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Podcast

Asia Stream: Deconstructing the Kazakhstan Crisis

From mob violence to military intervention, we investigate the unrest in the Central Asian state

NEW YORK -- Welcome to Nikkei Asia's podcast: Asia Stream.

Every week, Asia Stream tracks and analyzes the Indo-Pacific with a mix of interviews with experts and original reporting by our correspondents from across the globe.

New episodes are recorded weekly and available on Apple Podcasts, Spotify and all other major platforms, plus on our YouTube channel.

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This week, we examine the recent protests in Kazakhstan from local, economic and geopolitical perspectives.

Joining us for this episode are our correspondents Paul Bartlett, Monica Hunter-Hart and Jack Stone Truitt, with professor Luca Anceschi of the University of Glasgow and Katrina Keegan of Harvard University weighing in with expert analyses.

Asia Stream is hosted by Wajahat S. Khan, our digital editor, and produced by Monica Hunter-Hart and Jack Stone Truitt.

Our theme music is "What's the Angle?" by Shane Ivers.

Mentioned in this episode:

Kazakhstan unrest rattles region as Russia steps in: What to know by Paul Bartlett

Kazakhstan's crypto mining boom fizzles over power supply strain by Paul Bartlett

TRANSCRIPT:

(Theme Music in: "What's the Angle?" by Shane Ivers)

WAJAHAT S. KHAN, HOST:

Hello and welcome to Asia Stream, where we track, report, and analyze the issues and interests of the world's largest region. I am Waj Khan.

Today's episode: Deconstructing the Kazakhstan crisis. We start with a backgrounder on the recent unrest, talk to an eyewitness about what he saw, get a report from Almaty from our correspondent on the ground, and talk to Harvard and University of Glasgow experts about the crackdown and what's next.

It's a helluva show. Buckle up for some Central Asian geopolitics.

You're listening to the sound of Asia, streaming in your ear. From Nikkei Asia, this is Asia Stream.

(Theme Music out)

KHAN: Now, it's been almost two weeks since peaceful protests against a fuel hike turned into violent anti-government riots in Kazakhstan, not a country that is often mentioned in global headlines.

But Kazakhstan is a significant country. It's the largest and richest of the several "Stans" that were once part of the former Soviet Union. It has borders with Russia and China. It has the biggest oil reserves in Central Asia, is the world's largest uranium producer, and is also the planet's second-biggest miner of bitcoin. Thus, when these protests came almost out of nowhere, the results were felt globally: The chaos resulted in police repression, an internal reordering of the old regime, an internet blackout, Russian paratroopers being deployed as peacekeepers, and even the bitcoin network losing 12% of its hashrate.

To explain the latest on how this so-called color revolution that never was, and to remind us how it all began, we are joined by Asia Stream correspondent Monica Hunter-Hart. Monica, good to have you again.

HUNTER-HART: Thank you for having me.

KHAN: So, Monica, walk us through the latest updates.

HUNTER-HART: So the protests have basically stopped. Order has more or less been restored. But that came at a cost: As of Wednesday, 164 people had died and over 12,000 people had been detained. The internet seems to be more or less back. All of the cabinet members of the old government have resigned, and a new cabinet is in place, though there are a bunch of holdovers from the previous setup. And Russian troops are scheduled to leave the country as of today.

KHAN: Got it. So, just for context, going back to when all of this started just after New Year's, most of us were still in a holiday hangover then. So walk us through the genesis of this uprising. What sparked it?

HUNTER-HART: Well, Waj, you mentioned that Kazakhstan is a really energy-rich country. And it is. Now, when a country has a lot of a given resource, you'd expect it would be pretty cheap to get that resource there.

KHAN: Right.

HUNTER-HART: But it's actually more complicated than that, because in this case you have a bunch of foreign companies -- including American businesses like Exxon and Chevron -- that have set up shop there, are producing oil, and want to sell it -- not necessarily to Kazakh citizens, but to whomever they can sell at the highest price.

KHAN: Right. That's simple economics.

