bottleneck analysis

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Repost: “Kazakhstan: Astana at a Turning Point”

Giarre, Italy

As my physical and academic journey towards the Caspian approaches, I want to start taking direct inspiration and insights from who knows first-hand. Here’s Nate Schenkkan from Eurasianet:

You see banners all across Kazakhstan, strung across government buildings, on airport runways, and on billboards lining the streets of provincial capitals. They all say the same thing: “The primary values of the state are stability and the unity of the people of Kazakhstan. – N. Nazarbayev.”

For much of the last decade, that slogan seemed to define Kazakhstan. But in the past year, Kazakhstan’s reputation for stability and unity has faced a formidable challenge. First, there was a series of terrorist attacks, beginning in Aktobe in May. Then, in late 2011, there occurred a bloody clash between police and striking workers in Zhanaozen.

It’s no coincidence the unrest took place in Kazakhstan’s oil-rich west. A vast, barren region blessed with enormous reserves of oil and gas, western provinces are experiencing wrenching demographic and economic changes. Although the government has been aware of social, economic and religious tensions in the west for several years, it has not fundamentally changed its policy approach. Instead, it is funding more and bigger development schemes, appointing new leaders answerable only to Astana to run the regions, and intensifying repression. Such tactics seem unlikely to solve existing problems. Instead, they stand a better chance of making them worse.

The background to Kazakhstan’s recent unrest can be found in the country’s demographic transformation. Since independence in 1991, European nationalities have emigrated en masse. The number of ethnic Russians in Kazakhstan dropped by over one-third between 1989 and 2009, with approximately 2.3 million leaving. The community of ethnic Germans shrunk by approximately 770,000, and roughly 545,000 Ukrainians also departed. By 1999, 17 percent of Kazakhstan’s 1989 population had picked up and left.

As Europeans were emigrating, the Kazakhstani government was encouraging ethnic Kazakhs from surrounding countries to return. About 860,000 “oralmans” — returnees in Kazakh — ended up coming home. That influx, bolstered by the natural increase of the population, enabled Kazakhstan’s population to rebound to its 1989 level by 2011.

Returning oralmans settled largely in the south and the west. Joining them are internal migrants and illegal immigrants from nearby Uzbekistan. Economic opportunity was the chief allure for those settling in the west. As tough as life can be on the steppe, wages are higher in Kazakhstan’s energy belt than in Central Asia’s depressed agricultural regions, whether in southern Kazakhstan or Uzbekistan.

The flood of migration – the population of Mangystau Province grew 67 percent from 1999 to 2009, and Atyrau’s grew 32 percent over the same period – created inflationary pressure. Housing, in particular, is now scarce and expensive because Soviet-era buildings are deteriorating and new construction has been inadequate to meet demand. Meanwhile, the national 5.4 percent unemployment rate does not include almost one-third of the working-age population that is considered “self-employed.”

Whether in Aktau, Atyrau, or Uralsk, these are the complaints one hears every day: high prices, scarce housing, and a lack of work. The 2008 economic crisis exacerbated the situation, freezing development and eliminating hundreds of low-skilled jobs, especially in construction, which, in turn, stalled housing development.

So while social issues in the west garner a lot of attention, the fundamental catalyst for tension is economic—tens of thousands of un- and underemployed people, many of them recent migrants, who see vast resource wealth being extracted, but live in crowded, dilapidated, yet expensive conditions. Government programs so far have failed to adequately address this lack of socio-economic balance. And it looks like public policy is moving in the wrong direction.

The government approach hinges on ambitious, centrally designed development schemes. A national program, Affordable Housing-2020, is supposed to spend $236 million annually from 2014 to 2020 to build up to 4,000 apartments per year. In his January State of the Nation speech, Nazarbayev announced a new national employment program, which aims to create 1.5 million “quality jobs” by 2020. Nazarbayev also emphasized a series of enormous capital investment projects in the west, including a 1,200-kilometer railway connecting Mangystau with the central hub of Zhezkagan, a $1.7-billion oil refinery in Atyrau, and additional investment in the $6.3-billion chemical and gas processing facility in the same city.

Money is not a problem for Kazakhstan. The government is already generating healthy returns from energy development, and at least two new major hydrocarbon projects will go online in the coming years: the enormous Kashagan oil field offshore from Atyrau, and the third phase of development of the Karachaganak gas condensate field, 150 kilometers from Uralsk.

When it comes to finding a new socio-economic balancing point in the west, the problem is in execution. As in Russia, the allocation of resources rests on the so-called “power vertical.” And responsibility for implementing programs lies with officials directly appointed by the center, whose constituents are in Astana, not the communities they govern.

Such conditions provide ample opportunity for corruption. Much of Zhanaozen’s leadership, including the last two mayors, has been arrested, indicating that a culture of graft had developed over the past decade in the city. Meanwhile in Aktau, a newly appointed governor is only now raising questions about the privatization of a central park and huge stretches of the city’s scenic waterfront, which local activists have complained about for years.

The power vertical, of course, needs a coercive component in order to be viable. Accordingly, security services harass and intimidate independent journalists, activists and average citizens who try to oppose, or even question government policy. Whether the subject is workers’ rights, oralmans, Islam, or the environment many people are now afraid to talk publicly.

In a system where many are intimidated into silence, government development schemes remain unaccountable to the people they are supposed to help. Until Astana can develop mechanisms that allow local communities to hold authorities accountable, there is little reason to expect the new wave of development will significantly alter the inequalities driving discontent in the west.

In his January speech, Nazarbayev highlighted the importance of improving local self-government and increasing citizen participation in order to avoid a repeat of the Zhanaozen events. He tasked the government with developing a “Concept on the Development of Local Self-Governance” by July 1. Genuine local self-governance, though, requires that non-state interests and other centers of political power be allowed to develop—in other words, it requires actual democracy.

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