22 June 2007
Astana: A Modern Wonder in Kazakhstan
A Modern Wonder in Kazakhstan
by Dan Satinsky
Principle Partner B.E.A. Associates
After returning from my first business trip with a U.S. client to Kazakhstan in April, I was a bit surprised to find that even many veteran travelers to Kazakhstan had not been to the new capital of Astana, which is quickly becoming the economic, cultural, and scientific center for a growing oil and gas power.
The new capital actually has a long history. It was founded in 1824 on the River Ishim near the geographic center of modern Kazakhstan. It was then a military fort known as Agmola (or Akmola), which means "white abundance" or "white holy place" in the Kazakh language. It was built and occupied by Siberian Cossacks from Omsk. A civilian town by the same name grew around the protection offered by fort and via an economy that rested on its location near the famous Great Silk Road and especially on a cattle industry that was established early on. By 1924, the city became a center for the several Stalin-era gulag camps that spread across the Kazakh steppe. In 1961, it was renamed Tselinograd and became the capital of the Soviet Virgin Lands Territory, which was proclaimed by Khrushchev and saw a vast migration of Russians who were expected to develop the agricultural potential of the area.
After Kazakhstan became independent in 1991, the city's name was changed back to Agmola. In 1994, it was decided that the Kazakhstan's capital would be moved from Almaty to Agmola and the city's name was changed again in recognition of this. The new name, "Astana," literally means "capital" in the Kazakh language. A massive building effort was launched and the city was turned into a completely planned and modern city. It officially became the capital on December 10, 1997 and, with approximately 575,000 people, is now the third largest city in the country.
The construction of the new capital has been the special project of President Nazarbayev and has variously been attributed to the need to provide a new modern image for Kazakhstan or to move the center of political power more to the center of the multi-ethnic and multi-cultural country. In any event, it is now the political center for the country.
As an outsider, it was particularly impressive to see an entirely new, planned city being constructed in the middle of the steppe in Central Asia. The architecture is impressive and the style is described in Wikipeida as "ethno-postmodernism." I am not an expert in architectural styles, but the modernism, or post-modernism, of the buildings reminded me of some of the buildings I had recently seen in downtown Houston, another oil and gas center. The difference being that the buildings in Astana include elements of traditional Central Asian architectural style.
Alongside the new construction, on the other bank of the River Ishim, the original city is also undergoing extensive renovation, with new buildings being interspersed with the 19th and 20th century buildings that are still in place. This area is integrated into the city as a whole and seems to have a much more vigorous street life of shops, residences, museums, and cultural institutions.
The Kazakh government is now positioning itself as a friend to all of its neighbors in the cross-roads of Asia and as open to all religions of the world. For instance, in the top of the Bayterek, the tower in the center of the new city, there is a display tablet honoring all of the world's major religions. I was told that President Nazarbayev plans to hold regular biannual convocations of all of the worldТs religions to promote mutual understanding and peace.
There also seems to be a genuine commitment to use some of the growing oil and gas proceeds to diversify the future economy through government development funds. According to the website for the Khazakh Embassy in the UK, Astana is now a Special Economic Zone with geared mostly to encourage companies to purchase land, develop it, and practice business in Astana. The government has already completed construction of a fiber-optic telecommunications backbone system and plans further development of this telecommunications infrastructure. The Kazakh government has also established an E-government consortium that includes Microsoft, Intel, Cisco and IBM among its members.
The Kazakh nation itself is cosmopolitan. By religion, is divided nearly equally between Muslim and Russian Orthodox, with some Catholics, protestants, and other religions represented, including a small but active Jewish community. Ethnically, Kazakhs hold a small majority in the country, but there also many Russians, Ukrainians, and Germans (namely "Volga Germans" who immigrated to Russia under the invitation of Catherine the Great, but were then largely deported to Central Asia under Stalin). The population of Almaty is actually dominated by these three largest ethnic minority groups by upwards of 70%.
Perhaps despite this public commitment to diversity, there is no shortage of foreign criticism and controversy connected with President Nazarbayev, who was recently made President for Life in a round of otherwise liberal constitutional reforms. However, the Kazakh people I met seemed to have a deep, genuine respect for him and for the transformation that he is bringing to the country. One can look at a city like Astana as a personal monument to the President or as a visionary commitment to the construction of a new and prosperous Kazakhstan. This not a controversy that I would care to delve into, but I can say for sure that I was impressed by the energy and entrepreneurial spirit in the people I met and with the modern construction in the city of Astana.
It is dangerous to generalize based on one business trip, but it struck me that there was a distinctive Central Asian style of business culture, along with remnants of Soviet times. This makes for an interesting combination. An important aspect of the trip was the "getting to know you" visits to restaurants and cultural sites. On the surface, this is an expression of traditional Central Asian hospitality, but it was also a means of establishing a personal connection. In this order of things, the personal connection precedes business discussion. In some ways, it struck me as similar to business trips to regional Russia in the early and mid nineties, where the eating and drinking established whether there was enough in common personally to be able to do business together. Also, in our visit to Astana, it is important to note that the language of communication and business was Russian, although the staff at the hotels and the airline (Air Astana) spoke English.
These business cultural habits of interaction can be significant. For most Americans, the first question is the feasibility and profitability of the business proposal, then, if it looks as though the business can go forward, it is important to strengthen the personal relationship. At least for some Kazakhs, this is the reverse order of priority, although obviously an evaluation of business proposals takes precedence once the stage of acquaintance is completed. These different frames of reference can be a barrier to mutual understanding, if not taken into account.
For those interested in business and business opportunities in Kazakhstan, two excellent sources of information are:
U.S.-Kazakhstan Business Association American Chamber of Commerce in Kazakhstan
Bill Veale, Executive Director firstname.lastname@example.org
1200 G Street, N.W., Suite 827 Tel: 7 327 258 7938/39/20
Washington, DC 20005 Fax: 7 (327) 258 7942
Tel: (202) 434-8791
Fax: (202) 638-3040
Daniel Satinsky has been involved in markets in the FSU for more than 15 years. He is a practicing attorney with his own private practice, B.E.A. Associates, which is partially specialized in dealing with issues of international commerce between Russia and the US. He is also the editor of BuyerТs Guide to the Russian IT Outsourcing Industry, and is currently serving as the President of the US-Russia Chamber of Commerce of New England.