Kazakhstan’s future growth depends on reforms that provide a level playing field for the private sector and support economic diversification, according to a new Asian Development Bank (ADB) Country Diagnostic Study launched today.
The study, Kazakhstan: Accelerating Economic Diversification, identifies the most binding constraints to growth and provides in-depth analysis of structural reforms that will bring the country to its growth potential. The report finds that consistent and successful reform efforts can add an average of 1.2 percentage points per year to Kazakhstan’s gross domestic product.
“Kazakhstan needs to accelerate structural reforms to support the country’s economic diversification,” said ADB Country Director for Kazakhstan Mr. Giovanni Capannelli. “These reforms include improving the country’s business climate, enhancing competitiveness, and increasing private sector participation in the economy.”
Kazakhstan’s economy has transformed since its independence in 1991, mainly due to a surge in oil and gas exports. While the country achieved middle-income status in 2006, the downturn of oil and other commodity prices in 2014 exposed the country’s vulnerability to external shocks and constrained government revenues.
Future growth will depend on identifying sectors in which Kazakhstan has a strong growth potential, according to the study. These include food processing, basic metals, and chemicals. In agriculture, redirecting subsidies toward investment in infrastructure, improving access to finance, and promoting innovation can substantially boost productivity. Greater investment in infrastructure is essential to provide a link to unexploited markets, decrease transport costs, and support the production of tradable goods. Transit trade has a large growth potential, while increasing the efficiency of transport infrastructure can generate additional growth from other tradable sectors such as manufacturing, the report said.
ADB began supporting Kazakhstan in 1994 and has since approved over $5 billion in sovereign loans, nonsovereign loans, and guarantees. ADB operations in Kazakhstan are helping open up transport routes, foster private enterprise, address inequalities, promote inclusive growth, and deliver knowledge products and services. ADB also contributes to Kazakhstan’s participation in the Central Asia Regional Economic Cooperation (CAREC) program.
Kazakh court case tests Chinese power
A Kazakh court is set to put to the test China’s ability to impose its will and strongarm Muslim nations into remaining silent about its brutal crackdown on Turkic Muslims in the north-western province of Xinjiang.
The court will hear an appeal by a former worker in one of Xinjiang’s multiple re-education camps against the rejection of her request for asylum. The appeal illustrates the political quagmire faced by Central Asian nations and Turkey given their ethnic, cultural and linguistic ties to China’s estimated 11 million Turkic Muslims that include 1.5 million people of Kazakh descent.
It also highlights China’s risky bet on being able to leverage its economic power to ensure the Muslim world’s silence about what amounts to the most concerted effort in recent history to reshape Muslim religious practice.
Up to one million Turkic Muslims have, according to the United Nations, been detained in a network of re-education camps in which they are being forced to accept the superiority of Chinese Communist Party beliefs and the leadership of President Xi Jinping above the precepts of Islam.
Beyond the camps, Turkic Muslims in Xinjiang, a strategic minerals-rich province bordering on eight Central and South Asian nations that China has turned into a 21st century Orwellian surveillance state, are forced to refrain from religious practice and custom in public.
After denying the existing of the camps for the longest period of time, China last month felt obliged to acknowledge them and give them legal cover.
Authorities in Xinjiang amended their anti-extremism regulations “to allow local governments to set up institutions to provide people affected by extremist thoughts with vocational skills training and psychological counselling.” China asserts that the crackdown is intended to counter extremism, separatism and terrorism.
China’s acknowledgement was designed to counter the UN report, threats of US sanctions against officials and companies involved in the Xinjiang crackdown, and revelations by 41-year-old Sayragul Sauytbay, a Chinese national of Kazakh descent.
Ms. Sauytbay testified in an open Kazakh court that she had been employed in a Chinese re-education camp for Kazakhs only that had 2,500 inmates. She said she was aware of two more such camps reserved for Kazakhs.
Ms. Sauytbay was standing trial for entering Kazakhstan illegally after having been detained at China’s request.
