Mass protests in Kazakhstan stimulate Russian intervention

On January 5, 2022, Kazakh law enforcement officers were seen standing on a roadblock during a protest triggered by rising fuel prices in Almaty, Kazakhstan.

Pavel Mikhayev | Reuters

In just two days, the protests that began with soaring fuel prices have turned into the worst turmoil faced by the Central Asian country Kazakhstan in decades.

“I have never seen anything like this in Kazakhstan,” Maximilian Hess, an expert on Russia and Central Asia and a researcher at the Institute of Foreign Policy Research, told CNBC on Thursday. “This is absolutely unprecedented.”

According to Kazakh media reports, dozens of protesters were killed. On Wednesday, protesters lit a government building in the commercial capital of Almaty and occupied Almaty’s airport, which was recovered by the army that night. Videos on social media showed demonstrators confronting hundreds of security forces in riot gear. The crowd pulled down a statue of long-time strongman and former President Nursultan Nazarbayev.

On January 5, 2022, Almaty, Kazakhstan, law enforcement officers from Kazakhstan blocked a street during a protest caused by rising fuel prices.

Pavel Mikhayev | Reuters

Nazarbayev resigned as president in 2019, but still has important powers. On Wednesday, he was appointed by the current President of Kazakhstan, his carefully selected successor, Kasym-Jomart Tokayev (Kassym-Jomart). Tokayev removed him from his post as chairman of the country’s powerful Security Council. The entire cabinet of Kazakhstan has resigned, but this has not quelled the protesters.

The Internet has been suspended by the authorities. By the evening of January 5, Tokayev had requested support from Russia, and Russia responded by deploying troops from the Collective Security Treaty Organization, a military alliance of the former Soviet Union countries led by Moscow. Russian paratroopers have now entered the countryFor many people, this evokes the eerie memories of Kazakhstan under Soviet rule.

How did this start?

The riots began after the government of Kazakhstan announced that it would lift the price control of liquefied petroleum gas, which is the fuel used by most Kazakhs for cars. Letting the market determine the price of LPG means that most Kazakhs pay nearly twice as much for their natural gas during the New Year. Mangistau Province in western Kazakhstan is particularly affected. Although living in a country rich in oil and gas, the standard of living is very low. The average monthly salary is several hundred dollars a month, and the price increase of basic facilities such as gasoline is painful.

Kazakhstan is a country with a population of nearly 20 million, with an area approximately four times the size of Texas. It is the second largest oil producer in the former Soviet Union in the OPEC+ alliance. It has always been regarded as operating under an authoritarian system. . Tokayev promised to carry out political and economic reforms after taking office in 2019-but critics and national analysts say that progress has been slow.

On January 5, 2022, Almaty, Kazakhstan, demonstrators ride in trucks during a protest caused by rising fuel prices.

Pavel Mikhayev | Reuters

Protests sparked by anger over lifting LPG price controls are now increasingly political, with reports calling for democratic reforms.

“The protesters’ slogan goes far beyond opposing the recent deregulation of transportation fuel prices, but challenging the country’s leadership,” said Nick Coleman, senior editor of Petroleum News, Standard & Poor’s Global Platts Energy Information, who has lived in Kazakhstan for a long time. year. “In this regard, the worries over the years are no different from the worries of some other former Soviet countries.”

The Kazakh authorities know nothing about this. Tokayev has accused the protesters of being part of a foreign terrorist conspiracy and promised to be “as tough as possible” in the face of demonstrations. Some Russian state media have accused the West of being behind the riots.

Kazakhstan: Energy and Commodity Giants

According to data from the International Energy Agency, Kazakhstan is the largest oil producer in Central Asia and has the world’s 12th largest proven crude oil reserves. Its offshore Kashagan oil field in the Caspian Sea is the world’s fifth-largest crude oil reserves. In 2018, Kazakhstan was the ninth largest coal producer in the world.

Until 2015, Kazakhstan was one of the 10 fastest-growing economies in the world, and its per capita GDP has increased six times since 2002 due to investments in the oil, gas, coal, and metal industries.Major international companies include Chevron, Exxon Mobil and shell All operating in the country, Chevron is the largest private oil producer in Kazakhstan.

Workers in an oil well operated by a subsidiary of KazMunayGas Exploration and Production JSC in Kazakhstan on January 21, 2016.

Shamir Zhumatov | Reuters

Kazakhstan also has some key infrastructure, including a natural gas pipeline from Central Asia to China. However, despite solidarity strikes in some oil fields, including the huge Tengiz oil field, one of the deepest super-large oil fields in the world in which Chevron has a large shareholding, so far, there is no sign that these fields have suffered. Destruction, analysts said.

Matt Orr, an Eurasian regional analyst at risk intelligence company RANE, said: “In theory, American companies may be the most affected by Kazakhstan’s energy production because they are the country’s main crude oil producers.”

In 2019, U.S. oil producers accounted for approximately 30% of oil is produced in KazakhstanOrr said that by comparison, Chinese companies produce about 17% of production, and Russia’s Lukoil produces only 3%.

Orr added that although oil workers participating in protests or strikes “may not be necessary to maintain production, it is not clear how long production can remain unaffected due to the possibility of more workers’ strikes,” Orr added. , “Especially if the protest continues into the next week and beyond.”