Kazakhstan is one of Central Asia’s most important countries. Geographically, the nation links Europe and East Asia in a unique way. Aside from its unique landscape, the country is a natural resource hotspot. It is one of the prominent exporters of oil and uranium in Central Asia. Kazakhstan’s distinctiveness extends beyond its geology and natural resources with its unique political situation. Kazakhstan was a member of the former USSR for a long time, from 1917 until the collapse of the Soviet Union in 1991. Post attaining independence in 1991, Kazakhstan is the only post-soviet country which was controlled by its leader Nursultan Nazarbayev for nearly three decades.
Familial relations are more important in Kazakhstan and other Asian nations than political accords. One of the major causes for the three decade long leader of Kazakhstan, Nursultan Nazarbayev’s departure as President in 2019 was growing public discontent with his government, as well as bad economic conditions and widening socioeconomic gaps among the populace. Even after his resignation in 2019, Nazarbayev maintained his political status as “The Leader of the Nation,” wielding power over the country’s internal and foreign affairs. Kazakhstan’s elected it’s new President, Kassym Jomart Tokayev, in 2019. The new leader soon gained the title of the puppet President. Due to the country’s unbroken administration of the same President from 1999 to 2019, many Kazakhs feel the 2019 election was pre-determined by the country’s ex-President. President Tokayev is said to have been hand-picked by Nazarbayev. As a result, the discontent and hatred towards the Tokayev’s administration continued among the people.
Now the big question that comes to mind is why the country with abundance in natural resource is going through an economic break through. Is the income disparities rise to be blamed on the authoritarian endeavors of the Kazakh government? The answer is much complicated then the question.
Kazakhstan tried to uphold its stature as a democratic secular republic for the duration of President Nursultan Nazarbayev’s presidency. Despite the fact that during his time, the President had the right to veto any proposal voted by the Mazhilis (Kazakh Parliament). Kazakhstan’s authoritarian leadership has been accused of often violating citizens’ fundamental rights overtime, despite the country’s appearance of political stability. One of the significant examples is the 2011 protests, a dozen unarmed civilians were massacred on Zhanaozen Square, confirming this story. The demonstrators were unarmed oil field employees demanding better working conditions and a higher wage. When authorities retaliated against Kazakh protesters, the country’s reputation as a democratic state suffered a setback. The nonviolent opposition to the autocratic ruler was put down with excessive force. A glimpse of the same protest was seen currently post 1 January 2022; free market reforms led by Tokayev government.
Authoritarian rule is conceivable if there is a lot of foreign money. Kazakhstan has made significant growth in its resource sector in past few decades of Nazarbayev’s administration. However, non-mineral resource sectors of the economy fell as a result of the Dutch epidemic or a ‘NATURAL RESOURCE CURSE’, and income was not dispersed equally. Kazakhstan being one of the major exporters of oil in central Asia like several African countries is subjected to what economist term as the Dutch disease. Dutch illness is characterized by an abundance of a single or few natural resources. In such a scenario, foreign investments and currency swings have a significant influence on local markets by increasing the price of the domestic products. Under Nazarbayev’s political authority, Kazakhstanis wre concerned about growing economic inequality and wealth accumulation among the privileged few. Kazakhstan has been a hub of foreign investment with companies like Blackrock, Luxor Capital and many more. Due to the abundance of natural resources and their exports, the non-natural resource exports declined as the currency’s value increased, raising the cost of domestic products. This shifted the countries focus away from big importers and toward big exporters. While the poor people in a country have no idea what the Dutch disease is or why politicians fail to invest in their own country while having large quantities of money. As a result of the currency appreciation, oil export money that could be utilized to aid development is lost in the economy. The endeavor to follow sound economic practices resulted in outbreak in Kazakhstan under its current regime after the implementation of free market rule.
A step which led to increase in LPG prices in 2022 was not the main cause of protest—IT WAS JUST A TRIGGER POINT. The dissatisfaction among Kazakhs that existed in last 3 decades exacerbated further with financial disparities caused by the coronavirus pandemic and a lack of democracy over time. On January 1 the price cap on LPG was removed by the Kazakh government. In 2021, the oil firms being foreign led to worsening of the Dutch disease with no alternative to regulate revenue.
As a result of rising gasoline prices, food expenditures have grown significantly since the onset of the COVID-19 outbreak. Most Kazakhs resorted to LPG as fuel. The administration raised the cap on LPG prices on January 1, 2022, stating that the low price was unsustainable. After the government abolished price controls on LPG, protests occurred, causing fuel prices to skyrocket. Thousands of people demonstrated at Zhanaozen’s Mangystau oil hub following a hike in fuel prices. Protests broke out in Mangystau and western Kazakhstan, including Aktau, the province seat, and the Tengizchevroil labor camp. In response to violent protests over rising gasoline prices, Kazakh President Kassym-Jomart Tokayev accepted the resignation of his cabinet, led by Prime Minister Aksar Manin. Alikhan Smailov has been named interim Prime Minister by President Tokayev. Tokayev also stated that the price ceiling will be reinstated as a temporary pricing restriction for a period of 180 days while announcing his government’s departure. Apart from that, Tokayev has proclaimed a state of emergency for two weeks. The state of emergency included a curfew from 11 p.m. to 7 a.m., as well as a ban on mass gatherings. Meanwhile, the Dutch illness became worse, and the outbreak wreaked havoc on the country’s finances. As a rallying cry, protesters screamed “OLD MAN GO BACK.” The price cap was lifted in an effort to stop subsidized gasoline for customers, enabling the market to set the price. This action was done in an attempt to address the country’s LPG deficit. As a result of the increased demand, expenses increased. However, the approach backfired, resulting in demonstrations. Tokayev requested the resignation of the council of ministers and the PM, but the situation remained tense. The protestors aggression and the intensity of outbreak towards the government, prompting Tokayev to justify of CSTO intervention to control the situation of unrest in the country.
There is a huge geo-political implication of the Kazakhstan crisis. Kazakhstan is a trailer for a potential natural gas crisis that the Europe might face in the near future because of the dependency towards clean energy to reduce carbon footprint.
No one is in charge of the Kazakh protests. Protesters are taking to the streets in Kazakhstan to protest the country’s corrupt political system, which has benefitted a tiny group of elites for decades. The majority of successful commercial endeavors are backed by powerful elites and sponsored by the government. The Dutch sickness, on the other hand, is widespread all around the country. The Tokayev regime’s attempt to open the market failed, limiting the alternatives available to reduce Kazakhstan’s present economic inequalities. While the protests in Kazakhstan may be contained for the time being, they are only a reliable indication of a future energy crisis and probable eruption of riots in numerous other nations affected by the Dutch illness.
The elites in Kazakhstan have been favored by Russia, which seeks to maintain strategic supremacy in Central Asia. Kazakhstan is the world’s leading producer of uranium, which is used to fuel nuclear reactors. It’s critical for the global green economy. From fossil fuels to nuclear power, EU countries are working to decarbonize their economies. Several countries, notably those in the European Union, are doubling down on nuclear energy as part of their efforts to decarbonize their economies. On the other side, a new cold war between the US and Russia over Ukraine might result in western nations losing their contracts in Kazakhstan. The largest oil producing country in Central Asia. The failure of OPEC + to reach its quotas is keeping oil prices high. Many major European oil-producing countries have invested in Kazakhstan; nevertheless, if the demonstrations continue, they might constitute a serious threat to world oil prices. Because of the Cold War between Russia and the United States over Ukraine, Western countries may lose contracts in Kazakhstan. Such unrest might pose a severe threat to uranium production.