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“URGING KAZAKHSTAN TO COMPLY AND HONOR ITS CONTRACTS” mentioning the U.S. Dept of State was published in the Extensions of Remarks section on pages E574 on March 5, 2009.
The publication is reproduced in full below:
URGING KAZAKHSTAN TO COMPLY AND HONOR ITS CONTRACTS
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HON. EDOLPHUS TOWNS-
of new york
in the house of representatives
Thursday, March 5, 2009
Mr. TOWNS. Madam Speaker, I rise today to bring attention to a growing concern facing a U.S. friend and ally in oil-rich Central Asia, Kazakhstan. In light of the heightened concern over the global oil supply shortage, we want to give special recognition to the critical role that Kazakhstan plays as a major world-wide supplier, and therefore we urge in particular that the Government of Kazakhstan step up to the demands. In so doing, Kazakhstan leaders should be very cognizant of the need to comply with the rule and sanctity of its contracts and do its best to ensure proper appropriation of profits to its citizens.
Recently, Transparency International ranked Kazakhstan 150 on its Corruption Perceptions Index, with the worst country ranked 179. This puts Kazakhstan only slightly ahead of Hugo Chavez's Venezuela. The costs of corruption are exceedingly high--both for the Kazakh people, international investors and consumers--and will surely lead to the corrosion of that society.
In recent years, Kazakhstan's economy has grown tremendously because of its large oil deposits, and the political elite have been successful in virtually monopolizing the benefits of this boom. But, regrettably, Kazakhstan has become a centralistic and authoritarian state under the 27 year rule of President Nursultan Nazarbayev with little leverage for the development and activity of civil society.
Kazakhstan's governmental system lacks the basic features of democracy; elections are neither free nor fair, there are few independent media outlets and what political opposition exists is manipulated, harassed, physically attacked or even killed. There is massive corruption on a grand scale in this environment of intra-elite allocation of benefits connected to oil production. Corruption in Kazakhstan is systemic, even within the country's anti-corruption agency, and no public office is free from executive interference. Long wait times, unwieldy bureaucracy, weak business law, short deadlines, employee discontent and the absence of explanatory information all breed corruption. Foreign firms have frequently reported harassment by the Financial Police in the form of unannounced inspections and intimidation. Forbes Asia Magazine reported that AES Corporation, an American company and one of the largest power companies in the world faced this type of harassment in June 2005. The Forbes article titled
``Thug Capitalism,'' reported that AES was subjected to Financial Police raids and was forced to pay up to $200 million in fines before they decided they had enough and withdrew from Kazakhstan.
Exxon Mobil, which is also in the consortium with ConocoPhillips, Eni, Total and Royal Dutch Shell experienced similar problems with the Kashagan project. The Kazakh government has repeatedly used delays and cost overruns to renegotiate its original terms with the consortium, using negotiating tactics similar to those perfected by Russia to extract concessions from foreign energy investors.
Both the international investor community and the Kazakh people have every reason to be concerned over the Kazakh government's increasingly heavy-handed intrusion into business activity, especially in the energy sector. According to a recent report by ABC News: ``The U.S. Department of Justice prosecutors have long alleged in court documents filed in a case against a U.S. businessman that President Nazarbayev and his deputies accepted nearly $80 million in kickback from foreign companies in exchange for access to Kazakhstan's vast oilfields.''
And perhaps the largest concern of all is the precedent set when this, or any, government is rampant with corrupt practices. Nations and lives become unglued. Take for instance the assassination attempt on the former head of Kazakhstan's National Security Service in Vienna. According to Radio Ekho Moskvy, Alnur Musayev and his companion were both wounded; and simultaneously, that the ex-ambassador of Kazakhstan in Austria who is also the former son-in-law of the Kazakh President Nursultan Nazarbayev, Rikhat Aliyev, was targeted but escaped. These events were officially confirmed by the spokesman of the Austrian Office of Public Prosecutor, Gerhard Jarosh. Exiled citizens must not become targets of their home country. They must be free to live their lives and express themselves without threat of life or limb. Such is a fundamental right and expectation of all democracies and free nations.
Furthermore, the ex-Chairman of the National Security Committee of Kazakhstan was sentenced in absentia to 20 years of imprisonment. Rakhat Aliyev was also sentenced in absentia to 40 years in prison on multiple charges. However, when the Austrian Government investigated Kazakhstan's allegations of money laundering and corruption against Rakhat Aliyev, they found no evidence to substantiate such allegations, and thus have refused to extradite Mr. Aliyev for fear that he will never receive anything resembling a fair trial.
Such activities are all too reminiscent of a pattern of violence and corruption we have long seen in Russia, and nothing can be more destabilizing both internally and externally. Moreover, these are not the qualities that we expect of the incoming Chair of the OSCE. Kazakhstan has made several promises to implement reforms that respect political freedoms and human rights. To date these reforms have not been implemented and on issues such as religious freedoms and freedom of the press, it is arguable that Kazakhstan is becoming more restrictive and less tolerant.
The United States has sought a mutually beneficial relationship with Kazakhstan and provides aid to Kazakhstan in order to enhance economic growth, democracy, security, civil society and attend to humanitarian needs. However, it is evident that the current U.S.-Kazakhstan relationship is compromised by Kazakhstan's record of human rights violations and lack of immediate and necessary reforms before ascending to the OSCE Chairmanship. The U.S. Department of State has criticized President Nursultan Nazarbayev's government for human rights violations. A report from March 2008 faulted the government for practices including ``arbitrary arrest and detention'', ``restrictions on freedom of speech, the press, assembly, and association'', ``lack of an independent judiciary'', ``severe limits on citizens' rights to change their government,'' and more, including abuse of detainees and prisoners.
As an influential OSCE member and global leader, the U.S. must now more than ever, begin to raise questions regarding Kazakhstan's human rights record and about allegations that Kazakhstan has attempted to kidnap and injure its dissidents. Kidnapping and bodily harm have no place among nation states and Kazakhstan should be made to answer for any and all violations before it assumes the Chairmanship.
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