Kazakhstan: Nazarbayev Issues Rallying Cry To Fight Crisis
Kazakhstan may be experiencing its toughest economic times in years, but its people have never had it so good.
So says its long-ruling president, Nursultan Nazarbayev, who used his state-of-the-nation address on November 30 to issue a rallying cry to his people to tighten their belts and bind together to weather the economic storm battering their oil-rich country.
“We have withstood quite a few tests together, and become hardened and strengthened. We have achieved a pace of economic development unheard of in all our history,” Nazarbayev said in his annual address. “Never before have our people lived as well as they do now. We have achieved a lot.”
Nazarbayev stressed that the economic tribulations are caused by external factors over which Astana has no control — “a global crisis of an all-embracing nature,” as he put it.
Prices for oil prices are and downturns in neighboring Russia and China are hitting Kazakhstan, whose grow is expected to grow by just 1.2 percent this year.
That compares to growth of 4.3 percent last year, which already represented a slowdown for Kazakhstan.
Nazarbayev proposed “de-dollarization" as the key to combating currency woes that have seen the value of the tenge plunge by 40 percent since a move to a free float in August. This has become a buzzword in Astana, but economists say that is easier said than done.
After Nazarbayev’s speech, the central bank announced it would be issuing a new banknote worth 20,000 tenge ($65), twice as much as the largest existing bill.
Nazarbayev said everyone in Kazakhstan would have to tighten their belts to cope with the crisis, but the government had plenty of strategies in place to beat it.
These include the 2.7 trillion tenge ($8.8 billion) Nurly Zhol (Bright Path) stimulus package, designed to diversify the economy and reduce its dependence on oil revenues. A major privatization push is also in the works.
The goal is to get annual growth back on track at 5 percent, Nazarbayev said.
He ordered his government, headed by Prime Minister Karim Masimov, to draft a new employment program to keep people in work, and to review Kazakhstan’s welfare strategy in order to ensure it is targeted at the needy.
Nazarbayev has repeatedly pledged to ring-fence social spending, but this is another sign that the government will implement indirect cuts to make savings (such as a previously-announced end to bread subsidies).
The president made a couple of announcements designed to win popularity points, including a 25 percent rise in some welfare payments, the index-linking of basic pensions at 2 percent above inflation, and rises in public-sector salaries. All those measures will come into force in January.
However, the public-sector pay rises will for the first time not be across the board, with different categories of public servants receiving different rises in a system guaranteed not to please the losers.
Those employed in the health-care sector will receive increases of 28 percent on average, Nazarbayev said. Teachers will get an average of 29 percent and social-welfare workers will be awarded 40 percent.
Joanna Lillis is a journalist based in Almaty and author of Dark Shadows: Inside the Secret World of Kazakhstan.
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