Nazarbaev Comes Asking Beleaguered Kazakhs, Once Again, For Donations Amid Crisis
A call went out to the people of Kazakhstan on March 20 urging them not to stand on the sidelines but to be active in helping the country’s president and his government through a batch of pressing problems.
Aydos Ukibay, press secretary for the first president of Kazakhstan, Nursultan Nazarbaev, announced that “Elbasy” (Leader of the Nation), who is also Nazarbaev, wanted “those who want and are able, to help the country” and donate to a special fund to help Kazakhstan in these difficult times.
The call could indicate how much officials fear the upcoming double impact on Kazakhstan of greatly reduced revenue from oil exports and the effects of the coronavirus pandemic, the first cases of which were announced in Kazakhstan on March 13.
As concerns the coronavirus problem, people certainly want to do something to help during a health crisis, and Ukibay said Nazarbaev considered it “important to support doctors, volunteers, servicemen, and police who are on the front lines in the battle with this dangerous infection.”
Kazakhstan, a country of some 18 million people, had 80 coronavirus infections but no deaths as of March 25.
In the last major economic crisis Kazakhstan faced, which began in 2014, the government drew on its national fund to compensate for most of the country’s financial shortfalls.
Largely due to its oil and gas wealth, Kazakhstan is considered the wealthiest country in Central Asia.
But for this economic crisis Nazarbaev — who gave up his office in March 2019 after 28 years leading the country — chose to use a spokesman to beg Kazakh citizens to donate to the state.
Calling For Gold
He asked his fellow citizens for money once before — 21 years ago, to be precise.
And looking back at the situation then, there are some questions as to who should be first to contribute to this new social fund for Kazakhstan.
In June 1999, Kazakhstan’s outlook was bleak.
The country had started pumping more oil but the average price, which had been under $20 per barrel for most of the 1990s, fell to under $12 in 1998 and increased only to some $16.5 per barrel by 1999.
The grain harvest in 1998 was the worst in 40 years (just 7.3 million tons), down some 44 percent compared to the previous year’s harvest.
There were power shortages in the country, wages were not being paid, and workers were on strike.
In confused circumstances in early October 1998, the first presidential election in seven years was announced. The short campaign period was marred by the barring of the main opposition candidate and the January 10, 1999, election was harshly criticized for being fraudulent and patently unfair.
In February 1999, Prime Minister Nurlan Balghimbaev said Kazakhstan had posted a $1.7 billion trade deficit in 1998. That was nearly triple the January-May 1999 trade deficit of $664 million.
During the first months of 1999, the government slashed programs and trimmed the number of state employees. The National Bank allowed the national currency, the tenge, to float at the start of April and the rate fell from 88 tenges to $1 to about 131 tenge/$1 by the end of May.
In June 1999, the campaign Deposit Gold To The Golden Fund was started. Citizens were encouraged to hand over their gold and jewelry to the government so it could be sold and the money used to help bring Kazakhstan through the hard economic times.
The idea was modeled on what South Korea did in 1997, when the government asked its citizens donate gold to help the country pay off its debts.
Those in Kazakhstan who donated their gold were promised some compensation within a decade, though reports of how much gold and jewelry was gathered and the promised compensation that was to be paid were not divulged.
In early June 1999, Balghimbaev said some $10,000 worth of gold and jewelry had already been collected from the Karasai district in Almaty Province, which is where Nazarbaev’s home village of Chemolgan is located. Some reports suggested that while many people were “donating,” not all were doing so enthusiastically. There were reports of wages being garnished and employees being pressured by work managers to contribute.
Nazarbaev mentioned the fund on July 1, 1999, while attending the World Economic Forum in Salzburg, Austria.
“As for the gold and jewelry collection…. Of course, if ordinary citizens are eager to assist us in these very tough economic conditions, if they really want to make contributions to the social fund to help the needs of families with low incomes or many children, to support pensioners, I believe the government will not be against that,” he said.
Kazakhstan’s fortunes improved in 2000.
The price of oil increased to more than $27 per barrel that year and by 2005 it topped $50 and continued climbing over the next decade.
Kazakhstan was saved, financially, and the campaign for donating gold and jewelry faded away.
But a curious thing happened in April 2002.
Prime Minister Imangali Tasmagambetov told a session of parliament there was a “secret fund” in a Swiss bank. Tasmagambetov said that in 1996 the government sold 25 percent of its shares in Kazakhstan’s Tenghiz oil field to Mobil for about $1 billion, and Nazarbaev had put the money into a Swiss bank.
Tasmagambetov said the secret fund had been used to help pay off pension arrears in 1997 and in 1998 was used to soften the impact the Russian financial crisis was having on Kazakhstan. He did not mention money from the account being used in 1999.
The revelation about the bank account came after two opposition deputies — Boris Sorokin and Serilbolsyn Abdildin — wrote to Tasmagambetov on March 13 asking for more information about “Kazakhgate.”
Kazakhgate, in brief, was the scandal surrounding U.S. businessman James Giffen, who was accused of paying bribes to Nazarbaev and Balghimbaev so that Western companies would get contracts at the Tenghiz oil field. The two Kazakh parliament deputies wanted to know about government funds deposited into Swiss bank accounts that belonged to Nazarbaev, his friends, and family members.
Now back to today’s double punch of problems arising from the recent major decrease in oil prices and the oncoming coronavirus crisis.
Certainly, it appears to be a time of crisis.
Some people do want to help. Nazarbaev’s press secretary, Ukibay, did say “those who are able” could do so. That seems to definitely be saying that those who do not want or are unable to financially will not have to.
Those best-placed financially to help Kazakhstan, as history shows, would seem to be Nazarbaev, his family, and his friends, as the reports of their wealth have become legendary in recent years. One must wonder how many “secret” accounts exist today.
This list is just the tip of the iceberg from what has been reported.
It seems Nazarbaev and some of those close to him might be the best-positioned people in Kazakhstan to set an example of the spirit of charity to their fellow citizens.
Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave NW, Ste 400, Washington DC 20036.