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Articles

The Legacy of the ‘Coloured Revolutions’: The Case of Kazakhstan

Pages 347-368 | Published online: 18 Nov 2010
 

Abstract

In the second decade of independence, the Kazakh regime, which throughout the 1990s had been thriving on patrimonial networks, began showing signs of moving away from these established patterns. In response to the rise of a pro-business opposition at the beginning of the 2000s, the regime attempted to co-opt small and medium-sized businesses across the country and began setting up state-led business bodies. The process of co-opting Kazakh businesses through the regime-established institutions accelerated in the years following the events of 2004 in Ukraine and 2005 in neighbouring Kyrgyzstan. The acceleration has been the most important long-term structural legacy of the coloured revolutions in post-soviet Kazakhstan. The introduction of the new type of state–business relations aims at creating conditions for a predictable transition of power and guaranteeing the long-term durability of the existing power structure.

Notes

The term ‘semi-authoritarianism’ was coined by Marina Ottaway in order to describe some undemocratic regimes that were born in the post-1991 world, including post-soviet Kazakhstan: Marina Ottaway, Democracy Challenged: The Rise of Semi-Authoritarianism (Washington, DC: Carnegie, 2003). For a further discussion on the nature of the political regimes that came to existence in Kazakhstan and other Central Asian republics in the aftermath of the collapse of the Soviet Union, see Michael McFaul, ‘The Fourth Wave of Democracy and Dictatorship: Noncooperative Transition on the Post-communist World’, World Politics, Vol.54, No.2 (2002), pp.212–44; Thomas Carothers, ‘The End of the Transition Paradigm’, Journal of Democracy, Vol.13, No.1 (2002), pp.5–21; Larry J. Diamond, ‘Thinking About Hybrid Regimes’, Journal of Democracy, Vol.12, No.2 (2002), pp.21–35; Valerie Bunce, ‘Rethinking Recent Democratization: Lessons from the Postcommunist Experience’, World Politics, Vol.55, No.2 (2003), pp.167–92.

See Sally N. Cummings, ‘Kazakhstan: An Uneasy Relationship – Power and Authority in the Nazarbaev Regime’, in Sally N. Cumming (ed.), Power and Change in Central Asia (London: Routledge, 2002), pp.59–74.

John Ishiyama, ‘Neopatrimonialism and the Prospects for Democratization in the Central Asian Republics’, in Sally N. Cummings (ed.), Power and Change in Central Asia (London: Routledge, 2002), pp.42–58 (p.49).

In 1994, Azerbaijan signed a production-sharing agreement (PSA) with 11 shareholders for the development of the Azeri–Chirag–Gunashli (ACG) oilfields, located offshore in the Azeri sector of the Caspian Sea. The project is operated by the Azerbaijan International Operating Company (AICO). At that time, when the PSAs were finalized, the press called this ‘the Contract of the Century’, as almost $8 billion were earmarked for investment over 30 years, during which 511 million tons of oil were expected to be produced from the three offshore fields: see Nasib Nassibli, ‘Azerbaijan: Oil and Politics in the Country's Future’, in Michael P. Croissant and Bulent Aras (ed.), Oil and Geopolitics in the Caspian Sea Region (London: Praeger, 1999), pp.101–31 (p.107).

Turkmenistan was a major supplier of natural gas in the Soviet Union, its share exceeding 24 per cent as early as 1970, and rising to just below 33 per cent by 1975: see Robert Ebel, ‘Introduction’, in Robert Ebel (ed.), Caspian Energy Resources: Implications for the Arab Gulf (Abu Dhabi: The Emirates Center for Strategic Studies and Research, 2000), pp.1–12 (p.4).

A ‘giant’ field is one that contains between 500 million and 5 billion barrels of oil in reserves. Tengiz is estimated to contain more than 3.3 billion tons of oil, which is as much as Algeria's total reserves: see Matthew Sagers, ‘The Oil Industry in the Southern-Tier Former Soviet Republics’, Post-Soviet Geography, Vol.35, No.5 (1994), pp.267–98 (pp.275 and 278).

