CONTRASTACIÓN DE RESULTADOS EN BASE A LA PRUEBA DE HIPÓTESIS

As early as 1965, Moscow had established the Kazakh Ministry of Special Construction Works,267 which was responsible for building large industrial facilities such as the refineries in Pavlodar, Shymkent and Atyrau, the brass works in Balkhash and Zhezkazgan, the lead, titanium and magnesium works in Shymkent and Ust-Kamengorsk,

and the phosphor plants in Zhambyl and Shymkent.268 Moreover, in the 1980s,

enterprises that were a part of the ministry carried out works on Tengiz, Kumkol and

Karachagank along with enterprises from Russia, Czechoslovakia and Hungary.269 The

involvement of Kazakhstan-based companies in the oil and gas sector gathered speed in the second half of the 1980s with the collapse of the chemistry sector. Thus, an enterprise that had previously been involved in building chemical plants became responsible for building and maintaining a pipeline system as well as gas stations across the republic.270

The initial development of major construction and building enterprises in the

Kazakhstan SSR derived directly from the so-called equalization policy271 (Rodgers

1974; Liebowitz 1987; Ozornoy 1991), which aimed at equalising the levels of economic development and the living standards of the country’s diverse nationalities and regions.272 Whereas the success of the equalization policy, which dated back to the Stalinist’s period, was highly questionable, Kazakhstan (and especially the north of the republic) has been cited among its main beneficiaries (Capisani 2000: 24–47). In other parts of Central Asia which were supposed to be showcases to the outside world – predominantly to Middle

Eastern audiences – of a successful marriage between Islam and Socialism,273 the

equalisation policy failed to bring about the same changes as it did in the north of 267

The enterprises comprising the ministry were created over a period of twenty years. The earliest was set up in the mid-1950s, the latest in mid-1970s.

268 _{Interview with a director of a major steel constructing company: Almaty 21 October 2004; Michail}

Braznikov, ‘Who and how is developing Kazakh oil and gas sector. The growth of foreing construction companies or one more argument for the the local conetent policy,’Continient, 22 September 2001.

269_{Interview with a general manager of a major construction company: Almaty 20 October 2004.}

270_{Interview with a vice-president of a major sub-contracting company that specialises in the oil and gas}

sector: Almaty 19 October 2004; Interview with a director of KazMunaiGas’ major subsidiary: Almaty 28 October 2004

271 _{‘AO Imstalkon – 50 years. Life-long constructions. Interview with Director General Vladimir}

Kananykhin,’Kazakhstanskaya Pravda, 3 March 2006.

272

The heyday of the equalisation policy fell on the pre-war, early post-war years and a period between 1955–1965 (Khrushchev’s era).

Kazakhstan (Olcott 1982: 488; Anderson 1997: 48–50; Kandiyoti 2002b: 287). Despite the rhetoric on the part of the Soviet leaders about industrialisation, ‘agriculture remained at the heart of Moscow’s vision for the fourth southern republic’ (Anderson 1997: 39).274

Yet, the apparent gap between Kazakhstan and other Central Asian republics was a superficial one, since the increased industrialisation in Kazakhstan had few effects on the employment pattern of the Kazakh population (Olcott 1987: 236). In Kazakhstan, as in other Central Asian republics during the Soviet Union, ‘[i]ndustrial management and skilled labour were primarily comprised of Russians and other Slavs, while members of the titular nationality largely remained in rural areas engaged in unskilled agriculture labour’ (Luong 2002: 68).275 In Kazakhstan, this pattern began as early as in the 1920s and 1930s, and remained largely unchanged for the decades that followed. In 1959, for instance, 53 per cent of industrial specialists in Kazakhstan were Russians while only 24 per cent were Kazakhs, and in 1965, a report of government awards for ‘good work’ showed that awards went overwhelmingly to non-Kazakhs (Peck 2004: 54–55). It was stated that the Kazakh Ministry of Special Construction followed the established pattern and was also run by Russian specialists as well as Ukrainians and Belarusians.276 The overwhelming dominance of Russians in the ministry was reinforced by the fact that the ministry fell under the realm of the prestigious industrial sector, which meant that it was under Moscow’s direct control (Melvin 2001: 173). The situation only began to change in

