Hot on the heels of a graft scandal that has blighted a flagship exhibition to be staged in Kazakhstan’s capital comes news that its budget is being slashed – again.
With Kazakhstan in the throes of economic crisis, President Nursultan Nazarbayev has approved cuts of 53 billion tenge ($140 million) to the budget for hosting EXPO-2017 in Astana next year.
“We have to look at budget spending, taking account of hard times,” Akhmetzhan Yesimov, the official in charge of organizing the project, said in remarks quoted by Tengri News on January 26.
The latest cuts bring the total reduction in public spending on the exhibition to 131 billion tenge ($345 million), a dramatic slump forced by the fall in global oil prices.
That is around one-tenth of the originally expected total expenditure of $3 billion, most of which was to come from private investors but with a significant chunk provided by the state.
The project’s financial well-being was not helped by officials previously in charge of organizing it pilfering some $27 million dollars from the construction funds.
Kazakhstan is scrambling for ideas on where to cut as it enters its worst economic crisis since the 1990s. Some economists are forecasting negative growth this year for the first time in nearly two decades.
Critics of the EXPO see it as a vanity project that is wasting money at a time of crisis, though when Kazakhstan won the hosting rights in 2012 oil prices were riding high and growth was buoyant.
Armor-clad warriors surge out from behind a rocky outcrop and gallop across the steppe amid a thunder of hooves, banners flapping in the breeze and swords aloft. Emitting furious war cries, they descend on an encampment and – with a clash of swords – a pitched battle ensues.
As bad as things may have got for Kazakhstan, authorities have tended to grasp the tender slip of consolation that the economy was expected to grow in 2016, if only slightly.
Analysts at the London-based Economist Intelligence Unit now beg to differ and are predicting that Kazakhstan is set for its first year of negative growth in nearly two decades.
“We have revised our forecast for Kazakhstan and now expect GDP to contract for the first time since 1998,” the think tank tweeted on January 22.
An accompanying table showed that the EIU believes the economy will shrink by 2 percent this year, posting negative growth for the first time since 1998.
Years of near double-digit growth were fueled by surging oil prices, and the slump has accordingly been caused by the collapse in the cost of the commodity, which accounts for about one-quarter of Kazakhstan’s economy.
EIU’s prediction, the gloomiest one out there for Kazakhstan, piles on the misery as the country comes to terms with the economy slowing to just 1.5 percent last year, down from 4.3 percent in 2014.
The government is now recalculating its budget, with the most pessimistic scenario based on oil costing just $16 per barrel on average over the year, Prime Minister Karim Masimov said last week. The government’s core scenario is based on $40 oil, well above the sub-$30 per barrel mark registered most of last week.
Kazakhstan is also bearing the brunt of a slowdown in its major trading partners Russia, which is in full-blown recession, and China, which posted its lowest growth in a quarter of a century
Serikhzhan Mambetalin's mother, Anastasia, sobbing after the Almaty court verdict on Friday, January 22, 2016.
Two political activists have been jailed in Kazakhstan on charges of inciting racial hatred at the close of a trial that their supporters believe was politically motivated.
The trial in Almaty ended two days after President Nursultan Nazarbayev called a snap parliamentary election for March 20, a move he said was aimed at consolidating the nation as the country battles an economic crisis.
Yermek Narymbayev – who has been in ill health throughout the trial – received a three-year prison term and Serikzhan Mambetalin was jailed for two years at the end of a six-week trial, to cries of “shame!” from supporters as Mambetalin’s elderly mother was led away from the courtroom in tears.
During the summing up of legal arguments on January 22, Mambetalin denounced the proceedings as “a political order” and Narymbayev dismissed them as “illegal.”
The two were tried on the charge of incitement to ethnic, religious, tribal or social strife, which civil society campaigners recently urged the authorities to abolish, claiming it is used to muzzle critics. The government denies that any politically motivated trials take place in Kazakhstan.
The charges against Narymbayev and Mambetalin stem from their Facebook postings about an unpublished book written some two decades ago by another anti-government activist, Murat Telibekov, who is under investigation on the same charge.
In their postings, the two “incited ethnic strife and insulted the honor and dignity of the Kazakh nation,” a prosecutor claimed – arguments the defendants, known for their mildly nationalist stances promoting ethnic Kazakh interests, dismissed as nonsense.
A man faces a possible jail sentence after a video of him appearing to encourage his two young daughters to knock back shots of vodka went viral in Kazakhstan.
Broadcast by KTK TV on January 20, the video shows the children – who appear to be aged around three and six – drinking large shots of clear liquid dispensed by their father from a vodka bottle, to cries of “a hundred grams, a hundred grams!” and “let’s toast!”
The man, identified only as a 34-year-old resident of Astana, inadvertently drew the attention of the police to the video himself, by filing a complaint about an infringement of his privacy after a friend posted it online.
The clip went viral, sparking widespread condemnation among social media users in Kazakhstan.
The man now claims there was only water in the bottle – but he faces a possible 6 million tenge (around $16,000) fine or a prison term on the charge of encouraging anti-social behavior in a minor.
The video came to light as another case of child abuse shocked the nation, after a woman threw a newborn baby out of a car and allegedly caused its death in southern Kazakhstan earlier this month.
