Wednesday, 13 April 2011

Caspian: Nazarbayev pledges stability and growth

President Nursultan Nazarbayev, re-inaugurated as leader of Kazakhstan on 8th April after a dubious election landslide, has pledged to accelerate economic growth and political reform in his fourth term.

The Kazakh leader, 70, who has ruled the Central Asian state since the end of the Soviet Union, was re-elected with an alleged 95.5 per cent of the vote, with 89.1 per cent turnout, prompting criticisms of manipulation by international electoral monitors.

Serious concerns over Kazakhstan's record on human rights and democracy aside, Nazarbayev has presided over remarkable economic growth, fuelled by enormous energy reserves and solid fiscal management. Maintaining prosperity and cementing Kazakhstan's status as a middle-income country will be one of his key priorities, along with ensuring political stability alongside cosmetic democratic reforms.

The message of stability was emphasised by the reappointment of Karim Massimov as Prime Minister. Massimov has served in the post since 2007 and is widely seen as a safe pair of hands with a pro-business attitude. A fluent Mandarin speaker who was educated in China, his position has underlined Kazakhstan's growing interest in commercial ties with Beijing. Another indicator of continuity is the new Economy Minister, Kairat Kelimbetov, who served in the same post between 2002 and 2006 and was previously the head of the country's sovereign wealth fund.

Taking over from Kelimbetov as head of the $80 billion fund is Timur Kulibayev, the president's son-in-law. The move is a clear demonstration that power will not be spread widely across the country's elite, although this tight-knit control may be reassuring to investors who fear the impact of opaque power struggles on their holdings.

A surprising development is the suggestion that the Ata-Meken Union, a business association led by Kulibayev, could be turned into an opposition party, as an alternative to Nazarbayev's Nur Otan. According to Nazarbayev's political adviser the party would be a “liberal” one and would “support lower taxes.”

This engineered “opposition” party would not cause a radical shift in Kazakh politics. Some analysts have speculated that it would be an eventual stepping-stone to the presidency for Kulibayev, allowing for a formal transfer of power between two parties and thereby illustrating Kazakh democracy at work. In any case, the commercial origins of the new party will reinforce the message to international investors that Kazakhstan will remain open for business.

Sources: Eurasianet, Telegraph, Financial Times, BBC

For more news and expert analysis about the Caspian region, please see Caspian Focus.

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