Starving the Strongmen

by Nathan Hamm on 11/19/2004

Kazakh President Nursultan Nazarbayev, threatened by the economic power of his opponents, aims to weaken their power by opening the economy.

Nazarbayev launched a campaign in early November designed to greatly curtail the influence of Kazakhstan’s oligarchs, or entrepreneurs who run many of the country’s largest conglomerates. Some of those being targeted are key financial backers of opposition political parties, including Ak Zhol and Democratic Choice of Kazakhstan (DCK).

In a speech delivered at the newly elected parliament’s opening session on November 3, Nazarbayev depicted the oligarchs as intent on monopolizing the economy and squashing all competitors. “About 10 mega-holdings . . . control more than 80 percent of the Kazakhstani economy,” the president said. “They, as a rule, are against the appearance of competitors. That is why they are obstacles for the development of small and mid-size business.” Among the conglomerates identified as stifling development are some of the nation’s leading banks, the state oil and gas company KazMunaiGaz, and the Eurasian Industrial Association. Another conglomerate labeled as a mega-holding was the Khabar media empire, which is run by the president’s daughter, Dariga Nazarbayeva.

Criticisms leveled by the president against conglomerates ranged from tax evasion to the mishandling of investor relations. As a result, Nazarbayev contended, Kazakhstan’s stock market has failed to meet its potential. To correct the situation, the president has suggested that conglomerates shed some of their non-core holdings. He additionally proposed that an undefined number of state holdings be created to include “strategically important and big state companies.” Other firms may be put up for auction.

Of course, critics say that Nazarbayev is being disingenuous.


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Nathan is the founder and Principal Analyst for Registan, which he launched in 2003. He was a Peace Corps Volunteer in Uzbekistan 2000-2001 and received his MA in Central Asian Studies from the University of Washington in 2007. Since 2007, he has worked full-time as an analyst, consulting with private and government clients on Central Asian affairs, specializing in how socio-cultural and political factors shape risks and opportunities and how organizations can adjust their strategic and operational plans to account for these variables. More information on Registan's services can be found here, and Nathan can be contacted via Twitter or email.

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