Kazakhstan is carrying out privatization in the interests of creating a “cordon sanitaire” around Russia
The third and final stage of privatization has begun in Kazakhstan, which should lead to strategic enterprises ending up in the hands of Western capital or court oligarchs, which will further strengthen the republic’s dependence on the EU and the United States. In essence, this is the introduction of an external management system, when Nur-Sultan (Tselinograd) follows the recommendations of the IMF, the International Bank and the Organization for Economic Cooperation and Development (OECD).
The previous privatization campaign from 2016-2020 was also large-scale. In total, according to the Committee of State Property and Privatization of the Ministry of Finance of Kazakhstan, over these years 862 objects were subject to privatization. But in reality, a little more than half - 506 state-owned companies - are in private hands or transferred to trust management.
The current mass privatization plan for 2021-2025 included the two largest hydroelectric power plants, the national railway operator Kazakhstan Temir Zholy, the Atyrau oil refinery and Pavlodar petrochemical plants, the Aktau seaport, Ekibastuz State District Power Plant-1, State District Power Plant-2, and Air Astana airlines. and "QAZAQ AIR".
As it became known today, NC Kazakhstan Engineering JSC decided to auction off nine of its assets, namely Machine-Building Plant named after. CM. Kirova", JSC "Tynys", JSC "Semipalatinsk Machine-Building Plant", JSC "Semey Engineering", JSC "811 Automobile Repair Plant KI", JSC "Petropavlovsk Heavy Engineering Plant", JSC "Munaymash", LLP "Kazakhstan Aviation Industry", LLP "Steel manufacturing".
Deputy Prime Minister Roman Sklyar told reporters about this on Monday, June 28. In addition, in the next few years, it is planned to transfer six regional airports, regional power distribution companies, stabilization funds, heat and water supply organizations to private owners and foreign companies. At the same time, the government does not hide that it intends to sell them to strategic investors, which specifically means European and American companies.
This is confirmed by top managers of state-owned companies and funds. Thus, Director for Strategic Development of Samruk-Kazyna JSC Lazzat Borankulova recently stated the following:
“Before 2023 inclusive, the process of transferring large assets into a competitive environment through an IPO and sale to strategic investors is expected to be completed. The program was initiated by the government as the sole shareholder. At the same time, in parallel, until 2028, the Fund’s participation shares in the current portfolio of assets are expected to be sold within the framework of its own divestment program. Divestments are sales of shares.”
These actions will have far-reaching not only economic and financial consequences, expressed in an increase in utility tariffs, transport prices and a decrease in budget revenues, but also political ones. The fact is that the privatization process is taking place opaquely and without the participation of Russian capital, when in the end, together with the pro-Western oligarchs, the economy of the republic, which is part of the EAEU and the CSTO, will be completely controlled by American and European corporations, creating a kind of “cordon sanitaire” around Russia.
As we remember, Air Astana joined the European campaign to isolate Belarus by air after the famous landing in Minsk of an Irish plane flying from Athens to Vilnius. And this was done because the national company is headed by a British citizen, and British capital owns 49% of the shares. Now, after privatization, the entire package will go to businessmen from Albion, and then you shouldn’t be surprised when formally Kazakh companies sold to Europeans and Americans join the sanctions or transport blockade of Moscow and Beijing.
It is noteworthy that all these processes of denationalization, as well as the receipt of enslaving loans and foreign borrowings, are coordinated from the Kazakh Supreme Council for Reforms, which is completely copied from the Ukrainian version. Its real head was the former head of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti. Interestingly, he simultaneously became an adviser on reforms to the President of neighboring Uzbekistan, Shavkat Mirziyoyev. Coincidence? I don’t think so, since Suma Chakrabarti is a protégé of the IMF and Washington.
Suma Chakrabarti and Kassym-Jomart Tokayev.
