Kazakhstan

Photo courtesy of REUTERS/Mukhtar Kholdorbekov/Kazinform Last week, a west-east pipeline from Xinjiang to eastern China began bringing Central Asian gas to energy-hungry Chinese consumers. The pipeline runs more than 8,000 kilometers. It spans 14 provinces, autonomous regions, municipalities, and special administrative regions, including Shanghai and Hong Kong. Most important, the pipeline is the first to supply overseas natural gas to Chinese consumers and is thus a significant milestone in China’s energy acquisition strategy. But the opening of a west-east gas route also says something important about Chinese foreign policy, more generally. The gas is being supplied from Central Asia, beginning in gas-rich Turkmenistan, with the pipeline then transiting Uzbekistan and Kazakhstan. Russia has had a near-hammerlock on Central Asian gas, so China’s new assertiveness in the region comes primarily at Russia’s expense. Indeed, in many ways, China’s emergence in Central Asia is the most interesting thing to happen in the region since the Soviet collapse and the emergence of independent states in 1991. And in the short-term, at least, U.S. and Chinese objectives are much more closely aligned than U.S. and Russian objectives. Why? Beijing’s principal goal is to advance Chinese influence at Russian and American expense—first, to stabilize and assure China’s western border, and second, to satisfy energy and related economic goals in a region long dominated by Russia. But China is leveraging commercial and economic tools, creating new connections that will broaden options in the region and strengthen Central Asian independence by reducing economic dependence on a single market, single consumer, single set of infrastructure links, and thus a single point of transit. This is in the U.S. interest. The principal strategic problem in Central Asia is geography. Central Asia used to be integral to what passed for a global economy, but around the 17th century, the marginal cost of maritime trade dropped below the marginal cost of continental trade. Central Asia was pushed to the margins of the world economy. World Bank research shows that today, landlocked countries can face a growth deficit as high as 1.5 percentage points because transaction and other costs are so high. And so anything that reconnects the region—and reduces its dependence on a single point of transit— is to Central Asian economic advantage but also U.S. strategic advantage since it provides more choices and, thus, bolsters Central Asian independence and sovereignty. Trade with China—and pipelines to China—serve that purpose. Thus China is helping to diversify Central Asia’s energy transport mix. And at least some of what China is doing is broadly consistent with the core U.S. objective of strengthening Central Asian sovereignty and independence by providing options, choices, and alternative opportunities. Plus China is creating new infrastructure that complements the recent U.S. emphasis on economic integration with economies to Central Asia’s south and east, not least by restoring continental trade links. But four things about China’s role in Central Asia bear watching: First, China is eroding Russian economic influence in interesting and dramatic ways. Energy is the best but not only example of this, since it both ends Russia’s near-monopsony on, for example, Turkmen gas and, in doing so, increases Central Asian governments’ bargaining leverage with Moscow. Second, China’s commercial presence may, over time, erode the economic influence of certain indigenous elites, especially those with close ties to Russian industry, while empowering new ones. Third, China is eroding the influence of nearly every other lender in the region, especially the International Financial Institutions. Chinese loans of $10 billion for Kazakhstan, $4 billion for Turkmenistan, and more than $630 million for Tajikistan have come without World Bank-style conditionality. And why would a Central Asian government look to the Bank or the International Monetary Fund for cash, when the cash is so readily available in Beijing but without the strings? Here, too, China is providing new options but possibly new bargaining power. Fourth, then, China’s lending and commercial practices could erode the reform message Americans (and Europeans, for that matter) have promoted in Central Asia since 1991.

