Kazakh leader appoints PM as chief of staff

ALMATY (Reuters) - Kazakhstan’s powerful president, Nursultan Nazarbayev, appointed his long-serving prime minister as chief of staff on Monday in a move to balance the rival groups vying for influence in the oil-producing former Soviet state.

Kazakhstan's Prime Minister Karim Masimov (L) inspects an honour guard during an official welcoming ceremony in the Great Hall of the People in Beijing March 31, 2012. REUTERS/David Gray

Karim Masimov, 47, was selected by Nazarbayev to run his presidential office after serving nearly six years as premier of Central Asia’s largest economy, a period of sustained economic growth and billions of dollars in foreign investment.

The Nazarbayev loyalist replaces Aslan Musin, who was appointed head of the budgetary accounts committee.

Nazarbayev held closed-door talks with members of parliament about replacing Masimov. Two sources close to the government told Reuters that Serik Akhmetov, first deputy prime minister, was likely to be promoted to the premiership later on Monday.

Kazakhstan holds 3 percent of the world’s recoverable oil reserves and has attracted more than $150 billion in foreign investment in two decades of independence from the Soviet Union.

Nazarbayev, 72, dominates political life and tolerates little dissent in a country of 17 million people stretching from the Caspian Sea to China. A member of the last Soviet Politburo, he has ruled Kazakhstan since before independence in 1991.

Without an obvious successor, the veteran leader periodically reassigns important jobs in the state apparatus to guard against any one group obtaining too much power. Analysts said both Masimov and Musin had grown in influence in the last year.

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“Imbalances have appeared within the ruling elite,” said Andrei Chebotaryov, an independent political analyst in Almaty.

He said Masimov had established himself as a political force in his own right after distancing himself from Timur Kulibayev, the president’s billionaire son-in-law, who was removed from the top job at the sovereign wealth fund in December.

As head of the Samruk-Kazyna fund, Kulibayev was ultimately responsible for the oil companies where a long-running protest by thousands of sacked oil workers erupted into deadly clashes with police on December 16-17.

“If he (Masimov) had earlier been associated with Timur Kulibayev’s group, he has developed into his own person in the last few years and created his own influential group,” Chebotaryov said.

Masimov was appointed prime minister in January 2007 and is credited with having maintained economic growth through the worst of the global financial crisis, which struck Kazakhstan later the same year.

He was reappointed immediately after a parliamentary election in January. In an interview with Reuters at the time, he identified macroeconomic stability as his priority. Kazakhstan expects its economy to grow by 5.8 percent this year.

He also encouraged reforms to civil society and the justice system in the wake of the clashes in the oil region.

Akhmetov, identified by two sources as the leading candidate to replace Masimov, is a qualified metallurgical engineer who - like Nazarbayev - began his career at the steel plant in the city of Temirtau now owned by ArcelorMittal.

Prior to his appointment as first deputy prime minister in the January cabinet reshuffle, 54-year-old Akhmetov had been governor of the industrial region of Karaganda.

Additional reporting by Dmitry Solovyov in Almaty and Raushan Nurshayeva in Astana; Editing by Angus MacSwan