With the post-Soviet region embroiled in its deepest crisis since the Cold War over Ukraine and Kazakhstan facing the impact of Western sanctions on Russia, strong leadership and staunch policy decisions would seem to be required from Astana.
But when President Nursultan Nazarbayev summoned his government today, instead he engaged in a bout of cosmetic cabinet tinkering that may distract officials seeking to steer Kazakhstan’s economy through some choppy waters.
Nazarbayev kept his prime minister, Karim Masimov, but made several ministerial replacements and announced a merger of ministries to cut their number from 17 to 12 and subsume some of Kazakhstan’s numerous agencies, departments and committees.
The streamlining of the bloated bureaucracy is welcome, but it will likely spark a bout of distracting infighting as bureaucrats fight to keep their jobs in a vastly diminished pool of vacancies.
Several ministries received a rebranding.
The Oil and Gas Ministry became the Energy Ministry under new minister Vladimir Shkolnik. But a new name and a new face will not solve Kazakhstan’s main energy problem, the stalled Kashagan oilfield, now not expected to resume production until 2016. In an unusual meeting of interests sure to please oil and gas companies, the Energy Ministry was also handed the environment portfolio.
The Economy and Budget Planning Ministry became the National Economy Ministry, swallowing up the Regional Development Ministry. The Emergencies Ministry was merged into the Interior Ministry, and the health and labor portfolios were combined at the new Health and Social Development Ministry. Aset Isekeshev, formerly minister of industry and new technologies, heads up a new Ministry of Investment and Development.
A cement company owned by Russian oligarch Filaret Galchev appears to have become the latest target of an assets grab by Uzbekistan’s government, sparking speculation that this is part of a re-division of economic spoils following the fall from grace of Gulnara Karimova, the daughter of President Islam Karimov.
A Tashkent court has ruled that the post-Soviet privatization of the Akhangarantsement company – owned by Galchev’s Russia-based Eurocement – way back in 1994 was illegal, and froze assets worth 414 billion sums (nearly $180 million), the company said in a July 29 statement.
The claims of illegal privatization “are of an unfounded and illegal nature, as was convincingly demonstrated in the court hearing,” it quoted Mikhail Skorokhod, Eurocement’s president, as saying.
The assault on the firm was quite sudden, he said: The company found out about the lawsuit brought by the government’s antimonopoly committee on July 16. Hearings started two days later, and on July 21 the court deemed the privatization illegal.
The ruling effectively places the firm – Uzbekistan’s second largest cement producer – back in the hands of the state, a full two decades after it was put into private hands in the post-Soviet privatization rush.
Eurocement – whose owner, Galchev, is Russia’s 24th richest man with a fortune of $6.1 billion, according to Forbes – acquired a 75-percent stake in Akhangarantsement in 2006 and now owns an 84-percent share, with the rest in the hands of minority shareholders.
Islamic militancy is high on the agenda in Central Asia. This week, authorities have handed lengthy prison terms at two unrelated trials in Kazakhstan and Uzbekistan.
Six people were jailed for between nine and 15 years on terrorism charges at a mass trial involving 66 suspects in southwestern Uzbekistan. A court in central Kazakhstan jailed four citizens for between six and 12 years for recruiting militants to wage holy war in Syria.
At the mass trial in the city of Qashqadaryo in Uzbekistan, three men and three women were jailed on July 22 for allegedly plotting to overthrow the government of the strongman president, Islam Karimov, and propagating terrorism, RFE/RL reported, citing the Tashkent-based Ezgulik (Compassion) human rights center.
In Kazakhstan, the conviction of the four over the Syria recruitment campaign in and around the city of Zhezkazgan, reported by Tengri News on July 22, came as media reports emerged of a new propaganda video showing 16 people believed to be from Kazakhstan (since some are speaking Kazakh) who have headed off to fight in the Middle East.
Authorities in Central Asia have frequently cited Syria-linked threats this year amid a growing number of reports that militants from Kazakhstan, Kyrgyzstan, and Tajikistan are waging holy war in Syria.
Kazakhstan has lifted visa requirements for citizens of selected countries, a move designed to lure business travelers, and which is also expected to boost the tourism sector. But even without a need for visas, tourism experts believe that Kazakhstan will remain a hard sell for foreign visitors.
Astana is rebooting a program to lure ethnic Kazakhs living abroad to move to Kazakhstan. Observers believe Astana’s revived interest in the program is motivated by a desire to limit Russia’s potential to meddle in Kazakhstani affairs.
