Kazakhstan: Tested by Transition by Kazakhstan: Tested Chatham House Report Annette Bohr, Birgit Brauer, Nigel Gould-Davies, Nargis Kassenova, Joanna Lillis, Kate Mallinson, James Nixey and Dosym Satpayev Kazakhstan: Tested by Transition Bohr, Brauer, Gould-Davies, Kassenova, Lillis, Mallinson, Nixey and Satpayev Lillis, Mallinson, Nixey Kassenova, Gould-Davies, Brauer, Bohr, Chatham House Chatham House Report Annette Bohr, Birgit Brauer, Nigel Gould-Davies, Nargis Kassenova, Joanna Lillis, Kate Mallinson, James Nixey and Dosym Satpayev Russia and Eurasia Programme | November 2019 Kazakhstan: Tested by Transition Chatham House, the Royal Institute of International Affairs, is a world-leading policy institute based in London. Our mission is to help governments and societies build a sustainably secure, prosperous and just world. The Royal Institute of International Affairs Chatham House 10 St James’s Square London SW1Y 4LE T: +44 (0) 20 7957 5700 F: +44 (0) 20 7957 5710 www.chathamhouse.org Charity Registration No. 208223 Copyright © The Royal Institute of International Affairs, 2019 Chatham House, the Royal Institute of International Affairs, does not express opinions of its own. The opinions expressed in this publication are the responsibility of the author(s). All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical including photocopying, recording or any information storage or retrieval system, without the prior written permission of the copyright holder. Please direct all enquiries to the publishers. ISBN 978 1 78413 375 7 A catalogue record for this title is available from the British Library. Printed and bound in Great Britain. This publication is printed on FSC-certified paper. Typeset by Soapbox, www.soapbox.co.uk Cover image: The front cover shows a gilded imprint of the right hand of Nursultan Nazarbayev, the First President of Kazakhstan. Entitled ‘Caring Hand’, the impression is mounted on an ornate pedestal on the observation deck of the Baiterek Tower in the centre of the capital, now renamed Nur-Sultan. Visitors are encouraged to place their own hands in the print and make a wish. Copyright © Mateusz Atroszko Contents Executive Summary iv 1 Introduction 1 2 Governance 10 3 Political Economy 23 4 Political and Civil Liberties and Human Rights 37 5 Identity Politics 59 6 Relations with Other Central Asian States 70 7 Relations with Russia and China 86 8 Relations with the West 100 9 Recommendations 110 Appendix: Facts and Figures 113 About the Authors 123 Acknowledgments 125 iii | #CHKazakhstan Executive Summary A partial handover of political power through an orchestrated transition takes Kazakhstan into uncharted territory. Will it be able to pursue modernization and reform, and break from its authoritarian past? Kazakhstan is at a turning point in its history. At face value, at least, Central Asia’s wealthiest state has embarked on a bold experiment following the March 2019 decision by its founding father and long-standing ruler, Nursultan Nazarbayev, to resign from the presidency and initiate a managed political succession. A generational transition of this nature, untried in other former Soviet republics, brings with it high stakes. As well as looking to secure his own legacy, having dominated the country since before indepen- dence in 1991, Nazarbayev seeks to ensure Kazakhstan does not depart from the course he has set, while safeguarding regime stability in the context of multiple and evolv- ing domestic and international challenges. This is easier said than done. The uncertainty around this project is substantial, especially considering a ‘rowback’ decree just seven months after Nazarbayev’s resignation, limiting the powers of his anointed successor, Kassym-Jomart Tokayev. How long can Tokayev credibly remain president considering such a transparent undermining of his authority? Is Nazarbayev, in fact, grooming his daughter, Dariga Nazarbayeva, another relative or a power player from outside the family for the leadership in the longer term? Will the ‘Kazakh tandem’ of Nazarbayev and Tokayev function effectively, or will tensions and conflicts arise between them as many claim is happening already? How will the leadership cope with the protest mood now manifest on the streets of Kazakhstan, and address the politi- cal and socio-economic grievances fuelling this discontent? How might the political transition play out if Nazarbayev were to suddenly exit the political scene altogether? And what is the long-term transition plan for the time when Nazarbayev has departed, and how effective will it be? Far deeper political, As Kazakhstan enters uncharted territory, the purpose of this report is twofold. First, economic and to make the case for the West to devote