Finance In Brief

In January inflation reached 2.6% in Kazakhstan � National Bank

/IRBIS, Feb 7/

As the press-release of the National Bank of Kazakhstan, devoted to current situation on financial market of the country, reads inflation reached 2.6% in January of the year 2000. Prices of foodstuff grew 3.5%, that of non-food items � 0.2%, paid public services � 2.9%.

Consumer price index is used as a inflation indicator in Kazakhstan.

The press-release of the National Bank reads: �� growth in consumer prices mainly was caused by a seasonal rise in prices of foodstuff, and also by an increase in tariffs of the enterprises - natural monopolists�. It is also said the highest inflation is usually observed in January, which is related to a seasonal increase in monetary supply at the end of previous year.

Money base in Kazakhstan has decreased in January by 15.5% to 105.7 billion tenges � the National Bank

/IRBIS, Feb 7/

As the press release of the National Bank of Kazakhstan concerning the republican financial market informs, the decrease in the international reserves and in the net internal National Bank assets resulted in decrease of the money base by 15.5% to 105.7 billion tenges.

The press release underlines that the money base changes in the beginning of year are explained by the seasonal factors influence. The pensions, allowances and other social payments debt servicing at the end of year inevitably results in the money base growth, which, as a rule, is compensated by its compression in the beginning of the next year, and usually it happens at the expense of cash.

At KASE � balanced market for the dollar

/IRBIS, Feb 10/

The morning trades in US dollar, Deutsche mark and Euro were held at Kazakhstan stock exchange (KASE) with TOD payment terms. Because of technical problems trades began at 10:35AM Almaty time. 19 banks participated in the trades.

Today the trades in US dollars opened at 139.85 tenge per unit. Total of 54 deals were made. Weighted average dollar exchange rate equaled to 139.86 (+0.04) tenge per unit. Volume of the session � $3.115 mln (-$2.870 mln). Exchange rate fluctuation during the trade �0.02%. The trades were closed at 139.86/87 tenge per dollar.

Today the trades confirmed the decrease in dollar supplies of the banks of the second tier. However, demand was not great either. Clean up of correspondent accounts of the banks by the National Bank�s offering of notes for KZT1,633.0 mln a day before had its impact on behaviors of the participants. Overnight quotations jumped up to 8/13 APR in the morning.

The Exchange market for the dollar seemed to be balanced notwithstanding the inclination of the dollar towards the growth in the last phase of the trade. Most of the deals were made at 139.85 - 139.86. Equilibrium was reached at these levels.

Most of the traders took one sided position in working with USD, either selling them or buying them only.

One hour after closing of the morning session on interbank market of Kazakhstan dollar was quoted at 139.81/86 tenge per unit. Two hours later � 139.78/84. In the day session of KASE with TOD payment terms at 12:30PM the dollar was at 139.77/84, deal was made at 139.83 tenge per dollar.

After closing of the morning session indicators confirm the balanced condition of the market that may change under the influence of large repayment of the National Bank notes in the evening. Repayment amount reaches KZT3,502.4 mln on Thursday and Friday. Free funds will appear on the market, and it possible they will work to create additional demand for the dollars.

Deutsche mark, morning session, TOD: no deals. Closing demand � 71.25 tenge for mark, no offer.

Euro, morning session, TOD: no deals. Closing quotations � 138.71/76 tenge for euro.

Our People Have What to Celebrate

Interview with a High-rank Representative of the Iranian Diplomacy


ALMATY, Feb 10


Today, February 11 (Bakhman, 22) Iran celebrates the anniversary of the Islamic revolution. Ideas of the imam Khomeini were realized in Iran in the late 1970s: the monarchy was abolished and the Islamic governing was introduced. Following goals of the Islamic revolution, during 21 years Iran is going by the chosen way. The Iranian population annually celebrates the Independence Day. By the way, in this year the celebration will be held on the holy for Muslims day zhuma (Friday).

The temporary charge d�affaires of the Islamic Republic of Iran to Kazakhstan Abbas Golris gave THE GLOBE an exclusive interview regarding the forthcoming celebration.

Mr. Golriz, what the celebration of the Islamic revolution means for your people and how it is celebrated in Iran?

