theglobaljournal.net: Latest articles of irina Pavlova

TBi and Ukraine's Orange Future

2012-07-20T12:09:37Z

Ukraine has witnessed a new criminal case brought by Kyiv's tax authorities against Mykola Knyazhutskyi, the Managing Director of TBi. The case against the head of the most reputable television channels represents a government effort to curb any signs of opposition. Yuliya Tymoshenko, a former Prime Minister and prominent opposition leader, is currently serving her sentence in Kharkiv, having been charged with tax evasion and betrayal of national interests. TBi is also accused of tax evasion to the tune of six million hryvnas. Knyazhutskyi has denied any wrong doing, highlighting the political nature of the alleged criminal offence. The target of the investigation, as well as the rationale behind its timing, are clear.

TBi is seen by many as the most independent voice in a media environment where dzhynsa - paid journalism - remains the norm. According to a public survey conducted in June 2012 by the Academy of the Ukrainian Press, TBi is ranked as the most balanced news outlet in the group of eight national broadcast channels. It is seen as fair in providing air time to opposition parties and focusing on such controversial topics as the personal wealth of Ukraine's ruling elites and government procurement practices, exposing high-level corruption and tax evasion. The network's team has been making a conscious effort to educate the public on the importance of investigative journalism as a way to develop civil society in Ukraine.

“TBi is a unique media outlet. Most of our journalists are very well known and extremely active in social media. In such a way we will not disappear from the Ukrainian media space. And I truly hope that people who continue applying pressure on our channel will soon be forced to leave the political establishment” emphasized Knyazhutskyi.

TBi's troubles began in 2010, when Ukraine's National Broadcasting Council suspended the channel's operating license in favor of the pro-government Inter. That year also marked the appearance of the new political regime led by Victor Yanukovych and the beginning of a slippery slope in Ukraine's democratic values. According to the Democracy Index compiled by the Economist Intelligence Unit, Ukraine was ranked 52nd in 2006, while in 2011 it occupied 79th place due to the progressive curtailing of freedom of expression and increased censorship.

The revival of political pressure on TBi is most likely linked to the upcoming parliamentary elections scheduled for October, where the role of media will be decisive in shaping public opinion. Current surveys demonstrate high levels of public support expressed towards the pro-government Party of Regions and Tymoshenko's Batkivshuna. While the fate of TBi remains uncertain, the channel's team and its leadership continue to express healthy optimism.

“We are not going to immigrate and we are not going to ask for political asylum. And I am convinced that we will win through the existing legal channels” said Knyazhutskyi.

It was not very long ago that Ukrainians marched through the streets of Kyiv in a peaceful protest that came to be known as the ‘Orange Revolution’. Many have already forgotten that the prelude to this democratic outpouring was the movement titled ‘Ukraine Without Kuchma’, spearheaded by journalists in search of their professional rights.

(Photo © DR)

English Language Broadcasting in Switzerland: The End of the Story?

2012-04-05T15:46:03Z

The Swiss Broadcasting Corporation (SSR) has announced a wide review of all of its internet platforms, radio and television stations across Switzerland. The oldest English language radio with national broadcasting, World Radio Switzerland (WRS), finds itself in a peculiar situation. While the review process is projected to take place over the next seven months, WRS has already been threatened with either closure or privatization. The key argument invoked by the head of SSR is that WRS should no longer be funded by public money since it operates in English, a non-official language of the Swiss Confederation. The Global Journal tried to clarify the reasons behind the decision that has shaken Switzerland’s international community.

Mark Butcher, a long-term WRS host and recent founder and director of Radio Frontier, is convinced that the decision taken by the SSR is entirely motivated by financial constraints.

“At the moment the SSR has to save a lot of money as the funding from license fees has been frozen. Therefore, they need to make savings and they say that WRS is one of the stations they need to chop. It is a totally financial decision. They are trying to save money with the least political pain.”

