Fuel to the flames: uprising in Kazakhstan

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Hello and welcome to the Intelligence from the Economist. I'm your host Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. House prices have been going through the roof. Many people want roomier homes and have socked away the cash to buy them. But there's reason to believe that prices won't come down when the stimulus programs and supply chain problems end. And as a child, April Ashley prayed to wake up. As a girl years later, she answered her own prayers with surgery. She danced with Elvis. She adored champagne. Then a tabloid splash ended the glamour. Our obituary's editor remembers Britain's first transgender activist. But first. This week, civil unrest has gripped Kazakhstan. What began on Sunday as limited protests against fuel prices escalated and fast. As the week wore on, the demonstrations grew more widespread and more violent, with attacks on government buildings and infrastructure. Dozens of people have been killed and thousands detained. Protesters called for the entire political system to go. By Wednesday, Kazakhstan's president, Kassim Jomar Tokayev, had sacked his cabinet and the prime minister, and he called for backup. Yesterday, forces led by Russian troops arrived to help quell the violence. Overnight, President Tokayev claimed that order had been restored. He's due to address the nation later today. But with a media blackout, it's hard to know just how ordered things are and whether this is the end of or just a pause in an uprising.

This all began when the price of fuel rocketed in Kazakhstan, and particularly in one particular region, after the government ended subsidies on a particular type of gas that is used by many people in Kazakhstan to run their cars. And that's what sparked the protests.

Joanna Lillis writes about Central Asia for the Economist and is based in Almaty in Kazakhstan.

The protesters moved very quickly in very many places, many cities and towns where they had gathered, from protesting over this one particular issue to expanding their grievances and expressing those grievances over many socioeconomic issues such as poverty and joblessness and inflation. And from that, they moved also very quickly into voicing political slogans and political demands.

Why do you think all those grievances have come to the fore so quickly?

What we're seeing here is resentments that I've heard people expressing in Kazakhstan for many, many years now, more than a decade, certainly over the way that they live and the way that their leaders live, over the disparity between those ways of life. People feel that Kazakhstan is an oil rich country and they feel that they don't benefit enough from that. They feel that their leaders, many of their leaders, are corrupt and steal the proceeds. They feel that money is splashed on vanity projects, and they feel that their leaders don't understand their problems and don't try to solve their problems. And all of this we've heard at the protests, certainly in the early days of the protests, before these protests degenerated into violence. And we've heard people saying that they want political change, they want accountable leaders, because in Kazakhstan they don't feel they get a fair say and free choice in elections because there is no political opposition.

But what would that political change look like? What are the protesters asking for here?

Well, the protesters have been demanding that basically the entire political establishment should go. They have a slogan that's been chanted in Kazakhstan for many years, and it sounds like this shalkiet, and that means old man out, and it refers to the first president of Kazakhstan, the octogenarian Nur Sultan Nazarbayev, who now occupies an elder step statesman type role. And it means he kind of rules in tandem with his handpicked successor, that's Kassim Zomot Tokayev. And people shout that slogan meaning that he should get out of politics after they've lived under his thumb for 30 years now. But this slogan has really taken on a broader meaning for the protesters and for people generally in Kazakhstan who are demanding that the political class that really has ruled them for these three decades of independence, which they see as all tarred with the same brush that they should go. So they the protests have really taken on an enormous political angle, and this is obviously what spooked the regime.

And how has the government reacted as all this has played out?

Well, it started with a carrot by making concessions to the protesters. I mean, one thing it did quite quickly was to backtrack on the end of subsidies for this particular fuel so that effectively the initial demand was met. However, by this point, the protests had snowballed. The Demands had snowballed and this didn't satisfy the protesters. The President also fired the entire government, but this was not enough for the protesters. So at some point the government decided to react in a much more heavy handed fashion and also accused the protesters of being terrorists and reacting with what the President has called an anti terrorist operation. And the President has also invited foreign troops to come and help quell the disturbances, which is certainly a first for Kazakhstan and quite rare in the entire post Soviet region.

And where do these foreign troops come from?

So troops from an organization called the Collective Security Treaty Organization, which is very much a Russia led body and is sort of touted as the post Soviet region's answer to NATO have arrived in Kazakhstan. And so those troops are now involved in quelling the protests and helping to restore order, which is obviously a very dramatic development for an independent country to invite foreign troops in still more so from its former colonial power, because Kazakhstan was part of the Soviet Union and the Russian empire. So this is a real sign of how seriously President Tokayev is taking this.

And I suppose it's all the more significant because at the same time Russia has this massing of troops on the Ukraine border and squabbling with NATO and America. What's your view on how this move into Kazakhstan affects all of that?

Well, there are two ways of looking at this when we're talking about Russia's role now that it has troops on the ground in Kazakhstan. One is that this looks like a debacle for Russia. It's got now got unrest on its eastern flank while it's saber rattling, if you like, on its western flank in Ukraine. But it could also be seen, of course, as in some measure a victory for Russia because Kazakhstan has had to turn to to Russia for help and basically invited Russian troops into the country. So this could be seen by Vladimir Putin as a chance to show his strength and as a chance to show how Russia is needed by its former colonies and how it's still required. When the going gets tough, our neighbours turn to Russia and not to someone else. So this is one way of looking at it. We're also seeing some speculation in the Russian media that all of this is a sort of attempt to foment trouble for Russia by stoking unrest in Kazakhstan, stoking a color revolution by pro Western forces in order to create trouble for Russia as it tries to negotiate security guarantees with NATO at a particularly tense juncture. And that's what's been bandied about in the Russian media.