This day is the Day of our republic. The victory of the Islamic revolution greatly changed the life of our people. When in 1979 people headed by the outstanding thinker and theologist the imam Khomeini overthrew the shah�s regime, people got an opportunity to live independently and to determine their fate counting on their forces, to restore the national culture, customs and traditions.

The Islamic revolution was one of the bloodless revolutions in the world, as it was really the people�s one. Thanks to the revolution within some twenty years our country has made so significant economic and industrial progress, that at present Iran is self-sufficient practically by all parameters. If before Iran mainly exported oil and oil products, at present we export products of the chemical and light industries, metallurgy, agricultural products and medicines.

During the previous years the export volume of handicraft products raised significantly � everyone knows the quality of Persian hand-made carpets. The quality of Iranian hard-roe, pistachios exported to Europe and other western countries is considered the best in the world. Our people have what to celebrate. As I have said, this day is very important for Iranians. Naturally, it will be widely celebrated in the country. As that was the people�s revolution, all Iranians will participate in the celebration. Festival processions, meetings to support values of the Islamic revolution will be held in towns.

Being the official representative of Iran in Kazakhstan, the embassy organized celebration events in Kazakhstan. RK statesmen, cultural workers, as well as our colleagues from different diplomatic offices invited to the events.

On what principals are the bilateral relations between Iran and Kazakhstan based?

We are one of the countries that were first admitted independence of Kazakhstan. Our present relations are based on several principals: cultural-religious commonness of the two countries, mutual respect and acknowledgment of Kazakhstan�s independence. From the moment when Kazakhstan gained sovereignty, Kazakhstan and Iran held a lot of meetings, including of the presidents. Leaders of our states exchanged visits several times. Recently President Nazarbaev visited Iran. Heads of the governments and Ministers of Foreign Affairs of both countries held meetings, where they signed corresponding documents. All this, obviously, is a good basis for the wide bilateral cooperation.

Numerous trade companies represent Iran in Kazakhstan. Our products are demanded in the country. They are mainly constructional materials, foodstuffs, products of the light industry and detergents. You know that the Iranian Ministry of Transport won the tender for construction of a part of the motorway Astana-Almaty. The Ministry of Town Construction purchased a land plot in Almaty to build dwelling houses. All these facts prove the importance of the further cooperation between our countries.

Apart from political and economic relations, we are establishing cultural ties. For example, in the last week the Teheran University rector came to Almaty. Our commonness helps us to develop the cultural, scientific and educational cooperation. According to the agreement on cooperation, we exchange students and teachers. Sportsmen of both countries participate in competitions. A number of Kazakhstani trainers work in Iran. When our country holds international competitions, we always invite Kazakhstani sportsmen. Recently Iranian mountain-climbers subdued the Victory peak. The Iranian Films Week held in the Cinema House.

I should emphasize that our relations with Kazakhstan are friendly and the closets ones among countries of the former Soviet empire.

Today there are many disputes regarding transportation of Caspian oil to the West. Many countries in the region support the Baku-Ceykhan project. How do you treat this?

Every country has the right to follow its foreign economic policy. We respect any decision by Kazakhstan.

We repeatedly announced that the Iranian route is the cheapest, most profitable and safety one. Hence, this project is profitable for both Kazakhstan and Iran. Many international experts and representatives of the biggest oil companies say the same. Iran, in its own turn, is still ready to grant Kazakhstan a route to transport t oil. When any political decisions that do not take into consideration the economic profitability for the country, are taken, this do not have expected result.

We hope that relations between Kazakhstan and Iran in all spheres, including political, economic and cultural ones will be purposefully developing and will reach a new level, while friendship between our people will be still strengthening.

Priority Directions of the Kazakhstani-Iranian Relations

Comments by the Ministry of Foreign Affairs


ALMATY, Feb 10


The Islamic Republic of Iran due to its geostrategic location and definite economic potential is an important international partner of Kazakhstan. At the regional level Iran is a real political force and may affect policy of the contiguous countries, including the Persian Gulf, the Caspian region, the Caucasus, Central and South Asia.

Diplomatic relations between Kazakhstan and Iran were established on January 29, 1992. From the very beginning the Kazakhstani-Iranian relations were of a stable dynamic development and based on a constructive political dialogue.