The suspect, Bakhytgul Baysengereyeva, is the adoptive mother of the underage girl who unexpectedly gave birth to the child prematurely in a car traveling along a highway.
She “admitted that she was afraid and threw the baby out onto the road, because she did not know about the girl’s pregnancy,” a police officer explained to Tengri News.
Uzbekistan’s foreign minister has begun a round of annual consultations in Washington that happen to follow shortly after Tashkent launched an offensive to recover millions of dollars frozen in a U.S. corruption case involving the Uzbek president’s daughter.
Abdulaziz Komilov began the three-day talks on January 19 with a meeting with Nisha Desai Biswal, Assistant Secretary of State for South and Central Asian Affairs, the U.S. Embassy in Tashkent said in an e-mailed statement.
Topics for discussion include the usual suspects: security, political developments, human rights and trade. But one onlie Uzbek media outlet is speculating that Komilov may also be raising another thorny topic behind the scenes.
According to documents recently filed with a U.S. court, copies of which have been seen by EurasiaNet.org, Tashkent has begun pressing for the release of $300 million in assets frozen during a bribery investigation involving the president’s daughter, Gulnara Karimova. The last that was heard of Karimova, she was under house arrest in Tashkent.
The funds are allegedly illicit proceeds from “an international conspiracy to launder corrupt payments” made in Uzbekistan’s telecoms sector, according to a lawsuit filed by the U.S. Department of Justice last summer.
The $300 million – held in Bank of New York Mellon accounts in Belgium, Ireland, and Luxemburg – were frozen by a U.S. Federal Court order in July.
The lawsuit named two Karimova associates, Gayane Avakyan and Rustam Madumarov, as owners of shell companies “beneficially owned by GOVERNMENT OFFICIAL A.”
Human rights campaigners in Kazakhstan are calling for the abolition of two pieces of legislation frequently used against critics of President Nursultan Nazarbayev.
The appeal comes against the backdrop of an ongoing trial in Almaty of two activists facing charges of incitement — an accusation that their supporters argue is an attempt to muzzle them through the courts.
“There are two articles in our Criminal Code that can – given the desire – be used against inconvenient dissidents and political opponents,” Yevgeniy Zhovtis, the country’s best-known human rights campaigner, told a press conference in Almaty on January 19. “Both are political.”
Zhovtis was referring to the charge of incitement to social, ethnic, tribal, racial, class or religious strife — a statute routinely wielded against political activists and journalists — and the charge of dissemination of false information, which was criminalized last year.
Continued use of these articles “for the persecution of dissidents” risks “turning our country into a police state moving closer to totalitarianism, which is extremely sad,” said Zhovtis.
Oil production is entering a new year of decline this year in Kazakhstan — a dismal omen for a country so heavily reliant on energy exports.
Energy Minister Vladimir Shkolnik said on January 15 in remarks quoted by the Novosti-Kazakhstan news agency that Kazakhstan expects to pump 77 million tons of oil in 2016, 3.1 percent down on the 79.5 million tons produced last year.
The fall is down to the gradual depletion of the country’s oil fields, most of which have been under development for decades. As the fields dry up, recovering the remaining crude becomes more expensive, and with oil prices now hovering obstinately at $30, drawing Kazakhstan’s deposits is becoming costly.
And this latest government forecast may be too optimistic.
Shkolnik said in September that Kazakhstan would slash its oil output forecast for 2016 to 73 million tons if the oil price hit $30, as it has done this week. He said 77 million tons would be the target if oil stood at $40 per barrel.
The decline has been in train for several years already.
Oil output dropped 1.2 per cent in 2014, to 80.8 million tons, and 1.6 percent last year, to 79.5 million tons.
But it is the disastrously low prices that are taking the toll on the economy. The government announced on January 15 that gross domestic product grew by 1.2 percent last year – a significant slowdown on the previous year’s 4.3 percent.
The government is to meet on January 19 to discuss cuts to this year’s budget in the face of the economic slump.
Kazakhstan’s lower house of parliament called for a snap election on January 13, setting the stage for a vexed vote against the backdrop of chronic economic uncertainty.
The early dissolution of the Mazhilis had been widely predicted as President Nursultan Nazarbayev seeks to refresh the mandate for his ruling Nur Otan party.
“The Mazhilis has fulfilled its historic mission, creating the legislative basis for the implementation of the Plan of the Nation,” Vladislav Kosarev of the pro-government Communist People’s Party of Kazakhstan said in a statement read out in parliament and quoted by Kazinform news agency.
He was referring to a reform agenda unveiled by Nazarbayev last year that is intended to reverse an economic slowdown provoked in large part by the slump in the price for oil.
“Now that a new historic period is getting under way and the large-scale modernization of the country and practical implementation of presidential reforms in all areas are beginning, it is important that parties receive a new mandate of trust from voters,” Kosarev said.
Kosarev said that “broad social consolidation” was required to implement anti-crisis measures, since “only unity and coordinated actions will allow us to withstand fresh economic blows.”
The snap vote must be approved by Nazarbayev, which is expected to be a formality, and is expected in spring. Under the current schedule, the election had been due to take place in early 2017.
Despite talk of a fresh mandate, it is likely the authorities are also motivated by a desire to complete the electoral process ahead of time to head off any discontent provoked by the economic downturn.