Казахстан. Богачи Центральной Азии

SUMMARY

Nikolai Myachin, an economist from the "Simple Economics" channel, explores Kazakhstan's post-Soviet economic recovery through resource wealth, marred by corruption, clan structures, inequality, and geopolitical balancing, questioning ordinary citizens' benefits.

STATEMENTS

Kazakhstan is a vast, sparsely populated nation, ninth largest by area, with only 21 million people, ranking low in population density due to its arid landscapes.
The country's population clusters along borders with Russia, China, Uzbekistan, and Kyrgyzstan, creating a "donut" shape with an empty center dominated by deserts and steppes.
Soviet-era policies turned Kazakhstan into a hub for prisons and labor camps, like Karaganda, leading to a high incarceration rate post-independence.
After the USSR's collapse, former Soviet prisoners in Kazakhstan automatically became Kazakh citizens if registered there, exacerbating crime and unemployment in the 1990s.
The 1990s saw over 200,000 crimes annually in Kazakhstan, including rampant drug trafficking schemes exploiting Baikonur Cosmodrome flights.
Ethnic composition shifted post-1991 as Russians, Germans, and Ukrainians emigrated, reducing their share from majority to minority, while Kazakhs became over 50% of the population.
This emigration caused a brain drain, particularly in management and intellectual fields, dropping Russian representation in the elite from 33% to 14%.
The "Kazakhgate" scandal involved U.S. banker James Giffen bribing Kazakh officials, including President Nazarbayev, for oil deals, but he escaped charges due to CIA ties.
Kazakhstan's society is divided into three zhuzes (clans), influencing politics, marriages, and promotions, fostering nepotism akin to corruption.
Post-Soviet leaders were predominantly from the Senior Zhuz, marginalizing other clans and concentrating power in certain regions.
Despite challenges, Kazakhstan leads post-Soviet states in GDP per capita, largely from resource exports like oil, gold, and uranium.
Export is 90% raw materials, with gold alone generating $18 billion in 2023, nearly $1,000 per resident.
The Caspian Pipeline Consortium (CPC), built with foreign investors, enabled oil exports via Russia, boosting revenues amid global price surges.
Foreign companies control most oil production under production-sharing agreements, taking 83% of profits initially due to high development costs.
Corruption scandals, like those at Kashagan involving Unaoil, led to $13 billion in inflated contracts, siphoning funds abroad.
Privatization in the 1990s favored elites, with Nazarbayev's family acquiring major assets like Halyk Bank through insider deals.
Nazarbayev rose through Soviet ranks, navigated the 1986 riots, and became president, rejecting Gorbachev's premiership offer to lead independent Kazakhstan.
He tackled crime through unclear means, possibly self-elimination among gangs or police crackdowns, reducing organized crime by the late 1990s.
Water scarcity was addressed by the North Aral Sea dam, funded by oil money, mitigating desertification impacts compared to neighbors.
The Bolashak program sent thousands abroad for education on oil revenues, aiming to build skilled workforce, though many entered government roles.
Nazarbayev promoted Eurasian integration, founding the Customs Union and EAEU, enhancing trade while diversifying via multiple international alliances.
Post-2019, successor Tokayev retained Nazarbayev's influence but faced 2022 protests over fuel prices, quelled with CSTO intervention.
Geopolitically, Kazakhstan balances Russia, China, U.S., and others, but resource dependence makes it a prize in global bloc rivalries.