274_{For instance in the mid-1980s, around 65 per cent of cultivated land in Uzbekistan was devoted to cotton}

production. Thus Uzbekistan was described as ‘monoculture economy’. The situation was similar in Turkmenistan, and to a lesser degree in Tajikistan. In Kyrgyzstan, which produces only a small amount of cotton, it was the industry of the republic that linked it with the ‘cotton production complex’, as it mainly produced goods such as fertilizers and agricultural machinery (Gleason 1991b: 342–343, see also Stringer 2003: 149–152). It should be added that twenty years later, the situation seemed to remain unchanged. In 2005, ICG stated: ‘Cotton dominated the exports of Turkmenistan, Tajikistan and Uzbekistan, a monoculture with profound political, economic and social consequences. (…) [L]ack of political openness, failure to reform economies, large-scale poverty and social deprivation – have their roots in the cotton economy’.Quoted in‘The Cure of Cotton: Central Asia’s Destructive Monoculture,’International Crises Group, 28 February 2005.

275 _{On the basis of this situation, during the 1980s observers concluded that the Slavs comprised a}

privileged elite in Soviet Central Asia. However, Lubin inLabour and Nationality in Soviet Central Asia (1984) argued that the situation in which Central Asians found themselves was not solely due to Moscow’s imperial policies, but was also based on sound economic reasons. Central Asians, according to the author, preferred to work outside the socialized sector because these offered much better prospects for higher incomes earned as unofficial employment for scarce services, or as the result of parallel actives on unofficial markets.

276

Interview with a special advisor to the president of a major construction company: Almaty 20 October 2004.

the mid-1970s when the ranks of the lower levels specialists were filled with graduates of the Kazakhstan-based academies in Karaganda, Pavlodar, Rudny and Ust-Kamengorsk. Young Kazakh specialists were mainly recruited from demobilised military personnel and the Communist Union of Kazakhstan’s Youth.277

In the early 1990s, the ministry went through the process of the so-called state-by- state privatisation (Appendix 5a), which occurs ‘when public officials, using their formal powers, privatised those sections of the state for which they are themselves responsible’ (Krishtanovskaya and White 38: 1999). Others named this process political capitalism (Staniszkis 1992), and it is most likely to happen when privatisation relies on the free distribution of shares to citizens (vouchers privatisation) as opposed to direct sale of assets on public tenders. During voucher privatisations, shares are distributed to a large number of adult citizens without putting in place any mechanisms of control:

Under such a situation, it is more likely that over time individuals will emerge who are able to use their networks with government officials in state-owned banks and other government institutions to receive capital. This will enable them to establish one or more investment funds to purchase these vouchers, thereby gaining control of large amount of property. (King 2001: 516)

In the case of a single enterprise or a group of enterprises, the winners are most likely to be incumbent managers who, thanks to their knowledge, access to financial instruments and political connections, are able to appropriate sufficient numbers of shares only to emerge ‘as modern corporate executives, freed of the restraints of command economy, who may now allocate to themselves vastly increased pay and benefits’ (Walder 2003: 903).

In 1991–1992, the enterprises that made up the Kazakh Ministry of Special Construction Works were reorganised into stock-holding companies. Their stocks were issued to those employees who had worked in any given enterprise for more than five years. Once the stocks were issued, the enterprises became independent of the ministry. The entire operation of transforming the ministry into a stock-holding company took place at a time when no adequate legislation and no legal framework were in place. The people directly responsible for the privatisation process were directors of the enterprises that comprised the ministry. Thus, rather unsurprisingly, they turned out to be the main

beneficiaries. Through various intermediaries, they bought shares from employees who were willing to sell them almost immediately. Another group that gained from the privatisation process were the managers and engineers.278 It should be kept in mind that the ex-directors of the ministry were able to carry on the privatisation process in a speedy manner, since they fell into the category of the so-called influential Russians, a group that the Nazarbayev tried to keep on his side in the first years of independence279(section 1 of this chapter). Thus, the main rationale behind the ministry’s privatisation was to maintain the status quo under the new conditions.

