>>this week on world business... a special show on eurasia from kazakhstan.... >>...where leaders from around the world converged for the summit of the organisation for security and co-operation in europe. >>security in numbers, the shanghai co-operation organisation covers a huge proportion of the globalpopulation and is growing in stature. >>and we speak to the prime minister of kazakhstan, karim massimov about how central asia factors into the global tilt to the east.

>>hello and welcome. i'm eckart sager and this is world business, coming to you from a very cold andwindy kazakhstan, where leaders from 56 states gathered recently for the osce summit here in astana. kazakhstan is the first former soviet country to hold the chairmanship of the top european security organisation. that role and the decision to actually hold a first meeting in 11 years in central asia are signs of the region's rising geopolitical importance... >>reporter: when political heavyweights like the u-s secretary of state, the russian president and the german chancellor fly into the kazakh capital....

>>you realise the importance of this one meeting for the organisation for security and cooperation in europe or osce. >>nazarbayev: the astana summit restores the tradition of holding high-level meetings that was interrupted for eleven years following istanbul. this heralds a renaissance of this organisation...we are beginning to establish a euro-atlantic and eurasian community of unified and indivisible security. >>reporter: and with 38 heads of state attending, there were no doubts that the osce is seeking a revival of itsrole: the main agenda - to tackle long-standing conflicts on all fronts. >>massimov: it is a good platform and a good opportunity for people to talk to each other and to understand whatexactly do you mean by saying that, there are

a lot of issues that are viewed differently in the western europe, in central europe and in asia. >>easen: it's not just about handshakes and diplomatic rhetoric here in astana. there's a real commitment to expand the role of the osce, based on its principles of indivisible security from vancouver to vladivostok. the fact that the summit is here in kazakhstan suggests a shift in focus to the regi and the issues that affect both the east and the west. >>reporter: kazakhstan was widely commended by participants including hilary clinton for its response to the crisis in kyrgyzstan, and its efforts to inject new life into what is essentially a cold war institution, adapting it to a world which has fundamentally changed since the breakup of the soviet union. >>ki-moon: we share the conviction that security is not a narrow concept.e must address the challenge on all its dimensions. we must take

a comprehensive approach. that wider perspective has never been more valid and necessary in our increasingly globalised, complex and collective world. >>perrin de brichambaut: it is very important that a former soviet central asian state takes responsibility to lead the organisation and in a way empowers central asia to be an active and be a key actor into the process, almost an exporter of security. >>reporter: certainly the host was active - giving heads of state their first platform since 1999 - to voice their real concerns about the most enduring and serious global threats. >>clinton: afghanistan is just one conflict where the osce can and should play an expanded role. in fact we believe the organisation needs to be empowered to respond more effectively to crises.

>>ziemba : the big reason why i think we've managed to lure these leaders - is that this is central asia and it's a key strategic area that is of interest to a lot of these - to many countries and especially with its proximity to afghanistan and the security issues still going on there. >>reporter: yet the major snag for the final action plan was other older, lingering conflicts: those between post-soviet states -- azerbaijan and armenia, as well as georgia and russia. >>massimov: from the point of view to reach a consensus with 56 members of osce it is not an easy task. i remember the words of margaret thatcher; consensus is what satisfied everybody but nobody believes in that. normally

this is the reality and such kind of organisation is very difficult to make a very specific decision. >>reporter the summit ended with a reinvigorated organisation, and a declaration that will take it in a new direction. >>one that sees greater co-operation and integration between countries that stretch half way round the world, and possibly even a new alliance one that encompasses both the euro-atlantic and the eurasian community. >>kazakhstan is also the current chair of the shanghai co-operation organisation - an alliance of countries that between them cover a quarter of the world's land mass and account for a third of the global

