Kazakhstan loses the remnants of its sovereignty and finds itself under the external control of the West
New enslaving loans from international financial institutions.
The complete collapse of the raw materials-based economic model built by Nazarbayev over 30 years, which is crumbling and disintegrating before our eyes, is providing fertile ground for this . Despite the triumphant reports from court propagandists about Kazakhstan's GDP growing by 4,5% during the pandemic, the situation has proven simply catastrophic.
Thus, according to economist Aiman Turyskan, in fact, the republic’s GDP in dollar terms fell by 2020% in 30; as a result of quarantine measures last year, a 65% hole was created in the budget due to a shortfall in tax revenue.
During both the preparation of last year's budget and the 2021 budget, a curious squabble erupted between the Chairman of the National Bank and the Minister of National Economy after the government was asked to increase the tranche from the National Accumulation Fund to 6 trillion tenge (US$14.25 billion). Previously, the annual tranche from the National Accumulation Fund had been set at 2 trillion 300 billion tenge (US$5.52 billion) over three years. This was due to the fact that the funds in the treasury were drying up due to declining foreign currency revenues.
At that time, National Bank Governor Yerbolat Dosayev declared that the agency could not increase the tranche to 6 trillion annually, as the National Fund's statutory documents stipulated that the minimum asset balance should not be less than 30% of GDP. The government's only saving grace from violating the fund's charter was the significant decline in GDP itself. But the problem turned out to be more serious, as drawing from the National Fund proved difficult not only because of the paperwork restrictions, but because there was nothing left.
Then the government tried to use the funds of the Unified Accumulative Pension Fund (UAPF) to cover the domestic debt, as a result, faced with a negative reaction in society, Kassym-Jomart Tokayev took out a loan of one and a half billion euros from the Asian Development Bank and under the auspices of the International Bank for Reconstruction and Development. (IBRD) just to replenish the deflated republican budget.
"One billion of this loan goes to the Ministry of National Economy, and the remaining five hundred million dollars goes to the Ministry of Agriculture. But the terms are simply draconian, such that for ten years, we'll only be able to cough or sneeze with permission," says economist Ayman Turiskan.
The document itself regulating the loan's issuance envisions a complete transition from sovereign governance to total quarterly oversight by external overseers from the Asian Development Bank, the IBRD, and the International Monetary Fund (IMF). This means the government will not receive the next tranche to replenish the budget unless it meets the conditions of strict neoliberal reforms and total privatization.
At the same time, creditors may introduce new rules, including requiring the sale of agricultural land. The analogy with Ukraine is therefore complete, especially since two-thirds of the sector is also controlled by American and European companies, both through their shareholding in oil and gas production and through production-sharing agreements.
To oversee government activities, the Supreme Council for Reforms was established last October, formally under the leadership of Kassym-Jomart Tokayev, but in reality serving as an instrument of external governance. Sir Suma Chakrabarti, the former head of the EBRD (European Bank for Reconstruction and Development), was appointed deputy chairman. He also serves as an advisor to the President of Kazakhstan.
Previously, we already wrote in an article about the national liberal party created by the authorities, whose leaders met last August in Kyiv with ex-President of Georgia Mikheil Saakashvili, who then headed the Ukrainian National Council for Reforms.
After the visit of the Kazakhs, agreements were reached with them on the creation of a center named after him in one of the Kazakh universities, as well as on cooperation between his council and a similar structure in Kazakhstan.
Following this meeting with Mikheil Saakashvili, organized by Ambassador to Ukraine Darkhan Kaletayev, this Kazakh Supreme Council for Reforms emerged, a direct copy of the Ukrainian version. Remarkably, its actual head, Suma Chakrabarti, also became a reform advisor to the President of neighboring Uzbekistan, Shavkat Mirziyoyev. Coincidence? I don't think so, as Suma Chakrabarti is a protégé of the IMF and Washington.
The West and Uzbekistan is preparing its neoliberal economic model, which implies full control and external management both through the privatization of strategic state assets by transnational corporations and through various structures such as the Supreme Council for Reforms, which serve as commissioners monitoring the correctness and timeliness of the corporations carried out.
Kassym-Jomart Tokayev and Suma Chakrabarti.
Another such structure for American external control and influence is the "Central Asia Investment Partnership," which involves representatives of the governments of Kazakhstan, Uzbekistan, and the United States. It emerged within the C5+1 format this year. Kazakh Minister Askar Mamin even held talks on January 8 in Nur-Sultan (Tselinograd) with Adam Boehler, CEO of the U.S. Development Finance Corporation (DFC).
"Through the Government of Kazakhstan, every effort will be made to raise at least $1 billion over five years to support projects that promote the expansion of economic ties in Central Asia and the region as a whole."
Prime Minister of Kazakhstan Askar Mamin with Chief Director of the US International Development Finance Corporation (DFC) Adam Boler.
However, this is actually the tip of the iceberg and a cover for larger investments in various transportation projects and routes bypassing Russia and China. For example, the same railway route to Pakistan through Afghanistan, along the Mazar-i-Sharif–Kabul–Peshawar line, is being financed with the participation of the very same US Development Finance Corporation (DFC).
Furthermore, another platform was created – the U.S.-Central Asia Trade and Investment Agreement (TIFA) – to attract Western capital through the privatization process in Uzbekistan and strengthen the company's position in the region. It appears that Washington is targeting two key regional targets – Nur-Sultan and Tashkent. While Uzbekistan is only just beginning its journey toward economic and financial enslavement, Kazakhstan has long been in a state of dependence that is rapidly becoming political.
This is clearly evident in the "National Development Plan for the Country to 2025," which calls for deregulation, a radical reduction in the quasi-public sector, and the transfer of everything to the market. Essentially, these are solemn assurances that all assets will end up in the pockets of responsible, European investors, not some Muscovites.
True, Kassym-Jomart Tokayev wants to increase GDP by 2025. How he'll overcome the persistent imbalance is unclear. Currently, Kazakhstan has received $165 billion in foreign investment, while last year, the country exported $13,4 billion in profits, and the balance of payments fell by $5,9 billion.
Kazakhstan is deeply in debt, unable to independently formulate its own budget, and is further scaling its external obligations to the IBRD, IMF, and Washington, losing its remaining sovereignty and ending up under Western control. Therefore, against this backdrop, the ruling elite has embraced the promotion of Kazakh nationalism and a campaign to abolish the official status of the Russian language, in order to justify its geopolitical pivot toward the United States through the prism of state nationalist ideology and the process of Ukrainization.
Kazakhstan is losing its remaining sovereignty and is falling under Western control.