This publication is now archived. What is the expected outcome of Kazakhstan’s December 4 presidential elections?Experts on Central Asia predict incumbent president, the sixty-five year old President Nursultan Nazarbayev, to win easily a third seven-year term as leader of the former Soviet republic in the December 4 election. Among the country’s 15 million people, Nazarbayev enjoys approval ratings well above 70 percent for several reasons. First, Kazakhstan—whose landmass is larger than Western Europe’s and blessed with gas, oil, and minerals—has experienced annual economic growth of 10 percent since 2001. Second, the largely secular country has avoided the ethnic conflicts, instability, and top-down authoritarianism common among neighbors like Turkmenistan and Uzbekistan. Third, the opposition to date has been fractured, disorganized, and unable to garner much support outside of Almaty, the country’s former capital. Who is Nursultan Nazarbayev?A former Soviet apparatchik, Nazarbayev climbed the Communist Party ranks to become first secretary in 1989. After former Soviet leader Mikhail Gorbachev tried to install a Russian to head Kazakhstan, a nationalist uprising prompted the Kremlin to hand power to Nazarbayev. He was voted president in 1990 in Kazakhstan’s first elections. Despite his Soviet credentials, he styles himself a reform-minded, market-friendly leader. "He was from the beginning one of the most forceful and articulate figures arguing for reconstruction, new ideas, new approaches," says Scott Horton, a legal expert on Kazakhstan and a lecturer at Columbia University, pointing to Kazakhstan’s early success at privatization and importing Western market features like a mortgage finance system. Nazarbayev is also a shrewd politician. "In terms of political smarts, he’s a figure of a different caliber," Horton says. "He’s able to take a microphone and project a vision for his country that’s a positive and forceful image." Has Nazarbayev been accused of corruption?Yes. His opponents describe him as cunning, corrupt, and nepotistic. Nazarbayev’s eldest daughter, Dariga, controls some 90 percent of Kazakhstan’s media outlets; another daughter controls all of the country’s construction businesses, while his son-in-law oversees the lucrative oil and gas industries. Transparency International, a Berlin-based corruption watchdog, ranks Kazakhstan 107th out of 158 countries, between Nicaragua and Honduras, in its 2005 Corruption Perceptions Index. Nazarbayev himself is reported to be among the world’s richest people. The biggest scandal to embroil the leader involves financier James Giffen, a U.S. citizen and consultant to Kazakhstan’s government, who is under investigation in the United States for diverting more than $84 million in oil profits to personal bank accounts of high-ranking Kazakh officials, including Nazarbayev. Who are the main opposition candidates?Of the five main candidates, polls indicate only one has any genuine support: Zharmakhan Tuyakbai, of the For a Fair Kazakhstan opposition movement. Tuyakbai is a former ally of Nazarbayev’s—they both hail from the same southern regional clan—as well as former speaker of Kazakhstan’s parliament. His platform: to fight corruption, bring transparency to politics, and reexamine Kazakhstan’s past privatization deals that were handed out at cut-rate prices to close allies or family members of the president. Tuyakbai also wants to hand over more power to Kazakhstan’s rubber-stamp parliament, the Mazhilis, as well as return the capital to Almaty, where most of the country’s intelligentsia, opposition community, and financial class still reside (In 1997, Nazarbayev moved the capital to Astana, a city 650 miles north of the old capital whose buildings, as Paul Starobin put it recently in the Atlantic, seem "right out of Architecture for Dictators 101"). The rest of the opposition consists mostly of well-financed former ministers or members of parliament. How much support does the opposition have?Not much. According to a November poll by the Reputatsiya (Reputation) Communications Technology Center, Tuyakbai only has a 6.5 percent approval rating, well behind Nazarbayev’s 78.9 percent. The opposition faces a number of hurdles; chief among them is the country’s strong economy. Another factor, Horton says, is "the group that would provide a generational shift—the under-forty, highly educated elite—is disengaged from the political process." Finally, experts say most Kazakhs seem to genuinely like the president and support his market-oriented reforms. How much harassment has the opposition faced?Not as much as in recent elections in neighboring Central Asian republics, experts say. "In Almaty, there are big buildings that are the headquarters of the opposition," says Merkhat Sharipzhanov, director of Radio Free Europe/Radio Liberty’s Kazakh Broadcasting Service. "They’re harassed, but they’re functioning. That’s impossible to imagine in [Uzbekistan’s capital] Tashkent." There have been, however, some isolated cases of physical intimidation. On November 13, Zamanbek Nurkadilov, a former ally of Nazarbayev and chief adviser to the For a Fair Kazakhstan party, was found shot dead in his home, though Kazakh authorities have not ruled out suicide. In March 2004, Nurkadilov went public with damaging information that exposed nepotism, corruption, and misuse of power within Nazarbayev’s family circle. After his announcement, Kazakh journalists were banned from interviewing Nurkadilov. The one reporter who broke this rule was Sharipzhanov’s brother, Askhat Sharipzhanov, an online journalist with the web journal Navigator. He was later killed in a staged car accident in July 2004. "When he was killed, his interview with Nurkadilov went missing," Sharpizhanov says. Is the election likely to be free and fair?Experts say not. An October interim report by the Organization for Security and Cooperation in Europe (OSCE) found a number of campaign violations, including beatings of anti-government activists, seizures of opposition literature, and restrictions to opponents’ access to media. Nazarbayev’s campaign chief, Bakhytzhan Zhumagulov, disputed the OSCE report’s findings, claiming in a November 22 interview with the Associated Press, "There is no need for any violations. The president would win even if we sat around doing nothing." Still, ballot-stuffing is common in regional capitals of Kazakhstan; regional deputies do not want to meet the same fate as the former governor from western Kazakhstan who was sacked immediately after the 1999 elections for not providing enough votes to Nazarbayev. More than 1,400 observers will be on hand to monitor the election. What does the election mean for U.S.