COUNTRY REPORT OF THE REPUBLIC OF KAZAKHSTAN Strategy for the 21st Century

1. COUNTRY REPORTOF THE REPUBLIC OF KAZAKHSTANStrategy for the 21st Century Program: Legal Technical Assistance for Countries in Transition June 28~July10, 2004

2. Republic of Kazakhstan

3. COUNTRY OVERVIEW • President: Nursultan Nazarbayev (re-elected to a seven-year term on January 10, 1999) • Prime Minister: Daniyal Akhmetov (since June 2003) • Independence: December 16, 1991 • The capital of the Kazakhstan: Astana • National holiday: Republic Day, October 25, 1990 (date on which Kazakhstan declared its sovereignty) • Population (1/03): 14,9 million • Location: Central Asia, bordering the Caspian Sea, Russia -6.467 km, Turkmenistan-380 km, Uzbekistan-2.300 km, Kyrgyzstan-980 km, and China-1.460 km

4. COUNTRY OVERVIEW • Size:2,724,900 sq km • Major Cities:Almaty; Astana (capital, moved from Almaty in December 1998); Karaganda; Shymkent • Languages:Kazakh (state language) 60%, Russian (official, used ineveryday business) 40% • Religions: Muslim: 40%, Non-religious: 32.6% Russians, Ukrainians, etc., Orthodox:25.2%, Catholic: 0.6%, Protestant: 1% Mostly Russians and Koreans, Buddhist: 0.3% Korean, Buryet, Kalmyk, Jews: 0.1% • Administratively Kazakhstan:14 regions, 85 cities of which 40 refer to those of Republican and regional dubordination, 160 district, 10 municipal district, 195 settlements, 2.150 rural counties

5. ECONOMIC OVERVIEW • Currency:Tenge • Market Exchange Rate (7/01/2003):US $1=146.7 Tenge (KZT) • Nominal Gross Domestic Product (GDP) (2002E): $24.5 billion; (2003E): $28.5 billion • Real GDP Growth Rate(2002E):9.5%; (2003E):7.6% • Inflation Rate(Change in Consumer Prices, Dec. 2001-Dec. 2002E): 6.0%; (2003E): 7.4% • Unemployment Rate (2002E):9.3% • Current Account Balance (2002E): -$596 million; (2003E): -$396 billion • Major Trading Partners:Russia, U.S., Uzbekistan, China, Turkey, U.K., Germany, Ukraine

6. ECONOMIC OVERVIEW • Merchandise Exports (2002E): $10 billion; (2003E): $11.7 billion • Merchandise Imports (2002E): $7.6 billion; (2003E): $9.4 billion • Merchandise Trade Balance (2002E): $2.4 billion; (2003E): $2.3 billion • Major Exports: oil, ferrous and nonferrous metals, machinery, chemicals, grain, wool, meat, coal • Major Imports: machinery and parts, industrial materials, oil and gas, vehicles • Gross Foreign Debt (2002E): $12.95 billion

7. INVESTMENT CONCLUSIONS • The gross volume of foreign direct investments (FDIs) attracted into the economy of the Republic of Kazakhstan from 1993 has made up around US$ 23 bilion • Kazakhstan is one of the leaders on the CIS spase on such indicators as: - the political stability -currency stability and investment climate - volume of FDIs per capita - integration to the world economy -development of securities market legislation an price stability

8. List of priority areas for attracting direct foreign and national investments • 1. Production and industry infrastructure: -Railways support (train maintenance, railway stations). -Motorways and station areas. -Airports and complex areas. -Telecommunication networks, including satellite for countryside, international telecommunication infrastructure. -Electric stations (heat, turbo, hydro, wind), including transformer stations, high voltage lines, excluding general, collection, transfer and distribution of electricity, electricity networks. -Other areas. • 2. Production -Production of car equipment -Shipbuilding -Train building

9. List of priority areas for attracting direct foreign and national investments • 3. Astana objects -Business centre -Diplomatic city -Infrastructure • 4. Housing, social areas and tourism -Commercial housing -Hospitals and education building -Sport buildings, entertainment and tourism building • 5. Agriculture -Cropping of high yield grain and oil crops, grapes using modern technology -Creation of speciality selection and genetic centres for storage and renewal of semen of highly productive livestock

10. Direct foreign investments to the Republic of Kazakhstanin 1993-2001 on countries, %

11. Relationships between Kazakhstan and Korea • In January 1992 the Republic of Korea and the republic of Kazakhstan established diplomatic relations • Korea was the first foreign country to begin investments in Kazakhstan • Two-way trade volumes in 1993 amounted to US$88 million and grew to US$230 million in 1996. Up to 1997, Korea was the second largest investor behind the USA • Total amount of export to Korea in 2002 was 49.2887 mln. USD, in 2001  19.8849 mln. USD • Total amount of import from South Korea in 2002 was 107.179 mln. USD, in 2001  41.8795 mln. USD

12. Relationships between Kazakhstan and Korea • Korean companies in Kazakhstan -   Fields of activity: Metallurgical industry, household, electronic, medical and industrial equipment, stationery, textile industry, logistics and shipping, cars, tourism etc. -  Companies: LG, Samsung, Daewoo, Seo Jong Logistics, Woojing Trans, Buran Boiler, Medison, E-fashion, USCO, NTC, AutoKor, etc.

13. Relationships between Kazakhstan and Korea • Perspective projects: - Trans-Asian Rail Way uniting the Pacific and Atlantic Oceans. Realization of this project will be possible after joining of rail ways of North and South Korea; -   Oil fields development on the Kazakhstani side of the Caspian Seas shelf (participation of the Korean companies united in Consortium); -   Mining and metallurgical industry; -   Engineering industry -   Industrial and household production -   Communication

14. TOURIZM • Kazakhstan - the country of interest for any type of tourist. Those who enjoy history, ethnography and simply educational tourism will be interested in the diversity of historical places and preserved ethnical culture: mausoleums of Aisha-Bibi, Karakhan and Babadzhi-Hatun in Taraz, the complex of Khodja Akhmed Yassaui in Turkestan, Scythian necropolis in Semirechje (Almaty region), the preserved monuments of ancient Mangyshlak and Ustjurt (Western Kazakhstan), the motherland of the great kazakh poet Abai Kunanbayev, the famous writer Mukhtar Auezov (Eastern Kazakhstan).

15. TOURIZM • Those who prefer sports and health improving vacations have a unique opportunity to mountain ski, climb, and ice-scate: mountain ski resort Shymbulak (Almaty region). There are vast hunting grounds in Western Kazakhstan, as well as fishing and water sports. • The resorts of Kokshetau, Bayan-Aul, Mujaldy provide health treatment, and Kurgaldzhino and Naurzum would be interesting for scientific tourism. • One of the largest lakes in the world - Balhash, is located in the Central Kazakhstan (Karaganda region) as well as unique Karkaralinsk mountain-forest oasis.

16. Thank you