The old structures were also upheld by the new owners. Whereas fifteen companies that emerged form the process of privatisation became independent entities, they were, however, linked to one another. For example, company A bought five to eight per cent of the company B, and vice-versa. This reciprocal cross-ownership has been reinforced through various interlockings of the Boards of Directors and Supervisory Boards of the biggest companies in the group.280 Hence, the ministry might have ceased to exist in an official form, but those who took over attempted to sustain it. In the new environment, this was increasingly difficult to achieve, however. In the first years after gaining independence, the construction-building and assembling companies that used to be part of the ministry – as most of the other enterprises with a similar profile in Kazakhstan – found themselves on the verge of collapse. Two factors played a role in this: a) the building and construction sector in the republic came to a virtual standstill;281 and b) the oil, gas sector overnight became off-limits to the major Kazakh companies.

With reference to the latter point, firstly the companies that conducted works on major projects in the 1980s were unable to compete with the major sub-contractors that began arriving in Kazakhstan with foreign oil companies. The main problems included 278_{Interview with a special advisor to the president of a major construction company: Almaty 20 October}

2004; Interview with a vice-president of a major sub-contracting company that specialises in oil and gas sector: Almaty 19 October 2004; Interview with a director of a major steel constructing company: Almaty 21 October 2004.

279 _{Duisenbekov Daulet; Tholen Jochen and Ken Roberts, ‘Post-Soviet Management: Evidence from}

Kazakhstan,’ Working Paper, INTAS, July 2002; Douglas Bartley and Michael Minor, ‘Pitfalls in privatisation in Kazakhstan,’,Business Forum, Winter-Spring 1994.

280_{Interview with a special advisor to the president of a major construction company: Almaty 20 October}

2004; Interview with a vice-president of a major sub-contracting company that specialises in oil and gas sector: Almaty 19 October 2004; Interview with a director of a major steel constructing company: Almaty 21 October 2004.

lack of funds282, lack of experience and insufficient technology283. Secondly, the Kazakh government did not show much interest in promoting Kazakh enterprises, which the bosses of the newly privatised companies were expecting the government to do.284 This lack of interest on the part of the authorities in promoting major local companies was motivated by their sole concern with attracting as many international companies as possible to Kazakhstan by giving them and their sub-contractors far-reaching provisions, even if it meant leaving behind Kazakh companies285(chapter 5, section 1.1).

The apparent indifference of the Kazakh government meant that the oil– supporting industry, as well as enterprises that could potentially work in the oil and gas sectors, were left to their own devices. It was stated that in the first few years after 1991, major companies survived mainly due to the renovation works of the enterprises in whose building or construction works they had been involved in previous years, including oil enterprises such as Yuzneftegaz and Uzenmunaigaz.286 In addition, the new owners of, for instance, assembling companies simply began selling technical devices at low prices, together with production bases, systems etcetera.287 Hence, what took place was a classic case of asset stripping by the bosses of the newly privatised companies, who were eager to reap the benefits.

The silent policy of keeping Kazakh companies away from the oil sector, or not directly encouraging their direct participation, was formalised in the 1995 Subsoil law (chapter 2, section 3.1). The Subsoil Law and Petroleum Law stated that an operator (foreign oil company) was obliged to use: a) ‘materials and equipment produced in Kazakhstan, provided they were competitive in terms of ecological, technical, pricing, delivery and operational considerations; and b) and the services of Kazakhstan businesses

to the extent that they were competitive in terms of price, effectiveness and quality 282

Interview with ex-general director of a major foreign oil company in Kazakhstan: Almaty 27 October 2004.

283_{Interview with a journalist specialising in oil: Almaty 1 November 2004}

284_{Interview with an ex-general director of a major foreign oil company in Kazakhstan: Almaty 27 October}

2004.