Considering the substantial presence of foreigners in the Geneva canton, Mr. Butcher emphasizes the need for Geneva to have a vibrant English language radio station. According to him, Radio Frontier is perfectly suited to fulfill this role since it is a private organization not funded by tax payers.

The chairman of Saatchi and Saatchi Switzerland and outspoken media observer Pedro Simko adheres to the view that not only Geneva, but the whole of Switzerland, is bound to lose from the closure of the WRS, a national media platform.

“It is a completely short-sighted decision and a monstrously erroneous argument that WRS is not in one of our national languages. But beyond that, the role of WRS is to help a very large ex-pat community to integrate into Switzerland. And Switzerland lives from the very important relationship that we have with that community. Without WRS I think we are losing an opportunity to acquire some of these companies, which is the foundation of our economy.”

The final outcome remains to be seen, even though it appears that a decision to close the WRS would be equally disappointing for its staff and dedicated listeners. The latter have already begun generating comments and ideas on a dedicated web page. Ex-pat James Moffat explains why Switzerland needs to continue broadcasting in English.

“If we all want to have freedom of speech, true democracy and integration, surely having an English language radio station provides a great number of both foreigners and Swiss nationals the opportunity to communicate in one common language. After all, the Swiss themselves have great trouble internally with the four official languages, let alone the multiple dialects that impose yet another challenge. Closing down any radio station that provides the value that residents want is shameful, but when it is such an important part of integration for newcomers, or short contracts in Switzerland, and one that gives us all the ability to learn and understand more about Switzerland and what is happening in the country we live in, it’s also saddening.”

SSR was not available for comment on its decision concerning the WRS radio station.

(Photo © WRS)

Why Democracy Matters

2012-03-27T15:43:32Z

The piercing anti-EU pronouncements of the Member of the European Parliament (MEP) present nothing new or surprising. As a former trader from the City of London, and the founding leader of the UK Independence Party (UKIP), Farage has gained a reputation as a fearless Euro-skeptic in Brussels and Strasbourg, where he has profoundly criticized the President of the EU Council, Herman van Rompuy and the EU’s Commission President, José Manuel Barroso. This time (March 22, 2012), he had a special message to deliver to the Geneva business community at an event organized by the British Swiss Chamber of Commerce (BSCC). The Greek crisis took center stage and rightly so.

Greece is due to receive its second bailout package after its private creditors agreed to accept losses, cutting Greek private debt from 206 billion Euros to 101 billion Euros. The remainder of Greek liabilities held by the European authorities and the IMF constitute 162 billion Euros, while the total Greek debt is projected to reach 120 percent of the country’s GDP by 2020.

Farage noted that the Greek situation represents not only economic - but also a political – disaster, “When the former Greek Prime Minister George Papandreou dared to stand up and say that ‘I will give the referendum to the Greek people so that they can decide on whether to be in the Euro’, the Brussels boys got him removed and replaced by a puppet. Democracy really does matter, and it matters for this reason: in a democracy, when you hate something, you will initiate political change. And through that process democracy acts as a safety valve because it keeps us peaceful. Put yourself in the position of a young Greek person, who is unemployed and without hope. You now see your country run by Euro bureaucrats telling the Prime Minister of your country what he can and can’t do. In the next election, it does not matter how you vote because the real power is being exercised elsewhere. If that safety valve is removed, all you are left with is civil disobedience, civil disorder and violence."

On 2 February 2012, an estimated 80,000 young Greeks stormed the House of Parliament in Athens, where the vote on additional austerity measures was taking place. In the country's second largest city, Thessaloniki, around 20,000 protesters marched through the streets in protest against the austerity package awaiting approval to receive a 130 billion Euro ($171 billion) bailout. The Greek economy is currently contracting at an annual rate of 7 percent. Its youth unemployment rate is 51 percent, and one in four businesses have gone bankrupt since 2008.

