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Extraordinary presidential election in Kazakhstan: Tokayev keeps ahead of the game

photo: politring.com
4 September 2022

Strong President influential parliament accountable government

On 1 September 2022, Kassym-Jomart Tokayev addressed the people of Kazakhstan under the slogan «Strong President influential parliament accountable government». [1] The Kazakhstan authorities pre-announced that in his next State of the Nation Address the RoK President would identify the social and economic development priorities for the short-term period. It was assumed that the populist measures providing immediate support to all levels of population would be the key theme of the address, because the living standards are declining in the Republic and the frustration is growing. The key suspense of the address was in whether the forthcoming elections would be announced as extraordinary and take place in late 2022 already. [2]

A very vivid Tokayevs speech exceeded all the experts expectations: its content also turned out to be absolutely revolutionary. «The constitutional reform became a pivotal step in creating the new «fair Kazakhstan». Structural economic transformations must follow the political modernization», the President declared. Then he announced the new economic deal and made a number of unexpected political statements. The striking Tokayevs initiatives on the extraordinary presidential election in the fall of 2022, the extension of the presidential term of office up to 7 years and limiting the presidential powers to just one term, no doubt, are in the limelight of all the political analysts.

«The national interests stand above anything else for me. That is why I am ready to cut my term of office and go in for the extraordinary presidential election», the Kazakhstan leader announced. He emphasized the need to revise the scope of powers and the term of office duration and recommended to set the limit of 7 years without the re-election option. Parliamentary and local elections are also planned for early 2023. Let us remind here, that currently Tokayev is to stay in office until the summer of 2024.

The election solitaire

Experts emphasize that in any case Kassym-Jomart Tokayev personally is not losing anything. For example, previously the presidential campaign was planned for December 2024 in accordance with the effective legislation. The 5-year term of office defined by the RoK Constitution allowed for Tokayev to be re-elected and continue his rule until the end of 2029. If the early presidential election takes place this autumn and he is elected for one 7-year term, he will continue to head the Republic of Kazakhstan also until the end of 2029. However, according to regional analysts, all these election novelties will require immediate amendments to Articles 41 and 42 of the RoK Constitution. Moreover, Kazakhstan parliament will have to adopt these amendments, because there is simply not enough time to prepare and hold the national referendum. However, such an aggressive election scenario conspicuously will damage the legitimacy of the new Tokayevs presidency and it looks very stressful overall.

Another option of the election setup is much more interesting. During the forthcoming autumn campaign President Tokayev will be running in accordance with the existing rules, i.e., for the nearest 5 years (until the fall of 2027). Then, according to the verdict of the Constitutional Court, it will be possible for Kassym-Jomart Tokayev to be elected again using the amended Constitution for one single term of 7 years (until 2034). «After the election I will submit the initiative restricting the presidency by one single 7-year term to the parliament», Tokayev euphemistically announced. However, it is very difficult today to look so far ahead: it is wartime now, and every year accounts for two or three. Today, the Kazakhstan authorities are only considering the ways of using the open pre-elections opportunity window. However, one thing we can be absolutely  sure about: being a very experienced politician, Kassym-Jomart Tokayev is keeping ahead of the game.

The incumbent President announced the extraordinary elections at this precise point of time to exclude the internal and external negative factors adversely affecting the stability and sustainability of the administration. As we already pointed out, currently there is no political alternative for Kassym-Jomart Tokayev. After the failed coup-détat attempt in January 2022, he became the most influential politician in Kazakhstan far ahead of all the other political institutions in terms of his political capital. In essence, the incumbent RoK President received the blank check for restructuring the political class of Kazakhstan «from scratch», and he did not hesitate to use it. [3]

As envisioned by Ak Orda, the forthcoming extraordinary presidential election will fix the existing status quo. This will allow Tokayev to implement comprehensive and maybe unpopular reforms on the basis of the nationwide mandate. There are some other experts considerations in favor of the extraordinary presidential election. Firstly, it is necessary for the stability of power in the current complicated geopolitical and foreign trade situation. Secondly, it will eliminate the growing agitation of the local elites and potentially dangerous discourse about the succession. Thirdly, it will prevent the formation of anti-Presidential coalition during the 2024 campaign both by the «old guard people» and with participation of forces from outside. The ability to keep himself ahead of the game characterizes Kassym-Jomart Tokayev as a skilled and experienced politician with a broad strategic vision.

The new economic policy

In his State of the Nation Address the President of Kazakhstan proposed comprehensive reforms in the key areas of social and economic policy. According to Kassym-Jomert Tokayev, the new economic policy should become the priority stipulating for the private entrepreneurial initiative development. «The rejection of state capitalism and excessive interference of government into the economy; the competition development, i.e., assuring equal opportunities for everyone; fair distribution of the national income», those were the strategic tasks identified by the Kazakhstan leader. He also announced the refusal from administrative price regulation, as it reduces the investment inflow into certain sectors of the national economy leading to shortage of goods and dependency on the import. Exclusions will be made for the non-competitive markets the monopolies tariffs will remain under strict governmental control, which «does not mean governmental pressure».

Analysts believe that the head of the state did not offer a comprehensive new economic strategy, but suggested a series of selective strong initiatives to modernize the existing economy. Social equity, equal opportunities and access, improvement of the state policy quality and effectiveness were in the focus of attention in this State of the Nation Address. The key priorities of the new economic deal in addition to the above-mentioned «rejection of state capitalism» include some points known to the public from the previous President addresses: macroeconomic stability, diversification of the economy, digitalization, assurance of the rule of law, competition development, etc.