HUNTER-HART: Right. So, the Kazakh government -- currently led by President Kassym-Jomart Tokayev -- has been keeping gas prices low with price caps. For the Exxons and Chevrons of the world, that means they don't want to sell their oil domestically, and that's caused gas shortages in Kazakhstan. To deal with that, the government decided to remove the price caps on Jan. 1. That's when all hell broke loose.

KHAN: How?

HUNTER-HART: Well, the price of gas nearly doubled overnight. It was quite the blow, again, for a country with such large energy reserves. So the government was definitely taken aback by the immediate anger, which seems to have propelled quickly from being about fuel prices to the authorities themselves.

KHAN: Right. We've actually been talking to an eyewitness who saw some of these events transpire firsthand. He lives in the downtown area of Almaty, the biggest city in Kazakhstan, where a lot of these protests took place.. Here's what he's told us, on the condition of anonymity.

ANONYMOUS: On Jan. 4, around the lunchtime, I was talking to my friend and our internet cut out. So we became concerned because I couldn't connect to anyone and I couldn't call anyone online, so and then we start hearing gun sounds and explosions somewhere in the downtown area. Over a couple of hours, there was more and more explosions. And at first we thought it was like, fireworks going off. But then, as the messages start rolling in it, it became apparent that there was riots. So, from the windows, we can see that all the buildings are burnt from the ground up. When I went outside one time, there was there was cars tipped over, robbed and like the windows were smashed. There were some cars didn't even have wheels. Additionally, people were driving without their license plates because they've been ripped out.

KHAN: That was an eyewitness from Almaty who was explaining how the beginning of the unrest was marked by an internet blackout -- a big deal anywhere, but especially in Kazakhstan, a rather well-connected country where 86% of the population is online and 60% are on social media. We asked Katrina Keegan of Harvard University, who researches digitization in Central Asia, whether the blackout was effective.

KATRINA KEEGAN, GUEST: What was remarkable here is that it did seem to work to keep peaceful people off the streets. Many protest movements are often organized largely on social media. And when you, you know, dilute the share of people that are peaceful, you get a higher percentage, even if it's still a small number, who are violent. And I think this also allowed for violence to occur because it was less easy to document. So like, we know very, very little about these violent elements. We don't know who they're loyal to. We don't know what their goals were. We don't know what the security services were doing, who they were loyal to, and so on. And so it's very hard now -- because there was no access to the internet during that time -- to establish what was going on. And I think this is to the government's advantage because they were able to hide some aspects, perhaps, of their violence against peaceful protesters, of which there are reports, and it makes it much harder to establish a timeline of when things turned from peaceful to the riots.

KHAN: So the blackout was a double-edged sword, really. It decreased the ability of the peaceful protesters to organize, leaving more of the violent elements, but also gave the government the chance to crack down without a lot of scrutiny ...

HUNTER-HART: Yes, so as Keegan said, the facts around who the violent mob was are unclear as of now. But we know it was quite bad there for a bit, and that the security forces were also quite brutal. President Tokayev authorized the police to shoot and kill protesters without warning, calling them, quote, "bandits and terrorists."

(Tokayev speech drifts in and out)

KHAN: And around this time is when Russia decided to come to Tokayev's aid, right?

HUNTER-HART: Yes. As part of the CSTO, or Collective Security Treaty Organization, Russian President Putin sent in around 2,500 peacekeeping troops to aid the Kazakh government and also declared that the revolution will not be tolerated.

(Putin speech drifts in and out)

KHAN: Right. Now, from what I understand, the CSTO is basically the NATO of the former Soviet bloc.

HUNTER-HART: Right.

KHAN: And all this was all happening while 100,000 Russian troops were amassed on the border with Ukraine.

HUNTER-HART: Yes. The same week that Russia was playing peacekeeper in Kazakhstan, it was negotiating with the U.S. and NATO about Ukraine. But, coming back to the Kazakhs, Waj, the government did walk back the price cap transition and has started a purge of remnants of the former president's regime, which they blame for some of the unrest, which has caused many analysts to think the protests weren't all about fuel price increases or even economic inequality, which is another big problem, but also political tensions and rivalries within the country.

KHAN: Thanks for that, Monica, but I'll stop you there, because we're bringing in our contributor in Almaty to discuss exactly that.

