"Geopolitical Setting"

Democracy as the Americans see it?

Sergei Duvanov, Alma-Ata

I recall my recent talk with an American journalist. I asked him: "Why don't U.S. journalists criticize the government that helps dictators overseas?" And the answer was: "We trust the people whom we have elected. We believe that they are doing what is good for America". Our talk was about Kazakhstan, which seems so abstract to the Americans, that they can allow the U.S. government to do anything it finds necessary - for the good of America. Clearly, when it comes to the problems in America itself, American journalists seem to trust the U.S. government a little less. I kept thinking about his answer because it answered another my question: "Why the U.S. supports Nazarbayev?"

It's clear that in many respects today's social and economic situation in Kazakhstan is a result of the unwise, shortsighted policy of the Clinton administration. This policy has allowed Nazarbayev to rid not only of the republican system of government and concentrate power, but also to monopolize Kazakhstan's basic economic assets under the pretext of market reforms. The main flows of financial aid were used to fund the pro-government and government programs. All the credits were distributed by the Nazarbayev clan, who utilized the money in their own interests. This has made it possible for dozens of Kazakhstan's families to: a) acquire personal wealth; b) consolidate more political and economic power; c) get rid of their opponents; d) cut the ground from under free enterprise; e) curb the remaining democratic freedoms.

The basic task of the American aid, namely to help create free enterprise in Kazakhstan, hasn't been solved. It is thanks to the U.S. aid that the monopoly of the Nazarbayev family and his allies has been established. Today those people control the entire national economy. Today the large and a part of medium-sized businesses are in the sphere of influence of the Family. Thanks to the high-level protection, these business are doing well, while the remaining entrepreneurs are subjected to endless taxes, officials' exaction, and check-ups by various state agencies.

In fact, the credits given to central authority did harm to private sector. Private enterprises that can't boast high-level protection were unable to compete with those who managed to "utilize" western credits. The latter, with the help of those credits and with support of national customs and tax agencies, quickly broke and absorbed their competitors. So, the monopolies were established. The most typical example is the Sugar Center that belongs to a Nazarbayev's son-in-law.

The very idea of helping the team was a mistake. The strategy was based on the priority of economic reforms over political ones. The task was to speed up privatization. From the U.S. standpoint, this guaranteed that Kazakhstan would not slide back towards totalitarianism. That's why the main index of success here was the number of privatized companies. Since Kazakh officials were rather quick to divide the state-run property among them, the Americans were pleased. This explains why the Americans, under a spell of privatization successes, turned the blind eye to Nazarbayev's anti-democratic practices. They overlooked many offences, including closing down of dozens of newspapers, television and radio companies, dissolution of two parliaments, prosecution of opposition, and the deeply flawed elections.

Another whole issue is corruption. Since the Soviet times, Kazakh officials have been genetically susceptible to graft. The Americans did not take or did not want to take this into account. The money was given to the people who used to be part of the former deeply corrupt political system. It's a well known fact that a highly-placed Soviet-era official, who failed to get a slice of the state pie for himself and his relative, was secretly despised by his associates. It went without saying that a person should try to accumulate personal wealth at the expense of the state: this was not condemned even by public opinion. A post-soviet official (in fact all today's Kazakh officials are the post-soviet officials) can not oversee any activity that involves money without taking at least part of it. This is a fundamental truth.

But the problem is not that we feel sorry for the U.S. money, stolen by Kazakh officials. The problem is that the money just added to their corruption, cultivated their corrupt instincts, and helped to involve state officials into the shadow economy. It affected negatively the relations in the state and Kazakh society, and furthered its criminalization.

On the other hand, the fact that Kazakh officials (those who had access to the credits) laid hands on the unearned "privatized" U.S. money, ruled out any equal possibilities and conditions for competition among Kazakh businessmen from the very beginning. The part of Kazakh entrepreneurs who wanted and could work honestly, were unable to compete with those who had the "easy" transatlantic money - from the very start the market relations in Kazakhstan have taken ugly forms.