Daniyar Ashimbayev, an expert from Kazakhstan, points out that «the majority of these topics just migrate from one address to the next one. The state bureaucracy is used to viewing them as slogans, not as straightforward directives». The new presidential State of the Nation Address ultimately appears to be just a compilation of earlier speeches and assignments given by the head of the state in the economic sphere. The political analyst criticizes the Tokayevs team for obvious deficit of ideas and even bigger deficit of efficient organizers and effectors. He also emphasizes that «the people in charge of the economy remain the same as during the recent 5-10 years and have not manifested themselves from ideological and organizational standpoint». [4] All of this brings up a reasonable question about the quality of implementation of the tasks set in the most recent Presidential address.

In the economy, the Kazakhstan authorities policy traditionally features the so-called «three des»: deregulation, de-monopolization and decentralization. The remedies for curing the «protracted illness» of the economy was repeatedly offered again and again: continuation of the past liberal discourse inefficient in the new environment, but persistently implemented in the recent decades. That is why there are deep and reasonable doubts in the ability of the current Kazakhstan government and the economic team in general to implement the tasks set in the State of the Nation Address. The only hope is for the forthcoming political transformation: the presidential race will take place in 2022, in 2023 the elections to Majilis and maslikhats, and then the new government will be formed. «Eventually, by mid-2023, all the major political institutions President, Parliament and Government will undergo the reset and renewal», Kassym-Jomart Tokayev believes.

The campaign populism

The important social novation in the State of the Nation Address was the topic of fair distribution of the national income. This «new deal» for «fair Kazakhstan» offers the following: increasing the minimum salary level; refusal from tariffs restraint policy with simultaneous increase of the investment share; transition to differentiated tax rates in various sectors of the economy, and implementation of the «luxury tax». «To incentivized civilized trade, we need to enhance application of the retail sales tax with adequate rates and simple procedures. It is also important to explore the possibility of introducing the «luxury tax» within the tax reform», President Tokayev announced.

In particular, the minimum statutory month wage level will be raised from KZT 60 K to 70 K (approximately from RUB 7.7 K to 9 K). «This will directly affect the income of 1.8 mln citizens», Tokayev emphasized. On top of that, he announced the reset of the pension system. «We need consistent efforts to bring the minimum base pension rate up to 70% of the subsistence level, and the maximum rate up to 120%. Together with the earlier decisions, it will allow for increasing the cumulative pensions by 27% by 2025», Tokayev informed and promised to fix the pension qualification age at 61 years for women by 2028 (60.5 years today), and 63 years for men. According to the sociologists, all these topics are meaningful for the voters, so the Ak-Ordas focus on populism looks justified in the threshold of the early presidential race.

In addition, Kassym-Jomart Tokayev announced to the nation and to the world the poor performance by the National Foundation of Kazakhstan. «The transfers from the National Foundation will continue, but only to fund the reliable critical infrastructure development and the projects meaningful for the entire country», Tokayev informed. The President proposed to channel 50% of the annual return on investment of the Foundation to special savings account of children until they reach the age of 18 without the early withdrawal option. Both the grass-roots voters and media representatives were enthusiastic about this Presidential initiative. According to their estimates, each young citizen of Kazakhstan will be able to receive USD 332 this year, and may save up to USD 6 K by coming of age. [5] However, the experts are more skeptical: «given such pace of withdrawal, the National Foundation assets may be exhausted in 3-4 years, or even sooner». [6]

In his speech, President Tokayev highlighted some other challenges requiring special focus of attention by Kazakhstan authorities: the utilities wear-and-tear, shortage of resources for issuing loans to businesses, the growth of synthetic drugs consumption and many other things. For example, the President assigned such tasks as the Urban Code development and improving at least 95% of local motorways by 2025. Tokayev also announced the start of the national project for living standards improvement in rural areas: building 650 paramedics and midwifes facilities and upgrade of 32 local hospitals. As we already stated before, The population is expecting not just new declarations, but effective measures from Kassym-Jomart Tokayev. And they need to be made not in politics, but in economics new jobs, better business climate and Higher level of the citizens well-being. The political situation in Kazakhstan in the mid-term perspective will be to a great extent depend on how successful the Tokayevs team is in achieving the established targets. [7]

Russian interest

The recent State of the Nation Address by Tokayev is dedicated exclusively to domestic politics and does not cover foreign policy topics directly. However, the observers are asking a legitimate question: how can the forthcoming transformations of Kazakhstan affect the relations between it and the Russian Federation? Shortly after the publication of Tokayevs address the Kremlin declared that «the political reforms announced the leadership of Kazakhstan will not damage the bilateral relations, moreover, their prospects look bright». [8] Previously the head of Kazakhstan during his working visit to Sochi reminded that «we are united by the common frontier». «The longest land frontier in the world, and delimited, by the way. Hence, there are no grounds whatsoever to make pessimistic forecasts with respect to our future cooperation», Kassym-Jomart Tokayev summarized. [9] Numerous factors of mutual interdependency between Russia and Kazakhstan restrain both parties from hasty acts, abrupt movements and even mere negligence in their bilateral relations.

