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Июнь
2023

Kazakhstan’s Tokayev And Godunova, His Official For Budget Spending Control, Seem To Live On Different Planets – Analysis

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In his speech at the second meeting of the National Kurultay (a key presidential consultative and advisory body), which took place in Turkistan on June 17, Kazakh President Kassym-Jomart Tokayev announced plans to recreate three districts in Eastern Kazakhstan, Katon-Karagai, Markakol and Makanchi that were merged with other districts in the 1990s with the aim to optimizing the public administration system and reducing expenditures spent to maintain it. This move strongly looks like an attempt to smooth over deep public dissatisfaction with the actions of the authorities in the recent fight against major forest fires in eastern Kazakhstan. 

Something similar occurred last year. There was massive unrest across Kazakhstan in early January, 2022.  Then there was a high level of public dissatisfaction with the actions of the authorities, too. Two months later, Kassym-Jomart Tokayev announced plans to recreate three provinces in three different regions of the country that were merged with other provinces in the 1990s.

Now, that is history. But it seems very relevant today. The question is where all this can lead. The provinces of East Kazakhstan and Abai, of which those three districts – Katon-Karagai, Markakol and Makanchi – were and would once again be part, themselves still continue, as far as is known, being subsidized provinces of Kazakhstan. Hence, it seems to be reasonable to expect that the would-be increase in civil service costs would have to be largely financed from resources, being made available by the four donor provinces. 

Among the latter ones, the provinces of Atyrau and Mangystau, in which the genuine wealth-generating activities are carried out and the social and environmental situation is much more complicated than in other regions, should be particularly noted. 

The following passage in the article by Catherine Putz sheds light on this question: “The Mangystau region, where Zhanaozen is located, is “one of the poorest in the country,” Dr. Diana T. Kudaibergenova told The Diplomat. “In 2015 the poverty rate there was 22 times higher than the country average”. In 2021, drought caused massive livestock losses among the pastoralists in Mangystau and Atyrau provinces. At the time, the press wrote: “[Vainly] seeking water, the livestock die”. That is this is all rooted in problems of poverty, inequality and injustice, which have been mounting for decades.

In 2008, the difference between the average per capita income in the provinces of Atyrau and Mangystau which were and still are the only two provinces-donors of Kazakhstan, on one hand, and in the provinces of Almaty, Zhambyl and South Kazakhstan, on the other, was nearly ten times. Yet despite those facts, speaking certainly in favor of the former ones, the poverty rate in ‘the Mangystau region, where Zhanaozen is located, was 22 times higher than the country average’ in 2015. This suggests a conclusion about Kazakhstan being a country with very much unbalanced regional development, a country where social dynamics is, as counterintuitive as it might seem, inversely proportional to economic dynamics. It appears that there is a desire in Astana to time and again address emerging challenges, largely counting on the resources of the two Kazakh main oil-producing provinces where most poor and needy people live.

President Kassym-Jomart Tokayev himself called unacceptable the situation where only 18 per cent of the provinces were the donors in Kazakhstan. But words remain words until they produce actions.     

Speaking at the extended meeting of the Kazakhstani government on February 8, 2022, President Tokayev said: “The situation, in which 82 percent of the provinces are being subsidized, is not normal”. And indeed it was and still is difficult to disagree with these words. At that time, only 18 per cent of the provinces were the donors in Kazakhstan. These were the provinces of Atyrau and Mangystau, the cities of Nur-Sultan and Almaty. 82 per cent of the provinces were in need of help from the national budget.  In February last year, Kassym-Jomart Tokayev assessed this situation as abnormal. On March 16, 2022, addressing the Central Asian nation’s parliament, the Kazakh President said he wanted to recreate three provinces that were merged with other provinces in the 1990s. A little more than a month and a half later after that statement, on May 4, Kassym-Jomart Tokayev signed a decree on establishing three new provinces – Ulytau, Abai and Zhetysu. 

