Constantly rising prices for housing and utility services evoke concern among the majority of Kazakh citizens. The policy of the state puts a small business in a difficult position, and many residents of Kazakhstan are pushed to the brink of survival.
With the general level of inflation at 6.0% in 2012 (according to the report of the National Bank of Kazakhstan), utility bills increased by 9.3%, including the supply of hot water – (10.8%) and electricity (10.1%). Experts estimate that the average pensioner in Kazakhstan has to spend 70-80% of their minimum pension in order to pay utility bills. Since early 2013, prices have risen for almost all services, in virtually all regions. Only in February 2013, did rates for cold water rise up by 26.6%, for sanitation – 15.1%, and telephone line rental – 20%. The increase in prices mainly took place in the services that are dominated by state-controlled monopolists.
Justification for the constantly growing prices more and more frequently raises concerns in the environment of Kazakh experts and politicians. The management of the utility monopolists announce that they have to raise the rates, as 70% of utility networks are dilapidated, and public funding is not sufficient to cover the expenses related to their renovation. The state, in turn, passed the entire cost of upgrading the housing and utility networks to consumers. However, in reality, the housing and utilities sector is in the same condition as a few years ago.
On 27 February, 2013, a member of the lower chamber of the parliament, Nurlan Zhazylbekov, in his inquiry to the Prime Minister of the RK, Serik Akhmetov, stated that the money, obtained from utility users after the price increase, has been used ineffectively by the monopolists: “The Agency for Protection of Competition has revealed some incidents where the money earned by the monopolists by the means of raising tariffs for the population, were used not for the modernisation infrastructures, but rather for dividends paid to shareholders”. Expert: Dauren Kaysarov also notes that the monopolists are seizing the opportunity to raise rates in order to increase the profit of the enterprise, and they are neglecting the need for modernisation.
First deputy chairman of the president’s party ‘Nur Otan’, Bauyrzhan Baybek, believes that “increasing utility tariffs will teach people to use utilities sparingly”. Kazakh experts are very skeptical of this potential outcome, as the reduction of water consumption does not lead to the lowering of prices. In fact, the result is the exact opposite.
The increase in tariffs has struck not only ordinary residents of Kazakhstan, but also many enterprises. For example, in West Kazakhstan Province, the price for heating for a small business increased by 300%. In February 2013, at a round table in the Akimat of Uralsk (the administrative centre of North Kazakhstan Province), entrepreneurs expressed their outrage at the policies of the state. However, the authorities have not taken any action. Now, many businesses have been forced to fold.
On 1 March, 2013, a few dozen Almaty residents went out on to the streets in order to protest against the increase in utility rates. Local authorities refused to sanction the rally, and the police tried to obstruct the activities of the demonstrators. Leaders of the event stated that in the case that local authorities ignore their demands, a demonstration gathering thousands of protesters will be held on 1 May. On 12 March, 2013, the People’s Communist Party of Kazakhstan (KNPK) organised a protest rally in Astana. In the capital of Kazakhstan, the cost of electricity has increased by 33%, and the price of hot water has risen by 37%. Vladislav Kosarev, a member of Parliament from the KNPK, said that the the level of corruption in companies that run the system of utility services is behind the current state of affairs. The General Prosecutor’s Office agreed with this statement. The draft state programme of further modernisation of the law enforcement system of Kazakhstan stipulates that according to the analysis carried out by Association of Independent Experts on Corruption, “it increases the cost of goods and services in Kazakhstan by 50%, and, as a result, all citizens of the country suffer the consequences”.
According to the research agency ‘RIA Rating’, a minimum salary in Kazakhstan is 18 thousand tenge (approx. 91 euro). According to this indicator, Kazakhstan ranked 26th out of 27 countries. At the same time, the disposable income of citizens of Kazakhstan does not increase as the rate of which salaries increase is far behind the increase in prices for utilities.
The study of the Demoscope Bureau of Express Monitoring of Public Opinion, the overall level of confidence in the authorities in Kazakhstan is 11%. In particular, the government and ministries enjoy the confidence of an average of 3.5%, and the courts – 1.8%.
Freedom of peaceful assembly and association
In the socially tense Mangistau Province,labour action is being carried out by workers of large enterprises. They are making demands that an end be put to violations of their labour rights. Experts predict an intensification of protest mood in society.
On 19 February, 2013, in Aktau, Mangistau Province, more than 150 workers of the shipbuilding company ‘Keppel Kazakhstan’ laid down their tools, demanding higher salaries, elimination of disparities between the salaries of foreign and Kazakh workers as well as a permit for compensatory leave and a stop to illegal dismissals.
On 26 February, 2013, striking workers returned to their jobs, as the management of ‘Keppel Kazakhstan’ promised to raise salaries by 30% from the 1st March, 2013. Other demands of the employees will be considered at a later date.