population. the organisation held its summit recently in dushanbe, the capital of tajikistan. we were at the event to discover more about an organisation that will grow in importance as the global economic balance shifts to the east. >>reporter: a little-known entity to much of the western world... the shanghai co-operation organization is becoming a serious regional player on the eve of its 10th anniversary. >>it was formed in 2001 after uzbekistan was admitted into the shanghai five group... created in 1996 by russia, china, kazakhstan, kyrgyzstan and tajikistan due to growing security concerns followingthe collapse of the soviet union. it successfully managed to amicably settle all border disputes. >>security is still its central theme... but the sco has since expanded its remit to trade and development... initiating over 20 large-scale projects

related to transportation, energy and telecommunications. >>ziemba : this kind of grouping is trying to be part of the new silk road. historically through this region weof course had the supply chains from east and west. some of those are developing back again. >>reporter: at the summit in dushanbe, tajikistan... chinese premier wen jiabao proposed the establishment of a $10 billion sco development bank supporting trade and economic activities. just last year, china provided a loan to shore up the struggling economies of its members amid the global financial crisis. >>fan: china has contributed a lot to the organization, making endeavours to solidify and develop the organization. p/u china has been investing in the region in various ways over the years. we offer sco member countries preferential government buyer credit and we promised a loan of 10 billion dollars. theloan

from china has contributed to the development of sco member countries. >>reporter: but terrorism, extremism, drug-trafficking and cross-border organized crime continue to pose threatsto economic development as well as the security and stability in a region with a history of conflict. >>as chair of the sco... kazakhstan is pushing the notion that stability and prosperity go hand in hand. the country is proud of its track record... with per capita income growing tenfold over the past decade >>massimov: economic development is the base for future social-economic stability. without that, it's impossibleto do. i mean we should increase per capita income for each people. we should give opportunities for a concrete person to get money, to get job or start up his own businesses and create a very good legal framework for that. number two, it's

impossible to do it if the regional stability will not be sustainable. number three, with all these efforts, democracy should come up. >>sager: the kazakh government has adopted a pro-active attitude when it comes to strategic regional affiliations. meetings like this - the shanghai cooperation organization - are high on the list of priorities for prime minister karim massimov. >>reporter: who recently signed a customs union with russia and belorussia creating a trading bloc of 170 million people. but this may just be the beginning >>massimov: i think the custom union and the sco can also be partnering. it will be a good opportunity for all the members of the custom union and sco for the increased the market. but competitiveness is number one priority. >>reporter: with the centre for economic growth and political influence shifting east... kazakhstan is well positioned... taking

advantage of its strategic location. >>newton: the kazakhs have been extraordinarily skilful at playing a regional and international game with the us, europe, russia and china. and alone among states in the region - or one might say states anywhere - they seem to enjoy superb relations with all those players which again is something of a testament to kazakhstan's and the president's diplomatic skills, ingenuity and cleverness. >>antonenko: kazakhstan is a country which doesn't have any enemies, which is, you know, quite remarkable for a country in a region which is full of conflicts, both open conflicts as well as rivalries and historicgrievances. there really is no other country which has managed to achieve that balance. >>reporter: and as kazakhstan is steering

the sco towards its jubilee in june 2011... other organizations have begun to recognize its growing clout, actively engaging into dialogue... including southeast asia's regional block asean, the european union... even nato. >>kazakhstan's chairmanship of both the osce and the sco are indicative of the role that kazakhstan is playing on the world stage. the vast central asian country believes that economic development translates into greater overall security for its people and the region, which has a history of conflict- especially in pakistan & afghanistan. i sat down with the prime minister of kazakhstan, karim massimov to explore the efforts now underway.

