Kulimkhan HASENOVA
ALMATY, April 14
(THE GLOBE)
In the last week, the latest scandal happened in Kazakhstan�s economic world. Mr. Kara, the American owner of the Issyk wine plant announced that he would personally start a campaign to discredit the investment climate in the republic. According to Mr. Kara, his company is being continuously �pressed� by the authorities and, as it is impossible to continue his business here, he will have to �close� it. But before that, he is going to establish the �Society of businessmen-victims of Kazakhstan�, which will unite the investors who have incurred losses in our country. Moreover, before leaving the Kazakhstan market he will do his best �to discredit� the Kazakhstan investment policy before the international community.
This scandal arose right after another conflict � the dismissal of Almaty airport managers and the cancellation of a contract with the foreign managing companies.
A week before that, �Almaty Power Consolidated� was prosecuted in the court. The essence of the claim of the Almaty public prosecutor was �a monopoly of APC and prevented alternative electricity suppliers from penetrating into the market�. The president of APC Marc Jofz rejects these claims and does not agree with the accusations. However, he could not avoid the punishment, a penalty of 5000 tenge. The defendant considers this a factor of political pressure. �Our work (the work of the investors � notes of the author) turned out to be much more difficult than we had previously expected,� Marc Jofz declared during the informal meeting with several journalists from the editions, which he called �the most objective.� The correspondent from THE GLOBE was among them. The journalists� questions touched upon the APC, as well as the investment policy. Mr. Jofz�s statements were not as categorical as those of his American colleague from the Issyk plant. Nevertheless, he believes that the fine law �About investments� doesn�t actually work in Kazakhstan. THE GLOBE offers you the investor�s meditations without any comments.
1. About the reality of the problems
�We cannot be very resourceful and maneuverable, as the obligations undertaken by the heads of our company are extremely high. We are responsible for the supply of electricity and heat, and we distribute these two vital products. Today the company faces the heaviest financial deficit and we cannot find the required means for the next heating season. Our condition was difficult from the beginning of the year. Due to the dogmatic principles of the Antimonopoly Committee � their refusal to raise the tariffs, and because of the devaluation of tenge on �Black Monday�, our situation is becoming critical. We have sent a corresponding letter to the government of Kazakhstan. Today we may speak about a crisis. We are not the only energy company which is in such a bad condition. We do hope that in the nearest future the government will react to this adequately, find out what the real reasons of our problems are, and find a way to settle them�.
2. Mr. Jofz talks about �political pressure�
�If work in a normal market, it is impossible to work otherwise, than to pay a normal market price of the services, goods, etc. Everything has its definite cost. Everyone in Kazakhstan today knows that all the companies in Kazakhstan suffer from the low tariffs, as it prevents them from adequately investing in their own systems. Because of insufficient investment, the system is getting more and more unstable. We consider it to be a political decision, which means the company is not permitted to cover the incurred expenses. The tariffs of electricity and heat are kept at an artificially low rate. That is mainly owing to a social tension. But such a situation in a long perspective will be unbearable for the companies dealing with public utilities.�
3. About Mr. Kara�s actions, who announced a campaign to discredit the investment climate in Kazakhstan
�I partially share his point of view, as it has some common sense. In comparison with the other countries where �Tractebel� works, Kazakhstan is a very difficult country. It is mainly because the Law on investments provided some definite secure mechanisms that are not used today. It is very easy to frighten the foreign investors, if you change the Laws all the time. Though we hope that the Kazakhstan government will react adequately.�
4. Did the investor have to regret coming to Kazakhstan market
�Everything has proven to be much more difficult than we had anticipated. If we had known beforehand that the Law on foreign investments would not work, we would have not come here. We would have waited for some time, to be confident that your government used it practically, and only then we would have take a decision.�
Prepared by Kulimkhan Hasenova
Michail SERGEEV
ALMATY, April 13
(THE GLOBE)
�The introduction of the free floating tenge is the next important step for Kazakhstan on the multi-stage road towards entry into the World Trade Organization (WTO),� the US ambassador declared in Almaty after his meeting with the President.
According to Richards Johnson, the investment climate in Kazakhstan is much more favorable than in other Caspian countries, though it is not cloudless.
�The Ministries and departments should come to agreement on how to interpret the Kazakhstan legislation�, he said.
In his opinion, for the time being, every functionary considers the laws as an opportunity to profit. It hinders the investors.
�But we continue our work with the governmental organizations to improve and adjust the conditions in order to attract foreign investments�, the ambassador remarked.
Having touched upon the situation in the Balkans, Mr. Johns said that this theme was not discussed during his meeting with Nursultan Nazarbaev. The ambassador remarked that Kazakhstan had expressed its point of view in favour of a peaceful settlement of the conflict in Kosovo. Mr. Johnson also confirmed the information about the future visit of the Kazakhstan President to the USA to meet with the participators of the treaty with NATO �Partnership for the sake of peace�. The ambassador considers this meeting as a guarantee of the safety and stability in the region and all over the world.
The ambassador announced that he, along with the other US ambassadors to the Caspian states, is going to tour the Caspian countries to get acquainted with the industrial infrastructure of the Caspian region.
�I will go on to advertise the investment potential of Kazakhstan to attract more American investments�, he said.
Note: In 1998 the trade turnover between Kazakhstan and USA was US$ 343.9 million (export volume was US$ 75.9 million, import � US$ 267.9 million). The volume of American investments in the Kazakhstan economy was US$ 1.9 billion (i.e. 28% of the total volume of the direct foreign investments), which is the biggest in Central Asia. There are 178 Kazakh-American joint ventures and 82 representative offices of American companies registered in the republic. In accordance with the Agreement on non-governmental organizations (NGO), concluded between the Kazakhstan and US governments, 49 American NGOs are working in Kazakhstan.
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