The Kazakhstani Government has issued a memorandum saying that they must take preventive measures to consolidate budget revenues and cut down expenditures due to the economic and financial crisis in South Eastern Asia and the ensuing fall in world prices and demand for raw materials. The government, therefore, will be monitoring tax revenues from major tax payers. It will also revise all contracts with companies developing Kazakhstan natural resources and cancel those that have been breached. The privatisation programme will only be implemented by way of open cash auctions, unless otherwise specified by the government, with "clear indication of successors of contractual obligations". By September 1, the number of employees in budget-funded organisations will be substantially reduced. In addition, the government intends to reduce temporary financing of non-priority construction. To support national manufacturers, VAT on a number of commodities has been reduced to 10% while for raw material producers a VAT set-off procedure has been established. The memorandum says that the bankruptcies of all insolvent enterprises will be completed by the year-end. (Interfax)

The Committee Chairman Minister Nikolai Radostovets informed the press in Astana on Thursday that the Kazakhstani Committee responsible for regulating natural monopolies and ensuring fair competition has begun reviewing Intergaz Central Asia, Kazakhtransoil, Temir Zholy, Kazakhtelekom, KEGOC, Almaty Power Consolidated, and other natural monopolies. According to him, groups of experts from the committee will work out proposals on decreasing tariffs by cutting unreasonable costs. He said that the law "On Natural Monopolies" gives the committee the right to control monopoly costs and to annul agreements signed by natural monopolies if they violate the interests of consumers. Only agreements concluded with the Kazakhstani government cannot be cancelled. The law also prohibits monopolies to run businesses other than their major activities. In this connection KazakhOil was made to spin off from the founders of its trading structure Kazakhoilcommertsiya. The government considers the situation of oil prices in Kazakhstan abnormal: KazakhOil has increased the price of oil it supplies to refineries, despite a 17 percent decrease in the price of petroleum and falling prices of oil on world markets. Radostovets said the company "needs to be de-monopolised."(Interfax)

On Wednesday, July 15, at a confidential meeting with representatives of the Caspian Pipeline Consortium (CPC), Kazakhstan's Prime Minister Nurlan Balgimbaev expressed disagreement with the increased cost of the project. From the initially agreed US $2.1bn the cost has risen to US $3.7bn. A conciliatory commission will, therefore, have to find an acceptable solution by August 1. An official from the CPC project planning group assured the Kazakhstani government that the pipeline would be built by early 2000 instead of late 2000 as previously estimated. According to an agreement signed in December 1996, Russia owns 24% in the reorganised CTC, Kazakhstan has 19%; Oman—7%. The other 50% of the shares are divided among the U.S. Chevron (15%), Mobil Oil (7.5%) Oryx(1.75%); Russia-U.S. UKArco (12.5%), Russia-Britain Rosneft-Shell Caspian Ventures (7.5%), British Gas (2%), Italy Agip (2%), and Kazakhstan Pipeline (1.75%). (Reuters & Interfax)