In fact, our countries are «the Siamese twins» from the miltary strategy standpoint, they are closely interwoven in the «soft underbelly» by the long frontier. Today, Kazakhstan is not a venturous stake in the foreign policy gambling, but a factor of the Russian internal ethnical politics and geopolitics, even a factor of its territorial integrity. Kazakhstan is located in the important communicational focal point connecting Siberian Russia and European Russia, so massive de-stabilization of Kazakhstan (no matter, from inside or from outside) may affect the stability in Russia. Our countries also have close economic and logistical ties. All this explains the urgent telephone call of Vladimir Putin, who wished Tokayev all the success in implementing the announced ambitious targets. The parties also confirmed the «mutual commitment for further development and deepening of Russian-Kazakh relations including the agreements achieved at the recent bilateral summit in Sochi». [10]

Let us remind here that in Sochi the Presidents talked about «additional assignments» to their governments, which may be connected with expansion of the parallel imports. Even though Kazakhstan officials declared they would not be helping Russia to bypass the Western sanctions, it was Kazakhstan together with Turkey and Uzbekistan, who became the major supplier of the missing goods. According to the National Statistics Bureau of Kazakhstan, only export of smart phones to Russia in H1 2022 grew 2 thousand times in monetary terms. Our neighbor also supplies to Russia certain hi-tec goods, such as processors, controllers, memory sticks and integrated circuit cards. Previously, such goods were either brought from Kazakhstan in minimum quantities, or were not imported from there at all. The anti-Russian sanctions of the West brought obvious changes to the traditional export and import logistics, hence, the role of Kazakhstan as strategically important transit territory is growing today, including for implementation of the «North-West» and «East-West» transport corridors in the Caspian region.

The observers paid special attention to the section of the Presidential Address saying that «both Kazakh and Russian languages will be taught in the schools of Kazakhstan». Language issues are quite a sensitive topics for Russian politicians and media. Kassym-Jomart Tokayev said that  arduous discussions were taking place about that in Kazakh society as well. «Let me make myself crystal clear: we need to bring up children with equally good Kazakh and Russian language skills. This is for the benefit of the oncoming generation. The Ministry of Education should be based on the interests of children and should not follow the populists. The oncoming generation should be solidly standing on both legs in terms of the knowledge they receive including the language skills», the Kazakhstan President concluded. Experts believe that after a certain media tension between Moscow and Nur-Sultan after Tokayevs speech at the SPIEF, both parties clearly indicate their reconciliation and demonstrate full accord. [11]

Threats and risks

The strategic value of stability in Kazakhstan for the security of Russia calls for more attention to potential threats and risks, which may arise during implementation of the ambitious tasks set in the State of the Nation Address. The key task of the Kazakhstan authorities is to prevent the repetition of the tragic January events. Besides the standard conspiracy theory, there are three fundamental causes of the January turmoil in Kazakhstan: agitation in political elites, impoverishment of the population and growing archaization of the society. The recent events demonstrated that President Tokayev has in-depth understanding of the problems and is committed to systemic mitigation measures. The recent State of the Nation Address is in strict compliance with this political logic, because it combines the political modernization tasks with resolving the vital social problems.

Overcoming the political class splintering became the first priority for the Kazakhstan leadership. The solution was found in abandoning the previous political model of Nazarbayev, radical personnel purges and amplification of the political leadership of Tokayev as an independent politician. The previous State of the Nation Address (March 16) of the President was dedicated to the pressing tasks of political modernization, and the immediate results of the reforms were fixed in the Constitutional amendments at the referendum (June 5), when one third of the Constitution was changed. As envisioned by the ideologists of Ak-Orda, the new initiative of the single presidential term of office is the continuation of the measures to eliminate the «super-president model of power» in Kazakhstan. Such measures include the nonpartisanship of the head of the state, the ban for the relatives to take the top-level positions in the governing bodies, redistribution of certain presidential authorities in favor of other power institutions. «Introducing the single term of office for the President is called to complete the institutionalization of the presidential republic with optimal balance of powers», Erlan Karin, the State Secretary of Kazakhstan wrote.

The initiative of holding the elections to Majilis and to the maslikhats of all levels in H1 2023 is also based on the political modernization logic. The main question is how successful the administrative machine will be in coping with organization of a series of extraordinary election campaigns, as this machine is obviously weakened by the personnel purges and reshuffles. Politicians and technocrats from the second and third tiers have come to power in Kazakhstan, and so far, they have not yet demonstrated their skills and abilities. The regional experts have certain doubts in their ability to successfully handle the multiphase election campaign, which is always a stress test for even experienced staff. Poor voters turnout and high level of protest voting may present other important challenges decreasing the legitimacy of the elections. For example, the constitutional referendum already demonstrated the lowest turnout in both capital cities (Almaty and Nur-Sultan), as well as in protesting regions Aktyubinsk and Mangystau.

The economic situation in Kazakhstan is another systemic threat, which should not be ignored. For an average citizen the price surge is more important than all the pretentious discussions of Ak-Orda about political modernization. According to the official sources, the inflation in August was 16% on a year-on-year basis. The food prices grew by more than 20% during one year, including some basic items the sugar price doubled and the prices for flour and pastas grew by 40%. The non-foods prices grew by 16%, stationery prices by 60%, household chemicals by 27%, and household appliances by 25%. The housing prices in Kazakhstan cities demonstrated dramatic growth, just like the consumer services prices. The recent State of the Nation Address contains an impressive set of populist measures, but brings to life some justified skepticism with respect to the possibility of their implementation into practice.

Possible scenarios

Regional analysts believe that this autumn and the entire year of 2023 will be the most difficult period in the history of independent Kazakhstan from the economic standpoint. The sudden announcement of early elections provides important technological and strategic benefits for the incumbent President. In essence, Kassym-Jomart Tokayev may be re-elected prior to launching the pressing economic reforms, including the very unpopular ones. However, the threat of unexpected social turmoil due to the growth of prices (including for the basic-needs products) and tariffs still remains. Let us remind here, that a sharp surge in motor fuel prices triggered the January unrest. Such protest scenario looks quite possible during the forthcoming elections either presidential or parliamentary. The extensive verbal investment made in the recent State of the Nation Address may not necessarily be successful in neutralizing the effective decrease of the living standards.

