Magazine 2/2007
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The governmental system in Kazakhstan is a presidential one. In recent past, the role of the House of Representatives (Majilis) was formally strengthened at the expense of the authority of the president. The parliament is fully loyal to the person of the President Nursultan Nazarbayev, the governing party is the National Democratic Party “Nur Otan” headed by the President. Considering the restricted power of the parliament and its full loyalty to the President, the actual power is concentrated in the hands of the people centered around the President, who mutually compete for his favor, while the quality and level of their relations develops dynamically.
The struggle for power goes on in the level of family clans of the President`s sons-in-law, Rakhat Aliyev and Timur Kulibayev, of the Nurzhan Subkhanberdin`s group (a businessman with a close relation to the President`s nephew Kairat Satypaldy), and of the group of Vladimir Kim, who does not have a direct access to the President. Besides Nazarbayev, there are several people in Nur Otan, who are surrounding the President, especially his eldest daughter Dariga (Rakhat Aliyev`s wife) and Timur Kulibayev (husband of President`s daughter Dinara).
According to the law on amendments and additions to the Constitution of Kazakhstan effective since May 23, 2007, the power of the parliament has been extended. The president nominates the prime minister after consulting the parliamentary clubs of the parties represented in the Majilis, and if the law is passed by the absolute majority of the members, he appoints the government of Kazakhstan. The parliament approves of two thirds of the constitutional council structure and two thirds of the counting committee. The number of members increases from 77 to 107. 98 MPs are elected according to proportional election system and 9 MPs are nominated by the Assembly of Nations of Kazakhstan – a constitutional authority representing nationalities in Kazakhstan, whose members are nominated by the President.
The law includes regulations concerning shortening of presidential term of office from 7 to 5 years, and the regulation will be put into effect in 2012. In accordance to the law regulations, the first president has the right to apply for next election arbitrary number of times. His successors are not allowed to hold the office of president more than 2 consecutive terms of office. It is expected that Nazarbayev will leave the office in 2012, which intensifies the struggle of individual clans for influence in the country. When the Prime Minister was replaced in January 2007, the position of the President`s middle son-in-law (middle as for the age) was strengthened.
The clan of Timur Kulibayev
At the beginning of the 1990s, Kulibayev took control over the Altyn Alma corporation, dealing with wholesale and retail, and also a relaxation center in Almaty. In 1995 Kulibayev and partners established Almaty Trade and Finance Bank, where the accounts of the Khabar Agency and of several oil companies were kept. On the turn of 1996 and 1997 Kulibayev became the Deputy Chairman of the State Committee on Investments. In 1997 he became the Deputy Chairman for economy and finance of the newly established national energy company Kazakhoil, which absorbed all the state oil and natural gas companies. Until 2001, he separated the KazTransOil company from the Kazakhoil company, he took control over the Kazakhstan share in the Caspian Pipeline Consortium and added TransPetroleum, KaspiyMunaiBailanys, Bailanys, Aktjubneftesviaz, MunaiImpeks, Euro-Asia Air company, Atyrau zholdary and Atyrau aue zholy to his portfolio. In 2000 he established the KazTransGaz joint-stock company owned by the KazakhTransOil. Kulibayev`s clan controls Central Asia Petroleum Ltd. (CAP). CAP ownes the Mangistaumunaygaz company and Pavlodar Petrochemical Plant company. He also controls the Halyk Savings Bank of Kazakhstan and the National Oil and Gas Transportation Company. In January, 2006, Nazarbayev created a Kazakhstan State-Asset Management Holding Samruk, which was seized byt Kulibayev as at Deputy Chairman of the Board of Directors. Samruk controls several state enterprises: KazMunaiGaz, Kazakhstan Railways, KEGOK electric power lines company and Kazakhtelecom. Samruk controls the companies directly, without any interference of the ministries of economy. In January 2007 Karim Masimov, Kulibayev`s long-time political and business partner, became the Prime Minister of the Republic of Kazakhstan. (1)
The clan of Dariga Nazarbayeva and Rakhat Aliyev
Rakhat Aliyev is former husband of Dariga Nazarbayeva and the oldest President`s son-in-law. In 1993 he became the Deputy Head of the Foreign Economic Relations Office of the Kazakhstan Ministry of Healthcare and subsequently the General Director of the KazMedImport trade company created at the Ministry of Foreign Economic Relations, which dealt with import of medical preparations. In 1995 he became the General Director of RR Kazakhstan – Trade and Financing, Ltd., and a president of the Sakhar Center Holding.
