As certain as his re-election may be, Kazakhstan’s leader faces a pressing array of domestic and international challenges.
This month, Kazakh President Kassym-Jomart Tokayev is almost certain to be re-elected for a second term in office. The snap presidential election on November 20 will see him stand against a parade of largely unknown candidates – none of them a source of genuine opposition. When elected, he will be able to serve a seven-year term, up to 2029.
The election occurs after a momentous year in Kazakhstan. In early January, Tokayev’s presidency faced an existential threat from a dangerous combination of mass protests and an alleged attempted coup by family members and associates of his predecessor, Nursultan Nazarbayev, Kazakhstan’s first president.
Tokayev was able to overcome both threats, not least thanks to a strong show of support from Russian President Vladimir Putin, who sent a contingent of troops to Almaty to strengthen the resolve of the Kazakh security forces under the aegis of the Collective Security Treaty Organization (CSTO).
Since then, Tokayev has sought to consolidate his position. He has dismissed Nazarbayev loyalists, removed protections for the Nazarbayev family from the constitution, and outlined a program of political and economic reform. All that remains is for him to be re-elected – his first election without the overbearing presence of Nazarbayev.
For Tokayev, this is the optimal time to go to the polls. Having removed the Nazarbayev family from prominence and having set out a program of popular reforms, he is perhaps at the apex of his popularity. As noted, no popular opposition exists – and elites that may oppose him remain scattered and cowed by the momentous change in Kazakhstan’s power balance that January wrought.
The decision to go to the polls early also reflects the tremendous challenges that Kazakhstan faces, challenges that could be highly destabilizing for the Tokayev administration. Internally, the population is experiencing a grinding cost of living crisis that has been exacerbated by the war in Ukraine. The government remains on high alert for further unrest as living standards continue to fall.
New Government, Same Political Economy
Upon re-election, it is very likely that Tokayev will appoint a new government – including a new prime minister – consisting of younger, reform-minded technocrats. Allies that have remained close to the president within the presidential administration are also likely to take front line positions.
Free of the constraints of the Nazarbayev family, Tokayev will also be able to pursue a political program of his own making. While he has presented himself as a reformer, the model that he appears to have chosen for his own presidency is that of authoritarian modernization, similar to the regimes of Singapore or China prior to the rise of President Xi Jinping. It is perhaps not a coincidence that Tokayev’s two postings as a Soviet diplomat were in Lee Kuan Yew’s Singapore and Deng Xiaoping’s China.
For this reason, Tokayev’s political reforms have not – and are not likely to – foster the rise of political alternatives to the president and his Amanat party (the rebranded Nur-Otan). Kazakhstan’s law enforcement agencies and security services also remain too hostile for alternative political movements to emerge.
Instead, Tokayev’s reforms have been focused on improving the performance of the economy and increasing the efficiency of the public administration. Talk of greater accountability is therefore designed to make the sclerotic civil service more responsive to the demands of the population – although without allowing the direct election of key positions, such as regional governors. There will also be a heavy focus on professionalization of the civil service, digitalization, and the introduction of international standards, particularly for the governance of state-owned enterprises.
On economic matters, Tokayev has presented a sensible diagnosis of the challenges facing Kazakhstan. These include the overbearing presence of the state in the economy, price regulation, monopolies, low productivity, a lack of capital market development, and corruption – all of which have contributed to the creation of a high inflation, low productivity, and low wage economy.
However, Tokayev will face some difficult choices on economic reform. Delivering market-oriented reforms will require inflicting economic pain on the population in the short term in exchange for a promise of future growth.
Every reform has its costs. Price liberalization will encourage more investment but increase the cost of utilities and staple goods. Privatization will make the economy more dynamic but result in layoffs. Curtailing fiscal stimulus will lower inflation but reduce much needed support for the poorest households.
The poor socioeconomic conditions also mean that the state is unlikely to provide concessions to major investors, including those in capital-intensive industries such as mining and oil and gas. Already, the government has increased the Mineral Extraction Tax, a levy on mining activity. It also continues to squeeze additional revenue from investors through the tax system and ad hoc inspections.
A more pernicious barrier to economic reform is the role of corruption and rent-seeking in Kazakhstan’s political economy. While the president has pledged to “de-oligarchize” the Kazakh economy, this will require bold action to confront some very powerful economic interests in the economy. So far, there has been little evidence of such action.
De-oligarchization will also require the president to forgo the temptation to reward his own allies with the revenue generating opportunities enjoyed by the allies of his predecessor. There are growing signs, however, that Tokayev’s allies are gaining control of assets throughout the economy.
Given these challenges, there is a strong chance that Tokayev will try to introduce elements of market reform while maintaining the overall architecture of the state-led development model of the Nazarbayev era.
This would not be the first time such an experiment has been tried. However, this experiment has always ended with the state taking back control over the political system economy at times of crisis. This was most recently seen in the aftermath of the 2008-09 Global Financial Crisis, when Nazarbayev crowned himself as “Elbasy” (leader of the nation) and cracked down on all remaining forms of political dissent.
Geopolitical Concerns Will Dominate
An ongoing concern for the president is navigating Kazakhstan’s unenviable geopolitical position. Since the outbreak of the war in Ukraine, Kazakhstan has navigated a very narrow tightrope between Russia and the West. Astana continues to describe Moscow as a strategic partner but has not recognized its territorial claims in Ukraine and has respected the Western sanctions regime.
While this position is consistent with Kazakhstan’s stance on Ukraine since 2014, the context has changed dramatically. The Kremlin, viewing the current war as an existential battle with the West, has viewed Kazakhstan’s neutrality as a betrayal and made veiled threats against Astana – most notably via a July court order, subsequently rescinded, to shut down the Caspian Pipeline Consortium, the primary route for Kazakhstan’s oil exports.
In response to the war, Tokayev has also revived Kazakhstan’s multi-vector foreign policy by deepening ties with Western nations, Turkey, the Gulf, and China. In September, China’s Xi visited Astana – his first foreign visit since the outbreak of COVID-19 – to warn Russia to not destabilize Kazakhstan.
However, China’s opposition to a potential Russian intervention in Kazakhstan does not mean that China and Russia do not share interests in the region. Rather, they are united in their desire to keep Western powers – particularly the United States – out of Central Asia.
Beijing, in particular, is likely to view Tokayev’s commitments to deliver political and economic reform as heavily contrary to its own ideology. It could also interpret Western political support for Tokayev’s reforms as a form of political interference in the region.
Tokayev is perhaps Kazakhstan’s most experienced politician. However, having spent most of his career in the shadow of Nazarbayev, it remains to be seen what kind of leader he will prove to be and how he will choose to respond to all these challenges.
In the years spent as Nazarbayev’s chosen successor, Tokayev proved cautious and demonstrated a great ability to survive against the odds. For this reason, the combination of geopolitical and domestic pressures are likely to prevent Tokayev from delivering on significant political or economic reform. Tokayev’s second term will likely only see incremental changes to Kazakhstan’s political economy.
Source : The Diplomat
