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Bravo Tokayev—What a Difference a Year Makes

06 December 2022   |  

Recently, EMsights partook in a due diligence trip to the nations of Kazakhstan, Uzbekistan and Azerbaijan. We found Kazakhstan, which began 2022 in a bit of chaos, headed down a fascinating path towards reform and disentanglement from Russia. While we would like to see more progress made on Kazakhstan’s economic reform agenda, we are excited to see what President Tokayev does next.

Shaky start to 2022

At the onset of 2022, Kazakhstan found itself in a precarious position. The rising cost of living and widespread inequality sparked violent protests in the country that ultimately turned deadly. President Tokayev called in Collective Security Treaty Organization (CSTO) peacekeeping forces, dominated by Russian troops, to restore order. Western nations raised an eyebrow, but the move was ultimately successful in bringing an end to the unrest.

First position

Tokayev and his administration quickly took accountability for a failure to address the root causes of income inequality. He tied the discontent to a lack of competition within the economy, and co-option of the public and business spheres by a corrupt elite, specifically the family and friends of former President Nursultan Nazarbayev. Since then, Nazarbayev has been stripped of his lifetime immunity, his family members have been removed from plum positions in government, and even the name of the capital city, recently referred to as “Nur-Sultan” in honor of the former leader, was restored to Astana. Additionally, Tokayev proposed a raft of constitutional amendments he said would limit the powers of the executive branch going forward, which the public affirmed in a referendum in June.

Russian ballet

While Russia’s war in Ukraine has created a dramatic regional backdrop to these sweeping changes, Tokayev has navigated a difficult geopolitical situation with confidence. Even while visiting Moscow, Tokayev has been clear that Kazakhstan does not support the Russian invasion of Ukraine. Working with western authorities to avoid violating sanctions, landlocked Kazakhstan depends on Russian infrastructure to get its exports to market. On our recent trip, EMsights learned that the country is very focused on diversifying export routes. Some alternatives routes for oil shipments are already up and running.

Ending en pointe

Apparently, Kazakhs are more pleased with their leader than they were at the start of the year, as Tokayev won reelection at the end of November with 81.3% of the vote. President Tokayev has a lot more work to do to create the fair and competitive business climate he claims to want for Kazakhstan. However, his body of work in 2022 provides a promising start. With elections over and a final seven-year term ahead of him, we look forward to seeing what reforms will come in 2023.

  • EMsights Capital Group
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