Kazakhstan Opinions - The Times Of Central Asia

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Kazakhstan’s Bolashak Program: More Trouble Than It’s Worth?

In 1993, Nursultan Nazarbayev, the first president of Kazakhstan, established the Bolashak ('Future' in Kazakh) International Scholarship. Its goal was to help gifted Kazakhstani youth obtain a high-quality foreign education. However, the program is currently mired in scandals with alarming regularity. Of course, most of these clickbait stories are minor — such as a 2022 incident with the famous singer Dimash Qudaibergen. He was selected for the Bolashak Program and went abroad before changing his mind. He tried to transfer the scholarship to someone else but was forced to return the money to the state. Still, several cases indicate that behind the scenes at the Center for International Programs, which administers the scholarship, something is not right. So far, no one has intervened – the program is still running – but the latest scandal could attract the attention of Kazakhstan's president Kassym-Jomart Tokayev. And he has already expressed dissatisfaction with some of the conditions of the scholarship. Getting the president’s attention Let’s unpack the current scandal, which has to be extinguished by a senior official such as the minister of education and science. Kazakhstani Natalya Vorobyova recorded a video message to Tokayev, saying that in 2016, she and her colleague Makpal Daribaeva acted as debt guarantors for her former colleague Valeria Gavrilenko, who had completed the Bolashak Program. According to Vorobyova, Gavrilenko “in 2019, conspiring with the center’s employees… illegally withdrew two apartments [that had been pledged to the center] as collateral and went off to live in the UK.” Now, her debt – graduates of the program are required to work in Kazakhstani government agencies for 3-5 years (depending on the region) – has to be repaid by the guarantors, i.e., by Vorobyova and Daribaeva. They owe about KZT30 million ($60,000). The press service of the Center for International Programs explained that since Gavrilenko evaded paying off the debt, the agreement transferred it to the guarantors. Just days later, on May 30, Sayasat Nurbek, who heads Kazakhstan’s Ministry of Education and Science, intervened, saying that an agreement had been reached with Gavrilenko whereby she would pay off her debt, with a corresponding agreement already signed by her. “Since Gavrilenko took it upon herself to fully return the money, an agreement was signed with her, and she has begun to pay back the money. Accordingly, the claims against the guarantors are withdrawn. Nevertheless, we were forced to initiate a case against all three obligation-bearers. We were forced to do this because they are jointly liable under the law. If Gavrilenko pays the full amount, the claims against the guarantors will be dropped. Unfortunately, they seem to have been advised incorrectly. They felt threatened that they would be forced to pay full damages. Today, we are concentrating all claims on Gavrilenko,” Nurbek said in the Senate as he was answering questions from journalists. As for the third party in this scandal – which, according to the minister, is also responsible – it is the former president of the Center for International...

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Kazakhstan Works with Armenia and Azerbaijan for South Caucasus Peace

