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Kyrgyz Authorities Confiscate $35 Million of Oligarch Matraimov’s Assets – Plan to Nationalize Another $50 million of Property

Kyrgyzstan's State Committee of National Security (GKNB) has stated that following an investigation aimed at returning embezzled property into state ownership as part of a criminal case against former deputy chairman of the Customs Service, Raimbek Matraimov, the government has seized real estate worth $34,810,000. At the end of January 2024, the authorities placed the infamous oligarch Matraimov, who has bounced in and out of custody since 2020, on a wanted list. Matraimov, who is popularly known as "Raimbek-million" for his multi-million dollar fortune has already pleaded guilty to embezzlement, and is now charged under the article "illegal deprivation of liberty" on suspicion of abducting and illegally incarcerating unnamed individuals. The former deputy head of the Customs Service previously had extensive connections in the Kyrgyz parliament and government, and went unpunished for years. In 2021, the U.S. authorities banned Matraimov and his family members from entering the country. Head of the GKNB, Kamchibek Tashiev, accused Matraimov of creating a mafia clan. "Raimbek Matraimov has been put on a wanted list. All of his property... throughout Kyrgyzstan will go into the ownership of the state. We will not leave even a [plot] of land. He will no longer be Raimbek-million as he used to be. There will be no such thing as a clan. To destroy this clan, in the Osh region [alone] we fired about fifty people from state bodies," Tashiev stated. In 2019, the State Service for Combating Economic Crimes launched an investigation into corruption in the Kyrgyz Customs bodies. Earlier, documents had found their way into the hands of journalists showing that Matraimov had withdrawn about $700 million from the country through various banks over a period of seven years. However, investigators didn't find Matraimov's property abroad. In 2021, Matraimov was found guilty of corruption and convicted, but after paying a $22.5 million fine to the state, he was released. Law enforcement has since uncovered more of the oligarch's assets worth another $50 million. The GKNB is continuing to search for more assets obtained by criminal means in order to later transfer them to the state, according to the agency's press service. Matraimov's whereabouts are currently unknown.

Central Asia Justice Kazakhstan Justice Kazakhstan Business & Economy Features

Kazakhstan Claws Back Another $98.5 Million From Nazarbayev’s Nephew

A well-known Kazakhstani businessman and a relative of former President Nazarbayev has returned another $98.5 million to the state's coffers. This money was returned as part of the criminal case against Kairat Satybaldy, according to the Anti-Corruption Agency of the Republic of Kazakhstan. "At present, the funds have been sent to the republican budget on account of compensation for damage caused to the state," said the head of the agency, Askhat Zhumagali. Satybaldy - a nephew of the first president of Kazakhstan - is a well-known businessman and former politician. He held positions in the Akimat of the capital, the National Security Committee, and developed business in the oil and gas industry, banking, the services sector, and trade. Satybaldy was detained in March 2022, accused of abuse of power and embezzlement on a large scale at both JSC Kazakhtelecom and JSC Center of Transport Services. In September of that year, an Astana court found Satybaldy guilty and sentenced him to six years imprisonment, replete with the confiscation of property and deprivation of the right to hold office for ten years. In addition, he was relieved of the title of Major General of the National Security Committee (KNB) and other state awards. In total, since the beginning of 2022, the Anti-Corruption Agency has returned $2 billion of illegally withdrawn assets, of which almost $1.5 billion belonged to Satybaldy. These include a stake in state company, Kazakhtelecom, companies in the railroad and telecommunications sectors, as well as jewelry worth more than $200 million. Additionally, as part of the criminal case, the state repossessed a stake in the Baisat Market, which had belonged to Satybaldy's son. The Agency noted that other investigations into Nazarbayev's nephew on cases related to non-payment of taxes and the laundering of proceeds from criminal activities are ongoing. At the same time, in order to preclude the withdrawal of embezzled budget funds abroad, the anti-corruption service intends to introduce digital technologies, including mechanisms for "coloring" money, and the use of digital tender to fully track how state funds are spent. "Long-term construction projects [and] untimely and low-quality construction are often associated with either embezzlement or withdrawal of money for further kickbacks to officials and other offenses,"Zhumagali stated. "Digital tenge as a tool will help us realize the [plan for] 'coloring' money. And if this money is allocated for salaries, it will not go in other directions. This whole procedure of money movement allocated from the budget becomes transparent, and all transactions must reach their goal; each tenge must be spent for a specifically envisaged purpose." In Kazakhstan, corruption continues to be one of the main factors hindering the country's economic development. In 2023, the country ranked 93rd out of 180 states on Transparency International's Corruption Perceptions Index with a raw score of 39 out of 100. However, this saw an improvement on the ranking of 101st registered on the 2022 index, and following the resignation of the government, on February 7th President Tokayev targeted stamping out corruption as a...