HUNTER-HART: Sounds good. Thanks, Waj.

KHAN: And here is Paul Bartlett, whose recent work for Nikkei Asia has spanned the depth and breadth of Central Asia. Now, Paul, you've gotten to Almaty after what I'm hearing is a heck of a road trip. What's the latest you have for us over from over there, after what it is -- what is it now, almost two weeks after this initial uprising?

PAUL BARTLETT, CONTRIBUTOR: Yeah, well, it's about 10 days since the, the real start of things. And I think all the action was about a week ago. At the moment, it seems very calm in the city, it's like, it was quite surreal coming from the railway station to my home, which is very close to where all the action was. Everything looked normal. The streets are a bit quieter than usual. I went to the square where the city hall was seized, and this now is just like, on the approaches, you could smell the smoke in the air and the building has been gutted, and it's all covered in black. And it was like a very sort of landmark building in Almaty. It was in Soviet times it was the Soviet Socialist Republic's headquarters, which was like where all the decisions were made. It was very sad to see the building like, just a, just a wreck.

KHAN: Right. Now, towards the larger picture, here, Paul. This is an energy-rich country. It's one of the richest countries in the region. And yet, there are reports about the inequality in the country, right? The KPMG just reported that 162 people control 55% of the country's wealth, and it was reports like that which fed the whole inequality-was-behind-the-protests narrative when all of this was happening. And yet, apparently, there have also been reports that they're about palace intrigue. The old regime has been showing its fangs to the new one. And there's been a bit of a purge as well. So what in your opinion and reporting was behind the protests? Was it inequality, the palace intrigue, or both?

BARTLETT: Basically, it's, it's both we've got kind of two stories here two narratives. The first story was related to the inequality. As you said, this is an oil-, gas-, uranium-, energy-rich country, but there's vast inequalities. A lot of people quite resentful they they see their ruling class spending money on building new capital cities and buying apartments in London, Manhattan, Dubai. But their living standards are not getting any better. And a lot of people live without running water, electricity gets shut off. And it's, you know, that they feel like they're not gaining from this. So, in part, this drove the protests. This, in essence, was a peaceful protest. They were, the demands changed a bit from removing the price rise to more political freedom, because the political, there is no political freedom in Kazakhstan, it's, you know, the system is very authoritarian. And people are calling for the right to elect their own mayors or the right to elect their own president or parliament. So a lot of people would like to see a parliamentary democracy here. So this is in part driving the protests. But then, all of a sudden, a huge crowd of a mob of people appeared in the square in Almaty, from, more or less from nowhere. So estimates around 5,000 upwards. And this, this mob was very different in character to the peaceful protesters, they were more sort of violent-minded, and they had weapons and they'd got somehow and this mob then overran the small number of police that were and and stormed the city hall building. They also stormed the president's residence and a number of key government buildings in the center of Almaty. And then they moved on and took the airport.

KHAN: Right, now, that is the bit I'd like to know more, a little more about right? Like, who were those people? Because the reporting, which is coming out from Almaty and elsewhere, of course, is that they were linked to these forces. These people were linked to Strongman 1.0 in a bid to conduct a coup against Strongman 2.0, which is a colloquial way to talk about the difference between Nursultan Nazarbayev and Kassym-Jomart Tokayev. Nursultan Nazarbayev, the original Strongman 1.0, who's, who's been there for a while, who has retired from active duty but is still evidently lurking in the background. He's still a powerful authoritative figure on the ground. And yet there's been moves against him in the aftermath of these protests and riots by the current president, Kassym-Jomart Tokayev. So explain that bit to our listeners.

BARTLETT: It's becoming clear that the, there was some sort of coup attempt, and it was sort of linked to this split between the previous president, Nursultan Nazarbayev, and the current president, Kassym-Jomart Tokayev. In March 2019, Nazarbayev unexpectedly handed the presidency over to his anointed heir, Tokayev. But he still, Nazarbayev still controlled some key posts, so he never really left the scene fully. And Tokayev was always in a weak position, so he could never do any reforms he would like to do. There's always been pushback against this. So, essentially, what many people on social media are saying happened is that these, this violent mob took advantage of the protest that was happening. It was a planned operation, maybe. And they're linking this to elements of the security services, like rogue elements of the security services, who include some of Nazarbayev's nephews who had positions in the security services. And this, people are saying that they were behind this in an attempt to create a coup that would sweep Tokayev away.

