Economy


Abilov: “Please God let this referendum work!”

For anybody that has ever wondered whether Kazakhstan even has a political opposition, the answer is that it does, but not a very useful one.
Matters began promisingly on March 16 when one phalanx of the opposition met for an hours-long meeting to discuss a raft of referendum proposals that they hope could propel them into some kind of political relevance. The unwritten mantra among politicians in Kazakhstan is that if something is worth talking about, it is worth talking about for hour after endless hour.
Despite officially being banned, Respublika weekly newspaper usefully summed up the meeting with this pithy headline summary: “Opposition Says to Authorities: No to Eurasian Union, Yes to Elected Mayors.”
Other than backing referendums on those issues, the meeting also called for votes on whether to nationalize Kazakhmys, ArcelorMittal Temirtau, Kazzinc, ENRC and Halyk Bank, and on whether to prohibit the building of a nuclear fuel bank and an atomic power plant in Kazakhstan.
Overall, the proposals offer the suggestion of a nationalist-populist agenda that the largely anodyne opposition must hope will finally put a tiger in its tank.
The turnout at the meeting of 512 attendees was hailed as a success by Azat party leader Bulat Abilov.
“When, at the start of September, we proposed this referendum initiative, many told us that that we couldn’t bring people out and hold a meeting, that we would be harassed,” Abilov said.
But making the government see the error of its ways is imperative, he said.
The referendum, which will now need to be submitted to the election commission for approval, is also a useful platform for Abilov to return to the public eye.
He largely slipped from view last year after being jailed twice for participating in unauthorized rallies in which he vowed unending resistance to callous government indifference over the bloody suppression of unrest in Zhanaozen in late 2011. Presumably fearing a sentence longer than the two-week jail sentence slaps on the wrist he received, he judiciously tip-toed away from the whole Zhanaozen issue.

Zhanuzakov: "Alga Kazakhstan! No Alga Going to Jail!"

Zhanuzakov: “Alga Kazakhstan! No Alga Going to Jail!”

Other notable speakers at the March 16 meeting were the young, photogenic and well-spoken political analyst Mukhtar Taizhan and the leader of banned Alga political movement Marat Zhanuzakov.
Taizhan, who has spoken copiously elsewhere in opposition to the Customs Union/Eurasian Union and has thus set out his stall as a reasonable nationalist of sorts, is a figure to watch in the future. But many eyes will have been on Zhanuzakov, who has the unenviable task of taking over the helm of a party whose previous leader is now serving a seven-year prison sentence.
An interview with Respublika after his first public airing in the new role reveals a combative figure apparently intent on pursuing similar territory to his predecessor; namely the corruption and economic malfeasance that has hampered Kazakhstan’s potential.
The elephant in the room here is that both Respublika and Alga are known to be financed by fugitive businessman Mukhtar Ablyazov, which renders that position inevitably problematic, given that he has all but admitted to gross embezzlement.
The referendum proposals are certainly not without promise and clearly designed as a quixotically mischievous attempt to wrong-foot the government, since their chances of actually going to vote are negligible. On the Customs Union _ or the Eurasian Union as the opposition has taken to calling it, in a transparent attempt to raise nationalist hackles _ the public jury is clearly still out.
As KIMEP University Professor Nargis Kassenova has lucidly argued, the Customs Union has largely proved a hindrance to businesses in Kazakhstan by causing bureaucratic complications and raising the cost of Chinese and Western imports.
Speaking for the defence, independent political analyst Andrei Chebotaryev criticized the proposed Customs Union referendum, calling it a short-sighted policy as, in his opinion, voters may actually end up backing the economic bloc were they given the choice.
Media reports of Chebotaryev’s remarks do not dwell on how he reached that conclusion.
While it may have been smiles all around at the referendum meeting, it was a different story at the gathering of that other hapless opposition stalwart _ the All-National Social-Democratic Party, or OSDP.
With the unhappy marriage between the prima donnas in the Azat-OSDP union having more or less culminated in divorce, OSDP is now busy eating itself if events at their congress on March 20 are anything to go by.
Despite being party deputy secretary, Amirzhan Kosanov was told on the eve of the meeting that he need not bother to turn up, which was as good as an invitation to make a fuss.
“I did not want any scandal,” Kosanov says in this video, before launching into a lengthy invective in front of the bouncers keeping him out of the congress.
“Somebody is intentionally creating a provocation and attempting to discredit the party,” Kosanov says.
That statement seems to assume OSDP is unable to discredit itself on its own, which is patently not the case.
In his rambling peroration, Kosanov calls for greater efforts by a unified opposition in attracting young people _ indeed a pressing issue for these movements’ greying ranks.
As it happens, ODSP Zharmakhan Tuyakbay has announced that the party has approved the creation of a youth wing and that a woman’s wing has also begun operations.
This looks like too little and well over a decade too late.
The imminent death of this tired and aged opposition generation has become a recurrent refrain among political commentators. As this piece from December in Central Asia Monitor harshly but not unfairly notes, “people with big names do not join the opposition, even from among those injured by the authorities (incidentally, this is not to the opposition camp’s credit because it hints at its gradual degeneration).”

