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 PART
3
In pursuit of the snow
leopard
Part 1: The last frontier: China's far
west
Part 2: The king of the steppes
ALMATY - It's a winners-and-losers
capitalist classic: in 2003, 4 tons of oil and 1,000
cubic meters of gas will be produced per person in
Kazakhstan. This is arguably, per capita, the richest
country on the whole planet: not only because of oil and
gas, but because it inherited more than 60 percent of
all former Soviet mineral resources (at least 80
different types of minerals). In spite of all that,
roughly 56 percent of the 15 million-plus population
remains poor; and invisible to the ballet of Mercedes
and Audis of the oil oligarchs in Almaty, the average
Kazakh on a salary of US$50 a month still has to queue
up under the snow waiting for a bus.
According
to Vice Minister of Energy and Mineral Resources,
Lyazzat Kiinov, speaking last month at the 11th
International Oil and Gas Conference in Almaty, "Oil
 production in Kazakhstan
will be 1.2 million barrels a day by 2005, 2.8 million
barrels a day by 2008, and 3.5 million barrels a day by
2015. Kuwait, with its 2 million barrels a day, will be
left far behind us." The ambition is to more than triple
the number of barrels per day Kazakhstan currently
extracts.
So the myth lingers of Kazakhstan as
an immense "new Kuwait" at the heart of the great
Eurasian steppes, from the Caspian to western China,
from Siberia to the Tian Shan ("Celestial") mountains.
President Nursultan Nazarbayev keeps promising an oil
boom. Like Mahathir Mohamad in Malaysia with his "Vision
2020", Nazarbayev has devised a 2030 economic
development strategy: just as a reminder, Almaty's
tallest building, the delightful Soviet Hotel
Kazakhstan, has a "2030" illuminated billboard on its
roof top (no, they didn't mix it up with 2003).
Nazarbayev wants Kazakhstan to be "a Central
Asian snow leopard" - a development model for other
countries. The transfer of the capital from Almaty to
Astana (The king of the steppes) is
included in the strategy. Nazarbayev knows very well
that a country so naturally rich as Kazakhstan cannot
but be the ultimate, indispensable geostrategic ally.
But real life snow leopards are condemned to extinction.
Cynics wonder whether Nazarbayev's metaphor could
indicate the same fate for his dreams.
The expat
business community in Almaty and Atyrau ("Oil City" and
base camp for the monstrous Tenghiz oilfield, 350
kilometers south) went into scary movie mode when new
Kazakh Prime Minister Daniyal Akhmetov recently
complained that some existing oil-and-gas contracts are
out of touch with reality. But he quickly added that
Astana would not try to renegotiate any deals with
foreign corporations. No wonder: Nazarbayev in the
foreseeable future will be on a hunting expedition for
at least $70 billion in foreign direct investment that
Kazakhstan needs to turn its natural riches into
palpable wealth.
The biggest oil show in town at
the moment is the perceived - by the government - slow
pace of development at Kashagan in the Caspian Sea,
considered to be one of the biggest oilfields in the
world. Kashagan is being developed by Agip KCO, a huge
consortium set up in November 1997, and now consisting
of ENI, TotalFinaElf, ExxonMobil, ConocoPhillips, Royal
Dutch Shell and Inpex from Japan. The Chinese wanted to
be part of it too, but they were blocked by some of the
partners.
Production sharing agreements were
signed for a period of 40 years. Nazarbayev wanted
everything by the book - which means extraction starting
in 2005. But then Agip, blaming technical problems,
proposed starting a year later and extracting four times
less oil than the original plan. After months of
stalemate, Kazakhstan finally agreed to delay the start
of production to 2007. But Nazarbayev insists on other
conditions - like participation of as many Kazakh
companies as possible and close attention to ecological
problems.
Six months ago, Nazarbayev approved a
state program for developing the 1,894 kilometers of
Caspian shoreline shared by Kazakhstan. Minister of
Energy and Natural Resources Vladimir Shkolnik has
already announced plans to develop new areas beginning
in 2004. KazMunaiGaz - the state oil company - will have
a go first, and it's supposed to issue its own tenders
for foreign investment in 2005. But in fact the oil and
gas community in Kazakhstan knows that foreign
corporations can bypass parts of the tender review
process if they form a joint venture with KazMunaiGaz.
Oil matters in Kazakhstan usually follow a
Byzantine, long and winding road. Take the case of the
Tenghiz oil field. The negotiations lasted no less than
four years. The joint venture was formalized in 1992.
Work on the $2.6 billion pipeline only started in 1997.
The pipeline from Tenghiz, near the Caspian, to the
Russian Black Sea port of Novorossiysk was only ready in
December 2001. There are still production capacity
delays. Tenghiz will reach the mark of 1 million barrels
a day only in 2012, according to ChevronTexaco's
Eurasian unit.
PetroKazakhstan, which is in fact
a Canadian corporation, very active in the country since
1996 and with very close ties with Nazarbayev, will
cooperate with Russian giant Lukoil to get access to the
critical, Russian-dominated Caspian Pipeline Consortium,
whose hub is also in "Oil City" Atyrau, 30 kilometers
away from the Caspian shore. The consortium's pipeline
also goes west to Novorossiysk. PetroKazakhstan wants to
improve its pipelines from Shimkent, in southern
Kazakhstan, to increase its exports to Iran and China.