>>reporter: kazakhstan itself is involved in humanitarian aspects. you've just invested $50 million in the education programme in afghanistan. but how do you make your case to the osce for a safe, stable, viableafghanistan? >>massimov: the young boy who was born in afghanistan in 1979, now he is 31 years old but during this time he knows nothing except war. he knows how to use kalashnikov, but he doesn't know how to build, work in the factory or to be a person. this is a major issue. and from my point of view, social, economic improvement, investment in that region - this is the key for development. only by humanitarian support,only by case by case issues in afghanistan we cannot resolve this issue. it should be a joint effort for that.

and osce could play a better role." >>reporter: another big problem of course from afghanistan is the flow of opium and hashish and other drugs which really has caused social problems in russia and beyond. how do you plan to stem the drug flow? >>massimov: people they don't know what to do. they know how to grow drugs and they know how to use kalashnikovs. we together should offer them a better alternative, how to create job opportunities. if we will not do it, it will always be very profitable to sell drugs. >>reporter: there has been criticism about the suitability of kazakhstan's chairmanship with regards to human rights and democracy. how would you respond to that? >>massimov: human rights and democratic development is a very important issue for the agenda of kazakhstan and for central asia as a whole. if you can

compare the situation in kazakhstan and western europe, we can see there are some differences. but if you compare the situation in kazakhstan and neighbouring central asia, you can also see the differences. we should slowly step by step to get the destination and to be as close as much to the best international practice of osce. but at the same time, the stability in the region, stability in our country is on a very high priority at least for us. >>reporter: kazakhstan has also served as a link between the islamic world and the west. in fact kazakhstan introduced full scale inter-institutional collaboration between organisation of the islamic conference and the osce. what do you hope to achieve and is this initiative a recognition of the deteriorating relation between the west and the muslim world? >>massimov: both organisation are very important and influential.

and this is a big challenge for us to bring closer islamic and european world. from my point of view, this particular thinking is not really recnised by bh sides, but this is our role to playing a bigger role in closing both organisations together. >>reporter: kazakhstan was the first country to unilaterally scrap the all of its nuclear arsenal that inheritedfrom soviet union. given that iran is poised to become a member of the sco, which is currently blocked because of the un sanctions. what role can kazakhstan play in the issue of nuclear proliferation? >>massimov: number one, an is not a member of sco, iran is an observer of sco. number two, kazakhstan is one of the first countries in the world who made the decision to stop nuclear weapons. we are a safe

country, we are developing economically, socially, politically very fast, which means that we can prove to the rest of the world that to be without nuclear weapons is safer, and kazakhstan is a good example. >>still to come on world business... >>we meet the man behind the kazakhstan's sovereign wealth fund and diversification strategy, kairatkelimbetov. >>and we move from kazakhstan's role in chairing summits to exploring the country's mountain summitsand final preparations for next month's winter games. . >>skyhigh ambitions and more when world business continues... >>kazakhstan is blessed with natural resources, including huge reserves of oil, coal, copper & uranium. the country wants

to utilise that wealth below the ground to diversify the economy above. this effort is being led by its sovereign wealth fund, samruk-kazyna & chief executive, kairat kelimbetov... >>reporter: what are you doing to enhance the energy services? >>kelimbetov: we are thinking about, for example, better chemical industry development or modernisation of the oilrefineries or oil and gas services, new industry actually which is a little bit more sophisticated services in order to help the development of the oil and gas area. >>but the biggest opportunities for kazakhstan i think is also development of mining and related to mining, metallurgy areas and the development of uranium and as a downstream industry related to uranium. >>reporter: other areas include healthcare, education, it, agriculture. are there policies in place to attract investment? >>kelimbetov: in order to attract

investment, we are thinking about favourable investment climate. govt doing a great job together with world bank, there is a special approach which is more related to the approachof doing business in kazakhstan. and according to these issues, there are a lot of issues like thelicence registrations, tax administrations, custom administrations. so i think the government achieved great results and we were one of the best performers this year, recognised by the world bank. so coming back to the issues of the it, healthcare and education programmes, the government is also to develop some special programmes to prepare the human capital in kazakhstan in order to become competitive with the other countries and i think kazakhstan achieved the great results. so you probably know the famous programme bolashak which future prepares thousands of young and bright and talented students entered to the best universities in the world and then they are