Mambetalin: "Shut your gob, you glamorous bitch!"

Mambetalin: “Shut your gob, you glamorous bitch!”

Central Asia Monitor also alludes to relatively youthful Serikh Mambetalin, the delusional former leader of the now-nationalist, now-environmentalist, now-nothing Rukhaniyat party, as another missed opportunity.
Mambetalin these days prefers to hang out in social media sites, where the newspaper tartly notes he indulges in petty name-calling, dismissing people as “glamourous bitches” and telling them to “shut their gob.”
Rukhaniyat, which once included Taizhan in its ranks until he wisely dropped out, collapsed farcically in the weeks ahead of the show elections in January 2011 that led to the formation of the sitting rubber stamp non-parliament.
(Somewhat hilariously, former KazTransGas chairman Serik Sultangali was in February elected the new chair of Rukhaniyat. As party founder Altyntash Jaganova told a party congress, Rukhaniyat’s vision has always coincided with the ideas of President Nursultan Nazarbayev, which must have come as a surprise to Mambetalin.)
Central Asia Monitor, which seems to specialize in these obituaries on the opposition, ran with another piece earlier this month that revisited the same theme, albeit in an almost entirely incoherent fashion.
“An opposition that cannot see itself in power and simply occupies a certain political niche will never work up to the required standard,” writes commentator Bolat Shakuyev, without ever really getting to the point.
The standard is indeed low, but the burning question is whether it matters that Kazakhstan does not actually have an opposition party worthy of that title.
The government evidently doesn’t appear to believe so, but then again they were the people that let the issue of striking oil workers fester in Zhanaozen until it descended into bloodshed.
It is obvious that few lessons have really been learned from that tragic and quite possibly avoidable episode _ other than how best to massage the public relations fallout that is.
On the contrary, Alga, the one party vocally talking about Zhanaozen and warning of the dangers it represented in advance was instead accused of actually inciting the unrest and had its leader jailed in a kangaroo court.
The opposition is hapless and helpless, but there is no indication the government under the increasingly senescent Nazarbayev is possessed of a whole lot more vision.
The authorities’ strategy at the moment is a blind gamble on black: letting the population bumble around ideologically rudderless and hoping the oil money will be enough to quell any signs of unrest.

