I actually have a little bit invested in Central Asia. So if anyone has any insight or predictions to share, please let us know.
Here’s something I received today from a friend in a bank. It’s not limited to Kyrgyz, but is comment for the general vicinity
[quote=“A friend at a bank”]The events of the past few days in Kyrgyzstan can only be described as a popular revolution, the likes of which the world hasn’t really seen for a long time. Unlike Georgia and Ukraine, there was no person or collective body leading it and opposition politicians have struggled to assert some sort of authority over it during the past 24 hours. That they have succeeded makes this a revolution in the “good” sense of the word, in that it is likely to be followed by a return to democratic norms, respect for institutions and the rule of law. What has happened in Kyrgyzstan is important to us because a lot of our clients are invested in neighbouring Kazakhstan and we need to know what implications this may have.
Firstly I shall give a few background facts about President Akayev and Kyrgyzstan. When the Central Asian nations became independent in the early 1990s, President Akayev and his government seemed to be a model of openness and democracy. Laws were passed making the Kyrgyz economy one of the most open in the world, with complete freedom for capital to flow in and out. Elections were fair and President Akayev was genuinely popular. Kyrgyzstan was briefly described as the “Switzerland of Central Asia”. However, Kyrgyzstan has very few natural resources (just a little gold) and hardly any industry to speak of. The economy languished and unemployment reached over one third of the workforce. As the early promises of Mr. Akayev’s regime were not met, discontent spread but unlike neighbouring Uzbekistan, Kyrgyzstan was/is a relatively open society so a credible opposition began to emerge.
President Akayev gradually began to change and become more authoritiarian. Opposition figures were marginalised (ambassadorships abroad was a favourite tactic), removed from office and even imprisoned. A wealthy elite around the
President and his family began to emerge, which caused resentment when contrasted to the poverty of most of the population. Finally, he rigged elections and this (as was the case in Ukraine and Georgia) was his downfall.
How must President Nazarbayev, who faces re-election in 2006, be viewing all of this? If current reports are correct that Akayev and his family have fled the country, then President Nazarbayev will probably be thinking “…there but for the grace of God, go I.” Nazarbayev and Akayev were quite close: Akayev’s son married Nazarbayev’s third (and youngest) daughter but the marriage did not last. Nazarbayev has steered a careful line between democracy and openness, and authoritarianism. A wealthy elite has also emerged around Nazarbayev and his family…but there the similarities end. Kazakhstan is blessed with an abundance of natural resources and its buoyant economy has delivered a rapidly improving standard of living for most of the population. Even is the President’s family has become wealthy and powerful through its contacts, there are plenty of other wealthy elites in Kazakhstan that are not related or connected to the President. When a credible opposition in Kazakhstan began to emerge about three years ago (from within the ruling elite), President Nazarbayev ensured it did not become too powerful and marginalised some of its leaders (though others remain in office). The interesting thing is that the opposition never became a popular movement because there is little real discontent in Kazakhstan. Most Kazakhs are happy with what President Nazarbayev has achieved and there is a high degree of freedom of speech and the press.
However, even before these events in Kyrgyzstan, Nazarbayev showed that he was not complacent to rest on his laurels. There is every sign that he is taking the 2006 elections very seriously and is working hard to ensure his popularity among the electorate. He is avoiding selling natural resource (especially oil) to foreigners and there is a creeping re-nationalisation of parts of the oil industry. (British Gas recently announced it wanted to sell its share of the
Kashagan oilfield and the Kazakh government has declared its right of pre-emption. All new oil licesnes awarded must be JVs with the state oil company). These do not appear to be the actions of a man who is planning to rig next year’s elections…or at least not too outrageously. Nazarbayev is not and never has been an authoritarian dictator like his neighbour President Karimov of Uzbekistan…but he has been more authoritarian than Akayev was for most of the past 15 years, and now Akayev has had to flee the country with his family.
Nazarbayev is no fool and he will realise that movements such as the one in Kyrgyzstan are infectious. He does not want to see rioting on the streets and he certainly does not want to fly into exile with his family. The fact that he has shown signs of taking next year’s elections seriously indicate that he realises he cannot simply cow the Kazakh population into submission but he has to win their approval. And if he were tempted to rig the elections (even just a little), events in Georgia, Ukraine and Kyrgyzstan indicate that this would be a very bad idea. I think we have to watch Kazakhstan carefully going forward. I think the President’s inclinations will be to continue playing the populist card while cracking down immediately on any sign of street demonstrations. Even though the Kazakhs have less motivation than the Kyrgyz to start a popular revolution, these things are infectious and we could see something happening in Kazakhstan in the coming weeks. I just hope that Nazarbayev’s authoritarian streak does not get the better of him and make him crack down too hard on street demonstrations (if they occur); an over-vigorous response to demonstrations by the police often only inflames the situation. On balance, I feel that Nazarbayev has shown himself to be adept at balancing opposing forces in his country but I do expect him to move more in the direction of greater freedom of political expression and I think he will try to win the 2006 elections fair and square without obvious vote-rigging.
In the long run, I believe that a more democratic Kazakhstan will be a good thing and this is the direction that politics will increasingly take. I think the likelihood of a sudden and cataclysmic change of power in Kazakhstan can be avoided. (Though just to put this into context, sudden changes of government in Ukraine and Georgia have proved to be a good thing and I predict that the next government in Kyrgyzstan will be a great improvement on what preceded it). On the other hand, popular revolution in Kyrgyzstan is a much bigger threat to the regime in Uzbekistan. Karimov’s regime is highly repressive and acts as though the fall of the Soviet Union was something that happened to other people. Now I do predict trouble there, and it will be on a far greater scale (Uzbekistan: pop. 30 million) than the events in Kyrgyzstan (pop. 5 million)…let’s wait and see![/quote]