Protests and the state of emergency in Kazakhstan. The main thing is RBC

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• In several large cities, including Almaty, protesters clashed with the security forces. Several police cars were set on fire and destroyed in the city. The protests did not stop at night. Kazakh security forces used flashbang grenades and tear gas. Were heard shots, presumably with rubber bullets.

• Due to the events in Alma-Ata, at night, President Tokayev announced the introduction of a state of emergency in the Mangistau region and Alma-Ata from January 5 for two weeks – until January 19 (under the regime, among other things, any mass gatherings are prohibited and a curfew is imposed). To Alma-Ata pulled off special equipment.
• Internet failures were recorded throughout the country. Mobile Internet and What’s App, Telegram and Signal messengers stopped working in Almaty. Operators Beeline and Kcell confirmed interruptions with mobile Internet for reasons beyond their control.
• The country’s authorities also blocked media sites covering the protests in including KazTAG and Orda.kz.

• The protesters broke into the building of the akimat (administration) of Almaty. A fire started in it, as well as in the building of the office of the Prosecutor General’s Office. Following were attacks on police departments and the National Security Committee. By evening, the authorities briefly lost control of the airport.

• Demonstrators also tried to storm the administration building of Aktobe, a large industrial center in western Kazakhstan. The riot police used flash-bang grenades against them. Several explosions took place near the city administration building.

• The state of emergency was introduced in the capital Nur-Sultan and the Alma-Ata region. Later, the state of emergency was extended to the entire country.

• According to the Ministry of Internal Affairs, during the riots, 8 law enforcement officers were killed, more than 300 were injured.

• President of Kazakhstan Kassym-Zhomart Tokayev accepted the resignation of the government led by Askar Mamin. Alikhan Smailov, the first deputy prime minister of the republic, was appointed acting prime minister.

• In his address to the nation, Tokayev said that he was accepting the post of chairman of the country’s Security Council. This was one of the last official posts that the retired first president of the republic, Nursultan Nazarbayev, still retains. There is still no reaction from Nazarbayev to what is happening.

• Kazakh media reported that against the background of the seizure of administrative buildings in Alma-Ata, there were facts of looting, attacks on shopping centers and banks.

• During the day, the Internet stopped working throughout Kazakhstan. By the evening, there were reports that the Internet was working at least in Nur-Sultan and Alma-Ata.

• The protests in Kazakhstan began on January 2 due to an increase in the price of automobile gas since the new year from 60 to 120 tenge (from 10 to 20 rubles) per liter. The first rallies were held in the Mangistau region, in the west of the country, in the cities of Zhanaozen and Aktau. The Ministry of Energy of Kazakhstan explained that the increase in prices is associated with an increase in demand – gas consumption is growing annually, while production volumes remain at the level of previous years.
• At first, the owners of gas stations in this area decided to lower prices. This did not knock the mood of protest down.
• After the first protests, the government created a special commission to consider the situation in the Mangistau region. On January 4, she promised the protesters to fulfill their demand – to lower the price of fuel to 50 tenge (8.67 rubles) per liter. But that didn’t help either.
• In the city of Aktau, the Deputy Prime Minister and the Minister of Energy came out to the protesters. They informed people about the decision on prices and promised that people who came out to the square would not be held accountable.

Throughout 2021, sociologists recorded alarming post-pandemic effects, Daria Chizhova, director of the Information and Analytical Center for the Study of Social and Political Processes in the Post-Soviet Space of Moscow State University, told RBC. Tough quarantine measures have led to changes in the structure of the population’s income – the middle class, whose share has fallen sharply, is under the greatest threat; followed by a sharp increase in consumer debt – an increase of 26% compared to 2020, this economic well-being was consistently reflected in the general well-being – the share of Kazakhstanis who believe that they have a prospect of improving the economic situation fell to 30% (against 50% in 2019 year, for example), experts describe the situation. “The protests are a continuation of the systemic discontent and fatigue of the Kazakh society. That is why it is so difficult to stop the wave of protests now – there are no uniform demands, only dissatisfaction, ”Chizhova says.

The developing critical situation in the country, in my opinion, is caused not so much by ill-considered and poor-quality actions of the government, as by the functioning of the extraordinary system of state power formed in 2019 with the participation of the first (former) and second (current) presidents of Kazakhstan, notices Kazakhstani political scientist Andrey Chebotarev. “Disorientation of the state apparatus, especially its top echelon, and the maneuvering of high-ranking officials between Akorda or” Library “(Nazarbayev’s office. – RBK) negatively affected all spheres of life of Kazakhstani society and the state. This was especially evident in 2020 at the peak of the COVID-19 coronavirus infection pandemic, ”the expert points out.