Chevron agreed to pay $420 million for its 50 per cent and to invest $1.5 billion during the first three years of the project; for further discussion see Anne E. Peck, Economic Development in Kazakhstan: The Role of Large Enterprises and Foreign Investment (London: RoutledgeCurzon, 2004).

In the first quarter of 2002 foreign investors underwrote 80 per cent of Kazakhstan's oil production: see Theresa Sabonis-Helf, ‘The Rise of the Post-Soviet Petro-States: Energy Exports and Domestic Governance in Turkmenistan and Kazakhstan’, in Daniel L. Burghart and Theresa Sabonis-Helf (eds.), In the Tracks of Tamerlane: Central Asia's Path to the 21st Century (Washington, DC: Center for Technology and National Security Policy, 2004), pp.159–86.

Carola Hoyos, ‘$20bn Kazakh Oil Project Faces Two-year Delay’, Financial Times, 20 Aug. 2003; for detailed discussion of the Kashagan project, see Nadia Campaner and Shamil Yenikeyeff, ‘The Kashagan Field: A Test Case for Kazakhstan's Governance of Its Oil and Gas Sector’ (Paris: Institut Français des Relations Internationales, October 2008); Mark J. Kaiser and Allan G. Pulsipher, ‘A Review of the Oil and Gas Sector in Kazakhstan’, Energy Policy, Vol.35, No.2 (2007), pp.1300–14.

Beside Tengiz and Kashagan other major projects include Karachaganak, CNPC–Aktobemunaigas, Uzenmunaigas, Mandistaumunaigas and Kumokol, which altogether already produce one million barrels a day of liquids, or 70 per cent of the country's total, with the rest made up by smaller fields: see Carola Hoyos, ‘Energy: Oil Lubricates High-level Links’, Financial Times, 1 July 2008.

Richard Pomfret, ‘Kazakhstan's Economy Since Independence: Does the Oil Boom Offer a Second Chance for Sustainable Development?’, Europe–Asia Studies, Vol.57, No.6 (2005), pp.859–76 (p.868).

Bahavna Dave, Kazakhstan: Ethnicity, Language and Power (London and New York: Routledge, 2007), p.142.

Christopher Pala, ‘The Jewel of Central Asian Republics’, Insight on the News, 11 March 2002.

For good discussions of Kazakhstan during the transition period, see Martha B. Olcott, Kazakhstan: Unfulfilled Promises (Washington, DC: Carnegie, 2002); Joma Nazpary, Post-Soviet Chaos: Violence and Dispossession in Kazakhstan (London: Pluto Press, 2002).

David McKeeby ‘Crude Business: Corruption and Caspian Oil’, Caspian Energy Update, 31 Aug. 2000.

Quoted in Justin Burke, ‘Kazakhstani Opposition Movement Prepares to Renew Battle with Nazarbaev’, EurasiaNet, 17 Oct. 2002, available at <http://www.eurasianet.org/departments/insight/articles/eav101702.shtml>, accessed 20 Feb. 2009.

International Monetary Found, ‘Republic of Kazakhstan: Selected Issues and Statistical Appendix’, IMF Country Report No. 04/362, Nov. 2004.

‘Annual Address of President Nursultan Nazarbayev to the Nation’, Official Site of the President the Republic of Kazakhstan, 4 April 2003, available at <http://www.akorda.kz/www/www_akorda_kz.nsf/sections?OpenForm&id_doc=BB5EA19B864F2AE1462572340019E5EC&lang=en>, accessed 26 Feb. 2009.

‘Kazakh President's State of Nation Address to Parliament – Excerpts’, Kazakhstan Daily Digest, 19 Mar. 2004, available at <http://www.eurasianet.org/resource/kazakhstan/hypermail/200403/0035.shtml>, accessed 26 Feb. 2009.

Citibank, ‘Market Overview: Kazakhstan’ (2006), available at <http://www.citibank.com/kazakhstan/homepage/market>, accessed 20 Feb. 2009.

Fiona Hill, ‘Whither Kazakhstan? (Part I)’, The National Interest, Oct. 2005, available at <http://www.brookings.edu/views/papers/hillf/20051031_kazakhstan.pdf>, accessed 20 Feb. 2009.

