KazakhstanKazakhstanKazakhstan
Kazakhstan

Kyrgyzstan

Tajikistan

Turkmenistan

Uzbekistan

Home » Archive by Category

Kazakhstan

In dire need of professionals
Written by , Wednesday, 25 Jan, 2006 – 19:49 | 4 Comments

Kazakhstan’s domestic economy might not lack hydrocarbon resources, but it seems as with all the investment abound, an acute shortage of skills becomes ever more evident.

The landmarks of tertiary education in Kazakhstan, modern and Western-style institutions (like for instance KIMEP), focus heavily on social sciences and management, but what is needed most now are quite practical crafts:

Highly skilled non-professional occupation experts like woodmen, carpenters, crane operators, piplelayers, bulldozer drivers, mechanical trades, repairers, drivers, turners, millers, maintaining operators, etc are of strong demand for at present.

While for many of these professions, job applicants wouldn’t need a university degree, there is another side to this. If Kazakhstan was to import less human capital from abroad (especially in the extractive industries), it could need some more ‘homegrown’ engineers that are up-to-date with the newest tools and technical developments.

And, in general, Kazakhstan’s higher education performance is quite bad. There has been a radical decline in public expenditure towards universities in essence reducing the real expenditures by about 70% between 1992 and 2002. For more background on the financial situation of Kazakh institutions of higher education, read this PDF. Also, a recent report by USAID can help put Kazakh education spending into perspective:

Particularly low is the spending on tertiary education; at 10.2 percent of per capita GDP in 2002, it is less than half of the LMI-FSR average and less than a third of the average for all LMI countries; the gaps with expenditure per student in tertiary education relative to Bulgaria and Romania are similar.

However, a large amount of money is being spent on high-profile scholarships, i.e. the Bolashak program, through which around 100 students are studying mainly in the US and Europe each year, mainly in the social sciences and management.

Nevertheless, that shouldn’t mean that Kazakhstan cannot offer competitive education prospects to its citizens at all. That’s also proven by the relatively large number of international students studying there (see this for an Indian perspective). However, the little amount of cash being spent on the future labour force of the country is worrying, especially in those sectors showing the highest growth rates and future potential:

For Kazakhstan to achieve transformational growth and reduce its dependence on oil, more emphasis should be given to higher education. Such efforts are necessary to stay competitive in the region with a highly educated labor force.
(…)
According to the World Bank, far more flexibility and lifelong learning opportunities are needed soon to keep skill shortages from becoming a serious impediment to growth.

The outlook for the Kazakh economy could darken because right now, the country is far too relient on oil and is not taking off in other sectors that could also cushion the negative aspects of the ‘Dutch Disease’. Already, analysts say that the spectacular GDP growth rates are due to high oil prices and are eventually unsustainable. From that same RFE/RL article:

In addition, he adds, the ailing education system is unable to produce high-quality specialists, and therefore the national economy is likely to face a scarcity of qualified resources in the future.

Let’s remind the Kazakh government of one of its own statements:

Reformation of the educational system by opening it up to the world knowledge and experience, scientific and technological achievements by training highly qualified professionals with the best managerial skills always helps to transform the society into a progressive and democratic one.

It’s all a matter of priorities. Certainly, projects like this one are good for the psyche, but the money spent on the facade might be worth much more inside the brains of future generations.

My Kazakhstan 2: The New Anthem
Written by , Monday, 23 Jan, 2006 – 17:19 | No Comment

Although an incorrect version of the old “My Kazkakhstan” anthem was posted earlier (now corrected), here is a link to the new Kazakh national anthem, penned in part by Nazarbayev himself.

Thanks to Dr. Werner Linden, the Mad Musicologist.

Play
Nordic Nomads
Written by , Monday, 23 Jan, 2006 – 12:12 | One Comment

How Central Asian camels met East African refugees in rural Norway…

A small community in wintry Norway wants to help a group of East African refugees back to work by importing a flock of camels.

The local refugee council says it will allow refugees with nomadic background to use their camel-farming skills while also securing an alternative income for local agriculture. But how do camels adapt to Arctic conditions in the far north of Europe?

Igor, a five year-old Bactrian camel, is living proof his particular breed of camel has no qualms about snow and sub-zero temperatures.

The rest of the story is here: http://news.bbc.co.uk/1/hi/world/europe/4616236.stm

Correction to previous post
Written by , Monday, 23 Jan, 2006 – 0:28 | 4 Comments

Karakum raised an important point in his comment to my earlier post:

…as of they [Kazakhstan] have anything to export… KZ are only able to cover their internal demand through in kind payments for the transit of Turkmen gas to Russia and Ukraine.