And finally the most difficult long-term challenge is the growing archaization of Kazakh society. The authorities are only exploring the approaches and solutions to it; they are afraid of touching upon the most sensitive issues and do things half-way, like the improvement of schools and kindergartens system proposed by Tokayev. Meanwhile, the existing system of fiscal transfers and the social protection measures announced in the State of the Nation Address will only facilitate the growth of population in the backward southern regions. The last population census showed that the impressive demographic growth in Kazakhstan is underpinned by high birth rates in the overpopulated regions with work force surplus in the South of the Republic. They are the areas of the highest distress in the economy and social sphere, and the most problematic ones from the standpoint of cultural archaization and radical Islamism.

The analysts do not exclude a protest scenario during the elections, which could be implemented both by radical Islamists closely connected with the organized crime, and by a part of former ruling elites with financial resources and strong mobilization capabilities. In his State of the Nation Address, Tokayev for a good reason pointed to «the capital offense cases murders and gang warfare committed as aggravated assaults, which constitute a challenge for our entire society». The law enforcement/security agencies reform has obviously weakened the authorities capacity to control crime, and the former existing arrangements have ceased to be in force after some older cadres left the government.

Overall, the risk of new destabilization persist in Kazakhstan, because a significant part of the elites, especially the one connected with the ex-president Nazarbayev, may once again attempt to take revenge. These «old guards» have all the necessary resources and political heavyweights as alternative candidates. For example, Nazarbayev himself could become one of them, and some of his prominent and popular close associates, such as Askar Amin or Imangali Tasmagambetov. The authorities in power perceive this as a quite realistic threat. Thus, the Ministry of Justice of Kazakhstan already was quick to say that «the first President of Kazakhstan Nursultan Nazarbayev is not qualified to run for presidency at the extraordinary elections in the fall of this year». [12]

Conclusions

All in all, the risk of new destabilization currently persists in Kazakhstan, especially during the multiphase election campaign. There is a probability of the part of former elites, especially those connected with the ex-president Nazarbayev and having the necessary resources, once again attempting to take revenge. All of this makes the forthcoming extraordinary presidential and parliamentary elections not just an «easy walk» for Ak-Orda. They will look more like hurdling or even a barrier line crossing. Possible surprises and pitfalls both in political and economic spheres force the Kremlin to pay special attention to the rapidly changing situation in neighboring Kazakhstan.

1. Full text of the State of the Nation Address by Kassym-Jomart Tokayev «A Fair State. One Nation. Prosperous Society». Ak-Orda official website. https://www.akorda.kz/ru/poslanie-glavy-gosudarstva-kasym-zhomarta-tokaeva-narodu-kazahstana-181130

2. There may be early parliamentary elections in Kazakhstan. Nezavisimaya Gazeta, 29.08.2022. https://www.ng.ru/cis/2022-08-29/5_8525_kazakhstan.html

3. Kazakhstan: what will the Second Republic be? Caspian Institute for Strategic Studies, 12.05.2022. https://caspian.institute/product/solozobov-yurij/kazahstan-kakoj-budet-vtoraya-respublika-37940.shtml

4. In the pink ponies world. Social and political newspaper Vremya, 30.08.2022. https://time.kz/articles/ugol/2022/08/30/v-mire-rozovyh-poni

5. How much the children of Kazakhstan will be getting from the National Foundation: sample calculation. Express-K, 01.09.2022. https://exk.kz/news/140674/skolko-kazakhstanskiie-dieti-budut-poluchat-ot-natsfonda-primiernyi-raschiet

6. RoK National Foundation: it may be enough for us, but not for our successors. Information Agency Inbusiness.kz, 10.06.2022. https://inbusiness.kz/ru/news/nacionalnyj-fond-rk-nam-eshe-mozhet-hvatit-a-potomkam-uzhe-net

7. Citizens of Kazakhstan supported the policy of President Kassym-Jomart Tokayev to the referendum. Caspian Institute for Strategic Studies, 07.06.2022. https://caspian.institute/product/solozobov-yurij/naselenie-kazahstana-na-referendume-podderzhalo-politicheskij-kurs-prezidenta-kasym-zhomarta-tokaeva-38023.shtml

8. The Kremlin stated that the reforms in Kazakhstan will not damage its relations with Moscow. Interfax, 01.09.2022. https://www.interfax.ru/russia/860265

9. Tokayev expressed his satisfaction with the outcomes of his negotiations with Putin in Sochi. TASS, 20.08.2022. https://tass.ru/mezhdunarodnaya-panorama/15520223

10. Telephone conversation with Kassym-Jomart Tokayev, the President of the Republic of Kazakhstan. Official website of the President of the Russian Federation, 01.09.2022. http://kremlin.ru/events/president/news/69246

11. Evaluations and narratives: the speech of the President of Kazakhstan at the 15th Saint-Petersburg International Economic Forum. Caspian Institute of Strategic Studies, 20.06.2022. https://caspian.institute/product/sektor-kazahstana-kisi/vystuplenie-prezidenta-kazahstana-na-hkhv-peterburgskom-mezhduna-rodnom-ehkonomicheskom-forume-ocenki-i-smysly-38097.shtml

12. The RoK Ministry of Justice: Nazarbayev is not qualified to run for presidency at the extraordinary elections in the fall. informburo.kz, 02.09.2022. https://informburo.kz/novosti/minyust-nazarbaev-ne-smozhet-ballotirovatsya-na-osennih-vyborah