One can say that at first U.S. donors had underestimated the corrupt nature of Kazakh establishment. However, one can hardly believe that they did not realize this after 5 years of "the reforms". It's absolutely clear that the U.S. State Department has had the full information on how much money of the America's taxpayers has been pocketed by Kazakh "reformers". The Department of State officials have chosen to shut its eyes and consider this as the cost of the transitional period that just has to be paid. They were ready, it looks like, to accept it all: privatization was in full swing despite everything, so let them steal, what mattered was the result. In addition, the American history teaches us that capitalism can't be built with clean hands.

As we see, there is certain logic in this attitude towards corruption. But the State Department's theorists have not taken into account the scale of the deep-rooted corruption. The result, despite the fact that privatization is now practically completed, has turned out far the envisioned one (to put it mildly).

The most important thing is not that a considerable part of the capitals intended for building Kazakh economy has been deposited on the "reformers" accounts in foreign banks. Most likely, this was supposed to be the "reformers"' payment for their good work in transforming national economy into a capitalist one. The problem is what kind of market has been created in Kazakhstan. The communist-state monopoly has been replaced by a family-state one. Does it make any difference, after all?

It's time now to recall what the U.S. intentions were. The U.S. wanted market relations. But market is not only private ownership of assets. First of all, it is FREE ENTIRPRISE. That's its true purpose, while privatization, banks, exchanges and all other components are just the means. Has this been purpose achieved? Both yes and no. The irony of the situation is that privatization is completed, while there has never been any free enterprise.

It happened so that political monopoly in the country has opened the way to economic monopoly. The latter rules out free enterprise in principle. As a result, market relations in Kazakhstan represent a curious symbiosis of privately owned businesses and control, regulating and dictating practices of the political leadership.

The Americans believed that market reforms in national economy would trigger democratic reforms in political life. In fact, it turned out vice versa: concentration of power by the president has resulted not only in elimination of democratic institutions, but also in the restricted freedom of enterprise. Kazakhstan has become known as a highly unfavorable place for entrepreneurship. Doing business in Kazakhstan got more and more dependent on those at the top. Strictly speaking, by 1998 the authority had merged with business. Those at the top either owned or acquired the control over major profitable sectors and companies. In fact, all those people have divided the major bits of the national pie.

With all their resources and power, those people could as effectively as the former Soviet-era Gosplan (the Planning Committee) dictate their prices, customs tariffs, tax privileges, and crediting policies. They could take a plant from one investor to give it to another investor, they could ruin disloyal businessmen by sending tax police to check up their businesses. Today not a single businessman is secured against having problems with authorities in the future.

The uncertain future has triggered flight of capital, tax evasion, and expansion of the shadow economy. Doing business without any confidence and guarantees turns into a "buy-sell" scheme where there is no future, where there is always today, and the task is to get as much as one can.

As a result, one can say that the U.S. aid has helped President Nazarbayev to establish a political monopoly on power, which dominates over market relations and has rooted out free enterprise. The state authority in the person of President Nazarbayev's political regime dominates over market relations. This means that trying to escape from one dictatorship, Kazakhstan has come to yet another one.

The strategy of supporting the government instead of private businesses and democratic institutions was a mistake, though formally the money was given to the government to promote free enterprise and democracy. But the government, being just a tool, has something different in mind, namely to gather personal wealth, consolidate more power, and neutralize opposition.

As a result, a part of the received funds was stolen and the other part was used for programs that only seemed to promote democracy. They used numerous pinchbeck projects as a screen for their authoritarian political system. The more America helped the Kazakh government, the less democracy and free enterprise remained in Kazakhstan. This is the fact that hardly anyone can argue today.