Dilyara Teshebayeva, ‘Kazakhstan Plans Vast Expansion of Payments to Elderly, Students and State-sector Employees’, EurasiaNet, 5 May 2005, available at <http://www.eurasianet.org/departments/business/articles/eav050505.shtml>, accessed 20 Feb. 2009.

RFE/RL NEWSLINE,Vol.9, No.7 (22 April 2005), Part I.

Joanna Lillis, ‘Rich–Poor Gap Fuels Tension in Kazakhstan's Commercial Capital’, EurasiaNet, 8 Sept. 2006, available at <http://www.eurasianet.org/departments/civilsociety/articles/eav080906.shtml>, accessed 20 Feb. 2009; Joanna Lillis, ‘Oilfield Brawl Dents Kazakhstan's Image’, EurasiaNet, 21 Nov. 2006, available at <http://www.eurasianet.org/departments/insight/articles/eav112106.shtml>, accessed 20 Feb. 2009; see also: Saulesh Yessenova, ‘Tengiz Crude: A View from Below’, in Boris Najman, Richard Pomfret and Gaël Raballand (eds.), The Economics and Politics of Oil in the Caspian Basin: The Redistribution of Oil Revenues in Azerbaijan and Central Asia (London: Routledge, 2007), pp.176–98; ‘Central Asia's Energy Risks’, International Crisis Group, Asia Report No.133, 24 May 2007, available at <http://www.crisisgroup.org/library/documents/asia/central_asia/133_central_asia_s_energy_risks.pdf>, accessed 20 Feb. 2009.

Teshebayeva, ‘Kazakhstan Plans Vast Expansion of Payments’.

Richard Orange, ‘Oil Companies Face Tough Measures in Kazakhstan’, Alexander's Gas and Oil Connections, 18 Aug. 2004, available at <http://www.gasandoil.com/goc/company/cnc43382.htm>, accessed 20 Feb. 2009.

Interfax-Kazakhstan, 15 Dec. 2001.

Ibid.

For instance, in addition to Nazarbaev's demands, the Almaty tax committee accused foreign oil companies of ‘tax-dodging’; officials argued that a significant amount of Kazakh oil was supplied to false firms registered in the Caribbean islands; these firms then resold the oil to real customers at higher prices; such machinations yielded large profits, since duty was not imposed on trade operations under Caribbean laws: see BBC Monitoring Service – United Kingdom, 10 Apr. 2002; Source: Khabar Television, Almaty, in Russian 14:00 GMT 10 Apr. 02, available at <http://search.ft.com/searchArticle?id=020415007894&query=Kazakhstan+businesses+&vsc_appId=powerSearch&offset=80&resultsToShow=10&vsc_subjectConcept=&vsc_companyConcept=&state=More&vsc_publicationGroups=TOPWFT&searchCat=-1>, accessed 20 Jul. 2006; see also S. Smirnov, ‘Oil Mirage in Kazakhstan’, Oil and Gas Vertical, 2000, No.11, pp.62–6.

Michael Lelyveld, ‘Bitter Feelings Failed $3bn Kazakh Oil Deal’, Asia Times, 23 Nov. 2002; for details see ‘Kazakhstan Oil and Gas Tax Guide’, Ernst&Young Tax Services (2002 edn).

Alexander Zakharov, ‘Kazakhstan: Authorities Pressure Foreign Investors’, Institute for War & Peace Reporting, 16 Dec. 2002, available at <http://www.iwpr.net/index.php?apc_state=hen&s=o&o=p=rca&l=EN&s=f&o=162227, accessed 20 Feb. 2009.

For an overview of the KazMunaiGas history and activities, see Martha Brill Olcott, ‘KazMunaiGaz: Kazakhstan's National Oil and Gas Company’, The James A. Baker III Institute for Public Policy, Rice University, March 2007, available at <http://www.carnegieendowment.org/files/Kaz_Olcott.pdf>, accessed 20 Feb. 2009.

TengizChevrOil second generation and sour gas injection projects (SGP/SGI) were designed to raise Tengiz output from 260,000 to 480,000 oil barrels per day by 2005: see Dmitrii Solovyev, ‘TengizChevrOil announces its expansion in Kazakhstan’, Vremya Po, 26 June 2001.

Peck, Economic Development, p.158.

