Why Nazarbayev Visited the AIFC

For Kayrat Kelimbetov, Nursultan Nazarbayev’s personal assurance that he will continuously support the Astana International Financial Centre (AIFC) project is a guarantee that, as long as the First President is alive, the former won’t be criminally persecuted. And more.

On September 13, 2019, the First President of the Republic of Kazakhstan and the Leader of the Nation made an unexpected visit to the Astana center. The official press-release equipped with  plenty of pictures was published on Nursultan Nazarbayev’s website.

Let us quote from this document which, in our opinion, is not devoid of curiosity (text in bold by kz.expert).

«In the course of the visit, the First President of Kazakhstan also met with the key shareholders and participants of the Financial Center’s stock-exchange.

After hearing the speakers’ reports, Nursultan Nazarbayev noted that the country’s most top officials completely support the AIFC activities.

— We must continue working on putting the privatization plan into practice precisely via the AIFC stock-exchange. Of course, it is important to take into consideration the international business environment. Apart from that, we should increase the confidence of the world’s international financial centers in the AIFC. The volume of investments in the national economy depends on it, — said the Leader of the Nation.

The First President of Kazakhstan underscored the importance of ensuring the high growth rates of the economy and achieving the goals of the strategic plans for the country’s development.

— Serious work is awaiting the Centre in the future. In it important to continue pursuing the established cooperation with all the partners. I personally will continuously support the work of the AIFC, — concluded Nursultan Nazarbayev».

It is Nazarbayev’s last sentence that a lot of the Kazakh media have inserted into the headlines of their publications.

In our opinion, Nursultan Nazarbayev’s visit to the AIFC is a big personal success of the Center’s manager Kayrat Kelimbetov. As for Nazarbayev’s words that he will continuously support this project, it is nothing but the guarantee that, while the Leader of the Nation is alive, no charges (including criminal charges) will be brought against Kelimbetov for his actions while the Chairman of the National Bank as well as the AIFC Managing Director.

The thing is that the very idea of launching a stock market in Kazakhstan from the above (simultaneously creating a center of attraction for foreign capitals and a channel for a massive inflow of foreign investments in the country) is, by itself, beautiful. Moreover, a while ago, it was successfully realized in the UAE. Nonetheless, a lot has changed since then.

In our opinion, the likelihood of the successful realization of the AIFC project is minimal. We would even go as far as to say that the project is doomed. Mostly because this is an image-building project intended to glorify Nazarbayev. Besides, it was planned a while ago, during much more prosperous times and now does not have any competitive advantages before other similar projects.

In the environment when the leading foreign nations are actively and rigorously fighting the tax «heavens», it would be impossible to turn the AIFC into an offshore zone. As for attempting to make it a financial center to which the international capitals will come and from where they will then flow to the places where they can be invested profitably and problem-free is theoretically possible but will require too much time. Besides, this project has too many competitors around the globe.

As for Kazakhstan and its economy as a zone attractive for foreign investors and capitals, in our opinion, this is pure science fiction. Of course, the state today still has the possibility to provide for the AIFC and support its vigorous activity. Among other things, via using its stock-exchange venue for initial listings of quasi-governmental companies as part of  privatizing the latter. But, sooner or later, this program will end with either the complete privatization of the national companies or, to the contrary, with the total abandonment of it. And then the authorities will be faced with the questions what to do next and who is responsible for the failure.

The irony lies in the fact that the heat will be taken off the main «culprit» (in other words, the Leader of the Nation who, being invested in building his own image projects and establishing his own role as the forefather of the Kazakh statehood in the eyes of the world history allowed himself to be conned by the authors of the idea and Kayrat Kelimbetov). If only because it is impossible to hold Nazarbayev responsible while he is alive.

By the way, the First President’s September 13th AIFC visit confirms it vividly: on the photos taken at the event it is clearly shown that the Leader of the Nation (apart from his allies Abay Bisembayev, Aset Isekeshev and Daniyar Akishev) is accompanied  by Prime Minister of the Republic of Kazakhstan Askar Mamin and Chairman of the National Bank Erbolat Dosayev.

And this is at that very moment when President Kasym-Zhomart Tokayev made his allegedly historic visit to China that was supposed to solve the most important problems of the future political and economic cooperation with this country. We do allow for the possibility that Nazarbayev has personally invited Mamin and Dosayev to visit the AIFC with him for old sake’s sake so to speak and, out or respect, those did not refuse. However, from the bureaucratic and internal political standpoints, this looks quite differently.

The Leader of the Nation has visited the AIFC in order to publicly support Kayrat Kelimbetov and the image-building project that he had personally initiated. Therefore, his words were addressed to the Prime Minister of the Republic of Kazakhstan and the Chairman of the National Bank of Kazakhstan. And they had probably understood them correctly and agreed with everything he said. For it is Nazarbayev who is still the most important person in the country. 


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