Since 1991 Kazakhstan has leveraged its strong location in Central Asia—and as a member of the Commonwealth of Independent States (CIS)—to create favorable conditions for steady development and full integration into the international system. As the country attracts increasing levels of FDI, it hopes to develop its business center, Almaty, into a regional financial hub. In order to reduce the effect of fluctuating global oil and gas prices on the economy, Kazakhstan is looking to diversify its economic base and carve out an industrial niche in order to prosper between the huge trading powers of Russia and China. Such aims have formed the backbone of the country’s diplomatic drive, and have led to the development of the Russia-Belarus-Kazakhstan Customs Union, which is transforming the country’s trade landscape.
Kazakhstan employs a hybrid system of government that combines aspects of both parliamentary and presidential systems. The president acts as head of state, and the incumbent, Nursultan Nazarbayev, was re-elected for another five-year term on April 4, 2011 by popular vote. The president acts as commander-in-chief, sets foreign policy, initiates legislation, and appoints the prime minister, subject to parliamentary approval. The parliament, acting as the supreme legislative body, consists of two houses, the Senate, or upper house, and the Majilis, or lower house. Following his re-election, President Nazarbayev pledged to introduce
reforms to the system, including increasing the role of the parliament, political parties, and local authorities, as well as strengthening the independence of the judiciary.
In its drive to stand as an example in the region, Kazakhstan has balanced its multilateral commitments in the UN with developing bilateral ties in the region and beyond with the majority of North American, European, and Asian countries. In that regard, Kazakhstan has become a full member of the Organization for Security and Cooperation in Europe (OSCE), and the Organization of the Islamic Conference (OIC). Furthermore, Kazakhstan is working to promote regional economic and social integration through the framework of the CIS, the Eurasian Economic Association, the Central Asian Economic Association, and the Shanghai Cooperation Organization, an intergovernmental mutual-security organization founded in 2001 by the leaders of China, Kazakhstan, Russia, Kyrgyzstan, Tajikistan, and Uzbekistan.
The president is elected by popular vote, and has significant powers of appointment and veto, as well as being a key instigator of policy and legislation. President Nursultan Nazarbayev has been the incumbent since 1991, and was elected for another five-year term in April 2011. Karim Massimov has been Prime Minister since January 2007 following his appointment by President Nazarbayev and approval by parliament. The president also exercises the power to nominate the council of ministers. The prime minister is the head of government and chairs the cabinet, which acts as the supreme executive authority in Kazakhstan.
The Kazakhstani parliament is composed of an upper and a lower house. The Senate, acting as the upper house, contains 47 members, most of whom are elected for terms of six years, while half of the Senate is renewed every three years. Each of Kazakhstan’s 14 provinces plus the cities of Astana and Almaty are represented by two senators, selected by their elected local assemblies based on indirect voting at a secret ballot. Since 2007, 15 senators are appointed directly by the president. The total number of senators is likely to change following draft legislation that foresees presidents becoming life senators at the end of their presidential terms. The responsibilities of the Senate include the appointment and removal from office of heads of state organs, including the President of the Supreme Court, Governor of the National Bank of Kazakhstan, the Attorney General, and the Chairman of the National Security Committee. The Senate can also act as the lower house should the Majilis be dismissed prematurely.
The lower house, or Majilis, consists of 107 deputies, 98 of whom are elected by popular vote via a secret ballot. The governing bodies of political parties draw up deputy lists for elections. The remaining nine deputies are elected by the Assembly of Peoples of Kazakhstan. Deputies serve terms of five years, and Majilis elections are held no later than two months before the expiration of the incumbent parliament. The last parliamentary elections were held in 2007 and deputies are made up of members of the ruling Nur-Otan Party and independents. The powers conferred to the Majilis include approving the presidential appointment of the prime minister, and taking into consideration legislative proposals made to parliament.
For the purposes of local government, Kazakhstan is divided into 16 administrative units, or 14 provinces and two cities: Almaty and Astana. The president appoints the heads of councils that are directly elected for four-year terms and responsible for the administration of the units. The councils apply national policies on a local level, and coordinate these policies with the individual needs of each region. The president is empowered to cancel or suspend the acts of the councils—a system that makes local government directly subordinate to the president.
FOREIGN TRADE RELATIONS
Kazakhstan has taken a pragmatic approach to regional dialogue, opening up new avenues of trade while seeking to distinguish itself in the region as a destination for investment. The term “multi-vector diplomacy” has been applied to describe the nation’s non-polar approach to foreign relations, and it has been successful in turning Kazakhstan into a model for the region in terms of its economic openness to foreign participation in the economy.
Trade relations have been a main driver behind Kazakhstan’s flurry of diplomatic activity, as the country looks to diversify its economy in the face of intense industrial competition from Russia and China. To that extent, the Customs Union between Russia, Kazakhstan, and Belarus came into existence on January 1, 2010. The union will be tested after January 1, 2012, when the three states are expected to introduce a single economic space. In addition, Kyrgyzstan and Tajikistan—as well as Ukraine—have voiced interest in joining the union.
The oil and gas sector still acts as a vital platform for diplomatic courting as Kazakhstan continues to develop its extractive industries. China, Kazakhstan’s biggest trading partner, plays a vital role in the development of the sector, and in turn looks to feed its ever-growing energy needs. After China, Kazakhstan realizes 25% of its foreign trade with the EU, under the framework of the Partnership and Cooperation Agreement (PCA). Furthermore, in 2006 Kazakhstan and the EU signed a memorandum to enhance cooperation in the field of energy. Oil and oil products, as well as ferrous metals, constitute 59% and 19% of Kazakhstan’s export commodities, respectively, increasing the country’s importance for emerging and developed economies in the West and the East alike. The significance of Kazakhstan in that respect is evident from the presence of long-term investments from major Western companies, including Chevron, Total, Shell, and ENRC.
In 2010 Kazakhstan assumed chairmanship of the OSCE, a key intergovernmental organization monitoring security cooperation and human rights issues across Europe and beyond. Building on its existence as a model for the region, Kazakhstan is the first former Soviet state, and first predominantly Muslim country, to assume the chairmanship. The Kazakhstani agenda laid out has highlighted the advancement of alternative energy as a key focus. Astana is also hoping the summit will strengthen relations between Western and Central Asian nations. Kazakhstan has also sought to assert itself in the region, playing a larger diplomatic role in conflict resolution, issues of nuclear non-proliferation, anti-drug trafficking, and anti-terrorism. Investments are also being made in regional development, with $5 million allocated for projects related to water supply and infrastructure development, and the delivery of grain to Afghanistan, with a further $50 million earmarked for the education of 1,000 Afghan citizens in Kazakhstan.
© The Business Year