Contemplating the possibility of Greece leaving the Euro and the view of the EU leaders on this option, Nigel Farage noted, “I recently had a private meeting with Angela Merkel. I said to the Chancellor: ‘Wouldn’t it be better to recognize that Greece is being bullied around, and what good Europeans would try to do is to help Greece by stopping the capital flight from that country. What if we allow Greece to leave the Euro?’ ‘No, Mr Farage’, she replied, ’we cannot do that because if we do so, other countries will follow and the European project would fail."

Farage is convinced that EU leaders have become too removed from the real concerns of the majority of the European population, contributing to the growing democratic deficit. The rejection of the Lisbon Treaty by French and Dutch voters in 2005, and later by the Irish, clearly pointed to the existing gap between EU citizens and their EU-level leaders. After all, it was Mr. Barroso who has defined the EU project as “the first non-imperial empire”, based on the will of individual member states to form a political and economic union. But, as history shows, all empires eventually come to an end. The Greek conundrum represents a true test for EU institutions and their leaders. As Greece is being driven to the edge by onerous austerity measures, it becomes the responsibility of the EU and the Greek political elite to prevent a severe civil outcry in this debt-ridden European country. Despite Farage’s brutally blunt Euro-skeptic position, his vision of the EU as a purely economic project based on trade might prove to be the only meaningful solution in the years to come.

(Photo © Grégory Maillot/ Point of Views)

Putin's Call for Democratic Change

2012-02-07T11:06:46Z

The official response to Russia’s wave of protests held on February 4th was given by the country’s acting PM Vladimir Putin, who is also to participate in the presidential race on March 4th. He publicized his views in a piece entitled “Democracy and the Quality of the States,” released today on the web page of the Russian daily “Kommersant.”

The manifesto provides a detailed account of the developments in Russian society since the collapse of the Soviet Union in 1991, marked by extreme “corruption and anarchy.” However, the situation has changed drastically in the 2000s, since politics started to reflect “the will of the people. I would like to highlight that we achieved this through democratic and constitutional methods.”

Putin devotes a large part of his manifesto to ideas on the growing role of civil society and the reforms needed to fight corruption and to change the functioning of the country’s judicial system. Acknowledging that Russia’s civil society has become “more mature, active and accountable,” Putin calls for the need “to renew the mechanisms of our democracy in order to absorb the emerged civil activism.” He does not elaborate on the details about achieving this objective.

Perhaps the most concrete proposal found in this newly emerged document concerns the role of the federal governance system. Putin has called for a restoration of the regional elections of governors, scrapped in 2004 under his rule, authorizing direct presidential appointments. “Today, during the new stage of Russian development, we return to the direct elections of governors. However, the President will remain responsible for the mechanisms of control and reaction, including the right to remove the governors from their positions.”

On the subject of democracy, Putin proclaimed, "democracy in a big country is made up of the democracies of small areas. Local government is a school of responsibility for citizens," calling for municipal authorities to have greater autonomy from the Kremlin.
The true test for Russian democracy will occur during the presidential elections on March 4th. Amongst Putin’s rivals are the Russian businessman Mikhail Prokhorov and perennial candidates communist Gennady Zyuganov and nationalist Vladimir Zhirinovsky.

(Photo © Alexey Nikolsky)

Davos 2012: Capitalism No Longer Working Warns Schwab

2012-01-20T11:09:59Z

The World Economic Forum 2012, scheduled for January 25-29 in the remote Alpine resort of Davos, will take place against the backdrop of the world’s somber economic and political realities. For her third visit at Davos, German Chancellor Angela Merkel will deliver the opening address, possibly reinforcing the need for collective action in response to the situation in the Eurozone and concerns about high unemployment and fiscal imbalances worldwide. Prime Minister David Cameron who is also expected, will certainly bring his British view on the UE political crisis. The list of this year’s invitees includes heads of state, central bankers and leaders from religious institutions, NGOs and social entrepreneurs. While admission is officially free of charge for these leaders, the total cost for other participants usually ranges between $20,000 and $40,000. A high price tag for being included in the 260 off-the-record discussions set to improve the state of the world, which this year will focus on “The Great Transformation: Shaping New Models.” With 2'600 expected participants, this 2012 edition will be the biggest such gathering since its founding in 1971.