But what we've seen in other former Soviet republics. What we saw for months in Belarus last year is that the people can rise up like this. You don't need to invoke shadowy foreign actors.

I think that what is happening in Kazakhstan has been witnessed elsewhere in the former Soviet Union. It's been 30 years since the Soviet Union collapsed. That anniversary was celebrated last year. And I think in some countries, such as Kazakhstan and Belarus and other countries too, there is a perception that not enough has changed after 30 years. Indeed, very little has changed in terms of the political. So there are pent up resentments that have boiled over into anger, rage and protests on the street. And now in Kazakhstan into violence.

Joanna, thank you very much for joining us.

Thank you, Jason.

For more analysis like this from our international network of correspondence, take out a subscription to the Economist. Get a great introductory deal@Equality.com IntelligenceOffer the link is in the show Notes.

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But they're not the only ones who are hustling. Housing prices are booming all over the world, leading to bidding wars for buyers and bigger commissions for agents. And this, the house party could be going for some time.

So across the world, house prices basically are going nuts.

Callum Williams is a senior economics writer for the Economist.

In the third quarter of last year, the rate of increase of global house prices was the highest that it's basically ever been. Real global house prices, that is adjusted for inflation, are now far, far higher than they were just before the financial crisis in 2008. So something very strange is happening to global housing markets.

That's the sort of global aggregate, though that must mean that some places are going more nuts than others.

Absolutely. So one particular standout example is Halifax, which is a city in Nova Scotia. And in eastern Canada, their prices have gone up by about 50% since 2019. Seoul in South Korea is another example. Lots of Turkish cities are seeing enormous rises in house prices, but it is basically a pretty global phenomenon with only a few exceptions.

So what is it that's driving this?

Okay, so there's a number of things that happened during the pandemic. Now just cast your mind back to early 2020 most economists and housing market people thought that house prices were going to collapse or at least fall mildly when the pandemic struck. That's what normally happens in recessions, and there was a very large global recession last year. A number of factors made sure that house prices actually continue to go up. One was that people kind of had less stuff to spend on. Restaurants were closed, foreign holidays weren't possible. Often retail was even closed, which meant that they were able to accumulate large savings, which many people have put towards housing. And the other kind of big thing that was going on back then was to do with interest rates, which across the world were cut pretty sharply, thus reducing the cost of borrowing. I guess the other thing that was kind of very important, particularly in 2020, was that housing supply was really cut back. So in some countries, such as the uk, often consum, construction sites were actually forced to close by the government. And so you didn't get that sort of matching increase in housing supply that would have helped to keep prices in check.

Well, another thing that was talked about a lot was that since people were working at home, they were going to want different kinds of homes, bigger homes, home offices, more communal space.

Yeah, that's totally right. Some people have called this the race for space. And there has been some research from the bank of England on UK house prices, which suggests that that is accounting for about half of the total rise in British house prices over the past year or so.

Well, what about the supply side, though? If people want bigger, different houses, people are sitting on cash piles. In a lot of cases, doesn't that make for more house building?

So according to the textbooks, yes, it does. The problem is in almost all countries that housing supply is what economists would call inelastic. So in other words, when there's more demand for houses, unlike say, more demand for spaghetti or toilet roll, perhaps, to use a pandemic example, in those markets, what happens is that supply responds and you get much more pasta and much more toilet roll. It's different with houses for various reasons. So even before the pandemic, the rich world was building roughly half as many houses per year as it was in the 1960s and 1970s. Once you account for population growth, and then this was turbocharged during the pandemic, a lot of countries saw very, very sharp fall falls in housing construction, particularly in the second and third quarter of 2020. So in the UK for instance, they fell by half. And even in the places where zoning regulations are very lax and it's very easy to get housing projects off the ground, such as Texas and Florida to a lesser extent. The kind of wall of demand from people was just so high that the building firms just couldn't keep up. There are only so many carpenters, only so many electricians in Houston at any one time. But then of course, what you had, particularly from the end of 2020-2021, was quite binding supply constraints. So the price of lumber went up massively. It has now come back down. But at one point it was very, very high. Various other electrical components and so on were very hard to source. Shipping costs from China went through the roof. So you had all of these sort of supply chain crunches happening at exactly the same time as you had this huge increase in demand.

So where does that leave things for a would be global homebuyer today?

The conversation now is because inflation is high in lots of countries, central banks are raising interest rates. Now, it has been the case in the past that central banks raising interest rates has caused house prices to fall or even to crash because the cost of servicing mortgages goes up. I think there's kind of two reasons to expect that won't be the case this time. One is that I don't think that cheaper borrowing costs were a huge driver of house price increases to begin with. And so I think slightly higher interest rates won't make much of a difference in the other direction. The other reason is that in many countries, people have locked in very cheap borrowing costs for many years, 10 years or more, by getting fixed rate mortgages. Fixed rate mortgages are way more popular now than they were, say, a decade ago. So the kind of sensitivity of households to increases in interest rates is much lower than it used to be.