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If the flow of gas from Turkmenistan to Ukraine is to resume, the decisive factors will be political not economic, and they will be decided in Moscow, not Kiev or Ashgabat.
And so Ukrainian President Viktor Yanukovych’s visit to Moscow this week will be watched with interest for developments over energy cooperation.
Yanukovych set an apparently combative tone Friday when he told reporters that Kiev would not “sacrifice it’s sovereignty” while negotiating on the price paid for Russian gas.
Ukraine is currently bound by a 10-year take-or-pay deal with Russia’s Gazprom that leaves it open to punishing claims if it fails to buy less than given quantities of gas over a particular year.
A perceived shortfall in gas imports from Russia last year last month prompted Gazprom to claim $7 billion from state-run Naftogaz Ukrainy. The sum is clearly purposeful in its unrealism.
 Ukraine currently pays around $430 per 1,000 cubic meters for Russian gas.
“It’s clear that we have to make concessions and find a price that Russia will accept to change the contract,” Yanukovych said Friday.
Indulging in some creative thinking, Ukraine now speaks of developing its substantial reserves of shale gas and, on Friday, of bypassing Bosphorous routes for liquified natural gas imports.
“We see there is such an opportunity, the building of a gas terminal in the Mediterranean in front of the Bosporus, so that it does not go through the Bosporus, and build a terminal there,” Yanukovych said. “If we are able to do this — we are now working on this — we will have another opportunity to transport up to 10 billion, 7 to 10 billion cubic meters from these liquefied gas terminals,” he said.
Bringing cheaper Central Asian gas into the mix is evidently what Ukraine sees as another route out of the impasse.
What is abundantly clear is that this is most likely to happen if Kiev relinquishes control over its domestic natural pipeline network. Such a scenario was firmly resisted in the past, but has now evolved into a certainty that explains Yanukovych’s need to protest that he will protect his country’s sovereignty.
The proposal in the air is that a consortium involving Gazprom would operate the pipelines, finally giving Moscow the control over transit that is has so long sought. Yanukovych plaintively stated Friday that Kiev would seek assurances that it would still be able to make the call on what gas could transit to Europe.
“We want for the Ukrainian (gas transportation system) to work reliably, for it to be able to pump certain amounts of gas to Europe — the more, the better. And we want it to be technically modernised,” he said.
And, going by what Ukrainian officials said last month during Yanukovych’s visit to Ashgabat, some of that gas should be Turkmen and sold onward to Western Europe for Kiev’s profit.
Yanukovych is now also talking about “de-monopolising” the gas market, which sounds a signal for allowing in Russian and other investors. He has also made more positive noises about the Moscow-dominated Customs Union, tentatively committing his nation’s fate eastward.
The European Union, meanwhile, looks on with a degree of trepidation. Interfax cited the EU envoy to Ukraine, Jan Tombinski, as saying Friday that one option was was a three-way EU-Russian-Ukrainian consortium running the pipelines.
Whatever the outcome, the Ukrainian pipeline taboo is now broken, and that could set the stage for Turkmenistan’s long-held ambition to see its gas delivered to European households.
The finer details of the arrangement — which will be mired in the standard opaqueness and doubtless subject to all manner of financial chicanery — are yet to be decided.

For all its fabulous wealth, Turkmenistan has stooped once more to asking the Chinese for a staggering $4.1 billion loan to develop the huge and untapped South Yolotan field. Not wanting for a brass neck, President Gurbanguli Berdymukhamedov ordered his cowering minions to begin negotiations with the China State Development Bank for a loan on preferential terms.

The debt will pile on top of the $4 billion, of which $3 billion is also for developing South Yolotan, China has lent Turkmenistan last year. But why does a country supposedly awash with gas money and whose outlays on the provision of social services are seemingly risible suddenly need all this cash? Will China puts its hands in its pockets and where is the money likely to end up?

Turkmenistan is unwilling to embrace the more unmanageable aspects of modernity like an open society or the even vaguely comprehensive provision of healthcare, but it is striving nonetheless to convey the notion that it is speeding ahead towards the ranks of developed nations. Accordingly, state television and newspapers are little more than a wall-to-wall eulogy to the wisdom of Turkmenistan’s leader, the greatness of the country’s textile industry, the wonderfulness of its schools, the sterling dynamism of its army, the modernity of its confectionery factories, and so on and so forth. The most visible, and expensive, aspect of this tireless striving to some indefinable historical apotheosis has manifested itself in a gargantuan construction boom in the weird capital city, Ashgabat, and the utterly potty Caspian resort town of Awaza.

The numbers speak for themselves. Lording over his terrified browbeaten Cabinet, perennially smug-looking Berdymukhamedov announced in January that no less than $23.6 billion will be spent on hundreds of new buildings over the coming two years. Laughably, he suggested that some of this money would wash in courtesy of foreign investors. The only foreigner that would dream of parting with cash for Turkmen real estate, probably in Awaza, would do so exclusively in the hope it might put them in good stead when bidding for some government tender. Heaven only knows what proportion of the country’s economy that eats up, although with an official real gross domestic product of around $16 billion in 2009, it is safe to say that Turkmenistan may be spending a little beyond its means on things that it probably doesn’t really need. Plus ca change.