285 _{Ulbosyn Kozhantaeva, ‘National features of the international contracts,’ Delowaia Nedelia, 7 April}

2006.

286_{Interview with a special advisor to the president of a major construction company: Almaty 20 October}

2004; Interview with a vice-president of a major sub-contracting company that specialises in the oil and gas sector: Almaty 19 October 2004.

[italics mine].’288 The law, formulated in such a way, gave foreign oil companies a free hand in picking up the companies they wanted to co-operate with in the oil-rich regions. Moreover, the law allowed companies to avoid working with the Kazakh companies if they so preferred. For instance, Kazakh equipment could be easily called into question on the basis of its low technical and ecological standards. By the same token, the services provided by Kazakh businesses could be considered as less effective than those of a western company, because local companies did not work within the ISO standard recognized worldwide.

Thus a contractor, as Petroleum magazine put it: ‘could use foreign products or services and employ foreign citizens claiming that domestic products and services and are not competitive in prices, quality or in other terms’.289 This point was common currency to such an extent that the 1998 Investment Climate Statement produced by the staff of the US Embassy in Almaty openly said that: ‘investors usually are not required to purchase from local sources.’290Such far-reaching provisions for foreign investors were due to the apparently vital role that foreign interests played in drafting the 1995 law: ‘It is well known that the preparation of the 1995 Petroleum Law involved not only the best Kazakhstan lawyers but also major Western petroleum companies and lawyers: their professional advice contributed a lot to the methodology of the lawmaking. As a result, when enacted, the Law received a high appraisal of the investors for its quality’ (Chentsova 2003: 10).

On the domestic front, the ‘winners’ of the new structural set-up in which the centre became the only partner of the oil companies were the groups which had direct or indirect access to the apex of power, thanks to their links to members of the national elite including high-ranking directors of the Ministry of the Oil and Gas industry. Those links allowed individuals close to the regime to guarantee protection to the various non-Kazakh service companies that tried to win predominantly the construction contracts commissioned by the foreign oil companies. Thus, whereas the oil company could work 288

Abai Shaikenov and Anthony Cioni, ‘Changes in Kazakhstan’s Local Content Rules For Oil Operators’, Investors’ Voice. American Chamber of Commerce in Kazakhstan.

http://amcham.kz/article.php?article_id=155 (Accessed 18 June 2005).

289_{‘Will the new fields appear in Kazakhstan?’Petroleum Magazine, November 2001.} 290

‘Kazakhstan: 1998 Investment Climate Statement,’ US Embassy Almaty,Business Information Services for the Newly Independent States, 30 June 98. http://www.bisnis.doc.gov/bisnis/country/980630kz.htm (Accessed 12 June 2005).

with whomsoever it wanted, a sub-contractor that it employed nevertheless needed to be shielded against the central bureaucracy, tax police and so forth. The ‘umbrella’ which protected those non-Kazakh companies was provided by the people from the centre.291 Arguably, Nazarbayev favoured empowering groups from the centre, i.e. those close to him, since it was they who constituted his hardcore power base.

It should be added at this point that foreign oil companies on their part favoured non-Kazakh companies for a very simple reason, namely, that they had worked with many of them before. Hence, if foreign oil companies could, they would in most instances favour their close collaborators over local companies. As Paul Domjan put it in aWorld Bankpaper:

International oil companies (IOCs) prefer to deal with their global suppliers for a number of well justified reasons (including the fact that they do not have the infrastructure to deal with small suppliers in many countries). For cost-savings reason, they are reluctant to break these supplier relationships in order to source locally in each country where they operate (…) forming ties with global suppliers is one way in which many Turkish firms have themselves become global suppliers. In Kazakhstan, for example, Enka, one of Turkey’s largest construction companies, has formed an alliance with Bechtel, a key global supplier to ChevronTexaco, to supply the TengizChevrOil project.292

A similar scenario unfolded in other major projects. In Karachaganak, for instance, the main supplier was an Athens-based contractor company.