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Caspian Institute for Strategic Studies
Reports

Extraordinary presidential election in Kazakhstan: Tokayev keeps ahead of the game

photo: politring.com
4 2022

Strong President influential parliament accountable government

On 1 September 2022, Kassym-Jomart Tokayev addressed the people of Kazakhstan under the slogan «Strong President influential parliament accountable government». [1] The Kazakhstan authorities pre-announced that in his next State of the Nation Address the RoK President would identify the social and economic development priorities for the short-term period. It was assumed that the populist measures providing immediate support to all levels of population would be the key theme of the address, because the living standards are declining in the Republic and the frustration is growing. The key suspense of the address was in whether the forthcoming elections would be announced as extraordinary and take place in late 2022 already. [2]

A very vivid Tokayevs speech exceeded all the experts expectations: its content also turned out to be absolutely revolutionary. «The constitutional reform became a pivotal step in creating the new «fair Kazakhstan». Structural economic transformations must follow the political modernization», the President declared. Then he announced the new economic deal and made a number of unexpected political statements. The striking Tokayevs initiatives on the extraordinary presidential election in the fall of 2022, the extension of the presidential term of office up to 7 years and limiting the presidential powers to just one term, no doubt, are in the limelight of all the political analysts.

«The national interests stand above anything else for me. That is why I am ready to cut my term of office and go in for the extraordinary presidential election», the Kazakhstan leader announced. He emphasized the need to revise the scope of powers and the term of office duration and recommended to set the limit of 7 years without the re-election option. Parliamentary and local elections are also planned for early 2023. Let us remind here, that currently Tokayev is to stay in office until the summer of 2024.

The election solitaire

Experts emphasize that in any case Kassym-Jomart Tokayev personally is not losing anything. For example, previously the presidential campaign was planned for December 2024 in accordance with the effective legislation. The 5-year term of office defined by the RoK Constitution allowed for Tokayev to be re-elected and continue his rule until the end of 2029. If the early presidential election takes place this autumn and he is elected for one 7-year term, he will continue to head the Republic of Kazakhstan also until the end of 2029. However, according to regional analysts, all these election novelties will require immediate amendments to Articles 41 and 42 of the RoK Constitution. Moreover, Kazakhstan parliament will have to adopt these amendments, because there is simply not enough time to prepare and hold the national referendum. However, such an aggressive election scenario conspicuously will damage the legitimacy of the new Tokayevs presidency and it looks very stressful overall.

Another option of the election setup is much more interesting. During the forthcoming autumn campaign President Tokayev will be running in accordance with the existing rules, i.e., for the nearest 5 years (until the fall of 2027). Then, according to the verdict of the Constitutional Court, it will be possible for Kassym-Jomart Tokayev to be elected again using the amended Constitution for one single term of 7 years (until 2034). «After the election I will submit the initiative restricting the presidency by one single 7-year term to the parliament», Tokayev euphemistically announced. However, it is very difficult today to look so far ahead: it is wartime now, and every year accounts for two or three. Today, the Kazakhstan authorities are only considering the ways of using the open pre-elections opportunity window. However, one thing we can be absolutely  sure about: being a very experienced politician, Kassym-Jomart Tokayev is keeping ahead of the game.

The incumbent President announced the extraordinary elections at this precise point of time to exclude the internal and external negative factors adversely affecting the stability and sustainability of the administration. As we already pointed out, currently there is no political alternative for Kassym-Jomart Tokayev. After the failed coup-détat attempt in January 2022, he became the most influential politician in Kazakhstan far ahead of all the other political institutions in terms of his political capital. In essence, the incumbent RoK President received the blank check for restructuring the political class of Kazakhstan «from scratch», and he did not hesitate to use it. [3]

As envisioned by Ak Orda, the forthcoming extraordinary presidential election will fix the existing status quo. This will allow Tokayev to implement comprehensive and maybe unpopular reforms on the basis of the nationwide mandate. There are some other experts considerations in favor of the extraordinary presidential election. Firstly, it is necessary for the stability of power in the current complicated geopolitical and foreign trade situation. Secondly, it will eliminate the growing agitation of the local elites and potentially dangerous discourse about the succession. Thirdly, it will prevent the formation of anti-Presidential coalition during the 2024 campaign both by the «old guard people» and with participation of forces from outside. The ability to keep himself ahead of the game characterizes Kassym-Jomart Tokayev as a skilled and experienced politician with a broad strategic vision.

The new economic policy

In his State of the Nation Address the President of Kazakhstan proposed comprehensive reforms in the key areas of social and economic policy. According to Kassym-Jomert Tokayev, the new economic policy should become the priority stipulating for the private entrepreneurial initiative development. «The rejection of state capitalism and excessive interference of government into the economy; the competition development, i.e., assuring equal opportunities for everyone; fair distribution of the national income», those were the strategic tasks identified by the Kazakhstan leader. He also announced the refusal from administrative price regulation, as it reduces the investment inflow into certain sectors of the national economy leading to shortage of goods and dependency on the import. Exclusions will be made for the non-competitive markets the monopolies tariffs will remain under strict governmental control, which «does not mean governmental pressure».

Analysts believe that the head of the state did not offer a comprehensive new economic strategy, but suggested a series of selective strong initiatives to modernize the existing economy. Social equity, equal opportunities and access, improvement of the state policy quality and effectiveness were in the focus of attention in this State of the Nation Address. The key priorities of the new economic deal in addition to the above-mentioned «rejection of state capitalism» include some points known to the public from the previous President addresses: macroeconomic stability, diversification of the economy, digitalization, assurance of the rule of law, competition development, etc.

