WELCOME TO IWPR'S REPORTING CENTRAL ASIA, No. 565 Part Two, February 7, 2009
KAZAK TOWNS EMPTY FOLLOWING MASS JOB CUTS Experts warn of widespread migration
as company closures force residents to relocate. By Olga Shevchenko in Almaty
(RCA No. 566, 07-Feb-09)
ARMY TO SOAK UP KAZAKSTAN'S UNEMPLOYED After years of honing Kazak armed
forces, they are now being asked to conscript young men just to take them off
the streets. By Olga Shevchenko in Almaty (RCA No. 565, 07-Feb-09)
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KAZAK TOWNS EMPTY FOLLOWING MASS JOB CUTS
Experts warn of widespread migration as company closures force residents to
By Olga Shevchenko in Almaty
The industrial crisis unfolding in Kazakstan could leave a trail of ghost towns
in its wake as thousands of laid-off workers head to the big cities in search
Analysts believe the authorities should offer more support to the thousands of
former workers affected by the collapse of a string of large enterprises, and
some warn that growing discontent among the unemployed could be harnessed by
When the Goldy wine and vodka plant in the village of Turgen in southeastern
Kazakstan ran into difficulties and had to lay off staff, married couple Aliya
and Aydar Zhanybekov had to leave for the former capital Almaty to find new
Aliya and her husband decided to leave their two children with her elderly
mother during the week, returning only at weekends.
She now works as a shop assistant, while her husband has found an opening as a
There are no jobs in Turgen, and our small homestead cannot produce enough
food for all of us, she explained. We have to work hard for little money, but
these are the only jobs we have.
Aydar said that they were not the only ones affected by job cuts at the
villages only large enterprise.
Many of our friends are also in Almaty looking for jobs some have moved to
other villages, or have gone abroad. What else can we do? We are trying to
survive, he said.
Of all the Central Asian countries, Kazakstan has perhaps proven most
vulnerable to the global economic crisis. The countrys oil reserves and
advanced banking system, once great strengths, have become weaknesses.
Kazak banks borrowed heavily from international lenders, and have had to
drastically curtail lending over the last year, with serious implications for
businesses and the construction industry. Last week the government nationalised
BTA Bank the countrys largest and Alliance Bank.
Meanwhile, plummeting prices for oil and metals have placed a strain on the
countrys main export industries.
Official estimates say that thousands have been affected by the closure of
businesses across the country.
There are 25 enterprises employing 7,229 people which have ceased operations,
said Labour and Social Welfare Minister Berdibek Saparbaev at a January 13
government meeting, according to a KazTAG news agency report. Two hundred and
thirty-four companies have cut their working hours. These enterprises employ
72,196 people, of whom 28,818 were asked to take unpaid leave, and other
workers have gone onto shorter working hours.
Analysts believe the real number of closures could be even higher.
Nowhere is this more keenly felt than those towns and villages with just one
In the village of Ayaguz in East Kazakstan province, 1,000 residents have been
made redundant after the main local business, paint plant Alinex, closed.
Locals say that because neighbouring towns are experiencing similar problems,
there is nowhere in the area to go and look for work.
There are four people in my family, and I am the only bread winner. There are
very few jobs in our town, said local man Aydos Zakirov. We are thinking
about leaving this place, but even if we sell all our property, we wont have
enough money to buy a house in Almaty. We are saving all we can.
As businesses close one after the other in Kazakstans small towns and
villages, people are drifting to the cities in search of work in order to feed
their families, causing massive domestic migration.
Pervomaysky, another village in East Kazakstan region, had 5,000 residents
until recently, but only 2,000 remain following the closure of the Irtysh
When workers realised their jobs were under threat, they set up a committee and
staged several unofficial strikes in defiance of rules outlawing industrial
action of this kind.
They also sent an open letter to President Nursultan Nazarbaev asking him to
prevent the closure of the plant, either by nationalising it or by handing it
over to a private investor who would run it under state supervision.
Their efforts were to no avail, and the factory closed at the start of this
As of late 2008, there were 270 workers at the plant, and they hadnt been
paid since March 2008, said strike committee head Nikolai Mikenin. Many
people left because of delayed payments, and the remaining 165 workers were
laid off in early 2009.
Alexei Toporov, who worked as an engineer at Irtysh, said he was now
considering leaving for the nearest city, Oskemen (also known by its Russian
In the city, you can earn at least some money by doing odd jobs, though people
there arent happy to see newcomers job numbers are declining, and
unemployment is growing, he said.
