Putin’s Troops Prepare to Exit as Kazakh Leader Blasts Oligarchs
(Bloomberg) -- President Kassym-Jomart Tokayev said Russian-led troops that helped him crush an uprising would begin to leave in two days as he denounced “oligarchic groups” that dominate Kazakhstan’s economy.
The country is now “stable” after last week’s violence, allowing for the phased withdrawal over 10 days of forces from Russia and other ex-Soviet states that he’d summoned to Kazakhstan, Tokayev told lawmakers Tuesday. He demanded wholesale reform of Kazakh security services, saying officials didn’t respond to what he called a “terrorist” threat from inside and outside the country.
After naming Alikhan Smailov, a former finance minister, to head the country’s new government, Tokayev said oligarchs he didn’t identify had “seriously restricted development of the free market and dented the country’s competitive edge.”
He ordered the new premier to secure “additional revenue” from mining companies, saying their incomes had benefited from high raw materials prices, and called for gasoline producers to pay higher excise duties without passing on price increases to consumers. The government should present a program for the year within three weeks, Tokayev said.
Dozens of protesters and police died and 9,900 people were detained in the unrest that began over surging fuel prices but quickly spiraled into the most serious challenge to Kazakhstan’s leadership since independence in 1991. Tokayev made an unprecedented appeal to Russia and other Collective Security Treaty Organization member states to send troops to help him quell the disturbances, and ordered his forces to shoot protesters without warning to regain control.
He’s accused unspecified outside forces led by “professionals” of plotting the violence as part of an attempted coup. Russian President Vladimir Putin on Monday said some Kazakh protesters had been trained in camps outside the country as part of efforts to spark a “color revolution.”
However, Tokayev said Tuesday the unrest was “largely caused” by economic difficulties facing a population struggling with rising food and fuel costs amid a widening income gap, while a small group of Kazakhstan’s elite control much of its energy and mineral wealth.
While state bodies failed to respond to people’s needs, powerful financial and oligarchic groups enjoyed special privileges on the principle of “for my friends everything, for everyone else the law,” he said.
Tokayev singled out the state-owned Development Bank of Kazakhstan, which he told lawmakers “has essentially turned into a personal bank to serve a circle of persons” representing financial, industrial and construction groups. “We know everyone by name,” he said.
He ordered prosecutors and the Finance Ministry to overhaul the “real mess” in customs services, saying the state was losing tens of billions of tenge in unpaid duties with some operators regarded as “untouchable.” He also called for an overhaul of state bodies.
Still, Tokayev and his long-serving predecessor, Nursultan Nazarbayev, have hit out at rampant corruption and its impact on the population’s living standards for years, often pledging reform to little effect.
“Tokayev’s speech doesn’t change the overall reform direction,” said Tom Adshead, director of research at Moscow-based consultancy Macro Advisory. “What he’s looking for is some demonstrative populist measures against elites who made money under Nazarbayev.”
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