the same time secular country that values education and culture?

To address all that, we have a terrific panel. Starting to my extreme left is the Honorable Larry Napper, senior lecturer and director of the Scowcroft Institute of International Affairs at the George Bush School of Government and Public Service at Texas A&M University, and former ambassador to the Republic of Kazakhstan. Larry, I remember fondly our meetings there.

To my left, a very esteemed colleague, a person I learned from a lot: Martha Brill Olcott, senior associate of Russia and Eurasia at the Carnegie Endowment for International Peace, and the author of the forthcoming book, “In the Whirlwind of Jihad.” Martha is a co-director of the al-Farabi Carnegie program on Central Asia in Kazakh National University. And I had a pleasure to speak at the joint program in Astana just recently that Martha co-chairs.

Last but not least, another diplomat I hold in very high esteem: the Honorable John Herbst, director of Center for Complex Operations at National Defense University, and former U.S. ambassador to Uzbekistan and Ukraine – in both places facing challenges in managing them for the benefit of our country.

We said – who is – who is first?

MR. : (Inaudible.)

MR. : I think it was John.

MARTHA BRILL OLCOTT: John.

MR. : Yeah.

MR. : John.

MS. OLCOTT: John, then Larry, then me.

MR. : OK. You’re last, right?

JOHN HERBST: I was delighted to be speaking first this panel, figuring I’d therefore be able to speak my views and they would not be repeating what anyone said. But in fact, the previous three speakers have raised all – (laughter) – almost all of the issues that I intended to raise. Nonetheless, I’ll push ahead.

If you go back to Kazakhstan independence, you understand how far the country has come over the past 20 years. I think you could speak about four major challenges that faced the Kazakh leadership of that time. The first was, how were they going to organize politically in the wake of the collapse of communism? The second was, how were they to proceed with economic development, again in the wake of the collapse of the communist system? The third was, how would they manage the various, you might say communal issues that were essential to maintain the country’s stability – the rise of Kazakh nationalism and pan-Turkism, in a country with substantial Slavic population and with the tendencies toward irredentism in the neighboring country of Russia? And then finally, the issue of nuclear weapons.

Looking at that list, you can see how far the country has come. And I’ll deal with those issues backwards. As already discussed, Kazakhstan was quickly moving towards denuclearization – and in the process helping the international community, and the United States in particular, deal with the other nuclear states of the post-Soviet world, in Belarus and in Ukraine.

On the issues of civic comity or ethnic relations, I think you’d have to credit Nazarbayev with great leadership and great wisdom. He understood the importance of the rise of pan-Turkism and of Kazakh nationalism, and he wanted to challenge that in a positive way for the country. But he recognized, the same time, that ethnic chauvinism was a great danger, especially with this very large Slavic population and with certain influential voices in Moscow talking about how northern Kazakhstan properly belonged to Russia.

And so you saw President Nazarbayev, in the early years of Kazakh independence, arguing, as the 1993 constitution was put forward, that in fact, well, Kazakh should be named the official language of the country, but Russian should be recognized as a lingua franca. And ethnic – being an ethnic Kazakh should not be a condition to be president of the republic, but to be able to speak Kazakh fluently would be. So he was a visionary in managing interethnic relations, which were essential to also dealing with the problem of Russian irredentism.

Now Ross said we should talk about anecdotes as we discuss what happened in relations with the United States and Kazakhstan. And I’m – I remember being a deputy to Ambassador Jim Collins, working on the whole post-Soviet space in the early and mid-’90s. And I remember the way we were very skeptical, even laughing, at this bizarre notion of moving the capital from Almaty to the town of Akmola up in northern Kazakhstan. And of course, exactly on the schedule President Nazarbayev set down, the capital was created. A city of three-quarters of a million people exists today, and it’s a thriving and very modern and very impressive city. And in the process, the claim of Kazakhstan to this part of its territory was strengthened. So again, we see visionary leadership achieving important goals.

And of course, then you talk about the economy. I don’t need to discuss that much, because we have already heard from others. The growth of Kazakhstan’s GNP has been extraordinary. Of course, it’s based in part on the good fortune of having extensive hydrocarbon resources. But also, those hydrocarbon resources would not be developed without President Nazarbayev’s commitment early on to market-based reforms; to his understanding early on that, to develop these resources, he needed to have these – the help of the best countries – the best companies in the world, companies which were not necessarily popular in some of the neighboring capitals. And he understood as well that, to fully profit from his resources, he had to develop pipelines out which were not dependent upon one country. And he managed all of those things without provoking any countries in the area, which again is a signal achievement.

The last item on our list is the first thing that I mentioned, and that is the political organization of the country. Here is the one area where I don’t think we can talk about a clear achievement. Yes, the leadership of Kazakhstan deserves credit for creating 20 years of stability. And 20 years of stability is not something to be laughed at, especially in that part of the world. Just look at some of the neighbors, and you know what I am talking about.

But at the same token, we have not seen the institutionalization of a political system. Now, I’m not here talking about the institutionalization of democracy, which is related but distinct. Instead, we have a leadership which is essentially based upon personality. And you have no clear transfer-of-power mechanism, which is the key to stability over time. And the country’s leadership relies upon democratics (ph) symbols and institutions to justify its rule, even as it flouts those values in ensuring election results, muzzling the opposition and muzzling inconvenient media and inconvenient NGOs. This is a serious problem, which I think needs to be addressed. And it needs to be addressed so that there can be a stable transition of power to ensure the stability of the country.

Now I don’t want to end on this negative note, because again, if you look at the list of challenges that the country faced 20 years ago, success in managing nearly all of them is remarkable. And anyone who predicted that 20 years ago might have been dismissed as a Pollyanna, someone who could not see how things would truly develop. So Kazakhstan is a certain success story, and a success story we see as well in the use of the country’s vast resources to develop a cadre of leadership that will take the country forward.

And with that I have one more small anecdote. I went out last year to the Monterey Institute in California to talk about my day job, which is dealing with complex operations of U.S. forces in places like Iraq and Afghanistan. In this class of about 30 people, two individuals stuck out. The first was the actual professor of the – of the class, a young woman from Kyrgyzstan who was making her career in the United States because opportunities there in her native country are not quite what they can be and should be.

The second was an impressive young graduate student seeking her master’s, a Kazakh diplomat, who was there on a government scholarship to get her master’s and then to go back and serve in the foreign ministry. I saw in her the future of a country which is – has unlimited horizons. Thank you. (Applause.)

MR. COHEN: Ambassador Napper, you had a unique observation point from a neighboring country, and then followed the developments in Kazakhstan. What is your take on this?

LARRY NAPPER: Well, thanks very much. I appreciate the opportunity that Ross Wilson and the Atlantic Council have given us all to see old friends again that we haven’t seen in quite a while. I go back 20 years on this. Twenty years ago this month, then-Secretary of State Baker called a bunch of us together in the State Department. I had been the office – the office director – the last office director of the Office of Soviet Union Affairs – and was trying then to struggle to re-organize that office.

And he said, I want you – I want you boys to get going here. We’ve now recognized the independence of all these countries, and I want diplomatic – and I want an embassy in each of these countries within 90 days. And by the way, we’re not going to the Congress for a budget supplemental. (Laughter.) It was an election year, you will recall. And so, take it out of your hides, basically.

So we set about doing that. And we – I went back and went through my Rolodex of all the – all the guys that I had worked with and identified those that we – I thought – Dick Miles is here, Bill Courtney – (inaudible) – and we invited them to the State Department. And we said, OK, here’s a one-way ticket – (chuckles, laughter) – and a thin – this is the State Department – thin envelope of $100 bills. No check – no checking system, no credit cards – you remember this, Dick, I know. And here’s an Inmarsat – you know, the big backpack radio thing that you could make a call.

And I said, go out there, find the best hotel you can in town, and get two adjacent rooms: One’s the chancery, and the other’s your residence. (Chuckles, laughter.) And when you have that, then give us a call – (laughter, chuckles) – and we will – (inaudible) – that Inmarsat, and we’ll fly you out a starter kit. Remember the starter kit on the (pallet ?), that – back of C-141, and we pushed it off, and that was the starter kit for these embassies.

And I think Baker had it right, that one of the best things that the United States did in those – in those years was to immediately establish these embassies and diplomatic presence across the whole sweep of the former Soviet Union, and especially in Kazakhstan. And it was very important to us. Bill Courtney was a real pioneer there, and getting that embassy open and established was incredibly important.

I want to underscore what John and others have said about the statesmanship, the statecraft of Nursultan Nazarbayev in trying to – and succeeding in making it seem plausible, first – and then realizing in reality the statehood of – and the independence, the sovereignty, of Kazakhstan. I remember visiting there in – visiting Almaty in September of 1991 – this was after the coup but before independence – with Secretary Baker and Bob Strauss, who was the – an ambassador to the Soviet Union.

And I’ll tell you, there was a lot of – a lot of angst, a lot of concern, on both the – among the Americans and the Kazakhs, as to whether this was going to work or not. Well, the one person that you knew after talking with him, who had it in his heart and his mind and his head that it would work, was Nursultan Nazarbayev. And he was very convincing in that regard.

He laid out his legendary hospitality, including an all-nighter in the – in the (sauna ?) with Baker – (chuckles) – and think about that, and Strauss – (laughter) – you know, the – with the whole thing: the vodka, the birch bark – (laughter) – and birch – (inaudible). Going back to Moscow on the plane the next day, that was the only time I ever saw Bob Strauss under the weather.

But anyway – (laughter) – it – (chuckles) – Nazarbayev was great at this. And he always had a facility of working with American leaders in this way. He could – he could – he – and he was great at establishing partnerships with them and personal relationships. He could needle them gently when that opportunity presented itself. He was also – he – among all these leaders in the post-Soviet states, he had the facility of cracking a joke with these guys that worked.

I recall being in the Oval Office in – with President Nazarbayev and President Bush in December 2001. And – (inaudible) – I’m sorry, December – yeah, 2001, right – 2001 when he came to see – after the 9/11 attacks, came to see President Bush. And he came into the office and said – you know, and he had just been down to see George H.W. Bush in Texas. And he says, you know, I have a message for you from President Bush, the – Bush 41. And the president says, well, what is it? And he says, well, he told me to tell you that he’s going to kick your backside at the Bush family bowling tournament at – (chuckles, laughter) – over the holidays.

MR. : That was it.

MR. NAPPER: And – (chuckles) – yes. And, you know, that got President Bush, you know, and it sort of got the whole – now, you may think that’s a small thing. But to bring that off in the Oval Office is no small accomplishment. And he could do it.

Many have already spoken here about the enormous accomplishment in statecraft that was the settlement of the nuclear issue: the return of the nuclear warheads to Russia and the joining of the NPT as a non-nuclear state. And it demonstrates that what Nazarbayev understood, which is that Kazakhstan and its issues would seldom be front and center for American presidents, but that when it was – when – on those occasions when it was front and center, that it was important that Kazakhstan align itself with the overriding objectives of the United States. That occurred in the nuclear issue, and I want to talk about one other.

