Central Asia Digest | February 2022

HIGHLIGHTS

● Political Developments
● Economic Developments
● India-Central Asia Relations

Political Developments

The beginning of 2022 witnessed unimaginable events in Kazakhstan. That the largest and most prosperous among the central Asian nations would be suddenly wracked by violent protests and demonstrations of students and young people was farthest from the thoughts of the common people in the country and the world.

The trigger for the crisis that ripped the country apart starting 2nd January, 2022 was the uncapping of prices of liquefied petroleum gas (LPG) by the government over the new year. Most cars, particularly in western Kazakhstan, use LPG as their fuel because of its low price. The latest move however resulted in doubling the price of gas leading to outbreak of protests, first in the oil-rich Mangystau province in the west of the country, but very quickly spreading to the largest city and former capital of the country, Almaty and other cities and provinces.

The government headed by Prime Minister Askar Mamin resigned on 5th January.

Although the increase in prices of LNG was the immediate cause for the chaos that engulfed 11 of the 14 provinces of Kazakhstan in addition to cities of Almaty and capital Nur-Sultan, it was clear that the unrest was symptomatic of a much deeper and pervasive angst felt by the people for a long time. Much of this latent ire seemed to have been directed against the first President of the country Nursultan Nazarbayev who ruled the country with a firm hand for 30 years, from before the independence of the country in 1991 till 2019. He voluntarily handed over power in a sudden move on 19th March, 2019 to his trusted aide Kassym J Tokayev who is the incumbent President. Nazarbayev kept considerable control and authority in his hands by retaining the Chairmanship of the powerful National Security Council and Presidentship of the ruling Nur Otan Party. Tokayev deftly used the protests and instability to unseat Nazarbayev and wrest control of the influential National Security Council from him.

President Tokayev claimed that the unrest was the work of foreign-trained "terrorist gangs". Russia also supported the contention of involvement of foreign forces. No evidence of this was visible or made available.

In the face of mounting domestic unrest and apparent uncertainty over the loyalty of law enforcement and military forces, Tokayev turned to the Collective Security Treaty Organization (CSTO), a Russia-dominated security alliance for help. Within hours, CSTO announced its readiness to accept the plea for assistance. By early 6th January, planeloads of Russian elite airborne units landed in Kazakhstan. Around 2,500 CSTO ‘’peacekeepers’’ from all member states of the Organization (Russia, Armenia, Belarus, Kyrgyzstan, Tajikistan in addition to Kazakhstan), but principally from Russia were deployed.

This marked the first time the CSTO was engaged in an active operation.To legitimize his plea for outside military help, President Tokayev went on television to say the unrest was being perpetrated by “international terrorist groups.” This framing was important because the CSTO is designed to protect member states from external aggression. It was unclear, however, which outside groups might be allegedly fomenting trouble in Kazakhstan. Some analysts feel that Tokayev’s allegation of foreign involvement was only a pretext to legitimize the CSTO’s entry into a domestic conflict. For Tokayev, the rapid dispatch of troops buttressed his grip on power at a time when it was most shaky.

The move only increased speculation that the initial protests could have been used by groups within the country’s political elite to fight their own battles. There were reports in recent months of increasing tension between figures close to Nazarbayev and Tokayev.

Kazakhstan’s president called the protesters “terrorists”. Putin labelled them “external forces” bent on “revolution”.

One of the more surprising episodes of the week was Tokayev’s transformation from a placid placeholder to a furious autocrat, promising to crush the revolt brutally. Tokayev put Kazakhstan’s already beleaguered civil society on alert when he said that free media played a role in fanning the unrest. Tokayev nevertheless faced questions from his own people about whether his eagerness to welcome foreign troops did not dilute Kazakhstan’s sovereignty.

Presence of foreign troops on Kazak soil could make Tokayev more unpopular amongst the masses. The growing unrest could make foreign investors wary of investing in Kazakhstan, which has been the basis for the nation’s steady economic growth. This move could push Kazakhstan further into the embrace of the Chinese, notwithstanding the anti-China sentiment amongst the people.

