Economic growth has also been enhanced by careful government attention to the development of Kazakhstan's human resources. Since the 1990s, President Nazarbayev has made it a national priority to nurture a new technocratic elite through education reforms, and a far-sighted, state-funded study-abroad program--the Bolashak ("The Future") program. This program, which was established in 1993, places the best and the brightest from all over Kazakhstan (not just those with family ties to the ruling elite as in many other countries) in degree programs at a range of U.S., European, Russian, and other international universities. Most importantly these young, Western-educated experts are then brought back into the Kazakhstan government, as well as assisted in finding jobs in the Kazakh private sector, or in international institutions and companies operating in Kazakhstan. Over the course of the Bolashak program, it has produced a number of young deputy ministers and ministers including Azamat Abdimomunov, the Deputy Minister for Education and Science, who studied both at Indiana University and Harvard's Kennedy School of Government. Other young technocratic ministers, like Kairat Kelimbetov, the Minister of Economy and Budget, and Marlen Iskakov the Minister for Taxation, also spent time studying abroad with the encouragement and support of the state; and ministries and government commissions in Astana are full of young experts with impressive international educational experience. Although Kazakhstan still suffers from a shortage of skilled personnel for key government and private positions, it now has a new and growing, educated elite of world-class caliber.[14]

In addition, Kazakhstan under Nazarbayev has not just sent its young people to study abroad, but has also launched a global quest for ideas on reform and modernization, as well as trying to learn from its own past mistakes. Kazakhstan's national strategic plan--Kazakhstan 2030--which was conceived in the late 1990s with the assistance of a team of experts from Harvard University, consciously draws on the experience of the "Asian Tigers" with their state-driven, centralized, and more authoritarian approach to reform. It charts an evolutionary path to becoming a middle-income country--with even greater ambitions. At the same time, specific nationally-prioritized projects on the development of critical transportation routes, infrastructure, and future settlement patterns in this huge and sparsely-populated state have sought to minimize the burdens of the centrally-planned Soviet past, as well as to learn the lessons of development from similarly large states with low population densities and rich natural resources, such as Australia and Canada.

A Balancing Act at Home and Abroad

Equally importantly, on the domestic front, the Kazakh government has managed to avoid a potential north/south split of the country along ethnic lines that was predicted by many regional analysts in the 1990s. As the USSR collapsed, Kazakhstan was left with a majority Slavic population (Russian and Ukrainian) in the northern and eastern steppe regions--the legacy of Khrushchev's "Virgin Lands" campaign of the 1950s to settle and cultivate new agricultural land.[15] In the early 1990s, ethnic Russians in these regions demonstrated in favor of dual citizenship with Russia, and of having Russian established as the second state language, with many leaving for Russia when these demands were not met by the Kazakh government. The situation was also heavily manipulated by nationalist politicians in Moscow, who raised the possibility of the predominantly Slavic regions separating from Kazakhstan and joining the Russian Federation.

President Nazarbayev took a number of steps to head-off this possibility, including moving the capital from its old location in Almaty, in the predominantly ethnic Kazakh south, to Astana in the north to "anchor" the country. In spite of refusing to adopt dual citizenship and enshrine Russian as a second state language, Nazarbayev designated Russian the "language of inter-ethnic communication," and has taken care to ensure that non-ethnic Kazakhs still occupy significant posts in the central and local governments and are not overtly discriminated against in hiring. In addition, the government has maintained the "Assembly of the Peoples of Kazakhstan," an old Soviet-style institution celebrating Kazakhstan's ethnic diversity; played host to numerous international conferences on religious tolerance and a range of multi-cultural issues; and funded the renovation and construction of new churches and synagogues as well as mosques. Combined with Kazakhstan's economic growth, these policies have had some evident success. Inter-ethnic relations in Kazakhstan today present a very different picture from the dire predictions of a decade ago. Although tensions remain--especially given the fact that most ethnic Russians in Kazakhstan still have a poor command of Kazakh, which is an increasingly important skill at the top levels of government and business--the emigration of ethnic Russians and other groups from Kazakhstan has declined sharply from the levels of the 1990s. Instead, the country has become a major recipient of migration, the second largest after Russia in the region. In fact, according to the official figures of the Kazakhstan Migration Agency, 65,000 people--including 15,000 ethnic Russians--who left Kazakhstan in the 1990s, returned in 2003-2004.[16]