And that is immediately after the 9/11 attacks, because I was only six days into my ambassadorship in Kazakhstan when those attacks occurred. And President Nazarbayev immediately visited our embassy. He moved up the opportunity for me to present my credentials so we could begin to do business. He aligned himself, from the very start of the process of what we were going to do after the 9/11 attacks, with the work that had to be done – including working with the Central Asian states in order to put ourselves in a position to bring down the Taliban regime that had sponsored those attacks.

And I recall Yerlan was then foreign minister. He and I worked together. We even had a dedicated phone line installed between the ministry and the embassy so that we could work – I bet that phone is still there, Yerlan. Have you checked on that recently? It may still be there – on overflights and other issues. But that was a very, very important period, and a period in which Kazakhstan moved quickly to align itself with the United States.

Just one other point, and then I’ll stop. In that period, there was a feeling, certainly on the part of the administration, and we in the embassy as well, that this was an opportunity for Kazakhstan President Nazarbayev to move quickly and decisively on some of these issues that John Herbst and others have mentioned – about how to spur the evolution of a more complex, more modern, more transparent, more accountable political system. And the president and I had a number of very interesting conversations on that topic.

I was not as persuasive as I wished I could have been in that period, but we had a very open and frank dialogue on it. And I do hope that some of the recent developments that we have seen in the – with the organization of a multiparty Mazhilis and other developments will in fact see the development of a more modern, more accountable, more open and transparent political system. Thank you. (Applause.)

MR. COHEN: Martha?

MARTHA BRILL OLCOTT: Thank you. I feel really privileged to be here today. It’s wonderful to see so many people that I’ve known for so long. I’m one of the few people in the room, I think, that has spent the entire 20-year period since Kazakhstan’s independence doing things with Kazakhstan without stop. I feel privileged to have known every Kazakh ambassador to the U.S. and every U.S. ambassador to Kazakhstan.

I feel privileged to have been brought in very briefly – Larry remembers, I’m sure (laughs) – to the State Department, working as a special assistant and as a consultant to Deputy Secretary of State Lawrence Eagleburger at the very beginning of independence. It was my one stint of government service, and it’s not clear that either the government or I could do it again. (Laughs.)

When Kazakhstan first became independent, Kazakh leaders had very little direct knowledge of the U.S. and U.S. leaders had very little direct knowledge of Kazakhstan. Over the past 20 years, there has been an extraordinary amount of learning on both sides. The Kazakhs began their period of independence with only a handful of trained diplomats.

Very fortunately for Kazakhstan, although these diplomats were few in number, they were an enormously talented group. And on the basis of that group of diplomats – many of whom have served in the U.S., some of whom are in the room now – Kazakhstan today has a diplomatic service that ably represents Kazakhstan across the globe. And the U.S., at the same time, has built a substantial amount of expertise on Kazakhstan and, of course, all of Central Asia. And this expertise is now scattered throughout the appropriate agencies of the U.S. government.

So now, 20 years later, both sides deal with each other with much greater knowledge of the relationship, this has – knowledge of each other, and this has made the relationship – is now developed on a much more solid footing than it was 20 years ago. It’s a solid footing not just of shared goals, but of shared knowledge. It’s a relationship, I think, that is predicated on both sides trying to appreciate each other’s priorities in the formation of domestic and international relations. This effort to try to appreciate each other – even though they don’t always agree – I think is an important foundation of the very solid bilateral relationship that has emerged.

Do the U.S. and Kazakhstan see the world through identical eyes? No, they really don’t. And I think this is really important. Not surprisingly, obviously, given the disparity of size and the global positions of the two people, the two countries, Kazakhstan is generally expected to see its priorities through the U.S. prism. This sometimes leads to challenges in the relationship, because Kazakhstan has its own prism through which it views the world.

If I say inequality, I mean, it’s natural – this disbalance in size and importance has gotten Kazakhstan sometimes to do things it might not have thought about; other times, to do things that it wanted to do. And I think that some of the real successes in Kazakh foreign policy have been strengthened by this partnership with the U.S., the – and I’ll talk about some of these.

I think the partnership with the U.S. has been an important – has been an important aid in Kazakhstan’s multivectored foreign policy. I mean, I think Kazakhstan’s foreign policy, as everybody knows, is multivectored. Kazakhstan’s special relationship with Russia exists parallel with a close relationship with the U.S. It also exists parallel with a growing relationship with China, with Kazakhstan’s global role.

Kazakhstan’s relationship with the U.S. has also – was an important factor in Kazakhstan being able to achieve its goals in the nuclear sector and to be such a leader in the international disarmament movement. This leadership role, I think, in this international voice and international disarmament really made Kazakhstan’s bid to head the OSCE a more successful one. And, of course, it’s served Kazakhstan through the years.

Without this kind of foreign policy, I think it would have hard, even with all of President Nazarbayev’s enormous diplomatic talents and personal charm – it would have been harder for Kazakhstan to have the global role that it has created for itself. As I travel throughout the world, I’m always struck by this. I was in India last week, and really, you know, the relationship between Kazakhstan and India is also a strong one. Kazakhstan has carved out a place for itself, really, everywhere.

It has also created some disadvantages for Kazakhstan. People have talked about the difference in view on political change and political evolution. I think it is also – there are differences in view on national resource management and what the role of the Kazakh – what Kazakhstan’s role is. I mean, you’ll hear more in the energy section. I’d like to point out that it is also – even though the U.S. has been fully committed to a multi – multiple pipelines – I think Kazakhstan has effectively been cut off from shipping its oil out through Iran, oil and gas out through Iran.

And Kazakhstan has had to compensate for this all the way through. In that regard, I think, sometimes Kazakhstan doesn’t get enough credit for its good partnership with the U.S. as well. So in conclusion, I would really say, yes, the worldview of Kazakhstan and the U.S. – U.S. leaders and Kazakhstan leaders don’t always agree.

Kazakhstan has been a strong partner of the U.S. in Afghanistan, and that will give it a leadership role in Central Asia more generally. And there have been prices on both sides; that’s part of what a solid relationship is. I think we all know that in our own lives as well. People can be friends and not always see the world identically. Thank you. (Applause.)

MR. COHEN: Terrific. Three perspectives – two diplomatic, one an academic who is also a practitioner.

Now, we have a tremendous talent in this room, and I would encourage questions and comments. To keep this on track time-wise – we’re a little bit behind – let’s keep the questions or comments to about 30 seconds. Please raise your hand and identify yourself.

Who would like to ask the first question? Yes? And the mic is – yes.

Q: Julie Finley. I’m going to have to talk really fast because you said 30 seconds. (Laughter.) But I’m sitting here remembering how very, very strict the U.S. government was with Kazakhstan when Kazakhstan wanted to be chairman of the OSCE – almost to the point of rudeness in meetings. I know because I was rude in meetings. (Laughter.)

And it was a lesson in – a sort of lesson in diplomacy. I think the fact that the U.S. government was so strict and made it so difficult and so uncomfortable for Kazakhstan to reach its objective of chairing the OSCE made those extremely talented people in their foreign office more aware of what a great job they needed to do when in fact they were chairman of OSCE. Frankly, I never had any doubt they would chair it well.

And while a lot of people around the table at the OSCE said, oh my god, what have we done? They’re actually going to be chairman. I used to say, calm down. It’s probably a better foreign office than most of the foreign offices that have been in charge of the OSCE for the years. But it was – I thought it was great that we stood and were – we were vocal and tough about this opportunity. I think it made them better.

MR. COHEN: Thank you very much, Ambassador Finley. Any other questions? Or comments? Yes, ambassador – the mike, please, here.

Q: Rich Kauzlarich, George Mason University and former U.S. ambassador to Baku. A question, Martha: You mentioned China a bit, but could you reflect a bit on – looking into the future – the possibility of Russian-Chinese competition for influence in Kazakhstan and this part of the world? Thank you.

MS. OLCOTT: Well, I hate the term competition. I mean, I think that China has a strong position in Kazakhstan now. It’s a dominant partner in the oil and gas sector.

Kazakhstan’s participation in the customs union with Russia is something that will slow Chinese economic influence in Kazakhstan. I think that China – you know, unless there’s some sort of crash in China, which – I’m not a China expert and I’m not predicting – on its current economic development trajectory, China is going to be playing a much greater role throughout Central Asia in the coming years than Russia will be.

I think the cards are stacked in China’s favor in the long run. You know, and so I think that Russia – the customs union is part of Russia’s effort to slow it; I think Russia will succeed in slowing things. But inevitably, unless there’s an economic miracle in Russia or an economic crash in China, the balance favors China’s playing a greater and greater role. If that becomes competition – you know, but so far they’ve been tolerating each other because the cards they have are very uneven. I mean, they’re different.

MR. COHEN: And, of course, there is the Shanghai Cooperation Organization. That is supposed to be a platform to manage competing interests. I don’t know if I would accept that there is no competition. I think there is. But at least there’s a framework there that they can talk about.

MS. OLCOTT: I mean, other people know more about what goes on inside the Shanghai Cooperation Organization than I do. I think – obviously, there’s competition, but I’m not sure – but the question is, does it become vicious public competition? Both sides are aware of it. But the unevenness of the cards leads Russia to try to play a stronger hand. But I’m not sure that the Shanghai Cooperation Organization is able to – I mean, I think it has other functions to be a forum of dialogue; I mean, I think that this is going to go on in parallel space and not be verbalized.

Q: I think, also, that the – if there is a competition for influence between Russia and China in Central Asia, it just simply underscores the importance for Kazakhstan of a relationship with the United States, of the strategic relationship with the United States. Because that is a relationship in which, obviously, the United States can have no territorial ambitions on Kazakhstan and would find it very difficult to somehow monopolize the country’s resources or whatever.

So I think it underscores the importance of that – of the U.S. relationship for Kazakhstan, as a way of saying, OK, we have to deal with these pressures from our neighbors. We can use a strategic partner that is not a neighbor.

MR. COHEN: Two things about that. I think I wrote or said somewhere that faraway neighbors can be as important as nearby friends.

Q: Yes.

MR. COHEN: I’m sorry, far – oops – faraway friends can be as important as nearby neighbors, point number one. And point number two, in this town we tend to sort of phase in and out looking at Eurasia. We cannot afford to look at Kazakhstan and at Central Asia and Eurasia only through the prism of our logistics to Afghanistan. This is not just a shipping depot for our military. We have interests, and will have interests, way past the military phase in Afghanistan.

MS. OLCOTT: But if I can throw something in, I mean, we also can’t simplify this notion of balancing – great powers balancing in Central Asia. And the U.S. has a complex relationship with China. The way it’s going to deal with whatever China is doing in Central Asia is going to be through the prism of a much more evolved relationship – the same with the U.S. and Russia, and the same with Kazakhstan and all its various partners.

MR. COHEN: Right.

MS. OLCOTT: I mean, that’s the thing. We tend, especially when we try to get things to sound bites, to reduce it to two dimensions, when in reality there are at least three dimensions to all these relationships.

