Economically, at the moment Kazakhstan has been among the strongest post-Soviet states. This is due to many factors, the rich oil deposits located in the country being the chief one. Therefore, this is where the interests of the USA, China and Russia are clashing. However, Kazakhstan owes its standing to not its natural resources alone, but also competent domestic and foreign policy. The steady power vertical formed in the republic ensures stable economic development. According to Bahyt Sultanov, deputy minister of economy and budget planning, the task of doubling Kazakhstan’s GDP by 2010, set by the president, has been fulfilled with over a “calendar year ahead of the schedule.”

Kazakh President Nursultan Nazarbayev and Chinese President Hu Jingtao have recently made an important step – signed an Agreement on construction of Atasu-Alashankou oil pipeline, which is the second phase of the Kazakhstan-China oil and gas transit project. According to preliminary estimations, its carrying capacity could be up to 50 million tons of oil per annum. Implementation of this project will enable to raise Kazakhstan’s export potential by several times. In this issue, Kazakhstan has seriously outscored Russia, since Russia’s commodity turnover with China has been only 4.5 million tons of oil per annum.

Kazakhstan begins to outscore Russia in reforming the armed forces. The bill on military duty and military service has been lately submitted to the lower house of the Kazakh parliament. The Kazakh Defense Ministry proposes to cut the length of enlisted service to 12 months for soldiers and sergeants, and to 18 months for sailors and sergeants at the navy, border guards, soldiers and sergeants of the Interior Forces and the republican guard. The alterations are mainly connected to the gradual transition to the contract principle of manning. The bill cancels all existing deferments from military service and eliminates the ranks of junior lieutenant and ensign.

Similar transformations have been discussed at the Russian government, but they still remain the talk, whereas Kazakhstan has already switched to actions. If in Russia the share of contract troops is to be brought to 50% only by 2007, already in 2004 the share of professionals in Kazakh army will be 65% (followed by 85% in 2005).

The main reforms took place in the Kazakh Armed Forces at the start of the 21st century. Four military districts (transformed into regional commands later) were formed in 2001: Astana, West, East and South. The Kazakh Armed Forces switched to the three-force structure; correspondingly, formed were main commands of the Ground Forces, the Air Defense Forces and the Navy. The Committee of Staff Chiefs (CSC) was formed instead of the General Staff in 2003. The CSC includes chiefs of main commands, and chiefs of headquarters of regional commands. Unlike in Russian army, in Kazakhstan the functions of the CSC and the Defense Ministry are divided more substantially.

Proper financing has been arranged in the Kazakh army of late. The military budget is about 1% of the GDP, which is not much (Russia’s military budget has been 2.65% of the GDP). However, in the army of Kazakhstan is 12 times smaller than the Russian army. It has the strength of some 74,000 (47,000 in the Ground Forces; 19,000 in the Air Defense Forces and 3,000 in the Navy). An average salary of a lieutenant is some 23,000 Tenge (approx. 4,830 rubles); a colonel’s salary slightly exceeds 40,000 Tenge (almost 8,400 rubles). All officers and ensigns have a single benefit – compensation for sub-lease of housing (3,430 Tenge or some 720 rubles per month). As we can see, salaries of Kazakh officers slightly differ from salaries of Russian officers; in Russia officers still have some benefits. Although, lower prices in Kazakhstan compensate for this difference. It is therefore possible to say that monetary allowances of Kazakh and Russian officers are similar by size.

Kazakhstan’s “friends” play a significant role in the development of Kazakh army. Over past several years, the U.S. financial aid to the Kazakh military has exceeded $10 million. In the near future, the Kazakh Armed Forces will on the beneficial terms get an S-130 plane, four Huey-2 helicopters, a ships with the displacement below 1,000 tons (for the navy). The Kazakh border service will change for Hammer high-speed cross-country vehicles, manufactured in the U.S. This year alone, United States has plans to allocate some $3 million for construction of military objects in Kazakhstan. As per the estimates of the U.S. Department of Defense, the spending on training Kazakh military is expected to amount to $113,000.

In 1997-2003, China granted gratuitous material aid to the Kazakh army to the amount of some 30 million yuans; it supplied video and photo-equipment, accumulators, communications facilities, office equipment, assets for logistical services and the linguistic center of the Kazakh Defense Ministry. Last year, the Kazakh army also received 40 Jeep Cherokee vehicles and 30 power plants. On April 27, Kazakh and Chinese defense ministries signed a new agreement on granting gratuitous aid to the Kazakh army to the amount of 8 million yuans.

The program of training Kazakh servicemen at Chinese institutions of military education has been a success. In 1997-2003, 11 servicemen accomplished their studies in China. At the moment, 2 Kazakh officers has been studying at the Ground Forces Academy of the People’s Liberation Army of China (PLAC) and one Kazakh officer more – at the Foreign Languages Institute. This year it is planned to send 8 Kazakh officers more to PLAC’s leading institutions.