For more than a quarter of a century, Kazakh President Nursultan Nazarbayev has stayed in power and preserved his country’s status quo by operating a system of elite patronage networks that have distributed formerly state-owned assets among presidential family members, oligarchs, clan leaders and security bosses.
Behind the scenes, Kazakhstan’s political and business clans have always squabbled; but the era of high economic growth that largely insulated the regime from elite discontent is now over, and the rivalry between various factions has begun to surface in public.
- The stand-off between the Old Guard and the President’s loyalists has recently met a counterweight in the rise of the Southerners. This is adding a layer of complexity to President Nazarbayev’s efforts to balance rival interests in his inner circle.
- Although some may view the rise of the Southerners within government ranks as a Presidential ploy to keep his enemies ‘within sight’, others believe that the Southerners are gaining ground because of growing grassroots discontent over unpopular economic initiatives taken by the government. The most likely reason for their rise, however, is somewhat different.
A Familial Deadlock
The state’s finances have been hit by the collapse in oil and other commodity prices, which has triggered a recession and exacerbated weakness in the banking sector. In July 2017, Kazakhstan’s largest bank, Halyk Bank - owned by one of Nazarbayev’s sons-in-law, Timur Kulibayev - swallowed up its biggest rival, Kazkommertsbank, in a $560 million deal. Policymakers hope this deal will stabilise the fragile banking sector. However, a dispute between Kulibayev and Kairat Sharipbayev, another Nazarbayev son-in-law, over the privatisation of assets held by the Samruk-Kazyna wealth fund continues to threaten intra-elite stability.
Some Kazakh analysts regard the ongoing stand-off between Kulibayev and Sharipbayev as a proxy battle between two rival clans. The first is the so-called Old Guard, made up of conservative, largely pro-Russian loyalists close to Kulibayev; and the second include several oligarchs close to the president, including Nazarbayev’s daughter Dariga and the wealthy businessman Bulat Utemuratov.
However, a third group - loosely called the Southerners - has emerged in recent months as a counterweight to both factions, complicating Nazarbayev’s efforts to balance rival interests within his inner circle.
The Rise of the Southerners
A clear indication of the Southerners’ ascendancy came last September when Kulibayev’s protégé, Karim Massimov, was replaced as prime minister by Bakytzhan Sagintayev in the latest round of musical chairs that has come to define Kazakh politics.
A leading figure in the Southerners group, Sagintayev has already facilitated a shift within the elite to diminish the influence of figures with close ties to Russia, according to a Shadow Governance source.
This source – who once served in the cabinet - points to a wave of high-profile arrests in recent months. In January 2017, for instance, former Economic Minister Kuandyk Bishimbayev, who had worked closely with Kulibayev on plans for the Samruk-Kazyna privatisation, was arrested on corruption charges and accused of spying for Russia.
The following week another member of the Old Guard, Nartay Dutbayev, was convicted of leaking state secrets to Moscow, and the deputy chief of the presidential administration, Baghlan Mailybayev, was detained on a similar charge. In February, the deputy Prime Minister Imangali Tasmagambetov, whom many saw as the Old Guard’s preferred candidate to succeed Nazarbayev, was effectively sent into exile. He was appointed Kazakhstan’s new ambassador to Moscow, replacing the anti-Russian hawk Marat Tazhin, a Southerner who returned to Astana to take up a powerful new role as head of the Presidential Administration.
A Sprawling Network of Influence
One line of thinking doing the rounds is that Nazarbayev is wary of the Southerners who are often suspected of plotting to overthrow him, and is therefore channelling his inner Machiavelli by keeping his enemies closer, as it were, around the cabinet table.
The last time the Southerners attempted a minor coup was in December 2011 when they persuaded Nazarbayev to dismiss Kulibayev as head of Samruk-Kazyna for allegedly mishandling an oil workers’ strike in the western city of Zhanaozen, where at least 16 people were killed during clashes with police. On that occasion, Kulibayev was replaced at Samruk-Kazyna by the deputy Prime Minister Umirak Shukeyev, one of the founders of the Southerners group, along with Sarybai Kalmurzayev who died in 2012.
Shukeyev dealt what was seen at the time as a crushing blow to the Old Guard by reshuffling the Samruk-Kazyna management team and removing many of Kulibayev’s protégés from key posts. Aidan Karibzhanov, for instance, was dismissed as Samruk-Kazyna deputy chairman, and the fund’s managing director, Daniyar Abulgazin, was moved to another post, while the senior managements of KazMunaiGaz, Kazatomprom and KazTransGaz were also replaced.
These are some of the entities at the centre of the dispute over privatisation between Nazarbayev’s sons-in-law, but it is worth noting that even though Massimov was put in charge of the KNB following his sacking as Prime Minister last September, the rest of the state security apparatus is now in the hands of Southerners, with Kairat Kozhamzharov and General Kozy-Korpesh Karbuzov respectively in charge of the financial and military police, and Kairat Mami the Chairman of the Supreme Court.
The Façade of In-Fighting & Popular Discontent
In April 2017, Massimov’s deputy at the KNB, Samat Abish - who just happens to be Nazarbayev’s nephew - warned that a prolonged intra-elite struggle would destabilise Kazakhstan. Since then, however, the Southerners’ anger at the perceived greed of the Nazarbayev family has aligned with growing disaffection in Kazakhstan at grassroots level.
Rumblings of discontent suggest that the stability of the ruling elite has in fact been shaken; not by in-fighting, but by unpopular economic initiatives taken by the government - including land reform, the merger of pension funds, and currency devaluation.
Before his appointment as Prime Minister, Sagintayev was put in charge of the Land Commission, an ad hoc body tasked with mitigating tensions that erupted in the wake of the controversial land reforms. Last year’s anti-reform protests marked a rare outbreak of visible instability in Kazakhstan’s relatively peaceful state-society relations.
But, according to a politically well-placed Shadow Governance source, the demonstrations alarmed the Old Guard because they showed how a regional grouping like the Southerners could seek to leverage a sense of alienation among the Kazakh population.
Rumours abound that Nazarbayev is becoming increasingly suspicious of the Southerners’ bid for power and is ‘keeping a close eye on them’. However, most informed sources close to the Kazakh elite agree that these rumours actually have little basis.
The Southerners have learned the lesson of 2011-2012, and nowadays are careful to act only with the approval of Nazarbayev, for whom it is becoming ever more imperative to maintain the balance of power as economic crisis threatens to destabilise the country.
No wonder the political elite in Kazakhstan is rife with tension between the Southerners and other groups. Many Kazakh analysts expect another round of musical chairs before too long.