MR. COHEN: There’s more than three dimensions.

MR. : Yes, many more than –

MR. COHEN: We have time for maybe one last question. And I cannot resist – Ambassador Steve Sestanovich, right there.

STEPHEN SESTANOVICH: Thanks, Ariel, and thanks to everyone on the panel. I want to raise a slightly different question. Looking back over the past 20 years, whatever correct assumptions the United States made about what its relations with Kazakhstan were going to be, I think in general, American policymakers tended to think of the Central Asian states as a unit, and tended to think that there would be greater cooperation among them than has turned out to be possible.

In fact, the conflicts among them have been rather pronounced. I wonder whether the panelists could say a word about missed opportunities there, about whether there were ways in which Kazakhstan could have done more to facilitate regional cooperation.

MR. NAPPER: Well, it’s a – it’s a real puzzle. Regional cooperation – and it’s great to see you, Steve, by the way – it has been a – something that has eluded the countries of Central Asia. And part of it is because there are so many different aspects of it. One, I think it goes without saying there has been a rivalry, if you will, between Nazarbayev and Karimov, which has been – has been in some sense damaging to prospects for regional cooperation.

I think just the disparity between the size and potential strength of Kazakhstan and Uzbekistan, as opposed to the smaller countries of the region, whose economies are somewhat – and polities are so much weaker, makes it difficult for cooperation to be a two-sided, a two-way street there. As to what the United States could have done more, I’m not sure I have a good answer to that question. I think it has – the answer to that has eluded us as regional cooperation has eluded them.

I don’t know. John, do you have views on that?

MR. HERBST: I worked the issue of regional cooperation fairly extensively when I was in Tashkent. And my sense is that regional cooperation would have been more likely if leadership in the region, especially in Tashkent, were interested in it. But we didn’t really see that. I partly agree with you, Steve, that the United States saw Central Asia as a unit.

But as someone who was working the issues on behalf of the U.S. government, it was very clear to me – and I think not just to me – that we really weren’t going to succeed, because it would require the active participation of the locals, which we did not have. And Uzbekistan was really key on this question – one, because it is one of the two natural leaders in the region, and two, because it bordered each one. And in a sense, it was at the center of many of the problems between the countries of the region.

MR. COHEN: Real quick.

MS. OLCOTT: I will. I mean, I wrote a book about this, actually. You know, that was “Central Asia’s Second Chance.” I mean, I think we did have an opportunity – if the current Silk Road Strategy had been put in with more money and more cooperation, direct cooperation with the International financial institutions. I think we did have an opportunity in 2002, if we spend a lot more money – I don’t mean we; I mean the community – to have affected Uzbek domestic policy in that point in time, that that was a window we had. But I think now, you know, it’s just going to – it will muddle forward. It will improve, I think, as it muddles forward. I think things could have been a lot worse than they were. So it’s not regional cooperation, but it’s not regional enmity either.

MR. : In fact, border issues have largely been resolved.
MS. : Yeah.
MR. : It’s a very positive thing.
MR. : Yes.
MR. : But let’s remember. You dealt here, on the one hand in the Kazakh case, with “Mr. Integration.” Nursultan Nazarbayev came up with the Eurasian union idea 20 years ago, and tried to sell it to the Soviet, you know, leaders, the republic leaders – didn’t work. In Central Asia, the gentlemen in question were so obsessed with keeping their own power, and in a way so insecure – not just Uzbekistan. You know, trying dealing with the late Turkmenbashi. You know, good luck. He was so –
MR. : He was the antithesis of regional cooperation.
MR. : It could – it could be only done from bottom up. I remember Steve’s speeches about Central Asian integration in the ’90s, but there was no buy-in. And again, the cast of characters, on the one hand, you had “Mr. Integration,” but on the other hand you had Mister, you know, Disintegration or people who were trying to surround themselves with minefields and walls so high, it was very tough to integrate.
Unfortunately, we’re running out of time. A terrific panel. Thank you all very much.
MS. : Thank you.
MR. : Thank you to Atlantic Council. And back to Ambassador Wilson. (Applause.)
MR. WILSON: Thank you very much to our panel. We’ll take a 15 minute break now and reconvene at 11:30. Thanks.
(END)

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Introductory Remarks

Jason Harmala — Tue, 31 Jan 2012 12:02:04 -0600

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The Atlantic Council of the United States

Twenty Years of Kazakhstan Independence

Introductory Remarks:
Ross Wilson,
Director,
Dinu Patriciu Eurasia Center at the Atlantic Council

Welcoming Remarks:
Former Senator Chuck Hagel,
Chairman,
Atlantic Council

Yerzhan Kazykhanov,
Minister of Foreign Affairs,
Republic of Kazakhstan

Robert Blake,
Assistant Secretary of State
for South and Central Asian Affairs

Brent Scowcroft,
President and Founder,
The Scowcroft Group, Inc.

Location: Washington, D.C.

Date: Tuesday, January 31, 2012

Transcript by
Federal News Service
Washington, D.C.

ROSS WILSON: Good morning. My name is Ross Wilson; I’m the director of the Dinu Patriciu Eurasia Center at the Atlantic Council. And on behalf of the council, it’s my great pleasure to welcome you to this conference on the occasion of the 20th anniversary of Kazakhstan’s independence and of the establishment of U.S-Kazakhstan relations.

We’re especially pleased and honored to welcome here Kazakhstan’s foreign minister, His Excellency Yerzhan Kazykhanov, who is taking time out of a busy schedule visiting Washington to help open this event. We’re also honored to have Ambassador Robert Blake, U.S. assistant secretary of State for South and Central Asia.

I’m very grateful to the chairman of the Atlantic Council, Senator Chuck Hagel, and the chairman of the council’s international advisory board, General Brent Scowcroft, for joining us as well. Your being here demonstrates, from the very top of the Atlantic Council, this organization’s engagement and commitment to Kazakhstan and to Central Asia.

It’s customary at events such as this to recognize ambassadors in the room. If I did that, I would be speaking for quite a long time. There are at least 12, and possibly more, present or past U.S. and Kazakh ambassadors to each other’s countries, or ambassadors who had a lot to do with U.S.-Kazakhstan relations over the course of the last 20 years.

Two that I will recognize: the current American ambassador to Kazakhstan, Ken Fairfax, welcome; and also, of course, Ambassador Erlan Idrissov, current Kazakh ambassador to the United States, a friend of many of us, who encouraged the council to put together this retrospective and prospective look at Kazakhstan that we’ll have today. The council appreciates your support very much, and I also want to acknowledge the generous support of Chevron toward making this – today’s conference possible.

Today’s events look at Kazakhstan through two prisms: its very substantial achievements over the last 20 years, and the tasks that lie ahead. When independence was achieved at the end of 1991 – and a number of us in this room were involved, in one way or another, in U.S. foreign policy at that time – the circumstances and problems confronting the country must have been – have looked daunting, if not even extreme and fearsome. Our first session today after the opening will look back at the circumstances Kazakhstan faced in those early days and over the two decades that have followed, and how it managed some of those issues.

The next 20 years may be just as daunting. Kazakhstan will face many problems, some that will be new and some that represent unfinished business in its transition from the past. Our second session will talk about these issues, whose development will have tremendous bearing on the country’s ability further to consolidate an independent, free, prosperous and secure future for itself and for its citizens.

Throughout these discussions, and especially in our final session this afternoon, we can also reflect on the important role that our bilateral relationship has played. We’re not here to reminisce, but I am counting on my many friends, both Kazakh and American ambassadors, to share us some good stories. And you know who you are, so please be prepared.

To help us start the conversation, if not the reminiscing, I’m honored to be able to introduce Senator Chuck Hagel, chairman of the Atlantic Council. A two-term senator from the great Midwestern state of Nebraska, Senator Hagel served as a leading member of the Senate Foreign Relations Committee while in office. He made it his business to become one of the members of Congress most interested, knowledgeable and involved in foreign affairs and in the global challenges of importance to the United States. He brought that with him to the Atlantic Council.

He also serves as co-chairman of the president’s Intelligence Advisory Board, on the secretary of defense’s policy board, as a distinguished professor at Georgetown University and in many other capacities in the public life of this country. Please welcome Senator Chuck Hagel. (Applause.)

CHUCK HAGEL: Ross, thank you. Good morning. I add my welcome to each of you, and my thanks on behalf of the Atlantic Council for your contributions to not only this forum today, but to all of the efforts in leadership that you have made over the years to promote and deepen and widen this particular relationship between the United States and Kazakhstan.

As Ross Wilson noted, I believe today we’ll reflect on not just the last 20 years, the tremendous challenges and obstacles that Kazakhstan overcame – continues to work through; but the partnership that evolved and grows and strengthens each day between our countries. When one thinks of what happened 20 years ago in the world, when the Soviet Union collapsed, it unleashed tremendous forces of liberty, of possibilities, of hope, which the world had not seen, certainly since World War II. This also presented an astounding amount of great challenges for Central Asia and the former Soviet republics: no institutions, no governing institutions; there were ethnic, cultural questions and issues; tremendous poverty; hunger.

Everywhere you looked, and every metric you would apply to a successful society and nation, was in great question – not least of which, of course, was the nuclear arsenal that resided in Kazakhstan. And, much to the credit of so many people who worked diligently – including two of my friends, as well as many in this audience, and former colleagues Senators Nunn and Lugar – did an awful lot, and Dick Lugar still does as he visits Kazakhstan each year – and many of the Soviet – former Soviet republics – to focus on the continuation of dismantling these nuclear weapons. We’ll talk about that today. We’ll hear about that today from those who were there and contributed most to bringing Kazakhstan to where it is today.

Most importantly, though, what we will hear today – as we think about and talk about the future – which is what we’re really about, as the world needs to be about – is a focus on the Kazakhs themselves, and how they themselves were responsible for pulling together a very, very impressive country that has made astounding progress; and what that represents not just for Kazakhstan, not just for this relationship – the U.S.-Kazakhstan relationship – but just as importantly, and maybe more so, the region: stability, security, possibilities, engagement. And that is probably the anchor of, I think, the most significant accomplishments and what will represent the next 20 years that we all can look forward to.

Many in this audience, as I noted – and Ross introduced a couple, and there will be more introduced, and you’ll hear from a number today – were significant parts of that. And I want to add also my thanks to the ambassadors in this room who played a tremendous role in that, in particular the two ambassadors today that are already been acknowledged – our ambassador, Ambassador Fairfax, and Ambassador Idrissov – for the roles that you play; also to Chevron for its sponsorship of this forum today. There are corporate leaders in the room today. And you’ll hear from one of them, Ken Derr, who was the chairman and CEO of Chevron at the time, 20 years ago, when Chevron started to work arrangements and relationships with Kazakhstan – which have materialized and, I think, developed into not only significant energy production opportunities and realities, but also set down a base – a commercial base – a model for many other commercial ventures. And there are others in this room who were part of that. So Ken, welcome, and thank you for your continued involvement.

