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Oil and reforms

IN THE Central Asian republic of Kazakhstan, Nursultan Nazarbayev has been sworn in as the President of Kazakhstan for another seven years, following a landslide election victory last month. Leaders from 70 countries, including eight presidents attended the lavish and colourful swearing-in ceremony, which was broadcast live on national television.

In his brief speech, the president, as is customary in such cases, vowed to make Kazakhstan one of the world’s 50 most competitive states, brushing off the Western world’s criticism of the ‘undemocratic’ polls. Nazarbayev has headed the oil-rich nation since 1989, two years before independence. Though he is deemed to have brought prosperity and stability to the country, power is concentrated in the hands of close associates, loyalists and family members. The election campaign was marred by violence and intimidation of opposition activists, while the media gives only a one-sided picture of events, as it is controlled by the ruling clique.

At the swearing-in, as expected, much of the focus of Nazarbayev’s speech was on oil. Incidentally, Ukranian leader Victor Yushchenko wants to discuss possible routes for new gas pielines from Central Asia to Ukraine to reduce his country’s dependence on Russian gas. This could signal a new cooperation between the republics of the former Soviet Union to reduce their overall dependance on Big Brother Russia. Russia, meanwhile, is trying its best not to sever the umbilical cord with its former constituents. Most of the gas pipelines into different republics pass through Russian territory as they were built during the Soviet-era to ensure Moscow’s control over the economies of the smaller constituents.

The Karachaganak gas field in Kazakhstan is one of the world’s largest and is due to significantly increase production in the next few years. As Central Asia’s leaders begin to assert more control over their economies, they would also demand world market prices for their products such as oil and gas. Though Nursultan has introduced reforms in limited measure, he would need to do much more to gain the approval of the international community and Western leaders. As it is, many of the former Soviet-republics are trying to woo the West for pumping in more money into their resource-rich but people-poor economies. If countries like Kazakhstan want to come out of the shadow of the Soviet Union, they need to introduce more reforms and bring in better participation of people in the polity.