VIENNA, Jan 14 (Reuters) - New OSCE head Kazakhstan said on Thursday it would refocus Europe's main security and rights watchdog on tackling terrorism and development issues and brushed off criticism of its own record on rights and democracy.

Kazakh President Nursultan Nazarbayev said the Organisation for Security Cooperation had been slipping towards paralysis for a decade because of the West's fixation on imposing its political values on Eastern members that needed time for democratic evolution after decades of Communism.

"The decisive question for the OSCE for the future will be whether it can convert into a structure that recognizes the diversity of the world in the 21st century, or whether it will continue to be an organization segmented into blocs where the West remains aloof from the space 'east of Vienna'."

Human rights groups have protested over Kazakhstan leading the 56-nation OSCE through the group's rotating chair. They argue the former Soviet republic has never held a fair election and does not brook criticism of its president.

Recent rows between Western and ex-Soviet OSCE members include Russia's refusal to renew OSCE monitoring in pro-Western Georgia after a 2008 war over two separatist pro-Moscow Georgian regions, and Russian objections to OSCE election observers.

Nazarbayev said the fact the OSCE had not held a heads of state summit for 11 years showed its consensus method of decision-making was "in stagnation, if not in crisis".


"The OSCE is an organisation that cannot be replaced. Its stagnation or disappearance would create a volatile vacuum in the Euro-Atlantic area," he said in an address to the Vienna-based OSCE assembly conveyed by video link.

Rejecting accusations Kazakhstan's democratic reforms in the 20 years he has ruled have been cosmetic, Nazarbayev said building a democratic society "has been a conscious choice of our people and we will pursue further political liberalization."

Kazakh Foreign Minister Kanat Saudabayev told Reuters in an interview his country's democracy was "a work in progress".

Outlining Kazakhstan's priorities at the helm of the OSCE, Saudabayev highlighted counter-terrorism, tackling protracted conflicts and drug trafficking, reconstruction in Afghanistan -- which borders some ex-Soviet OSCE members.

He said nothing about democratic reforms in former Soviet states where presidents wielding monolithic power since the 1991 disintegration of the Soviet Union predominate.

Kazakhstan will concentrate OSCE resources as well on developing transcontinental transport corridors and promoting environmental and energy security, he told the Vienna meeting.

Kazakhstan has attracted dozens of billions of dollars of foreign investment in its oil and metals sectors since gaining independence when the Soviet Union collapsed in 1991. Its economy grew by an average 10 percent a year from 2000 to 2007, before slowing sharply during the global crisis.

The United States last month urged Kazakhstan to improve its human rights record in tandem with its OSCE leadership.

Human rights groups accused Nazarbayev's government late last year of silencing critical voices before taking over the OSCE chair, for example by seizing several print runs of an opposition newspaper and fining it $400,000 when a court found it guilty of causing a run on a state bank. (Editing by Matthew Jones)