David Stern and Matthew Jones, ‘Kazakh Fine US Led Oil Consortium $70 m.’, Financial Times, 4 Dec. 2002.

Michael Lelyveld, ‘Huge Oil Venture Abruptly Suspends Expansion’, RFE/RL, 18 Nov. 2002, available at <http://www.rferl.org/content/Article/1101409.html>, accessed 20 Feb. 2009.

Michael Lelyveld, ‘Oil Project Remains Murky’, RFE/RL, 11 Dec. 2002, available at <http://www.rferl.org/content/Article/1101638.html>, accessed 20 Feb. 2009.

Interfax-Kazakhstan, 30 Jan. 2003.

Dosym Satpayev, ‘Will the New Government Introduce the New Rules of Game?’ Petroleum Magazine, Feb. 2002, available at <http://www.petroleumjournal.kz/arhiv_2002.html>, accessed 10 Jun 2006.

Sally N. Cummings, Kazakhstan: Power and the Elite (London: Tauris, 2005), p.148.

Interfax-Kazakhstan, 24 June 2002.

Interfax-Kazakhstan, 2 Sept. 2003.

Interfax-Kazakhstan, 15 April 2002.

‘Bush calls Kazakhstan's stability and prosperity a Model’, Kazakhstan News Bulletin, News Bulletin of the Embassy of the Republic of Kazakhstan to the USA and Canada, Vol.5, No.30, 1 Aug. 2000, available at <http://www.kazakhembus.com/080105.html>, accessed 15 Oct. 2005.

Martha Brill Olcott, Central Asia's Second Chance (Washington, DC: Carnegie, 2005), p.205; for a further discussion on the US–Kazakh relationships, see Olga Oliker, ‘Kazakhstan's Security Interests and Their Implications for the U.S.–Kazakh Relationship’, China and Eurasia Forum Quarterly, Vol.5, No.2 (2007), pp.63–72; Pinar Ipek, ‘The Role of Oil and Gas in Kazakhstan's Foreign Policy: Looking East or West?’, Europe–Asia Studies, Vol.59, No.7 (2007), pp.1179–99.

Martha Brill Olcott, ‘Emerging Political Elites’, in Ali Banuazizi and Myron Weiner (eds.), The New Geopolitics of Central Asia and its Borderlands (London: Tauris, 1994), pp.44–67; Martha Brill Olcott, ‘Democratization and the Growth of Political Participation in Kazakstan’, in Karen Dawisha and Bruce Parrott (eds.), Conflict, Cleavage, and Change in Central Asia and the Caucasus (Cambridge: Cambridge University Press, 1997), pp.201–41.

David I. Hoffman, ‘Oil and State-Building in Post-Soviet Azerbaijan and Kazakhstan’, unpublished doctoral dissertation, University of California, Berkeley, 2000, p.301.

At that time, one source in the president's administration commented: ‘Kazhegeldin forgot who is the boss in the house, and [he has] paid for his forgetfulness’: quoted in Russian Petroleum Investor, Nov. 1997, p.8.

Barbara Junisbai and Azamat Junisbai, ‘Democratic Choice of Kazakhstan: A Case Study in Economic Liberalization, Intra-elite Cleavage, and Political Opposition’, Demokratizatsiya, Vol.13, No.3 (2005), pp.373–92.

Aldar Kusainov, ‘Kazakhstan's Critical Choice’, EurasiaNet, 13 Jan. 2003, available at <http://www.eurasianet.org/departments/rights/articles/eav011303.shtml>, accessed 20 Feb. 2009.

Dimitrii Furman, ‘The Regime in Kazakhstan’, in Boris Rumer (ed.), Central Asia at the End of the Transition (Armonk, NY: Sharpe, 2005), pp.195-267 (p.223).

Bhavna Dave, ‘Kazakhstan's 2004 Parliamentary Elections: Managing Loyalty and Support for the Regime’, Problems of Post-Communism, Vol.52, No.1 (2005), pp.3–14; Ryan Kennedy, ‘A Colorless Election: The 2005 Presidential Election in Kazakhstan, and What It Means for the Future of the Opposition’, Problems of Post-Communism, Vol.53, No.6 (2006), pp.46–58.