more attention to Kazakhstan. The country’s social reforms relative importance in Central Asia, and as the constant focus of intense attention from China and Russia, suggests that the West is wrong to direct so little time and diplomatic will be needed if effort and so few resources towards it. This is not so much a miscalculation (that would Kazakhstan is to be to assume there had been a calculation in the first place) as a misstep through neglect, meet the growing presupposing that the future will resemble the present – with Kazakhstan remaining challenges to its stable internally, relatively inconsequential geopolitically but nevertheless a friendly stability, prosperity ally to the West. In fact, the country’s trajectory over the next few years is of potentially and development strategic import. This is because even its political semi-transition presents the West with a rare opportunity to push back against the global rise of authoritarianism, in a state that is open to rational argument and economic logic. The second function of the report is to serve as a well-intentioned message to the lead- ership of Kazakhstan. The research undertaken by the report’s eight authors shows that Kazakhstan is at risk of failing to achieve the goals its leadership has set for the country. As significant as it has been, the partial stepping aside of Nazarbayev by no means guarantees the modernization and renewal that he and his successor have promised. iv | #CHKazakhstan Kazakhstan: Tested by Transition Executive Summary Far deeper political, economic and social reforms will be needed if Kazakhstan is to meet the growing challenges to its stability, prosperity and development. Street pro- tests since Nazarbayev’s resignation have demonstrated a level of popular disaffection far higher than the authorities acknowledge. The leadership needs to bridge the discon- nect between the rulers and the ruled and start listening to its people. To avoid slipping into decline, and to resist external pressures and geopolitical overtures that could diminish the sovereignty that its leadership is so determined to safeguard, Kazakhstan needs new faces – innovators and reformers – throughout every level of the administration, as well as new ideas. This report is intended to help with the ‘ideas’ part of that proposition. Kazakhstan’s principal challenges Internal Governance Although significant economic reforms occurred under Nazarbayev’s rule, political reforms conspicuously lagged during his presidency – with Nazarbayev choosing not to establish an independent judiciary, a parliament with meaningful oversight powers, or even a constitution that is respected by the authorities themselves. Indeed, Nazarbayev frequently amended the constitution to bolster and prolong his rule, and an opaque, informal political system persisted. This stymied the development of institutional governance and the country more broadly. As president in President Tokayev, meanwhile, faces formidable challenges. He needs to improve the a system still shaped government’s responsiveness to the needs of the population, address long-term struc- in the image of his tural economic challenges, and head off rising popular disaffection with the political system and socio-economic conditions, all while negotiating the very real constraints predecessor, Tokayev associated with his own limited authority. As president in a system still shaped in the is effectively one half image of his predecessor, Tokayev is effectively one half of a duopoly, no matter how of a duopoly often Nazarbayev himself and Tokayev’s own people deny the existence of any such thing. Although he is attempting to create his own power base beyond Nazarbayev, the latter retains extensive entrenched powers that make major political or economic reforms unlikely. Only once Nazarbayev fully retreats from the political front line will it be possible to harness the potential for change. But the capacity to do so will depend greatly on how the political system develops in the immediate transition period. The political economy Since independence in 1991, Kazakhstan’s strong economic performance on the back of its natural resource endowments has enabled it to reach upper-middle-income status. It is one of the most successful economies in the region and has been among the best-performing of the post-Soviet resource exporters. To achieve this, it has overcome formidable barriers of geography, climate and history. But the post-Soviet system and the natural-resources wealth that delivered this success have accumulated new problems that hinder further economic development. The eco- nomic crisis of 2014 exposed structural shortcomings that were hidden by the oil v | #CHKazakhstan Kazakhstan: