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KAZAKSTAN


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 29,749 24,205 22,400 60
         
GNI per capita
 US $ 1,780 1,510 1,350 119
Ranking is given out of 208 nations - (data from the World Bank)

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Update No: 328 - (28/04/08)

Pan-Central Asia?
Kazakh leader Nursultan Nazerbayev is in an unusual situation. He alone of the Central Asian rulers has an up-and-running successful economy, whose GDP growth has been consistently in double figures since the world oil boom from 1999-2000. It gives him a leeway unknown to the others.

He has conceived an ambitious project - to unite Central Asia no less, of course under Kazakh hegemony. Nazarbayev’s idea for the foundation of a union of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan is still a distant trend. But a most important milestone has been passed, the creation of a mini-union of Kyrgyzstan and Kazakhstan.

One year ago a supreme council and the council of foreign affairs ministers were founded and it became a first formal step. This year Kyrgyz President Kurmanbek Bakiyev and Nazarbayev have made another step forward. They raised the level of the bilateral intergovernmental commission, having reformed it into a council, which would be led by the prime-ministers of the two nations.

It is perfectly logical for the project of Pan-Central Asia to start with this mini-union. Both states are nomadic in origin, unlike neighbouring Uzbekistan and the other Central Asian states. They have long had good relations, whereas Kazakhstan and Uzbekistan, (who it is predictable to say would only agree to such a Central Asian union if it were led by them and based in Tashkent), are of course rivals for hegemony in the region. 

Bakiyev in Astana
A state visit of the Kyrgyz President Bakiyev to Kazakhstan started on 17th April to cement the mini-union. An official meeting of the presidents was held in closed format at the residence of the Kazakh president, "Ak Orda". There also was a session of the Supreme Kyrgyz-Kazakh Intergovernmental Council in expanded structure.

Bakiyev expressed his thanks to Kazakhstan President Nursultan Nazarbayev for the hospitality and the excellent work conditions.

"We feel ourselves at home in the beautiful Kazakh land. Our ancestors have been supporting warm and close relationships for centuries. We always have been ready to extend a helping hand to each other, setting out together against external enemies. To follow the legacy of our ancestors, we have founded a Supreme Intergovernmental Council to develop and consolidate the relationships of our brotherly nations, for the welfare of Kyrgyzstan and Kazakhstan", said Bakiyev. The presidents signed a joint declaration after finishing the session of the Supreme Kyrgyz-Kazakh Intergovernmental Council.

It indicated in the declaration that Kazakhstan would support the nomination of the Kyrgyz Republic to the post of vice-presidency of the 63d session of General Assembly of the United Nations Organization.

According to the declaration, the sides accepted their willingness to form constructive collaboration and joint actions regarding questions of rational and effective use of water and energy recourses in the region with the regard to their national interests.

During the joint press-conference Nursultan Nazarbayev stressed that Kyrgyzstan and Kazakhstan were united in their positions regarding the foundation of the Union of Central Asian states. "Kazakhstan is first in investment in the Kyrgyzstan economy. We are founding new joint enterprises, new work places, positive tendencies towards the development of mutual trade and investment connections", said Nazarbayev.

The question of the beginning of a Kyrgyz-Kazakh Investment Fund and future realization of joint strategic projects were also discussed. Besides the question of connecting the Kyrgyz side to the "Turkmenistan-China" gas pipeline project, participation of the Kazakh side in financing and constructing the second part of the main gas pipeline which runs through the Kyrgyz Republic were also discussed.

The visit was a historic occasion that could have far-reaching consequences, not just for the two republics in question, but the whole of Central Asia. Time will tell.

The Kazakh fulcrum?
Nazarbayev was the last First Secretary of Soviet Kazakhstan. He has his ruled his Central Asian nation as its autocratic President ever since the collapse of the USSR in 1991. 

Nazarbayev has led the transformation of a Soviet central planned economy into an oil and gas superpower courted by Russia, EU, China, India, and the United States. Like Vladimir Putin in the Kremlin, Nazarbayev has used the state’s energy resources as an instrument of power and diplomatic influence, balancing historic ties with Russia with new relations with China, Iran, India and the US, the emerging powerbroker in Central Asia’s energy "great game". 

Though Kazakhstan has been criticised by Amnesty International and Transparency for corruption and human rights abuses and the Kazakh secret service has inherited the ruthless reputation of its Soviet predecessor KGB, President Nazarbayev has governed his vast steppe nation with a political nimbleness, without recourse to the sort of mass violence or grotesque personality cult used by some Central Asia’s despots. He is no Kim il-Sung or Supurmurat Niyazov. That does not however mean that political murder of potential rivals is unknown, as our archives illustrate.

