Kazakhstan: Financial Crisis Fans the Embers of Political Discontent

The global financial crisis may be starting to have a political effect on Kazakhstan. As the government in Astana digs ever deeper into its coffers in an attempt to stabilize the country's economy, opposition parties are hoping to make a political comeback by riding a wave of popular discontent. Some opposition leaders are already agitating for the resignation of Prime Minister Karim Masimov's government, and the holding of fresh parliamentary elections.

One of the administration's most vocal critics, the Azat Party, attempted to mobilize public opinion with a nationwide day of protests on February 21. Those plans were thwarted, however, by officials' refusal to allow public protests in all but Kazakhstan's commercial capital, Almaty.

There, the rally went ahead on a chilly late-winter morning, with protesters waving placards calling for the government's removal and expressing dissatisfaction with the ruling party, Nur Otan, which is headed by President Nursultan Nazarbayev and which holds all elected seats in the lower house of parliament. "The sooner this government departs, the more quickly it will be possible to deal with the affairs of the economy, improving people's lives and anti-crisis measures," Azat Party Deputy Chairman Petr Svoik told banner-waving protesters.

Kazakhstan has been hit hard by the global financial downtown. [For background see the Eurasia Insight archive]. Since the start of the year, President Nursultan Nazarbayev's administration has earmarked billions of dollars for various financial stabilization and bailout programs. [For background see the Eurasia Insight archive]. Even so, hundreds of thousands of Kazakhstanis are facing the prospect of a significant decline in living standards, due in part to the dramatic decline of the Kazakhstani currency and skyrocketing food prices. [For background see the Eurasia Insight archive].

The opposition seems intent on scoring points by painting authorities as aloof from everyday economic concerns. "[Authorities] are only thinking about one thing today: safeguarding their millions and safeguarding their businesses and 15 million Kazakhstanis have to survive," said Azat Party Chairman Bolat Abilov.

The Azat Party is trying to publicize its own stabilization blueprint that emphasizes heavy spending on public programs, including increased pensions and subsidies, help for investors who have paid for housing but have not received it due to stalled construction projects, and assistance for holders of mortgages calculated in dollars who have been hurt by the Kazakhstani currency's devaluation.

Party leaders are also calling for the state takeover of companies such as Kazakhmys and the Eurasian Group, which are controlled by oligarchs close to President Nazarbayev. The opposition also wants Halyk Bank, owned by Nazarbayev's daughter and son-in-law, Dinara and Timur Kulibayev, placed in state custody. [For background see the Eurasia Insight archive].

The controversial role of Kulibayev, who is deputy head of the Samruk-Kazyna fund overseeing the state's anti-crisis package, was reflected in one of the February rally's slogans: "Dismiss the Kulibayev-Masimov government!"

Another opposition party, Ak Zhol, usually at loggerheads with Azat, has joined in calling for the government's resignation. A third opposition entity, the National Social Democratic Party, is also calling for the government's removal.

Ak Zhol issued a statement on February 23 demanding the dissolution of parliament and the removal of those affiliated with financial and industrial groups from positions of power. The demands sought to draw public attention to the close links between oligarchs and officialdom.

In addition, Ak Zhol is trying to cast current stabilization measures as an extensive welfare program for friends of the government. "Under the auspices of fighting the crisis an attempt is under way to provide support at the expense of all taxpayers to selected companies affiliated to officials," Ak Zhol leader Alikhan Baymenov told a February 23 press conference in remarks carried by Interfax-Kazakhstan.

Baymenov ridiculed a call by Nur Otan for parties to sign a memorandum on unity, along with a promise not to hold rallies. All major opposition parties have rejected the Nur Otan initiative. Baymenov described the call as ironic given the lack of opposition representation in parliament since the 2007 elections. [For background see the Eurasia Insight archive]. "There are none of us there [in parliament]," he said. "The Nur Otan Party formed the government, and they want to share responsibility for their incompetent actions with us."

The extent to which opposition agitation is putting pressure of Nazarbayev's administration is difficult to discern at present. Prior to the outbreak of the global financial crisis, the opposition was largely divided and ineffectual. [For background see the Eurasia Insight archive]. The scale of the economic turmoil, though, has the ability to dramatically reshape the country's political landscape. At the very least, Nazarbayev will find it very difficult to ignore or suppress opposition complaints, especially given the fact that Kazakhstan will become the chair of the Organization for Security and Cooperation in Europe (OSCE) in 2010. [For background see the Eurasia Insight archive].

Presidential adviser Yermukhamet Yertysbayev has on several recent occasions mentioned the advisability of holding early elections. Elections now, with the opposition divided, can only favor Nur Otan, he has said. They also could enhance Kazakhstan's image in advance of its taking the helm of the OSCE.

Nazarbayev has personally ruled out early elections, but -- with Yertysbayev nicknamed "the president's nightingale" due to a perception that he voices Nazarbayev's views -- some observers are wondering if the president might change his public stance. But even if opposition parties remain relatively disorganized, the administration would seem to be taking a risk by holding elections at a time when the public is facing job losses and salary arrears, devalued savings and rising debts.