Professor Klaus Schwab, shared his vision on the choice and the importance of this year’s theme. Referring to the Forum’s Global Risks Report 2012, which had identified the 50 most pressing global concerns, he highlighted the difficulties of confronting them while “still burdened by the sins of our past.” Schwab pointed to the growing state of “dystopia,” implying the possibility of a downward spiral of the global economy, accompanied by social disruption, rising protectionism and nationalism. These trends threaten to reverse the achievements of globalization and to precipitate the emergence of critical fragile states, comprised of both emerging and developed countries. In the report, the failure of global governance is identified as a key geopolitical risk; it is also the most interconnected with the other 49 risks discussed in the document.

Despite a rather gloomy global picture, Schwab believes that “we are living in a great transformation, driven by geopolitical, economic, social and technological forces.” The future of capitalism, according to him, would no longer be determined by the scarcity of capital itself, but rather by the global shortage of human talent. More than half of the world’s population is now below 27 years old, the majority of whom are urban dwellers with increasing access to Internet technology. This state of affairs should be reflected in revised models of leadership, which can no longer rely on hard power alone and are increasingly calling for collaborative forms of engagement. Consequently, in addition to the existing community of Young Global Leaders (individuals in their 30s), the Forum has recently introduced the group of the Global Shapers. Comprised of young leaders in their 20s, the members of this newly-formed community are expected to actively partake in this year’s meeting, where the overwhelming majority (among 1,600 participants) will still be senior business officers from the Forum’s 1000 member companies. “My wish is that the Annual Meeting 2012 will be much more than an economic forum – it should be a forum for the future of humanity,” declared Klaus Schwab, soon to turn 74. "We are in danger of completely losing the confidence of future generations," he said. "The question is what can we do, and what should we do, without looking for scapegoats and easy answers."

(Photo © DR)

The Future of India's Clean Energy

2012-01-16T12:02:22Z

Abu Dhabi once again welcomed the delegates of the World Future Energy Summit (WFES) on January 16. This three-day gathering represents an annual meeting of energy sector experts, committed to the global advancement of energy efficiency, innovation and the use of clean technology. China’s Prime Minister Wen Jiabao, UN’s Secretary General Ban Ki-moon and the CEO of Solar Impulse Bertrand Picard are amongst the conference’s distinguished speakers. The presence of the highest ranking political leadership of the emerging economies is not surprising as they represent key players in the global battle for energy. Dr Farooq Abdullah, India’s Minister for new and renewable energy, shares his views on the challenging balance between environmental degradation and energy needs globally and in his native land.

How important are renewable energy and clean technology to emerging markets such as India?

We are now on the verge of a second transition as far as renewables are concerned. We have passed through the phase of research, development and small scale deployments and now have an installed base of over 22,000 MW renewable-based capacity, which is around 11 per cent of India’s total power generation capacity. We have added over 11 GW capacity in the last 5 years and plan for another 30 GW in the next 5 years.

What initiatives is India undertaking to promote the growth of this sector?

India is perhaps the only country in the world to have an exclusive ministry devoted to the growth and development of renewable energies. We stand among the top five countries of the world in terms of renewable energy capacity. Our most recent initiative, The Jawaharlal Nehru National Solar Mission, envisages a capacity addition of 20,000 MW of grid solar power by 2022. A similar ambitious mission, the National Bio-Energy Mission, aims to tap the over 15 GW bio-energy potential in the country.

In which areas do you see renewable energy providing an easy replacement for traditional sources?

Renewable energy has already created its space in grid-connected power generation. Wind and small hydro are commercially viable options. We are working towards grid –parity in solar. However, what is most amazing is the capacity of decentralized renewable applications to usher in energy access for all, including the most disadvantaged and the most remote of our habitations. In its decentralized or standalone version, renewable energy is the most appropriate, scalable and optimal solution for providing power to thousands of remote and hilly villages and hamlets. By providing energy access to such communities, it becomes one the biggest drivers of inclusive growth.

