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Kazakhstan's 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 the top IOC 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. But after the late 2011 labour riots in the oil producing region of Mangistau in the west, he has suspended the role of his billionaire son-in-law, Timur Kulibayev, as chairman of the state's SWF, Samruk-Kazyna (SK) which owns the integrated super-NOC KazMunaiGaz (KMG) and many other public-sector companies. So Kulibayev is no longer the most powerful man in the petroleum sector next to Nazarbayev. Nazarbayev's first daughter Dariga is a very wealthy figure and controls the national TV network Khabar. She has initiated some of the most important decisions in the government, including a moratorium on the privatisation of strategic assets such as KMG. She has divorced her husband, Rakhat Aliyev, who was a deputy foreign minister and part of the decision making system but now is being pursued for arrest on serious charges; he remains outside the country.

Nazarbayev's critics call his regime a "kleptocracy". But Nazarbayev has proved to be a shrewd survivor, having maintained stability in the country since its independence from the Soviet Union.

It was hoped in late 1996 that, eventually, there would be some degree of de-centralisation in Kazakh decision making as a result massive privatisations and restructuring then pursued by a reformist prime minister (PM), 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 PM'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 (KMG). Kulibayev, husband of Nazarbayev's second daughter, 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 plans launched by Kazhegeldin's initial government. Kazhegeldin was fired in 1997 and now he is in the banned opposition (see gmt6KazWhoAug6-12).
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Publication:APS Review Downstream Trends
Geographic Code:9KAZA
Date:Aug 6, 2012
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