It’s true, Kazakhstan has been a net gas importer until recently:

Although Kazakhstan is currently [ed: 2002] a net importer of natural gas, with the expected increase in the country’s natural gas production, Kazakh officials project that the country’s natural gas exports could reach 1.2 trillion cubic feet (Tcf) per year by 2015.

In 2005, the country exported just a little bit more liquified natural gas than it needed to import, but numbers were down in comparison to 2004, according to Alexander’s Gas & Oil Connections:

Kazakhstan exported 4.787 bn cm of gas worth $ 126.7 mm in the period, down from 6.557 bn cm and $ 187.4 mm in the same period in 2004.
Natural gas imports totalled 4.193 bn cm (4.450 bn cm in the same period in 2004) worth $ 142.8 mm ($ 139.4 mm).

So what can we make of the Kazakh government positioning itself as the future’s safe gas supplier when the volumes that it can export are so negligible? Even if we’re talking a little more long-term here, the South Caucasus pipeline might be filled with Kazakh gas as early as 2008, and other export options have long been in the making. However, Karakum is right in saying that by no means Kazakhstan could be a substitute supplier of gas in the near future.

Kazakh gas to the rescue?
Written by , Sunday, 22 Jan, 2006 – 16:31 | 2 Comments

News just come in that it might get very cold in Georgia and Armenia soon: Explosions on the main Russian-Georgian gas pipeline halted supplies and it might take several days until normal operations resume. These news come at a time of tense gas diplomacy throughout the region.

The Russian-Ukrainian gas dispute has fuelled fears in Tblisi that Georgia itself might see Moscow using gas supplies as an instrument to exert political pressure. Georgian President Saakashvili has already accused Moscow of being behind the blasts this morning. So it becomes a matter of urgency that Georgia diversifies its energy sources as soon as possible. Tblisi will mainly be looking towards Kazakhstan and Iran for achieving that aim and has encouraged Kazakhstan to participate in the Baku-Tblisi-Ceyhan pipeline.

Sending a clear sign that strict market rules apply, Kazakhstan has announced that it will not subsidise gas supplies to Georgia, despite recent love signs being sent between Astana and Tblisi*. 1000 cubic meters will cost $110 and no cent less. Saakashvili is reported to have said that he doesn’t mind higher prices as long as the gas keeps flowing. It seems that little by little, Soviet-inherited gas deals between the constituent republics are being softened, paving the way for both potential confrontation and co-operation.

Also, taking into account that Armenia will be without Russian gas supplies very soon, Yerevan would have to look towards other sources in order to keep supplies steady. Whereas Georgia has already commenced talks with Azerbaijan, that option looks hardly like a feasible option for Armenia. Unfortunately for Yerevan, the Iran-Armenia gas pipeline is still under construction.

Kazakhstan seems to benefit most from the New Year’s gas turmoil. Astana’s petrodollar bonanza will inevitably translate into further purchases of foreign energy utilities, given that domestic investment opportunities seem saturated due to the high amount of cash already being spent. TbilGaz, Tblisi’s monopolistic gas supplier was recently bought up by KazTransGaz. Also, Kazakhstan seems keen on buying a Lithuanian oil complex. This direct engagement in foreign energy markets will safeguard a diversified demand base for Kazakh hydrocarbon resources, Astana’s ultimate goal. The Lithuanian deal also seems interesting inasmuch it looks like a clear sign that Kazakhstan wants a chunk of the large European market for its products, challenging Russia’s quasi monopoly for eastern gas supplies.

Kazakhstan’s policy of a ‘multi-vectored’ foreign policy makes it less suspectible to using oil as a political tool as long as the cash is right.

*Georgia sees Kazakhstan as an honest broker and asked Astana to take up a mediating role in talks between Russia and Georgia over the separatist territory of South Ossetia. Also, Georgia supports Kazakhstan’s bid to the OSCE presidency in 2009.

Cross-posted on the Kazakhstan blog.

Kazakh gas to the rescue?
Written by , Sunday, 22 Jan, 2006 – 16:14 | 3 Comments

News just come in that it might get very cold in Georgia and Armenia soon: Explosions on the main Russian-Georgian gas pipeline halted supplies and it might take several days until normal operations resume. These news come at a time of tense gas diplomacy throughout the region.