Some commentators asserted that the story was not about the price of gas. ‘’This story is about power. It's about inequality, and it's about a lack of political choice," they opined. Discontent, even if exploited by political elites, was very real. It however should be recognized that Kazakhstan is comparatively less repressive than most in a region dominated by brutal strongmen.

Addressing the CSTO summit on 10th January, Tokayev said that the organizers used the discontent of the population due to the rise in gas prices as a pretext. He claimed that the terrorists had planned to attack the country’s capital Nur-Sultan. If Almaty fell to the militants first Southern Kazakhstan and then whole country would have been under their control. Preparations for the events had been ongoing for a long time, Tokayev said, adding, “The attacks simultaneously covered 11 regions, but the main impact was on Almaty. The main goal was obvious: the undermining of the constitutional order, the destruction of government institutions and the seizure of power. It was an attempted coup d’état," the president added. Since the uprising began, police detained almost 12,000 people.

Tokayev termed as idiotic calls being made abroad to hold negotiations with the protesters for a peaceful resolution. He said that there cannot be any negotiations with criminals. He argued that Kazakhstan was dealing with armed and well-prepared bandits, both local and foreign, who should be destroyed.

Analysts fear Tokayev will continue to choose repression over reform, especially after calling protesters “terrorists,” dismissing demonstrations as being orchestrated by foreign interests. But if he chose reform, he could possibly restore some of his popularity and legitimacy, which would make him more willing to hold elections in the future and allow at least some semblance of political activity.

In his speech to the Parliament, Tokayev announced steps to assuage anger at rampant economic inequality that was at least part of the cause for the protests. Rampant inequality means that only 3.5% of adult population has an annual income above US$10,000. The country’s minimum monthly wage is about US$100. 80% of population is in “deep debt,” and cannot afford proper housing. Tokayev announced a five-year salary freeze for top public officials, and promised to destroy corrupt schemes that are widely believed to have benefited the country’s oligarchs.

Tokayev said these wealthy people, as well as profitable companies, would have to contribute to a new national fund, named ‘’For the People of Kazakhstan,’’ which he planned to set up. Salaries of lower level public sector employees will continue to grow. A fifth package of political reforms will also be unveiled in September.

Addressing a special session of the Mazhilis of Kazakh Parliament, Tokayev said "perpetrators of violence took advantage of the genuine discontent of the population with the increase in price for liquefied gas" and the "protests were hijacked by bandits, looters, and armed terrorists, including foreign militants" with the aim of "undermining of the constitutional order, and, ultimately, the seizure of power in Kazakhstan".

Nazarbayev, 81, remained absent from public view during the protests. The extreme wealth accumulated by many of his family members and allies has contributed to the mood of protest in the country.

Nazarbayev’s nephew Samat Abish, deputy head of the main security service and several other close associates were purged. According to some experts, the riots in Almaty were an attempt by members of Nazarbayev’s political clan to reassert their position. The crisis has thus exposed the infighting at the very top of the government.

One result of the crisis is already evident. Tokayev has strengthened his position, by taking over from Nazarbayev as head of the powerful security council and removing and arresting his protégé Karim Masimov. President Tokayev, who was seen as a handpicked successor to Nazarbayev that would protect the ruling family’s economic and political interests, appears to be cutting ties with Nazarbayev. As the crisis unfolded, the Kazakh Government’s rhetoric shifted from “restraining protesters” to conducting an “anti-terrorist operation” against a “foreign threat”. This probably occurred after phone calls between Nur-Sultan and Moscow, and was likely connected to the launch of the CSTO rescue operation—the CSTO is not designed to be used to suppress internal dissent, but “foreign threats” that require “collective responses”.

Kazakh Special Representative for International Cooperation Erzhan Kazykhan acknowledged that the root of the trouble lay in what he termed “peaceful demonstrations” triggered by a rise in car fuel prices. But those protests were later hijacked by “local and foreign terrorist groups,” Kazykhan said. “Their criminal activities caused riots, looting, rape and mass violence,” he said. Kazykhan strongly criticized international media and accused it of creating the false impression that only peaceful protesters had come out onto the streets. 

