FAST Local Information Network

Berne, November 2001 F • A • S • T

Kazakhstan

Country Update 4 / 2001

August – October 2001

Matthias Müller Dr. Heinz Krummenacher

Table of Content

1 Risk Assessment Kazakhstan ...... 1

2 Chronology Kazakhstan...... 4

3 Tension Barometers Kazakhstan...... 7

4 Analytical Raster Kazakhstan ...... 9

Note by the authors: For more general information on Uzbekistan (e.g. socio-demographic figures) see: FAST Report on Central Asia, 2 / 2000, p.16ff.

1 Risk Assessment Kazakhstan1

There is no likelihood of major domestic or international armed conflict involving Kazakhstan within the next three to six months. Although we expect no conflict escalation on the domestic level in the short term, we do see the ongoing enrichment of the country’s small elite along with the economic and political marginalisation of a considerable part of the Kazakh population as fertile grounds for Islamic extremist ideology. If opposition forces outside the government’s sphere of influence – for example, Islamic extremists – can orchestrate existing frustrations, destabilisation and armed conflict could occur in the mid- or long term.

Factors increasing the likelihood of armed conflict The various FAST-Tension Barometers indicate a high degree of stability for Kazakhstan during the period under consideration. The most important indicator for stability in a country, the Conflict Carrying Capacity curve, remained at a high level, and the Goldstein average of conflict and cooperation is even increasing. Nevertheless, several events and developments could aggravate the situation within the Kazakh society and bear the potential for armed conflict in the mid- or long term: The growing disparity in the standard of living between the small Kazakh upper class and the majority of the population increases tensions and even jeopardises national cohesion.

At the beginning of September, Kazakh President Nursultan Nazarbeyev presented the GDP figure for the first half year of 2001. According to the President, the national economy grew again by 14% and Nazarbeyev pointed out that the main goal was to double the GDP by 2010. The government is doing much to reach this goal, promoting the oil sector by all means. By far, oil exports account for the biggest part of Kazakhstan’s economic performance. However, the average person on the street is not affected by this recent economic boom. On the contrary, the standard of living – especially in Southern Kazakhstan – is receding continuously. People in this region hardly have any job opportunities, the infrastructure is almost completely run down, and they even face great difficulties in getting access to fresh water. Due to increasing prices for staple food on local markets, living conditions degraded even further during recent

1 This assessment is based on the analysis of events and developments from August to November 2001 along the FAST Analytical Monitoring Raster for Kazakhstan (see heading 4).

F • A • S • T months. Not surprisingly, the number of protest demonstrations (see Protest Demonstrations curve p. xx) remained on a constant level. At the end of September a group of women from Southern Kazakhstan gathered in front of the government complex in Astana to demand their outstanding social allowances. We see this demonstration as a sign that people are starting to blame not only local government authorities for their miserable living conditions but also the government in Astana. In the mid to long term, the concentration of economic and political power in the hands of one family clan (see FAST Update 3 / 2001), combined with growing disparities among rich and poor, could provide fertile grounds for Islamic extremist ideology as the only alternative to the current regime. Eventually, this could lead to armed conflict, especially in the much-deprived Southern part of Kazakhstan.

Factors decreasing the likelihood of armed conflict

Despite existing tensions and a considerable conflict potential which might threaten the country’s stability in the mid to long-term, Kazakhstan remains a stable country. The following factors add to the present stability in the country: First, showing sensitivity to people’s religious orientation Nazarbayev has successfully drawn a fine line between engagement with and detachment from the U.S. lead anti-terror coalition. US Senators Sam Brownback and Mary Landrieu recently characterized Kazakhstan as "ready for the United States to engage on the topic of terrorism." At the same time, Kazakhstan has been reluctant to follow Uzbekistan and Tajikistan in making airfields and other facilities available to US forces. Indeed, Defence Ministry officials have not hesitated to assure the local population that no US military-transport airplane has landed in Kazakhstan.

