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Kazakh arms exports chief optimistic about future

CEP20010115000094 Astana Kazakhstanskaya Pravda in Russian 0000 GMT 6 Jan 01

[FBIS Translated Text]

Kazakh arms exports chief optimistic about future

The Kazakh arms export chief, Maksat Nauruzbayev, has said Kazakhstan has
"huge potential" to improve its position on the world arms market. In an
interview with the Kazakhstanskaya Pravda newspaper on 6 January,
Nauruzbayev said the country had been so far doing "very poorly" in the
field, but had "powerful and unique" defence plants to catch up with such
countries as Belarus. He said state support and better marketing work were
needed to load the defence plants with work. The following is the text of
the interview:

[Newspaper headline] Arms - expensive goods

by Vadim Makhin

Kazspetseksport [Kazakh special export, the state arms exporter] republican
state enterprise has a delicate sphere of activity. It deals with the sale
of arms abroad. Naturally, it has masses of state secrets. However, we have
managed to learn something about the activity of the enterprise. Its
director-general, Maksat Nauruzbayev, has agreed to give us an interview.
[Makhin] Maksat Sabyrovich, you are a civilian, does this make the job more
difficult for you?
[Nauruzbayev] As is known, Kazspetseksport sells arms, military hardware and
other military goods. This is, certainly, a special business. Therefore,
probably, it should be headed by a person with certain business and export
and import operations experience.
[Makhin] As far as I know, a few years ago some aircraft illegally flew away
through the enterprise to the Far East, and helicopters - to central Africa.
Are there any guarantees that such things will not be repeated? Have normal
working conditions been created at the enterprise?
[Nauruzbayev] I can tell you with confidence that during the five years of
its existence, Kazspetseksport - before it used to be called
Kazvoentekhimpeks [Kazakh military hardware import and export] and later
Kary-Zharak [arms] - was not involved in any illegal deals which would have
damaged the republic's international reputation. There have been no
violations of the legislation on the sale of military property.
There is a very important issue here. When I came to the enterprise and
studied its documents, the practice of concluding and implementing
contracts, I was surprised to discover that we were not protected from a
repeat of those notorious scandals.
The main principle in the work of the enterprise should be ensuring
Kazakhstan's political security. Personally, for me it is the prime task. I
think that a solution to this has been found. Jointly with the Defence
Ministry, Foreign Ministry, National Security Committee, Security Council
and other government departments we have worked out a number of regulations
and rules, the observance of which, I am confident, will guarantee the
political security of our state. A repeat of international scandals has been
ruled out.
As regards the sale of military aircraft to North Korea and helicopters to
central Africa, they were sold by other enterprises which have nothing to do
with Kazspetseksport. At the same time, these deals were carried out with
certain violations of the country's legislation.
The organizational work on transferring the enterprise to the Ministry of
Defence has been completed now. [Kazspetseksport reports directly to the
prime minister's office] As a result, part of the staff members have left
and been replaced by highly skilled specialists who have quickly got down to
work. I believe we have a fully businesslike atmosphere at our enterprise
now.
[Makhin] How does Kazakhstan look on the world arms market?
[Nauruzbayev] Very poorly for now. At the same time, Kazakhstan has enough
potential to strengthen its position on the world market. As the saying
goes, everything becomes known through comparison. Recently I visited
Russia, Belarus and Ukraine. From the point of view of arms business
Kazakhstan, as it seems to me, is comparable to Belarus. The volume of arms
sales in Belarus has reached 400-500m dollars a year! This is slightly less
than the volume of arms sales in Ukraine, wich has a more developed defence
industry. Our Belarusian friends achieved this only in five or six years,
starting from scratch. Against the background of this, Kazakhstan just does
not look serious, however painful this might sound. I think we need a few
years of hard work to us the existing opportunities and look more dignified
on the market.
[Makhin] Where does the money received from international deals go? Do the
enterprise and its workforce get any dividends?
[Nauruzbayev] At present, all the money received from export deals are
transferred to the republican budget. The enterprise's costs are covered
from the budget. So, no-one gets any dividends.
[Makhin] We do not have a developed defence industry and have been selling
the arms inherited from the former Soviet Union. Is there any future for
Kazakhstan's arms export?
[Nauruzbayev] Allow me not to agree with you. Kazakhstan has very powerful
and unique defence enterprises with huge potential. Regrettably, many of
these have not been working at full capacity or even have been standing
idle. The reason for that is clear - a lack of orders, including from the
state. This can be easily explained, there is simply no demand. However,
there is another reason, that is a lack of purposeful marketing work.
The experiences of Belarus and Ukraine show that a strong marketing team can
ensure enough work for defence enterprises. For example, I was pleasantly
surprised at the experience of the Borisov tank maintaining plant near
Minsk. It operates in three shifts and in addition to tanks, the plant
repairs railway hand cars for Russia, the Baltic republics and Eastern
Europe, and also makes a considerable variety of civil diesel engines. And
this is not an isolated case.
Therefore, I consider creating of an efficient marketing service and
establishing close ties with all enterprises of defence industry my prime
tasks. Apart from that, we need to find an effective way of financing the
plants. And of course, state support is badly needed to get business going.
Now, one can feel significant moves in all these directions. For example,
the government has allocated credits to the Semipalatinsk armoured tank
maintaining plant [in East Kazakhstan Region] and for the first time in many
years we have placed orders with this plant to repair some equipment
intended for export. People's Savings Bank [of Kazakhstan] has started
financing a number of defence enterprises and we have also placed an order
with one of these to prepare for sale some equipment.
These are only first steps. There are other interesting plans which we are
planning to carry out jointly with the Committee for Defence Industry. Thus,
Kazakhstan has prospects in exporting weapons and, as it seems to me, not
very bad prospects. Personally, I am quite optimistic. [p 2]