How does India’s National Solar Mission fare compared to other emerging economies?

The Solar Mission aims to add 20,000 MW solar power capacity by 2022. Phase I of the Mission is now under implementation. In this year alone 186 MW of grid-connected solar power projects have been commissioned and another 300 MW are likely to be commissioned by March 2012. We have succeeded in cutting solar power costs by allotting projects through a tight international auction process. For instance, in the latest auction the lowest bid came from Solairedirect SA, a French company, at 7.490 dollars a kW. That’s about 38 percent below the average price in the December auction (Batch-I) and about 30 percent cheaper than the global average for similar projects.

What are the biggest challenges for the growth of renewable energy in India? Are these challenges unique to India or common to the global community?

As a distributed energy system, renewable energy has the inherent advantage of greater resource flexibility, but is also currently more costly than centralized power. Hence, there is a continuous need for innovation to increase efficiencies and bring down costs. The challenge before us in the renewable energy sector generally, and in India particularly, is to reduce the per-unit cost of renewable energy. Besides, the power generated through renewable energy is usually intermittent and sometimes difficult to predict. There are also other challenges like those related to technology and financing.

I see the role of governments as active facilitators who will work to create an enabling ecosystem for promoting newer business models, technical and market innovations, as well as promoting basic and applied research.

What can the Middle East, and in particular Abu Dhabi, offer India in terms of opportunities in renewable energy and energy efficiency?

Renewable energy is the future of mankind and the key to sustainable development. I am delighted to note that the UAE, despite its abundant hydrocarbon resources, has taken the initiative in promoting renewable energy and in hosting the headquarters of the International Renewable Energy Agency (IRENA). We, in India, see tremendous opportunities in cooperation not only via the medium of IRENA but also at the bilateral level. India will be happy to leverage its resources to help in capacity building and resource assessment.

(Photo © DR)

Food, Gas and Russia’s Neighborhood Policy

2012-01-13T17:44:59Z

The chief of Russia’s consumer protection agency, Gennady Onishenko, warned that his country might limit the import of Ukrainian agricultural products by May 2012. The announcement came after an initiative by the Ukrainian authorities to bring its existing food oversight body in line with EU standards, and several weeks after the annual Ukraine-EU Summit, which focused on the Free Trade Agreement.

The consolidation of Ukraine’s veterinary service into a single entity responsible for overseeing food quality is “an experiment that the Ukrainian authorities are conducting on their citizens,” according to Onishenko. Ukraine’s Minister of Foreign Affairs, Konstyantyn Gryshenko, demanded an apology and called such remarks “a provocation”. Whilst the bi-lateral nature of this affair is obvious, its broader context and implications for Russia’s current and potential influence in the post-Soviet space are less apparent.

Naturally, the immediate effect of import restrictions would be on Ukraine’s agricultural exporters. It is a genuine concern for a country whose share of commodity exports (including agriculture) to the CIS region has been growing since 2005 - currently accounting for almost 40 percent, while commodity exports to the EU have dropped to almost 24 percent in the same time period.

The use of economic means to achieve political aims is nothing new in the post-Soviet space, where Russia has remained eager to maintain its economic and political influence after the collapse of the USSR. And - after all - it was Onishenko who implemented import restrictions on Georgian wines and mineral water in the midst of the country’s military conflict with Russia in August 2008.

The current Ukraine-Russia food debacle is occurring against the background of Ukraine’s on-going attempts to re-negotiate the gas agreement initially concluded in 2009 by Ukraine’s ex-PM Yulia Tymoshenko. Unsatisfied with the high prices, the Ukrainian authorities initiated revisions to the terms of the Russian gas deal. But Gazprom has been reluctant to provide any significant price reductions without any concrete promises of controlling Ukraine’s gas transit system (GTS), used to transport Russian gas to the EU. Such a possibility has caused internal divisions amongst Ukraine’s oligarchs and the closest allies of President Victor Yanukovych.