By Robert M. Cutler On May 10–11, Kazakhstan's President Kassym-Jomart Tokayev hosted peace talks between the Azerbaijani and Armenian foreign ministers. These constructive negotiations were strictly bilateral, with Kazakhstan absent from the room and only providing the venue for the meeting. The event illustrates the dedication by Tokayev and his foreign policy to regional stability and mediation. Kazakhstan has done this sort of thing in the past; it hosted Russia–Turkey–Iran talks over Syria until last year. It was also mentioned as a place for bilateral Russia–Ukraine negotiations, although that idea never materialized. Armenia's Future is in the South Caucasus and Asia Tokayev had offered to provide the venue during his first official visit to Armenia, which took place on April 15 this year. His trip to Armenia may in retrospect be seen as a turning point. Former President Nursultan Nazarbayev had been forced to cancel a visit in 2016, following protests in Yerevan against Astana's support of Baku in the Karabakh conflict. Armenia’s participation in the new peace efforts, now under way for a couple of years, marks a significant shift after decades of rejecting such cooperation. It offers the prospect of renewed regional relations. Under Prime Minister Nikol Pashinyan, Armenia has lately been trying to shift its foreign policy, reaching out to Western countries such as France and the U.S. in order to decrease its long-standing dependence on (some would say, vassalage to) Russia. But Armenia is a state in the South Caucasus, not in Europe or America. For this reason, the state’s objective interests (as opposed to those of the far-flung diaspora) are geopolitically compatible with those of Azerbaijan and Turkey, and also of Kazakhstan more distantly. Astana’s ties with Baku and Ankara, and Azerbaijan’s strengthening of its own ties with Central Asia, reflect strategic manoeuvring in the region. These partnerships enhance Kazakhstan's and Turkey's roles in promoting stability and development in the South Caucasus. They consequently offer Armenia a new path to prosperity. Peace with Azerbaijan would lead to the lifting of the Turkish embargo on Armenia and open the possibility of Armenia's integration into the Trans-Caspian International Trade Route (TITR, "Middle Corridor"). Such an opening would further widen Armenia's diplomatic vistas and decrease its dependence on Russia. Turning to Europe and the U.S. can offer some advantages, but Armenia must be cautious of the influence of a bellicosely irredentist Armenian diaspora, whose interests are not first and foremost the well-being of Armenians living in Armenia. Prioritizing regional integration and cooperation with its South Caucasus neighbours and other TITR participants will enable Armenia proper to build a more stable and prosperous future. Infrastructure and Connectivity Initiatives With the assistance of the international financial institutions, the European Union and Central Asia are developing the TITR as a critical trade corridor that will also contribute significantly to the prosperity and stability of the countries lying along its route. Azerbaijan and Kazakhstan have long been key players in the promotion and realization of this plan. The Middle Corridor,...

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Central Asia’s Combined ‘Army of Turan’: Could a Hypothesis Become a Reality?

Kazakhstan will host the military exercise, "Birlestik-2024" in July of this year. Notably, this became known from the press service of the Ministry of Defense of Azerbaijan. The exercises will be jointly held by the Armed Forces of Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. It is a convenient occasion to refresh the topic of the 'Army of Turan', which is periodically raised by experts both in Central Asia and neighboring countries. The Army of Turan is a hypothetical military bloc of Turkic-speaking countries. Its ideas have become relevant in the context of global geopolitical turbulence. I hear the thunder of cannons... Most military analysts consider Azerbaijan to be Turkey's proxy in the South Caucasus. In general, Baku's rapprochement with the capitals of Turkic states (plus Dushanbe) meets Ankara's interests in creating a unified cultural and economic space: Turan. However, does the integration of Turkic states mean that they will eventually be able to create a NATO-style security pact in Central Asia? Such initiatives have resumed with renewed vigor after the end of the Azerbaijani-Armenian conflict, during which Turkey has shown the capability of its weapons. Indeed, in 2022, against the backdrop of the Russian invasion of Ukraine, Kazakhstan - the only country of the participants to share a land border with the Russian Federation - pondered how to protect itself from further expansion of the northern empire's borders. But in the run-up to the summer of 2024, fears have mostly subsided. Many were sobered by the obvious fact that loud declarations of assistance from strong states at best mean the delivery of obsolete weapons, but no more. At worst, your offender will be censured from high podiums, and you will be sympathized with. For example, Turkey, the most likely to defend Central Asia from outsider aggression, did not risk helping the Palestinians, its brothers in faith, and got away with accusing Israel of fascism. So, the 'Army of Turan' exists in the heads of fantasists and pan-Turkics, but in reality, something ordinary is going on — the arms trade. Let's see what the armies of the Central Asian republics are armed with, excluding Turkmenistan, which has declared neutrality. Tajikistan and Kyrgyzstan The most troublesome neighbors in the region have not been able to complete their border delimitation process. As a result, quarrels periodically erupt, in which border guards from both sides intervene, staging mini-warfare. The cause of discord is usually the same: water. The Tajik and Kyrgyz militaries gain some combat experience in these micro-quarrels. Despite or based on this experience, Dushanbe relies on agreements with other countries -- Russia, China, India, Iran, and CSTO partners -- for its defense capability. Tajikistan's armed forces number only 9,000 men. They have 38 tanks (T-62 and T-72 modifications), 114 armored vehicles (APCs, BMPs, BRDMs), 40 artillery systems, and several short- and medium-range air defense units. The Air Force has four Czechoslovakian L-39 Albatross, combat trainers. Kyrgyzstan does not have much more power in the number of its troops, at around...

