Kazakhstan: State of emergency declared amid large protests

Event

On 5 January 2022, President Tokayev declared a state of emergency following the wave of protests that erupted in the western regions on 2 January and spread quickly to other cities across Kazakhstan (including the financial centre Almaty and its airport) in the following days. Joining in protests, a group of workers at the giant Tengiz oil field refused to work, but without disruption on oil production according to reports. Protesters complain about the sharp increase in fuel prices, as well as corruption, high cost of living and the still persistent large political role of former president, Nursultan Nazarbayev. To appease protesters, the president announced a reduction in energy prices, the resignation of the government and took over Nazarbayev’s role as head of the powerful Security Council. For the first time in its history, the Collective Security Treaty Organization –  Russia-led security bloc – decided to send peacekeeping forces to support one of its member. In addition, the internet appeared to be shut off and hundreds of people were arrested. In the meantime, violent protests are continuing, which is likely to cause alarm in Russia.

Impact

While this worst unrest in over a decade was initially triggered by increase in fuel prices, underlying grievances are deeper and include anger at perceived misrule and corruption as well as poor socioeconomic conditions and complaints about the large role played by former president Nazarbayev, who retains significant power. President Tokayev could benefit from the protests and complaints about Nazarbayev to gain more power and, hence, have more room for manoeuvre to address the grievances.

It is very difficult to predict how the situation will unfold. The lack of coordination in the protests and the opposition could lead to a return to calm in the forthcoming weeks. That being said, a scenario of continued protests, and even a colour revolution, even if less likely, cannot be excluded. In this uncertain context, no immediate change in country risk ratings is foreseen but the outlook is clearly negative. In the long term, addressing underlying grievances will be key to avoid new eruptions of unrest (cf. past protests in 2016 and 2011).

The recent events in Kazakhstan highlight once again that unless underlying grievances are properly addressed the risk of protest is high, especially in a context of high inflation. Hence, 2022 could be marked by waves of protest given high inflation in many countries. Moreover, in countries where public finances are weak (which is not the case in Kazakhstan), governments have little room for manoeuvre and the implementation of fiscal consolidation could be an even more serious driver of social unrest.

Analyst: Pascaline della Faille - P.dellaFaille@credendo.com