JUNE 25 2013 (The Conway Bulletin) — The Kazakh government is considering changing the name of its ministry for environmental protection to the ministry of environment and water resources, media reported. This is important as it underlines how vital water is for Kazakhstan and the wider Central Asia region.
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(News report from Issue No. 141, published on July 1 2013)
JUNE 28 2013 (The Conway Bulletin) — The authorities in Georgia arrested several more officials linked to the previous government of Georgian President Mikheil Saakashvili’s UNM party. UNM members have said the accusations of corruption are false. The row highlights political instability in Georgia.
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(News report from Issue No. 141, published on July 1 2013)
JULY 1 2013 (The Conway Bulletin) — Most of countries of the former Soviet Union are a byword for bureaucratic meddling, corruption and obfuscation.
Kazakhstan, though, is trying to change. And in a radical way. In June, the Kazakh government finished recruiting 940 civil servants for a special cadre of professional bureaucrats. The idea, first espoused in President Nursultan Nazarbayev’s state-of-the-nation address in December 2012, is to modernise the system.
This so-called A-class of civil servants had to pass an entry exam (2,204 applied for the positions, according to media) and they will receive training and coaching similar to their Western counterparts.
There is still a long way to go for Kazakhstan’s embryonic civil service reform and putting these lofty ideas into practice will be hard. Still, these are encouraging signs.
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(News report from Issue No. 141, published on July 1 2013)
JUNE 18 2013 (The Conway Bulletin) — The Kazakh government’s plan to unite pension savings in one fund is looking vulnerable.
Unveiled in January, the plan had been greeted with a decidedly mixed reaction. The idea was to draw efficiencies from a single scheme and to create a fund worth roughly $20b to dip into during an economic recession.
Detractors of the plan, that would see 10 private pension schemes and one state-run pension scheme unified under the Central Bank, said it would be uncompetitive.
Kazakhstan had been the first post-Soviet country to encourage private pension schemes and many bankers considered ditching them tantamount to being a turn-coat.
Now Halyk Bank, which has the largest private pension scheme in Kazakhstan, has said it would rather sell off its pension scheme for cash by the end of 2013 than swap it for shares in nationalised bank BTA.
In March, Kazakhstan deputy PM, Kairat Kelimbetov said that the three biggest pension schemes would be offered shares in state-run bank BTA in exchange. BTA went bankrupt in 2009 during the global financial crisis.
BTA bank is still distressed and had to re-structure its $11b debt for the second time last year.
Halyk Bank’s opinion counts as it is the biggest bank in Kazakhstan by volume of cash lent.
The move to switch Kazakhstan’s pension scheme was always going meet resistance. This is likely to be an unsettling period for the Kazakh banking sector.
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(News report from Issue No. 140, published on June 24 2013)
JUNE 14 2013 (The Conway Bulletin) — A court in Almaty began the trial of Alim Khasenov, a former deputy head of Kazakhstan’s border guards service, for corruption, media reported. The case highlights endemic official corruption in Kazakhstan and problems at its border guards service. Mr Khasenov is charged with stealing $2m.
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(News report from Issue No. 139, published on June 17 2013)
JUNE 11 2013 (The Conway Bulletin) — The Kazakh government wants to modernise its pension system. Among other things this means making women work five years longer until they are 63, in line with men.
The logic appears simple but the issue has hit a nerve and triggered a rare show of ground-level dissent.
But, if the public dissent was rare, the government’s climb-down has been little short of extraordinary.
On June 11 Kazakh President Nursultan Nazarbayev, ever watchful for an opportunity to flourish his man-of-the-people credentials, sacked labour minister Serik Abdenov who had been charged with pushing through the pension reforms.
Mr Abdenov had cut an increasingly forlorn and isolated figure. Audiences have openly laughed at him, he has stumbled over his words when trying to explain the reforms and a protester has pelted him with eggs.
But the climb-down didn’t stop there.
Mr Nazarbayev has also said that the entire pension reform needs to be looked at once again and suggested that the changes should come into effect in 2018 and not in 2014. Since Mr Nazarbayev’s intervention state-influenced media have been putting out stories suggesting that the pension reforms have gone too far.
In Kazakhstan, this is code for a rare government U-turn.
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(News report from Issue No. 139, published on June 17 2013)
JUNE 6 2013 (The Conway Bulletin) — Kazakhstan’s parliament reduced the 2013 state budget by 4% because of low prices for metal and other mining exports. Metals have become an important part of Kazakhstan’s export earnings over the past few years but a global recession and sanctions against Iran, previously a major customer, have hit earnings.
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(News report from Issue No. 138, published on June 10 2013)
MAY 31 2013 (The Conway Bulletin) — Perhaps echoing its Soviet past, Kazakhstan will fire a third of its high-level government officials after they failed a new test, media reported quoting the chairman of the state service agency, Alikhan Baimenov. The test for officials was introduced last year to professionalise Kazakhstan’s bureaucracy.
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(News report from Issue No. 137, published on June 3 2013)
MAY 27 2013 (The Conway Bulletin) — It certainly sounds grand. Baiterek, the name for the new Kazakh national holding company, means earth-tree, a mythological tree connecting the inner Earth, the human-inhabited surface of the planet and the heavens.
On May 27, the Kazakh government said it planned to set up a new company, Baiterek, to hold some of the nation’s assets. It’s still, though, not entirely clear what specific role Baiterek will play.
According to media reports, Baiterek will hold stakes in various national companies and work with foreign investors on innovation projects.
Names are important in Kazakhstan and the symbolism of calling the new company Baiterek is difficult to miss.
Baiterek also holds greater resonance in Kazakhstan as the name for the tower at the centre of Astana, a symbol of a growing, proud nation.
Baiterek, the holding company not the tower, is probably one to watch.
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(News report from Issue No. 137, published on June 3 2013)
APRIL 3 2013 (The Conway Bulletin) — Underlining Kazakhstan’s reliance on its energy sector, Kazakh PM Serik Akhmetov, signed into law a 50% increase in oil export duties.
From April 13, exporters will pay a $60 tax to the government for every tonne of oil they export, up from $40. Reuters quoted deputy economy minister Marat Kusainov as saying that the extra revenue will be spent on social projects.
Wherever the extra revenue is spent, energy companies will no doubt be tired of being used as a cash cow whenever the Kazakh government wants to raise cash.
The government has flip-flopped on the oil export duty, introducing it in 2008, scrapping it altogether in 2009, when the global economy tumbled and energy prices fell, before reintroducing it again.
In 2010, the export tax stood was $20 per tonne. This increased to $40 per tonne in 2011.
The oil export duty also re-enforces the feeling that the Kazakh government is often too focused on taxing energy exporters rather than developing other parts of the economy.
After all, in 2011 Kazakh government ministers promised there would be no oil export tax rise until at least 2014.
Clearly the plan, if not the mind-set, changed.
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(News report from Issue No. 130, published on April 5 2013)