John C.K. Daly, ‘Kazakhstan's Emerging Middle Class: A Factor for Stability’, Caspian Information Centre Occasional Paper No.6, Nov. 2004, available at <http://www.silkroadstudies.org/new/docs/Silkroadpapers/0803Daly.pdf>, accessed 20 Feb. 2009.

Ibid., p.18.

Aldar Kusainov, ‘Kazakhstan Opposition Party Showing New Stridency’, EurasiaNet, 13 Nov. 2003, available at <http://www.eurasianet.org/departments/insight/articles/eav111303a.shtml>, accessed 20 Feb. 2009.

Novoe pokolenie (Almaty), 15 Nov. 2002, and Interfax-Kazakhstan, 31 Oct. 2003; see also Aldar Kusainov, ‘Opposition in Kazakhstan Press Campaign to Dilute President's Authority’. EurasiaNet, 19 March 2002, available at <http://www.eurasianet.org/departments/rights/articles/eav031902.shtml>, accessed 20 Feb. 2009.

Interfax-Kazakhstan, 7 Aug. 2002.

Interfax-Kazakhstan, 18 Sept. 2002.

Interfax-Kazakhstan, 18 April 2003.

Interfax-Kazakhstan, 31 Oct. 2003.

Interfax-Kazakhstan, 16 April 2003.

Interfax-Kazakhstan, 31 Oct. 2003.

Ibid.

‘Kazakh President Urges State Bodies to Change Attitude to Entrepreneurship’, BBC Monitoring Service, 31 Oct. 2003; source: Khabar Television, Almaty, in Russian 15:15 GMT 31 Oct. 03, available at <http://search.ft.com/searchArticle?id=031031003194&query=Kazakhstan+business+&vsc_appId=powerSearch&offset=110&resultsToShow=10&vsc_subjectConcept=&vsc_companyConcept=&state=More&vsc_publicationGroups=TOPWFT&searchCat=-1>, accessed 14 Jul. 2006.

Interfax-Kazakhstan, 31 Oct. 2003.

Ibid.

Interfax-Kazakhstan, 4 May 2004; Interfax-Kazakhstan, 5 Sept. 2005.

Dosym Satpaev, ‘The Political Elite Is Preparing for Presidential Elections’, Petroleum Magazine, Oct. 2005, available at <http://www.petroleumjournal.kz/arhiv_2005.html>, accessed 27 Nov. 2005.

Daly, ‘Kazakhstan's Emerging Middle Class’, p.158.

Marat Yermukanov, ‘Kazakhstan Balances on the Tightrope Between Velvet Revolution and Governable Democracy’, Central Asia–Caucasus Institute Analyst, 6 April 2005, available at <http://www.cacianalyst.org/?q=node/2938>, accessed 20 Feb. 2009.

For a full list of the founding members see <http://souz-atameken.kz/rus/founders>, accessed 20 Feb. 2009.

Irina Nos, ‘Law as Criteria of Effect’, Kazakhstanskaya pravda, 21 Feb. 2006.

Interfax-Kazakhstan, 25 May 2005; Interfax-Kazakhstan, 9 Aug. 2005.

Kazachstan Today, 6 June 2005.

Interfax-Kazakhstan, 11 May 2005.

Kazachstan Today, 7 April 2006.

Kazinform, 5 March 2006.

Dmitry Popazov, ‘In the Context of Mature Business’, Kazakhstanskaya pravda, 7 Jun. 2007.

Dulat Moldabayev, ‘Atameken Invites to Roundtable’, Kazakhstanskaya pravda, 1 Jun. 2006.

‘The Role Public Association of Entrepreneurs’, Electronic Government of the Republic of Kazakhstan, 28 Sept. 2007, available at <http://www.e.gov.kz/business/small_bus/asso_entre/article/1745?lang=en>, accessed 7 March 2008.

Kazinform, 1 April 2004.

<http://www.kazelection2005.org/news1>, accessed 6 Jan. 2006.

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Ibid., p.5.

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Additional information

Notes on contributors

Wojciech Ostrowski

Wojciech Ostrowski recently completed a PhD at the School of International Relations, University of St Andrews. He is currently completing a book entitled Politics and Oil in Kazakhstan, to be published by Routledge in 2009.

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