Also, another individual I want to recognize, who has been noted, is our assistant secretary – who, in his long, distinguished career as a diplomat – professional – career foreign service officer, has contributed a great deal to this as well. So Ambassador Blake, thank you.

Brent Scowcroft will be up here this morning. And I think you all have some understanding of Brent Scowcroft’s significance to this country, to the world; the contributions he’s made; and this particular contribution, the U.S.-Kazakhstan relationship, is not one of the minor achievements of General Scowcroft. So Brent, we’re – we appreciate you being here, and of course what you’ve done and – for and meant to – and your continued contributions to the Atlantic Council.

Chairmen of any institution are usually relegated to being very brief in their remarks – (laughter) – which I violate that occasionally, but I’m – (laughter) – a reformed United States senator. So I’m – (laughter) – attempting to put behind me the bad habits I picked up in the Senate. I’m not always successful, as you have just noted. But nonetheless, I try.

But our role is to – is to introduce the famous people, really, at these forums. And I have the distinct honor to introduce the foreign minister of Kazakhstan, who has played a rather significant role in this relationship and the development of Kazakhstan on the world stage. And that’s the other part of this, which is a remarkable story on not just what has happened in the areas that I have noted – you’ll hear more about in detail today – but the role Kazakhstan has played on the world stage. That is one of the great accomplishments of what’s happened in Kazakhstan over the last 20 years.

So, ladies and gentlemen, let me introduce you to the foreign minister of Kazakhstan, Yerzhan Kazykhanov. Thank you, sir. (Applause.)

MINISTER YERZHAN KAZYKHANOV: Well, good morning, ladies and gentlemen. It is a real privilege and honor for me to address this distinguished audience. And this is the first visit to Washington – my first visit in my capacity as a foreign minister, although I’ve been to the United States many times, and I’ve been working as an ambassador to New York.

And – but before sharing with you some thoughts about Kazakhstan and Kazakhstan-American relations, I would like to begin with few special thank-you. And I want to acknowledge the friendship and support of Ambassador Robert Blake of the State Department, General Brent Scowcroft and Senator Chuck Hagel, and thank you for giving me the floor; and a few former ambassadors to Kazakhstan – some of them here, some of them not – I’m talking about Beth Jones, Larry Napper – and I seen him sitting in the room – William Courtney, Richard Jones and Richard Hoagland, and of course current ambassador Ken Fairfax.

Thank you also to the honorary consul of Kazakhstan in San Francisco, Ken – Kenneth Derr, and the chairman of Chevron who signed the first breakthrough oil deal on Tengiz with President Nursultan Nazarbayev back in early ’90s; and to Ambassador Ross Wilson, our host today. This event and the close relationships between my country and yours would not be possible without all of you, and many more people I don’t have time to thank.

I would like to use this opportunity to congratulate Atlantic Council on the 50th anniversary. It is inspiring to see how your organization – initially focusing on U.S.-Europe, really, relations – is now contributing to foreign policy and international security on a global scale. In the meantime, let me welcome everyone to this event, and allow me to tell you a little about my country.

Distinguished friends, Kazakhstan is a new country. Last year we celebrated 20th anniversary of our sovereignty. The path which Kazakhstan chose in the first days of its independence remains unchangeable. Kazakhstan is a peace-loving nation. Its foreign policy is predictable, consistent and multivectored. That means we go out of our way to get along with everyone: first our neighbors, China and Russia; but also Europe and especially the United States. In short, our foreign policy stipulates that we do not have adversaries anywhere.

Most experts agree that Kazakhstan has done remarkably well in establishing independent foreign policy – better, in fact, than other former Soviet countries. Our foreign relations started – our foreign relations started even before we gained our independence on December 16, ’91. Kazakhstan’s president, Nursultan Nazarbayev, decided back then to create an – and maintain favorable conditions for the steady development of the country on the basis of political and economic reforms. Liberalization and determined integration into the world community was our goal then, and it is now.

An earlier success – an earlier success was our decision to spearhead nuclear disarmament – and – (inaudible) – said about that – and nonproliferation. Kazakhstan closed the Soviet nuclear testing sites and renounced what was then the world’s fourth-largest arsenal of the nuclear weapons. We remain to this day a leader in the efforts to rid of – to rid the world of nuclear devices of destruction. This is true even though we are also the largest producers of uranium.

Within this short – in terms of history – period of time, a lot of work has been done in the country on the path to develop democracy, rule of law, human rights and basic freedoms. Significant measures has been undertaken to enhance the system of human rights protection, develop the strength in civil society institutions. One of the most basic accomplishments is that Kazakhstan has been stable throughout its independence.

Moreover, we have achieved remarkable economic growth. You know that Kazakhstan is the most economically significant country in the region, with a strong resource base. The country has 3 percent of the world’s raw materials. Since ’93, Kazakhstan’s GDP grew up from $11 billion to $145 billion in 2010. Our GDP per capita today is $11,000, which you – if you compare it with the figures that we start with – we started with 700 (dollars) per capita income; now we have 11,000 (dollars), which is significant. And we have rather ambitious goals to double our economy by 2020 and reach the level of $16,000 per capita income in three years’ time.

Foreign direct investment in – into Kazakhstan amounted around 80 percent of all capital inflows into the Central Asian economies, with the European Union countries being the most important source of investment. The highly developed banking system, stable institutions and friendly government policy further encourage foreign investments.

From the very beginning it – of its independence, Kazakhstan has constantly been trying to promote regional economic integration. Astana has cooperated with the CIS, the Eurasian Economic Association, the Central Asian Economic Association, as well as the Shanghai Corporation Organization. Obviously, security and cooperation in Central Asia are priority for us. We are actively investing in our neighborhood and promoting regional efforts to confront regional challenges like illicit drug trafficking, water management, labor migration and disaster relief.

Kazakhstan is interested in stable development in Afghanistan – not least as a way of containing the spread of drugs, extremism and terrorism. We have spent 50 million (dollars) to educate young Afghans in Kazakhstan, and we have provided humanitarian assistance including fuel and wheat to Afghanistan.

We have growing partnership with the European Union. After Russia and Norway, our country is the third biggest supplier of energy resources to Europe among non-OPEC countries. We hope that our multidimensional cooperation with the countries of Europe will soon be reflected in a new basic agreement between Kazakhstan and the European Union.

At the same time, we are becoming more economically integrated with Russia and Belarus. As you know, we have established a customs union that will enable free movement of capital, labor sources, goods and services. This gives us to a market – this gives us access to a market of 170 million people.

As a Eurasian country, we look east as well as west. For example, we are part of massive transportation project, the China-Western Europe Motorway, going all the way from western China to Western Europe with 3,000 kilometers crossing the territory of Kazakhstan. We are also moving ahead with our efforts to join the WTO, and we appreciate America’s support. Extending its influence beyond Central Asia, Kazakhstan has also helped create the Conference on Interaction and Confidence Building Measures, known as CICA. CICA demonstrated that Kazakhstan is a part of larger Asian universe, just as its presidency of the OSCE in 2010 established its ties to Europe.

Kazakhstan has built solid relationships with various organizations, foremost among them: the CIS, the Collective Security Treaty Organization, NATO’s Partnership for Peace program, the European Union. At the moment, we are chairing the Organization for Islamic Cooperation, the second largest international organization after the United Nations – our task to improve understanding between Muslims and Western world. You can only imagine how busy job is.

We are bidding to become a U.N. Security Council nonpermanent members in 2017, 2018. Wish us luck. In any case, Kazakhstan remains committed to a proactive engagement with the international community, as we believe it is only through greater cooperation that we can build a better and more prosperous world for all.

Our welcoming attitude abroad is matched by our embrace of democracy at home. Kazakhstan is a developing democracy. We get better with each election. Earlier this month, we held parliamentary elections. Seventy five percent of those eligible voted. And as a result, we will now have a multiparty legislature. For a young country still learning the ropes, that is a great achievement. And we look forward to make – to making more progress in the year – in the years to come.

Kazakhstan has welcomed the presence of all international observers and believes their work has played an important and generally constructive role in the ongoing development of our electoral process. In fact, I give you the figures that we had 819 observers from 11 international organizations and 29 countries. I think that it says for itself, as well as we had 156 foreign media representatives coming from abroad to observe the elections. All international organizations have made independent assessments and conclusions based on their own observation of the electorial (sic; electoral) process. We understand that democracy in our nation is still a work in progress. Kazakhstan will continue to pursue a steady path of democratization, ensuring fundamental freedoms and human rights.

Ladies and gentlemen, the United States was the first state in the world to recognize the sovereignty of our country on the 25th December 1991. And for that, we will always be grateful to the American people. I tell you that it was a really significant moment because many of you know that famous Alma Ata Declaration that was adopted on the 21st of December 1991, when the leaders of all former Soviet republics gathered together in Almaty, and they adopted this declaration creating the CIS. It was the beginning of independence. So four days later, we received U.S. recognition, and we signed the diplomatic relations between two countries. It’s – in fact, two countries are now competing who was the first – U.S. and Turkey. (Laughter.) And I – I’m proud that I, at that time, being young diplomat, I helped first American diplomats to set up their new embassy, and William Courtney was the first ambassador. I even remember the name of first diplomat who came to Kazakhstan. It was Daria Fane (sp). She was the first diplomat who arrived to Kazakhstan. (Chuckles.)

Well – and therefore another anniversary is 20 years of diplomatic relations between Kazakhstan and the United States of America is very important for all bilateral relations. Over the past two decades, a strong strategic partnership has been established between Kazakhstan and the United States. This partnership is both wide and deep. It is based both on bilateral agreements and friendship. In September 2006, the president of our two countries issued a joint statement, which they laid out – in which they laid out the strategic perspective for Kazakhstan-American relations. This include deepening our partnership in areas like energy, military cooperation, trade, and investment and democratization.

Kazakhstan is actively supporting a number of American initiatives. For example, we endorsed the new Silk Road project on the creation of a(n) original network of economic and transit connections, connecting South and Central Asia with Afghanistan. With this aim, we played an active part in the international fora on Afghanistan that took place in Istanbul in November last year and also in Bonn in December last year. And we convened a special contact group meeting in Kazakhstan on the 15th of November last year in Astana.

For its part, the United States is supporting Kazakhstan initiatives. On December 2nd, 2009, the United Nations General Assembly adopted the resolution initiated by Kazakhstan, declaring 29th August date of the permanent closure of the Semipalatinsk Test Site, as an international day against nuclear tests. It is important to note that 26 states, including the United States, were the co-authors of this resolution. A high-level American delegation has participated in the international forum on nuclear-free war that took place in Kazakhstan in October 2011. There is a high level interparliamentary cooperation. There is a caucus of friends of Kazakhstan and caucus on Central Asia in the U.S. Congress. Furthermore, we have a continuous change of interparliamentary delegations.

