The Kazakh government was reshuffled on Wednesday 6 August by President Nursultan Nazarbaev. Two main priorities were put forward : the reduction of the number of ministries and the creation of a super-sized Energy Ministry. These decisions reinforce the position of personalities close to the President while trying to limit the impact of Western sanctions on Russia.
An “effective and compact government”
Make the government more “effective” and “compact” : these are the two priorities of Kazakh President Nursultan Nazarbaev. To achieve it he announced during a government meeting on August 6th a complete reshuffle of the government. Ministries should be cut from 17 to 12 while the number of state committees will decrease to 30, against 54 today. The second big announcement was the creation of a large Energy Ministry, which takes over the current Oil and Gas and Environment ministries. "It is time to concentrate the entire energy sector in the hands of one person,” President Nazarbaev declared. This person will be Vladimir Shkolnik, previously in charge of national uranium company Kazatomprom and a close ally of the President. He will be replaced in Kazatomprom by current Environmental Protection Minister Nurlan Kapparov.
Saving energy exports
Kazakhstan is the world’s largest uranium producer and the second-largest ex-Soviet oil producer after Russia. Its economic growth reached 6% in 2013 after a 5% rise the year before. However, despite being Central Asia’s largest economy thanks to its energy revenues, Nazarbayev declared on August 6th that "Generally speaking, [Kazakhstan’s] energy sector is in disarray." The statement underlines the recent stagnation of oil production after Kashagan oilfield output was halted due to gas leaks, and exports to trade partner Russia are slowing down. Despite its participation to the Eurasian Economic Union which will come into force on January 1st 2015, Kazakhstan suffers from the several rounds of sanctions imposed by the US and the European Union on Moscow over the Ukraine crisis. They have big consequences for all of Russia’s trading partners.
Last February, Kazakhstan’s central bank was forced to devaluate its currency by almost 20% to support oil and industrial metals exporters and maintain its economic growth. Exports to Russia plummeted by more than 21% between January and May while those to Ukraine collapsed by 30%.
Reinforcing the President’s power
The recent reshuffling underlines Kazakhstan’s authoritarian rule. The power of President Nazarbayev, in office since 1991, has gradually been increased constitutionally. In 2007 the parliament voted to allow Nazarbayev to stay in office for an unlimited number of terms. In 2010, he was granted the title “Leader of the Nation” and was given immunity from any prosecution meaning that he will be able to control Kazakh politics even after retiring. Following the April 2011presidential election, 71-year-old Nazarbayev stated that he was not considering giving up the presidential position. The attribution of Kazakhstan’s most important ministry – the Energy Ministry - to a close friend should reaffirm his control over the country’s resources and overall wealth.
For the complete list of new ministries, click here.