Kazakh State television took the unusual step of underlining that Tokayev was “the highest official of the state, the chairman of the Security Council. In this capacity he takes decisions independently.”

New Prime Minister, Alikhan Smailov, together with seven new ministers, including new Energy Minister Bolat Akchulatov, were appointed by Tokayev on 11th January. Nine ministers from former PM Askar Mamin’s government kept their seats.

President Tokayev said on 11th January that soldiers deployed to Kazakhstan by the CSTO had completed their mission and would leave the country in 10 days.

Speaking to European Council President Charles Michel on 10th January, Tokayev said that he had no doubt that it was a terror attack. Citing preliminary estimates, he added that economic damage could total US$2-3 billion.

Tokayev duly thanked Russia and the CSTO allies, as well as China and the Shanghai Cooperation Organisation, Turkey and Uzbekistan for their support. In a virtual meeting of the CSTO on 10th January, Putin accused both internal (a probable hint to Nazarbayev) and external actors for provoking an “act of aggression” against Kazakhstan, adding that the CSTO would not allow “coloured revolutions” on its territory (which Putin referred to as “our home”).

Russian President Vladimir Putin vowed not to allow “colour revolutions” (a reference to regime changes) to take place. Kremlin also criticized the role of social media in fuelling the protests. This will surely increase Russia’s influence in Kazakhstan, with which it shares a 7,644km border. For Moscow, what mattered was to show that stability and Russian influence in the region is being maintained through the CSTO. This is also significant for Beijing – the Kremlin is sending a clear signal that it does not want to lose ground to Chinese interests in Central Asia.

Chinese President Xi Jinping sent a verbal message to Kazakh President over the riots in Kazakhstan. Xi said that China strongly rejects any attempt by external forces to provoke unrest and instigate a "color revolution" in Kazakhstan, as well as any attempt to harm the friendship between China and Kazakhstan and disrupt the two countries' cooperation. Chinese President Xi Jinping expressed his support for Kazakhstan, while accusing and condemning foreign forces for undermining the peace and stability of the country. Beijing is most likely concerned about the safety of Chinese investments in the country and about violence spilling over into Xinjiang. Xi praised Tokayev, saying that the Kazakh president had taken decisive and effective actions and demonstrated high responsibility to maintain calm in the country.China also said that it stands against any attempt by external forces to bring unrest, instigate “colour revolutions” or harm the friendship and cooperation between China and Kazakhstan.

Chinese State Councilor and Foreign Minister Wang Yi pledged China's firm support to Kazakhstan in ending violence in the country and safeguarding security. Wang also stressed China's willingness to jointly oppose interference and infiltration by any external forces. He expressed confidence that under the strong leadership of President Tokayev, peace and stability would be fully restored and Kazakhstan would emerge even more resilient and stronger from this dark hour.

Russian Foreign Minister Sergei Lavrov and his Chinese counterpart Wang Yi discussed the situation in Kazakhstan and voiced their “firm support” for efforts by the Kazakh authorities to restore order.

Turkish president spoke to Tokayev to convey solidarity. Erdogan said he was closely watching developments and hoped the unrest would subside so a new government could be formed. Erdogan also offered "all forms of technical information and experience," and discussed the crisis with the leaders of Azerbaijan, Kyrgyzstan, and Uzbekistan.

Afghanistan Foreign Ministry spokesperson said that it is "closely monitoring the situation in Kazakhstan and, as a close neighbor and economic partner state, is concerned about the recent unrest." He also added that his ministry "urges both the government and protestors to resolve issues through talks and peaceful means, and to return calm and stability to the country."

The United Nations criticized Kazakhstan after government soldiers were seen wearing UN peacekeepers' blue helmets during the violent unrest. The UN said that it had received assurance that this issue had been addressed.

The protest was supported by Democratic Choice of Kazakhstan Party, headed by former Energy Minister Mukhtar Ablyazov, now in exile in France. Ablyazov called upon the citizens to protest the presence of Russian troops in Kazakhstan, claiming that it will embolden President Putin to interfere and control Kazakhstan.