While the first group is eager to do anything that would ensure cheaper gas supplies for their energy-starved enterprises, Yanukovych and team are fully aware that Russia’s control of the GTS would deprive the country and the president himself of an important bargaining chip, opening the door to Russia’s complete dominance in the region. In other words, Yanukovych is not ready to assume the fate of the Belarusian president Alexander Lukashenko - at least not yet. Consequently, Ukraine’s control over its GTS will greatly depend on Yanukovych’s ability to resist both the growing pressure from internal business groups AND Russia’s usual practice of economic bullying - something which has demonstrated its effectiveness in the past.

FEMEN in Belarus: A Nearly Deadly Visit

2011-12-23T14:33:22Z

FEMEN, the Ukrainian feminist group, has once again struck the chord of public dissent, but this time in the neighboring Republic of Belarus. Three of its members, Inna Shevchenko, Oksana Sasko and Alexandra Nemchinova, arrived in Minsk for the first anniversary of the presidential elections that had once again extended Alexander Lukashenko’s rule (he has been in power since 1994). The female activists staged a shirtless protest in front of the country’s KGB office, chanting “Viva Belarus.” There was a rapid reaction from a group of almost a dozen men, who initially introduced themselves as representatives “of some governmental agency.” The protesters were kidnapped at the South Bus Station in Minsk, interrogated, physically assaulted and ordered never to return to Belarus.

The activists shared the full story at a press conference, upon their successful return to Kyiv.

Oksana: We were immediately told to be quiet. Inna began to scream and she was quickly hit in the face and we realized that there was practically nothing we could do because not a single person at the train station paid any attention to us. On the contrary, everyone just looked away. Everyone was scared. People in Belarus are too scared to show any resistance. When they threw us into the car, we were put in the car together but we had no idea where they took Sasha [Alexandra Nemchinova]. They immediately took all our phones, all our possessions and began interrogating us. Who were we? Why had we come here? What kind of organization was this? Who was financing this?

Inna: We drove around for four or five hours before stopping in a sparse forest where we were taken out of the bus by force, with our eyes closed. At this point they were wearing masks. They took us into the woods for approximately 100 meters where we were told to stop, lift our heads and remove the hoods. We were then told to remove our clothes and hold up various signs. On the signs were drawn swastikas, fascist swastikas. On the signs it was also written "One Slavic Nation". We were forced to raise these signs. We were forced ... we were told to smile and look into the camera. All this was being filmed on two cameras. Then we were told to dress. We were told that if we can't get dressed by the time we say three, you will die, immediately. We got dressed and we were then again told to undress. We were told to bow our heads and then they poured Zilonka [a greenish iodine-like substance] over me and then with a knife they began to cut my hair.

The kidnappers covered the activists’ bodies with oil, beat them with sticks and warned them to never come back to Belarus. The women were eventually freed near a forest on the Belarus-Ukraine border. With the assistance of a few villagers and the Ukrainian diplomats, the interrogated protesters managed to return home safely.

Inna: Now is the time where we should analyze the situation. The most important thing that we would like to say is that we do not in any way, not even for a second, regret that we were in Belarus. We know what is going on over there, we see how scared the people are and we see that the government is run by a freak. There exists a special organization that fulfills his whims and desires. We are already planning a second protest in Belarus. We will go there to support its citizens. Through our personal example we will show that these freaks, who are trying to scare the activists, should not be feared. We will come to Belarus. We will go to its people, but this time with much more force.

The Phantom of Ukraine's Integration

2011-12-20T10:01:35Z

On December 19 the official Kyiv welcomed a delegation of EU representatives to the annual Ukraine-EU Summit. Amongst the EU leaders are the Commission’s President Barroso and the European Council’s leader, Herman Van Rompuy. The summit is expected to focus on the Association Agreement, comprised of the Free Trade Agreement (FTA) and visa-free travel to EU countries for short-term stay. The conclusion of the Agreement during the Summit is as uncertain as Europe’s ability to sustain its monetary union. But this time the explanation lies outside of the EU.