The bulk of construction work in Ashgabat appears to be focused on residential apartments, although no Turkmen building boom would be complete without a fair share of waste. As usual, dictator-serving French construction titan Bouygues has cornered the market for official buildings with its orders for a new Oil and Gas Institute, Makhtumkuli University, the Sport and Tourism Institute and extra premises for the oh-so-busy parliament.

Presumably, Ashgabat thinks that $4 billion here or there will come out in the wash, and that it can always offset the debt against future sales of gas. Because, of course, by the time the pipeline to China is pumping 40 billion cubic meters of gas annually, the country’s economy will be fully diversified, what with German teenagers clamoring for Turkmen-made jeans, Turkish children nibbling on Ashgabat choccies and German tourists hogging the sun-beds along the Caspian coastline. At least this is the hazy vision that appears to Berdymukhamedov in his sleep, amid dreams of grateful subjects willfully prostrating themselves at his diminutive frame as his pudgy face beams contentedly. Chinese economic policy is made of somewhat more reality-bound stuff, and they will likely part with requested cash as much of it will end up in their own pockets anyhow.

In December, the Turkmen state media announced that the government had awarded $9.7 billion to several foreign companies to develop South Yolotan. Among those companies was CNPC Chuanqing Drilling Engineering Company, which won a $3.13 billion deal to produce 10 billion cubic metres of gas annually. That is to say, please lend us $4 billion, so we can pay a company you own $3 billion to do work in our own country.

On the face of it, none of this necessarily makes bad economic sense, but being that it is Turkmenistan we are dealing with here, much room must be reserved for pessimism and cynicism.

As of March 4, results from Tajikistan’s parliamentary elections show the People’s Democratic Party led by President Emomali Rakhmon winning 54 seats in the 63-seat lower chamber. Other parties – namely the Islamic Revival Party, the Communist Party, the Agrarian Party and the Economic Development Party* – won two seats each.

Depending on whom you believe, this outcome is either the vindication of the long-sighted platform put forward by the pro-presidential party or the outcome of systemic fraud.

In any case, the composition of parliament remains almost unchanged; the Communists have lost a couple of deputies, and the government party has lost a few seats to two dummy opposition parties that essentially materialized from nowhere, despite them having absolutely no public profile to speak of.

Reactions have varied from weary disdain to creeping dread about what lies ahead for Tajikistan. So what does the future hold in store: stagnation, tentative development or spiraling instability and a descent into worsening authoritarianism?

Kabiri: Two to Tango?

The fate of the Islamic Revival Party seems a useful illustration of general tendencies. Party leader Muhiddin Kabiri optimistically predicted before the vote that the IRP would win 10 seats. Kabiri has also insisted, since results were announced, that his party claimed at least 30 percent of votes cast, far more than the 7.7 percent officially attributed to it.

Kabiri earned some glowing write-ups on the eve of the election, and was cast by Radio Free Europe as a secular modernizer, complete with clean-shaven look and suit. Indeed, Kabiri seems like a confident and interesting personality, while his party has conducted a lively campaign, with supporters hitting the pavements and taking the message from door-to-door. The IRP also benefits from a natural hard-core base due to its regional roots and its, admittedly soft-focus, religious stripes.

One strand of thought on the eve of the elections had it that the IRP could be gradually co-opted by the government as a useful pressure valve for Islamic currents. There are monthly reports of arrests of adherents to banned groups like Hizb-ut-Tahrir and Tablighi Jamaat, not to speak of the Islamic Movement of Uzbekistan terrorist organization. IRP represents the respectable face of political Islam and it has gone to great lengths to disavow the values of those underground groups and reject the notion of creating an Islamic state.

Kabiri, who lived and studied in Yemen during Tajikistan’s five-year civil war, also adamantly insists his party has received no support from foreign movements or governments.