-Kazakh relations? A number of issues, in addition to the ongoing trial of James Giffen, have strained once-close U.S.-Kazakh relations in recent years. Kazakhstan’s leadership suspects Washington’s involvement in revolutions that overturned governments in Georgia, Ukraine, and Kyrgyzstan. It also supported the Chinese and Russian-led Shanghai Cooperation Organization’s July 5 declaration for the U.S. military to vacate bases in Uzbekistan and Kyrgyzstan. Although Nazarbayev supported the U.S.-led campaign in Iraq by sending soldiers, he has not been granted a formal invitation to Washington in years.Kazakhstan remains an important regional player to the United States for three reasons: energy, security, and democratization. With Kazakhstan’s oil output predicted to triple to 3 million barrels per day by 2015, U.S. investors increasingly view the country as an untapped, potentially lucrative market. Horton, however, says security trumps energy concerns, which he warns are always "overplayed." Although he does not envision a U.S. base on Kazakh soil, he says the U.S.-Kazakh security relationship is more crucial than ever given the downturn in U.S.-Uzbek relations and the removal of U.S. forces from Uzbekistan. Democratization is a less pressing issue for U.S. policymakers, experts say. Kazakhstan has not been racked by the same violence as its Uzbek neighbors. Nor does it detain thousands of political prisoners. According to Sharpizhanov, only one dissident sits in a Kazakh jail—Galymzhan Zhakiyanov, head of the opposition party Democratic Choice of Kazakhstan. Still, the United States spent roughly $7.4 million on democratization programs in Kazakhstan this past year. Is there any real chance of a so-called color revolution in Kazakhstan? Almost none, experts say. "Many people have a lot of things to lose if something happens there," Sharipzhanov says, who predicts minor, violence-free protests occurring in Almaty but not spreading from Kazakhstan’s former capital. Unlike in Georgia, Ukraine, or Kyrgyzstan, Kazakhstan is a wealthy country teeming with natural resources, and its security forces are handsomely paid. Further, Washington has not indicated it supports a change of power in Astana. Who is Nazarbayev’s likely successor?"That is the $84,000 question," Horton says. Nazarbayev has made some indications in recent months he does not intend to hand over the reins of power to one of his family members, including Dariga, his eldest daughter. Most likely, experts predict he will pick someone within his immediate political circle as his successor in 2012. A bill passed in 2000, which Horton says is tied to the Giffen affair, grants Nazarbayev a number of rights, protections, and immunities once he steps down as president.

Martha Brill Olcott, an expert on the former Soviet republics of Central Asia, which includes Kazakhstan, says that Nursultan Nazarbayev, who has been that country’s only president since gaining independence from the Soviet Union in 1991, is certain to win re-election in Sunday’s presidential vote.She says that Nazarbayev wants the election to appear as "clean" as possible because Kazakhstan is hoping to be the chair of the Organization for Security and Cooperation in Europe (OSCE) in 2009. But she is not sure that this is possible. "He wants Kazakhstan to be chairman in 2009 and unless it’s a spanking-clean election, they have no chance at all. It’s not clear that this election can be spanking clean, it’s not clear that it hasn’t already failed enough tests in terms of how the opposition has been treated."Olcott, a senior associate with the Russian and Eurasian Program at the Carnegie Endowment for International Peace in Washington, was interviewed by Bernard Gwertzman, consulting editor for cfr.org, on November 30, 2005.There is another election taking place on Sunday in a former Soviet republic. This time it is in Kazakhstan, which has been ruled by Nursultan Nazarbayev since the last days of the Soviet Union. I guess he is a sure winner. That’s an understatement.Let’s talk a bit about Kazakhstan in general. We know it has rich deposits of oil and gas. How would you compare it to other former Soviet republics?Kazakhstan is not an aberration. It’s really a state that has made enormous progress since Soviet times in terms of reshaping the nature of the country. They have created a state out of a republic that most people thought could not survive the transition to independence because of its close economic, political, and ethnic links to Russia. So, on the one hand it’s made this incredible stride forward. It has had a great deal of economic reform; it’s taken sort of seriously as an international actor. In sum, it’s viewed as a real international player. On the other hand, it has not evolved into the kind of political system that it was capable of being. Its political system could be much more participatory than it is. So it didn’t make the same leaps in terms of political institution-building that it did in terms of state-building and economic change. Was there really a potential for a competitive political system?I think there really was. My book, Kazakhstan: Unfulfilled Promise, looks at that. I really feel that there were three points in time when the Kazakhs could have evolved very differently. The first was the beginning of independence and the second was the mid-1990s. Kazakhstan wasn’t that different from Russia in terms of the variety of political voices. It’s a less complex society than Russia, so obviously there were fewer voices, but you had a lively media—you still have a lively media. You had informal