Second, we don’t believe that the ongoing Afghan war will have a negative short term impact on Kazakhstan. Many analysts as well as the Kazakh government itself fear that the new war in Afghainstan might result in a refugee influx into the Central Asian republics that would question the current distribution of resources. We believe that the probability of such a scenario is unlikely because of the following reasons:

We don’t believe that the ongoing Afghan war will have a negative short term impact. Many analysts as well as the Kyrgyz government itself fear that the new war in

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Afghanistan might result in a refugee influx into the Central Asian republics that would skew the current distribution of resources. We believe that the probability of such scenario is very low because of the following reasons:

A possible refugee influx would first affect the neighbouring countries, Uzbekistan and Tajiksitan. The emergence of new refugee flows in Northern Afghanistan is very unlikely as the military battles are shifting south, rathern than north. When the Taleban launched their offensive against the Northern Alliance las year, only jew refugees tried to move in northern direction. The Kazakh government is currently strengthening its borders, especially to Uzbekistan, in order to prevent people from crossing the border.

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2 Chronology Kazakhstan

Date Events 2001 Aug 1 The Kazakh government decides to close uranium extracting enterprises and to clear the aftermath of developing uranium deposits until 2010. A government speaker pointed out that about 20 uranium deposits were developed in Kazakhstan over the past 40 years. About 40 per cent of the uranium produced in the former USSR were extracted over that period. 2001 Aug 1 Kazakh President Nursultan Nazarbeyev and Senior Chevron Oil official Richard Matzke discuss the delay in the formal ceremony to mark the arrival in Novorossiisk of the first Kazakh oil exported by the Caspian Pipeline Consortium. The ceremony, originally scheduled for August 6, has been postponed indefinitely. Matzke said there are no technical problems affecting the use of the pipeline. He said CPC shareholders, which include Chevron and other foreign oil companies and the governments of Russia, Kazakhstan, and Oman, will meet in Moscow on August 3 where they hope to finalize and sign an agreement on the commercial exploitation of the pipeline. 2001 Aug 3 Russian President Vladimir Putin proposed a meeting of the four post-Soviet Caspian littoral states (Russia, Azerbaijan, Kazakhstan, and Turkmenistan) to discuss the legal status of the Caspian sea. 2001 Aug 3 The Turkish armed forces' General Staff opens a military office in Astana. Mustafa Oszoi, who will serve as the Turkish representative at that office, stated that Turkey is ready to contribute to the ongoing reform and modernization of Kazakhstan's armed forces. Kazakhstan's First Deputy Defense Minister and chief of General Staff, Colonel General Alibek Kasymov, said at the opening ceremony that Turkey will provide Kazakhstan with military assistance to the value of $10 million over the next decade. 2001 Aug 6 Deputy general director of the Kazakh Tengiz-Novorossiisk Pipline Project Kairgeldy Kabyldin is optimistic that the project will be ready to start operations in September. But at the same time, he stressed that the specific date of the ceremony to launch the Caspian Pipeline Project has not been determined yet. The pipeline connects Western Kazakhstan deposits with Russia's Black Sea coast. At the first stage, the pipeline's capacity will be 28.2 million tonnes of oil annually. 2001 Aug 7 Former Kazakh Prime Minister Akezhan Kazhegeldin is questioning claims by Kazakh officials that the capital amnesty that ended last month resulted in the return to Kazakh banks of over $400 million that had been illegally transferred abroad. Kazhegeldin said the actual sum returned was no more than 10 percent of the official figure, while up to $2 billion from the proceeds of the sale of Kazakh oil was illicitly transferred to banks in the Bahamas and Bermuda only last year. 2001 Aug 8 The Kazakh Energy and Mineral Resources Ministry has approved a draft program for developing the national gas industry. That draft program advocates increasing natural gas extraction to 34 billion cubic meters by 2005, 47 billion cubic meters by 2010, and 52 billion cubic meters by 2015. 2001 Aug 8 Kyrgyz Deputy Minister of agriculture, water resources, and food processing, Barataaly Koshmuratov pointed out that Kyrgyzstan will establish special commissions to draft regulations for receiving payment from Kazakhstan, Tajikistan, and Uzbekistan for water they receive from cross-border rivers flowing out of Kyrgyzstan. Kazakhstan's President Nursultan Nazarbayev on July 24 condemned Kyrgyzstan's plans to charge for its water as a violation of international norms. 2001 Aug 15 The trial in absentia of former Prime Minister Akezhan Kazhegeldin started in Kazakhstan's Supreme Court in Astana. Kazhegeldin is accused of abuse of his former official positions, bribe-taking, tax evasion, and illegal possession of weapons.

