| Upon the implementation of the New Year’s Day doubling of fuel prices, major anti-government unrest broke out throughout Kazakhstan. Protesters appeared to take over the airport of the major city of Almaty and burn or enter many government offices. President Kassym-Jomart Tokayev immediately ordered the cabinet to resign, voided the fuel price increase, and declared a state of emergency. In subsequent days, he pressed forward with a violent crackdown on the rioting, and he said he ordered security forces to “fire without warning” on protests. In an unprecedented move, President Tokayev appealed to Russia and the Collective Security Treaty Organization (CSTO) for assistance in dealing with a threat he labeled as “terrorist,” blaming the unrest on foreign trained terrorists without providing any evidence to that effect; this raises questions about Kazakhstan as a partner for many international counterterrorism efforts, including its significant role in proactively repatriating citizens affiliated with ISIS. As of January 7, after reportedly killing dozens of protesters since the uprising began, the government appeared to have quieted most of the unrest in the largest cities, although sporadic bursts of gunfire could still be heard. Nonetheless, it has received relatively little comment from international actors and notably none from the UN Security Council which, other than scheduling its regularly closed annual meeting on Central Asia, has not yet met on the issue. Poland, as OSCE Chair, issued a statement on January 5 calling for de-escalation of violence.
Initially, protesters cited the fuel price increases as the cause of their agitation, questioning the price hike when Kazakhstan is itself a major oil and gas producer. However, broader and longstanding opposition to the authoritarian political and economic structures that have controlled the country since independence emerged as the dominant theme among demonstrators. From its independence from the Soviet Union in 1991 until 2019, the country was led by Nursultan Nazarbayev, who typically moved quickly to suppress unrest and had eliminated major political opponents. Nazarbayev formally retired from the presidency in 2019, but he retained leadership informally as head of the powerful “Security Council” and as the honorific “leader of the nation.” Moreover, Nazarbayev’s family continued to exercise monopoly control in key economic conglomerates in the oil and gas and import-export related sectors, crowding out the country’s aspiring class of entrepreneurs and fueling grievances about inequality. In part to appease the anti-Nazarbayev sentiments fueling the unrest, on January 5, President Tokayev formally removed Nazarbayev from his Security Council post, raising questions also about the relationship between the two leaders. The subsequent arrest “on suspicion of treason” of Karim Massimov, Kazakhstan’s former intelligence chief and reportedly a close ally of former President Nazarbayev, further indicates the possibility of an internal powerplay between the political leadership.
The unrest in Kazakhstan assumed broader geopolitical dimensions with Russia’s deployment of troops to Kazakhstan at their request. The Russia-led security contingent of about 2,500 special forces formally deployed under the CSTO, which groups six countries (Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Armenia, and Belarus) that were formerly part of the Soviet Union, with little clarity from officials regarding the conditions under which the troops might leave Kazakhstan. There are obvious concerns that, once deployed, these Russian forces would become a permanent presence in Kazakhstan, as they have elsewhere. The CSTO deployment reflected Moscow’s fears that the unrest was serious enough to potentially topple the government of a leading Russian ally, and no doubt increased Russian President Vladimir Putin’s longstanding concerns that pro-Western leaderships could rise in Central Asia, as well as Ukraine, Belarus, and other ex-Soviet republics. These concerns have led Putin to the precipice of launching a major invasion of Ukraine in early 2022—a development the Biden administration is seeking to head off through diplomacy, as well as threats of U.S. and allied economic sanctions.
President Putin’s policies in the countries that he asserts are part of Russia’s “sphere of influence” are also apparently motivated by what he claims is a U.S.-sponsored effort to move the NATO alliance membership up to the borders of Russia itself. However, there has been no indication that Kazakhstan would seek or be offered membership in NATO. There was also nothing to corroborate Tokayev’s formal justification for requesting CSTO intervention—the assertion that terrorist groups such as the Islamic State, al-Qaeda, or the Islamic Movement of Uzbekistan were behind the unrest. Instead, there is a risk that the Kazakh government will seek to portray the protesters as terrorists to justify a swathe of repressive measures under the rubric of counterterrorism and as part of their international obligations as set out by the UN Security Council. At the same time, the Russia-led intervention provides Putin the opportunity to not only reassure the 20% of Kazakhstan’s population that is ethnic Russian, but also to exert leverage over Kazakhstan not to expand ties with the United States or China, both of which are significant investors in the country. China has also, in recent years, undertaken joint transportation projects with the country as part of Beijing’s Belt and Road Initiative to ease transportation routes through Eurasia. Additionally, China has sought to develop Kazakhstan’s vast deposits of minerals, including its significant holding of uranium that make the country pivotal to global nuclear power production.
The unrest sent immediate shock waves through the already tight global energy markets and raised questions about Kazakhstan’s long-term prospects in that industry. Kazakhstan exports about 1.6 million barrels of oil per day—about 2% of global traded oil—and the rioting caused a modest but noticeable spike in oil prices. The country owns two of the largest oil fields in the world: the onshore Tengiz field, which U.S. majors Chevron and Exxon-Mobil are expanding, and the Caspian Sea-based Kashagan field. Kashagan is being developed by global majors including Exxon-Mobil, Royal Dutch Shell, France’s Total, and Italy’s ENI. Kazakhstan also has the 15th largest holdings of natural gas in the world. It can be argued that the unrest could limit future energy investment as global majors perceive future worker disruptions and plan for Russian pressure on Kazakhstan to resist Western economic influence. No matter how global investors respond to the unrest, it is certain that Kazakhstan’s government will need to undertake dramatic reforms, or serious unrest will surely flare again in the future. The political unrest is also impacting Kazakstan’s significant Bitcoin mining industry. As one of the largest cryptocurrency mining hubs—the second largest in the world after the United States—the internet and telecommunications shutdowns in the country have reportedly caused the price of a single Bitcoin to drop to $42,000, the lowest since September 2020. |