KHAN: Right now, Paul, I want to concentrate for a minute on Russia. Now Russia wins the song-and-dance award in all of this, especially when almost 2,500 CSTO troops arrived, most of them from Russian barracks, there were other forces there as well. But a lot of people in the West, I know people in Washington were quite nervous when Russian forces were seen on the ground. Now we hadn't heard of the CSTO in a while, and here it is in technicolor with Russian troops on the streets of Almaty. And the analysis which emanated from those pictures was that Russia still matters in Central Asia. Russia matters more than anybody else, including China, in Central Asia, and all of this was happening when they were already 100,000 troops, Russian troops, on the border with Ukraine.

BARTLETT: Absolutely, Russia remains a very important presence in Central Asia. Maybe we have the case in Uzbekistan, Kyrgyzstan, Tajikistan, where huge numbers of labor migrants leave from those countries each year to work in Russia. So Russia remains the lingua franca in the region. So there's a lot of close ties still. I think Russia is seeing Kazakhstan has been slipping away from its orbit a bit in recent years. So this was like an opportunity for Russia to, to get some influence again, in Kazakhstan without having to do too much just send some troops, they didn't have to start a war or invade or anything or snatch a bit of land, like they did with Ukraine. All they had to do was send in 2000, so called peacekeepers, and then you've got Kazakhstan owes you one or owes you many, it wouldn't come without conditions. Already today, we've seen the Russians have been complaining about -- Kazakhstan had a government, a new government formed this week, and Russia has complained about one of the ministers because he's supposedly made anti-Russian remarks in the past. So we're already seeing Russia is trying to influence the formation of the government. So there's many other factors that could happen here. Like we could see, Kazakhstan is planning to transition to the Latin alphabet from the Cyrillic alphabet. But Russia is not very happy about this. So they could pressure Kazakhstan to drop this. There's a number of things that could happen.

KHAN: Right. Ah, Paul, you have also recently reported that the crypto boom, which was happening in Kazakhstan -- and you reported this just before the these protests were erupting -- you said that the crypto boom is fizzling out because of the energy crisis there. And now we are hearing, of course, that the crypto mining has been specifically affected because of the internet outage. Considering the importance of Kazakhstan in the global crypto ecosystem, explain to us, if you will, about that particular industry -- where it stands currently.

BARTLETT: The crypto boom essentially started last May when China banned crypto miners. And so they were forced to move out of China and look for other places Kazakhstan neighbours China. So there was an obvious choice, easy to move equipment across the border. So a lot of miners moved into Kazakhstan. But this led to a big, big pressure being put on the electricity grid in Kazakhstan. And come the autumn come the fall when, when demand for electricity always rises for heating whatever. The, the energy ministry started targeting the crypto miners and trying to ration the amount of electricity they could use. There's two sectors here: there's the legal crypto miners, but there's also the illegal crypto miners, who are not registered. So the legal ones found their electricity is being started to get restricted, but there was an agreement when with the miners and the government to, to keep the electricity flowing, but this agreement was broken. And a lot of the crypto miners, legal crypto miners, found that they couldn't operate anymore. So the first story I wrote in November, it was more focused on the boom were Kazakhstan had risen to be the second-biggest producer of bitcoin in the world, it was producing something like 18% of the world's bitcoin at one point, then, more or less, within days of that story coming out, the miners started leaving because the electricity is being cut off.

KHAN: Huh. And now, in the post-protest world, when the internet blackout -- or rather blockage, because it was completely taken out -- how and where does the crypto mining industry stand?

BARTLETT: This is probably more of a temporary blip because what we had in Kazakhstan was for five days, the Internet was shut down where the crisis played out. So this obviously meant that the crypto miners couldn't work. But this caused a big drop in the value of bitcoin, but I think this will iron out in, in the medium term. And also, bitcoin does have a future in Kazakhstan, I think, because a lot of companies are, are looking into using real their own renewable sources to power their mining, so they wouldn't be reliant on the national grid. So I don't think the story's entirely over for crypto mining in Kazakhstan yet.

