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Tajikistan’s investment environment is inhospitable, regardless of an investors appetite for risk. Business and politics are inseparable in the country, and the political elite successfully manipulate the political and commercial environment to their benefit – seen through cases of embezzlement, corruption, intimidation of rivals, and the diversion of profits offshore. Those who challenge the Presidential family in private enterprise inevitably face repercussions.
A month after the Saudi King’s landmark visit to Moscow, the courtship between Russia and the Saudis is yet to show signs of a slowdown. While a lot of the discussion revolves around the geopolitical dividends for the Kremlin, the new partnership has more pragmatic business implications for key power players. Shadow Governance looks beyond the headlines to uncover the key Russian benefactors of the new friendship between Moscow and Riyadh.
Although nepotism, like corruption, has been a fixture of the Kazakh elite, there are no obvious presidential candidates in the Nazarbayev family itself. Succession plans, as such, have been turning into an art of guesswork, as Nazarbayev is guarding discussions from public consumption. Although the family has its own candidates, the future of Kazakhstan’s political leadership may well fall to individuals who are a degree, if not two, removed from the family.
Tajikistan’s kleptocratic system is characterised by government critics as one in which the ruling elite would rather have 100% of a $1 million pie, rather than 10% of a $100 million pie. This sentiment highlights the risks associated with doing business in a country where business and politics truly are inseparable.
Uzbekistan is on a path that is seeking to diverge from its past. It is shifting away from Russia and towards China; and, it is looking to introduce market transparency, initially through a concerted anti-corruption programme. Although the two policies can be viewed as progressive, they may not be able to co-exist over the long term.
Reforms have brought a degree of transparency to Ukraine’s political system. A legacy of oligarch interference over political institutions, however, is not so easily disrupted; evident in media revelations that President Poroshenko has prioritised the security and growth of his business interests over the promises he made to the electorate. As Ukraine’s future balances between progress and regression, will the balance tilt towards further reform, or will the road towards a new oligarch class and influence be opened?
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Although Moscow is keen to maintain some degree of influence over Kazakhstan, there are strong indications that Astana is repositioning its foreign policy focus. A careful balancing between East and West has been replaced by a marked shift towards anti-Russian defiance – seen in alternative foreign ties, internal social and cultural policies, and reshuffles of the political elite.
With the presidential elections just six months away, the attention of the Kremlin is on targeting the social media audience efficiently to avoid the repetition of 2012 scenario. However, attempts to engage and mobilise Internet users have been sporadic and clumsy while their effect has been marred with the Kremlin’s continuous attempts to increase Internet censorship.
Although the life expectancy of Kazakh opposition parties is usually brief, rising social discontent is changing the equation. Disaffection with political governance is no longer limited to the grassroots, but increasingly resounding within the middle and business classes, and within elements of the ruling elite itself. This is feeding a resurgent opposition; but will change be orderly or chaotic.
Increased affiliation to the Russian Orthodox Church has proved to be a trend among Russia’s elite groups during Putin’s third presidential term. Both the church and elite groups benefit from their mutual allegiance. While power players finance Church operations, the Church provides ideological backing to the Kremlin and a positive public image for business elite.
During the economic recession, the Kremlin suggested that private players would need to secure their own financing to advance its energy ambitions in the Arctic. This might result in renewed corporate disputes, as state-owned monopolists of the Arctic shelf are determined to retain control over the hydrocarbon reserves of the Russian High North.
There is a shake-up of power players in Kazakhstan’s nuclear sector. In the midst of waning Russian influence, and growing Chinese interests, the political elite group known as the Southerners have been given another opportunity to expand their footprint in the country’s political and commercial echelons of influence. Nuclear sector dynamics are thus simultaneously highlighting Astana’s geopolitical and political realignments.