Friday, September 15, 2006

An International Financial Figure in King Nursultan’s court?: James Wolfensohn may take a position as advisor to the President of Kazakhstan

It is not as shocking as when Gerhard Schroeder decided to join Gazprom, but the project to which Paul Wolfensohn is signing on to is also not as well established. According to the Russian news agency “Ria Novosti”, President Nazarbayev of Kazakhstan has offered an advisory position to the ex-World Bank head, James Wolfensohn, in connection with developing Almaty into a regional financial center.

Whatever one thinks of Wolfensohn, he would certainly bring attention to the project, which intends to provide special conditions for international financial activities in the city of Almaty, making it a special economic zone. As Ria Novosti states, “Unlike elsewhere in Kazakhstan, 100% foreign ownership of financial institutions and the repatriation of profits and capital will be allowed in the zone.” While this plan has been discussed for awhile, the offer to Wolfensohn suggests that Kazakhstan is at least very serious about the project.

What’s next? Will Karimov offer a security position to Donald Rumsfield?


Anonymous Anonymous said...

The person in the photo is not Wolfensen, that is Wolfowitz, the current head of the WB.

9:41 AM  
Anonymous Anonymous said...

Wolfowitz is on the photo not Wolfensohn.

9:41 AM  
Blogger Sean R. Roberts, PhD said...

Thank you for catching that...that's what I get for posting too early in the morning.

9:59 AM  
Blogger Sean R. Roberts, PhD said...

The new photo is correct

10:30 AM  
Anonymous Bertrand said...

Aside from the photo thing, which has been corrected, the "meat" here is that Kazakhstan - still a post-Soviet , highly authoritarian government - seems to be learning at least some lessons about entering the real world, unlike some of its
Central Asian neighbors. The Borat thing aside, Kazakhstan has been employing economic, as well as political and public relations experts from the west, and is increasingly portraying itself as a 21st century country.

The person who should really worry about this is Islam Karimov, Uzbekistan's president. Since the breakup of the Soviet Union, Karimov has always portrayed Uzbekistan as the key to, and himself as, the leader of Central Asia. What is now clear is that Kazakhstan as a country - and Nazarbayev as a leader - is leaving Karimov in the dust.

While Karimov has fiddled away his position into nothing more than making sure he appears next to Putin in photo opps - and has managed to place himself on the list of the world's worst dictators - Nazarbayev is playing a balanced hand - still the old Soviet-style politician, but one who recognizes the world around him.

I suspect this will all play out when it becomes clear to Karimov that Putin wants to stand next to Nazarbayev, while he (Karimov) will need to keep trying to elbow himself into the photos.

The result will be increased isolation, and unrest, in Uzbekistan.

6:31 AM  
Blogger Sean R. Roberts, PhD said...

The west did see Uzbekistan as a centering point of Central Asia immediately after the fall of the U.S.S.R., and Russia maybe has entertained the idea longer. Kazakhstan, however, has pretty much taken over that role since 1997 if not earlier due to its more progressive relationship to foreign investment and its efforts to reform its enterprise and finance environment. Almaty is already a defacto regional financial center, and the Kazakh banks are even out ahead of Russia's in terms of their sophistication. But, I would certainly agree that succeeding in implementing real incentives to bring more financial players into the city of Almaty will put the nail in the coffin as far as any competition between Uzbekistan and Kazakhstan for regional dominance. The major Kazakh banks are already building massive headquarters along Al-Farabi to ensure that they are not dwarfed in the process. My guess is that it will become something of reality, but it will still be a bit rough around the edges until Kazakhstan makes serious rule of law reforms.

7:40 AM  
Anonymous Bertrand said...

Agreed, as far as rule of law reforms, etc., but we are talking here of comparatives, in terms of Central Asia.

There is no question that Nazarbayev remains a Soviet-era "leader," with significant vestiges of Soviet thinking (see Russian Federation), but his attempts to parlay his oil wealth, etc. are influencing his actions, including his desire to head the O.S.C.E.

Arguably, to the extent he continues to pursue these ideals, he may well be dragged (probably kicking and screaming)into improvements - albeit slowly - in areas such as human rights, rule of law and democratization.

Karimov, on the other hand, continues to want to be a leader on the "world stage," but faced with the need to improve his regime, has decided to try and shrink the stage. Lately, other than smooching Putin whenever he can, he's normalized relations with Cuba and sought succor from the likes of North Korea and Iran.

In the end, of course, that won't work, but Karimov seems to be oblivious to that fact.

8:34 AM  
Anonymous Anonymous said...

I don't think that Karimov is oblivious, but more the 'wounded tiger' - and unfortunately for the Uzbek people and for Central Asia as a whole - his Soviet-trained attempts at a 'controlled economy' will continue to grind the people down. Unrest is highly unlikely; the civil servants that live the best, on average, are those in the 'power ministries'; Defense, Interior, Finance.

It also appears that Karimov's paranoia is really taking hold. He doesn't appear in public for extended periods of time; he travels infrequently and the cocoon around his world is getting smaller and smaller.

On an intellectual side - the sad fact is that Tashkent is beginning to reflect his personality; prior to the collapse of the SU and into the mid-90s, Tashkent was a dynamic, vibrant place with new restaurants, cultural happenings, and a certain level of 'traffic'. Tashkent today is being overrun by the illiterati (also a function of Karimov's programming).

It's easy for people in the US to take 'pot-shots' at Nazarbayev's version of democracy...but compared to Karimov (and it can also be argued, Russia, especially in the financial sector)...he has done an extremely impressive job of creating a sovereign country and semi-functioning political/economic system.

Regretfully, Nazarbayev is also still somewhat of a hyper-sensitive humorless hack, but that comes with the territory. I'm sure that Borat IS on the agenda, because Bush can't afford to alienate Nazarbayev...and quite frankly, kissing Nazarbayev's ass by (possibly) having Tony Snow make a comment to the effect of 'Borat does not reflect what most Americans are thinking on Kazakhstan' is probably likely.

If the appointment of Wolfensohn is true - while he has incredible credentials for such a post, it is difficult to say how effective he may be or what his real scope of acheivable work would be - the further alienation and 'loss of face' for Karimov will in the long run, serve the people of Uzbekistan better. He is a shitty leader, and at least they have the example of a better one, on their doorstep. And believe me, Uzbeks are watching...

11:06 AM  
Blogger Sean R. Roberts, PhD said...

I agree with both of you that Kazakhstan is a "different stan" as Mr. Vasillenko of the Kazakh embassy in the US allegedly said recently. It is a country with great potential, and it deserves international recognition for the strides it has made to reform itself from a Soviet republic into an emerging market with a modicum of liberalism in everyday life. The most important issue now, however, is whether the country can make the critical transition from an "enlightened autocracy" into a sustainable democracy. This requires dealing with the very difficult succession from President Nazarbayev to the country's second president. This will not happen without problems, and the way in which this succession is carried out will likely be the key to the country's future. Hopefully, the same people who have the foresight to think seriously about how to make Alamty into a regional financial center will be thinking about how to establish a system in which successions of leadership can take place seamlessly and reflect the will of a significant percentage of the population. I think we can all agree that Uzbekistan is very far from even entertaining such ideas at this point in time. Kazakhstan, however, may not be.

12:38 AM  

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