Akezhan Kazhegeldin was Prime Minister of the Republic of Kazakhstan from 1994 to 1997. After his dismissal from the government in September 1997, Mr. Kazhegeldin has become the most significant challenger and political opponent to current President Nursultan Nazarbayev. In November 1998, Mr. Kazhegeldin formed the opposition Republican People's Party of Kazakhstan (RPPK). He was barred from running against President Nazarbayev in presidential elections on account of an administrative conviction against him by the Nazarbayev regime for alleged corruption and illegal campaign meetings. Mr. Kazhegeldin is now one of the leading critics of the current leadership in Kazakhstan.
Kazhegeldin began his remarks commenting that the United States could not afford to disengage from Central Asia, as September 11th so clearly demonstrated. Further, unlike other authoritarian regimes closer to Europe, Belarus for example, Kazakhstan is in particular need of U.S. attention. U.S. engagement must include working not only with leaders and particular regimes but also with ordinary citizens. He suggested that the United States increase funding in Kazakhstan for the Voice of America and Radio Liberty broadcasting.
Kazakhstan's current political climate is deeply flawed. Leaders of nations should be able to step down freely and leave office, but in President Nazarbayev's case, he would be exposing himself and his family to retaliation by the people over whom he has ruled. Kazhegeldin voiced skepticism regarding President Nazarbayev's remarks that the national security organs would never have the power in society that the Communist-era KGB had. Rather, Nazarbayev is growing increasingly dependent on internal security forces.
Kazhegeldin noted that it would have been easier for him to remain a member of President Nazarbayev's coterie, but he had instead chosen opposition and freedom. Leaving the inner circles of the ruling elites is always a more difficult task than entering them, but Kazhegeldin does not believe his political career should center around the protection and support of a single ruler. He stated that he believes a vibrant parliamentary democracy was the only system that could provide Kazakhstan's citizens with both economic and political freedom.
The Central Asia region is a hotbed of potential political and security problems, Kazhegeldin reminded the audience. While at the moment, Central Asia's rulers lack the resources to fight wars against one another, the control of borders, territory, water, and other resources will provide plenty of fodder for disputes. One example of this type of danger is Turkmenistan which prior to September 11 was threatened by a Taliban invasion or infiltration. Central Asian leaders have not publicly acknowledged the extent of the threats they face. Kazhegeldin warned that after the current crisis in Afghanistan ends, the problems facing Central Asian countries will reemerge.
Kazhegeldin also discussed the Kazakh economy, speaking on privatization as well as Kazakhstan's oil development. He spoke of several officially tendered offerings of large oil and gas companies in Kazakhstan and the way in which fraud and corruption have plagued the process of privatization. He singled out the New York based Mercator consulting company as having undue influence on Kazakh's government officials. Furthermore, all restructuring, pension reforms, and progress on privatization of blue chip companies has been suspended.
Discussing the relationship between oil and the Kazakh economy, Kazhegeldin pointed out that as oil prices have risen, GDP growth has fallen. He said this shows that money is leaving the country in the form of capital flight. These statistics also show how the lack of transparency in Kazakhstan has negatively affected its growth potential and the economy at large. Mentioning the recent government departures of the so-called 'young technocrats', Kazhegeldin believes problems will get worse, and the departures show that the Presidential family continues to crave more power.
The discussion then turned to specific oil and pipeline projects. He pointed out Ukraine, Belarus, and the Baltic states as being key transit points that Kazakh oil could move through. He also stressed that in the next two years he truly hoped Russian President Putin will implement more liberal economic reform including the demonopilization of companies such as Transneft.
Mr. Kazhegeldin also mentioned the 'Northern Gate' oil pipeline project (from Yaroslavl to Murmansk using north Russian oil) as second only to the Sakhalin project in size. He criticized Nazarbayev's suggestion of an oil pipeline through Iran, arguing that what may seem cheap now will likely become expensive. Regardless, geopolitical costs are also associated with running oil through Iran. Kazhegeldin supports the Baku-Ceyhan oil pipeline project but is against an underground pipeline from Aktau to Baku. Finally, even though he believes Kazakhstan to be 10 to 12 years away from becoming a major oil producer, he supports the further development of the CPC pipeline project which runs Caspian oil to Novorossiisk.
In conclusion, Mr. Kazhegeldin stressed Kazakhstan's dependence on the West as well as Russia. He also mentioned that Western government and private oil companies could assist Kazakhstan's development. He suggested that the U.S. could pressure Nazarbayev to honor his own pledges on democracy and civil liberties, that oil companies could avoid shady dealings and build up the social welfare infrastructure (schools or hospitals). Most helpful would be money donated to the purpose of establishing a printing press for independent and opposition forces in Kazakhstan, even though he believed such a step is a political impossibility.
In the question and answer period, Kazhegeldin further stressed the role of Russia as pivotal in Central Asia. He remarked that not only does Russia have geopolitical interests in the Central Asian region but also a sense of obligation in determining the outcome of the region's development. While he did not believe that Putin has clarified or expressed an explicit policy towards the region, Kazhegeldin hoped that Putin's age and statements mean that he is committed to economic reform.
In response to a query about Kazakh-Chinese relations, Kazhegeldin spoke of his belief that economic freedom was impossible without political liberty. He finds the development of China frightening, and Kazhegeldin sees China as a competitor and rival to every country of the CIS. China's power means that Kazakhstan cannot afford neutrality and must ally itself with the West.
Asked to elaborate on pension reform by, Kazhegeldin explained that for pension reform to work, pension fund investors must participate in oil and the natural resource sectors of the Kazakh economy. However current investment climate conditions make this unattractive. The Mangistau Oil Company's take-over of the People's Savings Bank for a mere $40 million is one example of the country's rampant corruption. When Kazhegeldin was Prime Minister, his government spent over $200 million keeping the bank afloat. Furthermore, the $40 million spent on the sale was wired from the Cook Islands.
Kazhegeldin made his final remark in response to a question about whether Central Asia's presidents had been given a carte blanche in terms of domestic policy for their support of the U.S. operation in Afghanistan. Kazhegeldin said he takes the U.S. at its word and believes that the U.S. will adhere to its principles of democracy and freedom. The U.S Congress he believes would not allow an administration to ignore the internal politics of any country with whom it deals. In a final note, Kazhegeldin cautioned against comparing a country like Kazakhstan to Turkmenistan and proclaiming the former better than the latter. Mr. Kazhegeldin does not believe that President Nazarbayev is better than Turkmen President Niyazov; rather what makes countries like Kazakhstan and Kyrgyzstan stand out is the presence of a vibrant opposition, and this opposition is in need of help from the United States and its allies.
Summary by Marc Fellman, Program Associate with the Russia & Eurasia Program.