Trade and economic relations between our two countries are increasing. The U.S. is one of the Kazakhstan’s biggest trade partners. According to 11 months of last year, the volume of commodity turnover between the two countries was $2.5 billion. That is 26 percent more than for the same period of the previous year. From ‘93, the gross inflow of direct investments from United States to Kazakhstan amounted for over $20 billion. Since 2006, we have been taking – we have been working with our American friends to implement a program of economic development, designed to diversify the economy, improve the competitiveness, and achieve steady growth.

For the past 10 years, the Kazakh-American special commission on partnership in the field of energy has been established. And I had, yesterday, a very good meeting with Mr. Poneman, and we discussed energy cooperation issues. By the way, our country has put forward this candidature to host Expo 2017 in Astana, with the topic “Energy of the Future.” We believe that this topic is of great interest to our American partners. The support of the United States for our candidature would be a wonderful opportunity to once again confirm the unanimity of our views in the field of sustainable development.

Another important topic for our common cooperation is the strengthening of a regional integration in Central Asia. We believe that the framework agreement on trade and investment between the United States and the countries of Central Asia, known as TIFA, can become one of the basic instrument for stimulating the integration process in the region. Also, in the field of defense, the cooperation between Kazakhstan and the United States is actively developing. Over the duration of our military cooperation, the United States has allocated over $91 million to Kazakhstan in assistance program.

Ladies and gentlemen, of course, like any country, we sometimes face internal difficulties. For example, regardless of our internationally-recognized success in the field of achieving interconfessional harmony, Kazakhstan has not been immune from some manifestations of Islamic radicalism. For example, there were attacks by religious extremists last year in Aktyubinsk region and city of Taraz. We cannot allow to spread and – spread of extremism or terrorism in our country. Therefore, we took a firm response, which I think was understood by the international community.

It is clear that the labor dispute that appeared to have caused the demonstrations and violence in the Mangystau district should have been resolved earlier. The loss of life was tragic. And our government has expressed its sympathy and support for the families of the victims. In the immediate aftermath of the violence incident – violent incidence, we took steps to restore order and provide security for our citizens, and we launched an independent and comprehensive investigation into the causes of violence and the response of the police. We recognized that a full understanding of this event can yield important lessons for government and help contribute to more effective policymaking and governance in future.

Ladies and gentlemen, in concluding my remarks, I am confident that our meeting today will further strengthen mutual understanding, trust, political and economic cooperation between Kazakhstan and the United States, for the benefit of our peoples and for stability and security in the world. This is the main reason, in my opinion – in my opinion, why the work of this Atlantic Council conference is so important for both parties. In this regard, let me wish you – all of us cooperative and fruitful work. Thank you very much for your attention. (Applause.)

MR. WILSON: Thank you very much, Mr. Minister, for those excellent remarks. It really laid out many of the issues that I think we’ll be discussing in more detail today. To give us the American government’s perspective on Kazakhstan and U.S.-Kazakhstan relations, we’re very pleased to have with us Robert Blake. A career diplomat, Ambassador Blake has served in Tunisia, Algeria, Nigeria, Egypt, and India. He served as the U.S. ambassador to Sri Lanka and the Maldives from 2006 until he was appointed assistant secretary of state for Central and South Asian affairs in 2009. Please join me in welcoming Ambassador Robert Blake. (Applause.)

ROBERT BLAKE: Well, thank you very much, Ross. I appreciate that introduction.

Mr. Minister, let me add my own very warm words of welcome to you. Here in Washington, Secretary Clinton looks very much forward to seeing you tomorrow in your bilateral meeting. And let me also just thank the Atlantic Council for arranging this conference here today. It’s a real treat for me to see so many of the diplomats who did so much to build relations that now exist between our two countries and to share a platform with wonderful leaders like General Scowcroft and Senator Hagel. So thank you all so much for all that you have done to help build this partnership.

Ladies and gentlemen, the United States and Kazakhstan have enjoyed 20 years of dynamic and growing partnership. We’ve worked closely and cooperatively together, starting on December 21st – 25th 1991, as Senator Hagel and the minister said, when then-Secretary of State James Baker visited Almaty to meet with President Nazarbayev and establish formal diplomatic relations between our countries. Twenty years later, we have accomplished much, but see great scope to do more. When they meet tomorrow, Secretary Clinton and Foreign Minister Kazykhanov will discuss how our two nations can strengthen further our strategic partnership in the years to come.

From the very first days, our relations with Kazakhstan focused on integrating Kazakhstan into the world community and helping it to deal with the many challenges of a new nation. First among those was nuclear nonproliferation, since newly independent Kazakhstan inherited responsibility for a broad array of nuclear weapons and other arms. Many people feared, in the collapse of the Soviet Union, the potential for a new and increasingly dangerous era that could have triggered a wave of nuclear weapons proliferation, creating untold dangers, instability and risks. Thanks in part to our close cooperation that did not happen. Key to this outcome was President Nazarbayev’s firm decision to make Kazakhstan the first country voluntarily to relinquish nuclear weapons and protect stockpiles of other dangerous materials. Not only did Kazakhstan transfer those weapons out of Kazakhstan in a responsible way, but it ratified the Nuclear Non-Proliferation Treaty.

Since then, we’ve worked to reduce other risks of proliferation, including helping to decommission the Soviet-era nuclear reactor in Aktau that produced weapons-grade plutonium, and moving tons of spent fuel, which could easily be used to produce nuclear weapons, to secure long-term storage. Today, Kazakhstan remains a key player in nonproliferation cooperation as it meets the challenges of the 21st century, both bilaterally with the United States and increasingly multilaterally. It serves as a model to the world of how a country can gain – not lose – security as a result of ridding itself of nuclear weapons.

Energy is another important building block of our growing relationship. As the Soviet Union began to dissolve, U.S. energy companies took what, at the time, was an economic and political risk by investing in oil and gas development in Kazakhstan. The risk paid off, producing a partnership between a stable, responsible government and international energy firms with the necessary capital and expertise to help unlock Kazakhstan’s energy resources.

Again, President Nazarbayev recognized the challenge and opportunities for his young country and initiated macroeconomic reforms that set the country firmly on the path towards a market economy. The decision was not an easy one, and the country went through a painful period of adjustment in the 1990s. However, these reforms created what is today one of the strongest economies in the former Soviet Union.

For twenty years, Kazakhstan has also attracted considerable international investment, particularly in the extractive industries, that has created jobs and prosperity. Kazakhstan stands out in the region for substantially reducing poverty and laying a solid foundation for the creation of a real middle class. The Kazakhstani government’s wise decision to create a national oil fund has served to protect the country against the effects of the financial crisis and to help ensure that oil revenues are invested for the future of Kazakhstan’s people.

To further diversify its economy and stimulate further economic reforms, Kazakhstan soon hopes to join the World Trade Organization, which the United States strongly supports, and recently announced it will adhere to the principles of the OECD’s Declaration on International Investments and Multinational Enterprises. WTO accession and participation in the OECD will help and encourage Kazakhstan to make the structural changes necessary for it to take advantage of regional and global integration efforts, and to spur its own domestic output and exports.

Kazakhstan recognized economic success would rest on investments in education, particularly higher education. The Bolashak scholarship program has provided thousands of young Kazakhstani undergraduates and post-graduates education in high-quality universities around the world, including in the United States. The academic success of these young Kazakhstanis, and Kazakhstan’s growing economic and regional weight, made it of interest to American universities. It was no surprise, then, that the newly established Nazarbayev University in Astana has partnered with top- tier international universities, including Duke, Rensselaer and several other American universities, to provide students in Kazakhstan with education that meets international standards.

The close partnership that both Nazarbayev University and the Kazakhstan Institute of Management have with top-ranked U.S. universities as well as with two Department of Energy national labs speaks volumes about the robust nature of the ongoing cooperation and government focus on investment in education and the development of Kazakhstan’s youth. The planned opening of a Carnegie International Institute for Peace program at the Al-Farabi University represents yet another example of advanced education and scholarly cooperation.

The United States has been fully supportive of Kazakhstan’s commitment to international education. We are pleased to host Kazakhstani students at our many excellent universities, and we look forward to Kazakhstan’s continued, considerable investment in international education to complement the large investment we have made through our own professional and educational exchange programs, such as the Fulbright, Muskie, Future Leaders and International Visitor Leadership Programs.

A focus on education, technology and innovation continues to be a priority for both of us. Kazakhstan was the first country in Central Asia to sign a bilateral science and technology agreement with the United States. And our bilateral science working group held its first meeting in 2011 and is now developing ideas for future cooperation.

Progress on education and innovation are part of Kazakhstan’s welcome efforts to position itself as a leader in the international community. Kazakhstan, as the minister noted, has assumed a much more prominent role on the world stage, first as the 2010 chairman in office of the OSCE, and now as the 2011 chair of the Organization of Islamic Cooperation. It is increasingly assuming an important role as a donor, with considerable assets and expertise. It made a very significant contribution to stabilizing Iraq by sending troops to assist the coalition efforts with demining.

Today Kazakhstan is supporting ISAF in Afghanistan by facilitating ground transportation and over-flights. It is also contributing to U.S. and international efforts to stabilize and rebuild Afghanistan through its investment of $50 million to educate, in Kazakhstani universities, Afghanistan’s next generation of leaders. Additionally, last October Kazakhstan delivered over 5,000 tons of food and other supplies to Turkey after the devastating earthquake that shook that country. We look forward to working with Kazakhstan as it develops its work through KazAID and other mechanisms.

At the Istanbul conference last November, Foreign Minister Kazykhanov affirmed Kazakhstan’s commitment to improving regional cooperation, especially in support of Afghanistan’s stability. Regional leaders agreed on a set of ambitious confidence-building measures and a process of regular consultation to ensure implementation. At Istanbul, Kazakhstan also took a lead in supporting the New Silk Road vision with projects such as supporting the Central Asia regional economic cooperation transportation corridors across Kazakhstan, that will link China with Europe and will also create a north-south highway linking Central and South Asia.

We welcome also Kazakhstan’s ratification of an agreement with the Asian development bank, just a few weeks ago, to finance reconstruction of 790 kilometers of the kara (ph) Transportation Network, that will connect Kazakhstan with its Central Asian neighbors, Russia, Azerbaijan and Turkey across the Caspian Sea. Such transport and other networks will help spur the trade and investment that can catalyze the regional integration everyone agrees will be essential to helping Afghanistan move to a trade- rather than aid-based economy and expand the opportunities for all the citizens of Central Asia.

Despite Kazakhstan’s undeniable progress over the last 20 years, there remain important steps that must be taken to fully ensure Kazakhstan’s long-term stability and prosperity. President Nazarbayev has often spoken about the three goals he set for his country when Kazakhstan became independent: to build a truly sovereign and independent state, to jump-start the economy and to liberalize the political system.

Kazakhstan has advanced rapidly in pursuit of the first two goals, although the country still faces challenges with respect to economic diversification. But the third goal remains largely unmet, despite Kazakhstan’s stated commitments to reform and to uphold human rights and democratic principles. At the OSCE ministerial in Vilnius on December 6th, Secretary Clinton stated that even as the United States seeks cooperation with Kazakhstan and other Central Asian nations on Afghanistan, energy and trade, we will continue to encourage our Central Asian partners, both governments and civil society, to pursue democratic reforms and improve respect for fundamental human rights.