Washington may not like it, but the fact is Nazarbayev
wants to explore all possible export routes: east to
China, south to Iran, west to Turkey.
Kazakhstan
is dying to expand its markets. One day before Latvia
voted to become part of the European Union, the
Commonwealth of Independent States (CIS) - a very loose
confederation of most of the former Soviet republics -
voted in favor of a common market. It will begin with
Russia, Kazakhstan, Ukraine and Belarus, but it may
eventually include all CIS countries.
Almaty,
originally a Silk Road oasis devastated by the Mongols
and so "remote" from a Soviet point of view that Leon
Trotsky was exiled here, usually has the atmosphere of a
city built in the middle of a park. Now autumn leaves
are falling and it's already starting to snow - making
it impossible to enjoy the superb backdrop of the
snow-capped mountains of the Zailiysky Alatau - an arm
of the "Celestial" Tian Shan. Appropriately, the death
certificate of the former USSR was signed here when the
city was still named Alma-Ata, and all of the five
Central Asian republics plus Azerbaijan, Armenia and
Moldova joined the CIS founded by Russia, Ukraine and
Belarus. Nazarbayev, very close to Russia, wants a
stronger CIS: Uzbekistan's Islam Karimov - still
infatuated by his strategic relationship with the US -
doesn't.
At the Kazakhstan Investment Promotion
Center (Kazinvest), the head of information Zulfira
Sadykjanova lists the six priority areas for foreign
direct investment: agriculture, the processing industry,
industrial infrastructure development, construction,
tourism and the "social sphere". In the past 10 years,
Kazakhstan received $22.2 billion in investment. Thirty
percent of this came from the US, followed by Britain
(14 percent), South Korea (8 percent), Italy (7
percent), and 5 percent each from the Netherlands,
Switzerland and Islamic Development Bank
member-countries. More than half of all the money was
for oil and gas.
Kazinvest lists the country's
many priorities: to explore the Caspian, upgrade
refineries, increase oil and gas processing facilities,
develop a petrochemical industry, broaden export markets
and develop legislation that will attract more
investment. Kazinvest of course denies there's too much
bureaucracy, too much corruption, and that it takes too
long to get anything approved. Business expats think
otherwise. They complain of state bureaucratic
nightmares and inefficiency - like waiting 20 minutes to
cash a check; and they deplore the severe lack of small
and medium enterprises and shortage of skilled workers.
Kazakhstan still depends on expensive imports. State
salaries are a pittance. In Almaty, every car is a
potential taxi because there are no jobs. A German
businessman says. "Only a few joint ventures can be
considered more or less successful, and they are are
mainly related to minerals and metallurgy."
Decades of demented Soviet practices and
avalanches of social cataclysms have cooked up an ethnic
mix out of these descendants of Genghis Khan's hordes
that is tolerant and frankly globalized: here we find
Kazakh vegetarians, Ukranian Muslims, Russian Buddhists,
Uighur Christians, people who have a Kazakh name and
look European or look like a Mongol but have a Russian
name. They're only two generations away from nomadism,
but visibly, at least in Almaty, are much more stylish,
cosmopolitan and cool than any new Russian. Kazakhs just
can't get enough of globalization.
In the middle
of all these contradictions, a "dynasty" scenario is
brewing. Nazarbayev is arguably one of the richest men
in the world. His wife, Sara, is an economist, and head
of a children's charity fund. Dariga Nazarbaeva, the
eldest daughter, is the chairman of the board of the
Khabar media group, which includes state TV. She is
married to go-getter Rakhat Aliyev, who caused so much
trouble in the court that he was "exiled" as ambassador
to Vienna. Aliya Nazarbaeva, the youngest daughter, was
the star of Central Asia's equivalent of a royal wedding
when she married the son of Kyrgyz President Askar
Akaev.
Dariga Nazarbaeva is arguably being
prepared to follow daddy's fooststeps. She is the leader
of a new "public association", Asar ( "all together", in
Kazakh): it's not a political party, at least not yet.
But sooner or later leading the media and a political
party simultaneously would be the perfect positioning
for Nazarbaeva to ascend to the throne in Astana:
probably in 2013, say Almaty insiders. Till then,
Nazarbayev remains in full control of the snow leopard
model - hoping not to be derailed by the ongoing
criminal investigation in New York into alleged
deal-lubricating bribes from American oil giants to top
Kazakhs officials. Many a political analyst in Almaty is
convinced that Nazarbayev wants to position his daughter
as his successor so he can leave in peace if the going,
known as Kazakhgate, gets tough.
Three years ago
Nazarbayev forced the Kazakh parliament to give him and
his family political and legal rights for life - which
include total immunity against any charges, past,
present and future. It's "dynasty" in the steppes:
ironically, the original American soap "Dynasty" is
still showing on Russian TV. Moneychangers in Almaty
kiosks have no need to worry: with Tenghiz, the
Baku-Tblisi-Ceyhan pipeline, Kashagan and a proposed
pipeline to China, rivers of foreign exchange will keep
flowing. But the verdict on the snow leopard is still
pending - as a model of development or as an
authoritarian and corrupt way of wasting the resources
of the richest country in the world.
(Copyright
2003 Asia Times Online Co, Ltd. All rights reserved.
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