For the last few years Kazakhstan has been actively courting the European Union. The trade and diplomatic relationships between the two have been growing steadily. In March 2020 the EU-Kazakhstan Enhanced Partnership & Cooperation Agreement (ECPA) came into force. The EU is Kazakhstan’s largest trading partner, accounting for 30% of its external trade with the EU. It is also the biggest foreign investor in Kazakhstan.
However human rights in Kazakhstan have remained a concern. Two weeks ago, my former colleagues in the European Parliament overwhelmingly passed a resolution urging the Kazakh authorities to respect human rights, fundamental freedoms and to immediately release demonstrators, many of whom were arrested in the mass protests which swept the country in January.
These protests ended after the Kazakh government introduced “shoot to kill” orders and invited Russian security forces in to “stabilise” the country. Thousands of innocent Kazakhstanis were detained, the most prominent of them being Karim Massimov, former Chief of the National Security Committee (KNB) and two-time Prime Minister.
While events are not clear, it appears that he may well have been targeted for not actioning the shoot to kill order against protestors. He, along with many hundreds of demonstrators, remains in prison, held on uncorroborated and clearly politically motivated charges. Their fate will be closely watched, not only by European policymakers but by nervous corporations and investors alike.
Prior to the events of early January, Kazakhstan was cementing itself as a strategic and reliable partner to the UK and EU. The two regions were benefitting from increased trade and a burgeoning framework to address a number of issues ranging from geopolitical concerns in Afghanistan to combatting climate change. One of the main factors contributing to the growing relations between Europe and Kazakhstan was the perception that investments in the country were safe and protected by law.
“If charges are brought against Karim Massimov, they should be clear, transparent, and not politically motivated”
In 2018, Kazakhstan established the Astana International Finance Centre (AIFC), a financial hub in the capital city with favourable tax and legal incentives to attract international corporations, investors, and FDI. Among the factors that made the AIFC so attractive was the establishment of a common law court system based on the norms and principles of English law, which operates to the highest international standards to resolve civil and commercial disputes. This inspired strong investor confidence in the country. The number of companies establishing a foothold in Kazakhstan nearly doubled in two years and FDI reached the highest levels in the country’s history.
The March 2020 EU-Kazakhstan ECPA agreement was the next step in the closer relationship. Kazakhstan was the first Central Asian country to have such an agreement. The agreement consolidated trade relations and bolstered perceptions of Kazakhstan as a reliable and promising investment destination.
However, there was always an Achilles heel in this relationship. Trade and investment may have been growing, but human rights were always a concern. The European Parliament passed several resolutions hinting that patience was wearing thin with Kazakhstan’s apparent disregard for human rights.
This disregard has been graphically demonstrated by President Tokayev’s response to the recent protests. It sends the message to European audiences and policymakers that Kazakhstan’s institutions and regulations are at risk of decaying, and that investments made in the country may no longer be safe.
This uncertainty is already biting. Kazakhstan’s three biggest companies, Kaspi, Kazatomprom and Halyk Savings Bank, have all lost an average of 33% of their stock value since the protests. This fall will continue while Kazakhstan’s commitment to international norms, such as the strict independence of the judiciary, appears to be waning.
Kazakhstan has huge potential, but it stands to lose its carefully crafted international standing, along with investor-confidence, and potentially it’s trade deal with the EU, if its government continues to deviate from established judicial process and the rule of law. This includes the fundamental principles that all are innocent until proven guilty, and the right to a fair trial.
The process against Karim Massimov, an internationally known figure who spearheaded several of Kazakhstan’s modernising principles, will be the canary in the coalmine for investors and EU policymakers alike. It will be hard for the EU to ignore a politically motivated trial against an individual who appeared to defy a shoot to kill order against his own countrymen.
“Kazakhstan has huge potential, but it stands to lose its carefully crafted international standing, along with investor-confidence, and potentially it’s trade deal with the EU, if its government continues to deviate from established judicial process and the rule of law”
However, President Tokayev and Kazakhstan still have the opportunity to repair the damage from their response to the protests. The hundreds of protestors still imprisoned should be freed. If charges are brought against Karim Massimov, they should be clear, transparent, and not politically motivated. Any subsequent trial should be subject to due process and the rule of law. If there are no charges, he should be released.
President Tokayev doesn’t appear totally unreceptive to Western demands. His announcement of an investigative committee to identify what caused the protests and the subsequent loss of life is welcomed in Europe, but would be more so if the investigators were impartial & independent (i.e. non-Russian).
Europe is looking for a renewed commitment to the internationally acceptable standards that were the engine of Kazakhstan’s modernisation and economic growth. Anything less will be seen by MEPs and European investors as a government-led attempt to create scapegoats for the riots and thwart any dissent of Tokayev’s regime. In such circumstances, the nature of the EPCA the EU agreed with Kazakhstan will come under pressure and is likely to be reassessed.
The recent European Parliament resolution set down the benchmark of an impartial and transparent investigation into the violence against peaceful protesters and bringing those responsible to justice. Not a political witch-hunt against those, be they of high office or ordinary protestors, who have fallen out of favour with the government.
This article reflects the views of the author and not the views of The Parliament Magazine or of the Dods Group