January 2025 may become a month of large-scale reshuffles in the state apparatus of Kazakhstan, up to resignation of the government. The main focus is to purge the authorities of the destructive corporate agents influence
The election of Donald Trump as US President sets a trend for the fight against the influence of the deep state not only in America, but around the world. The telephone conversation between the US President-elect and the head of Kazakhstan Kassym-Jomart Tokayev on December 6 indicates that the new White House administration understands the importance of the largest Central Asian state for building foreign policy in the eastern direction. Trump is well aware of the risks of destabilization of Kazakhstan by big business and makes it clear that he wants to build the dialogue with leaders whose decisions are not influenced by the corporate lobby.
Against this background, the possible resignation of the government is being discussed in Kazakhstan. One of the main complaints about the current head of government, Olzhas Bektenov, is the slow purge of the state apparatus of shadow lobbyists of Kazakh financial and industrial groups and foreign corporations. As the former head of the Anti-Corruption Agency, Bektenov was expected to make significant progress in this area, but so far he has simply integrated into the traditional decision-making system of Kazakhstan. Meanwhile, President Tokayev seems to have launched his own game against lobbyists.
Shadow boxing
Tokayev’s presidential term formally expires in 2029. The interpretations of the Kazakhstan Constitution allow us to talk about the date of possible elections in December 2028 as well. One way or another, Tokayev promised not to be re-elected to the post of president, which means that there is not much time left to build a new stable system of power and find a successor. Despite the fact that the threat of revenge of the old elites is only growing.
Meanwhile Kazakhstan’s economic problems are expanding. The local currency, tenge, is rapidly devaluing and inflation is rising. Oil prices remain low and are likely to decline under pressure from slowing economic growth in the world’s largest economies. Kazakhstan’s commitments to limit oil production, undertaken by OPEC+, are becoming increasingly burdensome for it.
Against this background, the entourage of former President Nursultan Nazarbayev has stepped up efforts to destabilize the socio-economic situation through a network of expert organizations and the media. Kazakhstan remembers well the tragic events of January 2022, when the news of rising liquefied gas prices was enough to trigger mass protests that engulfed Kazakhstan’s largest cities and almost led to a violent seizure of power. It seemed that the protests came out of nowhere, which once again demonstrated the power of deep-seated processes cemented by almost thirty years of Nazarbayev’s undivided rule.
On January 1, 2025, a new Tax Code will come into force in Kazakhstan. In addition to the direct task of balancing public finances, it hits a lot businesses associated with the family of former President Nursultan Nazarbayev. For example, new differentiated corporate tax rates affect the interests of the banking sector and the gambling business (for them, the rate will be a record 25%). In both of these sectors, business structures associated with so-called “old elites” have a strong position.
Timur Kulibayev, the husband of Nazarbayev’s middle daughter Dinara, indirectly controls the country’s largest bank, Halyk Bank (People’s Bank). The figure of Nazarbayev’s nephew Kairat Satybaldy is behind Kaspi Bank. The interests of Nazarbayev’s eldest daughter Dariga are visible behind Nur Bank and others. Businessman Timur Turlov, close to Dariga Nazarbayeva, owns Freedom Finance Bank. A huge shadow turnover of money passes through the gambling business, also controlled by the “old elites” of Kazakhstan. The large payment service PayDala, which processes bookmaker bets, is associated with the grandson of the former president Nurali Aliyev. And the large bookmaker companies themselves are often associated with Nazarbayev’s inner circle.
Move corporations away from decision-making
President Tokayev has repeatedly raised the issue of the need to regulate lobbying activities. The latter, according to Tokayev himself, creates “a wide field for corruption.” But at the executive level, the problem of reducing the influence of financial and industrial groups on political and economic decisions has been sabotaged.
In Kazakhstan, there is no regulation of lobbying activities, and the concept of “conflict of interest” applies exclusively to civil servants. Various consultants, experts and political scientists who are members of advisory and consultative bodies under the parliament and the government can freely lobby the commercial interests of large corporations, having access to decision-makers.
Rarely do such cases reach the public sphere. The loudest public scandal that leaked to the press was criticism of the work of the Public Chamber under the Majilis (the lower house of parliament). The advisory body, designed to take into account the interests of society when adopting important laws by parliament, has turned into a powerful corrupt tool for lobbyists.
Thus, a member of the Public Chamber, former head of the Board of Trustees of Transparency International, Natalia Malarchuk represents the interests of several business structures at once. Malarchuk received money from the above-mentioned payment service PayDala for representing the company’s interests in government agencies. In particular, PayDala claimed the role of the operator of the bookmaker betting processing system with broad powers in terms of their administration and taxation.
Subsequently, Natalia Malarchuk and a number of her business partners were part of the so-called “bookmakers’ headquarters”, which resisted the adoption of a law restricting the advertising of bookmaker bets. Through the Public Chamber, Malarchuk and her associates managed to largely emasculate the bill banning advertising and tightening control over the gambling business. At the same time, gambling addiction remains an acute problem for Kazakhstan’s society and economy.
How Apple and Amway are changing Kazakh laws
The consulting company Markets Mentor, where Natalia Malarchuk is employed, was created by Kairat Kelimbetov, the former head of the Astana International Financial Center, the operator of Kazakhstan’s largest stock exchange, Astana International Exchange (AIX). Under President Nazarbayev, Kelimbetov worked in the government, the presidential administration, and also headed the National Bank. In other words, he is the person closest to Nazarbayev.
Operational work of Market Mentors is financed by another representative of the “old elites”, oligarch Timur Turlov, in whose business structures former top managers of the AIFC and Kelimbetov himself are employed. Markets Mentor’s key clients are large American corporations Apple and Amway. The interests of these companies were also transmitted into draft laws through Natalia Malarchuk’s participation in the work of the Public Chamber. We are talking about amendments to a wide range of draft laws – from e-commerce and government procurement to consumer protection and taxation. As in the US, corporations like Apple do not simply transmit their interests through government agencies, but directly influence the legislative process through local elites.
Apparently, this is well understood in the Tokayev Administration, for whom such voluntary freedom of local financial and industrial groups, foreign corporations and lobbyists working for them poses a direct threat to the effective work of the authorities. In the coming weeks and months, we can expect a purge of government and parliamentary advisory structures from corporate influence. And officials and MPs who resist these changes will fall into disgrace with the current government.