* Outgoing PM Masimov moves closer to power as chief of
* First deputy PM Serik Akhmetov appointed premier
* President seeks to restore balance in ruling elite -
By Robin Paxton and Dmitry Solovyov
ALMATY, Sept 24 Kazakh President Nursultan
Nazarbayev on Monday replaced his chief of staff with his
long-serving prime minister, a compliant ally, to reaffirm his
grip on the oil-producing former Soviet republic and dispel any
talk of succession.
Nazarbayev, 72, ended months of speculation by removing
Karim Masimov as premier of Central Asia's largest economy and
bringing him closer to the workings of power just as confidence
in his reforms had begun to wane.
The reshuffle, which saw outgoing chief of staff Aslan Musin
given control of the state budget, was a move characteristic of
Nazarbayev to keep the political elite guessing and stop any one
group from accumulating too much power, analysts said.
"It's part of the cyclical nature of Kazakh politics," said
Kate Mallinson, analyst at political risk consultants GPW. "He
is reminding everyone that no one is eternal, and that he is the
Kazakhstan is the world's largest uranium miner and holds 3
percent of its recoverable oil reserves. Foreign investors have
poured more than $150 billion into the country during its two
decades of independence from the old Soviet Union.
Nazarbayev dominates political life and tolerates little
dissent in his nation of 17 million people. A member of the last
Soviet Politburo, he has ruled a country four times the size of
Texas since before its independence in 1991.
The lack of an obvious successor is the main political risk
in Kazakhstan. Political analyst Aidos Sarym said the reshuffle,
which saw Masimov's deputy take over as premier, was a sign from
the president that he had no intention of anointing a successor.
"The appointment of Karim Masimov or Serik Akhmetov serves
only one goal: to balance the system of clan and group
connections and allow the president to feel comfortable," he
Akhmetov, who was first deputy prime minister to Masimov in
the previous government, was promoted to the premiership. The
54-year-old former head of the industrial Karaganda region began
his working life - like Nazarbayev - in the Temirtau steel mill.
Trained in metallurgical engineering, Akhmetov received a
postgraduate degree in Moscow before returning to run the steel
mill's marketing division before its acquisition in the
mid-1990s by ArcelorMittal's .
Masimov, fluent in several languages including Mandarin, was
largely popular with foreign investors and is credited with
shepherding Kazakhstan's economy, worth $185 billion at the end
of 2011, through the worst of the global financial crisis.
But critics say reforms to diversify Kazakhstan's
resource-dependent economy have stalled. The government also
drew scorn from creditors by allowing BTA, the
country's third-biggest bank, to pursue a second debt
restructuring since 2010.
Though high oil prices have shielded the economy from global
financial woes in 2012, year-on-year growth in industrial
production slowed to less than 1 percent in the first eight
months of the year from 4.6 percent in the same period of 2011.
Nazarbayev said Masimov had first tendered his resignation
last year. Novosti-Kazakhstan news agency quoted the president
as saying he had refused to accept the resignation at the time
and even now had "not let him go far".
"To be close to Nazarbayev is to wield power," said Sarym.
"You could be his cleaner, or trim his lawns, and that's
power. When you're beside him all the time, formulating his
decisions, planning his agenda and public speeches, such power
is incomparably greater than that of the prime minister."
Masimov's predecessor, Aslan Musin, also grew more powerful
during his four-year tenure as chief of staff. The 58-year-old
former economy minister will now control state purse strings as
head of the budgetary Accounts Committee.
Musin served briefly as Masimov's deputy in 2007, and some
analysts said Nazarbayev would be wary of any consolidation of
power between the two.
"In the near term, President Nazarbayev will be focused on
rebuilding a loyal political bloc," Citi analysts wrote in a
Masimov's own political stature has grown as he distanced
himself from Timur Kulibayev, the president's billionaire
son-in-law, who was seen as a potential successor before his
removal in December from the top job at the sovereign wealth
The fund is the ultimate owner of the oil companies where a
long-running protest by thousands of sacked oil workers erupted
into deadly clashes with police on Dec. 16-17, the biggest
challenge to date to Nazarbayev's authority.
"If he (Masimov) had earlier been associated with Timur
Kulibayev's group, he has developed into his own person in the
last few years," said political analyst Andrei Chebotaryov.