This domestic balancing act has been mirrored externally in Eurasia. Kazakhstan has positioned itself proactively, by playing a weak hand strongly, promoting regional integration, and charting a course among the interests of the three main powers active in Central Asia: Russia, China, and the United States. This has involved including the major energy companies of all three states in high-profile oil and gas agreements; forging bilateral military-military ties with the United States and joining NATO's Partnership for Peace agreement, while extending Russia a fifty-year lease for the Baikonur space launch facilities, and pursuing an active membership in the Shanghai Cooperation Organization (SCO) with Russia and China; and promoting the creation of a single economic space with Russia, while still developing trade relations with the U.S. and China. Kazakhstan has also set its sights more broadly internationally, including initiating the creation of a regional security organization for Asia, the Conference on Interaction and Confidence-Building Measures in Asia (CICA), which held its first summit in Almaty in June 2002; applying to be the first Eurasian state to chair the OSCE in 2009; and courting international economic and political elites by hosting a number of major conferences, such as a Eurasian version of the World Economic Forum, and the Eurasian Media Forum.

Catching "the Russian Disease"?

Beneath the surface, however, Kazakhstan still faces a lot of challenges. These have tended to get far more attention and scrutiny in the West than the positive achievements of the last decade--as the title of Carnegie Endowment scholar Martha Olcott's 2002 book--Kazakhstan: Unfulfilled Promise--might suggest. In part this is the result of the rather gloomy prevailing view of the region that Kazakhstan finds itself in: bordering Russia, China's troubled western province of Xinjiang, Kyrgyzstan, and Uzbekistan. In the international media, the tendency has been to project the problems of the adjacent countries onto Kazakhstan. In spite of the fact that Kazakhstan was never traditionally considered to be part of Central Asia in the Soviet period, in most Western discourse it has been lumped in with the rest of "the stans" and assigned the same patterns of mismanagement, state weakness or failure, dictatorship, and repression as its neighbors. But Kazakhstan is not just "another stan" and Nazarbayev is not just "another Central Asian dictator." In fact, Kazakhstan is emerging as one of the more advanced and substantial states in post-Soviet Eurasia--more akin, politically and economically, to Russia and Ukraine than to its other Central Asian neighbors--and it should be viewed as such.

Even in the nature of its economic and political problems, Kazakhstan mirrors Russia and Ukraine rather than its Central Asian neighbors. The flip side of the development of Kazakhstan's energy resources underscores this very clearly. As in the case of Russia, where oil and gas are now seen as the country's greatest strategic assets, in Kazakhstan energy resources are viewed as the key to modernization and Kazakhstan's establishment as a future regional power. Currently in Russia, however, soaring world oil prices have led to an unprecedented influx of energy export revenues into the state budget, increasing the role of the state in politics and the economy, and stifling the further development of political pluralism and private-sector innovation as the government begins to drive major investment decisions. The Russian energy industry is also being stripped of revenues that would otherwise be reinvested in its long-term development to diversify the rest of the economy--running the dual risks of a future downturn in the oil and gas sectors if production and energy prices fall, and a broader collapse of the economy if government subsidies for other industries then disappear. [17]

As a major oil producer with a similar post-Soviet economic profile, Kazakhstan runs the risk of catching this new "Russian disease," where heavy-handed centralization and over-bearing statism loom on the horizon. Indeed, just like in Russia, economic nationalism is on the rise in Kazakhstan. Western investors in the oil and gas sector are feeling the squeeze through the stealth repeal (with new taxes and fines rather than canceled contracts) of some of the favorable terms for investment by international energy companies in the 1990s; and the Kazakhstan government has announced that it wants more "strategic control" over the development of its energy resources.[18] In terms of state spending, in President Nazarbayev's addresses to Kazakhstan's people and parliament on both February 18, 2005 and September 1, 2005, he outlined an extensive array of government budgetary expenditures for increasing public sector wages and payments, new public housing programs, and developing small and medium businesses, as well as a whole series of new reforms.[19] One Kazakh official commented to me in a candid moment in March 2005 that he feared that, with the state's coffers bulging with money, the government was now trying to do too much, too fast, and without adequate preparation--risking the quality of reforms in the quantity of spending.