Meanwhile, the authorities say they are doing their best to breathe life into
the ailing industrial sector.
In late November, the government adopted an anti-crisis programme to tackle the
financial problems facing the country. Around 10 billion US dollars are to be
redirected from a special fund that holds oil export revenues to support the
government budget over the next three years, while about one billion dollars
has been set aside to support small- and medium-sized businesses, in particular.
Speaking in the capital Astana in November, President Nazarbaev urged Kazak
investors to help the government overcome the economic crisis.
The challenges facing the economy and society should be dealt with in an
appropriate way every effort should be made to preserve jobs and peoples
earnings, said Nazarbaev.
However, observers say the presidents appeal merely led to some employers
keeping plants open, yet cutting posts or failing to pay wages. Many
enterprises in the Aktobe region in western Kazakstan, for instance, have cut
staff and working hours.
A worker at the Aktobe Chemicals Plant, AZHS, said around 500 staff there had
been made redundant and some full-time workers were now working fewer hours for
This man, who had worked at the plant for 20 years, said that even in a large
city like Aktobe (also known as Aktubinsk) this could result in serious
Although its a big town, its unlikely that all these 500 laid-off workers
will be able to find work, he said. Young workers get paid peanuts and cant
always find jobs. What about those of us who will turn 50 soon? I think Im
going to work as a self-employed taxi driver.
The head of the AZHS plant, Alexei Khimich, denied that any jobs had been cut
at the plant.
We havent laid anyone off all our workers are at work at the plant, he
said, adding, We are not going to comment further on the situation.
Staff at the Goldy wine plant in Turgen also reported having to take
substantial pay cuts.
Starting in 2009, staff pay was cut by 40 per cent and 200 people were forced
to go on unpaid leave. But what can we do about it? There are no other jobs
here, said a packing worker who had been with the company for ten years.
Marat Nazarov, a journalist from Shymkent, the main town of South Kazakstan
province, told IWPR that employers were closing positions and cutting business
activities without reporting this to the authorities.
Many major enterprises have cut their production levels for instance, the
cotton seed, sunflower oil and flour producer Kaynar May, car component
manufacturer Kardanval, and cement producer Shymkenttsement to mention but a
few, said Nazarov.
As the ranks of the unemployed swell each day, many people are looking for
unskilled jobs in large cities. Yet there, too, businesses are also reporting
According to the Almanews.kz news portal, the future of Almaty Heavy
Engineering Plant, AZTM, is uncertain after shareholders met on January 19 to
discuss possible closure, which would leave more than 1,000 unemployed.
Meanwhile, those who have tried to register as unemployed in order to access
support say they face major hurdles.
When the Zhanybekovs were laid off, they said they tried to register as
unemployed in Almaty so they could claim benefits. However, they eventually
gave up as they decided that the paltry sum on offer did not warrant the
bureaucratic procedures they had to pursue to access it.
To apply for benefits, we had to collect several different documents and spend
a week or two standing in long queues to submit them. The benefit [was just]
6,000 tenge [50 US dollars], so we decided not to waste our time and to work
instead, said Aydar.
Almas Nesipkaliyev, deputy head of Almatys municipal employment and social
programmes department, declined to comment on the arrangements for claiming
Munavara Paltasheva, executive director of the Kazak Business Forum, said that
as many of those who become unemployed failed to register, the true scale of
the problem was masked.
If we had [accurate data], then the authorities would have to face up the
situation and take steps to help the population overcome it, she said.
Experts interviewed by IWPR said the government should to take further action
to protect companies and support people who lose their jobs.
Ivan Voitsekhovsky, an economic analyst with Karavan newspaper thinks the
authorities should launch social protection and anti-crisis measures similar to
those seen in the United States during the Depression of the Thirties.
What the country needs at the moment is redistribution of its resources,
stricter taxation of the rich, an improved social welfare system, and
large-scale investment in infrastructure, said Voitsekhovsky. However, our
government is not taking any of these steps.
Political analyst Oleg Sidorov called on employers to provide retraining
courses for staff who can no longer be employed in their current area of
He expressed concern that if nothing was done to support the hordes of
unemployed, there could be devastating consequences.
Groups of unemployed people may soon congregate and be targeted by various
political parties and for religious, extremist and even criminal groups, said
Sidorov. The question is which of these groups will be the first to approach
them, which of them will attract the most new members, and how they will use
Olga Shevchenko is an IWPR-trained reporter in Almaty. Journalists from various
regions of Kazakstan provided additional reporting.