Daniyar Ashimbayev, an expert from Kazakhstan, points out that «the majority of these topics just migrate from one address to the next one. The state bureaucracy is used to viewing them as slogans, not as straightforward directives». The new presidential State of the Nation Address ultimately appears to be just a compilation of earlier speeches and assignments given by the head of the state in the economic sphere. The political analyst criticizes the Tokayevs team for obvious deficit of ideas and even bigger deficit of efficient organizers and effectors. He also emphasizes that «the people in charge of the economy remain the same as during the recent 5-10 years and have not manifested themselves from ideological and organizational standpoint». [4] All of this brings up a reasonable question about the quality of implementation of the tasks set in the most recent Presidential address.

In the economy, the Kazakhstan authorities policy traditionally features the so-called «three des»: deregulation, de-monopolization and decentralization. The remedies for curing the «protracted illness» of the economy was repeatedly offered again and again: continuation of the past liberal discourse inefficient in the new environment, but persistently implemented in the recent decades. That is why there are deep and reasonable doubts in the ability of the current Kazakhstan government and the economic team in general to implement the tasks set in the State of the Nation Address. The only hope is for the forthcoming political transformation: the presidential race will take place in 2022, in 2023 the elections to Majilis and maslikhats, and then the new government will be formed. «Eventually, by mid-2023, all the major political institutions President, Parliament and Government will undergo the reset and renewal», Kassym-Jomart Tokayev believes.

The campaign populism

The important social novation in the State of the Nation Address was the topic of fair distribution of the national income. This «new deal» for «fair Kazakhstan» offers the following: increasing the minimum salary level; refusal from tariffs restraint policy with simultaneous increase of the investment share; transition to differentiated tax rates in various sectors of the economy, and implementation of the «luxury tax». «To incentivized civilized trade, we need to enhance application of the retail sales tax with adequate rates and simple procedures. It is also important to explore the possibility of introducing the «luxury tax» within the tax reform», President Tokayev announced.

In particular, the minimum statutory month wage level will be raised from KZT 60 K to 70 K (approximately from RUB 7.7 K to 9 K). «This will directly affect the income of 1.8 mln citizens», Tokayev emphasized. On top of that, he announced the reset of the pension system. «We need consistent efforts to bring the minimum base pension rate up to 70% of the subsistence level, and the maximum rate up to 120%. Together with the earlier decisions, it will allow for increasing the cumulative pensions by 27% by 2025», Tokayev informed and promised to fix the pension qualification age at 61 years for women by 2028 (60.5 years today), and 63 years for men. According to the sociologists, all these topics are meaningful for the voters, so the Ak-Ordas focus on populism looks justified in the threshold of the early presidential race.

In addition, Kassym-Jomart Tokayev announced to the nation and to the world the poor performance by the National Foundation of Kazakhstan. «The transfers from the National Foundation will continue, but only to fund the reliable critical infrastructure development and the projects meaningful for the entire country», Tokayev informed. The President proposed to channel 50% of the annual return on investment of the Foundation to special savings account of children until they reach the age of 18 without the early withdrawal option. Both the grass-roots voters and media representatives were enthusiastic about this Presidential initiative. According to their estimates, each young citizen of Kazakhstan will be able to receive USD 332 this year, and may save up to USD 6 K by coming of age. [5] However, the experts are more skeptical: «given such pace of withdrawal, the National Foundation assets may be exhausted in 3-4 years, or even sooner». [6]

In his speech, President Tokayev highlighted some other challenges requiring special focus of attention by Kazakhstan authorities: the utilities wear-and-tear, shortage of resources for issuing loans to businesses, the growth of synthetic drugs consumption and many other things. For example, the President assigned such tasks as the Urban Code development and improving at least 95% of local motorways by 2025. Tokayev also announced the start of the national project for living standards improvement in rural areas: building 650 paramedics and midwifes facilities and upgrade of 32 local hospitals. As we already stated before, The population is expecting not just new declarations, but effective measures from Kassym-Jomart Tokayev. And they need to be made not in politics, but in economics new jobs, better business climate and Higher level of the citizens well-being. The political situation in Kazakhstan in the mid-term perspective will be to a great extent depend on how successful the Tokayevs team is in achieving the established targets. [7]

Russian interest

The recent State of the Nation Address by Tokayev is dedicated exclusively to domestic politics and does not cover foreign policy topics directly. However, the observers are asking a legitimate question: how can the forthcoming transformations of Kazakhstan affect the relations between it and the Russian Federation? Shortly after the publication of Tokayevs address the Kremlin declared that «the political reforms announced the leadership of Kazakhstan will not damage the bilateral relations, moreover, their prospects look bright». [8] Previously the head of Kazakhstan during his working visit to Sochi reminded that «we are united by the common frontier». «The longest land frontier in the world, and delimited, by the way. Hence, there are no grounds whatsoever to make pessimistic forecasts with respect to our future cooperation», Kassym-Jomart Tokayev summarized. [9] Numerous factors of mutual interdependency between Russia and Kazakhstan restrain both parties from hasty acts, abrupt movements and even mere negligence in their bilateral relations.