IDEAS

Kazakhstan's emptiness enabled Soviet nuclear tests and Baikonur, turning liabilities into strategic assets like the world's largest cosmodrome.
Post-USSR prisoner citizenship created a crime wave, as ex-convicts without homes or jobs formed gangs amid 13% unemployment.
Drug smuggling via empty Baikonur return flights highlights how space infrastructure inadvertently fueled 1990s narcotics trade.
Ethnic shifts weren't just emigration but a calculated Kazakhification, yet it emptied urban intellectual centers, crippling administration.
Kazakhgate reveals how U.S. intelligence used bribery for oil access, shielding informants while Kazakh leaders gained legal immunity.
Zhuz clans function like invisible castes, dictating marriages and careers more rigidly than urban-rural divides in other societies.
Senior Zhuz dominance mirrored Moscow-centric rule in Russia, breeding resentment and inefficiency in a multi-clan nation.
Resource curse inverted: Kazakhstan's wealth didn't trickle down due to foreign control and elite capture, unlike Gulf states.
CPC pipeline's timing with oil boom multiplied revenues 120-fold, but locked exports through Russia, heightening vulnerability.
Production-sharing pacts echo colonial deals, where hosts bear no costs but yield most profits, enabling cost inflation scams.
Unaoil's Kashagan bribes show how Western firms outsourced corruption to fixers, costing Kazakhstan 20% of project expenses.
Privatization's "trust management" phase allowed elites to debt-trap state assets, turning profitable enterprises into worthless shells.
Nazarbayev's biography blends loyalty to Moscow with opportunistic nationalism, rejecting USSR premiership for Kazakh presidency.
Crime's decline might stem from gang infighting, police executions, or absorption into legitimate business, leaving a taboo history.
Bolashak's success in education abroad contrasts with graduates flocking to bureaucracy, perpetuating clan-based governance.
Eurasian Union idea positioned Kazakhstan as integrator, leveraging Medvedev's ego against Putin's dominance.
Tokayev's continuity with Nazarbayev via family placements and city renaming underscores clan inertia over reform.
2022 protests exposed fuel price hikes as flashpoints for deeper anti-corruption, anti-Nazarbayev grievances.
Kazakhstan's neutrality in Ukraine sanctions risks pipeline sabotage, as seen in CPC drone attacks post-Zelenskyy thanks.
Declining globalization turns resources like lithium into bloc weapons, forcing Kazakhstan from bystander to contested asset.
High Gini for wealth (0.75) versus low income inequality stats suggests manipulated data hiding elite hoarding.
Tokayev's anti-clan declaration in 2025 challenges traditions, but implementation could unlock true sovereignty or spark backlash.

INSIGHTS

Vast, empty territories that once hosted Soviet horrors now symbolize untapped potential, but low density hinders resource mobilization without foreign aid.
Inherited prison populations morphed into a criminal underclass, illustrating how colonial legacies distort post-colonial identities and economies.
Clan structures embed nepotism deeper than overt corruption, turning social bonds into barriers for merit-based progress.
Foreign investment in resources promises growth but often extracts more value, perpetuating dependency on volatile global prices.
Privatization schemes designed for fairness enabled elite capture, showing how Western models fail without cultural adaptation.
Nazarbayev's longevity stabilized the state but entrenched family power, making true succession a facade for continuity.
Geopolitical balancing acts preserve autonomy short-term but expose vulnerabilities in a fragmenting world order.
Educational investments like Bolashak build human capital, yet clan pulls direct talent toward patronage over innovation.
Protest suppressions via external forces undermine legitimacy, fostering latent unrest amid economic grievances.
Resource wealth masks inequality, where official stats obscure elite dominance, eroding public trust in institutions.
Eurasian integration hedges against Russian overreach but ties economy to unstable neighbors, limiting diversification.
Anti-corruption rhetoric must dismantle clanism to equitably distribute riches, or risk turning Kazakhstan into a perpetual buffer state.

QUOTES

"Казахстан - это островок стабильности в центре Евразии."
"За этой ширмой стабильности растёт разрыв между богатыми и бедными, а также недовольство властью."
"В девяносто втором году в Казахстане было совершено более 200.000 преступлений или более 500 преступлений в день."
"Жузы - это, по сути, объединение местных родов, которые исторически делят между собой территорию Казахстана."
"Несмотря на все проблемы, Казахстан сегодня один из лидеров по ВВП на душу населения среди стран бывшего Советского Союза."
"Экспорт Казахстана на 90% состоит из добытых в недрах страны ресурсов."
"Иностранцам доставалось от проекта 83% прибыли."
"В системе руководства страной нет больше места клановости."
"Если Казахстану удастся в ближайшие годы действительно победить свою коррупцию, то я сделаю об этой стране ещё одно видео."

HABITS

Balancing geopolitical ties by joining multiple alliances like EAEU, SCO, and Turkic Council to avoid over-reliance on any single power.
Investing oil revenues in education abroad via programs like Bolashak, requiring return service to build national expertise.
Constructing infrastructure like dams and pipelines to address environmental and export challenges proactively.
Promoting internal passport travel with Russia to ease ethnic tensions and family reunifications across borders.
Simplifying privatization through auctions to boost budget inflows and attract foreign capital quickly.
Publishing visionary articles, like Nazarbayev's on Eurasian Union, to shape regional integration agendas.
Responding to protests by adjusting policies, such as subsidizing fuel prices nationwide after regional unrest.
Encouraging self-identification through clans post-independence to foster national unity amid identity crises.
Using state funds for water management projects, like the North Aral dam, to combat desertification effects.
Retaining elite privileges post-tenure, such as immunity laws, to ensure smooth power transitions.

