Kazakhstan Quo Vadis?
I appreciate the invitation to contribute to this commemorative issue marking the 25th anniversary of the establishment of the Republic of Kazakhstan.
I am, however, wary of making any recommendations, as my exposure to the country was short and superficial. I do not want to fall into the trap of another American professor who visited India for three days and wrote a book titled India: Yesterday, Today, and Tomorrow. It is the people of Kazakhstan, and its highly dedicated and popular President Nazarbayev, who know best what needs to be done. I am just a visitor.
But since you have given me the honor of contributing, I am happy to share my insights with the hope that they might have some relevance to the future of the country.
Under the leadership of Nazarbayev, Kazakhstan has made incredible advances in all fields—in industry and economics; in building from scratch an architectonic marvel in the capital, Astana; and in establishing strong positive international relations with both the West and Russia. Further, despite the country’s strong Muslim population, it has fostered fruitful relations with Israel.
One cannot ignore Kazakhstan’s transformation from a nomadic country to regional powerhouse, a modern country with operating democratic governance, political stability, and economic growth. I believe, however, that singing its praises is not necessary. The chorus is loud enough as is. I will instead focus on the challenges the country will face in coming years.
Not all these challenges will necessarily arise. No one can predict the future with certainty. Nevertheless, it might be of some help to point to where the cracks in the system might be—even if they are a hair’s width, almost invisible today—so that we are all aware of them.
The first and obvious one is Kazakhstan’s tremendous dependency on oil. The country needs to diversify. (Easier said than done.) This requires Kazakhstan to decide first what it wants to be when it “grows up.” What should the country focus on developing? Is it to be a major food-producing country, a high-tech new Silicon Valley, a financial and trade center, or an exporter of raw materials, utilizing mines it has in abundance? Kazakhstan needs to visualize what it wants the country to look like twenty years from now, and what steps need to be taken to get there. It will take at least twenty years to implement such major strategic developments.
The next question is who will lead those changes without interruption? Mr. Nazarbayev might lead for another twenty years, but that is not probable. It will not be easy to find a leader as charismatic, popular, and capable as Nazarbayev. There must be a succession plan that is implemented one step at a time. The turbulence of a transition that is not smooth could undermine the implementation of the twenty-year plan.
New leadership will have to be smart in maneuvering its ties with the West and Russia (taking into account the million Russians Kazakhstan has in the North), and the ties it will have with China due to its shared border.
The challenges Nazarbayev’s successor will face are not only in foreign relations, however. Diversifying the economy will require managerial capabilities and entrepreneurial spirit. Developing these will not be easy because of the effects to Soviet legacy has on how management is performed. In the Soviet Union, the “boss” had all the power and was the last word on everything. The system was run on fear. My experience in CIS countries has been that leaders of companies totally dominate meetings, while the other participants do not dare to speak much or, God forbid, challenge what the leader is saying. This creates a major obstacle to developing leadership from the ranks. Even the training the most talented young Kazakhs receive abroad has a limited impact because, when they return and are employed by Kazakhstan companies, the dominating climate of autocracy prevents the knowledge acquired abroad from being absorbed and accepted.
Kazakhstan needs to depart from the Soviet legacy of how management is performed. This is a major cultural revolution that needs to be carried out experientially, not through lectures or university trainings.
Furthermore, due to the country’s nomadic tribal history people have strong sentiments regarding those related to them. This breeds nepotism, and people are appointed to positions of leadership based not on competence but on family ties, further undermining managerial performance and Kazakhstan’s ability to build a thriving, diversified market economy.
Another point of caution: I am aware of the efforts privatize government-owned companies, selling them to the private sector. This tactic has been used by many countries. Economists love it; they believe it brings the profit motive to be the focus of how the company is managed. It should lead to better economic performance, more efficiency, and de-bureaucratization of government-owned enterprises.
While this might be the right move from an economic point of view, from a sociopolitical point of view it can have negative collateral outcomes. When the profit motive becomes the driving force in decision making, people get fired, companies go through downsizing, and the population at large responds negatively, causing some political turbulence. True, this is not likely while Nazarbayev is leading the country, but it might be probable during his successors’ regime.
Kazakhstan is geographically situated between Russia—which has a serious demographic problem and would love to have another million Russians within its borders—and China, which I suspect would enjoy more space for its exploding population. Both counties might welcome some political turbulence in Kazakhstan, which they could use to their advantage.
To keep that from happening, Kazakhstan has to be united and its population committed to the country’s independence. Confrontation between workers and owners leads to undesirable disintegration, and to political turbulence that might paint the country as weak.
Kazakhstan has the potential to be a regional leader, and if it has a successful transition of leadership and economic growth without political turbulence, it can be a world leader as well. The transformation will not be simple, and the challenges not easy to overcome. The last twenty-five years have been an incredible success, but for sustainable success we need to look not only at the past but at the future.
I wish you well,
Dr. Ichak Kalderon Adizes