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Kazakhstan: New Capital Falling Behind Schedule Amid Criticism

By Merkhat Sharipzhanov

Prague, 5 March 1997 (RFE/RL) -- Kazakh President Nursultan Nazarbayev's efforts to move the capital from Almaty to Aqmola are under attack by opposition leaders who say the money should be used instead to pay months' worth of overdue wages to state employees.

Nazarbayev has sought to build the new capital in a crash five-year program. It is officially due to open early next year. But no construction of new ministeries has yet begun in Aqmola, some 800 kilometers. north of Almaty, and all major costs of the move still lie ahead. This has fueled public doubts about whether the capital can be completed on time, and, in fact, whether Kazakhstan can afford to build a new capital at all.

These doubts have grown into overt opposition to Nazarbayev's project as Kazakhstan has been rocked in recent months by labor protests over unpaid wages. This winter thousands of teachers staged strikes to protest government failure to pay tens of millions of dollars worth in back wages, in many cases as much as six months overdue.

The leaders of the country's largest opposition party, Azamat (Citizen), have called on the government to stop budgeting money for Aqmola and pay the teachers instead. So has the opposition Communist Party of Kazakhstan. Both parties have sought to make a political issue of the new capital by saying that its construction should be halted until the country's economic situation improves and until Kazahakstan is able to debate the country's spending priorities.

Nazarbayev has said moving the capital is necessary to tie northern Kazakhstan closer to the rest of the country and because Almaty lies in an earthquake zone. The new capital is intended to draw thousands of Kazakhs, who make up 51 percent of the country's population, into the northern region where towns are currently populated mostly by ethnic Russians and other Russian-speaking minorities.

The opposition to moving the capital is growing -- and is likely to grow further -- because of increasing concern about the cost. No official figures for the cost of the move exist. But the government expects to spend some $15 million this year just to enlarge Aqmola's existing airport to accomodate transcontinental flights. Far larger sums must be spent just to make the capital easily accessible by train from Almaty. The government says it will cost some $185 million to modernize current rail links to reduce travel time between the cities from 14 hours to 4 or 5 hours.

Since announcing the start of the construction in 1993, Nazarbayev has repeatedly said he will find foreign investors to cover the costs. To attract investment, he has declared Aqmola a free trade zone. But while the Japanese government recently said it intended to allocate some $260 million to restructure Aqmola's airport, Tokyo's support is not expected to arrive until sometime late next year, months after the government is already due to be operating from the city.

It now appears clear that building Aqmola is going to take longer than planned and that Kazakhstan is going to have to assume much of the financial burden itself. If it does, analysts say, the capital could easily consume the lion's share of investment monies and other contributions Kazhazkstan annually receives from foreign countries. Input from abroad into the Kazakh economy totalled some $1.5 billion this year.

Nazarbayev appeared to acknowledge his failure to find enough outside investment for Aqmola when he said recently he would appoint special commissions to find new funds and that monies would have to come from the state treasury. Almaty recently ordered Aqmola's city mayor to look in his own local treasury for some $9 million to build the new international airports VIP reception facilities.

But there's doubt whether Kazakhstan itself can afford to complete even a part of the new capital. The economy is currently struggling with high inflation which the government has kept within International Monetary Fund guidelines only with tough measures. Among those measures has been delaying the payment of government salaries, a tactic which, by reducing the spending power of at least the state's own employees, is intended to ease the competition for consumer products which causes inflation. Needless to say, this step was not recommended by the IMF. And it has prompted protests, including the teachers strike, and has created serious risks of sparking social unrest.

Public anger with the wage arrears has increased as a State Commission for Control of Salaries and Pension Arrears recently reported that the government slowdown of wage payments resulted in unintendedly long delays as administrators at the local level invested held-back wages for their own private gain. Some 300 local officials have been ousted in the scandal and 30 criminal cases opened.

Meanwhile, reluctance to embrace Aqmola as the Kazakh capital may be nowhere higher than within the ranks of the government itself. The president ordered the first two ministries to move by last December from Almaty, a mountain city in Kazakhstan's milder southern climes, to the open steppeland city of Aqmola where the winter temperature can drop to minus 40 degrees centigrade. The Ministries of Communications and Transportation and of Agriculture dutifully moved to their new temporary buildings in Aqmola at the last possible moment before the deadline. But after a Potemkin village display of fulfilling their orders, 90 percent of the bureaucrats were back in their old Almaty offices by January. Construction of the two ministries' permanent facilities in Aqmola has yet to begin.

The bureaucrats' quick return may be easy to understand. Last winter, Almaty failed to pay energy bills for electricity supplied by neighboring Russian Siberia, causing periodic energy blackouts in much of the country's north, including in the new capital itself. The energy problems forced a major Turkish builder, FILTRACO, which is planning the city's restructuring, to drop everything and concentrate instead on building a domestic power station to guarantee Aqmola's energy supply.

President Nazarbayev continues to say that he personally will not be deterred from his plans to celebrate the 1998 new year in his new Aqmola office. His residence is now the first building due to be constructed.