Will the government target all assets spirited abroad or only those owned by specific individuals?
At his inauguration speech on November 26, Kazakhstan’s President Kassym-Jomart Tokayev emphasized the government’s willingness to repatriate all assets that were stripped from the country in the past, a populist move that could further anger some oligarchs.
Elected with a massive margin against a field of political nobodies on November 20, Tokayev presented himself to the nation as a balanced leader, one who promised repeatedly that this new seven-year term will be his last. According to amendments to the constitution approved this year, Kazakhstan’s presidents will now serve a single term at the helm before making room for new candidates.
This lame duck setup could embolden the president to make decisions that are unpopular among the elite, and the call for asset return is one of them.
Before entering into specifics, Tokayev mentioned a popular saying in Kazakhstan: “Why would you need wealth, if it was obtained dishonestly? Why would you need power, if you do not build justice?”
This could be Tokayev’s latest shot at his predecessor, Nursultan Nazarbayev, who ruled the country for three decades until 2019, when he hand-picked Tokayev as his successor.
On January 11, in the aftermath of the repression of protests that became known as Qandy Qantar (Kazakh for “Bloody January”), Tokayev said that “thanks to First President Elbasy [the title of “Father of the Nation” given to Nazarbayev in 2010] a group of profitable companies appeared in Kazakhstan, and these are rich people even by international standards.”
Days later, Tokayev described how the “colossal concentration of businesses in one person’s hands” led to “the same individual owning a production company, a processing plant, banks, and a bunch of other side businesses.”
In March, he repeated that “the concentration of power in the hands of the highest echelons of the elite leads to the unjustifiable strengthening of the financial-oligarchic groups close to them. They perceive the state as their personal fiefdom.”
At the time, Tokayev envisioned a top-down method of redistribution in the form of a fund called “For the People of Kazakhstan” (in Kazakh, “Kazakhstan Khalkyna”). Large businesses were ordered to cut “voluntary checks” to the fund, which would have then allocated the accumulated capital to social projects.
Since then, the focus of the government has gradually shifted to targeting assets that Kazakhstan’s richest have illegally moved to tax havens abroad.
At his inauguration, Tokayev was finally explicit: “The government will prepare a draft law, which will adopt the necessary regulations to return the funds illegally transferred abroad.”
In 2008, in the aftermath of a joint investigation between Swiss and U.S. authorities on suspicions of money laundering in Kazakhstan and a bribery investigation between officials and U.S. citizens, the Bota Foundation was set up to ensure a fair return of stolen assets, amounting to more than $100 million. So far, this has been Kazakhstan’s only large-scale, international experience in asset recovery.
There had been a few different initiatives that, for various reasons, targeted a few specific wealthy businessmen, accused of having “extracted” wealth away from the county.
In 2016, the Kazakhstani Initiative on Asset Recovery (KIAR) appeared online without an explicit founder or charter. It publishes articles mostly focused on alleged corruption schemes involving Nazarbayev’s family members and close associates. Because of KIAR’s selective targeting, it is believed to be closely linked to former Prime Minister Akezhan Kazhegeldin and fugitive ex-banker Mukhtar Ablyazov.
A more recent initiative is the Elge Qaitaru Fund, founded by Orazaly Yerzhanov and Bulat Abilov and established after Qandy Qantar. Abilov is a veteran politician that resurfaced this year after an eight-year hiatus from politics. Yerzhanov served as a deputy at the Central Bank and the Ministry of Finance.
With the help of a popular media project, Elge Qaitaru has specifically targeted the assets owned by Timur Kulibayev, Nazarbayev’s son-in-law and one of the country’s richest people, and the so-called “Eurasian Group,” formed by Aleksander Mashkevich, Patokh Chodiev, and Shukhrat Ibragimov, which owns several key mining operations in the country.
In a strange case from two years ago, the Prosecutor General overturned a Supreme Court decision and ordered the return of confiscated assets worth tens of millions of dollars to a group of former state officials close to ex-governor of the Atyrau region Bergei Ryskaliyev. The group was indicated by the courts as an organized crime network. Asset return can sometimes result in a glitch in the system.
All eyes, unsurprisingly, remain on the assets owned by Nazarbayev and his associates, who retained control of key industries, ministries, and foreign connections for decades. Several other politicians and businessmen, however, have accrued immense riches to the detriment of the state budget alongside the “big names” in the Forbes list of the country’s wealthiest.
Given that even Tokayev has come under fire in the media about unexplained assets abroad, a fair and just assessment of the history of stolen assets in Kazakhstan would target all suspected individuals, and avoid the kind of selective justice that has been the rule in the country for many decades.
Source : The Diplomat