So anybody who's been watching house prices rise during this time and thinking that it's down to temporary factors, ought to get used to the rises, I guess.

Yeah, I think the preference shift towards larger houses is probably to an extent here to stay. People will want to work from home permanently at least some of the week from now on, so they will permanently need a bigger house. And I think the other thing is that there's really no suggestion that there's going to be this roaring back of new house building anytime soon. If anything, the opposite is taking place. So you're not going to get this enormous expansion of housing supply that would also help to bring house prices down. So, yes, I do think that more expensive house prices are here to stay.

Callum, thanks very much for joining us.

Thanks, Jason.

In May 1960, a rather bizarre figure walked into lobby of a hotel in Casablanca.

Anne Rowe is the Economist's obituaries editor.

The concierge on the desk was astonished when a little bit later, after arriving, he. He suddenly appeared in a ravishing, shimmering Givenchy dress. This was the figure who later became April Ashley and was the most celebrated transgender activist, in fact, the first person in Britain to have a male to female transition. Because she had felt, from as soon as she could think, that she was a girl rather than a boy. She had been born a boy, of course, and was very unhappy all the time and had all sorts of medical conditions which drove her parents mad. Her mother, she said, always detested her. At school she was mocked. And when she joined the Merchant Navy at the age of 15, trying to be a seaman like her father and trying to be a man, she was raped and set upon by people who couldn't believe that she was really a boy. And life was made so intolerable that she tried to commit suicide three times. She took herself to Paris, where she became a dancer in a drag club called Le Carrousel. And she was hugely popular there and attracted the attention, among others, of Elvis Presley, who couldn't stop, stopped dancing with her. And at the same time, surreptitiously, she was taking black market estrogen, which was gradually rounding out her body and allowing her breasts to grow, which made her feel all the more that her body was a woman's and she was not even a woman trapped in a man's body. She was a woman in a woman's body. And that the only way she could find fulfillment and commitment, completion was to have the operation in Casablanca that was then almost the only place where you could go to obtain one. The operation cost thousands of pounds, but the doctor warned her that it was a 50, 50 chance of survival. She didn't care, because she decided by then that if it failed, she didn't want to go on living anyway. When I was in the clinic, and in fact I was desperately ill and I thought I might die, I would prefer to have died than not to have the operation. When she'd gone under with the anesthetic, the last thing the doctor said to her was, au revoir, monsieur. And then when she woke up, the first words she heard were, bonjour, mademoiselle. But triumphant as she felt when she woke from the operation, she still had a male name on her birth certificate, and it was to take more than 30 years before that was removed. And her life from then on was partly being a great celebrity around the clubs of London mostly, but also campaigning to get the right for trans people to correct their legal documents so that they were now the people they had always felt they had been. She had managed to get a fairly good career as a model. She was very beautiful and she was photographed by David Bailey and Lord Litchfield and she starred on the pages of Vogue. But unfortunately, there was this secret. It only took one outing of her by a friend in the Sunday People to bring everything she had worked for crashing down. And the friend she had supposed was a friend betrayed her for £5. Once the media had got a hold of her story, there was nothing else to be done in her career. The outing in the Sunday People was bad enough, but the hardest part of her life came in 1970. She had married seven years before, an English cross dressing aristocrat. Marriage was a disaster and she left it after about a fortnight. But the divorce came up and went to the court. And in 1970 the judge gave his ruling that the marriage was null and void, because April was a person of the male sex. And if you were born male, you were male in perpetuity. And this completely devastated her. She found in the end that she had to take refuge in drugs and drink. She went bankrupt, but she continued to try to help other transgender people who needed as much help as she had, who were finding it equally difficult. People started writing to her and she answered their letters. She said she probably wrote thousands. She became a general sexual agony aunt, if you like, but especially a helper and a campaigner for trans people. Her life seemed very difficult to most people, but in fact she considered that it was a wonderful life and was always saying so, that despite the pain of it, she'd had a wonderful time. And her whole existence seemed sparkling, just like the champagne that she loved to drink all the time. She seldom appeared without it because it was her way of toasting herself and toasting the triumphs that she had managed to have, of which the greatest was probably the passing in 2005 of the gender Recognition act, which she had drawn most attention to, and which meant that now on her birth certificate, she had the name April Ashley.

Ann Ro on April Ashley, who's died aged 86. That's all for this episode of the Intelligence. The show's editors this week are Marguerite Howell, Kim Gittleson and Chris Impey. And our sound engineer is Will Rowe. Our senior producers are Stevie Hertz, Sam Clark Colbert, Sam Westren and Jack Gill. Our producers are William Warren, Lori Galloway and Alize Jean Baptiste, and assistant producer Avisoe Ocean Dairo. With extra production help this week from Emily Elias. We'll all see you back here on Monday.