EU says Kazakhstan backslides on democracy
Adil Dzhalilov
3rd meeting of the EU-Kazakhstan Cooperation Committee took place in
Astana a couple of days ago. Cornelius Wittebrood, head of the department for relations
with the CIS, Central Asia, and the Caucasus of the European Commission's Directorate
General for External Relations, came to Astana to attend the meeting. (The first foreign
vice-minister Yerlan Idrisov represented Kazakhstan.)
The Committee is one of three bodies overseeing the fulfillment of the
Partnership and Cooperation Agreement (PCA) between Kazakhstan and EU. It is responsible
for trade and investment cooperation, democracy development, cooperation within the TACIS
program, fight against terrorism, illegal drug trafficking, and foreign policy issues.
This time, the discussion focused on Kazakhstan's admission to WTO, intellectual property
issues, as well as the notorious political events in Kazakhstan (arrests of opposition
leaders, crackdown on the media, etc). In his interview to Panorama, Mr. WITTEBROOD
discussed these issues in more detail.
- Does Europe view with concern the notorious political events in
Kazakhstan linked to the names of Ablyazov and Zhakiyanov?
- We discussed this issue at the Committee meeting. On behalf of the
EU, we expressed our concern about the turn of events in Kazakhstan. A big deal of the
discussion was devoted to the restriction of media freedom in Kazakhstan. As far as we
know, several media outlets suffer from this. We urged the Government to get back on the
track of democracy and rule of law.
- Does the level of democracy in this or that country influence the EU
economic and political decisions regarding it, and if so, to which extent?
- We support the status of Kazakhstan as an independent state, in
particular as a member of various international organizations (OSCE, for instance)
considering this an important element of international cooperation. We help Kazakh
Government meet its commitments as a member state of those organizations and the
obligations under our Agreement, which directly require observing democratic principles
and rule of law. This is the key element of our cooperation. But recent events indicate
that Kazakhstan does not exactly move in right direction. In this connection, we expressed
our concern about that. A pronounced tendency towards violation of democratic principles
worries the West, especially in the context of Kazakhstan’s achievements in
democratization process.
- If Kazakhstan keep going this “wrong” direction in spite of its
previous achievements, what reaction can it cause in Europe?
- I guess, I should clarify my previous statement. I mean that
hopefully Kazakhstan still follows the path towards democracy. But today we witness some
deviation from that course. Still, this alarms EU too. As to any hypothetical measures,
sanctions and other things of that sort regarding Kazakhstan, I think it is premature to
talk about that. At least because EU has not concluded yet that our cooperation is lacking
in democracy and human rights observance elements. As long as this is true, we will keep
supporting the Government in its efforts to pursue the policy of reforms and democracy.
- Was the situation with moving Galymzhan Zhakiyanov to Pavlodar
discussed at the meeting in the context of the memorandum signed? The embassies of three
European countries were involved in these events.
- Yes, we expressed our concern that the memorandum signed by three
embassies and Kazakhstan was not fully realized. Naturally, this impugns the opportunity
of signing similar documents in the future.
- And what was the reaction of the Government representatives?
- Kazakhstan authorities took our comments very seriously. They assured
us that Mr. Zhakiyanov was moved to Pavlodar temporary, and that no guarantee in the
memorandum will be violated. We were also advised that the investigation of the Pavlodar
Region ex-akim case is expected to be completed by late April. Afterwards Mr. Zhakiyanov
will be returned to Almaty immediately.
- EU has recently awarded Kazakhstan a market economy status. Kazakh
authorities now consider that as an achievement. How does this decision objectively
reflect the attitude of European business community to the investment climate in
Kazakhstan?
- I would like to make it clear that this decision was taken
exclusively within the anti-dumping legislation. It can’t serve as a brand or a label of
economic or political achievements of a particular country. This decision has just a
pragmatic purpose, i.e. to provide Kazakh companies with certain privileges to boost goods
turnover and other things of that nature. The problem of the investment climate in
Kazakhstan was also discussed at the meeting. In includes such issues as contracts,
corruption, double taxation, bureaucracy. We clearly expressed our position: these spheres
need real reforms if Kazakhstan wants to attract more investments not only in oil and gas
sector and if the country really intends to improve the investment climate.
- The plans by Kazakh Government to reconsider, or, as the authorities
stress, itemize previous contracts, are widely discussed in Kazakhstan, particularly by
investors. Did you get any clarification from the Government?
- This was one of the major issues discussed at the meeting. The thing
is that PCA has a clause covering the invariability of contracts with European companies.
For this reason we reject any contract changes by the Government that discriminate
investors and ignore their interests. But the Government offered us certain explanations.
In particular, to attract investors Kazakhstan avoided imposing some requirements before.
Now the situation has changed. For instance, it requires ensuring equal opportunities for
local and foreign investors. Changes are needed to correct the fiscal policy as well. For
instance, out of 52 taxes just 7-8 have remained, which is undoubtedly good news for
investors. In this context, the revision of contracts looks more or less fair, provided
both sides participate in decision-making. And these measures should not lead to worsening
the situation in any case. If the authorities are unable to ensure that, I am afraid
companies will be forced to appeal to the arbitration and international courts.
- And what was the final decision?
- We came to the conclusion that Kazakh authorities should consult the
international business community in the framework of the existing platforms (the
President's Foreign Investors Council and others). It was also resolved not to take any
unilateral decisions. Everything should be done on mutually beneficial and acceptable
basis.
- You have had a chance to meet investors? How do they evaluate the
investment climate in Kazakhstan, whether it changed or not?
- In our opinion, recent legislative changes have caused more negative
than positive reaction from investors. When we discussed the investment opportunities in
Kazakhstan at the European Business Association, each company has its story to tell about
bureaucracy, corruption, etc. Taken separately though, these companies do not express
their indignation for fear of governmental sanctions. At the same time, I can’t say that
the situation is getting only worse. Sometimes, the authorities listen to the investors’
point of view. However, the general attitude of foreign businesses to the investment
climate is negative. As far as I can see, a major problem here is the lack of
transparency. Some investors, who know “ways and means”, feel pretty comfortable. But
others are unhappy, as they do not have a chance to forecast their profits and even handle
a routine paperwork the way it should be done.
Panorama
Panorama, April 27, 2002
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