Nazarbayev Party Keeps Kazakh Dominance

Kazakh President Nursultan Nazarbayev’s ruling party maintained its dominant role in parliament even as two other parties unexpectedly won seats following the worst violence in the oil-rich nation in 20 years.

Nur Otan garnered 80.74 percent of the vote in yesterday’s election, Kuandik Turgankulov, the head of the Central Electoral Commission, told reporters today in the capital, Astana, after 100 percent of votes were counted. The pro-business Akzhol party and the Communists scored above the 7 percent threshold to win seats in the Majilis, the lower house of parliament, he said. Turnout was 75.07 percent.

Nazarbayev, 71, who has ruled the Central Asian state since 1989 in the Soviet era, is seeking to staunch discontent and promote a multiparty system in a nation shaken by mass riots and clashes with the police. The president, speaking at Nur Otan’s campaign headquarters after the vote, said Kazakh citizens voted for “stability, calm, tolerance, friendship of a multinational people.”

“We see the virtual continuation of the political status quo as the only likely scenario,” Julia Tsepliaeva, head of research at BNP Paribas in Moscow, said by e-mail today. “At the same time, political monopoly of Nur Otan has been broken.”

The tenge weakened for the first time in five days, losing 0.2 percent to 148.43 per dollar as of 12:37 p.m. in Astana. The Kazakh currency has gained less than 0.1 percent against the greenback in 2012, while the ruble advanced 0.6 percent and Ukraine’s hryvnia weakened 0.3 percent.

‘Free and Fair’

No election in Kazakhstan has ever been deemed “free and fair” by the Organization for Security and Cooperation in Europe, the continent’s democracy watchdog, which is scheduled to hold a briefing in Astana today.

Riots broke out last month in an oil-rich region in the west of the former Soviet Union’s second-biggest energy producer, killing 16 people and leaving more than 100 injured in the worst violence since the former Soviet republic won independence two decades ago.

Change and Modernize

Kazakhstan will change and modernize its political system because of the risk of “large-scale” unrest following the mass riots, Erlan Karin, secretary of the Nur Otan party, said in a Jan. 9 interview.

Nur Otan won all the seats in Kazakhstan’s legislature in an August 2007 vote. The election law was changed two years later to ensure that if only one party passes the 7 percent threshold, the party with the second-highest number of votes gets no less than two seats.

Kazakhstan is the second-biggest oil producer in the former Soviet Union after Russia, with output of about 1.6 million barrels a day, about the same as Libya before the uprising that ousted Muammar Qaddafi. It has attracted companies including Exxon Mobil Corp., Royal Dutch Shell Plc, ConocoPhillips, Total SA, Eni SpA and BG Group Plc.

The authorities permitted elections be held in the town of Zhanaozen, where the protests were instigated by oil workers at state-owned KazMunaiGaz National Co. units after disputes over job losses and wages.

‘Rather Actively’

Voting in Zhanaozen proceeded in a “stable situation, calmly and at the same time rather actively,” with turnout of more than 50 percent, Nurdaulet Suindikov, a spokesman for the Prosecutor General’s Office, told reporters yesterday in Astana.

Central Asia’s largest economy probably swelled by 6.5 percent in 2011 and may expand 5.6 percent this year, according to the International Monetary Fund. Fitch Ratings raised Kazakhstan’s sovereign credit rating one step to BBB on Nov. 21, level with Russia, as energy exports boosted foreign-currency assets.

“The next 5 to 7 years will be very important” because “we need to stabilize what was achieved and break forward,” said Nazarbayev’s eldest daughter, Dariga, who represented Nur Otan in the election. That’s why “we need a strong and even malicious parliament.”

Observers from the Commonwealth of Independent States, a grouping of former Soviet republics, found no violations during the conduct of the vote, Russian state television reported.

New Parliament

“The new parliament will be populated by pro-government deputies except some of them will now be part of another party,” Lilit Gevorgyan, an analyst at IHS Global Insight in London, said by e-mail. “The change in the name only of the parliamentary parties is unlikely to convince ordinary Kazakhs that positive changes are on the way.”

Akzhol received 7.46 percent and the Communists 7.2 percent, according to the Central Electoral Commission. The opposition National Social Democratic party got 1.59 percent of the vote.

“We have our own position, which we will defend and, if necessary, we’ll enter into tough discussions,” Azat Peruashev, the chairman of Akzhol and former head of a Kazakh business lobbying group, said yesterday. “I wouldn’t have sought to enter parliament only to press buttons silently.”

Bulat Abilov, head of the National Social Democratic Party, and Gulzhan Yergaliyeva, another candidate from the only opposition party, were banned from the ballot after filing false reports on their income and property, the electoral commission said Jan. 13 on its website.

‘Transparency, Openness, Fairness’

Nazarbayev told supporters after polls closed that the election was “unprecedented for its transparency, openness, fairness.” The president won a new five-year term last April with 95.5 percent backing. He was named “leader of the nation” in 2010, giving him power to dictate policy even after he retires.

The main question is whether the legislative body will become “a serious political institution that can guarantee stability and continuity,” as this may be the last parliamentary election under Nazarbayev’s control, Dosym Satpayev, director of the Kazakhstan Risks Assessment Group, said by phone.

“Time is playing against the current political system,” Satpayev said, adding that building a succession mechanism, including a strong parliament, must have begun eight to 10 years ago.

To contact the reporters on this story: Svetlana Antoncheva in Astana at santoncheva1@bloomberg.net; Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; Stephen Voss at sev@bloomberg.net

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