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2001 Aug 16 Kazakh Economy and Trade Minister Zhaqsybek Kulekeev admitted that ongoing talks on Kazakhstan's accession to the World Trade Organization (WTO) are "proceeding in a tense atmosphere". He pointed out that, like the EU, the U.S. "is pursuing quite a hard line with regard to proposals for every commodity position". Kulekeev accused the U.S. of artificially dragging Kazakhstan’s membership to the WTO. 2001 Aug 17 The U.S. granted border-control equipment worth over 4m dollars to Kazakhstan. The US Embassy's information service stated that the equipment was designed to increase control over the country's borders. 2001 Aug 23 The Russian Transport Ministry assured that it will guarantee the security of loading tankers at Novorossiisk with oil from Kazakhstan's Tengiz oil field. 2001 Aug 24 The Kazakh government assured to pay in 2002 its water debt to Kyrgyzstan by supplying 400,000 tons of coal worth $12 million and power engineering equipment worth another $5.8 million. 2001 Aug 24 Members of the political opposition in Kazakhstan picketed the U.S. embassy in Almaty to demand that Washington defend democracy in Kazakhstan. 2001 Aug 27 Kazakh President Nursultan Nazarbeyev stated at a meeting with his ministers, that his priority tasks for 2002 are to increase foreign investment in Kazakhstan and to strengthen the country's defense capabilities. 2001 Aug 28 The Kazakh Defence Ministry announced that it will form a navy detachment to defend its oil platforms in the Caspian Sea. 2001 Aug 29 Kazakh ambassador in Tashkent, Umarzak Uzbekov, stated that 3,000 families of ethnic Kazakhs living near the Aral Sea want to leave Uzbekistan and resettle in Kazakhstan, and that they are seeking financial help to do so. There are approximately 1.2 million ethnic Kazakhs in Uzbekistan at present, he said, and recently the desire to emigrate to Kazakhstan has increased. 2001 Aug 29 The Offshore Kazakhstan International Operating Company (OKIOC) announced that it has renamed itself the Agip Kazakhstan North Caspian Operating Company (AgipKCO). A company speaker said that the new name is reflecting the fact that Agip is now the sole operator of the project. 2001 Sept 3 Kazakh President Nursultan Nazarbeyev formulated the goal to double Kazakhstan’s current annual GDP until 2010. Noting that GDP growth during the first six months of 2001 amounted by 14 percent, he stressed that Kazakhstan must preserve its "leading position" among CIS members states in terms of economic growth. Nazarbeyev also called for increased domestic investment in the economy as a mean of improving living standards, and pledged to raise the pensions of persons who retired before 1994 by 25 percent next year. 2001 Sept 6 The Kazakh Supreme Court sentenced former Kazakh Premier Minister Akezhan Kazhegeldin to 10 years of prison. Kazhegeldin was found guilty in absentia of power misuse, tax evasion and illegal weapons possession. 2001 Sept 7 The OSCE office in Kazakhstan issued a statement expressing doubt that the jail sentence handed down to former Prime Minister Akezhan Kazhegeldin conforms to international standards of justices. 2001 Sept 14 The Prime Ministers of six member states of the Shanghai Cooperation Organization (SCO) – Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan – condemned the 11 September terrorist attacks in the U.S. as "a barbaric act defying the fundamentals of human civilization". In a statement released at the end of their two-day meeting, the Prime Ministers of the six member states of pledged to cooperate closely with all states and international bodies to combat the "serious threat to humanity" that terrorism represents. 2001 Sept 14 The founding congress of a new political movement named "My Kazakhstan" was held in Astana. Its leader is Qayrat Satybaldy, a nephew of President Nazarbayev. 2001 Sept 16 Kazakh President Nursultan Nazarbayev has pledged support for measures the U.S. may take to combat terrorism. He said that Kazakhstan was behind the international fight against the "global evil" of terrorism, but cautioned that any response should be just as well as effective, and should be backed by a UN Security Council resolution. 2001 Sept 19 Kazakh security officials arrested the leader of the “Adilet” Movement, Ulmeken Saidova.

