JPMorgan - KASE

Under the Constitution, the President also enjoys significant powers of appointment, including
the power to appoint the Prime Minister subject to the approval of the Parliament, but the
President may dismiss the Prime Minister and members of the Government without
Parliamentary approval. In addition, the President has the power to appoint and remove the
Governor of Kazakhstan’s central bank, the NBK, whose appointment is subject to the approval
of Parliament.
The Constitution provides that the President is elected to office by popular vote for a term of
seven years. The Constitution also provides for early termination of the President’s term of office
in the event of death, resignation or impeachment. New presidential elections must be held
within two months of any such early termination.
The then First Secretary of the Communist Party of Kazakhstan, Nazarbayev, became President of
Kazakhstan with the formation of the newly independent State in December 1991 and has held
the position of head of the executive branch of the State since that time. His presidency has been
confirmed in referenda in December 1991 and April 1995. President Nazarbayev was re-elected in
elections held in January 1999 and his current term of office expires in 2006.
President Nazarbayev has had and continues to have a dominant influence on economic and
political life in the country. In December 1993, Kazakhstan’s Parliament voted to dissolve itself
prior to the end of its term and to give the President the power to adopt laws. In March 1995,
Parliament was again dissolved following a ruling of the former Constitutional Court declaring
the 1995 Parliamentary elections invalid due to election law violations. Thus, from December
1993 until April 1994, and from March 1995 through January 1996, legislative functions were
vested solely in the President. During these periods, the President brought into effect over 100
ordinances and decrees which represent the legislative framework for much of the economic and
structural reforms currently being pursued by the Government.
The Government comprises the Prime Minister, as its executive head, and deputy prime ministers
and ministers as members of the cabinet. The Government is formed by the President, based on
recommendations of the Prime Minister, for a term of five years, and is automatically dissolved
after each presidential election, to allow for the formation of a new administration by the
President. Neither the Prime Minister nor the members of the cabinet are members of
Parliament. The Government is responsible for implementing laws, decrees and international
agreements, preparing and implementing the budget, establishing fiscal policy, carrying out
social policy and defending the rights and freedoms of citizens.
In January 1999, the President re-organized the Government following his re-election. Nurlan U.
Balgimbayev, formerly President of Kazakhoil, was re-appointed Prime Minister having held that
position since 1997. In October 1999, Mr. Balgimbayev resigned as Prime Minister, returning to
Kazakhoil as its president. He was succeeded by Kasymzhomart Tokayev, the former Foreign
Minister of Kazakhstan and Mazhit Esenbayev, a governor of one of Kazakhstan’s regions,
became Minister of Finance.
On 28 January 2002, Mr. Tokayev resigned as Prime Minister and was replaced by Imangali
Tasmagambetov, who was appointed by the President and confirmed by Parliament. The
previous major restructuring of the Kazakhstan Government occurred in December 2000.
Presidential Decree No. 931, dated 28 August 2002, called for the reorganization of state
administration in the Republic. The former Ministry of Economy and Commerce was split into the
Ministry of Economy and Budget Planning and the Ministry of Industry and Commerce, the latter
assuming responsibility, inter alia, for development of industry, construction and trade. The
Ministry of Industry and Commerce also assumed responsibility in the state support of direct
investment and small business. The former Ministry of Finance was split into the Ministry of
Finance and the Agency for State Procurement. The budgetary planning responsibility of both
ministries were transferred to the Ministry of Economy and Budget Planning. The former Ministry
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