Upon the invitation of the chairman of the People�s Republic of China Tzyan Tzemin, Kazakhstan�s President Nursultan Nazarbaev will visit China in autumn. The deputy Prime-minister, the Minister of Foreign Affairs of Kazakhstan Kasymzhomart Tokaev will visit Peking in July. It is believed that the negotiations regarding bordering rivers Black Irtysh and Ili will be in the centre of negotiations during the future visits. According to the press-service of the Ministry of Foreign Affairs, the first round of negotiations on the problem of the bordering rivers will start on May 5.
Construction of a channel on the Black Irtysh by China is also supposed to be discussed. According to the informed sources, Kazakhstan is at the verge of ecological crisis. After the construction of the Irtysh-Karamai channel (in Sintszyan Uighur Autonomous Republic) is completed, China is going to utilize 40% of the waters of the Black Irtysh. The realization of this plan may cause serious damage to the entire river basin in Eastern and Central Kazakhstan. Great damage to the agriculture will be accompanied by the collapse of the entire ecological system in the Zaisan delta of Irtysh. Navigation in the Irtysh basin will become problematic, it may even be impossible. Among other possible negative sequences, the specialists expect: 20% reduction of produced electricity at Bukhtarma and Ust-Kamenogorsk power stations; lowered water level in the Irtysh-Karaganda channel; reduction of drinking water resources in Astana and other big industrial cities in Central and Eastern Kazakhstan abd possible epidemics in some Kazakhstan regions. On the other hand, the significant requirements of China for water resources can be explained by development of oil-mining industry, and its agricultural needs. The agreement of China to conduct the first round of negotiations at the experts� level is the beginning of the proper settlement of this problem.
On April 22th to 24th the Kazakhstan delegation headed by N. Nazarbaev will visit Washington to attend the NATO summit. The NATO invitation is connected with Kazakhstan participation in the NATO program �Partnership for the sake of peace�. The US ambassador to Kazakhstan Richard Henry Johns informed the media of this development shortly after his meeting with President Nursultan Nazarbaev at his Almaty residence. According to the ambassador, during that meeting, the two expressed their attitude to this event, as well as aspects of Mr. Johns� upcoming visit to America. Mr. Johns is to be accompanied by a group of US diplomatic representatives to the Caspian countries. The objective of the ambassadors� tour to New Orleans, Washington and New York is to assist in attracting investments to a number of projects to improve the infrastructure in Caspian region.
The measures taken by the Kazakhstan authorities regarding the introduction of the free floating tenge�s rate are quite logical and well-grounded in the current situation, � was the announcement of the Integration Committee of Byelorussia, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. The Committee considers the decision as a step towards reducing the fall of the GNP, to increase Kazakhstan gold and hard currency resources, heightening the competitiveness of Kazakhstan goods in the domestic market, and rendering essential support to the producers of the exported goods. The abandonment of the recent prohibitions and restrictions on imports from the neighboring countries will increase the commodity turnover between the countries of the Customs union and will improve the republican balance of payments.
The heads of �Hurricane Kumkol Munai� (HKM) officially refuted rumors about its merger with the JSC �Shymkennefteorgsyntez� (recently the Shymkent OPP). Rumors about the merger of these two enterprises appeared in autumn 1998. In that time the Shymkent OPP stopped the receipt of HKM oil for processing. In the last week the HKM acting president Marlo Thomas declared that the company continued its consideration of various restructurization options and it would �choose that variant which will conform with the requirements of the interested parties: personnel, share- and bond-holders and the suppliers�.
Following the OKIOC announcement of its plan to start prospecting drilling on June 12 to 15 on the northern Caspian shelf, activists from the public ecological movement �Caspian tabigaty� demanded that the OKIOC consortium pay US$ 500 billion in insurance against possible ecological damage.
The Agency on the regulation of the natural monopolies and protection of Kazakhstan competitiveness took a decision to reduce the tariff on additional electricity for the Kazakhstan�s consumers by 50%, compared with the same period of the last year. The decision was announced by the press-service of the national company managing the power networks of the JSC �KEGOC�. The mentioned discount will be granted to all the consumers of the main power networks. This decision was taken in accordance with the government�s instruction not to increase the tariffs for the services of the natural monopolies for several months, in order to prevent the prices increases under the free floating rate of tenge.