political groups, you had the capacity—I wouldn’t call it a nascent party system—but you had the capacity to develop a nascent party system. So what happened? Was Nazarbayev able to just crush it?No, it’s not that simple, I’m sorry. Different things happen at different times. He took advantage of [then-Russian President] Boris Yeltsin’s disbanding the Russian parliament in 1993 when Yeltsin sent tanks on the parliament. Nazarbayev got rid of his parliament at the same time because it was too fractured. It wasn’t threatening a communist overthrow or anything but when the international community tolerated moving away from more democratic norms, he moved. In the mid-1990s, there was enormous pressure for economic reform in Kazakhstan. The West had discovered the size of the oil and gas reserves in Kazakhstan; it wanted a legal environment that protected property better and was really pushing hard for Kazakhstan to begin macroeconomic restructuring. The then-prime minister, Akezhan Kazhegeldin, who is now in the opposition, worked with Nazarbeyev and pushed to get rid of that parliament because, they argued, the parliament was seen as a brake on economic reform. That parliament was dissolved by the constitutional court. In its place, the constitution created a two-house parliament with much more limited rights. So they had another parliamentary election, constitutional reform, and later yet another parliamentary election. And that’s the parliamentary system that they still have today, a much weaker parliament. The West chose not to push hard for political reform because it saw the promise of economic reform. In this post-9/11 world, there has been another opportunity. Kazakhstan has a strong desire to be part of European political institutions, you know. It wants to be chair of the OSCE [Organization for Security and Cooperation in Europe] in 2009, a decision that’s made in 2006. It would like to be invited into European clubs but it’s just not at all clear that they’re going to be willing to play by European rules.I noticed this current election has all kind of observers from Europe watching them.They do; they have a new electronic voting system, a very expensive system. Is this because he’s so confident he’s going to win easily?He’s confident that he’s going to win easily. He wants to be part of the OSCE, he wants Kazakhstan to be chairman in 2009, and unless it’s a spanking-clean election, they have no chance at all. It’s not clear that this election can be spanking clean, it’s not clear that it hasn’t already failed enough tests in terms of how the opposition has been treated, and it’s not clear that the kind of forces that existed in Azerbaijan that wanted to deliver on a plate to the president a good victory won’t be there in Kazakhstan as well. Have there ever been protests in Kazakhstan like there were in Azerbaijan?Not on the same scale. What the opposition will do afterwards is not clear in Kazakhstan. Three of the candidates have said that they would observe Kazakh law in the aftermath of the election. The two others, the two that sort of have political futures, have not agreed to be bound by legislation they consider non-democratic.The main opposition candidate is Zharmakhan Tuyakbai?Right. Alikhan Baimenov is also an opposition figure but he broke with the other opposition figures earlier on. But he’s also a young politician very much worth watching. Those are the two that didn’t agree to be bound by rules that they see as non-democratic.What are Kazakhstan’s relations with the United States? Do Kazakhis help out in Iraq?They were slow to get on the Iraq bandwagon. They do have a few dozen support troops. It is a very small contingent.But we don’t have any bases there as we did in Uzbekistan.We don’t have a base but they did sign on to support the U.S. effort in Iraq. I guess our relations with Uzbekistan’s in deep freeze right now.Yes, they’re pretty cold. Obviously the United States is looking to Kazakhstan as an important partner in Central Asia.Secretary of State Condoleezza Rice was there recently, right?Right, and she said all the correct things in that regard.Really, I see. It’s interesting that she went all the way out there.She was on her way to Afghanistan, but she stopped in Kyrgyzstan, Kazakhstan, and Tajikistan if I’m not mistaken.What kind of guy is Nazarbayev? Have you ever met him? Yes, I’ve met him three or four times. He’s grown in office. He’s certainly somebody who, at his worst, some people think of him as trying to be [Genghis] Khan-like, but I don’t think that’s quite fair.I think he understands that that’s not a practical model for somebody who wants to be taken seriously internationally, but he most definitely has a strong personality and is a strong ruler. He’s not an authoritarian personality, Westerners find him very affable. Does he speak English?No, I think he understands some at this point.We talked about Azerbaijan the day after the parliamentary elections were held [November 6] and it was unclear what the reaction would be in the streets. There was one bloody demonstration a couple of days ago.Another demonstration is scheduled for December 3.What is your feeling on this? Is this really a terrible result for the Azeri president or what?It’s too soon to tell. If you had asked me last week, I would have said President Ilham Aliyev is managing the results and he will overcome the bad image, but the fact that the last demonstration was broken up with force and that if people demonstrate again and that’s broken up with force, I think he’s going to take a continued hit from this. I think it depends upon whether the demonstrations run out of steam. If they do, then he will withstand this without too much trouble. And the Europeans have already decreed this was a corrupt election.Yes, the procedure was considered flawed and the vote-counting was considered very seriously flawed. And Aliyev didn’t invoke the powers of the presidency to adjudicate claims of election frauds. He basically accepted it as a clean election.I see. So he had a chance to say he would throw out a lot of elections, but he didn’t.Exactly. And he’s only thrown out a handful of them.