Kazakh vote tests stability after oil town unrest

* Ruling party set for easy parliamentary election win

* Second-placed party guaranteed presence in chamber

* Authorities wary of unrest after oil-town riots

* Critical opposition sidelined

By Robin Paxton

ALMATY, Jan 15 (Reuters) - Kazakhstan holds an election on Sunday that will put a second party in parliament, aiming to ease discontent after deadly riots last month, but few expect the vote to lead to real pluralism in a country dominated by its veteran leader.

No-one doubts the Nur Otan party of President Nursultan Nazarbayev will win the vote by a landslide. For the first time, the second-placed party will also automatically be guaranteed a presence in the 107-seat chamber, whether or not it clears the 7 percent entry threshold.

But many of Nazarbayev's opponents have been barred from standing, and the party that is expected to place second is a pro-business group led by a former ruling party member.

"This election will be another missed opportunity to bring political debate into the Kazakh parliament," said Lilit Gevorgyan, analyst at IHS Global Insight. "The new parliament will be populated by pro-government deputies, except some of them will now be part of another party."

Kazakhstan, a mainly Muslim country of 16.7 million people four times the size of Texas, has attracted more than $120 billion in foreign investment in two decades of independence and boasts per capita GDP on par with that of Turkey or Mexico.

Nazarbayev remains overwhelmingly popular throughout most of the country. Its relative wealth helped ensure Kazakhstan was long spared the sort of unrest seen in other former Soviet countries in Central Asia.

But many people complain they have remained poor while an elite few grew rich. Anger erupted last month in the western region of Mangistau, where oilmen sacked by their state-owned employers had been protesting for seven months.

Officials say 17 people were killed in clashes during which police fired live rounds.

Politicians are wary of the mass protests that greeted a disputed election in Russia, still Kazakhstan's biggest trading partner and a cultural reference point for its millions of Russian-speaking citizens.

Nazarbayev sacked several high-ranking officials in response to last month's violence. In a gesture showing support for the oilmen, he overruled a decision to cancel voting in the riot-hit town of Zhanaozen.

Security has been stepped up in and around the remote and dusty town, 150 km (95 miles) from the Caspian Sea, where a state of emergency has been prolonged until Jan. 31.

OPPOSITION SIDELINED

The party favoured to claim second place and a spot in parliament is the pro-business Ak Zhol, membership of which has swollen rapidly since its founder left Nur Otan last year to build it into the country's second-largest political force.

Its presence in parliament would assure a managed democracy but would not placate Nazarbayev's most vehement critics, most of whom have been barred from the election on technicalities. Western monitors have never judged a Kazakh vote free and fair.

A crowd of around 30 peaceful demonstrators gathered briefly on Saturday in Almaty, the commercial capital and largest city, and urged people to boycott the elections.

"Citizens of Kazakhstan should make the only right choice by refusing to be pawns in the hands of the authorities," said activist Larisa Boyer.

Nazarbayev, 71, has no obvious successor. He says the parliamentary election, called seven months ahead of schedule, is necessary to appoint a new government equipped to tackle a looming economic crisis.

"Difficult times await us," he said in a speech on Jan. 13, the final day of campaigning. "Instability in the world economy, the likelihood of a new wave of crisis and a drop in export prices could affect Kazakhstan's economy."

Kazakhstan's economy grew by 7.5 percent last year and the country has accumulated nearly $75 billion in foreign currency reserves and a National Fund for windfall oil revenues.

"These funds will be needed in the event of new crises, cataclysms, from which nobody in the modern world is immune," Nazarbayev said. "In the event of such cataclysms, these funds will be needed to pay pensions and salaries on time."

The unrest in Mangistau has made social problems impossible to ignore. Presidential adviser Yermukhamet Yertysbayev said on Dec. 12 that Kazakhstan was at a time of "social reckoning".

Saule Batyrbekova, a pensioner, was among the small crowd in Almaty calling for a boycott. She said her apartment was being repossessed and that, after working for 60 years, she struggled to survive on a monthly pension of about $160.

"They don't care about ordinary people and the way these people survive," she said.

Nur Otan pledges by 2017 to raise per capita GDP to $15,000, to boost life expectancy to 70 from the current 68.4 and to ensure running water reaches 90 percent of urban households. It might also need to root out social discontent.

"It is only a matter of time until broader questions are asked about the benefits of the political stability of strongman governing style," said Gevorgyan. "It appears to benefit some but not all Kazakhs." (Additional reporting by Mariya Gordeyeva and Dina Teltayeva; Writing by Robin Paxton; Editing by Peter Graff)