31 мая 2024
Paolo Sorbello, photo by Zhanara Karimova

The Week in Kazakhstan: Changing Hands

Inefficient budget spending in sports, interest rate cut, and more floods

The Week in Kazakhstan: Changing Hands

The Prosecutor General’s Office said on May 28 that the policeman that tortured a Kyrgyz musician and 22 other people during Qandy Qantar was detained. He is one of four accused of having abused their powers and ill-treated detainees during the violent clashes in Almaty in January 2022, which were later labeled “Bloody January” (Qandy Qantar in Kazakh). At least 238 people were killed across Kazakhstan, while thousands suffered injuries.

One firefighter died on May 29 while pumping out water from Kulsary along with other emergency workers. Kulsary, a village in the western Atyrau region, was the last site to suffer from the massive floods that hit Kazakhstan over the past two months. On May 25, emergency workers completed the evacuation of 1,200 people, the entire population of Taldykol, a village near Atyrau, in light of potential floods.

Inefficient budget spending and risks of corruption were the two main warnings that the Anti-Corruption Agency issued on May 30 after a multi-year review of the government’s participation in sports financing. Samruk-Kazyna, the state holding and sovereign wealth fund, owns several sports clubs including FC Astana (football), HC Barys (hockey), and Astana Qazaqstan Team (cycling).

Kazakhstan’s Central Bank cut interest rate by 25 basis points to 14.50% on May 31. This is the second time that the regulator cuts interest rate this year, signaling that slower inflation represents less of a problem for the economic equilibrium of the country. In April, Kazakhstan recorded a 8.7% inflation rate, according to the Statistics Committee.

The proceeds from the sale of Bereke Bank will be sent straight to the state budget, the national holding Baiterek told media on May 30. Baiterek had taken control of Russia’s Sberbank subsidiary in Kazakhstan in 2022. The bank was later renamed Bereke and put up for sale. Qatar’s Lesha Bank bought Bereke on May 21 for 65 billion tenge ($146 million). Before the decision was made public, observers had wondered whether the proceeds would be transferred to the National Fund instead of the budget.

Turkish construction company YDA plans to build a shipyard near the port of Aktau, in western Kazakhstan, the local government said on May 30. The plan is in line with the government’s strategy to increase capacity at the ports of Aktau and nearby Kuryk by 50% by 2028, and make them viable options for the Trans-Caspian International Transit Route (TITR).

Timur Turlov, one of Kazakhstan’s richest people, bought a 60% stake in Sky Service, the company that operates the Sary-Arka airport in Karaganda, an industrial city in central Kazakhstan. The deal, completed on May 30, saw Yerlan Ospanov, who previously owned 95% of Sky Service, sell a majority stake to Turlov Private Holding.

Vietnamese Aviation Holdings, the company that purchased Qazaq Air last week, could become the operator at one of Kazakhstan’s airports, minister of transport Marat Karabayev said on May 29. The government is considering transferring one airport into trust management to the Vietnamese company. For now, the possible targets are Aktobe, Turkistan, Kyzylorda, and East Kazakhstan, all small-size airports.

Kazakhstan will continue to pump oil via the Druzhba pipeline across Russia to Germany in 2024, the press service of Kazmunaigas, the state-owned oil and gas company, said on May 27. Kazakhstan-based producers, among which participants in the consortia operating the Karachaganak and Kashagan fields, started exports via Druzhba in late 2023. Kazakhstan has exported oil to Germany for decades, via Italy.

Veon, the Amsterdam-registered holding that owns telecoms businesses in Kazakhstan, said in a statement on May 28 that it sold shares in TNS Plus, a telecoms infrastructure provider in Kazakhstan, to DAR, a company owned by Alidar Utemuratov. DAR paid $136.5 million for a 49% stake in TNS Plus. Veon, together with Utemuratov’s father Bulat, owns Beeline, a major mobile operator in Kazakhstan.

RusCapital, a management company based in Russia, bought a 99% stake in the Baimskaya gold and copper deposit in the Chukotka region, in Russia’s north-east. The stake was owned by Trianon Limited, in turn controlled by Vladimir Kim and Oleg Novachuk, the main shareholders of KAZ Minerals, one of the main miners in Kazakhstan. In 2019, London-listed KAZ Minerals bought the company operating at Baimskaya from Russian businessmen Roman Abramovich and Alexander Abramov. In 2023, KAZ Minerals formally offloaded this asset to its main shareholders to fully exit the Russian market.