FACTS

Kazakhstan holds 99 of 118 elements from the periodic table, actively mining over 60, including 12th place in oil and top-10 in rare earths.
In 1991, Kazakhstan ranked third globally in prisoners per capita, with 140,000 inmates from Soviet camps.
Baikonur Cosmodrome, leased to Russia, was exploited for drug smuggling, yielding 150 kg in one busted flight.
Russians dropped from 37% to under 20% of population by 1999 due to 1.6 million emigrants.
Kazakhgate involved $78 million in bribes, netting Kazakhstan $5 per citizen after scandal resolution.
Three zhuzes formed between 10th-15th centuries, dividing territory without strict hierarchy based on river flows.
CPC pipeline increased oil revenues 120-fold from 2001-2007, raising their budget share from 2% to 43%.
Kashagan corruption via Unaoil cost $13 billion, 20% of development expenses.
Nazarbayev's family wealth exceeds $10 billion, with daughter and son-in-law topping Forbes lists.
2022 protests led to CSTO intervention, the first such use, deploying troops from five nations.

REFERENCES

Boosty post for sources and text version.
Sponsr.ru for sponsorship.
Telegram channel "Простая экономика" for economic analyses.
"Простые финансы" mini-app for financial literacy courses.
T-Business for IP registration.
Books: "Notes from the Dead House" by Fyodor Dostoevsky, inspired by Semipalatinsk exile.
Law: U.S. Foreign Corrupt Practices Act, applied in Kazakhgate.
Scandals: Kazakhgate, involving Mobil Oil and CIA.
Company: Unaoil, fixer in Kashagan bribes.
Professor: Chan Byung-hyun, designer of privatization scheme.
Program: Bolashak, sending students to Oxford, Harvard, etc.
Article: Nazarbayev's "Eurasian Economic Union: Theory or Reality?" in Izvestia.
Bank: Eurasian Development Bank, funding infrastructure.
Organizations: EAEU, SCO, Turkic States Council, Islamic Cooperation Organization, Council of Europe candidacy.
Dam: North Aral Sea dam, built 2005.
Pipeline: Caspian Pipeline Consortium (CPC).
Field: Tengiz and Kashagan oil fields.
Monument: Unbuilt Astana metro pillars as corruption symbol.

HOW TO APPLY

Assess demographic distribution to concentrate development along borders, avoiding central deserts for efficient infrastructure planning.
Repurpose Soviet legacies like prisons into economic zones, ensuring former inmates integrate via job training to curb crime.
Negotiate resource deals with foreign firms cautiously, capping profit shares at fair levels and mandating local content requirements.
Map clan affiliations during hiring to promote diversity, rotating leadership across zhuzes for balanced governance.
Launch national education abroad programs funded by resource exports, enforcing return clauses with incentives for private sector roles.
Build export pipelines diversely, incorporating multiple routes to China and Europe to reduce single-path dependencies.
Conduct transparent auctions for privatization, auditing trustees to prevent debt schemes and ensure competitive bidding.
Integrate regionally via economic unions, starting with tariff-free trade to boost intra-bloc commerce before deeper policies.
Address water scarcity through dams and conservation, prioritizing northern retention to support agriculture and population centers.
Respond to protests by immediate policy reversals, like price controls, while reforming underlying inequalities to prevent escalation.

ONE-SENTENCE TAKEAWAY

Kazakhstan's resource-driven stability hides deep corruption and inequality, demanding anti-clan reforms for equitable prosperity.

RECOMMENDATIONS

Diversify economy beyond raw exports by investing oil funds in manufacturing and tech to build resilient industries.
Enforce strict anti-corruption laws targeting family elites, auditing all state contracts for transparency.
Promote inter-clan marriages and education to erode zhuz divisions, fostering a unified national identity.
Negotiate better production-sharing terms, reclaiming majority stakes in fields like Kashagan over time.
Expand Bolashak to private sector incentives, directing talent toward innovation hubs rather than bureaucracy.
Strengthen multiple alliances equally, avoiding EAEU dominance by deepening ties with EU and Turkey.
Implement wealth taxes on elites to fund social programs, reducing Gini coefficient through redistribution.
Monitor and publicize official statistics independently to expose discrepancies in inequality data.
Prepare contingency pipelines bypassing Russia, enhancing energy security amid geopolitical tensions.
Use international pressure, like Council of Europe candidacy, to advance democratic reforms against clanism.
Quell unrest proactively with economic dialogues, involving citizens in policy-making to build trust.
Capitalize on rare earths by developing domestic processing, positioning as a green tech supplier globally.
Train police in non-lethal crowd control, reducing reliance on foreign interventions like CSTO.
Encourage financial literacy nationwide via free apps and schools to empower citizens with resource wealth.
Time major announcements, like anti-clan pledges, with global windows to gain diplomatic leverage.