In November 1992 President of Kazakhstan visited Iran for the first time. Then in October 1993 the Iranian President Khatami came to Kazakhstan. Director of the Department on bilateral cooperation, Ministry of Foreign Affairs of Kazakhstan Darkhan Berdaliev said this.

Before Kazakhstan took into consideration the political situation in Iran and sharp political contradictions in the top power ranks. Now, after Khatami was elected the Iranian President, there are trends to give up rigid religious ideological dogmas.

The priority direction of the bilateral relations is the trade-economic cooperation. The huge economic potential of the two countries, and official and business circles� interest in developing the cooperation are the main basis of mutually beneficial relations. At present the main directions of the cooperation between our countries are cooperation on the oil project, transport, industry and servicing spheres.

According to the Kazakhstani-Iranian intergovernmental agreement dated August 9, 1996, Kazakhstan was to supply 2 to 6 million tons of crude oil within 10 years. This agreement was cancelled in January 1997, after the first lot of 67.4 thousand tons had been supplied.

According to the concluded agreements, plans on receipt and transportation of the Caspian oil via Iran consist of three stages. The first stage is transportation of oil to the port of Neka and further to Teheran by the existing oil pipeline. The new contract for construction of the second branch of the pipeline in Teheran is to be signed in two to three months. The construction term is two years. It is planned to widen capacities of the shallow port Neka, as well as to reconstruct the Teheran and Tebriz refineries to process the Caspian oil.

The second stage means the transportation of the Caspian oil through existing domestic pipelines to the Esfahan and Araks refineries. To do this we need to change the direction of the oil flow from the north to south. Iran will be able to process about 130,000 tons of oil per day.

To realize first two stages the country will require US$ 700 million of investments, including to reconstruct two refineries � US$ 120 million and for the Neka-Teheran pipeline � US$ 280 million. Initially both phases were intended for exchanging oil with Caspian exporting countries. The U.S. Administration withdrew its objections to these projects. If prognoses regarding the Caspian oil resources are true and they exceed the capacity of the four Teheran refineries, the third phase will be realized.

The third phase means transit of the Caspian oil via Teheran through internal pipelines to the Persian Gulf. According to international researching centers, the Iranian route will economize 4 to 8 dollars per 1 barrel.

Over 40 intergovernmental and interdepartmental agreements and documents signed during mutual visits. These documents formed the necessary basis for the development of the bilateral relations. Today the joint Kazakhstani-Iranian intergovernmental commission regularly functions dealing with the trade-economic, scientific-technical and cultural cooperation. On behalf of Kazakhstan the Minister of Transport and Communications Serik Burkitbaev heads the commission. On behalf of Iran � the Minister of Mines and Metallurgy Djahangiri.

Kazakhstan-Iran: Tendencies and Perspectives



THE GLOBE asked Sanat Kushkumbaev, deputy the Director of the Oriental Studies Institute to comment on the present relations between Kazakhstan and Iran.

- How do you estimate the current Kazakhstani-Iranian relations?

- First of all, we should state that the relations between Kazakhstan and Iran are rather positive.

Many western media try to present Iran as a country that actively propagandize Islamic fundamentalism. However, it is not quite correct. Undoubtedly, both the Iranian foreign and domestic policies have some ideological aspects, but Iran tries to build its relations with other countries, including Kazakhstan, on mutually beneficial and political principles.

Iran understands the importance of normal good-neighbor relations with Kazakhstan. Iran is interested in the reconstruction of the seaport Aktau. The Caspian Sea that washes territories of our states, is one of the promising communicational gates to the external market.

- Are there any unsettled problems in our intergovernmental relations?

- There are some disagreements. First of all they concern the status of the Caspian Sea. Iran has its own position regarding this issue. This country does not like that western companies work in the Sea. The situation is even tensed, as Azerbaijan striving for dividing the Caspian Sea into sectors, proposes to establish NATO military bases in the Caspian coastal zones.

When we speak of the cooperation with Iran, we should not forget that Turkey, which is eager to dominate in the political and economic relations with Kazakhstan, is a potential rival of Iran.

- How do you think, what tendencies of the development of the Kazakhstani-Iranian relations are?

- Each year relations between our countries will strengthen. The two factors play the main role here: the global and the regional ones. First, we should not forget that relations between Iran and western countries will improve. At present the Iran�s political regime is evolving becoming more liberal.