While Nazarbayev is rather the Kazakh version of Ataturk, he is almost 68 and disputes over the Presidential succession have caused bitter rifts in the ruling family, particularly his two sons-in-law and their rival entourages, who are not known for their responsible behaviour. Moreover, the Wall Street credit crunch has hit Kazakh banks that had borrowed $40 billion from the international capital markets to finance breakneck growth in property and consumer loans. 

Even though the president has promised that no major Kazakh bank will be allowed to fail, the balance sheets of Kazakh banks have been gutted by higher funding costs and losses on consumer loans as the real estate bubble begins to unravel. Kazakhstan, despite its vast riches, still has the political culture of a Soviet era dynastic dictatorship blended with the attributes of a central asian khanate. 

The President rules a tightly-knit wealthy elite of powerbrokers. Nazarbayev’s eldest daughter’s ex- husband Rakhat Aliyev was sentenced to 20 years in absentia for plotting to overthrow the regime while head of state security. Aliyev was earlier exiled to Austria as ambassador after he kidnapped (and allegedly tortured to death) two executives of Nurbank, a bank he at that time part-owned and then with their shares owned completely! 

Son-in-law Aliyev’s meteoric rise and fall demonstrates the personal nature of Kazakh politics, and the nexus between Nazarbayev’s clan, big business, the secret police and government. 

As the giant offshore Caspian Sea Kashagan field will make Kazakhstan a Central Asian Kuwait after 2011, any change in the rules of the presidential succession game will generate shock waves from Moscow to Qom, Beijing to London. The world’s major oil companies, from Shell to ENI to Agip, the concessionaries at Kashagan, have a critical interest in the political future of Kazakhstan. 

Russia, Kazakhstan’s imperial power ever since the Tsarist conquests of the 1860’s, dominates Kazakh oil exports, thanks to the Soviet era network of pipelines controlled by Gazprom. But the Chinese have aggressively courted the petrocurrency autocrats in Astana after a new oil pipeline pumped Kazakh crude to China. 

While a loyal member of Kremlin’s Commonwealth of Independent States, Nazarbayev has done his best to improve relations with Washington, London, Beijing and New Delhi. He has also developed good relations with Turkey in jointly leading a pan-Turkic association.

The state oil company Kaz Munai Gas parcelled out concessions in giant oil fields like Tengiz, one of the planet’s legendary oilfields, like Saudi Arabia’s Ghawar and Kuwait’s Burgan. A new law makes it impossible for foreign oil companies to explore for Kazakh oil or gas without partnering with the state’s national champion. 

The Kazakh government has ensured that KMG gets at least a 50 per cent stake in all oil and gas production ventures on the Caspian Sea, making Astana as important as Abu Dhabi, Houston, Oslo and Riyadh in the boardrooms of Big Oil. Moreover, Kazakhstan, which surrendered its 176 nuclear missiles for hard cash soon after the fall of USSR, owns no less than fifteen per cent of the world’s uranium reserves. 

It is also an exporter of beryllium; a rare metal used by the Pentagon in missile guidance systems. It is no coincidence that Cameco, Sumitomo, Westinghouse, the Chinese, the French and the Russian state-owned companies all have a strategic interest in maintaining ties with the Kazakh leadership. 

Nazarbayev has strong ties with the Bush White House and even sent Kazakh military personnel to Iraq. But Astana’s foreign policy is increasingly "multi-vectored", developing closer relations with both Moscow and Beijing, though the President remains the ultimate diplomatic free agent. 

Although Kazakhstan seeks the chairmanship of the OSCE, Britain opposes its application and the US is to say the least skeptical about the regime’s human rights record, let alone that only MPs from Nazarbayev's own party won any seats in the last parliamentary elections.

The Kazakh population is a multi- ethnic melting pot of nomadic Turkic tribes, Belarus and Russians, even Volga Germans exiled by Stalin after Hitler invaded USSR in July 1941. Kazakhstan is central to the success of the EU’s planned Nabucco pipeline, intended to offset Russian dominance of European gas exports across Turkey, Bulgaria, Romania and Hungary to Austria. 

It is a pity and greatly resented there that that Kazakhstan is best known in the West as the fictional homeland of Brit comedian Sacha Cohen’s 'Borat'. Kashagan, the planet’s biggest wildcat oil strike since Alaska’s Prudhoe Boy, alone ensures that Kazakhstan is the embryonic regional superpower of Central Asia. 

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