MEMO

In the vast steppes of Central Asia, Kazakhstan stands as an improbable success story amid post-Soviet ruins. Spanning an area larger than Western Europe, this ninth-largest country by landmass hosts just 21 million people, its population hugging borders like a fragile rim around desolate interiors. Economist Nikolai Myachin, in a detailed dissection for his "Simple Economics" channel, attributes this sparsity to unforgiving deserts and Soviet-era displacements, including nuclear tests at Semipalatinsk and the Baikonur cosmodrome launches. Yet, beneath the emptiness lie treasures: 99 elements of the periodic table, with Kazakhstan ranking 12th in oil reserves and a top player in rare earths vital for electronics and green tech. Independence in 1991 unleashed this wealth, transforming a prison-riddled backwater into the post-Soviet leader in GDP per capita—surpassing even resource-rich neighbors without EU subsidies.

The 1990s, however, were a crucible of chaos. Soviet labor camps had swelled Kazakhstan's inmate population to one-seventh of the USSR's total, and dissolution turned these prisoners into unintended citizens, fueling a crime epidemic with over 500 daily offenses. Ethnic tensions peaked as Russians—once 37% of the populace—fled amid Kazakhification, draining managerial talent and leaving a brain exodus that halved their elite presence. Myachin highlights the "Kazakhgate" scandal, where U.S. banker James Giffen funneled $78 million in bribes to President Nursultan Nazarbayev for oil access, only to be shielded by CIA connections. This episode underscores a deeper malaise: systemic corruption woven into clan structures known as zhuzes, tribal unions dictating alliances, marriages, and power since medieval times. Senior Zhuz dominance, centered around former capital Almaty, marginalized others, turning kinship into a nepotistic veil over graft.

Resource booms masked these fissures. The Caspian Pipeline Consortium, forged with Russian, Omani, and Western partners like Chevron, funneled oil to global markets via Novorossiysk, multiplying revenues 120-fold as prices soared in the 2000s. Gold exports alone yielded $18 billion in 2023, yet 90% of trade remains raw materials. Foreign firms dominate under lopsided production-sharing agreements, claiming up to 83% of profits for footing development costs—echoing colonial pacts that siphon billions abroad. Scandals like Unaoil's Kashagan bribes, inflating expenses by 20%, exemplify how Western intermediaries corrupt locals, while privatization schemes debt-trapped state assets into elite hands, including Nazarbayev's family, whose $10 billion fortune tops Forbes lists.

Nazarbayev, ascending from Soviet apparatchik to "Father of the Nation," navigated 1986 riots and rejected Gorbachev's premiership to helm independence. His tenure quelled crime—perhaps through gang wars or shadowy purges—and channeled oil into fixes like the North Aral Sea dam, averting water crises plaguing neighbors, and Bolashak scholarships sending thousands to Oxford and Harvard. Geopolitically astute, he birthed the Eurasian Economic Union as a counterweight to Russian dominance, while joining SCO and Turkic bodies for balance. Yet, his 2019 "retirement" was illusory: immunity laws, family placements, and the Elbasy title preserved influence, with successor Kassym-Jomart Tokayev renaming Astana to Nur-Sultan in tribute. Clan loyalties, both from the same zhuz, stifled reforms, as a 0.75 Gini coefficient reveals wealth hoarded by elites despite egalitarian income stats.

The 2022 protests, sparked by doubled fuel prices, exposed simmering rage against this inequality. Spreading from Mangystau to Almaty, demands escalated to ousting Nazarbayev's privileges, prompting Tokayev to invoke CSTO troops—the alliance's debut—for order. Prices fell nationwide, ministers shuffled, and Nazarbayev's perks eroded, but foreign boots on the ground tainted legitimacy. Ukraine's war amplified dilemmas: Kazakhstan's neutrality irks Russia, yet CPC sabotage risks loom, as drone strikes halted exports after Tokayev's Zelenskyy endorsement. In a deglobalizing world, lithium and molybdenum make Kazakhstan a strategic prize, contested by U.S. oil giants, Chinese "Belt and Road" infrastructure, and regional powers.

Myachin's narrative warns of fragility: clanism and corruption fragment unity, rendering leaders puppets to payers rather than sovereign voices. Tokayev's 2025 anti-clan vow signals intent, but execution demands dismantling family empires and transparent resource stewardship. If successful, ordinary Kazakhs could claim their steppe's bounty, rivaling Gulf prosperity without monarchies. Failure risks subsumption into blocs, as global rivalries intensify. Kazakhstan's tale, blending resilience and rot, urges introspection for nations balancing abundance and autocracy—could reforms unlock a truly equitable future, or will sands swallow another promise?