ARMY TO SOAK UP KAZAKSTAN'S UNEMPLOYED
After years of honing Kazak armed forces, they are now being asked to conscript
young men just to take them off the streets.
By Olga Shevchenko in Almaty
A plan to conscript more soldiers into Kazakstans military looks like a
desperate measure to cope with the rising numbers of unemployed young men,
On January 20, Prime Minister Karim Masimov instructed the defence, interior
and emergency ministries to look into the possibility of increasing
conscription into their respective military and paramilitary forces.
In the current economic downturn, he said, it would be better for them to
serve [in the military] to the benefit of their country, rather than join some
Once the respective ministries have considered the plan, it will be submitted
to Kazakstans Security Council in about two months time and then passed to
President Nursultan Nazarbaev to sign.
If approved, the plan would mark a complete reversal of defence thinking in
Kazakstan. A defence strategy agreed in 2007 set the parameters for shifting
from the old Soviet-style conscript army to a tighter, more flexible force
largely consisting of volunteer professionals.
Kazakstans armed forces, which come under the defence ministry, are believed
to number about 70,000, of which 65 per cent are contract or professional
soldiers. The annual intake of conscripts, who serve one year, is down to
Defence ministry spokesman Serik Shalov was unable to give IWPR figures for the
additional conscript intake proposed by Masimov, pointing out that the
ministries are still working on the issue.
When we get the figures, well address issues of training, equipment, rations
and housing. It will become clearer over the next couple of months, he said.
Another defence source, speaking on condition of anonymity, said, Whatever the
government says, thats the way it will be. Were soldiers. When we get an
order, we say, Yes sir.
Other officials interviewed by IWPR were unable to estimate how long the
initiative would last.
In addition to the armed forces proper, both the interior ministry and the
emergencies ministry, which deals with the aftermath of natural disasters, have
their own paramilitary forces, which are also being asked to consider drafting
Military experts and political analysts have criticised the prime ministers
plan, arguing that it will place extra strain on the armed forces resources.
Dosym Satpaev, director of the Risk Assessment Group, told IWPR that Masimovs
proposal was short-sighted.
The government is now trying to channel surplus unemployed young people into
the army, but it has not considered what impact this would have on the armys
fighting capacity, he said. It may be right as a tactical move, but it hasnt
been fully thought through from a strategic point of view.
Satpaev explained that as a result of the international financial crisis, the
government was going to have to reduce expenditure, including on defence, yet
the forces were going to be asked to absorb more men.
Sergei Pashevich, who heads the Military Brotherhood of Kazakstan, an
organisation uniting veterans of the Soviet Afghan war of the Eighties, said
the army did not have the capacity to accommodate an additional influx of
At the moment there arent enough barracks to house more people. If this basic
problem isnt resolved, we will get disease on a massive scale and other
According to Pashevich, the government spends around three US dollars a day on
maintaining each conscript serviceman barely enough to cover the cost of
Marina Nazarova, whose son is liable for military service, shares these
concerns. What will conditions be like in the units where our kids serve? she
She thinks the government has got it wrong and asks, Is this an instruction to
turn my child into a free source of labour? Why havent they introduced social
Among conscription-age men, the response was mixed some felt it would be no
bad thing to join up during these tough economic times.
Id happily join the army, said Ermek Sepiev who lives in Talgar, a small
town not far from Almaty. There are no jobs in the town at the moment, but
there [in the army] you dont need to think about where to get money for food.
The majority, however, were against the plan, like Oleg Hvylko from Almaty.
I dont have a father so Im the only man in the family. Id rather earn money
for my sister and mother than join up, he said. Were not about to have a
war, and Im not about to become a criminal. Id do better to work than serve
Rising unemployment is a direct consequence of the sudden economic downturn in
Kazakstan, until recently Central Asias economic tiger with huge oil reserves
and progressive market reforms. However, its reliance on oil exports and
exposure to international financial markets have left it staggering over the
last year, and workers are being laid off.
Satpaev believes tackling unemployment among young people needs a more
sophisticated approach than simply taking them off the streets and putting them
in uniform for a while. The authorities, he says, should not just rely on the
army to sweep up excess labour resources like a vacuum cleaner, but look at
those young people who are in need of retraining and proper state support as
they look for work.
>From a military perspective, Pashevich said, A serviceman needs to actually
>do something. I see no need to feed and water a useless soldier just for the
>sake of it.
Olga Shevchenko is an IWPR-trained journalist in Almaty.
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