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KAZAKHSTAN - The Decision Makers.

Decision making in Kazakhstan is concentrated in the hands of one man, the president of the republic, and a small number of persons around him aided by experts. The process follows presidential decrees issued in March 1997 re-centralising authority in all the sectors.

President Nursultan Nazarbayev involves himself in all the big E&P deals, pipeline agreements or downstream projects. To promote Kazakhstan and attract foreign investors, he has travelled around the world since the country's independence and collapse of the Soviet Union in late 1991. He has a Boeing 747 to take him anywhere and, at the presidential palace in the capital Astana, he meets foreign oil executives.

There is a lot of corruption and nepotism and Nazarbayev is said to have become one of the wealthiest men in the world. He has given his relatives key positions. One of his sons-in-law, Timur Kulibayev, working in the integrated super-NOC KazMunaiGaz (KMG), is the most powerful man in the petroleum sector next to Nazarbayev. Nazarbayev's daughter Dariga is a very wealthy figure and controls the national TV network Khabar. Her husband, Rakhat Aliyev, is the ambassador to Austria. Nazarbayev's critics call his regime a "kleptocracy".

It was hoped in late 1996 that, eventually, there would be some degree of decentralisation in Kazakh decision making as a result massive privatisations and restructuring then pursued by a reformist prime minister, Akezhan Kazhegeldin, who was forced to resign on Oct. 10, 1997. Nazarbayev's March 1997 decrees slashed Kazhegeldin's government by 50% with seven ministries dissolved and set up four presidential commissions crippling the prime minister's main functions.

Soon after changing the government, in February 2002 Nazarbayev decreed a merger of KazakhOil and the oil/gas pipeline monopoly TransNefteGaz under KazMunaiGaz. Kulibayev was behind the merger. This helped consolidate changes made under the 1997 decrees, which had marked a turning point in the Kazakh economic philosophy as policy lines and measures by presidential commissions reversed reform-related programmes launched by Kazhegeldin's initial government. Kazhegeldin was fired in 1997 and now he is in the banned opposition (see Gas Market Trends).
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Publication:APS Review Downstream Trends
Date:Aug 9, 2004
Previous Article:KAZAKHSTAN - The Economic Base.
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