Presidential resignation signals new era in Kazakh politics

Nazarbayev will remain at the top of the power vertical

A challenging outlook for Nazarbayev’s successor

On the surface, President Nazarbayev’s shock resignation presents an opportunity for Kazakhstan to breakout of the economic stagnation the country is in. Kazakhstan's economy faces significant headwinds as it has failed to diversify from its reliance on oil in past decades.

The downturn since the global financial crisis in the late noughties reflects deep structural challenges, including state dominance of Kazakhstan's economy and the privileged position of politically connected businesses. A change of leadership presents an opportunity to address head on such challenges.

A further challenge to the Kazakh authorities is a restive public. Anti-government protests have increasingly forced Nazarbayev and the government to re-act to public concerns in an attempt to appear responsive to popular demands.

Economic stagnation and the changing popular mood have likely contributed to Nazarbayev’s decision to resign. Indeed, they were among the reason we increased the probability of a resignation in our latest forecast, though, we did not predict it.

Notably, Nazarbayev’s resignation speech listed the many achievements of his leadership. Resigning before the socio-economic malaise worsens further is likely an attempt to remove himself from direct responsibility.

Kazakhstan politics: Staying at the helm of power

Nazarbayev’s resignation will not necessarily mark the end of his 30 year-long leadership of Kazakhstan, however. As chairman of the Security Council and of the national welfare fund Samruk Kazyna’s management board, Nazarbayev will continue to wield significant power over the country’s security and economic policy. Moreover, Nazarbayev has high levels of informal powers, which suggest that in the immediate term, he will remain at the top of the power vertical.

Kassym-Jomart Tokayev will be sworn in as interim president on 20 March and remain in post until the next election scheduled in 2020. We expect Tokayev to be an interim figure. The real question is, who will be Kazakhstan’s third president. Nazarbayev will oversee the transition process, including the vetting of presidential candidates, and ensure that his chosen successor follows Tokayev’s interim leadership. It is plausible, though in our view unlikely, that Tokayev will be elected president in 2020; the interim presidency allows Nazarbayev a period in which to evaluate the appropriateness of Tokayev and other candidates for the presidency.  

Camilla Ogunbiyi

Principal Analyst, Financial Sector Risk and Forecasting