EurasiaNet Eurasia Insight - Kazakhstan: The Domestic Implications of Rakhat Aliyev's Precipitous Fall

EURASIA INSIGHT

KAZAKHSTAN: THE DOMESTIC IMPLICATIONS OF RAKHAT ALIYEV’S PRECIPITOUS FALL
Joanna Lillis 6/13/07

It has been a bad couple of weeks for Rakhat Aliyev. First, he was dismissed as Kazakhstan’s ambassador to the OSCE, and then indicted on racketeering charges. In the latest stage of his precipitous fall, Aliyev’s ties to Kazakhstan’s first family have been summarily severed.

Aliyev on June 12 announced that President Nursultan Nazarbayev’s eldest daughter, Dariga, had divorced him, a move that effectively locked him out of the corridors of wealth and power in energy-rich Kazakhstan. He reportedly found out about the divorce via a fax left at the gate of his Vienna home in the middle of the night. He claimed that his signatures on the divorce papers were forged and that he had not given his consent to a permanent separation. He also claimed that Dariga had filed for divorce under pressure from her father.

Aliyev’s troubles began in late May, when President Nazarbayev stripped him of his official posts. After being briefly detained by Austrian authorities, who acted on an arrest warrant issued in Kazakhstan, Aliyev was released on bail. [For background see the Eurasia Insight archive]. Since then, he has sought to portray himself as a victim of Nazarbayev’s authoritarian tendencies. In a message carefully crafted for a Western audience, Aliyev, speaking in an interview with Austria’s Profil Magazine, characterized his arrest as part of a Kazakhstani government offensive to restrict freedom of speech. [For background see the Eurasia Insight archive].

"My only crime is that I expressed an opinion which deviates slightly from the president’s opinion. I hinted that I would like to stand for the head of state’s job myself and that I favor reforms," he said. "This is what President Nazarbayev does to potential opponents and opposition politicians when they even just think of challenging him."

In other public comments, Aliyev contradicted himself, thereby undermining his argument that the charges against him are politically motivated. Aliyev at one point acknowledged that his business interests were a root cause of his troubles. He also claimed in comments distributed by the German broadcaster Deutsche Welle that Kazakhstani officials visited him in Vienna, offering a deal under which the criminal case against him would go away if he agreed to surrender his business interests.

The charges against Aliyev stem from his involvement in one of Kazakhstan’s largest financial institutions, Nurbank. A holder of an unspecified, perhaps controlling interest in Nurbank, Aliyev was implicated in the abduction of two senior bank officials in January. The motive for his involvement allegedly was a desire to improperly increase his influence at the bank. [For background see the Eurasia Insight archive].

Observers who have followed recent developments concerning Aliyev believe there is far more to the case than meets the eye. A Nurbank shareholders’ meeting on May 25 � days after Aliyev was declared under criminal investigation � elected a new board chaired by Adolf Wala, a former Austrian National Bank chairman. Recent media reports suggest that Austrian banks are interested in a buyout of the Kazakhstani institution, thereby raising the possibility of a conflict of interest, or some other form of impropriety.

Although Rakhat Aliyev was a shareholder in Nurbank, Kazakhstan’s seventh largest bank, the present status of his holdings is unclear. The Kazakhstan Today news agency reported June 13 that Dariga Nazarbayeva had been made a “major participant in the Nurbank joint-stock company along with Nurali Aliyev." Nurali Aliyev is the son of Rakhat Aliyev and Dariga Nazarbayeva, and is now reportedly the bank’s first deputy chairman. Rakhat Aliyev’s father, Mukhtar Aliyev, holds a 6.73-percent stake in Nurbank. A representative for Nurbank, contacted by EurasiaNet, declined to discuss any management or shareholder changes.

In the face of denials from Vienna, Kazakhstan’s Interior Ministry spokesman repeated on June 11 that Austrian police have opened a money-laundering case against Aliyev. The ministry asserts that Aliyev ran eight companies in Austria.

Two Aliyev-controlled media outlets that were temporarily suspended after the arrest warrant was issued against him have since resumed operations. The KTK channel was back on air � without any news bulletins � on June 6, headed by Arman Shurayev, a presidential administration official with a journalistic background. The Karavan tabloid was back on newsstands on June 8.

In Kazakhstan speculation is rife over the implications of Aliyev’s spectacular fall. Commentators have asked the question: who stands to gain from Aliyev’s departure from the politico-economic scene? Many have pointed to another presidential son-in-law as the main beneficiary. "It is not known exactly who organized the opposition to Rakhat Aliyev and who just joined it, but it is obvious who gains from the fall of the eldest son-in-law and his emigration. It is primarily the group [centering around] Timur Kulibayev," commented opposition newspaper Respublika. Kulibayev is married to President Nazarbayev’s younger daughter, Dinara, and is a top official in Kazakhstan’s energy conglomerate, KazMunaiGaz.

Bolat Abilov, opposition Nagyz Ak Zhol party co-leader, suggested that Dariga Nazarbayeva is ideally-placed to take over the businesses that her ex-husband once controlled. "I think everything that belonged to Rakhat will now belong to her," he told a news conference on June 11.

Many top entrepreneurs, not only Kulibayev, are happy over recent developments, suggested analyst Dosym Satpayev, the director of the Assessment Risks Group. Aliyev, it seems, was not a popular figure in Kazakhstani business circles, allegedly because he often resorted to unsavory tactics to advance his interests. To underscore his point, Satpayev pointed to an open letter to Nazarbayev that supported the state’s actions against Aliyev. "If we look at the list of who signed this statement, it is rather varied and includes members of various financial and industrial groups," Satpayev said.

Almaty Mayor Imangali Tasmagambetov � a long-time Aliyev rival and powerful figure sometimes tipped as a future president � is seen as another winner. Aliyev has blamed Tasmagambetov and Interior Minister Baurzhan Mukhamedzhanov for his predicament.

Observers agree that Aliyev’s downfall, though rooted in Kazakhstan’s opaque business world, has a definite political element, connected to an ongoing struggle among various factions for influence over Nazarbayev. "In an authoritarian regime it cannot be otherwise�. [People] must fight in groups for influence over the president," commented Abilov.

Many in Kazakhstan doubt whether it is in the establishment’s interests for Aliyev to face trial in Kazakhstan, given the possibility that he amassed compromising material while working in top governmental posts in the security service and financial police. Nazarbayev, however, has indicated that he wants to press ahead with a criminal case.

Perhaps in an attempt to avoid further problems with Kazakhstani authorities, Aliyev has backtracked from previous statements about joining the country’s political opposition. Even if he wanted to, though, it doesn’t sound like opposition leaders would accept him. "We have never considered him a democrat or a member of the opposition," Asylbek Kozhakhmetov, leader of the unregistered Alga party, told reporters.

Aliyev has said he has not yet requested political asylum in Austria. At the same time, he readily acknowledges that he cannot return to his homeland. "In Kazakhstan I am now enemy No. 1 and if I returned, I would be a walking corpse," the RIA Novosti news agency quoted Aliyev as saying June 13.

Editor�s Note: Joanna Lillis is a freelance writer who specializes in Central Asian affairs.

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