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Viewing cable 09ASTANA1464, KAZAKHSTAN: WHAT'S BEHIND THE CURRENT

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Reference ID Created Released Classification Origin
09ASTANA1464 2009-09-03 08:10 2011-04-20 07:00 CONFIDENTIAL Embassy Astana
Appears in these articles:
http://kaztag.kz/ru/news/50920
VZCZCXYZ0000
PP RUEHWEB

DE RUEHTA #1464/01 2460810
ZNY CCCCC ZZH
P 030810Z SEP 09
FM AMEMBASSY ASTANA
TO RUEHC/SECSTATE WASHDC PRIORITY 6134
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE PRIORITY
RUCNCIS/CIS COLLECTIVE PRIORITY 1891
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 1261
RUEHUL/AMEMBASSY SEOUL PRIORITY 0918
RUEHTV/AMEMBASSY TEL AVIV PRIORITY 0260
RUEHKO/AMEMBASSY TOKYO PRIORITY 1959
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/CDR USTRANSCOM SCOTT AFB IL PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEAWJA/DEPT OF JUSTICE WASHDC PRIORITY
RHEFAAA/DIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY 1448
RUEHNO/USMISSION USNATO PRIORITY 2767
RUCNDT/USMISSION USUN NEW YORK PRIORITY 2452
C O N F I D E N T I A L ASTANA 001464 
 
SIPDIS 
 
STATE FOR SCA/CEN, INR, EEB 
PLEASE PASS TO USTR AND USTDA 
 
E.O. 12958: DECL: 09/04/2019 
TAGS: PGOV PINR ECON KCOR KZ
SUBJECT:  KAZAKHSTAN:  WHAT'S BEHIND THE CURRENT 
ANTI-CORRUPTION CAMPAIGN? 
 
Classified By: Ambassador Richard E. Hoagland:  1.4 (B), (D) 
 
1.  (C) SUMMARY:  The well-connected Israeli Ambassador 
analyzes that the current anti-corruption campaign in 
Kazakhstan is not a political-economic clan struggle to 
succeed President Nazarbayev.  Rather, it is Nazarbayev 
himself cracking down to preserve his generally positive 
economic legacy and to improve Kazakhstan's international 
image.  END SUMMARY. 

2.  (C) During a one-on-one lunch that the Ambassador hosted 
for Israeli Ambassador Israel Mei-Ami on September 2, Mei-Ami 
gave a more nuanced analysis of the high-level corruption 
prosecutions in Kazakhstan currently dominating domestic and 
international headlines than we have heard before.  Mei-Ami 
is a credible source because he was born in Soviet 
Kazakhstan, is a native Russian speaker, and has a broader 
and deeper range of contacts, both in the public and private 
sectors than any other foreign ambassador in Kazakhstan, with 
the possible exception of Russian Ambassador Mikhail 
Bocharnikov.  Bocharnikov, however, is an Africanist who has 
"returned home" to the Former Soviet Union, and tends 
sometimes to be dismissive about Kazakhstan. 
 
NOT A SUCCESSION STRUGGLE? 
 
3.  (C) According to Mei-Ami, the current anti-corruption 
campaign and supposed political struggle are not a 
political-economic clan show-down to jostle for position to 
succeed 69-year-old President Nursultan Nazarbayev, who is in 
fine physical and mental health.  Rather, it stems from 
Nazarbayev's instinctive and carefully calculated response to 
the current global economic crisis that has hit heretofore 
economically successful Kazakhstan hard, in part because 
Nazarbayev's economic and financial policies of the last two 
decades have embedded Kazakhstan in the global economy. 
Nazarbayev sees Kazakhstan's global economic standing as 
endangered.  In Mei-Ami's view, Nazarbayev is alarmed that 
his legacy itself is threatened, and is, thus, acting to rein 
in some of the worst corruption. 
 
4.  (C) COMMENT:  If true, this might explain why, after 
years of inaction, Kazakhstan's parliament passed, and 
Nazarbayev just signed, anti-money-laundering legislation. 
It would also suggest why, after years of progressive 
economic policy, Nazarbayev is now sometimes leaning backward 
instinctively toward "homo sovieticus" solutions like his 
ill-considered decision, at least provisionally, to dump 
World Trade Organization accession in favor of the 
Russia-Belarus-Kazakhstan Customs Union.  END COMMENT. 
 
ECONOMIC CRISIS THREATENS NAZARBAYEV'S LEGACY 
 
5.  (C) Mei-Ami cited a source who has direct, first-hand 
access to one of the principals who took part in a meeting 
earlier this year (date unknown) when Nazarbayev convoked 
Prime Minister Karim Masimov and the several economic 
ministers, as well as Chairman of the Central Bank Grigoriy 
Marchenko, and thundered, "Stop lying to me like you do to 
the media and tell me the truth.  Where do we stand 
economically?"  Reportedly, they laid out in honest detail 
the "real reality" for the President -- that the 
usually-tolerated, mind-boggling corruption in Kazakhstan 
(including in the President's family) threatened to bring the 
banking and financial sectors down like a house of cards. 
First, second, third, and even fourth-tier banking executives 
had been embezzling like crazy during the fat years when 
international lenders jostled each other with sharp elbows 
while standing in line to dump ever more money into 
Kazakhstan.  According to Mei-Ami's sources, Nazarbayev was 
both appalled and shaken, and roared to his assembled 
 
advisers the equivalent of "off with their heads!" 
 
BUT THERE'S STILL A CLAN TO WATCH 
 
6.  (C) Mei-Ami said that his mostly high-level business 
sources have explained to him that the current situation is 
not really a "clan war," but that, nevertheless, one clan is 
the "deer in the headlights" -- the 
Masimov-Kulibayev-Nigmatullin (MKN) clan (Prime minister 
Masimov, Nazarbayev's billionaire son-in-law Timur Kulibayev, 
and Karaganda Oblast Governor Nurlan Nigmatullin). 
 
7.  (C) In Mei-Ami's view, Nazarbayev does not necessarily 
feel politically threatened by this clan -- thus Mei-Ami's 
analysis that the current situation is not a power struggle 
for succession -- but is making it clear that they must 
"shape up or ship out," to put it mildly.  And so Nazarbayev 
has instructed his close ally, Chairman of the Committee for 
National Security (KNB, ex-KGB) Amangeldy Shabdarbayev to go 
after some of the MKN clan's closest associates.  If, in the 
meantime, the KNB can identify some of the more flagrantly 
corrupt officials not necessarily part of the MKN clan, then 
more power to them.  However, in a paranoid political culture 
that is common to the post-Soviet world, this has opened the 
door to petty -- and sometimes not so petty -- political 
vendettas.  As a result, Mei-Ami said -- and we have heard 
this from other sources -- the bureaucracy is paralyzed 
because ministers and deputy ministers are desperately 
hunkered down and averse to making any decision at all, 
unless they are forced to do so, for fear that the kind of 
decision-making they are used to -- greased palms -- will 
drag them into the current shake-out. 
 
8.  (C) In Mei-Ami's view, Nazarbayev's ultimate goal is not 
only to preserve his own image, but also to "bucket-out" the 
cesspool of business-as-usual Kazakhstan.  Mei-Ami judges 
that Nazarbayev not only cares deeply about his own legacy, 
but also sincerely wants the country he has struggled cannily 
for two decades to build to be successful in its own right 
and, thus, internationally respected.  Therefore, according 
to Mei-Ami, Nazarbayev's anti-corruption campaign, including 
hits against some high-level officials, is generally 
legitimate. 
HOAGLAND