Even more propitiously for Rakhmon’s regime, as suggested above, the IRP does not even make any claims to power. The party’s very modest expectation of claiming less than one-sixth of the available seats in parliament was an advance declaration of defeat and evinced a clear desire to engage in a compromise stance from the outset.

"Check if any of those pesky OSCE people are coming?"

Why then would Rakhmon’s party, with the connivance of the Central Elections Commission refuse to accept the possibility of admitting the existence of the IRP as a weak, if viable, opposition?

Broadly, and crudely, speaking there is something in the Central Asian-Soviet regime mindset that determines that legitimacy can only be conferred by appearing to gain an absurdly and implausibly large swathe of popular support (with 72 percent of the vote and an 87 percent turnout, more than 62.5 percent of registered voters supposedly cast their ballot for deputies from the People’s Democratic Party). To put it more succinctly, again and again, crooked post-Soviet leaders decide that legitimacy is earned by numbers, not process.

Rakhmon also evidently believes that compromise is not a necessity. That much has been evident from the immediate postwar years, when Rakhmon’s Kulyabi clan began reneging on power-sharing commitments made during the peace negotiations. Over time, the legitimate Islamic opposition has been squeezed out and, all the while, the authorities have been muscularly stamping out alleged militants or terrorists (whatever you want to call them) and their troublesome teenage chai-wallahs**.

This steady process cannot but add impetus to the widely held theory that all the government is contriving to do is drive Islamic movement underground, where they will fester and grow malignant. Perhaps Rakhmon looks with hidden admiration to Uzbekistan, where Islam Karimov’s intransigent line has led to apparent success in terrifying and extirpating potential violent radicalism into virtual extinction. Or even to Kyrgyzstan, which has been seemingly blessed with a lack of active extremist groups, but whose forces have also claimed victories in the fight against terrorist groups.

Those parallels can be misleading, because the countries are so fundamentally different in their political structures, demographics and recent legacies.

But what should be clear is that all the leaders of these countries pursue a malign and dangerous logic drawn from the small blueprint: Crush the religious underground, while using it as the straw man justification for quashing basic democratic freedoms in the name of some hazy indigenous notion of national development.

Because Tajikistan’s regime is no less absolutist than those of its ex-Soviet neighbors, its pursuit of unfettered power cannot allow for the appearance of an opposition in the ascendancy. Therefore, the Islamic Revival Party must wither or remain stunted, and those that desert it for the radical fringes will be hunted down without mercy.

Pretending for a moment that Rakhmon is driven by something other than megalomania, greed and an unquenchable thirst for power, what else would explain this desire to remain so utterly unchallenged?

Wanting to make a purely academic argument, one could argue that the Rakhmon regime has come to understand that its model for the country’s future economic prosperity, which appeared predicated almost entirely on the success of the Roghun hydroelectric dam, requires absolute control and supremacy.

It is true that Rakhmon’s government will need total control over all levers of power to get away with squeezing the population as hard as it is doing to raise the money needed to build Roghun.

Road to Ruin or Stairway to Heaven?

A little bit of background here – The Tajik government has issued $1.3 billion worth of stock in Roghun and it hopes the cashless population will be able to stump up the sum and pay, which will cover the cost of building the plant’s first two units. According to plans, Roghun will eventually comprise six 600 megawatt units, which would be more than enough to supply the country with its own electricity needs and leave enough left over to export to Afghanistan and Pakistan.

Having broken off a deal with Russia’s RusAl some years ago and realizing that nobody would want anything to do with a project rife with peril from corruption and intemperate Uzbek resistance, Tajikistan has decided to go the first part alone. The government ensures Roghun will pay dividends (literally) in spades, although Rakhmon seems curiously reluctant to sink his ill-gotten hundreds of million (if not billions) into the enterprise, but that is hardly surprising.

No, this will need a Soviet-style combination of ceaseless propaganda and strong-arming. And there is no room for even the smallest hint of dissent in this scenario.

Cynicism apart, the publicity drive does appear to have been successful and will ensure that the anger that should be brimming over will be tempered for some to come.

Kabiri has warned that he will bring his supporters onto the streets in a peaceful and legal protest against the fraudulent elections, but there are all too many reasons to think this call will not be heeded, if it is even formally issued in the first place.

