Kazakhstan: EXPO Pension Raid Report Raises Hackles
Authorities in Kazakhstan have had to mount a rearguard battle against claims that they have dipped into the state pension pot to fund the showcase EXPO-2017 fair in Astana.
A few media outlets, news agency Interfax-Kazakhstan first and foremost, put the cat among the pigeons on August 9 by citing the Kazakhstan Development Bank as saying that it would use 15 billion tenge ($43 million) sourced from the state pension fund to build unspecified facilities on the grounds of EXPO-2017.
Perhaps understandably, the news was immediately and widely interpreted (maliciously misinterpreted, official say) as the government throwing the cash of future retirees at a loss-making vanity project.
The government has steadily been outlining plans on how it intends to use its pension fund bounty, which is gathered through 10 percent levies on the salaries of Kazakhstani workers, to kickstart an economy hamstrung by reliance on low oil prices. Last October, then-National Bank chairman Kairat Kelimbetov announced that 1 trillion tenge out of the fund would be used to support the budget and sunk into stimulus-generating construction and investment projects.
In March, the government clearly listed what kind of investment opportunities pension fund cash could be used for — namely shares, bonds and gold.
The general public is brimming with distrust for its officials, whom they already suspect of trying to auction off land to foreigners over their heads.
RFE/RL’s Kazakhstan service, Radio Azattyq, illustrated the mood well with a series of vox pops some months back in which people queried expressed their skepticism about the fate of the pension fund.
“Well, there is no saying that tomorrow they will give back this money. Anything could happen,” one woman said.
Bearing that diffidence in mind, claims that pension cash was being spent on the EXPO went down badly.
“Did anybody ask the permission of millions of citizens before agreeing to hold EXPO-2017,” Zhanbolat Mamay, outspoken editor of the independent Tribuna newspaper, fumed on his Facebook page. “Did the bunch of incompetent officials and bureaucrats that decided to spend the pension funds do anything to earn the money? No? Then no official has the right to spend the citizens’s savings on an EXPO that nobody wanted.”
All kinds of social media were replete with similar sentiments lamenting the disappearance of their future pensions and such. This looks like a little bit of mischief, however, since EXPO organizers were lightning quick to deny the claims their event is being paid for out of the pension pot.
“Interfax-Kazakhstan says black on white: ‘facilities on the grounds of the EXPO’ and not EXPO facilities. These are different things. As you know, the fair covers an area of [1.74 square kilometers]. EXPO exhibits only cover [250,000 square meters] out of that,” EXPO-2017 public relations manager Sergei Kuyanov told radiotochka.kz. “All the rest is residential complexes, a entertainment-shopping mall. They may de jure be located on the EXPO grounds, but they are de facto not EXPO exhibits.”
What Kuyanov’s clarification lacked in concision, it made up for in scandal-staunching. Or did it? Not quite.
First, he has aggravated Kazakhstan’s media-unfriendly image by promptly threatening to sue Interfax-Kazakhstan for its perhaps forgivably confused report on the EXPO.
“We are still thinking about whether to sue them or not, because we have a lot of work on right now and we have particular wish or time to mess around with them,” he said. “But from the point of view of the law, or just from the point of view of human reason, it would be worthwhile punishing them.”
Now, one bad story has been replaced by another as local media reports that one of the non-EXPO facilities being funded by pension cash might be a shopping mall called Mega Silk Way.
News website Total.kz contacted the developers of the mall to ask who was funding completion of the project, but said they were given only a partial and evasive answer. Whoever spoke to the website noted, however, that Mega Silk Way was considered an important development in the context of EXPO-2017, implying that its successful completion might be deemed a high priority for officials.
Total.kz also points out significantly that Mega Silk Way is being developed by company called Baiterek Development, which is in turn a daughter company of the Baiterek holding company founded by President Nursultan Nazarbayev as a vehicle for modernizing the economy and supporting small and medium enterprises. And one of Baiterek’s many subsidiaries includes the Kazakhstan Development Bank, whose ill-judged statement set off the whole sorry mess in the first place.