She told the court that she had escaped to Kazakhstan after being advised by Chinese authorities that she would never be allowed to join her family because of her knowledge of the camps. Ms. Sauytbay was given a six-month suspended sentence and released from prison to join her recently naturalized husband and children.
Since then, Ms. Sauytbay’s application for asylum has been rejected and she has until the end of October to leave Kazakhstan. She hopes that an appeal court will reverse the rejection.
Ms. Sauytbay’s case puts the Kazakh government between a rock and a hard place and is but one of a string of recent cracks in the Muslim wall of silence.
Kazakh authorities have to balance a desire to kowtow to Chinese demands with a growing anti-Chinese sentiment that demands that the government stand up for its nationals as well as Chinese nationals of Kazakh descent.
Ms. Sauytbay’s revelations that ethnic Kazakhs were also targeted in the Chinese crackdown sparked angry denunciations in Kazakhstan’s parliament.
“There should be talks taking place with the Chinese delegates. Every delegation that goes there should be bringing this topic up… The key issue is that of the human rights of ethnic Kazakhs in any country of the world being respected,” said Kunaysh Sultanov, a member of parliament and former deputy prime minister and ambassador to China.
In a further crack, Malaysia this week released 11 Uyghurs who were detained after having escaped detention in Thailand.
The Uyghurs were allowed to leave the country for Turkey. The move, coming in the wake of a decision by Germany and Sweden to suspend deportations of Uyghurs to China, puts on the spot countries like Turkey and the United Arab Emirates, where Uyghurs risk extradition.
Malaysia’s release of the Uyghurs occurred days before Anwar Ibrahim took the first hurdle in becoming the country’s next prime minister by this weekend winning a parliamentary by election.
Mr. Ibrahim last month became the Muslim world’s most prominent politician to speak out about the crackdown in Xinjiang.
Earlier, Rais Hussin, a supreme council member of Malaysian prime minister Mahathir Mohamad’s Parti Pribumi Bersatu Malaysia (Bersatu) party and head of its Policy and Strategy Bureau, cautioned that “that geographical proximity cannot be taken advantage by China to ride roughshod over everything that Malaysia holds dear, such as Islam, democracy, freedom of worship and deep respect for every country’s sovereignty… On its mistreatment of Muslims in Xinjiang almost en masse, Malaysia must speak up, and defend the most basic human rights of all.”
Pakistan’s Religious Affairs and Interfaith Harmony minister, Noorul Haq Qadri, was forced to raise the issue of Turkic Muslims with Chinese ambassador Yao Xing under pressure from Pakistanis whose spouses and relatives had been detained in the Xinjiang crackdown.
Ms. Sauytbay’s appeal for asylum is likely to refocus public opinion in Kazakhstan and other Central Asian nations on the plight of their Turkic brethren.
“She will not be deported, we will not allow it,” said Ms. Sauytbay’s lawyer, Abzal Kuspanov.
Mr. Kuspanov’s defense of Ms. Sauytbay is about far more than the fate of a former Chinese re-education camp employee. It will serve as a barometer of China’s ability to impose its will. If China succeeds, it will raise the question at what price. The answer to that is likely to only become apparent over time.
Why the upcoming Congress of the Leaders of World is so vital for peace and prosperity
Religion has been, and remains, an immense spiritual force for good in our world. The shared values which underpin all world’s major faiths have positively moulded how we treat each other. Religious beliefs give direction, comfort and hope to billions of people.
Religious communities appear to have enormous potential for addressing today’s social problems. Faith groups across the globe are prominent in feeding the hungry, sheltering the homeless and caring for the vulnerable. Our world would be poorer without the impact of religion on our lives.
Throughout history, religion has also been exploited to sow divisions. Instead of bringing people together and encouraging them to behaving decently toward each other, it has been abused to fuel suspicions and hatred, spread confusion about the true essence of religion. We are facing the problem of ignoring what religions have in common and exaggerating and distorting the difference between, and at times within, faiths.