Second, we should also remember that Iran play a significant role in the Central Asian region. In particular, we may consider the Kazakhstani-Iranian relations in the light of Iran�s relations with Uzbekistan.

Official Tashkent thinks that neighborhood with the state propagandizing purely Islamic values menaces the secular regime of Islam Karimov.

Hence, developing our further relations with Iran, we should always take into consideration both the global and regional factors.

The Iranian Revolution 1979 in Comments of that Time

(THE GLOBE based on materials from Pravda, The New York Times, Washington Post, Financial Times from January 31 to April 1, 1979)

In Teheran the IAP Mehrabad opened. This was done due to the arrival of Ayatollah Khomeini from Paris. Almost 2 million people who came from different regions of Iran meet him.

Anti-governmental demonstrations held for several days in Tehran and other countries forewent this. Protest manifestations against massacres over demonstrators, and for soon returning of Khomeini were held all over Iran. Opposition called people for continuing struggle and to be careful. All American clerks and specialists were evacuated from Iran. That time about 10,000,000 US citizens were in Iran.

The former U.S. Minister of Justice R. Clark who visited Teheran that time and met Khomeini in Paris announced that 99% of the Iranian population were against of the shah�s regime.

The new sign of growing anti-American moods was the attempt upon the U.S. military advisor mayor Davis. In Esfahan demonstrators beat the U.S. consul.

A Washington Post correspondent reported that the contingent of Iranian soldiers who guarded the U.S. embassy was completely changed. This was done after one of the guards aimed his machine carbine at an American officer. When all 60 soldiers were taken from the embassy they shouted: �Yankee, get out of here!�

The Iranian Shah Muhammad Reza Pahlevi left the country, having proposed the PM post to Shahpour Bakhtiar, one of the leaders of the opposition National Front. The Shah asked President of Egypt Anwar Al-Sadat to help him �to restore the order and security.�

The Shah announced that the only way to achieve this goal was a coup with the help of a part of the army that still obeyed him. The escaped ruler assured that the USA would support the plan.

After 15 years of proscription Khomeini came back to his motherland. Khomeini declared: �Struggle against people is going on, and the recent departure of the Shah meant only the beginning of the second stage of this struggle.�

Meetings and manifestations supporting the program on changing the life announced by Ayatollah Khomeini were held in the capital and other towns.

Large divisions were dislocated to the southern part of Teheran, where the residents of Ayatollah and the opposition were located. Troops blocked main motorways.

Military helicopters continuously went round above capital streets full of demonstrators. Troops blocked ways to the medjlis and tightly surrounded Bakhtiar�s residence and ministries� buildings.

Demonstrations supporting the temporary government of Bazargan were held in the country. Only in Teheran there were about 3million demonstrators who demanded immediate dismissal of the Bakhtiar�s cabinet appointed by the Shah, liquidation of the monarchy and declaration of the republic.

One of Bazargan�s assistants emphasized that the Iranian army was so disconnected that the government loyal to the Shah could not count on it any longer.

In Roosevelt Street many people blocked the U.S. embassy�s exit. �Americans, go out of here!� �No Pentagon bases!� � these words were written in big letters on the embassy�s walls and transparencies. On February 10, in the night the imperial guard with the support of tanks attacked the Navy training base Farahabad to make short work of cadets and officers who participated in demonstrations supporting Khomeini.

On February 11, after rebels captured important military and civil objects in the capital, the army made no resistance and announced its neutrality. Bakhtiar escaped, his government fell having lost the army�s support. The monarchy was overthrown. On February 12 Bazargan appointed by Khomeini the Prime Minister, began to form the Temporary Revolutionary Government. On April 1 the clergy declared the Islamic Republic of Iran.

Comments about Revolution day from participants

(based from materials of The BBC)

Bakhtiar Shahpour (1935 - 1991)

Last prime minister of the Shah in 1979; educated in France; long standing activist in the National Front (Jebhey-e Meli); leader of the Ian Party (Hezb-e Iran); founder of the National Resistance Front (Jebhe-ye Moghavemat-e Meli) in Paris after the revolution; assassinated in Paris.