We believe a prosperous, peaceful future for Kazakhstan, and an increasingly deep bilateral relationship between our two countries, will benefit from meaningful progress to institutionalize democracy and ensure respect for the human rights of all of Kazakhstan’s citizens. A more open and dynamic political system would reflect the maturity of the country and provide institutional bases for long-term stability, predictability and development that the people of Kazakhstan deserve.

We hope that Kazakhstan’s newly-elected multiparty Majlis will shape a legislative process that reflects the needs and the desires of all Kazakhstani people through transparency, lively debates and public hearings. The Majlis can take bigger steps towards political openness by considering the opinions of all political factions and segments of society. Respect for freedoms of expression, association, assembly and religious belief is necessary to undergird social dialogue and vibrant democratic, as well as economic, development.

We also hear and support important voices from within and outside of the government of Kazakhstan, calling for greater independence of the media and judiciary, space for civil society to operate without undue hindrance and an electoral system and laws to ensure fair elections that fully meet international standards. President Nazarbayev has the opportunity today to demonstrate the same far-sighted leadership to build democracy that he showed in renouncing nuclear weapons and initiating market reforms. The people of Kazakhstan will be the first beneficiaries, but Kazakhstan would also be a powerful example for the wider region.

So in conclusion, let me say that over the past 20 years the United States and Kazakhstan have developed a genuine and increasingly strategic partnership. President Obama and President Nazarbayev reaffirmed that strategic partnership in April 2010, declaring our two nations’ commitment to a shared vision of stability, prosperity and democratic reform in Central Asia and the broader region. A partnership is an ongoing process, and I am confident that our foundation is solid, that prospects are bright, and that it will continue far into the future. Thank you very much. (Applause.)

MR. WILSON: Thank you very much, Mr. Secretary. To complete this opening session, it gives me special pleasure to introduce General Brent Scowcroft. As many in this room will recall, General Scowcroft served President Nixon as deputy national security adviser to Henry Kissinger, and then as national security adviser in his own right during the presidencies of Gerald Ford and then George H. W. Bush, during which time the USSR collapsed and Kazakhstan achieved its independence along with the other republics of the former Soviet Union.

General Scowcroft is a mentor to me, to many in this room, a leader of the Atlantic Council, along with Senator Hagel and Fred Kempe. Please join me in welcoming General Scowcroft. (Applause.)

BRENT SCOWCROFT: Thank you very much, Ross, for those kind words. There’s very little left to say after the comprehensive presentations of the foreign minister and Secretary Blake, and so I’ll say very little. But what I’d like to do is maybe add just a little bit of color, because President Bush, Sr. came into office just shortly before all of these dynamic developments took place. And so we had – not only a key seat in the audience watching these developments, but we were participants in a process which we had not fundamentally anticipated, didn’t know what direction it would go or how it would turn out.

And it all sounds so pat and scripted now, but, boy, it wasn’t. I first met Nursultan Nazarbayev early in 1989, shortly after we had come into office. And he came on a visit to Washington. And he came into my office and he was the archetype, to me, of a Soviet politician. You know, he just looked the picture. And he sat down, and at this time he was the chairman of the council of ministers of the Soviet Socialist Republic of Kazakhstan, a part of the Soviet Union.

Well, we didn’t really, at that time – we didn’t think of all of the entities of the Soviet Union. There was the Soviet government and the rest of them didn’t really matter – psychologically. So he sat down and he told me what a wonderful place Kazakhstan was, and how rich it was in raw materials, and how he wanted to turn it into a dynamic structure. And he was extremely impressive – positive and impressive. But I thought, well, that’s nice.

Then we got involved in the unraveling of the Soviet Union. And there are two aspects to it that I want to mention, and they’re aspects that continue strongly today with our bilateral relations, and that is: energy, in general, and nuclear aspects in particular. Because shortly after Nazarbayev came in to see me, Ken Derr came to visit the president. And Ken Derr presented what was a pretty astonishing notion, the idea that an American oil company would invest in the Soviet Union, and could we help.

Well, we didn’t know how to – how to help exactly, so the president talked to Gorbachev, and is that the way to go or do you go directly to Kazakhstan? We didn’t know. But we pushed that notion of investment because that looked like a really solid way to start to be – to start a different process with a Soviet Union that we could see was in – was in dramatic change.

But then came the unmistakable signs of a breakup. And Gorbachev was trying to restructure the union into a more autonomous group. And he was having elections. He had a new constitution for the Soviet Union and he was having elections around in the various republics. And so this was going on. In the meantime, we’re looking at the Soviet Union with a nuclear arsenal that is absolutely immense, and we began to talk. What do we do if this falls apart? Are we better off with whatever parts remaining – even if it fell apart, there still could be a Soviet Union because the notion that the Soviet Union would disappear as it did in the following December was still very remarkable.

So our – would we be better off with a Soviet Union that, whatever happened to the internal structures, controlled all the nuclear weapons? It terms of control of the weapons, absolutely. But then you’re faced with the huge arsenal under single control. Is that in our interest or is in our interest really to have control of those weapons go to the constituent states, which would make a concerted attack by the Soviet Union on the United States improbable if not impossible but it would disperse control of those weapons to a number of different places, which is troublesome.

So those were the problems that we struggled with. And Nazarbayev helped us enormously because he was committed mentally – and we didn’t know this at the time – he was committed mentally to make a contribution to nonproliferation and to getting rid of nuclear weapons. And Kazakhstan was a particularly important place. Not only were there four bases of missiles deployed there, but it was a Semipalatinsk test ground. So if the Soviet Union broke up, would they be willing to let go of their test facilities, because they were all in Kazakhstan?

So it was a very complicated issue. And Nazarbayev came up and helped us enormously, because he said: I want to close Semipalatinsk. I don’t want it at all. So that solved that kind – that part of the problem. But those were the – those were the things we were wrestling with while this was going on and before we really got to know Nazarbayev.

I think on – moving forward, the last time Nazarbayev came to Washington, I think, in 2006 – somewhere around there – he chided us and the weapons states of the world for not making reductions in the size of the arsenals. Well, we now do have a new START treaty and the way is cleared for further steps. And I think that Kazakhstan can play a role, not only in urging reduction in nuclear weapons but, as the foreign minister said, they’re the largest uranium producer in the world with, I think, at least the second-largest reserves.

And one of the things that we need to do is to get better management of the fuel cycle. And one of the ways that Kazakhstan could help is in the production of slightly enriched uranium for nuclear fuel and in the disposition of spent nuclear fuel. In other words, if we can look forward into a way to manage the growing nuclear power incentives in the world, it maybe is managing the fuel cycle in an international way which reduces the chances of proliferation by new nuclear power states. And Kazakhstan, I believe, can play a very important role in that regard.

In the energy field, Kazakhstan remains an energy powerhouse next door to a power-hungry Europe. And the possibilities there are enormous. One of the problems is that that part of the world is difficult in terms of how you ship – how you get out, how you get the resources out. It’s been one of my favorite hobby-horses to look at the Caspian Sea and to envision the possibility of a pipeline under the Caspian Sea, which would remove the possibilities of interruption of supplies in a way which could help all the way around.

Now, one of the problems is, who owns the Caspian Sea? And is it – it’s an international body. It – do you take the traditional ways you do for the oceans and divide it into its sectors? A number, I believe, of the Caspian partners want that. Or do you treat it, as Russia says, it’s a collectivity and it takes unanimous consent to do it. Anyway, it seems to me, the interesting thing is if you go back to the beginning of the time of our relationship with this great country to the present, the two key elements that we started the relationship with are still very important aspects.

Let me say just one additional thing about President Nazarbayev. He has a strong personality – strong, self-confident and visionary. And I think that he has done wonders for Kazakhstan. Increasingly, though, he has to pay attention to passing on the stable political structure – passing on one which can adapt to the rapidly developing country, and to guarantee its economic and political development. The first steps were taken in the last election to increase representation in the parliament. That will be a task that I’m sure that President Nazarbayev will take on with relish, as he has all of his other enterprises.

It’s a great pleasure to be with you. Thank you, Mr. Foreign Minister, for gracing us with your presence. And good luck with the conference. (Applause.)

MR. WILSON: Thank you very much, General Scowcroft, for those remarks that I think lead very nicely into the next session. That concludes the opening of this conference. Please don’t go far. Our next session, “Looking Back at Kazakhstan’s First Twenty Years,” will start more or less immediately. In the meantime, please join me in thanking all of our opening speakers. (Applause.)

(END)

Twenty Years of Kazakhstan Independence and US-Kazakhstan Relations: 1/31/2012 - Lunch Keynote

Jason Harmala — Tue, 31 Jan 2012 11:12:16 -0600

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The Atlantic Council of the United States

Twenty Years of Kazakhstan Independence

Luncheon Keynote

Introductory Remarks by Ross Wilson,
Director,
Dinu Patriciu Eurasia Center,
Atlantic Council

Speaker:
Dan Poneman,
U.S. Deputy Secretary of Energy,
U.S. Department of Energy

Location: Washington, D.C.

Date: Tuesday, January 31, 2012

Transcript by
Federal News Service
Washington, D.C.

ROSS WILSON: Gentlemen, if I could have your attention please. (Sound of clinking glass.) Yes, that would help, thank you. Thank you very much. Ladies and gentlemen, it is time to move on to the next portion of our program and to – and to resume our discussions about Kazakhstan and the region and the issues before it.

Our featured speaker today is the Honorable Daniel Poneman, U.S. deputy secretary of Energy. I know from my own time at government that senior officials – some senior officials give more time and attention to some problems than do others. Dan Poneman is one of those who’s made a serious effort on Kazakhstan.

Since his appointment by President Obama in May 2009, the deputy secretary has visited the country several times, including as co-chair of the U.S.-Kazakhstan Energy Partnership, to commemorate the closing two decades ago of the Soviet nuclear testing site at Semipalatinsk that I think General Scowcroft referred to this morning, and to represent the United States at the Kazakhstan International Oil and Gas Exhibition and Conference.

Mr. Poneman served as special assistant to the president and senior director for nonproliferation and export controls at the National Security Council from 1993 to 1996. In between his stints in government, Mr. Poneman published widely; served on federal advisory panels related to proliferation and other matters; and was a principal at the Scowcroft Group for eight years.

The deputy secretary has agreed to make some remarks, and then, time permitting, to take a few questions from our participants. Please join me in welcoming Deputy Secretary Dan Poneman. (Applause.)

DANIEL PONEMAN: Thank you, Ross, for your kind introduction and for your extraordinary diplomatic service to the nation for so many years, and we watched with great admiration. I’d like to thank also the Atlantic Council, which has really become a very important thought leader in issues of this character. It’s always a pleasure to try to find out where Fred Kempe is on any particular day. He always sounds like’s he’s on a long-distance phone call, and I think he is.