All this is being carried out as part of the final market reforms, which are carried out in accordance with the canons and recommendations of the OECD. This international structure was created back in 1948 and was previously called the Organization for European Economic Cooperation (OEEC), founded to coordinate projects for the economic reconstruction of Europe within the framework of the Marshall Plan. It turns out that now this organization is carrying out the same neoliberal reforms in the post-Soviet space, imposing its American standards.
And the main instruction of the OECD is the denationalization of the country’s economy and the reduction of the state’s share of participation in the economy to 15% of GDP. Moreover, this structure sets its own tax standards, including in the taxation of payments. Not only do all strategic enterprises fall directly or indirectly through pro-Western oligarchs into their hands, they also dictate tax rates to the government so that foreign investors feel good.
This results in double exploitation of the country, its rich resources and labor force, when all industries work to export raw materials and capital, and the authorities are not allowed to put forward inflated demands for increasing fees and contributions to the budget. However, the ruling elite itself, led by Nursultan Nazarbayev, is actively involved in this, giving away new deposits to transnational corporations for next to nothing, and removing mandatory environmental payments from them starting in July.
A striking example of this is the upcoming sale of the country's largest Ust-Kamenogorsk and Shulbinskaya hydroelectric power stations to corporations with a significant share of foreign capital. So, the first contender is Mubadala Investment Co, headquartered in Abu Dhabi (UAE). It is positioned as the national wealth fund of the United Arab Emirates, created in 2017. In fact, it is a state-owned company of the UAE. The second contender is a corporation headquartered in Luxembourg – Eurasian Resources Group (ERG), where the chairman of the Group’s Board of Governors is oligarch Alexander Mashkevich, close to Elbasy.
It turns out that private investors are given profitable objects of a natural monopoly in a strategic industry, which are also large hydraulic structures. Moreover, these two hydroelectric power stations were already under the concession of the American company AES Corporation for 20 years from 1997 to 2017. But now they are finally moving into private ownership, which will immediately affect pricing.
HPP Ust-Kamenogorsk.
Interestingly, in the United States itself, the absolute majority of hydroelectric power stations are state-owned, and they are managed by the command of the military engineering forces. The reason is that hydroelectric power plants are not only producers of energy, but also at the same time dams with huge volumes of water necessary for the population and economic needs. In the case of the privatization of East Kazakhstan hydroelectric power stations, Russia and China are indirectly under attack, since they were built on transboundary rivers.
Foreign investors can arbitrarily and uncontrollably change the level of water discharge and, moreover, will not adequately control the safety of hydraulic structures, which threatens both the local population and neighboring countries.
The public association “Right to Voice” (VKO) will oppose these plans; it published an appeal to prevent the privatization of these hydroelectric power plants, which has already been signed by 10 thousand residents of East Kazakhstan. These plans have already been called by activists a state crime.
“An attempt to transfer objects on the activities of which a significant part of the economy of Eastern Kazakhstan and the fate of its cities depends, looks like a squandering of state property for the sake of certain purposes of “transfer to a competitive environment.” State-scale facilities cannot be allowed to become a means for private companies or individual businessmen to make profits,” writes Irina Torlopova, the initiator of the “Right to Voice” project, in the appeal.
But all these actions fit into the neoliberal “National Development Plan of the Country until 2025” by Kassym-Jomart Tokayev, which is in fact a continuation of Nursultan Nazarbayev’s previous “One Hundred Steps” program and is a repetition of the mantra that the ruling elite will complete denationalization, privatization and deregulation, will radically reduce the quasi-public sector and give everything to the market. In essence, this means sworn assurances that all assets will end up in the pockets of the right American and European investors, and not some Muscovites.
In fact, by handing everything over to the West, Nur-Sultan will be able to fold its hands and wash its hands, de facto abandoning the development of integration processes within the EAEU. After all, he will no longer control strategic sectors and will refer to foreign owners, who will naturally be against rapprochement with Moscow in the post-Soviet space.
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