In 1996 he left business and he became the First Deputy Head of the State Tax Committee tax police and the chief of the tax police department section on battling corruption and contraband in the Ministry of Finance. After the exchange of the government in April 1997, he made his way to the leading positions in the tax police and in November 1997 he became the head of the economic crime division in the Home Office. In 1998 he became the Chairman of the Tax Police Committee and the First Deputy of the State Income Minister, whose resort includes also the tax police and customs control. He transformed the tax police into a new center of economic influence, which in the level of power was able to compete the Ministry of Finance and the National Bank. The tax police had conflicts with the Home Office and with the customs committee because of their control over seized illegal goods from China. In that time Aliyev established close relations with several businessmen who had connections to criminal groups. In September 1999 he was appointed the Chief of the Department of the National Security Committee (KNB) for Almaty and the Almaty region, in July 2000 the Deputy Head of the KNB and in May 2001 he became the First Deputy Head of the KNB. In the fall of 2001 Aliyev provoked a political crisis, which was caused by economic conflict of the leading representatives of the intelligence services and several grand businessmen, and which lead to consolidation of anti-Nazarbayev forces. After the exchange of the governments he lost his position in the KNB and in 2001 he became the Deputy Chief of the Presidential Protection Service.
In the fall 2002 he left for the position of an Ambassador in Austria, a special representative for the issues of cooperation with OSCE and a permanent representative in international organizations seated in Vienna. In 2006 he came back to Kazakhstan to take up the position of the First Deputy Minister of Foreign Affairs. In September 2006 he proposed a change of the constitutional system to a constitutional monarchy headed by a sultan. In February 2007 he declared his share in Kazakhstan media and went back to Vienna, which he explained by plans of Kazakhstan to gain chairmanship in OSCE in 2009. However, the logic of the fact is that the President sent him to Vienna in relation to the scandal concerning kidnapping and blackmailing of the Head of the Narbuk Board of Directors controlled by the clan of Dariga and Rakhat Aliyev. The Nurbank affair lead to further conflict of interests between the Finance police, the Home Office and probably also the KNB, which provoked the President`s reaction – criminal prosecution, deposing from all the diplomatic positions, repeated requests of extradition from Austria to Kazakhstan and liquidation of the KTK channel and the Karavan weekly.
Dariga is the eldest daughter of the President. In 1994 she became a Vice-President of the broadcasting and television company of Kazakhstan and a director of Khabar press agency. In 1995, Khabar was transformed into an autonomous structure of the Government. The group surrounding Dariga gained the Europa Plus broadcasting channel, the KTK and NTK TV channels and Novoye pokoleniye and Karavan newspapers, and Kazakhstan Today information agency. The TV-media and Alma-media companies were established to manage the medial holding. Dariga Nazarbayev headed the Asar party, which was absorbed by Nur Otan. The basic instruments of the clan of Dariga and Rakhat Aliyev are the Sakhar Center, Neftanoy Center and Nurbank companies, and according to several sources also the nuclear power company Kazatoprom. However, the group is currently not favored by the President. Dariga interrupted her political career when she did not appear in the election list for the Nur Otan party in the elections held in the beginnig of August 2007, and Aliyev is facing the criminal prosecution. At the same time, the means of their influence are disposed of throughout the country. (2)
The group of Nurzhan Subkhanberdin
Nurzhan Subkhanberdin is one of the most influential businessmen of Kazakhstan. He controls the Commerial Bank of Kazakhstan. In the mid-90s he was an active ally of Kulibayev, but later on he became independent. If the position of the group of Daiga Nazarbayeva and Rakhat Aliyev strenghted, he would have to settle alliances with Kulibayev`s clan. The group has close relations with President`s nephew Kairat Satypaldy. (3)
The group of Vladimir Kim