In fact, our countries are «the Siamese twins» from the miltary strategy standpoint, they are closely interwoven in the «soft underbelly» by the long frontier. Today, Kazakhstan is not a venturous stake in the foreign policy gambling, but a factor of the Russian internal ethnical politics and geopolitics, even a factor of its territorial integrity. Kazakhstan is located in the important communicational focal point connecting Siberian Russia and European Russia, so massive de-stabilization of Kazakhstan (no matter, from inside or from outside) may affect the stability in Russia. Our countries also have close economic and logistical ties. All this explains the urgent telephone call of Vladimir Putin, who wished Tokayev all the success in implementing the announced ambitious targets. The parties also confirmed the «mutual commitment for further development and deepening of Russian-Kazakh relations including the agreements achieved at the recent bilateral summit in Sochi». [10]

Let us remind here that in Sochi the Presidents talked about «additional assignments» to their governments, which may be connected with expansion of the parallel imports. Even though Kazakhstan officials declared they would not be helping Russia to bypass the Western sanctions, it was Kazakhstan together with Turkey and Uzbekistan, who became the major supplier of the missing goods. According to the National Statistics Bureau of Kazakhstan, only export of smart phones to Russia in H1 2022 grew 2 thousand times in monetary terms. Our neighbor also supplies to Russia certain hi-tec goods, such as processors, controllers, memory sticks and integrated circuit cards. Previously, such goods were either brought from Kazakhstan in minimum quantities, or were not imported from there at all. The anti-Russian sanctions of the West brought obvious changes to the traditional export and import logistics, hence, the role of Kazakhstan as strategically important transit territory is growing today, including for implementation of the «North-West» and «East-West» transport corridors in the Caspian region.

The observers paid special attention to the section of the Presidential Address saying that «both Kazakh and Russian languages will be taught in the schools of Kazakhstan». Language issues are quite a sensitive topics for Russian politicians and media. Kassym-Jomart Tokayev said that  arduous discussions were taking place about that in Kazakh society as well. «Let me make myself crystal clear: we need to bring up children with equally good Kazakh and Russian language skills. This is for the benefit of the oncoming generation. The Ministry of Education should be based on the interests of children and should not follow the populists. The oncoming generation should be solidly standing on both legs in terms of the knowledge they receive including the language skills», the Kazakhstan President concluded. Experts believe that after a certain media tension between Moscow and Nur-Sultan after Tokayevs speech at the SPIEF, both parties clearly indicate their reconciliation and demonstrate full accord. [11]

Threats and risks

The strategic value of stability in Kazakhstan for the security of Russia calls for more attention to potential threats and risks, which may arise during implementation of the ambitious tasks set in the State of the Nation Address. The key task of the Kazakhstan authorities is to prevent the repetition of the tragic January events. Besides the standard conspiracy theory, there are three fundamental causes of the January turmoil in Kazakhstan: agitation in political elites, impoverishment of the population and growing archaization of the society. The recent events demonstrated that President Tokayev has in-depth understanding of the problems and is committed to systemic mitigation measures. The recent State of the Nation Address is in strict compliance with this political logic, because it combines the political modernization tasks with resolving the vital social problems.

Overcoming the political class splintering became the first priority for the Kazakhstan leadership. The solution was found in abandoning the previous political model of Nazarbayev, radical personnel purges and amplification of the political leadership of Tokayev as an independent politician. The previous State of the Nation Address (March 16) of the President was dedicated to the pressing tasks of political modernization, and the immediate results of the reforms were fixed in the Constitutional amendments at the referendum (June 5), when one third of the Constitution was changed. As envisioned by the ideologists of Ak-Orda, the new initiative of the single presidential term of office is the continuation of the measures to eliminate the «super-president model of power» in Kazakhstan. Such measures include the nonpartisanship of the head of the state, the ban for the relatives to take the top-level positions in the governing bodies, redistribution of certain presidential authorities in favor of other power institutions. «Introducing the single term of office for the President is called to complete the institutionalization of the presidential republic with optimal balance of powers», Erlan Karin, the State Secretary of Kazakhstan wrote.

The initiative of holding the elections to Majilis and to the maslikhats of all levels in H1 2023 is also based on the political modernization logic. The main question is how successful the administrative machine will be in coping with organization of a series of extraordinary election campaigns, as this machine is obviously weakened by the personnel purges and reshuffles. Politicians and technocrats from the second and third tiers have come to power in Kazakhstan, and so far, they have not yet demonstrated their skills and abilities. The regional experts have certain doubts in their ability to successfully handle the multiphase election campaign, which is always a stress test for even experienced staff. Poor voters turnout and high level of protest voting may present other important challenges decreasing the legitimacy of the elections. For example, the constitutional referendum already demonstrated the lowest turnout in both capital cities (Almaty and Nur-Sultan), as well as in protesting regions Aktyubinsk and Mangystau.

The economic situation in Kazakhstan is another systemic threat, which should not be ignored. For an average citizen the price surge is more important than all the pretentious discussions of Ak-Orda about political modernization. According to the official sources, the inflation in August was 16% on a year-on-year basis. The food prices grew by more than 20% during one year, including some basic items the sugar price doubled and the prices for flour and pastas grew by 40%. The non-foods prices grew by 16%, stationery prices by 60%, household chemicals by 27%, and household appliances by 25%. The housing prices in Kazakhstan cities demonstrated dramatic growth, just like the consumer services prices. The recent State of the Nation Address contains an impressive set of populist measures, but brings to life some justified skepticism with respect to the possibility of their implementation into practice.

Possible scenarios

Regional analysts believe that this autumn and the entire year of 2023 will be the most difficult period in the history of independent Kazakhstan from the economic standpoint. The sudden announcement of early elections provides important technological and strategic benefits for the incumbent President. In essence, Kassym-Jomart Tokayev may be re-elected prior to launching the pressing economic reforms, including the very unpopular ones. However, the threat of unexpected social turmoil due to the growth of prices (including for the basic-needs products) and tariffs still remains. Let us remind here, that a sharp surge in motor fuel prices triggered the January unrest. Such protest scenario looks quite possible during the forthcoming elections either presidential or parliamentary. The extensive verbal investment made in the recent State of the Nation Address may not necessarily be successful in neutralizing the effective decrease of the living standards.

