Before the start of the new year, Nursultan Nazarbayev signed a historic document. We are talking about forming the extra-constitutional economic body that will become the “headquarters” for implementing the task of the accelerated national economic growth and, in addition to the Security Council, serve as yet another power house in the country. 

The document in question is Presidential Decree 816 of December 27, 2018 “On the Changes to Presidential Decree 1116 of December 6, 2010 on the Samruk-Kazyna National Welfare Fund Management Council”.

Let us study in detail the changes in Sections 1,5 and 7 of the “Regulations of the Samruk-Kazyna National Welfare Fund Management Council (text in bold by kz.expert).

“1. The Samruk-Kazyna National Welfare Fund Management Council (hereinafter – the Council) is a consulting advisory agency led by the First President of the Republic of Kazakhstan – the Leader of the Nation (Nursultan Nazarbayev – kz.expert).

 “5. The Council’s responsibilities include the following:

1) working out ideas how to improve the Fund’s competitive ability and efficiency;

2) approving the Fund’s development strategy and reviewing the Fund’s annual report on the course of its realization as well as working out suggestions regarding the priority sectors of the economy in which the Fund conducts its operations;

3) reviewing the governmental proposals on the Fund’s participation in the state’s diversification and modernization economic programs including the implementation of the socially important and industrially-innovative projects counting those that involve appropriating the funds from the state budget and from the National Fund of the Republic of Kazakhstan;

4) approving the candidates to be elected as the Fund’s non-executive directors as well as the size and conditions of the payments to the non-executive directors;

5) providing recommendations for appointing a government or other state official a Board member or the supervisory committee member of an organization affiliated with the Fund”;

“7. The First President of the Republic of Kazakhstan – the Leader of the Nations serves as the Chairman of the Council;

the Council’s personnel (with indication of rank) approved by the aforementioned Decree must be presented according to the new version based on the appendix to the current Decree”.

According to the appendix to Decree 816, the Council’s personnel now includes:

“The First President of the Republic of Kazakhstan – the Leader of the Nations serves as the Chairman of the Council

Members of the Council

The Prime-Minister of the Republic of Kazakhstan

The Head of the Presidential Administration

The Chairman of National Welfare Fund Samruk-Kazyna (subject to an approval)

two representatives of the Kazakh business

a foreign business representative”.

Now, let us compare the cited fragment with the text of the original document – Presidential Decree 1116 of December 6, 2010.

This is how Section 5 is presented in its appendixes:

“5. The Council’s responsibilities include the following:

1) working out suggestions how to improve the Fund’s competitive ability and efficiency;

2) approving the Fund’s development strategy;

3) reviewing and working out suggestions on the Fund’s participation in the state’s diversification and modernization economic programs;

4) working out suggestions regarding the priority sectors of the economy in which the Fund conducts its operations”.

The Council’s personnel was supposed to look like this:

“The First President of the Republic of Kazakhstan – the Leader of the Nations serves as the Chairman of the Council

Members of the Council

The Prime-Minister of the Republic of Kazakhstan

The Head of the Presidential Administration

The Chairman of the National Bank of the Republic of Kazakhstan

The First Deputy Prime-Minister of the Republic of Kazakhstan

The Minister of Finance of the Republic of Kazakhstan

The Minister of the National Economy of the Republic of Kazakhstan

The Minister of Investments and Development of the Republic of Kazakhstan

The Chairman of National Welfare Fund Samruk-Kazyna (subject to an approval)”.

So, apart from the editorial corrections, the President of Kazakhstan had made some important and, as we have noted before, historic changes:

1. He granted to the Council the right to review Samruk-Kazyna’s annual report on the course of the development strategy implementation and to evaluate the performance of the Fund’s management.
2. He granted to the Council the right to review the governmental suggestions on the Fund’s participations in different state programs and not to take them as orders. In other words, de-facto, he equated the government with the Samruk-Kazyna National Welfare Fund.
3. He granted to the Council the right to both approve the candidates to be elected as the Fund’s non-executive directors and provide recommendations for appointing state servants as the Boards and supervisory committees members of the organizations affiliated with the Fund.
4. He reduced the Council’s staff from 9 to 7 employees and, most importantly, instead of the five officials, he included three entrepreneurs (two domestic and one foreign) as the staff members.

We believe that, by reorganizing the Fund’s Management Council and widely expanding its responsibilities and authorities, Nursultan Nazarbayev is trying to create the extra-constitutional economic body that, under his personal supervision, will become the “headquarters” for implementing the task of the accelerated growth of the national economy and, in addition to the Security Council, serve as yet another power house in the country

It is hard to predict the effectiveness of such drastic measures since it will largely depend on who among the Kazakh and foreign entrepreneurs will become the Council’s members and if they will be able (and want) to show initiative. It is interesting though, if the President’s second son-in-law, Chairman of National Entrepreneur Chamber Atameken Timur Kulibayev will become the Council’s member.

According to the bureaucratic and political logic, it should happen in a mandatory fashion. However, if Timur Kulibayev does not join the newborn Council, it will indicate that his father-in-law has certain issues with him. Hence no political future for Timur Askarovich.