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Statement by KIMEP administration on the attempted suspension of our license

September 23, 2010

KIMEP received a decree on September 16, 2010 from the Ministry of Education and Science. If implemented,the decree will suspend the license of KIMEP for six months, beginning September 26, 2010. The reasons for this decision are largely technical and wholly inconsistent with the Western model of education followed at

KIMEP as instructed by President Nazarbayev and expressed in our Charter which is approved by the Ministryof Education and Science, Committee on State Property and Privatization, and the Department of Justice of Almaty under the Ministry of Justice of the Republic of Kazakhstan. Needless to say, it is our strong view thatthese issues have nothing to do with the high quality of education we provide.

This decree was signed by N. Kalabayev, the Chairman of the Committee of Supervision in the Sphere of Education and Science of the Republic of Kazakhstan. Dr. Kalabayev is a member of the Board of Trustees of KIMEP, and it is his legal obligation as an elected board member to notify the Institute if it is in any violation of Kazakhstani law. In almost three years of service, he has never attended a meeting.

Legal action has already begun against the Ministry and the Prosecutors Office of Medeu District based on thequestionable legality of this decree.

In the meantime, operations continue as normal. Scare stories and rumors about closure are entirelymisplaced.

Moreover, KIMEP has already applied directly to the Minister for a meeting on September 23 or 24, with theaim of stating our case and avoiding a completely unwarranted suspension of our license. To this date,September 23, we have received no response. If the Ministry is unable to have this meeting at KIMEP, we havealready indicated a willingness to meet with them in Astana.

Meetings have already been called with students, faculty and staff. Those that attended these meetings have been briefed on all of these recent developments and are supportive of our decision to directly contest theseactions.

KIMEP has full confidence that this decision will not take effect due to the inaccurate assessment made byinspectors from the Ministry and the Prosecutors Office in many cases, the minor nature of any actual violationsand the unrealistic nature of one of the regulations. In particular:

1. MES says that the format of the contractual relationship between students and KIMEP vary from their norm and requires to comply with the norm. Our contracts are in line with the system of education wehave been instructed to establish. This is why we have not followed the exact format dictated by theMinistry. They insist on this. We will do this if necessary, and are in the process of preparing contracts.All the same, this practice directly contradicts the model of education that we were instructed to adopt,which was approved by the Government when it approved our charter in 2007.

2. The Ministry argues that KIMEP has not issued state diplomas. We have issued state diplomas since thespring of 2010 and have repeatedly requested state diplomas from the Ministry for all previous KIMEPgraduates for some time. We are still waiting for the Ministry to issue us the necessary diplomas tocomply with this rule. While they insist on applying this regulation, they have not helped us to do so.Moreover, this practice also contradicts the North American model of education that we followaccording to our charter.

3. The Ministry pointed out an oversight in our charter concerning our LLM program. The program has been licensed by the Ministry since December 4, 2008, and the issue with the charter will be corrected atthe next meeting of KIMEPs Board of Trustees.

4. An inability on the inspectors behalf to account for KIMEPs extensive electronic learning resources ledto the conclusion that our library does not properly supply the suitable number of resources to our

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students. A conservative assessment from the director of our library shows that we have at least twicethe necessary amount of resources per student.

5. A lack of understanding of KIMEPs credit system led to the conclusion that KIMEP does not providesuitable academic space for its students. In fact, we comfortably meet this requirement.

6. Investigators took issue with our hiring process, which we have extensive documentation to show issuitably exhaustive and in compliance with regulations. The process is wholly open and transparent. Allrecruitment is merit based and competitive.

7. Minor issues about ongoing capital improvements and maintenance were raised. KIMEP has the bestfacilities of any academic institute in Kazakhstan. Over the last five years, we have invested 15 milliondollars for capital improvements, and our facilities are comparable to those of universities in Europe and

North America. Nonetheless, we have followed the Ministrys advice and have already made many of the improvements they recommended. The remainder are in progress.

8. The Ministry claims that KIMEP has a student to faculty ratio of twenty to one, rather than their norm of eight to one. We strongly believe that this is standard is not relevant because it is not intended for theWestern model of education followed at KIMEP. Based on our education system, the ratio is 12.6undergraduate students to each faculty member and 1.8 graduate students to each faculty member. Thisis a better performance than many of the worlds leading universities that operate on the same educationmodel, such as the University of California at Berkeley, the University of Notre Dame, Rutgers StateUniversity, Northeastern University, the University of Michigan at Ann Arbor, the University of Texasat Austin and almost all other public universities in the United States. Were we to meet this regulation,we would have to employ 500 faculty as opposed to our current 226. Tuition fees would more thandouble.

Having passed the Ministrys attestation in 2008 and received an extension of its license, KIMEP strongly believes that these technical issues do not impact the high quality of education we provide nor are they deservingof the draconian response chosen by the Ministry. KIMEP is not in compliance or not working towardscompliance on only one issue student/faculty ratios. As stated above, we believe that there are strong legalgrounds that make this standard inapplicable to KIMEP.

We are certain that KIMEP provides the best educational services in the world for the amount of moneyinvested, and we are proud to be a part of developing a world-class academic institute in Kazakhstan. Our mission is to provide the best education possible to the young people of Kazakhstan, and we believe in our ability to fulfill this task. We are confident that this belief will be vindicated, and that together the KIMEPcommunity will emerge even stronger.

The Executive Committee of KIMEP