The abuse of religion continues and is undermining hopes for peace and progress. In recent years, many thousands have died and millions more had to flee their homes in conflicts, in which religion has been used to justify discrimination and violence. Countering these dangerous distortions is one of the challenges that religious leaders should address.
There is no single answer. Yet at the heart of the solution is dialogue between religions to foster understanding and respect. This is an overarching aim of the Congress of the Leaders of World and Traditional Religions which is to be held for the sixth time in Kazakhstan’s capital Astana this month (October.)
The Congress was initiated by Kazakh President Nursultan Nazarbayev amid the growing religious tensions and extremism following the 9/11 terrorist attack in the United States. He believed it was critical that the opportunity be provided for religious leaders to work together to prevent religion being used to divide us.
His vision has struck a chord across the world. The Congress, which takes place every three years since 2003 has engaged prominent religious leaders and politicians from different countries around most pressing issues. By 2015, the number of delegations attending had increased from 23 to 80. High-profile attendees included then UN Secretary-General Ban Ki-moon, King Abdullah of Jordan and President of Finland Sauli Niinistö. Discussions centred on the role of religion in promoting development and measures to reduce appeal of violent extremism among young people.
The Sixth Congress, which takes place on October 10-11, will build on this efforts. Its focus is on how religious leaders can work together to play their full part in creating a secure world and prevent faith being abused to set people against each other.
Located at a crossroads of different civilizations, Kazakhstan has placed greater importance on promoting religious harmony and mutual respect. Our country’s history and geography have combined to create a society in which people of many different backgrounds and faiths live within single boundaries. Religious freedom has become a precious asset of our nation, which allows diverse beliefs to peacefully coexist and helps us to negotiate any concerns in a constructive spirit.
Such a mixture could have been, as it has been the case in other countries, a worrying source of tension and conflict. Despite negative expectations such diversity has been turned into a strength in our society where citizens are equally respected and are able to make their full contribution to the common welfare.
As a matter of fact, while Kazakhstan’s population may be largely Muslim, followers of all traditional faiths live in harmony with each other, are free to worship and enjoy equal rights guaranteed by the constitution. It is a source not only of national pride but has also been an indispensable platform for our stability and prosperity at home and growing influence abroad.
In this turbulent world, dialogue and mutual respect has never been more important. Nor has it been more critical to provide the forum where religious and political leaders can work together to prevent any distortion of faith for violent ends. The upcoming Congress is so vital for peace and prosperity.
China’s policies spur Central Asians to cautiously chart independent course
China’s brutal crackdown in its north-western province of Xinjiang and growing questions about the dark side of some of its Belt and Road investments is fuelling anti-Chinese sentiment, prompting some countries to explore ways to chart an independent course, and feeding into the narratives of rising populist leaders.
The incarceration of up to 2,5000 Kazakhs in re-education camps in Xinjiang designed to install Chinese values and loyalty to President Xi Jinping, erase nationalist and militant sentiment, and introduce ‘Chinese characteristics’ into perceptions of Islam among the region’s Uyghur population, a Muslim Turkic ethnic group, has spurred a Kazakh search to cautiously chart an independent course.
An estimated 1.5 million ethnic Kazakhs live in Xinjiang, 200,000 of which obtained Kazakh citizenship after the demise of the Soviet Union in 1991. In contrast to Uyghurs, they were able to move freely across the Kazakh-Chinese border until 2016 when China stepped up its crackdown in Xinjiang.
Chinese policy also figures in crucial Pakistani elections with populist contender and former international cricket player Imran Khan demanding greater transparency in China’s US$ 50 billion plus investment in the China Pakistan Economic Corridor (CPEC), a Belt and Road crown jewel and the initiative’s single largest investment. Mr. Khan is also demanding a more equitable distribution of Chinese investment among Pakistan’s provinces.
Irrespective of whether Mr. Khan emerges victorious from the Pakistani polling, he is likely to be a major voice. His call for greater transparency resonates with significant segments of the business community represented by the Federation of Pakistan Chambers of Commerce and Industry who have been critical of commercial terms that advantage Chinese companies with reduced benefit to their Pakistani counterparts.
