When in Kazakhstan…

What do Canada and Kazakhstan have in common? Enough, according to Hector Corwan, the Canadian Ambassador to Kazakhstan. Corwan spoke at the U of C on Tue., Dec. 3 on current issues facing the central-asian nation in a discussion sponsored by the U of C International Centre.

“There’s a lot of foreign investment and quite a bit of Canadian interest in Kazakhstan,” said Corwan of the nation of 16 million people. “It has been a profitable relationship between Canada and Kazakhstan.”

Corwan reiterated a conversation with the Kazakhastani President: “We must do more with Canada. We both have huge territories, low populations and abundant natural resources.”

Nestled in the middle of Russia, China, the Caspian Sea and various other former Soviet satellites, the largest former Soviet republic is imbued with abundant natural resources including fossil fuels and minerals. With a quarter of Canada’s land mass and half its population, Kazakhstan stands to gain handsomely from the international oil markets.

“Kazakhstan is a major oil producing country,” said Corwan. “It possesses about the same amount of oil as Canada and we believe those proven reserves are only a fraction of what’s there.”

Daily production is about one-third of Canada’s but Corwan believes that production can increase at a steady 10-12 per cent per year for at least the next decade to over 100 million tonnes a day. Despite the potential, Corwan feels that Kazakhstan’s reliance on oil may be detrimental to its future and has told the Kazakhstan government as much.

“The government is trying to diminish its reliance on oil and are trying to use oil and gas revenues to build small and medium enterprises,” he said.

On the subject of a potential war on Iraq, Corwan said that prolonged military action would have a serious regional impact.

“If we assume that Saddam Hussein will be gone in the next year or so, the effect would be to unbottle a lot of oil,” he said. “The fact that the oil would be available for export means oil prices will go down.”

That, he said, could hurt the Kazakhstan economy in the short term. To produce a barrel of crude in Kazakhstan costs $5-7, $2-3 in Iraq, and two to three times that in Canada.

“This could certainly cause some future investments to go to Iraq and not to Kazakhstan, and in my opinion, that’s not a bad thing,” said Corwan. “Investments may go to Iraq but it will make Kazakhstan aware that their reliance on oil is a bad thing.”

Currently, Kazakhstan derives 80 per cent of its GNP from petroleum-related industry, something that could change with additional foreign investment and technology. SAIT, which has a world-class reputation in Kazakhstan for its technical programs, may be part of the solution, but according to Corwan, many students experience difficulty in leaving to study in Canada.

“Our facilities for providing student visas are not good,” he said. “There are too many students and not enough people to process the requests so we have to do it from Moscow.”

Corwan said that while they do get 600 applicants per year from Kazakhstan, that number is insufficient to justify a full-time visa officer in the country who would have only a couple of months of work per year. Other barriers exist as well.

“A lot of central-asian students don’t come back [to Canada],” said Corwan. “It’s a two-edge sword. We try to facilitate without restricting too much but there has to be some level of restriction.”