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Saidova organized a protest action outside the Kazakh parliament building in Astana earlier this year by dozens of women from southern Kazakhstan who demanded that they be paid child allowances dating back to 1996. 2001 Sept 24 After a meeting with President Nazarbayev, Saudi Arabia's Oil Minister Ali al-Naimi stated that “it is in the interest of all countries that are exporters of petroleum to propose that Kazakhstan join OPEC. 2001 Sept 25 A group of women from the Baidibek district of Southern Kazakhstan started a new protest outside the parliament building in Astana to demand the payment of overdue family allowances dating back to 1996. They have threatened to commit collective suicide if those allowances are not paid. Security officals in South Kazakhstan last week arrested the coordinator of the protests, Ulmeken Saidova. 2001 Sept 28 Ukrainian President Leonid Kuchma and his Kazakh counterpart Nursultan Nazarbayev intend to expand economic cooperation and trade between the two countries. Specifically, the two sides declared their readiness to participate together with Russia, in implementing the Dnepr space program, and agreed on the creation of a joint venture with Russia to extract and process uranium for use as nuclear fuel. The two Presidents also discussed the possibility of increasing oil exports from Kazakhstan to Ukraine. 2001 Oct 3 The chairman of the Republican People's Party of Kazakhstan, Amirzhan Qosanov, stated that his party will oppose the planned election later this month of local administrators. Qosanov argued that no such elections should be held before the present election legislation is amended, and that not just village administrators but also oblast governors should be elected. 2001 Oct 10 Kazakh Deputy Prime Minister Akhmetov stated that because of the "strong" mutual interdependence of the economies of Russia and Kazakhstan, Kazakhstan plans to join the WTO at the same time as Russia. 2001 Oct 10 Tolen Toqtasynov, a deputy to the Mazhilis (the lower chamber of Kazakhstan's parliament) addressed an open letter to President Nursultan Nazarbayev requesting that he "rein in" his son-in-law Rakhat Aliyev. Aliyev is first deputy chairman of the National Security Committee (the former KGB). He and his wife Dariga Nazarbayeva reportedly control most of Kazakhstan's media outlets. Toqtasynov also said that the National Security Committee is currently engaged primarily in monitoring the activities of opposition political parties rather than taking measures to increase the country's security. 2001 Oct 17 Deputy Defence Minister Zhannat Ertlesova declared that Kazakhstan's 2002 budget allocates more than $220 million for her ministry. Compared to 2001 the Defence Ministry’s budget is increasing by 87 percent. 2001 Oct 30 Kazakhstan's Central Election Commission rejected as based on a superficial examination of relevant documentation the criticism expressed by the Kazakhstan Office of the OSCE's Office for Democratic Institutions and Human Rights of the 20 October elections of regional administrators in Kazakhstan's 14 oblasts. The OSCE concluded in its report on that ballot that the voting procedures were flawed and that the vote did not meet international standards.