Mr. Khan’s call for greater transparency is likely to get a significant boost if Pakistan is forced to turn to the International Monetary Fund to bail out its troubled economy.
Major political parties and business organizations in the Pakistani province of Gilgit-Baltistan have meanwhile threatened to shut down the Pakistan-China border if Beijing does not release some 50 Uighur women married to Pakistani men from the region, who have been detained in Xinjiang.
The province’s legislative assembly unanimously called on the government in Islamabad to take up the issue. The women, many of whom are practicing Muslims and don religious attire, are believed to have been detained in re-education camps.
Concern in Tajikistan is mounting that the country may not be able to service its increasing Belt and Road-related debt. With the World Bank and the IMF warning that Tajikistan runs a high risk of debt distress, Tajikistan has seen its debt-to-GDP ratio balloon from 33.4% of GDP in 2015 to an estimated 56.8% in 2018.
The emerging stories of Kazakhs released from re-education camps in Xinjiang and a court case a Chinese national of Kazakh descent accused of entering Kazakhstan illegally after working in one of the detention centres holding hundreds of thousands of mostly Turkic Muslims is forcing the Kazakh government to stand up more forcefully for the rights of its nationals and reinforcing its desire to steer a middle course between Chinese and Russian ambitions in Central Asia.
41-year-old Sayragul Sauytbay is on trial for allegedly illegally crossing the Chinese-Kazakh border border to join her husband and two children in Kazakhstan. Ms. Sauytbay told the court she had escaped to Kazakhstan after being told by Chinese authorities that she would never be allowed to join her family because of her knowledge of the camps.
Chinese authorities have denied the existence of the camps despite mounting evidence from both official documents and witness accounts. China’s foreign ministry said it “had not heard” of the camps.
Ms. Sauytbay’s defense is attracting attention and spurring anti-Chinese sentiment not only because of her first-hand account of the detention camps but also because of her assertion that she had access to classified Chinese documents that shed light on the sprawling network of re-education centres.
Ms. Sauytbay’s trial puts the Kazakh government, an important Belt and Road partner, in a bind. She has admitted having illegally entered the country but said she would disappear in one of Xinjiang’s detention camps if she were returned to China. Ms. Sauytbay has requested political asylum in Kazakhstan.
Kazakhstan has until now to sought to raise the issue of the fate of ethnic Kazakhs in Xinjiang quietly and cautiously with China. Returning Ms. Sauytbay would open the government to accusations that it is kowtowing to Beijing and failing to protect its people. Allowing her to stay, would give further credibility to reports on the extent and nature of the crackdown in Xinjiang.
The trial also boosts Kazakh efforts to steer a middle course between Chinese and Russian influence in Central Asia by forging closer ties to European nations and the United States as well as the Muslim world.
Kazakh President Nursultan Nazarbayev discussed with President Donald J. Trump, on a visit to Washington in January, an “enhanced strategic partnership” that would strengthen cooperation “on political and security issues, trade and investment, and people-to-people relationships.”
Uzbek president Shavkat Mirziyoyev travelled to Washington on a similar mission, seeking US support for his liberalizing economic and political reforms.
Central Asian leaders suggested to European Union High Representative for Security and Foreign Affairs Federica Mogherini that they were looking to Europe rather than China and Russia for assistance in building sustainable economies that can create jobs for the region’s mushrooming youth population.
That is not to say that Central Asian nations, most of which are members of the Shanghai Cooperation Organization, do not welcome massive Chinese and Russian investment. They do, but also realize that the investment may improve their infrastructure and enhance security but does not necessarily ensure their ability to sustainably create jobs.
In a sign of the times, Russian commentator Yaroslav Razumov noted that Kazakh youth recently thwarted the marriage of a Kazakh national to a Chinese woman by denouncing it on social media as unpatriotic.
Quoting Kazakh commentators as blaming Russia for stirring anti-Chinese sentiment in their country, Mr. Razumov, in an article entitled ‘Ally, but not a friend,’ warned that Russia, and by extension China, “must learn to live with this.”
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