KHAN: Got it. Well, Paul Bartlett in Almaty, keeping us honest about the crypto industry as well as the state of affairs in Kazakhstan. Paul, good luck. Stay safe.

BARTLETT: Thank you, Waj, yep. Thank you very much.

KHAN: So that was a perspective on the very latest from the ground, but now to answer the "what's next" question -- there's a lot of moving parts to the Kazakhstan crisis after all, we go to business and markets reporter Jack Stone Truitt. Jack, take it away.

JACK STONE TRUITT, REPORTER: Thanks, Waj, here to discuss how Kazakhstan's political future has shifted going forward is Luca Anceschi, professor of Eurasian studies at the University of Glasgow. Luca, thank you for being here today.

LUCA ANCESCHI, GUEST: It's my pleasure.

TRUITT: So, looking forward, now that the protests have been quashed, President Tokayev's entire cabinet, as well as the prime minister, has resigned. Does the new lineup of ministers signal anything different from those who resigned?

ANCESCHI: It's not particularly different. I mean, we have a new prime minister, but the top ministers, foreign affairs, are still there. The exception of course, people who deal with energy sector, people who deal with the security sector, they have been kind of removed, which tells you that even when it comes to the government level, Kazakhstani politics happens elsewhere, there is this kind of conversation going on within the elite that has shaped very much how we understand the power debate in Kazakhstan, how power is kind of digested how power is developing. And on the other hand, you have this performance of ministers, prime ministers and presidents, who mimic this kind of interinstitutional dialogue, when really what we see is just the outward manifestation of decisions taken elsewhere.

TRUITT: For a long time after the collapse of the Soviet Union, Kazakhstan balanced its interests between the EU and Russia, rather than strongly aligning with one over the other. So one of the more striking aspects of the Russian-led deployment of CSTO troops is the way it has sort of hitched Kazakhstan's wagon to Russia from a foreign policy perspective. What implications could this alignment have for both countries?

ANCESCHI: The president, Tokayev, clearly has linked his own political future to the support of Russia. And Putin has intervened to support Tokayev at the time of need, and you would expect that this kind of debt will be repaid by a somewhat more Eurasianist foreign policy, but not Eurasianist in the way it was before when Kazakhstan had an independent idea of what Eurasianism in Eurasia was. But something which is much more aligned with the Russian version of that version of it.

TRUITT: You wrote a piece of analysis this week for the Carnegie Endowment for International Peace and you conclude it with a look ahead and that this new chapter for Kazakhstan may be one of its darkest. What gives you cause for pessimism going forward?

ANCESCHI: My argument for this being pessimistic is that whatever change we've seen in the Kazakhstan elite, and whatever change we'll see in the politics of the government, will not be in any way shape or form related to the demands that the people rightly asked for in the streets. There is and there was and there will be a demand coming for change from the public. But whatever change we will see is not consequential of that; it will be because the government has to look after itself first.

TRUITT: Luca Anceschi is a professor of Eurasian studies at the University of Glasgow. Luca, thank you so much for your time.

ANCESCHI: My pleasure.

(Theme Music in)

KHAN: That's it for Asia Stream this week. Thanks to Luca Anceschi, Paul Bartlett and Katrina Keegan for joining our show today. As always, I encourage you to head to Nikkei Asia at asia.nikkei.com for more in-depth coverage of Kazakhstan and the rest of Asia. If you enjoyed this podcast, please share, subscribe and leave us a review -- a five-star rating -- on Apple Podcasts. And a reminder that Nikkei Asia is currently offering an exclusive discount for our podcast listeners, just type in code ASIASTREAM, all caps, no space, at checkout.

This episode was produced by Monica Hunter-Hart and Jack Stone Truitt. Our theme music is "What's the Angle?" by Shane Ivers. I'm your host, Waj Khan. Talk to you next week.

(Theme Music out)

-- END OF TRANSCRIPT --

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