Vladimir Kim and his group of industrialists in Eurasian Energy Corporation controll the TNK Kazkhrom, Aluminiy Kazakhstana, the Aksus Metallurgical company, the Eurasian Energy Corporation and the Traktebel group, under which belongs Intergas Central Asia and Almaty Power Consolidated. His group emerged on the turn of 1995/1996. Vladimir Kim gradually became a complete owner of the Kazakhmys Copper Corporation. In March 2006 it was made public that Kim planned to gain a 25 % stake in the ENRC Kazakhstan Holding B. V. ENRC was registered in 2006 and its basic substance are packages of ineterests of TNK Kazkhrom, Aluminiy Kazakhstana, Kazakhstan Aluminum Company, Zhayrem mining and processing combine, Sokolov Sarabay mining and metal-enriching group, Eurasian Energy Corporation, ENRC Eogistics and ENRC Marketing & Sales. Not only the interests owned by the members the Mashkevich, Ibragimov and Shodiyev clan are consoled, but also state interest packages. According to the ENRC statement, the company secures 5 % of the Kazakhstan GDP income and is the third biggest iron ore producer, a leader in ironstone mining and processing, it supplies two fifths of the gallium produced in the world and also an important producer of aluminum oxid concentrates and manganese. The group controls one fourth of the world`s supplies of chrome and is the strongest energy supplier in the Republic of Kazakhstan. Besides Kazakhstani companies, ENRC Kazakhstan Holding Group includes MKM ENRC, a German company producing copper products. Yet Vladimir Kim is not a member of the family and he and his group have no direct influence on the President and the course of the state apparat. (4)
In the early parliamentary election in August 2007, Nur Otan did not have any serious competitor. Yet there was an expectation that one of the political paties – United Social Democratic Party of Kazakhstan (OSDP) or Democratic Party of Kazakhstan Ak Zhol will get to Majilis. Preceding reform of the election system was motivated by an attempt of Nazarbayev to gain chairmanship in OSCE in 2009, while the same factor was supposed to motivate to allow one of the opposing parties to enter Majilis.
There was an expectation that the President will allow the Ak Zhol to enter the parliament, because it would play the role of a constructive pro-governmental opposition. In July 2007, the Ak Zhol and Adilet parties merged. Maksut Narikbayev, the former leader of Adilet party, became the vice-chairman of Ak Zhol. It was supposed that behind the merge of the two parties was an agreement with the President, who was to secure himself full loyalty of Ak Zhol through the vice-chairman by exchanging the election results of Ak Zhol exceeding 7 % essential to gain seats in the parliament. (5)
Similarly the OSDP merged with another political subject, when at the end of July 2007 Naghyz Ak Zhol (the Real Ak Zhol) merged with the OSDP. An agreement with the President was assumpted, which was supposed to include liquidation of the Naghyz Ak Zhol political party and moderation of criticism towards President`s regime in Majilis and in Socialist Interancionale, where the OSDP has observatory statute with a right to vote, in exchange for participation of the OSDP in the parliament. This explanation provided arguments for merge of the two parties, which has no transparent motivation from the point of view of liquidating a traditional opposing party Naghyz Ak Zhol and from the point of view of diverse ideological orientation of Naghyz Ak Zhol and OSDP on the axis right wing – left wing. (6)
The election outcome indicates that Nazarbayev eliminates sources of potential instability in Kazakhstan not only by means of weakening the group of his daughter Dariga and Rakhat Aliyev, but also by beans of concentrating the power on a parliamentary level. The new election system does not weaken President`s actual reach on the House of Representatives, consisting of MPs for Nur Otan headed by himself. The President nominanted the Prime Minister after consulting the parliamentary club Nur Otan and after the nomination was passed by absolute majority, he will appoint the new government. Concerning the fact President`s measures confirm his attempt to stabilize the power situation by means of strengthening Timur Kulibayev`s clan to the expense of the group of Dariga abd Rakhat Aliyev, it is natural that the new Prime Minister again will be a person under the influence of Timur Kulibayev`s clan – Karim Masimov. When taking into consideration the power processes in the country, maintaining continuity in the government of Kazakhstan appears to be fully comprehensible.
(1) for more detail, see http://www.regnum.ru/news/869347.html
(2) for more detail, see http://www.regnum.ru/news/869347.html
(3) for more detail, see http://www.regnum.ru/news/869347.html
(4) for more detail, see http://www.regnum.ru/news/869347.html