Christian Bleuer at Registan.net predicts conflict fatigue – a legacy of the civil war – and the IRP’s inability to mobilize and organize mass crowds makes a successful protest unlikely. This is a fair but perhaps only partial explanation for what seems like the most probable outcome.

There is a case to be made that the People’s Democratic Party and Rakhmon have been successful in ramming home the anodyne, but effective, rhetoric of sustainable development, stability and energy independence.

The fact that many people may bought into this line makes it all the more tragic that the corruption, incompetence and thoughtless callousness of the Rakhmon regime is likely only to drive Tajikistan further to the brink of collapse and conflict.

* These two parties were both created in 2005, the year of the last parliamentary elections. The Economic Reform Party, led by Olim Boboyev, reputedly has 17,000 registered members. The Agrarian Party, led by former Soviet apparatchik Amir Karakulov, has 20,500 members.

** Last month, Soghd regional court jailed four men for “involvement” with the IMU, including 16-year-old schoolboy Nasibulloh Zabirzoda. The court found Zabirzoda guilty of providing his uncle, an IMU member, with food and provisions.

Perhaps the strangest piece of good news to come out of Central Asia so far this year is that Uzbekistan will maintain its strong pace of economic growth, despite the worsening global crisis. As the Foreign Economic Relations Minister Elyor Ganiyev said at a forum this week citing International Monetary Fund figures, Uzbek gross domestic product growth will hit 7 percent in 2009, a relatively small drop against 9 percent last year.

Ganiyev

Ganiyev

The official Uzbek forecast is a little more generous, putting economic growth this year at 7.8 percent, an achievement Ganiyev puts down to “new investment projects.”

According to the findings of an IMF mission that visited Uzbekistan in December,  the country “has remained resilient to the ongoing international credit crisis and the downturn in developed economies, with … large external current account and fiscal surpluses, further accumulation of foreign exchange reserves, and continued stability in the banking system.”

In explaining its reduced expectations for 2009, the IMF cites the dropping prices and demand for Uzbekistan’s export commodities, as well as the oft-cited diminution of remittances. Also, like many countries in the region, Uzbekistan’s lack of integration into the global economy will insulate it from the type of credit woes that have bedeviled Kazakhstan.

Perhaps one of the IMF’s most interesting findings is the idea that the government should coordinate with the lending sector to ensure a steady availability of cash _ which would make a change.

The state of the world economy may ironically prove to be a helpful boost to the instinctively autarchic Uzbek authorities, who can claim to have been proved right all along in their resolute determination to spurn Western capitalist models.

Loadsamoney

Uzbekistan: Loadsamoney

Speaking at a ceremony last month to mark the 16th anniversary of the Constitution, President Islam Karimov assured listeners in a keynote speech that the country had “sufficient reserves of resilience and the necessary resource base to ensure the steady and uninterrupted work of [its] financial, economic, budget and banking and credit systems.”

Taking a veiled pop at some of his neighbours, Karimov reminded the audience of the “ill-thought out external debt policy of many nations [that] made their economies vulnerable and very dependent on external factors and threats.”

To back this up, he cited the fact that Uzbekistan’s external debt is 13.3% of its GDP and is below 31% of its total exports.

It is in all this macroeconomic data that Karimov often seems to find solace, since there is nothing reassuring about the fact that anything between one-fifth and a quarter of the population Uzbekistan lives in poverty. There is also little in Karimov’s unique model, as he likes to describe it, that suggests the government is prepared to allow those sectors of the economy that will most benefit the poor to develop. Repeatedly, over the years, Uzbek authorities have clamped down on cross-border trade and heavily penalized small merchants.

It is hardly surprising that such large amounts of Uzbeks have been compelled to emigrate abroad, like so many of their Central Asian counterparts.

The country’s complete isolation means, however, that little firm information is available to the outside world about the scale of suffering that the majority of the population endures while a select minority benefits from the cash earned from cotton, gold and gas exports. In terms of public relations, the illusion of economic stability, not to say success, represents a victory for Karimov’s government, which will make its eventual unraveling only that much more bitter.