How could it happen? What is really behind the near-sightedness of the American theorists? How could it happen that the money of the America's taxpayers, intended for the noble cause of democracy promotion, has worked against this democracy? According to the most widespread version, that was a mere mistake of the U.S. foreign policy: the U.S. has adopted a wrong strategy. It's possible to explain many things that have happened in Kazakhstan just by incompetence. But not all the things. There are some moments in the relationship between the U.S. State Department and Nazarbayev that prompt us to question this version.

In 1995, Kazakhstan was preparing to adopt a new Constitution. Nazarbayev proposed a constitution draft that actually abolished the separation of powers and made the president a personal leader. The country had to choose between the parliamentary and presidential form of government. Kazakh democratic public saw the grave threat to democracy, and rang the alarm, alerting the people to the dangerous President's initiative. U.S. independent experts who had been specially invited to Kazakhstan to help draw up the Constitution shared this opinion. The U.S. Embassy failed to hear not only Kazakh opposition, but also its own experts. Furthermore, the independent experts were not allowed to continue their work and were practically sent back home. It was the time when much depended on the U.S. In fact, it backed up Nazarbayev's draft and allowed him to abolish the republican form of government in Kazakhstan.

In 1998-1999, presidential and parliamentary elections were held in Kazakhstan. Those unfair elections fell short of democratic standards. Everybody knew that the results did not reflect popular vote. OSCE said the elections were undemocratic. The Department of State had to say the same. It was logical enough to expect that deeds would follow the words. However, something strange happened. Right after the elections Nazarbayev goes to the U.S. on an official visit, where he was not only praised for yet another time, but was also given new credits. To say nothing of several grants "to aid democracy". Kazakhstan considered this as the award for "fair" elections.

Clearly, oil and geopolitics were the main things behind this partnership with Kazakhstan (not to allow Russia to regain its former influence in the region), and quite recently, to stem Islamic extremism. If anyone says that there was the fourth component, that is democracy promotion, do not believe him. This person either understands nothing or intentionally lies in the attempt to prove something that simply does not exist. All those years, the Clinton administration has used democratic slogans to imitate aiding Kazakh democracy, but in fact helping to curtail democratic processes in Kazakhstan.

The above is very well explained from the point of view of the American national interests, but has absolutely nothing to do with democratic priorities of the official U.S. foreign policy doctrine. Thus, the (U.S.) national interests have held democratic principles (in Kazakhstan) as a hostage. Obviously it's up to Americans to choose whom they would support, that would best serve their national interests. But the question arises: should anyone be held responsible for the hypocrisy that has been made a state policy. The problem is that the U.S. has publicly declared its commitment to promotion of democracy in the world and sworn to support it in every possible way. In many countries, people who are fighting for the cause of democracy, have believed the U.S. and still hope for support and sympathy. Moreover, democrats have been following Uncle Sam's advice very scrupulously, since they believe that U.S. advice can't be bad. However, the people gradually come to understanding how little democracy has with it in common. The people, who have been trying to build an American-style democracy in their home countries, come to realize that Americans are just guarding their geopolitical or economic interests. Those people feel as if they have been betrayed. Understandably, the disappointment, as a rule, turns into the anti-American attitudes.

I have talked to a great number of people from those countries where the U.S. has "helped" to build democracy. There is a widespread opinion that America's aid is sincere only when the U.S. interests coincide with the interests of democracy (like it was in Yugoslavia). In all other cases this promotion of democracy is just a show up, a facade needed just to justify the U.S. presence. In practice, it is usually the America's geopolitical, economic and other tasks that are being solved, and for this purpose the U.S. is ready to support any political regime.

In light of the above, it's high time to reevaluate our attitude towards the U.S. "aiding democracy". It is time to take a more cautious approach to this aid, bearing in mind that the White House considers only those things democratic that help promote U.S. democracy. No matter how sad it may be to realize, but today's democracy from the American point of view is the democracy that is useful for the Americans only.

Received via e-mail, 16 January 2001