Comments:It was Sunday morning 22nd Bahman. I asked him: �General, what happened? Where were you?� He replied: �Your Excellency. Prime Minister, the army has just now declared its neutrality.� As soon as I heard that, I went to a different world. I told him: �Neutrality between who and who? Is it neutrality between law and anarchy? Is it neutrality between Iran and Iran�s enemies? How come I failed to predict such a thing? Thank you General. thank you very much.� I then put the phone down.�

Bazargan, Mehdi (1907 - 1994)

Prime minister of the provisional government formed during the revolution, educated in France; leader of Freedom Movement (Nehzat-e Azadi) leading figure in the National Front (Jebhey-e Meli) and among Islamist nationalists.

Comments:�Everyone was happy, thankful and full of hope. No-one could guess at the time, when the pages of history were turning, what the future had in store for them. Perhaps we could guess many of their concerns, but no-one could ever predict the outcome, which followed.�

Qarabaghi, Abbas (General)

(1918 - )

Chief of Staff of the army before and during the revolution; interior minister in the government of Sharif Emami and Field Marshal Azhari; military and law education; left Iran for France after the revolution.

Comments:�We ordered them all together that morning to attend a meeting, which we military men call an army staff council. I wanted the council to report to me about the situation, because no-one was answering my telephone calls to ground forces headquarters. Lt.-General Sane�i had telephoned earlier from the ground forces headquarters to say: �General, in view of the fact that I have served as your subordinate and am very fond of you, I wanted to let you know that you can no longer count on the ground forces. This was the result of our talks with other officers of this force from last night until morning.� I told him: �I do not understand. If I am not going to count on the ground forces, what am I going to count on?� He replied: �This is it. There is nothing we can do.� I said: �This is highly regrettable.� The general quite agreed with me.

The discussion continued and eventually the minority, who were in favour of declaring solidarity, agreed that we should declare neutrality. As soon as we ended our session, the gentlemen wanted the results of our discussion to be broadcast immediately. I ordered the public relations officer of the general staff to contact Tehran Radio and I told them that I would ring the prime minister myself. I did so, and informed the prime minister about the decision taken at the council of commanders. Lt.-General Vafa telephoned me back to say: �General, the radio announced the army�s neutrality just a moment ago.� The time then was one fifteen in the afternoon.In fact, in this way, the army�s unity and integrity were maintained. Firstly this was His Majesty�s order to stop bloodshed and fratricide. Secondly, this is what everyone wanted. In view of the circumstances at the time, the declaration of neutrality was in the interest of the country.�

When I entered, I saw seven or eight people were sitting there, who were introduced as Messrs. Dr Siassi, Engineer Bazargan, Dr Sahabi, Amir-Entezam, Engineer Khalili, and someone else, whose name I cannot remember now, but I have mentioned it in my book. After I sat down, one of them began praising the army for its decision and said that the army and the nation belonged to each other and they asked me to help them to establish security. I said: �Security would be maintained if you were to issue a statement to this effect. You have been appointed prime minister by Khomeini, therefore either you or Khomeini should issue a statement ordering the people not to attack army barracks and to respect its dignity and honour. If you were to issue such a statement, security would automatically be established.� He said: �Fine. I shall order such a statement to be issued immediately.

Jafroudi, Kazem (1913 - )

Senator and member of the Parliament (Majlis-e Shora) under the Shah; leading figure of the People�s Party (Hezb-e Mellat); academic, educated in Paris.

Comments: At the same time, I telephoned General Qarabaghi and said: �General, you and your companions had better not come to my house in your military uniforms, because you will be recognized and that might be dangerous for you.� General Qarabaghi came with Lt.-General Nasser Moqaddam, may God bless his soul, accompanied by a civilian guard all in one car. Before their arrival, Engineer Bazargan had come with Dr Yadollah Sahabi and Engineer Abbas Amir-Entezam. These three gentlemen were followed by a large crowd, which poured into Saltanat-Abad Avenue. I remember it well. Following a request made by Engineer Bazargan, Mr Yodollah Sahabi took a megaphone and went on top of a pedestal to ask the crowd to disperse. He addressed the crowd with the following remarks: �Gentlemen, today is the decisive day of the struggle. An important meeting is about to take place in this house. I ask you to disperse from the areas around this house, so that the individuals, who want to attend the meeting, can make their way into the house.��

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