I would like to say how honored and delighted I am to be here with my good friend Minister Kazykhanov, and so many – (inaudible) – I’m going to get in trouble by not mentioning everyone I know in the room from Kazakhstan. It’s been a long, happy relationship for me, one that has collegial attributes but really genuine friendship.

I would be deeply remiss if I did not acknowledge Ambassador Erlan Idrissov. I would note, I was surprised to see that the U.S.-Kazakh Energy Partnership that I co-chair was actually launched by Secretary of State Colin Powell and Foreign Minister Erlan Idrissov in an earlier era. Perhaps you had a few – fewer gray hairs at that time; I’m not sure; but you are doing a tremendous job here today.

But listen, this is a very important subject. And it’s an important issue not just for the country of Kazakhstan, but for the region and the world. It is not given to many generations in any nation to have the opportunity to really build a nation, to build a republic. And that is the opportunity that Kazakhstan has had. And 20 years ago now, we are looking back at just an extraordinary development of that nation since then.

With the end of the Soviet Union – and, as Ambassador Wilson acknowledged, I’ve spent a lot of time working not just on Kazakhstan, but on proliferation and nonproliferation issues – people sometimes forget, when things turn out well, how they could have turned out. But I remember. I was a nonproliferation student, and at that time, the breakup of the Soviet Union caused deep concern. I was already working for General Scowcroft at the National Security Council. We were facing the prospect of four – four – new nuclear weapon states.

Now, you know, nuclear weapon states – when it comes to proliferation, pace matters. And you look along the trajectory of history, and you had the United States, Russia, France, China. Then we go 10 years until the Indian peaceful nuclear explosion of ’74. So all of a sudden, we’re looking at the prospect of four.

And indeed, at the National Security Council, we were focused on what was going to happen to the material, what was going to happen to the weapons, what was going to happen to the people, to the expertise. And it was not at all inevitable what would ensue – not at all. It depended on choices. It depended on deep, fundamental, strategic choices.

And President Nazarbayev took an historic choice, a strategic choice, a choice for peace, a choice to end testing at Semipalatinsk, a choice to send the nuclear weapons to Russia, and a choice to bet the future of Kazakhstan not on a vision of a legacy nuclear power; but a rather different kind of a vision of a nation that would turn away from nuclear weapons, that would embrace the principles of nuclear nonproliferation, and would bet the future on the talent of its people and the resources that nature had endowed the nation.

That’s 1,400 nuclear weapons. And when you think of the devastation that can be wrought even by one, it gives you some sense of the transformational decision that President Nazarbayev made at that time. And that is why – when I had this extraordinary opportunity last October to join Minister Kazykhanov and many others in this room – and Ambassador Bill Courtney, our first ambassador to independent Kazakhstan – to go out to ground zero and to see where the Soviet testing had first been done – the first Soviet fission device, the first Soviet fusion device – and this had all been abandoned – and to have the opportunity, as we did, to visit with and be joined by on the order of 20,000 Kazakh citizens out there – it was an absolutely unforgettable experience.

The decision that the president made for peace, for nonproliferation, has rightly earned Kazakhstan international respect and established a pathway forward for the rapid development of the nation. And I’m going to depart from my text to say: and for other nations, because nothing succeeds like success, and I think the results of Kazakhstan and that historic decision speak for themself.

As Kazakhstan progresses down that pathway, we at the United States Department of Energy are committed to building on two decades of mutually beneficial cooperation across a broad range of shared strategic interests, from nuclear security and nonproliferation to Kazakhstan energy production and economic diversification.

I am proud to report that this partnership is flourishing; it’s robust. I have an extraordinarily good relationship with my counterparts, and Minister Mynbayev has been an extraordinary partner. And we’ve worked on a wide variety of issues together, and some difficult issues as well – and always, if I may say, to a successful conclusion. I’m going to focus today on just a few areas of that cooperation that give ample reason to believe that progress will only gain momentum.

I will turn first, perhaps not surprisingly, to nuclear security and nonproliferation. Given Kazakhstan’s prominent role as a supplier of uranium for nuclear power plants, as well as the large nuclear weapons infrastructure that it inherited following the breakup of the Soviet Union, it is not surprising perhaps – especially given the decisions that President Nazarbayev has taken – that nuclear security and nonproliferation are bedrock issues in our bilateral relationship.

In the 20 years since that dramatic decision, the United States of America and the Republic of Kazakhstan have worked closely together to achieve our shared nuclear security and nonproliferation goals. And one that I’m very happy and proud to report is the comprehensive campaign to safely shut down the BN-350 reactor and secure 775 nuclear weapons’ worth of used fuel at that facility.

And I had the extraordinary experience of going to Aktau, where the BN-350 reactor is, and seeing these – I think the technical term is humongous canisters of spent fuel – in a rather much more exposed location; and then last October seeing those very same canisters at the other end in Semi, which was extraordinary – (inaudible) – technology center, which was one of the measures we came up with in those early days of 1991, to develop this center to engage former Kazakh weapons scientists in peaceful pursuits, and so to prevent the spread of expertise in nuclear weapons development and production by giving people more interesting and more benign paths of cooperation.

And most recently, these efforts have resulted in a milestone achievement in our work to eliminate the remaining stocks of highly enriched uranium in Kazakhstan. And this I actually had the opportunity to announce in October in Astana. Our two nations have partnered with the International Atomic Energy Agency to blend down 33 kilograms of highly enriched uranium from the Kazakh Institute of Nuclear Physics in Almaty. The resulting low-enriched uranium cannot be redirected to weapons use. Instead, it will be returned to the institute for future scientific work that will support the safe, secure and peaceful use of nuclear energy.

We look forward to continuing this cooperation, and we applaud Kazakhstan’s regional and international leadership in these areas. Together, our nations can continue to make progress toward achieving our shared goals of securing vulnerable nuclear materials, combating illicit trafficking in nuclear materials and strengthening the international nuclear nonproliferation regime. And together, Kazakhstan and the United States can continue to work to realize the ultimate vision that President Nazarbayev and President Obama both share, the vision of a world without nuclear weapons.

Just as Kazakhstan has been a leader on nuclear issues, so too can the country play an expanded role in promoting energy security and fueling global growth. The country has been endowed by providence with prodigious natural resources, including some of the world’s most impressive oil and gas fields. And I note here presence of Ken Derr, who I’ve seen in the Dan Yergin books signing the critical early contracts. I’ve had the opportunity to go out, and I’ve been at the Tengiz Chevron oil fields. And I think it is fair to say – I don’t think you would disagree – that it is an extraordinary demonstration of how advanced technology in some very challenging environments can bring a tremendous benefit to both of our people.

The rapid growth of hydrocarbon production in Kazakhstan since the country’s independence is largely the result of cooperation between the government of Kazakhstan and international oil companies. Within the framework of our U.S.-Kazakhstan Energy Partnership, we have worked to promote this kind of public-private cooperation. We’re very clear about the role of government, including our own. We strongly encourage private companies in their efforts, and we are gratified that it’s been very successful.

Many of America’s largest private companies have made significant investments in the production and transit of oil and gas in Kazakhstan. In turn, these investments have enabled some of the largest and most technically challenging oil production projects anywhere in the world, at places such as Tengiz, Karachaganak and Kashagan. They have also generated significant employment opportunities for the Kazakhstan people.

And yet, we have only just begun to get a sense for Kazakhstan’s importance to global energy markets and to energy security. Kazakhstan has tremendous potential to develop further its hydrocarbon resources. In the coming years, the country can play an important role in helping to meet the world’s increased demand for energy. Full development of its major oil fields could make Kazakhstan one of the world’s top five oil producers within the next decade.

However, that outcome is far from a foregone conclusion. Many of Kazakhstan’s oil and gas fields present engineering challenges and require significant investments in capital, technology and expertise. Our two nations can and should work together to promote the safe and effective development of these resources in the years ahead. At stake is much more than efficient extraction, or even the monetary wealth it provides.

As the first 20 years of Kazakhstan independence have shown, investing wisely in energy production can also provide the Kazakhstani people with an important source of employment, as well as revenues that can in turn be reinvested in other sectors to help diversify the economy. And in this respect, I would like to acknowledge the thought leadership and political leadership of Prime Minister Massimov, who I think has been a strong advocate and visionary in this area.

For example, oil and gas revenues were central to the creation of the country’s sovereign wealth fund, Samruk-Kazyna. During the financial crisis of recent years, this fund in turn provided a critical source of strategic support for the nation’s financial system, enabling Kazakhstan to avoid recession and to emerge quickly from the worldwide downturn.

Since achieving independence, Kazakhstan has pursued macroeconomic reforms that have attracted substantial international investment in new or expanded industries such as mining, chemical production and agriculture. Kazakhstan has demonstrated its ability to develop strong economic opportunities for investors, and we look forward to seeing new areas for potential investment expand over the next few years, both in and out of the energy sector.

Oil and natural gas are not Kazakhstan’s only energy resources. The nation’s geography and landscape also provide it with vast potential for renewable electricity from sources such as solar power and wind. And anybody who, like me, has been jogging in Astana knows what I’m talking about when it comes to the wind. We are encouraged by Kazakhstan’s interest in working with private-sector companies to develop that wind infrastructure. And through the U.S.-Kazakhstan Energy Partnership, we are engaged in efforts to train the workers and engineers who are pioneering clean energy and energy efficiency technologies in Kazakhstan.

This kind of expert-to-expert collaboration between our academic institutions and our laboratories is equal in importance to the formal cooperation that occurs at levels high within our respective governments. And may I say, in some respects it’s more important, because what happens here is you develop the people-to-people relationships, people understand the opportunities; they bring it back to their home institutions. I view our role from a governmental perspective as to facilitate that kind of interaction. I don’t see it in any way as a substitute for it, much less as anything superior to that kind of person-to-person and lab-to-lab kind of cooperation.

Just as it is liberalizing its economy, we continue to hope that the government of Kazakhstan also follows through on its stated goal of strengthening the overall conditions necessary for genuine political pluralism. As we look to the future, we want to deepen the engagement of our civil societies and private sectors in trade and investment, science and technology, education, the arts and much more.

By wisely developing its natural resources, a strong, prosperous and democratic Kazakhstan can energize the global transmission of learning, trade and freedom across the Steppes of Central Asia. We congratulate Kazakhstan on this momentous anniversary of its independence and we look forward to continuing to work with Kazakhstan in the pursuit of nuclear nonproliferation, regional energy security and prosperity for many, many years to come.

Thank you. (Applause.)

MR. WILSON: Thank you very much. As I indicated in getting ready to introduce the deputy secretary, he’s prepared to take a couple of questions, if people may wish to – may wish to pose them.

Ambassador Bill Courtney.

BILL COURTNEY: (Off mic) – terrific this morning. The demonstration effect – Kazakhstan’s nuclear – the demonstration effect of Kazakhstan’s nuclear activity over the last two decades, as you look around the world, has really been one of the remarkable nonproliferation successes.

