Why Mamin’s Put His Neck on the Line

Recently, we have presented our critical assessment of transforming NWF Samruk-Kazyna into an investment holding — an idea that the First President of the Republic of Kazakhstan Nursultan Nazarbayev as the Chairman of the Management Council of the said structure articulated on November 13, 2020.  

Here is a quote from our publication «Samruk-Kazyna’a Uncertain Future».

«We have no doubt that, giving his speech, Nursultan Nazarbayev was articulating someone else’s ideas. Most likely, these ideas had been suggested by the innovators such as Kayrat Kelimbetov with the approval or at least non-resistance on the part of Akhmetzhan Esimov, the Chairman of the Management Board of Samruk-Kazyna and Nazarbayev’s nephew.

Note that the Elbasy didn’t ask himself the question — why does one need to transform Samruk-Kazyna into an investment holding when the country has already got one, the Kazakhstan National Fund?

Of course, if the resources of the latter will be depleted and it will have to be liquidated as useless, then the country may be in need of a new structure, however, judging by the official announcements, such a possibility has not even been considered by Akorda and the Library. 

Moreover, Nazarbayev did not bring into view that, currently, Samruk-Kazyna is a joint-stock company performing the role of the head structure for a significant part of the quasi-state economy. According to the Elbasy, it includes 300 thousand employees and 340 companies. And, in order to truly become an investment holding and then to „diversify the portfolio according to the geography and the sectors of the assets“, Samruk-Kazayna must first –

a) sell a part of the national companies’ shares;

b) get enough profit and not give it away to the state budget;

c) learn to borrow money on the market;

d) learn to invest.

In our opinion, it is impossible by definition particularly on a mid-term horizon. Nonetheless, Nursultan Nazarbayev has articulated what was written on the piece of paper placed in front of him».

The fact that the First President of the Republic of Kazakhstan and the «Leader of the Nation» has publicly voiced an idea that cannot be realised in practice and, therefore, has assumed the political responsibility for this reckless affair has become the main reason for asking the following question — to what extent can Nazarbayev adequately perceive what’s going on in the county and understand how catastrophic the gap between himself/his circle and his fellow citizens is?  

With that, we realise full well that, from the perspective of private interests of certain people from among the Elbasy’s current environment, the idea of transforming Samruk-Kazyna into an investment holding is not simply justified and efficient but vitally important.

Why is that so? Because implementing this idea (even with no results or a minimal effect) will allow them -

a) to significantly increase their political weight in the country since it is these people that are going to decide in which projects the state will invest its funds;

b) to develop a steady mechanism of stealing the state and investment funds both at the moment the funds are received and through a disguised extortion of shares in investment projects;

c) to escape the external monitoring on the part of the National Bank and the Agency for Regulation and Development of Financial Market of the Republic of Kazakhstan.

For this reason, when assessing the idea of transforming NWF Samruk-Kazyna into an investing holding as an extremely senseless, unrealisable and doomed one, we are nonetheless certain that it is going to be implemented. Therefore, the state holding will soon get the right to invest its own and attracted funds in the investment projects selected by the apparatus officials and successively approved by the Management Board, the Board of Directors and, finally, by the Management Council chaired by Nursultan Nazarbayev.

As a result of such transformation, Samruk-Kazyna will irreversibly turn into what it has already been these past several years -

on one hand, the structure that directly controls and manages a significant part of the quasi-state sector of the national economy; the structure that, at the same time, has slipped out of the direct control of the government,

on the other hand, the personal wallet/pocket for a small group of people that have concentrated around the Elbasy and are using his resources for their own private projects.

To confirm our idea, let us quote two decrees issued by the Kazakh Government — Decree No. 772 of November 19, 2020 and Decree No. 720 of October 29, 2020. 

Decree No. 772 of November 19, 2020, says -

«In accordance with Subsection 15-2), Section 2, Article 7 of the Kazakh Law of February 1, 2012, „On the Sovereign Welfare Fund“, the Government of the Republic of Kazakhstan hereby decrees:

1. NWF Samruk-Kazyna JSC (as per agreed and as required by the Kazakh law) must ensure:

1) the funding of the initiatives of autonomous organisation Nazarbayev University aimed to advance the development of Higher School of Business and to attract highly-qualified international-level scientists in 2020».

Decree No. 720 of October 29, 2020, says –

«In accordance with Subsection 15-2), Section 2, Article 7 of the Kazakh Law of February 1, 2012, „On the Sovereign Welfare Fund“, the Government of the Republic of Kazakhstan hereby decrees:

1. NWF Samruk-Kazyna JSC (as per agreed and as required by the Kazakh law) must ensure:

1) the funding of the construction of two research and innovation oriented multi-field hospitals in Nur-Sultan and Almaty».

The irony lies in the fact that Prime Minister Askar Mamin who signed the said decrees has de-facto put his neck on the line. For, if the cardinal political changes do happen in the country, he may become the one blamed for them since NWF Samruk-Kazyna JSC should not finance such projects. However, it does.

And the decisions to finance them are made directly in the Library and not in Akorda (not to mention the Government that, in this case, performs the role of a chore boy).

Those who wish to see it for themselves, may read yet another Decree of the Kazakh Government (No. 646 of October 7, 2020) titled «On Reviewing the 2019 Progress Report of SWF Samruk-Kazyna’s Board of Directors». This Decree describes quite clearly who and how makes decisions in this quasi-governmental structure.


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