Tajik President Emomali Rahmon during an on-line meeting of the Security Council of the CSTO said that Tajikistan will establish a security belt along its border with Afghanistan to deter insurgents' threats emanating from Afghan soil. According to Tajik estimates, over 40 camps and centres for training terrorists with over 6,000 militants were located in northeastern Afghanistan. These pose security threats to CSTO countries. While refuting charges of President Rahmon, Taliban said no country will be threatened from Kabul.

Taliban's Defence Minister Mullah Yaqoob warned Tajikistan and Uzbekistan to immediately return Afghan planes and choppers, which were flown away by the defence personnel of the ousted Ghani government to the two neighbouring states. He said that they may be relatively weaker than the neighbouring countries but they are not cowardly.

Oil production at Kazakhstan’s top field Tengiz was reduced, its operator Chevron said, as some contractors disrupted train lines in support of protests.

Economic Developments

Kazakhstan is the top global producer of uranium and the unrest prompted an 8% jump in its price. It is the world's ninth biggest oil exporter producing 85.7 million tonnes in 2021. Kazakhstan is a member of the OPEC+ and the biggest oil producer in Central Asia, extracting about 1.6 million barrels of oil per day. The country has the 12th-highest proven oil reserves in the world with 30 billion barrels (3% of global reserves) of crude oil reserves. Most of the fossil fuel it produces is shipped abroad, including to the European Union and China. The country is also the 10th largest producer of coal, producing 108 million tons in 2018. It produces 40% of global uranium supplies. Similarly, oil prices also increased about 2% on January 6, before settling slightly lower the next day. The hydrocarbons sector has attracted about 60% of foreign direct investment (FDI) in Kazakhstan since 1991 and accounts for more than half of the country's exports revenue. Global oil majors such as ExxonMobil, Chevron, Italy's Eni and France's TotalEnergies have invested billions of dollars in the country over the years, helping foster its oil and gas growth. In 2018, the country was the world's ninth-largest exporter of coal and 12th of natural gas, according to the International Energy Agency. It has 12 per cent of uranium reserves (India gets 80 per cent of its uranium from Kazakhstan).

Kazakhstan is also the world's second largest miner of bitcoin after the United States. Bitcoin's "hashrate" - the measure of computing power of machines plugged into its network - dropped by over 10% after Kaz internet was shut off.

Over the past two decades, China has built up its relationship with Kazakhstan, eroding the leading role that Russia has historically played in the region. China is Kazakhstan’s second-largest trading partner with bilateral trade reaching US$22.94 billion in November 2021. Beijing has invested US$17 billion in Kazakhstan, including an 8.3% stake in the Kashagan oilfield. By next year, 56 China-backed projects, valued at US$24.5 billion are due to be completed. China obtains about 20% of its natural gas from Kazakhstan. During the unrest, one of the CCP’s greatest worries was that the pipelines would be attacked. But state-run media Global Times reassured the Chinese that the pipelines were safe, because they are far away from the cities where the riots took place.

Kazakhstan runs a huge trade deficit with China, which is growing. Moreover, China’s “zero-COVID” policy kept the border closed, adversely impacting Kazakhstan’s exports. In the first 10 months of 2021, food exports to China decreased by 78%. As wages in China have risen, Kazakhstan had hoped that manufacturing jobs would come back. But so far, this has not happened in significant numbers.

In a significant move, Tokayev announced plans to bring an end to a widely criticised private recycling monopoly linked to Nazarbayev’s youngest daughter, Aliya Nazarbayeva, 41. He said that this should be done by a state organisation, like in other countries. Nazarbayev’s middle daughter Dinara and her husband Timur Kulibayev control Halyk, the largest commercial bank, and are among the richest people in the country. Kulibayev is also a key player in the flagship oil sector. Oldest daughter Dariga Nazarbayeva’s political career, mainly in the legislature has been marked by a series of controversial statements and perceptions of an abrasive style. Her reported business interests are also rumoured to be extensive.

