Domestic Crackdown in Kazakhstan Could Have Economic Consequences

The recent criminal convictions of two leading political opposition figures in Kazakhstan have effectively crushed a significant challenge to President Nursultan Nazarbayev's authority. But in relying on heavy-handed tactics to preserve a monopoly on power, Nazarbayev may find that he has dealt a severe blow to the country's economic prospects, his opponents say.

On August 2, Galimzhan Zhakiyanov, a former governor of the northern Pavlodar Region who emerged as a leader of the main opposition movement Democratic Choice of Kazakhstan (DCK), received a seven-year prison term on an abuse-of-power conviction stemming from his tenure as a government official. Zhakiyanov's sentencing came shortly after a court convicted another DCK leader, Mukhtar Ablyazov, for abuse of power. Ablyazov, a former energy minister, received a six-year sentence.

Nazarbayev critics have maintained that both Zhakiyanov and Ablyazov did not receive fair trials, adding that the cases were politically motivated and designed to discourage opposition to the incumbent administration. Government officials insist that Zhakiyanov and Ablyazov were prosecuted purely on the basis of their corrupt practices while in office.

The convictions leave the DCK in disarray. Given the examples of Zhakiyanov and Ablyazov, many DCK supporters are worried about government retribution if they attempt to mount a fresh challenge to Nazarbayev's authority. Some opposition figures, such as political scientist Nurbulat Masanov, have accused the president of pursuing anti-democratic policies. Meanwhile, prominent human rights advocate Yevgeny Zhovtis, head of the Almaty-based Kazakhstan International Bureau for Human Rights and Rule of Law, complains that the country's legislative framework helps authorities enforce their will. "Kazakh legislation has been designed to protect the interests of the state rather than those of the individual," Zhovtis said in an interview published by the Vremya newspaper July 18.

The prosecutions of the two DCK leaders, along with the passage of legislation that limits the ability of political parties to contest elections, indicates that Nazarbayev was seriously concerned by opposition movement's calls that he share power. The DCK came together in late 2001, attracting not only high-profile politicians but also prominent entrepreneurs. Earlier this year, the DCK appeared to be gaining momentum after staging a mass rally in Almaty. [For background see the EurasiaNet Human Rights archive]. Soon thereafter, Nazarbayev began taking action to thwart the DCK. [For additional information see the EurasiaNet Human Rights archive].

Nazarbayev's actions have left many in Kazakhstan's business community discouraged. [For additional information see the EurasiaNet business archive]. Kazakhstan has enjoyed steady economic growth in recent years, driven largely by the country's large reserves of natural resources. The president's unwillingness to release his tight grip on the country's political sphere raises fears among entrepreneurs about their future ability to protect their business interests. Nazarbayev's critics note that many relatives, friends and associates of the president have considerable business holdings, and may be tempted in the future to use their political clout to enhance their economic interests. As a result, the president's political maneuvers may have lasting economic consequences.

"This [the Zhakiyanov and Ablyazov trials] is a real strike at both major and medium-sized businesses in Kazakhstan," Bulat Abilov, a leader of the Ak-Zhol Democratic Party told Vremya on July 27. "I know many businessmen who are now thinking of taking their businesses out of Kazakhstan. They believe that continuation of economic repression in relation to any businessman is possible."

"The businessmen are jumping to the conclusion that it is safer in Russia now," Abilov continued. "Therefore, they are negotiating the sale of their companies here and have already started to work out ways of transferring their businesses to Russia."

Abilov went on to suggest that authorities, having beaten back a threat to their political influence, are intent on enhancing their control over the country's economic life. The situation has reached a point where a businessman with no ties to those in power cannot hope to find new economic opportunities. Many economic sectors have already come under the influence of business interests with close government connections, Abilov asserted.

"All the aspects of the economy are divided between several financial and industrial groups, behind which there are well-known officials. Business has been monopolized," Abilov said. "Under the present circumstances, when competition is ruled out and there are no prospects, people will not go on doing business in Kazakhstan."

The international community, including the United States, has largely been muted in its criticism of the government's domestic political crackdown, in part due to geopolitical factors. According to one Kazakhstani political scientist, who spoke on condition of anonymity, the United States desires access to Kazakhstani military facilities, and is reluctant to do anything that might jeopardize Washington's strategic aims.

"Speaking of the long-range outlook, America needs Kazakhstan for large-scale control of China," the political scientist said. "In terms of the short-range perspective, Kazakhstan would provide its airports for the possible operations against Iraq since the United States would [probably] not be able to use bases in Turkey and Uzbekistan."

Some analysts and politicians believe that Nazarbayev has overreacted to the political challenge, and while the opposition may prove timid over the short term, over the longer term it may emerge as more powerful. Some point to the law on political parties, approved by parliament in June, as a potential catalyst for the revival of the opposition.

Under the new law, many opposition parties do not meet the eligibility criteria – including a stipulation that a party has at least 50,000 registered members – to contest elections. Gulzhan Yergaliyeva, a leader of the People's Congress of Kazakhstan, suggested that the law may ultimately prompt the fractious opposition to unite in order to contest Nazarbayev at the ballot box. Some government officials also share this view.

"Kazakhstan's opposition has two ways: the first one is to set up boycott to the Act and the future elections, which is an ineffective defeatist way. The second one is to accept the Act and start active work. Speaking frankly I am afraid of the second way," presidential advisor Yermukhamet Yertisbayev told the Russian-language Navigator news web site.