Corruption EXPO-sed in Kazakhstan

By bne IntelliNews June 17, 2015

Naubet Bisenov in Almaty -


Image-obsessed Kazakhstan regularly bids to stage multi-billion-dollar global events such as the EXPO and Olympics as a way to enhance its reputation and project an image of itself as a major player on the international stage. Yet rampant government corruption often invites scandals that defeat the whole point of the exercise.

The latest embarrassing example concerns EXPO 2017 Astana, which has become mired in scandal after President Nursultan Nazarbayev on June 11 was forced to replace the head of the national company responsible for building facilities for the international exhibition. On June 13, Talgat Yermegiyayev was placed under house arrest on embezzlement charges and he now faces 7- 12 years in jail along with the confiscation of property and a ban on holding public office for up to five years. According to Eurasianet, another top EXPO official, Kazhymurat Usenov, who was in charge of the department overseeing construction of facilities for the exhibition, has also been placed under house arrest. He is suspected of embezzling KZT214mn ($1.2mn). 

To critics, the corruption scandal comes as little surprise given the scale of the public funds allocated for EXPO 2017. Hosting the event comes with a total price tag of $3bn – a cost many people question at a time when they are facing hardship from an economy struggling in the teeth of low oil prices, which has forced the government to cut budget spending.

The kinds of sums involved and the associated temptation for embezzlement by officials is a direct result of the president's determination to host such image-enhancing events regardless of cost. “It is clear that all these major projects, both Olympics and EXPO, are… directly linked to the personality of the incumbent head of state," Dosym Satpayev, director of the Almaty-based Risks Assessment Group thinktank, tells bne IntelliNews. "This means certain international images of Kazakhstan are deliberately being associated with the president, for whom it is very important to style Kazakhstan as a serious global player that can suggest certain initiatives, and can afford to stage certain events and spend huge sums on them."

"Because [these events] are linked to the international image of the head of state, the government will not economise on them, despite serious problems that have emerged in the economy and the president calling for belt-tightening," Satpayev says. "No one has suggested we should abandon the Olympic Games or EXPO."

Poor timing

The Kazakh government will be doubly disappointed with the timing of the EXPO corruption scandal, coming as it did just two weeks before the International Olympic Committee (IOC) will choose between the Kazakh commercial capital of Almaty and Beijing as host of the Winter Olympic Games in 2022 on July 31. While the government hasn't clearly specified the amount of money it plans to spend on the Olympics if Almaty is chosen, the level of corruption and embezzlement that plagued the Sochi Olympics in 2014 as well as the deterioration of the human rights situation in Russia suggest Kazakhstan is in no better position to avoid the same kind of bad press in the run-up to staging the Games. The anti-graft NGO Transparency International's “Corruption Perception Index 2014” ranked Kazakhstan 126th out of 175 countries, on a par with Azerbaijan and Pakistan; Russia occupied 136th place along with Nigeria and Kyrgyzstan.

Unlike the 2011 Asian Winter Games that was held in Astana and Almaty, where embezzlement scandals burst into the open after the event, the latest arrests point to the government's apparent determination to uncover and deal with corruption as it crops up, rather than sweeping it under the carpet until the world's attention has moved elsewhere. In 2014, three years after the event, a judge in Almaty sentenced an official involved in organising the Asian Games to 5 1/2 years in prison for embezzling KZT600mn (nearly $4mn at the time) that had been allocated for the event.

While the awarding of host city status for the Olympics might not involve the same kind of bribery that tainted FIFA's awarding of the 2022 football World Cup to Qatar (and allegedly others), any corruption scandals associated with the preparations for the Games will be something that the IOC is no doubt keen to avoid.

For critics like Satpayev, there is hope the government is beginning to understand that wasting money on large projects while ignoring domestic problems like ethnic clashes and social strife like the one in the western oil town of Zhanaozen that resulted in striking oil workers being killed can also damage the country’s international image.

"We have shop windows we show to the foreign audience, but we also have domestic problems and internal conflicts and unflattering images which we try to conceal," Satpayev says. "Even if [such global events] are held in Kazakhstan, I am more interested in any trickle-down effects they will have after they are staged. Will they be useful for Kazakhstan?" 

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