In Kazakhstan, in 2019, a phased transition to the sale of liquefied petroleum gas (LPG) began on electronic trading platforms, and from 2022 it was planned to completely switch to the sale of this fuel through the exchange, abandoning manual price regulation. LPG prices have been growing in Kazakhstan throughout 2021 and especially actively since the beginning of autumn. For example, in October prices at gas stations were already very close to 90 tenge per liter. This happened against the background of rising oil and gas prices on the world market, as well as due to a gradual transition to market pricing within the country. “Kazakhstan from January 1 switched to trading [СУГами] through the commodity exchange. For a long time, the government artificially restrained the rise in gas prices, the demand for which has grown significantly. In the context of high prices on world markets, producers have an incentive to export gas, and not supply it to the domestic market, ”Kirill Bakhtin, an analyst at Sinara investment bank, told RBC.

The transition to e-commerce will allow balancing the price of LPG on the basis of supply and demand, which will allow attracting investment in the creation of new production facilities, – said in a message from the Ministry of Energy of Kazakhstan, published on January 3. “In addition, market mechanisms have a positive effect on the development of competition, reduce the impact on the market of unproductive intermediaries, create favorable conditions for the development of small and medium-sized businesses,” they noted.

The Ministry of Energy then argued that before the transition to electronic trading, the price of this type of fuel was unprofitable for producers, since it was sold at a price lower than the cost price. The main LPG producer is Tengizchevroil, which is controlled by American Chevron (50%) and ExxonMobil Kazakhstan Ventures Inc (25%), 20% belongs to the state-owned Kazakh company Kazmunaigaz, 5% belongs to LUKOIL’s subsidiary LUKArco. Tengizchevroil owns the country’s largest oil field, Tengiz, in western Kazakhstan. But most of Tengizchevroil’s fuel is exported.

In the middle of summer 2021, the Ministry of Energy of Kazakhstan obliged LPG producers to send all free volumes to the domestic market, refusing to export, with the exception of the Tengizchevroil and Zhaikmunai plants (owned by Nostrum Oil & Gas, which is part of the structure of the Singapore holding Steppe Capital Pte Ltd controlled by Nursultan Nazarbayev’s son-in-law Timur Kulibayev) and Gas Processing Company. The shortage in the market worsened in October, when one of the major gas producers, the Pavlodar Petrochemical Plant (a subsidiary of Kazmunaigaz), stopped for repairs. Market participants reported problems with providing LPG to consumers, in particular in Nur-Sultan, Mangistau and North Kazakhstan regions.

LPG is the main fuel for light vehicles in Kazakhstan. From 2019 to 2021, the number of liquefied gas vehicles doubled – from 140 thousand to 313.4 thousand.Its consumption in two years increased from 1.3 million tons to 1.6 million tons. At the same time, the production volume remained at the same level. In 2020, Tengizchevroil produced 1.482 million tons of LPG, of which 1.351 million tons were exported (Refinitiv data).

The average salary in Kazakhstan for the III quarter of 2021 was 243 thousand tenge per month.

President Tokayev is in a difficult situation, notes Daria Chizhova, the manifestation of weakness is unacceptable for an Asian country, and the authorities must clearly fix their monopoly on strength. The expert notes that now there is an active localization and sewerage of the protest – some activists are calling to take to the streets and seize buildings. “If the authorities do not allow open provocations, then the situation will be stabilized in the near future. The protest has no specific political demands, if there are no specific leaders – the instruments of the state of emergency can be effectively brought out of this crisis, ”Chizhova believes. However, in her opinion, after the end of the state of emergency, the new government and administration will have a lot of work to do, since the underlying causes of discontent, including economic ones, will not go anywhere.

Now the country’s leadership is taking “fire” measures, most likely, there will also be a change in the leaders of a number of regions of the country, Chebotarev continues. “At the same time, the current processes in the country surpassed the 2011 Zhanaozen events and the 2016 land protests in scale. In this regard, they simply cannot but become a serious political lesson for the entire ruling elite of Kazakhstan. Therefore, after the stabilization of the situation in the country, it is necessary to start developing and adopting more radical measures, primarily of a political nature, ”the expert believes.