The Clever Move of Erbolat Dossaev

The new scheme of organizing the state monitoring of the financial market is Erbolat Dossaev’s big success. Kazakhstan’s main banker has not simply preserved his existing authorities but seriously strengthened his position as a politician. Let us explain what the trick is.

In our article The “Return” of the FSA: Who Benefits published by our portal on May 20, 2019, we express an opinion that the creation of the Agency on Regulation and Development of Financial Market was a result of:

a) the lobbying on the part of the owners and the management of the Kazakh banks (first and foremost, of Halyk Bank, but not only that) that are experiencing enormous discomfort because they have to deal with a state agency with, basically, the dictator-level authorities;

b) the opportunistic standing of the new National Bank’s Chairman Erbolat Dosayev who, as oppose to his predecessor Daniyar Akishev, Erbolat Dosayev seems to have chosen not to fight with the people from Nursultan Nazarbayev’s immediate circle.

However, it turns out we have underestimated the far-sightedness and cautiousness of the country’s main banker as a statesman and a member of the top of Kazakhstan’s ruling elite.

We thought that the creation of the independent Agency on Regulation and Development of Financial Market subordinated directly to the President would allow the National Bank and Dossaev personally to seriously weaken the volume and the energy of all the negativity that is brought down on them. And that, probably, Erbolat Dossaev chose to share his authorities in order to escape the crossfire.

However, judging by how the system of the monitoring of the local banking sector and financial market looks now, we can say that, after the creation of the Agency on Regulation and Development of Financial Market, the current Chairman of the National Bank of the Republic of Kazakhstan has not only become less vulnerable in the face of the governmental pressure but has completely preserved his previous authorities and, therefore, his capabilities.

In other words, Erbolat Dossaev’s position has noticeably strengthened.

To confirm this, let us cite some documents.

For instance, following Presidential Decree 220 of December 18, 2019, “On the Council for Financial Stability of the Republic of Kazakhstan, the agency has been created. And it is the Chairman of the National Bank, in other words, Dossaev himdelf, who will serve as the head of the agency. With that, in accordance with Section 4 of the Decree, the latter holds the following authorities (text in bold by kz.expert).

“The Head of the Council:

1) conducts the general management of the Council’s operations;

2) chairs the Council’s meetings;

3) determines the place and the time of the Council’s meetings;

4) conducts the general monitoring of the implementation of the Council’s resolutions;

5) once every three months no later than the 20th day of the month following the financial quarter, reports on the Council’s operations to the President of the Republic of Kazakhstan”.

To these, we should add the two bureaucratic factors that are of no interest to the journalists and civic activists but are still very important under the current conditions.

According to Article 11 of the Decree, “the National Bank serves as the working body of the Council”. And, according to Article 12, this working body:

“1) arranges the organization of the Council’s meetings and conducts the preparation of the materials related to the Council’s meetings on the basis of the Council’s members’ suggestions and the previously made decisions;

2) works out a draft of the meetings’ agenda on the basis of the Council’s members’ suggestions and the previously made decisions;

3) informs the members of the Council on the place, time and agenda of the next scheduled meeting and provides them with the necessary materials in a timely fashion;

4) handles the process documentation and approval of the Council’s resolutions;

5) conducts the monitoring of putting the Council’s resolutions into practice;

6) in a two-week time after making a decision, sends a copy of the minutes of the meeting and related materials to the members of the Council and other interested state agencies and organizations”.

In other words, thanks to the creation of such a rational, efficient and far-sighted organization of the state monitoring of the financial market, Erbolat Dossaev is now placed above and at the same time behind Madina Abylkasymova, the Chairperson of the Agency on Regulation and Development of Financial Market. And, more importantly, he does not bear any kind of direct administrative responsibility for the decision made by both the agency she chairs and the Council for Financial Stability of the Republic of Kazakhstan. For, even though Dossaev serves as its head, the Council’s decisions will always be collective ones.

It is not hard to notice the clear similarities between the organization of the state monitoring of the financial market and the double-headed scheme of the country’s governance when the First President of the Republic of Kazakhstan, having given away the presidential chair and the authorities, has nonetheless preserved the levers of influence over his successor while being placed above and behind him. So, as funny as it may sound, but the fact remains: today, Erbolat Dossaev’s position against Madina Abylkasymova is just as unique and, we would say, elevated and comfortable as Nazarbayev’s position against Tokayev is. 

After Abylkasymova was appointed the head of the Agency on Regulation and Development of Financial Market by Presidential Decree 217 of December 18, 2019, many in the country have expressed surprise at Kasym-Zhomart Tokayev’s strange decision. Now it has all fallen into place. She serves as an ideal “cushion” between Erbolat Dossaev and those who may want to influence him and the Agency on Regulation and Development of Financial Market’s decisions: she is an official who is used to not being loved by her colleagues, the public and the press; apart from that, judging by how stoic she is in the face of the abundance of criticism against her, she is a person with steady nerves.

In this regard, accusing her of non-professionalism and the frequent change of her positions within the state apparatus is nonsensical: her main task today is to cover for Erbolat Dossaev and the National Bank of Kazakhstan via occupying a certain post.

To confirm this, let us cite the list of her rights as an ordinary member of the Council for Financial Stability of the Republic of Kazakhstan (not even the Deputy Chair!).

“9. The members of the Council:

1) make suggestions regarding the agenda of the Council’s meeting and the order in which the issues should be discussed;

2) participate in the preparations of the Council’s meetings’ materials, helps to solve the tasks set before the Council;

3) participate in discussing the issues at the Council’s meetings”.

We will highlight yet another similarity between the organization of the state monitoring of the financial market and the current double-headed scheme of the country’s governance: with its almost unlimited authorities and, at the same time, its lack of responsibility, the Council for Financial Stability chaired by Erbolat Dossaev closely resembles the Security Council of the Republic of Kazakhstan chaired by Nursultan Nazarbayev. The only difference is that the former can be dismissed by the President while the latter will occupy his chair for life. But this, one must agree, is quite logical and goes hand-in-hand with the spirit and practices of the Kazakh authoritarian political system and the “super-presidential” vertical.

In conclusion, let us observe that the Chairman of the National Bank of Kazakhstan has, quite cleverly, double insured himself in case Madina Abylkasymova starts falling for someone else’s influence or tries to ignore her unofficial boss. How? Very simply: Oleg Smolyakov who has worked at the National Bank for a number of years (and, for the past five years, in the capacity of the Deputy Chairman) is now appointed the First Deputy Chairperson of the Agency on Regulation and Development of Financial Market (in other words, Abylkasymova’s deputy).

This person had not only actively participated in the creation of the Agency, in the preparations of the required normative documents and in putting the idea into practice but acts as a kind of “behind-the-scenes master” of the project. In other words, if Abylkasymova makes a wrong move, she will have to watch out for the blows not only from the above but from the side and the below as well.

One must agree then that, as a politician, Erbolat Dossaev has grown, and quite seriously so.


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