Our streams of gold...

The abstractness of human values is astonishing: why, for example, it is gold and not iron, copper, or, say, zirconium, that serves as a symbol of power and richness? They used to slash each other with steely swords, but they paid in gold. Maybe our ancestors liked how that metal that later was christened "noble" looked? Who knows, in any case, today it is traditionally considered that there is no better way of investing capital, than buyung jewellery or golden bars.

At the same time gold often cedes way to "cool" real estate and seductive deposits for allocation of funds.

In our republic there is no law on the turnover of precious metals and stones. There is no any civilised trade either. According to approximate data, this market, which is also quite criminalised, is evaluated in tens of millions of tenge. According to official statistics, gold reserves make up 16-18 per cent of all gold and currency reserves of the National Bank - which is around 53 tons.

Let's return into the past. In the Soviet times Kazakhstan was on the second place after the Russian Federation in the consumption of golden jewellery, being even ahead of Uzbekistan with its eternal passion for precious things.

According to the Kazakhstani Association of Jewellers, in twenty years - from 1970 to 1990 - the population of our republic has purchased 120 tons of golden jewellery. I remember my wife giving me a certain amount of swiftly cheapening roubles forced me to a jeweller shop: go buy at least something. Alas, all signet rings and chains were already sold out to more enterprising compatriots. After the collapse of USSR an abrupt fall of gold production took place in Kazakhstan due to separation and imperfect technologies - if in 1989 this figure was 29 tons, in 1997 - only 9.5 tons. The state could not finance its own gold producing industry. But the privatisation and joint stock capitalisation of its ventures was proliferating.

What about today? It is impossible to walk by Almaty Arbat without hearing an intimate question: "Sell some gold"? It is the so called scrap, bought cheaply, then re-melted, and again sold to us as jewellery. Quite good jewellery, because the same Italy and France prefer to work not directly, but through trafficker countries, opening golden jewellery producing factories as close as possible to the markets.

According to specialists, the national jeweller industry can compete with the same Turkey, which found itself so well-off in the current market conditions. The problem is that foreign companies carry out shameless dumping, aspiring for concrete profits. And, generally, they don't mistake: the dumping factor increases the huge volume of second hand materials that can be bought several times cheaper than the market value of gold. Representatives of Kazakhstani Association of Jewellers are for a long time pointing out to this problem.

It is well-known that a flow of cheaper jewellery comes to the Kazakhstani market from clandestine Russian ventures, produced from the gold stolen from us.

Moreover, the percentage of fake jewellery is quite high - modern technologies allow to "provide" a jewel with a high rate, containing not more than 45 per cent of pure gold. Even a qualified specialist fails to see difference between a really high rate jewel from the scrap produced in other countries and successfully sold here for a super-product. There was no refining production in Kazakhstan in Soviet times, raw materials were sold to Russian and Ukrainian plants. In July 1995, a decree by the president of the republic valid as a law was issued - "On state regulation of relations concerned with precious metals and stones", but it didn't change much in the existing system, because traditions of this elite area were strong.

The total market of gold market in the republic in 2000 was making approximately 15 tons, including jewellery, import, electronic industry.

The development of any area in any country depends on tax rules. In Kazakhstan they have not been elaborated at all with reference to the market of gold: this area has been largely given away to the foreign capital.

Although the possession of 1.54 per cent of world gold reserves (it is quite a lot, if we remember that Europe has 2.05 per cent) automatically includes our country among the top ten gold producing states.

An analytical bulletin "Wоrd Gold Council" quotes Kazakhstan among the most developed gold suppliers in the world. However, it is acknowledged that without significant foreign investments the republic is not capable of developing this area on its own.

The production of gold in the whole world is business, related with financial problems of certain investors. The "raw material base", naturally, is treated differently. And it is a shame that a country with an impressive potential cannot manage it smartly.