In response, KEGOC president Yevgeny Feld declared that he supported the Agency on regulation of the natural monopolies and protection of Kazakhstan competitiveness, and that he would do his best to keep the tariffs at the minimum rate.
The first most difficult weeks after the introduction of the free-floating rate of tenge have passed normally. This was the assessment of current situation in the financial sector of the country was evaluated by the Chairman of the NB board Kadyrzhan Damitov. The worst of the possible variants � panic in the market and the collapse of the financial system have been avoided, due to the active explanatory work and cooperative actions of the different Ministries and departments. �If we do not take into consideration Monday and Tuesday, i.e. April 5 and 6, everything is actually as usual�.
According to the specialists� estimations, in the first week after the introduction of the free floating rate, prices of foodstuffs in the consumable market increased by 5.3%. The prices for other goods rose by 6.7%. The NB considers the price rises to be artificially increased, in many cases. According to K. Damitov, there is no direct proportionality between the increased US dollar rate and the price of the goods. The limited solvent demand will make the sellers reduce the price in the nearest future. Moreover, the National Bank is not going to throw �empty� money into the market. According to the announcement of the head of the National Bank, no direct loans to cover the budget deficit are expected. Emission, i.e. an increase of the monetary mass will be executed by a purchase of US dollars in the hard currency market. For the next three days, the official exchange rate of the National Bank will be same � 114 tenge per US dollar.
On April 13, K. Damitov called the auction at the Kazakhstan stock exchange (KASE) �historical�. The auction volumes on that day were US$ 21 million. This figure exceeded the usual volume by 2 to 5 times. The chairman believes such big volumes to be connected with the activization of the enterprises-exporters at the KASE. K. Damitov noted that during the previous auction, the offers of the hard currency significantly exceeded its demand. Therefore �while closing the auction session, not all the sellers had sold their hard currency�.
The Board of the National Bank of Kazakhstan made some changes in the Rules on execution of hard currency operations in the Republic of Kazakhstan. The cash hard currency amount permissible to take abroad by Kazakhstan citizens without submission any documents confirming its origin has been reduced. From May 1, Kazakhstani citizens will be entitled to take abroad the cash amount equivalent to US$ 3000, without any documents confirming its origin. In case this amount exceeds the equivalent to US$ 3000, Kazakhstan citizens should submit to the Customs department the documents for the total amount intended for export. The following documents are to be submitted: either certificates on purchase of cash foreign currency prepared by the exchanges of the authorized banks and organizations, or the custom�s declaration on the cash hard currency amount imported earlier to the Republic of Kazakhstan.
The floating rate of the tenge will not influence the reimbursement of the external debts of Kazcommertsbank (KCB), announced the managing director of Kazcommertsbank Oleg Kononenko. According to Mr. Kononenko, KCB is not going to dramatize the situation regarding devaluation in the republic. Moreover, the next repayment of the external loan is to be executed only in December 1999, when KCB will have to pay off a loan in the amount of US$ 20 million, signed in November 1998. At present the volume of the external loans of KCB is approximately US$ 170 million, including US$ 100 million of the Euro-notes, which will be paid off later than in 2 years.
Representatives of the International Center of Public Affairs (ICPA), arrived in Kazakhstan on Tuesday, April 13. According to the head of the delegation Marc H. Battail, the aim of the trip is to �gather information about the investment climate, legislation base, banking structure, and situation in the country in general, to discuss issues of privatization and perspective development of business.� During their visit the ICPA delegation negotiated with the deputies Prime-minister of Kazakhstan K. Tokaev, U. Dzhandosov, A. Pavlov, Zh. Karibzhanov, with the Ministers and chairmen of the agencies. The issues concerning economic policy, followed by Kazakhstan under the falling price of raw materials were also touched upon. The measures taken by the government to stabilize the macro-economy, to cooperate with IMF, and to widen and strengthen the economic reforms, were discussed.
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