Zhanaozen - Learning and Improving

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The Government of Kazakhstan has been relentlessly determined to fully investigate not only the immediate events that led to the outbreak of violence -- including the response of the authorities – but also the troubling underlying issues that contributed to the unrest.

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Zhanaozen - Learning and Improving

  1. 1. Zhanaozen: Learning and Improving"Events in the Mangistau region have become a serious trial for Kazakhstan."President NursultanNazarbayev, December 2011Learning the Lessons of ZhanaozenOn 16 December 2011, a long-running labor dispute in Zhanaozen, in the Mangistau region of WesternKazakhstan, turned violent. As a result of the unrest, 16 people died and 64 were injured, including 17law enforcement officials. A second incident in the town of Shetpe resulted in one death.Since that tragic day, the Government of Kazakhstan has been relentlessly determined to fullyinvestigate not only the immediate events that led to the outbreak of violence -- including the responseof the authorities – but also the troubling underlying issues that contributed to the unrest.There are important lessons for the Government at all levels that once adopted can, and will, contributeto more effective policy-making and governance. Over the last year, we have worked to improve laborand employment conditions in Zhanaozen and introduced new legislation aimed at addressing the widerproblems highlighted by the tragedy to ensure that events like this don’t happen again.Improving Zhanaozen’s economyAfter months of unemployment and protests, the primary challenge for authorities was to revitalize theeconomy in Zhanaozen and to provide new jobs and adequate salaries for the laid-off oil workers. TheGovernment, in conjunction with local employers, implemented a range of measures to provideresidents with new employment and training opportunities:• A comprehensive plan for the development of Zhanaozen through to 2020 was adopted tostabilize and improve the immediate socio-economic situation in the town, creating new industries andjobs, and developing the wider region’s economy for the longer term.• Special employment centers were opened in Zhanaozen and Aktau to assist applicants in findingnew jobs in the local area and further afield. Each resident of Zhanaozen has been offered theopportunity to find alternative employment at enterprises, with all expenses related to their relocationand housing reimbursed.• Two oil service companies were established, creating over 2,000 immediate jobs in the localarea for laid-off oil workers with their salaries unchanged. By March of 2012, all 1,986 of the dismissedoil workers were re-employed at newly established enterprises.• A special two-year development plan for entrepreneurship in Zhanaozen was designed todiversify the local economy and provide new, more secure jobs to the self-employed. This included theopening of a business development center and practical financial support for local enterprises throughspecial commercial loan conditions for existing businesses and start-ups.
  2. 2. • Businesses that had previously taken loans with interest rates above 10 percent are now able toapply for refinancing. Individuals and businesses affected by the violence have been offered preferentiallending directly from the National Welfare Fund, Samruk-Kazyna, at a 0.1 percent interest rate to rebuildand grow.• In total, 50 projects amounting to KZT 1.1 billion ($7.4m) were approved in Zhanaozen under theSpecial Plan for Entrepreneurship Development. Over $10 million was allocated for the implementationof the Employment 2020 Program in the region in 2012.• As a result of the renewed investment and initiatives, over 6,000 new jobs have been created inZhanaozen over the last year, bringing current unemployment down to a significantly low 5.6%.Improving social infrastructure and conditionsTo support the comprehensive economic measures being implemented in Zhanaozen, the Governmenthas embarked on a wide-ranging program to develop the town’s social infrastructure and livingconditions:• This year, new housing, medical clinics, a maternity hospital and kindergartens have beenopened in Zhanaozen and the nearby villages of Kyzylsay and Tenge. In total, 26 facilities will beconstructed between in the next two years.• Local authorities have expanded dialogue with civil society groups and the local community. Aresource center has been built in Zhanaozen, housing 20 NGOs and a center for youth policy whichprovides advice and assistance to the local young population.• Local authorities have spent KZT 127m ($850,000) on the construction of 20 greenhouses inZhanaozen, providing fresh produce year round at low prices, reducing basic living costs, particularly inthe off season.Understanding and addressing broader policy implicationsIn the aftermath of Zhanaozen, the Government looked seriously at the areas that may have contributedto the conditions for unrest, and worked to improve the mechanisms for identifying and preventingpotential crises before they escalate.Single industry settlements and governance• Zhanaozen, like many other settlements in Kazakhstan, was dependent on a single industry foremployment, leaving the economic and social structure of the town highly vulnerable and dependant onthe fortunes of one sector. This highlights a wider issue that must be resolved, particularly in difficulteconomic times.• In May of 2012, the Government adopted a comprehensive program for development of singleindustry towns in the next decade, focusing on diversifying the economy, supporting small and medium
  3. 3. enterprises, and increasing the participation of citizens in the decision making process. A total of KZT 20billion ($134m) was allocated to the program in the past year alone.• The special development program funding complements the KZT 135 billion ($900m) of projectsplanned in single industry towns under existing development programs in 2013-2015.• At present, a total of 114 projects worth KZT 1.25 trillion ($8.6 billion) are being implemented in20 single-industry towns nationwide through the ‘Map of Industrialization’ and the “Business Road Map– 2020” programs.Resolving employment disputes and identifying problems• The failure of company management and the local authorities to resolve the dispute withstriking workers set the context for the outbreak of violence. As a result, the Government has focusedon developing and improving mechanisms for resolving employment disputes at local and national levelbefore they deteriorate.• Amendments to the Labor Code were passed on 6 January 2012. Taking into account therecommendations of the International LabourOrganisation, these changes strengthened and codifiedthe rights of shift workers, established complaint mechanisms, and clarified the responsibilities of allparties in any dispute.• In November, Labor Minister SerikAbdenov announced plans to introduce uniform standards forlabor conditions and monitoring systems to improve working conditions across the country and presentdispute solutions earlier.• In conjunction with the Ministry of Labor and Social Protection, SamrukKazyna has launched anew assessment mechanism combining 40 indicators of employee sentiment. This will allowSamrukKazyna to identify potential problems and address issues before they escalate.The tragic events of a year ago were totally avoidable and President Nazarbayev identifying this firstyear since them as a “serious trial” for our young nation could not be more true. As Kazakhstan’seconomy continues to grow and diversify, the Government will continue to apply the costly lessonslearned in Mangistau to ensure that the tragedy of Zhanaozen is never repeated.Kazakhstan has also moved quickly to tackle the underlying economic, social and human rights issuesexposed by the shocking unrest in Zhanaozen a year ago. Over the last year, Kazakhstan has worked toimprove labor and employment conditions in Zhanaozen and introduced new legislation aimed ataddressing the wider problems highlighted by the tragedy to ensure that events like this don’t happenagain.

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