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Kazakhstan Shapes an Ambitious Future

As Kazakhstan continues on its path towards economic expansion and modernization, it has set forth a revitalization and growth vision for 2024 and beyond, underpinned by a series of ambitious reforms and strategic investments. A central part to President Kassym-Jomart Tokayev’s vision, which he also detailed in a government meeting on February 7th, is the development of a sustainable and inclusive economy driven by innovation, strategic foreign investment and proactive engagement with the global community. Building on the 2023 growth momentum There are positive indications that Kazakhstan is on the right track, despite challenges posed by ongoing global geopolitical risks and uncertainties. Its strong economic expansion continued in 2023, as gross domestic product (GDP) increased by nearly 5% as of the third quarter. The government is aiming to accelerate the pace of growth further throughout the remainder of the decade. Tokayev said in his February 7th speech that the target was to increase economic output to $450 billion by 2029, stressing that to do this, the country will need 6% annual GDP growth. Attracting investment To achieve this ambitious goal, the country’s leadership is currently implementing a series of reforms, which are designed to attract a substantial influx of foreign investment (of at least $150 billion in total) by adopting environmental, social and governance (ESG) principles, as well as by enhancing the country’s overall investment climate. Examples of these initiatives include “green bonds” introduced in 2017; the sustainable finance initiatives presented since 2021 via the Astana International Financial Center, and the mandatory ESG reporting framework for companies listed on the Astana International Exchange. A pivotal element in Kazakhstan’s comprehensive series of economic reforms and investment strategies is the establishment of the Investment Headquarters, which is charged with the critical mission of enhancing the investment climate within Kazakhstan while ensuring qualitatively the proper execution of investment projects. At the same time, the government is working on a new Tax Code that should comprehensively reset the dynamics between the state and the private sector. The development of this code is guided by the need for a delicate balance between creating an environment conducive to investment, and securing the necessary revenues for the national budget. Local capacity building The strategic plan behind the reforms foresees the introduction and transfer of cutting-edge technologies, the localization of production processes, and the establishment of high value-added clusters. These clusters would be strategically focused on driving the acceleration of the manufacturing sector. Potential sectors to benefit from these clusters include green technology, finance, and agriculture. Furthermore, the legislative and institutional framework will be implemented through the enactment of a fresh law on industrial policy and the establishment of a new Ministry of Industry and Construction. A focus on standards of living These steps represent a commitment to improving the overall well-being of the population in tandem with ensuring economic growth. Tokayev has underscored that the focus of these efforts extends beyond merely achieving macroeconomic expansion and emphasized that economic developments must have a...

Central Asia Local Politics Kyrgyzstan Kyrgyzstan Local Politics Features

From Sabotage to Negligence: Kyrgyz Parliament Seeks to Hold Bishkek Plant Management Accountable After Accident

A special commission is working at the Bishkek thermal power (CHP) plant to find out the cause of the recent accident, with the President of Kyrgyzstan stating that he's taken personal control over the investigation. At a meeting of the Parliament of the Kyrgyz Republic today, MPs demanded the plant's management be held accountable - the same management which issues reassurances that there would be no accidents this winter, and that all equipment was ready for the cold season. "At a strategic facility, the manager has changed three times during the year. It is good that the accident happened at night and not during the day. The damage is said to have exceeded one billion som ($11 million). How many people were hurt, and who will be held responsible? The leaders must answer," MP Emil Toktoshev said, addressing those gathered at the meeting. "It is time to move from just a visual inspection of machinery and equipment to a fully-fledged technical audit, and not only [the Bishkek plant], but, in general, all boiler and power plants should be inspected not by eye. Let's find out what the problems and what needs to be done," said MP Dastan Bekeshev. In the early hours of February 2nd, an incident at the Bishkek CHP plant injured five people, and the city was left without heat and hot water for several days. The interdepartmental commission has been tasked with identifying the cause of the accident within a month. Based on this analysis, a list of urgent tasks will be developed which they say will ensure a stable end to the fall-winter heating period of 2023-24. Measures will also be drawn up to prevent similar situations in the future, including proposals for the reconstruction of the plant, and the decentralization of Bishkek's entire heating system. The Bishkek Prosecutor's Office has opened a criminal case over the accident.