It entered into force on June 8, 2022, which effectively meant increasing the share of the provinces in need of help from the national budget at least up to 90 percent at the time, when Kazakhstan, according to Natalya Godunova, the key responsible for budget spending control, ‘is living beyond its means’, since ‘net State revenues are covering only 50 of the republican budget for spending’. She told: “Despite the limited budget capacity, we launched more than 1100 new projects in 2021”

Natalya Godunova said this during a speech at a plenary session of the Senate of the Parliament of Kazakhstan on June 15 last year, i.e. only one week after those new provinces had been established. But that’s not all! Speaking at the July 14, 2022, enlarged government session, President Kassym-Jomart Tokayev once again said that… all but four [the provinces of Atyrau and Mangystau, the cities of Nur-Sultan and Almaty] provinces had become dependent on subventions from the national government. Only one thing was left untold this time. And that’s that between February and July 2022, the number of provinces in need of subsidies has been by Kassym-Jomart Tokayev’s efforts increased from 13 to 16.

This strange story kind of continued in the current year. While  delivering a speech at the opening ceremony of the Astana International Forum,  Kazakh President Kassym-Jomart Tokayev enthusiastically spoke of the achievements of his country’s economy. “Despite geopolitical upheavals Kazakhstan keeps serving as an economic engine in and for Central Asia. We continue to attract significant foreign investment and provide exceptional conditions to do business in Kazakhstan… Last year, Kazakhstan’s exports increased by almost 40 percent. While a significant proportion of our GDP still comes from the energy sector, our drive towards diversification is accelerating”, he said. The Kazakhstani economy’s current performance seems to give him even more reason to take pride in the work his administration and government do. In his speech at the 35th plenary session of the Foreign Investors Council (FIC), which coincided with the Astana International Forum on June 8, 2023, he said that Kazakhstan had successfully adapted to external realities with the real growth of its economy by 5 percent in the first four months, which is three times the global average projected growth rate for 2023. He also noted that ‘nowadays Kazakhstan is different from what it was two years ago’. In this case, it was to be understood that the situation in the country had changed significantly for the better.

And the day before, on June 7, 2023, Natalya Godunova, speaking in the Mazhilis (lower house) of the Parliament of Kazakhstan, pointed out that the irrational spending of budget funds were increasingly carried out through contractors and suppliers. “If four years ago [that is, when Kassym-Jomart Tokayev just took over the presidency] we estimated the overestimation of costs in design and estimate documentation at 10%, i.e. at about 1 trillion tenges [1 KZT = 0.002237 USD] per year, now it has taken epidemic proportions. It [far] exceeds 1 trillion tenges. With these funds, we would have been able to close the question on emergency and three-shift schools, to which no solution has been found thus far, or to reconstruct our heat and power plants (CHP) and heating networks, most of which are about to breathe their last”, she said.

Natalya Godunova next noted that in the development plans of ministries and their budget programs, there are practically no final indicators related to changes in the quality of life of the population. “[They feature] GDP growth, trillions, tons, thousands of kilometers! And did this make life better for an [ordinary] person? This is [quite] unclear! It is impossible to determine [the answer to it]! Quite impossible! Because the conditions of the task have incorrectly been defined”, she said emotionally.

Natalya Godunova, chairwoman of the Accounts Committee for Control over Execution of the Budget for the Republic of Kazakhstan, spoke in the Mazhilis (lower house) of the Parliament of Kazakhstan, we repeat, on June 7. On June 8, Kazakh President Kassym-Jomart Tokayev made speeches at two international events, in which he proudly said that Kazakhstan ‘keeps serving as an economic engine in and for Central Asia’, its ‘exports increased by almost 40 percent last year’, and that his country had successfully adapted to external realities with the real growth of its economy by 5 percent in the first four months, which is three times the global average projected growth rate for 2023.

Is all what is cited above merely a reflection of different visions regarding what objective reality is? Although it is possible that this is the case, when one listens to those two, Kazakh President Kassym-Jomart Tokayev and Natalya Godunova, his top official for budget spending control, it feels like they live in different countries, or even on different planets.








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