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3 Tension Barometers Kazakhstan

Source: FAST Local Information Network

Conflict Carrying Capacity and Forceful Actions

1 0.8 0.6 0.4 0.2 0

n = 18 n = 21 n = 39 n = 31 n = 27 n = 29 n = 7n = 6n = 81 n = 82 n=47 n=10 7 n=65 n=11 3 n=13 1 n=12 3 n=14 4 n=76

CCC Forceful Actions

Conflict Carrying Capacity (CCC): Reflects the stability of the system or polity as a whole rather than a particular regime or administration. A CCC trend line approaching 1.0 suggests 100 % stability. Forceful Action (FA): Refers to the proportion of any and all uses of physical force and any associated manifest violence by any actor. When the CCC and FA trend lines intersect it implies regime instability coupled with violence. “n”: signifies the number of events per month reported by the FAST Kazakhstan Country Coordinator.

Goldstein Conflict and Cooperation

4 3 2 1 0 -1 -2 -3 -4 -5 -6 2000/5 2000/6 2000/7 2000/8 2000/9 2001/1 2001/2 2001/3 2001/4 2001/5 2001/6 2001/7 2001/8 2001/9 2000/10 2000/11 2000/12 2001/10 n = 18 n = 21 n = 39 n = 31 n = 27 n = 29 n = 7 n = 6 n = 81 n = 82 n = 47 n=107 n = 65 n=113 n=131 n=123 n=144 n=76

Goldstein Conflict and Cooperation

Goldstein Conflict and Cooperation: measures the relationship between individuals, groups, or states ranging from – 8.4 for unmitigated conflict to + 10.2 for complete cooperation, whereas 0 stands for neutral events. The Goldstein scale summarises the different values to an average for every time period. The value 0 indicates that the sum of all negatively and positively valued events revoke each other.

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Number of Protest Demonstrations

Number of Protest Demonstrations 10

0 2000/8 2000/9 2001/1 2001/2 2001/3 2001/4 2001/5 2001/6 2001/7 2001/8 2001/9 2000/10 2000/11 2000/12 2001/10 n = 31 n = 27 n = 29 n = 7 n = 6 n = 81 n = 82 n=47 n=107 n=65 n=113 n=131 n=123 n=144 n=76

Protest Demonstrations: signifies the number of protest demonstrations, and control crowds events.

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4 Analytical Raster Kazakhstan

I N T E R V E N I N G F A C T O R S A ROOT CAUSES PROXIMATE CAUSES Decreasing the likelihood of conflict

Historic Political / Governance Natural disasters R Foreign assistance (NGO, IO) Soviet hegemony / legacy Autocratic regime behaviour Seasonal changes Widespread corruption Economic and social consequences of drugs production and M Suppression of opposition forces Political / Institutional drugs trade Harsh state control and suppression of suspected Islamic Authoritarian political culture (as a Economic growth extremists perpetuating pattern of the Soviet era) E Unequal economic support of different regions by the

government Societal / Socio-Demographic D Language cleavage between Russians and Security Kazakhs Poorly equipped army Ideological vacuum after the break-up of the Border demarcation Soviet Union Negative impact of clan structure on nation C Societal / Socio-Demographic building High unemployment rate (especially among the young) Economic Collapse of key elements of social infrastructure (e.g. O education and health care) Economic inequalities between different

regions N Economic Growing disparity between poor and rich, i.e. increased International poverty F Arbitrary national borders with neighboring I N T E R V E N I N G F A C T O R S Closure of Uzbek borders Increasing the likelihood of conflict countries (e.g. Uzbekistan) Competition between different states in getting L Ecological Natural disasters access to Kazakh resources Further repression of opposition groups Ecological pollution (from Soviet times). Growing economic inequality between different I regions International Erection of border posts by Uzbek Foreign support of Islamic forces in southern Kazakhstan authorities C Visa restrictions with neighboring countries Economic and social consequences of Frontier disputes with Uzbekistan, and Kyrgyzstan drugs production and drugs trade Closure of Uzbek border (landmines, visa restrictions, Land reform T border posts)