On 11 March, 2013, in the Kalamkas deposit, in the Mangistau Province, 101 oil workers of one of the largest contractors, ‘Oil Service Company’ (‘OSC’), went on strike. Oil workers demanded a pay increase and the removal of security service from the production fields. Management of the ‘OSC’ company promised to solve the issue of the salary increase by 30 April, 2013, but also stated that they cannot dismiss the security service, as their work is necessary to avoid violations of labour discipline. On 12 March, 2013, oil workers resumed their work. The Akim of Mangistau Province, Alik Aydarbayev promised to personally oversee this matter.
The leader of an independent union of oil workers in Mangistau Province, Mukhtar Umbetov, stated that there is a likelihood of resumption of the strike by oil workers of the Kalamkas deposit in the near future. Oil workers demand systemic changes in remuneration, which must be carried out in all of the companies of the region.
Analysts at the Centre for Sociological and Political Studies ‘Strategy’ predict thatdue to a high level of anxiety, social protests in Kazakhstan may break outin the near future. The main causes of potential conflicts are: growth of tariffs and prices, corruption, low standards of living as well as violations of labour rights.
On 17 February, 2013, amendments to the law on social security, which considerably reduced maternity benefits for women receiving a high salary, came into force. The state initiative sparked criticism among the public: many activists came to the rally in order to defend women’s rights.
Amendments to the law affected the women whose monthly earnings exceed ten minimum salaries, i.e. 186 thousand tenge (approx. 950 euros), as well as women who had worked for less than 12 months before taking maternity leave. According to the adopted amendments, women, whose salary exceed 186 thousand tenge, at the time of taking maternity leave will receive a one-off benefit of not 1 million tenge (approx. 5100 euros), as before, but 783 thousand tenge (approx. 4,000 euros).
State officials have announced that this step was a necessity, and the changes are going to affect only a small percentage of women. According to Serik Abdenov, the Minister of Labour and Social Protection of Citizens, the previous system of calculation of maternity payment created preconditions for various means of financial fraud, as some women claimed to be receiving fictitiously higher salaries in order to obtain a higher maternity benefit. “There are incidents where we transfer maternity leave payments of several million tenge. And they occur at a time when an average of 65 percent of the female population in the country does not even make two hundred dollars a month” – the Minister admitted. But Olzhas Khudaybergenov, the director of the Centre for Macroeconomic Research, shows on the basis of calculations that, in fact, the maternity payment calculation system does not allow enough time to rig the amount of the salary in order to get a higher maternity benefit, so fraudulent cases must therefore be rare.
Meanwhile, opponents of the reduction of maternity benefits are concerned that this is just the beginning of changes and, potentially, in a year, some new risks may be claimed by the authorities; however, this time, the amendments related to the potential risks will affect all women.
On 20 February, 2013, a peaceful protest was held near the building of the Department of Labour and Social Security in Almaty. Two dozen women stood up against the reduction of pregnancy and childbirth benefits. Similar action was carried out in Almaty on 2 March, 2013, despite the fact that local authorities had banned it. On 9 March, 2013, female residents of Astana also went to the streets in order to defend their rights. On 16 March, 2013, Almaty inhabitants gathered to protest again; this time more than 100 people showed their support for women. On 6 March, 2013, female activists of the protest movement accused the security services of Kazakhstan of hacking into Facebook group ‘Against the reduction of maternity benefit’, which had more than 8000 followers.
Prior to the reduction of maternity payments, other amendments to the law had been introduced, cutting by 7-fold the amount of child maintenance– from 26 thousand tenge (approx. 130 euro) to 4 thousand tenge (20 euro).
On 5 March, 2013, it transpired that Vladislav Chelakh was transferred to the city of Zhitikara, Kostanay Province, to the penal colony UK 161/3, where the country’s most dangerous criminals are kept under close supervision. In this penal facility, prisoners are isolated in order to prevent their communication each other. Vladislav Chelakh’s mother reported that those who begin to communicate with her son, are immediately placed in solitary confinement. Vladislav Chelakh was sentenced to life imprisonment for the assassination of 14 soldiers and a huntsman, committed at the ‘Arkankergen’ border post in Almaty Province on 28 May, 2012. The defendant claimed that he had confessed guilt to the crime under torture, and experts state that the interests of certain political elites affected the outcome of the case. Serik Sarsenov, Vladislav Chelakh’s counsel, intends to file a cassation complaint against the verdict.
A public campaign in support of Vladislav Chelakh has gained momentum over the last month. On 7 March, 2013, activists sent a letter to the UN office in Kazakhstan, requesting that an objective consideration of the case be demanded. On 15 February, 2013, Abzal Shakarov, an activist of the movement in support of Vladislav Chelakh, was arrested and taken to the Anti-Extremism Department of the Ministry of the Interior in the Zhambyl Province; before he reached the Department, his mobile phone and identity card were confiscated. The detention took place after the publication of Abzal Shakarov’s interview, where he expressed doubts regarding the official version of the investigation in the case of Vladislav Chelakh. Once the information about the detention of the activist appeared in the media, the police released Abzal Shakarov, but demanded that he publicly state that his detention was not linked to his support for Vladislav Chelakh; however, the activist refused to meet these requirements of the police.