US embassy cable - 05ALMATY2380

C O N F I D E N T I A L  ALMATY 002380 
 
SIPDIS 
 
 
DEPARTMENT FOR EUR/CACEN JMUDGE, MRUBIN, DRL/PHD (P. DAVIS, C. 
KUCHTA-HELBLING) 
TREASURY FOR CENTRAL ASIA DESK OFFICER MGAERTNER 
COMMERCE FOR CENTRAL ASIA DESK OFFICER DSTARKS 
 
 
E.O. 12958: DECL 06/24/2015 
TAGS: PGOV, KZ, POLITICAL 
SUBJECT: KAZAKHSTAN: TROUBLE LOOMING FOR PRIME MINISTER AKHMETOV? 
 
 
CLASSIFIED BY MARK ASQUINO, DCM REASON 1.5 (D) 
 
1. (SBU) Summary/Background.  Prime-Minister Daniyal Akhmetov's 
government may face a motion for its dismissal at a special joint 
session of Parliament June 27.  The special session was proposed after 
contentious June 13 session during which the Senate received a bleak 
report from the Finance Ministry on the inadequate execution of the 200 
republican budget. 
 
2. (SBU) Rumors of Akhmetov's imminent dismissal have been a staple of 
Astana political discussion since his June 2003 appointment.  However, 
the current contretemps bears close watching for several reasons: it 
originated in the Parliament; it coincides with recent exposures of 
high-level misdeeds, and because it has potential for changing the 
political landscape ahead of presidential elections scheduled for 
December 2006 but widely rumored as likely at the end of 2005.  End 
Summary/Background. 
 
Government on the Ropes 
----------------------- 
 
3. (SBU) At the June 13 Senate session, Senators learned that the 
government had failed to spend nearly 49 billion tenge ($365.7 million) 
of 2004 appropriated funds.  Senator Sagyndyk Yesimkhanov, speaking to 
Channel 31, charged that this type of mismanagement is chronic and that 
the national government's incompetence deprives local governments of 
needed resources.  He called for a special session of Parliament at 
which he would attempt a motion to dismiss the Government.  While media 
reports only attribute the call for dismissal to Yesimkhanov, a non- 
aligned senator from Pavlodar oblast, Otan party Senators Kuanysh 
Sultanov and Orynbai Rakhmanberdiyev also criticized the government 
harshly in the press.  Yesimkhanov's request for the special meeting ha 
been granted for June 27, only three days from the scheduled end of the 
current parliamentary session on June 30.  The Mazhilis (lower house of 
Parliament) will consider the report of the Finance Ministry June 22. 
 
4. (SBU) Yesimkhanov's call for the Government's dismissal is the 
latest in a string of recent embarrassments to Akhmetov's ministries. 
 Currently, Minister of Healthcare Yerbolat Dosayev is under 
investigation for allegedly embezzling up to $12 million in state funds 
allotted under a government contract to a company he co-owned.  A deput 
minister and a committee chairman in the Ministry of Transport and 
Communications were recently dismissed for corruption.  Public 
presidential reprimands have also been issued to the First Deputy 
Minister and to the Chairman of the Geology and Subsurface Use Committe 
in the Ministry of Energy and Mineral Resources. 
 
What Can Happen 
--------------- 
 
5. (SBU) The Kazakhstani Constitution specifies that a vote of no 
confidence can be taken on the initiative of one-fifth of the deputies 
of both Chambers of Parliament and requires a two-thirds majority of th 
Chambers to pass. If the President concurs (he has ten days to consider 
the vote), or upon the Prime Minister's resignation, the entire 
Government must resign.  Since the Prime Minister's nomination needs 
parliamentary approval, a special session would have to be called in th 
event that a new Prime Minister was appointed after June 30, the last 
day of the Parliament's session.  A second session would have to be 
called a month after this appointment so the new Prime Minister could 
present the Government's program to the Parliament in accordance with 
the Constitution. 
 
Comment 
------- 
 
6. (C) While Akhmetov has been a perennial favorite target of 
government critics, this latest round of Akhmetov-bashing bears close 
watching in the context of wide speculation that presidential elections 
may be called later this year. Replacement of Akhmetov would afford the 
President the opportunity to assign blame for rising inflation and slow 
implementation of programs on the Prime Minister and the departing 
government.  Akhmetov's removal would also weaken some of the 
opposition's most persuasive political points, and would 
likely be met with favor by pro-presidential, technocratic elites. 
Likewise, clearing the slate of ministers would give the President an 
opportunity to correct any imbalances of elite interests he perceives o 
to co-opt selected political opponents with appointments (Astana source 
suggest that True Ak Zhol's Alikhan Baimenov is a likely candidate. 
 
Baimenov told the Ambassador on June 23rd that President Nazarbayev has 
asked to meet with him and that this will likely take place within the 
next ten days.We think it highly unlikely that Baimenov would accept an 
offer to enter the government).  Such a move would echo Nazarbayev's 
July 2004 appointment of Altynbek Sarsenbaiuly as Information 
Minister at the height of the Mazhilis election campaign. 
 
7. (C) Despite Akhmetov's long list of political and personal enemies, 
he has managed to cling to his position.   However, the totality of 
current circumstances, including the President's reprimands of official 
and lack of public support for the premier of late, indicates that this 
resignation rumor may have more substance than the others. Asia Society 
Chairman Richard Holbrooke, for instance, was told privately by senior 
GOK officials that Kerim Masimov is a leading candidate to replace 
Akhmetov. Masimov is currently the president's economic adviser. While 
Government shake up would not necessarily bring about changes in 
Kazakhstani policy in any core areas of U.S. interest, a new Prime 
Minister or shuffling of ministers would likely slow ongoing 
areas of engagement or establishing any new initiatives during the 
transition period. 
 
8. (U) Minimize for Dushanbe considered. 
 
Ordway 
 
 
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