Sunday

22nd Jul 2018

Kazakh 'father-creator' comes technology shopping to EU

  • Mr Nazarbayev (l) in Brussels on Monday. Global Witness says the 'kleptocratic' administration poses risks for investors (Photo: consilium.europa.eu)

Kazakhstan's septuagenerian President Nursultan Nazarbayev has brought over 50 businessmen on a three day visit to the EU that is to see the European Investment Bank (EIB) open a €1.5 billion credit line to help fund technological upgrades.

Kairat Kelimbetov, the chief executive of Samruk-Kazyna, the state-owned firm which owns much of the country's oil, gas, uranium and transport sectors, told EUobserver in a phone interview on Monday (25 October) that the EIB will sign a memorandum of understanding on the funds during the EU peregrination.

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The money is to help fund alternative technologies and energy efficiency projects in the mineral-dominated Central Asian economy.

The trip is also to see Mr Kelimbetov in Brussels, London and Paris talk with European firms such as Alstom, Areva, BNP Paribas, Eni, Royal Dutch Shell, Societe Generale and Total about future investment in the banking, oil, railway and uranium industries.

"Right now Kazakhstan is coming back to its previous period of economic boom, and we very much appreciate the presence of European companies, not just in terms of foreign investment but also know-how and technology," he said. "We are creating a new country, a new economy, like Singapore or Malaysia 30 or 40 years ago ... under the leadership of the person who is making this possible, the father-creator of our country."

Mr Nazarbayev has led Kazakhstan since it gained independence from the Soviet Union in 1991 and has despite his advanced years said he will run in 2012 elections after altering the Constitution to enable himself to remain President for life.

Speaking at a pre-scripted event with no question and answer session for press together with EU Council head Herman Van Rompuy in Brussels on Monday, Mr Nazarbayev said: "I was pleased to notice that the economic situation in Europe is getting better, this is important to Kazakhstan, which also feels the fluctuations of the European economy."

Mr Van Rompuy said that: "Democracy, the rule of law and respect for human rights are the core values which need to be implemented in practice. I stressed during our meeting that closer and stronger bilateral ties go hand in hand with adherence to these values."

Leaving aside concerns about jailing of opposition figures, intimidation of press and "hellish" conditions for migrant workers, the British NGO Global Witness in a report in July noted that the President's entourage closely controls most of the business activity in the country in a situation posing a risk for foreign investors.

"President Nazarbayev may be able to unduly influence the decisions taken by the company, should he choose, in a way that may be detrimental to other shareholders," it said on the case of copper mining company Kazakhmys.

"As recent events in neighbouring Kyrgyzstan show, kleptocracies can lead to instability, disorder and ethnic violence, as citizens remain poor while the elite get richer."

The report contained a leaked phone conversation from 2007 in which one of Mr Nazarbayev's aides (Voice 2) justifies the purchase of a large jet for the leader (Voice 3) in a window onto the political culture in Astana.

Voice 2: "Let the next Kazakh presidents fly smaller planes. We have one president, let him fly a bigger plane. This will be a plane like [Russian PM] Putin's, he ordered it already. But you will be the first to have it! You know, your Airbus, the one you have now, an identical one has arrived for Putin. Don't you know? Has he told you?"

Voice 3: "Which one?"

Voice 2: "A small Airbus. He has received one like that."

Voice 3: "Like mine?"

Voice 2: "Yes, it has arrived a year later. Of course, we follow everything ... You will be able to fly it in February-March next year. It will have no match. There are three of them in the world. You will drop all these Boeings, you will fly to Saudi Arabia for example and they will say to you: 'Oh! What a plane of yours! We would all like to have such planes'."

Mr Kalimbetov told EUobserver the Global Witness report is "a stereotype ... more fantasy than reality."

"This is just my personal opinion, but in Kazakhstan we follow a more slow model perhaps in political reforms but we are more active in terms of economic reforms," he added. "Now, during the crisis, when the economy is starting to recover, it is more a time to talk about pragmatic issues, than to discuss other issues."

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