"The Nazarbayev System"

Two words are enough to express what is the fuel of the protests in Kazakhstan: "Grandpa, step down!" This exclamation is heard again and again during the national demonstrations of the past few days. This made it clear to everyone that the anger and frustration, which is currently emerging in that Central Asian country, is only marginally related to the increase in the price of liquefied gas, which was the reason for the unrest.

For the protesters, it is a much more fundamental matter: it is about Nursultan Nazarbayev, "Grandfather". And it is about what this 81-year-old committed during 29 years in the chair of the president of the country.

"Kazakhstan has been turned into Nazarbayev's private company," said a woman among the protesters in the Kazakh economic capital of Almaty to TV cameras a few days ago. And she added: "The only thing that flourishes here is corruption!" Many Kazakhs, who have taken to the streets in recent days, share this view.

They feel cheated by a man who has remained a defining figure in the country even after he resigned as president in 2019. And they are furious at the kleptocratic system created by this long-serving ruler - a system that has brought spectacular wealth to the ruling clan. The example of Nazarbayev shows how a cunning autocrat, who controls the vast natural resources of his country, can find an open door in the West as well: if he brings with him a large enough suitcase full of dollars.

Bonanza for self-enrichment

One of the secrets of Nazarbayev's success was seen right at the beginning of his career: his nimble agility. When Kazakhstan gained independence after the collapse of the Soviet Union in 1991, almost everything in the country changed. But one thing remained the same: Nazarbayev was and remains the Master. A former worker of a failed iron factory, of poor origin, he had already made a career under Soviet protection, so he was the last head of the Communists of the Soviet Republic of Kazakhstan. After the fall of the Berlin Wall, he became the first president of the newly independent state of Kazakhstan.

Nazarbayev did the transition of Kazakhstan from the stone age of communism to capitalism perfectly. The president took advantage of the fact that his country has enormous natural resources: oil, gas, uranium, chrome, and coal in abundance. The income generated from their exploitation helped to stabilize the country economically and politically - because Nazarbayev was wise enough to allow his people to participate in at least part of the distribution of this wealth.

However, an incredible amount of money immediately ended up in his pockets. As in other former Soviet republics, the end of the Cold War created unprecedented opportunities for the communist elite to become massively rich. Nazarbayev tolerated that robbery - as long as the robbers remained loyal to him. According to experts' estimates, between 1995 and 2005, every year more than a quarter of the money from the Kazakh economy ended up in private accounts abroad. For a few Kazakhs, the nearly three decades of Nazabrayev's rule were bonanza years for massive self-enrichment.

From the beginning, Nazarbayev did not distinguish between his account and the wealth of the state. His family especially benefited from direct access to state assets. Nazarbayev's three daughters and their husbands were appointed to important positions in Kazakhstan's business and politics at an early age. As a result, numerous companies in the finance and raw materials sectors, as well as in the construction and media sectors, came under the control of Vođa's family.

Going public, as a cover

Tom Burgis' book, published in 2020, offers a particularly vivid insight into the system of corruption that Nazarbayev cultivated. In his meticulous work, the British investigative journalist follows how three businessmen, who were close to the Kazakh president and who, according to the media, once supported him with donations for the "election campaign", became rich from the country's natural wealth and resources.

The raw materials company ENRC, managed by the trio, which among other things was active in the mining of iron ore, was listed on the London Stock Exchange in 2008. Which poured hundreds of millions of dollars into the accounts of these three shady businessmen. And it allowed the company to transfer tens of millions of dollars through London to opaque corporate structures in tax havens.

ENRC also soon invested in the raw materials sector in various African countries: according to Burgis' research, the relevant acquisitions in Congo-Kinshasa involved embezzlement on a large scale. ENRC delisted from the London Stock Exchange in 2013 - just after the British Criminal Investigation Agency (SFO) opened an investigation into the company: for fraud, bribery and corruption in Africa.

Construction contracts under Nazarbayev, which were realized through the president's clan, were apparently another means of embezzlement of state funds. According to the Burgis investigation, Nazarbayev's son-in-law Timur Kulibayev, otherwise a director in the supervisory board of the Russian company "Gazprom", allegedly stole tens of millions of dollars during the construction of the Kazakh gas pipeline to China. Kulibayev is said to have been the real owner of an intermediary company that supplied steel for gas pipeline pipes and sold it to an authorized state construction company at astronomical prices.

Villas on Lake Geneva

The extent of the wealth Nazarbayev's family has amassed over the years is unclear. Estimates range up to $7 billion. The inner circle of people around this long-term ruler shows no reluctance when it comes to investing the accumulated billions abroad. According to a 2020 survey by Radio Free Europe, members of the closest Nazarbayev family in Europe and the US alone own real estate worth a total of $785 million.

The impressive portfolio of the ruling family of Kazakhstan also includes three properties in Switzerland. In addition to the house in Tessen and the castle in Belrive, there is also an imposing villa on Lake Geneva. According to research, the second daughter of Nazarbayev, Dinara Kulibayev, bought this villa in 2009 for almost 75 million francs. In the telephone directory of Switzerland, she is still listed as a resident of this large estate. Kulibaeva is considered to be Kazakhstan's richest woman and is the wife of Timur Kulibayev, a gas promoter and alleged steel middleman from Burgis' research.

Nazarbayev's ties with Switzerland do not end there. Kazakhstan's oil sector has long been closely linked to the raw materials trading center of Switzerland. Swiss banks have long cultivated good relations with Central Asia. In Burgis' research, the branch of a famous Swiss bank in London plays an important role in the laundering of Kazakh money. According to media reports, the Swiss Financial Market Supervisory Authority (FINMA) is currently investigating Genfer Bank for alleged illegal payments to Kazakh oligarchs. The freezing of more than 160 million francs in Swiss bank accounts in 2004 will also be remembered, which, according to the American investigative authorities, was a payment to Nazarbayev by oil company rackets.

Friends in the West

In yet another segment, Switzerland shows how strongly the "Nazarbayev System" had influence abroad. About six years ago, the Kazakhstani lobbying affair in the Bundesbern caused several weeks of blushing. On the one hand, this episode showed how eager the Central Asian regime was to burnish its image abroad and to fight for its own interests. On the other hand, it was a clear proof that Nazarbayev has no problem finding influential "friends" in the West as well - if the "amount of dollars" is "enough".

Quite illustrative of this type of "closeness" is the close cooperation between the Kazakh ruler and former British Prime Minister Tony Blair, who "advised" him on several occasions. Blair and countless other lobbyists, hired for the personal interests of Nazarbayev, contributed to the fact that the Kazakh regime was seen in the West for years primarily as an anchor of stability and a profitable business partner - and therefore they were all in the West and more than willing to "overlook" violations of human rights rights and repressions of this authoritarian regime.

For Burgis, the modern history of Kazakhstan is therefore an example of how "a well-paid global network of lawyers, bankers, politicians and PR managers helps launder the reputation and money of a totally kleptocratic regime".

New Zürcher Zeitung (NZZ)

Translation: Mirko Vuletić