While the two parties have agreed on the technical details of both the political and the economic components of the document, the text of the preamble remains incomplete and controversial. This fall, Ukraine’s president Victor Yanukovych called for Ukraine’s EU membership prospects to be included in the preamble. It was an unrealistic demand to make, in the context of Europe’s expansion fatigue and most importantly, Ukraine’s internal developments.

The arrest and questionable trial of the opposition leader and former PM, Yuliya Tymoshenko, has exposed issues of selective justice and political motivation against high profile political figures. Tymoshenko has been condemned to 7 years in prison for exceeding her powers in 2009, in signing a gas deal with Russia.

But according to many Ukrainian experts, it is the existing gas sector lobby that is primarily to blame for the lack of progress on Ukraine’s EU integration. One of the key priorities of this business group led by Dmytro Firtash, a billionaire and co-owner of the gas intermediary RosUkrEnergo, is to keep Ukraine in the grey zone, neither with Russia nor with the EU. A closer union with the eastern neighbor could lead to a loss of assets to the Russian government, while EU integration would call for increased transparency in the energy sector. Tymoshenko has openly criticized the role of intermediaries involved in opaque gas dealings between Russia and Ukraine.

While the Summit is unlikely to produce concrete results with regard to the conclusion of the Association Agreement, the EU officials could use it as an opportunity to voice their serious concerns over deteriorating democratic norms and the rule of law. Andrew Wilson from the European Council on Foreign Relations argues that one of the ways is to introduce targeted sanctions on travel and financial privileges enjoyed by the responsible Ukrainian officials.

(Photo © DR)

Kazakhstan’s Diversification Game

2011-12-12T10:37:46Z

Putting all your eggs is one basket has never proved to be an effective investment strategy. The Republic of Kazakhstan, a post-Soviet Central Asian state with a population of 16.6 million, has come a long way in realizing the merits of economic diversification. After independence in 1991, the country fell into a resource dependency trap with the lion's share of its GDP being produced in the oil and gas sectors. Even between 2000 and 2010, more than 40% of its foreign direct investment benefited Kazakhstan’s energy industry. The situation is now changing in a drastic way and, naturally, under government supervision.

Kazakhstan has adopted an ambitious modernization plan targeting 12 priority sectors, including transport, machinery production, pharmaceuticals, space activities, IT and biotechnology, and tourism. At least 152 projects are involved, with the total investment - approaching US $500 billion - to be implemented by 2015.

With its long history in precision industries and the technological know-how, Switzerland has had a special role to play in this government-led modernization plan. This was the key message delivered by KAZNEX INVEST, a government investment promotion body, during a presentation organized by the Zurich-based Joint Chamber of Commerce for Russia, Ukraine, Kazakhstan, Belarus, Kyrgyzstan, and Moldova. The message was clear: invest in our economy under extremely favorable conditions.

The incentive structure proposed by the Kazakh government to lure foreign investors could be seen as a basket of the usual far - with some occasional surprises. Amongst corporate tax breaks ranging from 50 to 100% and exemptions on customs duties, there are also the so-called “state natural grants” that come in the form of land ownership given to foreign companies in exchange for invested capital.

Another modernization initiative concerns the area of transportation. A 3,000 km modern Silk Road is being constructed on Kazakhstan’s territory. It will connect China with Russia and Western Europe. The total cost of the “Western Europe –Western China” corridor is estimated around US $ 6.7 billion. The World Bank, the EBRD, the Asian Development Bank and the Islamic Bank of Development are amongst major lenders. The initiative has been defined as a “people’s project” by the country’s 20-year long incumbent President Nazarbaev, as the completion of the corridor is expected to raise trade flows and employment.

In the trade arena, Kazakhstan has embraced the policy of regional integration, forming a Customs Union along with Russia and Belarus. Expected to evolve into the Eurasian Economic Community on January 1, 2012, this single economic space was designed to facilitate free movement of labor, goods, services, and capital. But Russia’s likely entry into the WTO raises serious concerns about the future of this regional economic arrangement.