Amid reports that two close associates of Gulnara Karimova, the embattled daughter of Uzbekistan’s strongman president Islam Karimov, have been jailed, a man claiming to represent her family has denied allegations of her involvement in bribery and money-laundering in Europe. The spokesman suggests the root of her troubles could be political infighting ahead of next year’s presidential election.
“There has been no proof to back up any of the claims made against Gulnara Karimova,” the spokesman – who works for a recognizable London-based communications firm, but insists that neither he nor the firm be identified – said in the statement, sent to EurasiaNet.org by email on July 14.
“However,” he continued, “given her relationship to the president of Uzbekistan, we cannot ignore the likelihood of these allegations against Gulnara Karimova being politically motivated ahead of the forthcoming 2015 elections.”
Karimova, a one-time powerful player previously tipped as a possible successor to her father, has reportedly been under house arrest in Tashkent since February. This follows a vitriolic family feud with her mother, Tatyana Karimova, and younger sister, Lola Karimova-Tillyaeva.
As well as her mother and sister, Karimova has blamed Rustam Inoyatov, the head of Uzbekistan’s domestic intelligence service (known as the SNB), for her woes. In an interview with Russia’s REN TV last month, her son (called Islam after his grandfather) blamed unnamed “powerful” figures for arranging the detention of his mother and 16-year-old sister Iman in Tashkent.
When Zeinulla Kakimzhanov took over a dilapidated vineyard in the foothills of the Tian Shan Mountains in south-eastern Kazakhstan in 2006, he had ample reason to wonder whether the property would ever be productive again.
Hard-drinking Kazakhstan is moving to curb alcohol abuse by extending a ban on late-night alcohol sales.
The new bill banning retail sales between 9 p.m. and noon was signed into law by President Nursultan Nazarbayev on June 18. The rules extend an existing late-night ban on alcohol sales (including beer) and will hit retail outlets which do a roaring trade in late-night booze sales. Restaurants, bars, and nightclubs will not be affected.
The law also bans alcohol sales altogether at filling stations as well as education and health institutions, but moves by parliamentarians to ban sales at markets and stadiums as well failed.
Kazakhstan raised the legal drinking age from 18 to 21 in 2009. The new bill doubles fines for selling liquor to under 21s to a maximum of $1,200 (with the revocation of an offender’s license to sell alcohol).
The government says the bill is aimed at curbing excessive alcohol consumption, for which Kazakhstan rates 34th worldwide, according to a World Health Organization survey of 188 countries released in May.
Each person in Kazakhstan aged over 15 imbibes on average 11.3 liters of alcohol a year, almost double the global average of 6.2 liters, the report said—although the government has questioned the WHO’s methodology.
The report found the prevalence of “heavy episodic drinking” (defined as consuming at least 60 grams or more of pure alcohol on at least one occasion in the past 30 days) to be 7.8 percent in Kazakhstan. Among drinking males the prevalence stood at 30 percent. Some 8.9 percent of males and 1.9 percent of females have drinking disorders in Kazakhstan, according to the report.
The WHO singles out Kazakhstan as one of 11 countries with the “most risky patterns” of drinking.
South Korean President Park Geun-hye kicked off a six-day tour of Central Asia on June 16 in Uzbekistan.
Park was reportedly pushing for new joint gas-sector projects in Uzbekistan, and offering investment in a $300-million solar energy plant that is to be built in Samarkand as part of Uzbekistan’s fledgling renewable energy industry.
Two deals worth $350 million were signed on June 17, Uzbek media reported. Under the first, the Korea International Cooperation Agency will provide $250 million for investment in unspecified projects; the second involves a $100 loan agreement between the National Bank of Uzbekistan and South Korea’s Exim Bank to invest in joint projects.
Park and her Uzbek host, President Islam Karimov, issued a joint statement vowing to boost trade and investment, especially in the IT sphere, as well as road and rail construction, South Korea’s Yonhap news agency reported.
South Korea’s INHA University is to open a university in Tashkent specializing in IT courses in the coming academic year, it was reported in March.
With an estimated $8 billion worth of joint projects, South Korea is now one of Uzbekistan’s largest investors, along with Russia, China, and Kazakhstan. One of South Korea’s top investment spheres is energy; South Korean companies are building a gas processing plant at the Kandym gas field and a gas and chemical plant at the Surgil field. Textiles have also attracted South Korean interest, with three factories owned by Daewoo International corporation operating in Uzbekistan.