working like engineers, like managers, financiers, economists in kazakhstan and i think this is the changes of mentality. >>reporter: there's a tendency to lump kazakhstan into all the other 'stans'. what are you doing to differentiate yourself and talk to me about kazakhstan's focus on economic development and the ripple effect that it has. >>kelimbetov: you know if we're talking about brands we are the same geography, the same history, very similar nature but from the beginning of getting independence the president of kazakhstan did a great job in terms of the economic and social reforms [sic] and in comparison with the other countries we increasedour gdp for example gdp per capita from $700 to more than $8000 us dollars so it means we achieve agreat result in macro-economic reforms. we did great reforms in the banking sector,

in pension reforms and we improve social achievements in our country and i think from the social welfare point of view these people of kazakhstan are very happy what we have achieved even in the 20 years so we havea special strategy and in this long-term vision the president of kazakhstan brings a new challenge to kazakhstan to be in top 50 competitive country in the world and kazakhstan wants to be in this club of countries. >>at the end of january kazakhstan will host the 7th asian winter games in astana and almaty. the kazakhs hope to use the games to boost a rapidly growing tourism industry and draw attention to a relatively unknown but impressive ski area. we went to see how preparations for the games are coming along.

>>reporter: positioned outside two of the newest sporting facilities in almaty & astana; synced countdown timersare a constant reminder of the approach of one of the biggest sporting events in kazakh history - the 7th asian winter games. >>kulmurzayev: our country is the first country in asia who organising this winter games. so also there is image project for kazakhstan that gives the very big success for us & the power that we are also the sport country in the world. >>reporter: for a country keen to break away from its post soviet role as a supplier of natural resources, hosting the games should give a much needed boost to the tourism sector, somewhat symbolically in the year that kazakhstan celebrates the 20th anniversary of its independence. >>yermegiyaev: i think asian games, 7th asian winter games, are very

important for kazakhstan, firstly this is the indicator of how the economy of kazakhstan is developing, secondly, its an indicator of political stability in kazakhstan. it also will draw in tourists who will come to watch the asian games. and ithink this is a very big event for kazakhstan, moreover previously the asian games were only hostedinouth korea, japan and china. >>reporter: held across 2 major cities the government has invested $1.5 billion in preparing for the games, building new sporting facilities & improving the infrastructure which will cater to around 10,000 extra tourists expected for a week at the end of january. >>pashkovski: the asian winter games will leave an important legacy in the form of sports facilities. victory in the games will also attract more pple to the sports.

and that is the most important legacy. >>reporter: with state-of-the-art facilities, including the 2nd largest ice-skating rink and one of the best ski-jumping facilities in the world, kazakh athletes won't have to travel to expensive european training facilities in the future. >>russell: kazakhstan might not be well known internationally for its sporting achievements, but since competing in the asian winter games from 1999 kazakh athletes have won 92 gold, 95 silver and 129 bronze medals, placing them forth in the overall ratings. this time competing on home ground hopes are high for kazakhstan to put in a stellar performance. >>reporter: the president himself is a keen sportsman and sees the games as one of the best ways to garner international attention, raising the country's profile as a tourist destination.

>>savchenko: well, we all know that the president initiated the program to improve the health of the nation, the sports bodies are trying to get 30% of the population to actively take part in sport. i think this idea to improve the nation's health is very honourable and we will pursue that. >>reporter: and kazakhstan's sporting ambitions don't end with a clutch of medals from the asian winter games. after narrowly missing being shortlisted to host the 2014 winter olympics it's hoped a successful showing in january will be a good springboard for future olympic bids. >>seidumanov: we prepared everything on the basis of hosting tholympic games. for example in almaty we have everything except the bobsleigh track. so there will be a powerful impetus to submit new a applation for the olympic games. >>reporter: you only have to look at how the manchester commonwealth games paved the way for a successful london2012 olympic bid to realise how

staging one event can lead to others. and already the international skiing federation has decided to hold the 2011 ski jump world cup here. it's not a huge leap to envisage a future olympics followg suit. >>that's it this week's world business from a very cold astana. thanks for watching. we'll see youagain back in the studio next week.