The Russian-Ukrainian gas dispute has fuelled fears in Tblisi that Georgia itself might see Moscow using gas supplies as an instrument to exert political pressure. Georgian President Saakashvili has already accused Moscow of being behind the blasts this morning. So it becomes a matter of urgency that Georgia diversifies its energy sources as soon as possible. Tblisi will mainly be looking towards Kazakhstan and Iran for achieving that aim and has encouraged Kazakhstan to participate in the Baku-Tblisi-Ceyhan pipeline.

Sending a clear sign that strict market rules apply, Kazakhstan has announced that it will not subsidise gas supplies to Georgia, despite recent love signs being sent between Astana and Tblisi*. 1000 cubic meters will cost $110 and no cent less. Saakashvili is reported to have said that he doesn’t mind higher prices as long as the gas keeps flowing. It seems that little by little, Soviet-inherited gas deals between the constituent republics are being softened, paving the way for both potential confrontation and co-operation.

Also, taking into account that Armenia will be without Russian gas supplies very soon, Yerevan would have to look towards other sources in order to keep supplies steady. Whereas Georgia has already commenced talks with Azerbaijan, that option looks hardly like a feasible option for Armenia. Unfortunately for Yerevan, the Iran-Armenia gas pipeline is still under construction.

Kazakhstan seems to benefit most from the New Year’s gas turmoil. Astana’s petrodollar bonanza will inevitably translate into further purchases of foreign energy utilities, given that domestic investment opportunities seem saturated due to the high amount of cash already being spent. TbilGaz, Tblisi’s monopolistic gas supplier was recently bought up by KazTransGaz. Also, Kazakhstan seems keen on buying a Lithuanian oil complex. This direct engagement in foreign energy markets will safeguard a diversified demand base for Kazakh hydrocarbon resources, Astana’s ultimate goal. The Lithuanian deal also seems interesting inasmuch it looks like a clear sign that Kazakhstan wants a chunk of the large European market for its products, challenging Russia’s quasi monopoly for eastern gas supplies.

Kazakhstan’s policy of a ‘multi-vectored’ foreign policy makes it less suspectible to using oil as a political tool as long as the cash is right.

*Georgia sees Kazakhstan as an honest broker and asked Astana to take up a mediating role in talks between Russia and Georgia over the separatist territory of South Ossetia. Also, Georgia supports Kazakhstan’s bid to the OSCE presidency in 2009.

Cross-posted on the homebase.

Opposition Leader Loses Resolve
Written by , Saturday, 21 Jan, 2006 – 23:35 | No Comment

Recently freed opposition leader Galymzhan Zhakiyanov will probably not become the thorn in Nazarbayev’s side that many had hoped.

Galymzhan Zhakiyanov, leader of the Kazakh democratic opposition set free after four years behind the bars last Sunday, does not intend to return to active politics right away. As far as Zhakiyanov is concerned, both the opposition and the official authorities should take care of development of democracy in the country. Zhakiyanov implied that he himself trusted the authorities to do what was necessary. He said that the authorities had already done a great deal for triumph of democracy in Kazakhstan. Those present at Zhakiyanov’s press conference in Alma-Ata got the impression that imprisonment had undermined his determination and willingness to continue the struggle.

Four years in a Kazakh prison might just do that to one’s will to fight.

Everyone decided that Zhakiyanov was careful not to provide the authorities with the excuse to arrest him on charges of organization of an unsanctioned rally. Indeed, any minor infraction of the Administrative Code, and he will find himself in jail again for the remaining three years of his sentence.

Zhakiyanov’s press conference yesterday was something everyone had been waiting for. Nobody expected it to become the worst disappointment for the Kazakh opposition after the dismal failure in the presidential election last year.

Freeing an opposition leader after the elections are already over, and even then keeping him on a shortleash, is a pretty shrewd (and characteristic) move for Nazarbayev’s regime. He gets most of the PR benefits of liberal reform, but few of the disadvantages.

A martyred opposition leader who leapt back into politics with a vengeance would have been a powerful figure. A released opposition leader not willing to oppose the regime loses even the symbolic power he had from jail.

A Dutch Disease
Written by , Thursday, 19 Jan, 2006 – 17:35 | 12 Comments

At the same time President Nazarbayev claims a place within the top-50 leading nations of the world table in ten years time (RIA Novosti), well-known Kazakh economist Bulat Khussainov has written a new book about Kazakhstan in an ever more globalised world economy, reports Kazinform. One of his policy recommendations:

In particular, he recommends elevating the home export structure in favor of value added goods.