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The Outlook for Kazakhstan’s Rail Network

As a core infrastructure industry, railways play a strategic role in Kazakhstan’s economy. Today, over 50% of freight in the country is transported by rail, while the figure for passengers is 15%. Kazakhstan’s favorable geographical position between the largest producer of goods in the world, Asia, and the largest consumer, Europe, is spurring the development of transit freight transport and related income. However, government regulations and imperfect reforms have failed to reverse a degradation of Kazakhstan’s rail infrastructure and solve its capacity shortage problems. The robust rail network created during the Soviet period for a single national economy turned out to be ineffective under the new conditions of market dynamics. The country’s railway infrastructure, while reaching almost every region in Kazakhstan, meets neither current nor possible future needs of freight owners and has already nearly reached its limit in terms of throughput and processing capacity. The national railway carrier of both passengers and freight, Kazakhstan Temir Zholy (KTZ), cannot provide by itself the financial resources and investments at the scale needed to meet current and future challenges. The national budget is also unlikely to allocate such funding. A lack of prompt, large-scale modernization of key areas of rail transport, however, may hurt the country's economy. Tentative sources of funding for improvements According to the Ministry of Transport’s plan for the modernization of rail infrastructure, 1,300 km of railway track is to be added by 2030, while 4,800 km of second track is to be constructed. The expected price tag for these additions is over $11 million. It is currently unclear where these funds will come from. There have been mentions of borrowing around $400,000 from the national pension fund. According to the Ministry of Transport’s modernization plan, private investments will also be a key source through public-private partnership projects (PPP). In recent years, state participation in financing the construction and reconstruction of sections of the rail network has been limited and paled in comparison to those involving road projects. As part of the Nurly Zhol (“Bright Path”) infrastructure initiative, $9.2 billion has been allocated for just two programs to develop roads versus only $16.1 million allocated for railways. Added to this is the involvement of KTZ in implementing major transport infrastructure projects – the Khorgos dry port, the Kuryk port ferry complex and more than 1,000 km of railway track built in recent years, among others – using borrowed funds. Thus, the company bears a considerable burden in terms of servicing and repaying loans already raised for these projects, which represent its long-term assets. Given this debt burden, it is clear that the rail industry remains underfunded. Tariffs present a further dilemma Across the world, funding for the development of main rail networks is typically allocated from the national budget. In many European countries, for example, government funding covers up to 97% of operating and capital costs of rail infrastructure. Besides direct subsidies from the state, other sources of funds for modernizing and renewing rail infrastructure include bond...

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A Demographic Phenomenon in Kazakhstan — the Population is Rapidly Getting Younger