And finally the most difficult long-term challenge is the growing archaization of Kazakh society. The authorities are only exploring the approaches and solutions to it; they are afraid of touching upon the most sensitive issues and do things half-way, like the improvement of schools and kindergartens system proposed by Tokayev. Meanwhile, the existing system of fiscal transfers and the social protection measures announced in the State of the Nation Address will only facilitate the growth of population in the backward southern regions. The last population census showed that the impressive demographic growth in Kazakhstan is underpinned by high birth rates in the overpopulated regions with work force surplus in the South of the Republic. They are the areas of the highest distress in the economy and social sphere, and the most problematic ones from the standpoint of cultural archaization and radical Islamism.

The analysts do not exclude a protest scenario during the elections, which could be implemented both by radical Islamists closely connected with the organized crime, and by a part of former ruling elites with financial resources and strong mobilization capabilities. In his State of the Nation Address, Tokayev for a good reason pointed to «the capital offense cases murders and gang warfare committed as aggravated assaults, which constitute a challenge for our entire society». The law enforcement/security agencies reform has obviously weakened the authorities capacity to control crime, and the former existing arrangements have ceased to be in force after some older cadres left the government.

Overall, the risk of new destabilization persist in Kazakhstan, because a significant part of the elites, especially the one connected with the ex-president Nazarbayev, may once again attempt to take revenge. These «old guards» have all the necessary resources and political heavyweights as alternative candidates. For example, Nazarbayev himself could become one of them, and some of his prominent and popular close associates, such as Askar Amin or Imangali Tasmagambetov. The authorities in power perceive this as a quite realistic threat. Thus, the Ministry of Justice of Kazakhstan already was quick to say that «the first President of Kazakhstan Nursultan Nazarbayev is not qualified to run for presidency at the extraordinary elections in the fall of this year». [12]

Conclusions

All in all, the risk of new destabilization currently persists in Kazakhstan, especially during the multiphase election campaign. There is a probability of the part of former elites, especially those connected with the ex-president Nazarbayev and having the necessary resources, once again attempting to take revenge. All of this makes the forthcoming extraordinary presidential and parliamentary elections not just an «easy walk» for Ak-Orda. They will look more like hurdling or even a barrier line crossing. Possible surprises and pitfalls both in political and economic spheres force the Kremlin to pay special attention to the rapidly changing situation in neighboring Kazakhstan.

1. Full text of the State of the Nation Address by Kassym-Jomart Tokayev «A Fair State. One Nation. Prosperous Society». Ak-Orda official website. https://www.akorda.kz/ru/poslanie-glavy-gosudarstva-kasym-zhomarta-tokaeva-narodu-kazahstana-181130

2. There may be early parliamentary elections in Kazakhstan. Nezavisimaya Gazeta, 29.08.2022. https://www.ng.ru/cis/2022-08-29/5_8525_kazakhstan.html

3. Kazakhstan: what will the Second Republic be? Caspian Institute for Strategic Studies, 12.05.2022. https://caspian.institute/product/solozobov-yurij/kazahstan-kakoj-budet-vtoraya-respublika-37940.shtml

4. In the pink ponies world. Social and political newspaper Vremya, 30.08.2022. https://time.kz/articles/ugol/2022/08/30/v-mire-rozovyh-poni

5. How much the children of Kazakhstan will be getting from the National Foundation: sample calculation. Express-K, 01.09.2022. https://exk.kz/news/140674/skolko-kazakhstanskiie-dieti-budut-poluchat-ot-natsfonda-primiernyi-raschiet

6. RoK National Foundation: it may be enough for us, but not for our successors. Information Agency Inbusiness.kz, 10.06.2022. https://inbusiness.kz/ru/news/nacionalnyj-fond-rk-nam-eshe-mozhet-hvatit-a-potomkam-uzhe-net

7. Citizens of Kazakhstan supported the policy of President Kassym-Jomart Tokayev to the referendum. Caspian Institute for Strategic Studies, 07.06.2022. https://caspian.institute/product/solozobov-yurij/naselenie-kazahstana-na-referendume-podderzhalo-politicheskij-kurs-prezidenta-kasym-zhomarta-tokaeva-38023.shtml

8. The Kremlin stated that the reforms in Kazakhstan will not damage its relations with Moscow. Interfax, 01.09.2022. https://www.interfax.ru/russia/860265

9. Tokayev expressed his satisfaction with the outcomes of his negotiations with Putin in Sochi. TASS, 20.08.2022. https://tass.ru/mezhdunarodnaya-panorama/15520223

10. Telephone conversation with Kassym-Jomart Tokayev, the President of the Republic of Kazakhstan. Official website of the President of the Russian Federation, 01.09.2022. http://kremlin.ru/events/president/news/69246

11. Evaluations and narratives: the speech of the President of Kazakhstan at the 15th Saint-Petersburg International Economic Forum. Caspian Institute of Strategic Studies, 20.06.2022. https://caspian.institute/product/sektor-kazahstana-kisi/vystuplenie-prezidenta-kazahstana-na-hkhv-peterburgskom-mezhduna-rodnom-ehkonomicheskom-forume-ocenki-i-smysly-38097.shtml

12. The RoK Ministry of Justice: Nazarbayev is not qualified to run for presidency at the extraordinary elections in the fall. informburo.kz, 02.09.2022. https://informburo.kz/novosti/minyust-nazarbaev-ne-smozhet-ballotirovatsya-na-osennih-vyborah