To what extent is this demonstration effect helpful in other parts of the world? I imagine it’s hard for a demonstration effect to have too much impact on an Iran or a North Korea, but there must be a lot of other areas of the world where countries look to a country like Kazakhstan, the success it’s had in nonproliferation, and using that success to leverage other economic success in other areas of energy and the economy. How much importance has that demonstration effect had on the approach that America and other countries are taking for nonproliferation?

MR. PONEMAN: It has a great deal of importance, Bill. And I wouldn’t even underestimate, at the end of the day, the importance of this kind of demonstration effect can have on hard cases, because it’s interesting – and as you know, I’ve spent 30-plus years working on nonproliferation – but it is a really about the whole fabric of a regime.

And so for example, the fact that we were able, in 1995, to get the nonproliferation treaty extended – that’s a community of 185 nations. And the moral weight of that is actually very important. And they’re – not every state is sensitive, to the same degree, to that sort of moral weight, but many states that might be candidates to pursue another path, I think, are. And so I think it’s very important.

Look, Kazakhstan has three fundamental elements that I think characterize its unique nuclear position. One of them cannot easily be replicated, but two of them can at least be modeled, OK? One is they have this tremendous quantity of uranium in country, which makes a business opportunity that, frankly, if you don’t have those resources may not be equal in the same measure.

Secondly, it’s got deep subject matter expertise in places, like the BN-350, like the Institute of Physics, like Ulba and so forth, which is something that, with time, others can achieve. And then third, it’s got this impeccable record going back to the initial decision of President Nazarbayev in ’91.

When people look at Kazakhstan and they see something like $150 billion of foreign direct investment in the development of that economy, and the benefits that has brought to Kazakhstan and its people, and they say: this is what you do by taking a path of peace and nonproliferation and development of your technology, but cooperatively and under IAEA safeguards – it’s not the only place you can tell that story. You can tell that story in Germany. They don’t have uranium. You can tell that story in Japan. These are the countries that we worried about from a nonproliferation perspective in the ’50s, right? So to be part of an overall global network, where you demonstrate that by taking responsible positions – that’s the way to vouchsafe the prosperity of your people and to develop your country – I think it’s a very powerful image.

And that’s why – one of the reasons why the U.S. so highly values its nonproliferation partnership with Kazakhstan, precisely because Kazakhstan has made its own choices for its own reasons. It was not just a matter of looking at what others expected of it, this was a decision that President Nazarbayev took at looking at his own understanding of the best long-term path for Kazakhstan. And for others to take that same message, I think, is a very positive one.

MR. WILSON: Rich Kauzlarich.

Q: Rich Kauzlarich from George Mason University. A question about Caspian Energy policy looking ahead: For 20 years now U.S. energy policy and diplomacy has been focused on developing these resources and transportation links to Europe as a way of achieving greater energy security for Europe. Now as our national security emphasis seems to be shifting to Asia, how do you see this affecting changes in how we’re going to carry out U.S. energy policy in the future in this region?

MR. PONEMAN: I do not think that the increased emphasis on Asia fundamentally alters our approach or our policy with respect to the development of Caspian Energy resources or the importance of finding pathways for those resources to reach markets in Europe and Asia. You know, we’ve got a pipeline – they have a pipeline running to China now.

I think that we will continue to support both the responsible and safe development of the resources there, and to support, in a very sort of even-handed and wide-ranging way, access of those resources through whatever means the commercial marketplace finally invests in to market, and that’s whether it’s (ending at ?) finding a way across the Caspian for the gas as well as the oil, going up through the CPC. We are very open to that.

Sometimes when I go out to the region, it’s like you like this one or that one? Again, I know what the role of government is and what it’s not. Our role is to support the safe investment climate, transparent investment rules, stable tariff structures and so forth, that allow unfettered commercial forces of supply and demand to determine the best pathway for those resources to reach market.

I might suggest perhaps some of the changes that we’ve seen geologically may actually end up being more important than the added emphasis you saw from the president going to Asia because, for example, to the extent that the shale gas resources turn out to be as prodigious in parts of Europe as they have been in parts of the United States, the demand curve is going to shift.

And so what that does in the whole great game of pipeline politics is anyone’s guess. There are certainly people who are studying it more closely than I am. But I don’t think that you’re going to see any shift in either of our two emphases to support responsible development and to support good access for those resources to reach markets.

MR. WILSON: Let me turn to Dr. Ariel Cohen from Heritage Fund.

ARIEL COHEN: Policy in the near – so-called near-broad is going to develop. If you take it seriously, how does that affect the level playing field for our energy companies? How does it affect the balance of peace that we’re seeking in that part of the world? And what is the current thinking on this issue, if any, that the administration is developing? Thank you.

MR. PONEMAN: It’s a good question. I’d make a couple of observations. We actually – we do not view this as a zero-sum game. It’s no secret – in fact, there’s a presidential commission between President Obama and Medvedev to set up a U.S.-Russian civil nuclear working group, which I co-chair with Mr. Kiriyenko, who is the head of Rosatom. And we deal with a wide, wide range of nonproliferation matters, and also matters having to do with international cooperation in the fuel cycle and so forth. And there are even aspects of trilateral cooperation that we have had between Russian and Kazakhstan and the United States.

I think we need to distinguish, however, between a broad level of strategic convergence on one thing that Russian and Kazakhstan and the United States all agree on, which is the importance, A, of nonproliferation; B, fighting nuclear terrorism; C, minimizing highly-enriched uranium stocks wherever they are in the world and that whole cluster of issues that goes with it, and the sort of clean, level playing field, duke it out, competitive issue that is faced when people are bidding to sell reactors and sell nuclear fuel services.

And the way we think of this – and this is something we talk about very openly – is we need to keep our nonproliferation standards high and clean. And we need to have that kind of a level playing field. And then the United States never shrinks from competition. We’ll win some; we’ll lose some. I have great confidence in American technology, in the safety of our products and so forth. And all we can ask for – and you imply it in your question – is a level playing field. And if we have that level playing field, then we’re very happy to compete.

At the end of the day, if we’re able to get over the very challenging circumstances of responding responsibly to the Fukushima challenge and making sure everyone – and certainly, we have done this in our country – is satisfied that they’re taking appropriate measures to make sure that nuclear energy can be pursued safely, then there’s going to be plenty of work out there for everyone involved. And I think what you’re also seeing in the consolidation globally of the nuclear industry, is you see today’s competitor is tomorrow’s partner. And I think you’re going to continue to see that kind of development.

MR. WILSON: Mr. Secretary, let me, maybe, close with a question that asks you to be a little bit more speculative. In the last session before lunch we talked about where Kazakhstan is going, looking ahead 20 years. Steve Sestanovich, who you know, I thought made a particularly thoughtful and compelling set of remarks sort of looking ahead at the world in 2031, 2032. He did it primarily through the lens of security and some security opportunities and especially security challenges that Kazakhstan may face looking ahead at the end of that – end of that time frame.

I wonder if I could ask you maybe to apply that same kind of a model to energy and to nonproliferation, in particular some of the big opportunities and also some of the big problems that Kazakhstan could well face, given the known unknowns that, as we look out 20 years, and in particular some of the perhaps less-known developments that we can imagine as plausible scenarios for this – the complicated part of the world we’re in.

MR. PONEMAN: Yes. Well, first of all – that’s a great question – first of all, I think the nature of energy demand and consumption patterns – and, you know, we’re constantly studying this. We had the World Energy Outlook come out of the International Energy Agency a few weeks ago. We’ve had our own International Outlook from the Energy Information Administration. No matter which way you cut it, you’re going to see probably on the order of a 30 percent demand for hydrocarbon resources over the next 30 years. It’s going to be pretty much flat or even declining in most of the OECD, but the demographics and the economic projections for Asia and the Middle East are such that that’s what’s happening.

Therefore Kazakhstan is going to remain, I think in a quite technical sense, pivotal, both in terms of its geographic location and the resources that it has. And so I think in terms of long-term security challenges, we’re going to, I think, continue to be needing to partner with Kazakhstan as we’re facing challenges we’re facing right now, because I don’t think that our proliferation challenges will end with Iran.

And right now, because of the importance of showing international solidarity that Iran cannot persist in defying the international community and its own international obligations to transparency to the International Atomic Energy Agency, to have all producer nations pulling oars in a consistent direction, certainly including Kazakhstan, that’s going to remain very important. Point one.

Point two: I do believe that the general sense I get literally from traveling around the world since Fukushima, is that most governments are reaching a similar conclusion, and certainly this is the conclusion that Argham (ph) has reached, that we need to study deeply the lessons that need to be learned about what you have to do to respond to a loss of power, accident, to keep your spent fuel ponds properly cooled and so forth. But, having taken those into account, if you’re looking to build a long-term energy portfolio with a significant low-carbon component, nuclear is going to continue to play a very important role.

And in this respect, secondly, I think that Kazakhstan, precisely because of that confluence of three factors – it’s natural endowment of uranium, it’s indigenous expertise that’s been developed and further evolved in recent years with the leadership of people like Mr. Skolnik (ph) at – (inaudible) – and precisely its nonproliferation credentials – are going to be very important.

And this I’d like to underline, that we welcome a couple of things: number one, the fuel bank proposal that Kazakhstan offered up when the International Atomic Energy Agency looked for countries to take that opportunity and, indeed, the cooperation and leadership that Kazakhstan has shown in the Nuclear Security Summit, the first one that President Nazarbayev attended with President Obama hosting in April 2010, but also not just showing up at the meeting but the cooperation that goes with it.

And here – you know, I know – (inaudible) – in working with his fellow Sherpas in finding ways to minimize HU (ph) – and if we are to actually achieve the benefits that nuclear energy can offer, we’re going to have to be as assiduous on addressing the proliferation challenges as we are on the safety challenges.

And third and finally – because I think this really is the future – the view that I get – and the last time I was in Astana, and I think Ambassador – (inaudible) – was actually in the meeting I’m referring to – we had – we had very interesting sessions with people from the industry and technology ministry, with people from Somrakazinah (ph), and they are very focused on the next step, which is the evolution beyond. They may have decades’ worth of hydrocarbons – they certainly do – but you have to look beyond that.

And the responsible way to do that, at a time when people are very focused on transformational opportunities that clean energy presents, not just in terms of altering your energy profile, but of creating good, high-paying jobs, making the country, you know, an attractive place to work and live – I think that is the one that, at this point, is a small wedge, but that could open up in decades ahead. So if you ask me to take the long view, I would be remiss if I did not include that very important piece.

MR. WILSON: Thank you very much, Mr. Secretary, for honoring the Atlantic Council and for honoring Kazakhstan, an important bilateral relationship that I think pretty much everybody in this room cares very deeply about and, I hope, appreciates a little bit more as a result of the discussions that we’ve had today. We’re very, very grateful to you.

Our next session will begin at 2:30 back in the other room. Please join me in thanking Deputy Secretary Poneman. (Applause.) Thank you very much. It was really terrific.

(END)