Kazakhstan stands out sharply on the demographic map of the world, according to Alexei Raksha, a Russian demographer. The republic's government supports high birth rates, which not only bring significant benefits but can also be a source of risk. Independent demographer Raksha has repeatedly said that Kazakhstan does not fit into global fertility trends. By all parameters (relatively high GDP, rising living standards, urbanization, etc.), the republic belongs to countries that should have already completed the first demographic transition. This term means a decline in mortality and fertility due to improved nutrition and medicine, resulting in simple generational replacement. That is, women no longer give birth to 10-15 children, hoping that two or three of them will survive. The first demographic transition has ended almost everywhere except in Africa, scientists believe. Nevertheless, according to Raksha, Kazakhstan -- along with Israel -- shows other indicators. In both countries, both religion and the desire for some kind of historical justice play a role. However, the demographer emphasizes that Kazakhstan's fertility figures are unevenly distributed regionally and ethnically. The fertile southern and western regions contrast sharply with the north, where the population is aging. Raksha recently commented on Kazakhstan's birth rate by women's ethnicity in 2022-2024. "If Kazakhs, Uzbeks and Uyghur women have birth rates at 2.9 to 4.2 children per woman, then representatives of European nations have an average of 1.3-1.5 children (average European level). It is obvious that there is a deep difference in cultural attitudes, both in the degree of social conservatism and in the level of religiosity," he wrote online. According to his data, in recent years, Kazakhstan has been steadily overtaking Uzbekistan, formerly considered the regional leader in population "production". This is confirmed by the data of the study of the leading medical journal The Lancet "Institute for Health Metrics and Evaluation" (IHME) on fertility in 204 countries and territories in the period from 1950 to 2021 with forecasts up to 2100. According to the report, Kazakhstan has surpassed all its neighbors in Central Asia and all countries in the Northern Hemisphere in terms of fertility over 70 years. For contrast, Raksha constantly cites data on prolonged depopulation in Europe, North America, China, Korea, and Japan. Countries whose population is inexorably aging and whose birth rate is below the level of simple reproduction (less than two children per woman) are doomed to attract labor migrants, the expert believes. In addition, the SWO plays a destructive role in the post-Soviet space. Russia has faced precisely unrecorded but obvious demographic losses, while Ukraine is on the verge of social catastrophe. Kazakhstan will not face the fate of an endangered country in the coming generations. In late April, the Bureau of National Statistics of Kazakhstan reported that the total fertility rate in 2023 amounted to 19.52 per 1000 people. In 2022 it was at the level of 20.57 births per 1000 people. The highest birth rates are noted in Mangistau region (26.74 people per 1000 people), Turkestan region (26.18) and Shymkent...

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Liberalizing Kazakhstan’s Economy Must Not Become Uncontrolled Privatization, Expert Warns

Last week, President Kassym-Jomart Tokayev signed a decree on reducing the state’s participation in the economy, aiming to help develop competition and private business. This could be a significant boost to the economy, financial analyst Rassul Rysmambetov, an Almaty-based expert in distressed assets and Director of the Financial Freedom Public Foundation, told The Times of Central Asia, though everything will depend on how the decree is implemented. Firstly, the decree envisages creating a National Office for Privatization under the Agency for the Protection and Promotion of Competition. This office is to develop criteria for state assets subject to privatization and create a list of them. In addition, measures are provided to increase the autonomy, quality, and independence of corporate governance at Samruk-Kazyna, the National Welfare Fund, and its subsidiaries. “The government must establish a specific list of large entities that will offer major stakes in the next two years in IPOs,” President Tokayev explained. According to Tokayev, the quasi-public sector – bloated and often ridden with debt – needs serious reform. “We need to put an end to the question of where state participation should continue and where competition can be developed. The largest share of the state in the economy is represented by the group of companies held by the Samruk-Kazyna fund, so that is where this work must start. New, systemic measures are required to fundamentally rehabilitate the fund,” the president stated. A separate section of the decree presents measures aimed at protecting the rights and legitimate interests of business, including decriminalizing offenses related to economic activity and coordinating with prosecutors on prohibitive and restrictive measures initiated by government agencies. This is not the first time Kazakhstan has tried to liberalize its economy – it has even privatized social institutions, such as hospitals, schools, and creative centers for children before – but previous attempts yielded no tangible successes. “We need to continue to work to improve the quality of services, consistently reduce state participation and eliminate excessive regulation and restrictions. This applies to all sectors of the economy,” Tokayev stressed. “Uncontrolled monopolies, unequal access to resources and unfair trade practices must be eliminated at the root. A pillar of economic liberalization will be effective privatization. There have been so many privatization plans, but every time we make the same mistakes.” Rysmambetov believes that professionals should take the lead. “Liberalizing the economy is a process. By no means can it be limited to a single decree – it is a strategic course. I see here dozens, if not hundreds of by-laws, industry reference documents and possibly new laws and codes. I'm afraid that parliament will prove unable to keep up with the pace at which these reforms should be carried out,” he stated. According to Rysmambetov, Samruk-Kazyna could be dissolved tomorrow, but the holding has taken on a lot of debt for its subsidiaries, meaning that in the near term its assets can only be partially privatized. In general, each Samruk-Kazyna company has a related supervising ministry, so, to...