JULY 20 2011 (The Conway Bulletin) – A secret trip by Kazakh President Nursultan Nazarbayev to a hospital in Germany, reportedly for prostrate surgery, has unnerved investors.

Immediately after German tabloid newspaper Bild reported the news on July 18, the interest earned on holding Kazakh sovereign debt increased. This effectively meant investors believed that with Mr Nazarbayev in hospital taking on Kazakh debt meant taking on more risk.

After the 1991 breakup of the Soviet Union, Turkmenistan and Uzbekistan became increasingly closed and instability stalked Kyrgyzstan and Tajikistan but Mr Nazarbayev is credited with keeping Kazakhstan stable and opening it up to Western businesses.

His status was underlined last year when the Kazakh Parliament bestowed upon him the title of “Father of the Nation”. This year Mr Nazarbayev has won an election with 95% of the vote and said that he wants to rule until 2020.

For investors looking for stability, Mr Nazarbayev is generally good news. The problem is — what happens after the 71-year-old Nazarbayev leaves office? He doesn’t appear to have a firm succession plan.

The powers of his son-in-law Timur Kulibayev have grown this year but his ascendency to the top job is by no means guaranteed. Kazakhstan’s politics are a patchwork of competing clans and groups and other powerful figures such as PM Karim Massimov, Economy Minister Kairat Kelimbetov and Imangali Tasmagambetov, the mayor of Astana, have been touted as potential successors.

ENDS

JULY 19 2011 (The Conway Bulletin) – Kazakh President Nursultan Nazarbayev, 71, has had secret prostate surgery in a hospital in Hamburg, German tabloid Bild reported. Nazarbayev is considered key to stability in Kazakhstan and the news spooked investors. Bild said Nazarbayev went into hospital on July 14 and left two days later. The President’s office just said he was on holiday.

ENDS