Central Asia Home Kazakhstan Features

Kazakhstan Political Experts Outline Tasks Ahead for New Government

On February 7th, an expanded meeting of Kazakhstan's new government took place at which President Tokayev sharply criticized previous initiatives. For example, tax code improvements had been in the works for quite some time, but the final proposal was reduced to raising rates and even imposing taxes on mobile-phone transfers. This caused a wave of resentment among ordinary Kazakhstanis and entrepreneurs. Therefore, the recent resignation of the government is not a surprise, according to political scientist and Director of the Institute of Eurasian Integration, Urazgali Selteyev, who also labeled such legislative reforms "mistakes." "The resignation was long overdue," Selteyev told The Times of Central Asia. "There are accumulated omissions and systemic failures in the work of the government. For all the months of work, no serious improvements are visible. A practical vision of a new economic model has not been presented. The development of the budget code has been delayed, and the clarification of tax reform has failed. Positive statistics on the reduction of inflation do not correspond to the real state of affairs in the economy and social sphere." A similar opinion is held by political scientist and Managing Director of GR Consulting Group, Yerbol Yedilov, who notes that the focus will now be on improving the economy, but not to the detriment of business, as instructed by Tokayev at the meeting. "I think they will target [improving] the country's economy, and, led by the prime minister, will carry out large-scale work on the return of illegally exported funds. Reforming the budget sphere, which the president is talking about, is only the beginning. There are deeper plans, and in time they should lead to a global increase in the country's economy," Yedilov told The Times of Central Asia. The head of state referred to this in his address, stating that Kazakhstan will seek to improve its anti-corruption policy, meaning that further personnel reshuffles are inevitable."Tokayev mentioned that the state of roads, heat and power centers is a reflection of our corruption. It can be understood that [more] personnel purges within the ministries lay ahead. Emphasis will be placed on honest and incorruptible officials," Yedilov concluded. Currently, according to political analysts, Kazakhstan is lacking in investment resources, and the main goal of the new cabinet is to replenish the national fund. "This is a transformation of the economy on the basis of strengthening and expanding investment activity," political scientist Gaziz Abishev told The Times of Central Asia. "After all, the liberalization of prices in a number of sectors, the liberalization of the economy itself, the protection of investors from corruption and bureaucracy, the use of public funds and simplification of the tax code is all about investment, which is now so lacking in Kazakhstan. We need to invest in new production and the creation of [value-added industries], but this cannot be done without capital. For both internal and external reasons, and because of volatility in foreign markets, there is not a lot of free money in Kazakhstan's economy. How realistic...

Central Asia Turkmenistan Justice Turkmenistan Features

Turkmen Prosecutors Fired in an Attempt to Curb Corruption

The Prosecutor General of Ashgabat, Ovezmammed Shykhmammedov, was fired and then arrested on the night of February 3rd, according to Turkmenistan's central state news agency. President Serdar Berdymukhamedov reportedly fired him for "improper fulfillment of his official duties and serious shortcomings in his work." Shykhmammedov's arrest followed the dismissal of Turkmenistan's Prosecutor General, Serdar Myalikgulyev, just two weeks earlier. The reason given was similarly named as a failure to properly fulfill his official duties. Both men held their posts for about one-and-a-half-years. During this time, they surrounded themselves with trusted confidants and ousted possible opponents from their posts. Former Minister of Justice (2013 - 2021), Begmurat Mukhamedov has been named the new Prosecutor General. He was Chairman of the Committee on International and Inter-parliamentary Relations in the Mejlis (Parliament) prior to his appointment. The position of the capital's prosecutor is still vacant. Sources familiar with the case say Serdar Myalikgulyev testified against Shykhmammedov after he was ejected from the session hall and afterwards detained. The former prosecutors are implicated in a scandal involving embezzlement from state-subsidized stores. They are also believed to be involved in Turkmenistan's recent agriculture crisis, wherein last year only half of the planned wheat and cotton harvest target was realized. This is seen as a driving factor behind such radical measures being taken against the former Prosecutor General, notwithstanding his distant ties with the family of the President. Despite being a signatory to the UN Convention Against Corruption since 2005 and crafting a five-year National Anti-Corruption Action Program, Turkmenistan remains the most corrupt country in Central Asia, ranking 170th out of the 180 countries included in Transparency International's Corruption Perceptions Index for 2023.