Much has been said about Kazakhstan’s problems with relying too heavily on the export of hydrocarbon resources, with all related problems usually lumped together under the term ‘Dutch Disease’. In essence, the problem with a country deriving a large portion of its GDP from oil and gas revenues is that its appreciated currency makes other sectors in the economy less competitive.

Nazarbayev has announced some of his key priorities for further economic reform:

He also called tax reform a key priority, noting that increased tax collection and simpler tax laws would give a much-needed boost to business and international trade.

Other steps to be taken include the implementation of a flexible monetary policy to cushion the economy against inflation and the raising of the fuel sector’s efficiency, Nazarbayev said.

“Every deposit should be viewed as a potential base for the development of private enterprise. Along with producing oil and natural gas, we must [work] to transform the country into an oil services cluster, using Norway as an example,” he said.

So, the Kazakh government tries to diversify its economy by actively encouraging investment in other domains, preferably those with a high value-added component. It has therefore promoted the establishment of high-technology parks around the country, realising that it is crucially important for growth within the small- and medium-sized enterprises sector.

The sectors beyond the extractive industries need to account for larger a chunk of total GDP in order to reach sustainable levels of growth not only in output, but also in employment. The oil and gas sector may account for about 16-17% of GDP, but only for 1% of employment (check this BISNIS video for more information on that). Besides the social implications of such an uneven distribution of ‘oil-benefits’, it is also not helpful in creating an affluent middle class beyond of what we can see now on the streets of Almaty and Astana.

The World Bank has a great overview of this debate here. As I am writing a thesis on the wider field this year, I probably won’t be able to refrain from posting on this debate once in a while.

Kazakh Opposition Leader Freed
Written by , Wednesday, 18 Jan, 2006 – 8:38 | 4 Comments

Kazakh opposition leader Ghalymzhan Zhaqiyanov was released from prison 14 January after serving a little under half of his seven year sentence. His release is expected to give a boost to the opposition, and he pledged to continue advocating reform after his release.

It seems that mixed signals are coming from Kazakhstan; several days ago it was reported that the opposition was continuing to be persecuted after the election. The release of Zhaqiyanov is obviously a step in the right direction. Time will tell if opposition leader Bulat Abilov will be persecuted further, and/or incarcerated.

There is a fine line between steady reform, and sitting on the fence in an effort to placate all sides while retaining as much power as possible. The latter would be more of the same. It is not entirely clear which avenue Nazarbayev will pursue now that his rule is more or less assured in the near future.

Nod to Nathan for the tip.

No Post-Election Thaw for the Opposition
Written by , Saturday, 14 Jan, 2006 – 0:19 | One Comment

While few disagree that the Kazakh election was seriously flawed, editorials and opinion pieces have, for the most part, been fairly positive and optimistic, as have governments around the world. The elections had serious irregularities, but were an improvement over past elections, and are the best that Central Asia has yet seen.

Some go on to argue that the irregularities are not a result of any direction on the part of the central government. Instead, overzealous regional officials, all competing to please their beloved president, have an incentive to skew results even though Nazarbayev was doing what he could to ensure a more fair election.

As observers, it is difficult to know for sure what Nazarbayev had in mind for the election, and to what extent he tried to ensure their fairness (or, alternatively, encouraged fraud through his silence). With an international consensus (more or less – for extensive debate over how fair the elections were, look here and here) that the elections left much room for improvement, Nazarbayev’s actions after the fact are probably more indicative of the role he played (or didn’t play) in ensuring their fairness. If Nazarbayev truly did intend a fairer poll than the one that took place, in the coming months we should see a strong push for the rule of law, and elimination of corruption.

Initial indicators, however, are not looking good. IWPR reports:

Although Nursultan Nazarbaev’s landslide victory in the December presidential election appeared to make his position more unassailable than ever, pressure on the opposition has been stepped up since then.

As Nazarbaev was inaugurated on January 11, he embarked on a seven-year term in office with no strong political rivals even on the horizon. So his administration might have been expected to show a little magnanimity towards an opposition that had effectively been marginalised for the foreseeable future.

But instead, in the weeks following the December 4 election the authorities have shown even greater determination than usual to slap down their opponents – and keep them down. Signs of the pressure include the failure to release one opposition figure Galymzhan Zhakiyanov, and attempts to prosecute another, Bulat Abilov.

More information is necessary for a fair judgment to be made (after all, he was only just inaugurated), but if Nazarbayev really desired a fair election, and is serious about reform, he had better push early, and push hard.