Uzbekistan reduced electricity supply to Afghanistan by 60% ostensibly on account of technical problem at the Marjan power station in Uzbekistan. This triggered widespread power cuts in the country. For its electricity needs, Afghanistan relies heavily on Central Asia.

Afghanistan stated that Turkmenistan plans to start work on the TAPI project in September this year. Turkmenistan has not clarified how and when the requested financing for TAPI will be arranged and disbursed, as well as its size, nor confirmed the timeline for resuming work on the project. Agreements to lay the gas pipeline and determine its technical parameters have yet to be finalised for the Pakistani segment. Turkmenistan has completed its short 200-kilometre stretch of the route that runs from the Galkynysh group of fields to its border with Afghanistan. However, work in Afghanistan on preparing the route for the planned pipeline halted in mid-2018 after unidentified gunmen killed five mine clearance workers and kidnapped a sixth worker in the Kandahar province of the country. Afghanistan has promised to uphold the validity of agreements that the country’s previous government inked with Turkmenistan and contractors for the country’s 820-kilometre segment of the TAPI pipeline before power in the country fell into the Taliban's hands last year.

India-Central Asia Relations

In response to a question on the unrest in Kazakhstan, the ministry of external affairs (MEA) extended its "deepest condolences to families of innocent victims who have lost lives in the violence." Highlighting India as a "close and friendly partner of Kazakhstan," it said that New Delhi looked "forward to an early stabilization of the situation". On the situation of the Indian community, MEA said, "coordination with authorities has helped ensure the safety and security of Indian nationals. They are advised to follow local security instructions and get in touch with the Embassy of India for any assistance". Size of Indian community in Kazakhstan is about 7,800 including 5,300 students and some 1,000 construction workers, while the rest are professionals.

India approved signing of a Memorandum of Understanding (MoU) between India and Turkmenistan on cooperation in disaster management. The MoU will put in place a system whereby both countries will be benefitted from the disaster management mechanisms of each other in various areas — monitoring and forecasting emergencies, assessment of their consequences and interaction between appropriate organisations involved in disaster management through competent authorities. The two countries will jointly plan, develop and implement research projects, exchange scientific and technical publications, and publish results of research works in disaster management, the statement noted.

Russia and India exchanged a white paper on ways to step up their defence cooperation in Central Asia. The document includes recommendations on how both countries can jointly manufacture defence equipment in the former Soviet states of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, and conduct bilateral counterterrorism and military drills.

 

The previous issues of Central Asia Digest are available here: LINK

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(The views expressed are personal)
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About the Author

Ambassador Ashok Sajjanhar

Former Ambassador of India to Kazakhstan, Sweden and Latvia; President, Institute of Global Studies and Distinguished Fellow, Ananta Centre

Ambassador Ashok Sajjanhar belongs to the Indian Foreign Service and has acquitted his responsibilities in the diplomatic service for 34 years. He was Ambassador of India to Kazakhstan, Sweden and Latvia and has worked in senior diplomatic positions in Indian Embassies/Missions in Washington DC, Brussels, Moscow, Geneva, Tehran, Dhaka and Bangkok and also at Headquarters in India. He negotiated for India in the Uruguay Round of Multilateral Trade Negotiations and in negotiations for India-EU, India-ASEAN and India-Thailand Free Trade Agreements.

He contributed significantly to strengthening strategic ties and promoting cultural cooperation between India and USA, EU, Russia and other countries.Ambassador Sajjanhar worked as head of National Foundation for Communal Harmony to promote amity and understanding between different religions, faiths and beliefs. Ambassador Sajjanhar has been decorated by Governments of Kazakhstan and Latvia with their National Awards and by Universal Peace Federation with Title of ''Ambassador of Peace.'' Currently Ambassador Sajjanhar is President of Institute of Global Studies, New Delhi. He writes, travels and speaks extensively on issues relating to international relations, foreign policy and themes of contemporary relevance and significance. He appears widely on TV panel discussions. Ambassador Sajjanhar is interested in reading, music and travelling. His wife Madhu is an economist and an educationist. They have a son and a daughter both of who are accomplished singers. Their son passed out of Yale University and their daughter is pursuing her PhD at University of Minnesota.