Kazakhstan is a Success Story of Central Asia, EBRD Top Banker Says

Mar 16. MFA

Kazakhstan is a Success Story of Central Asia, EBRD Top Banker SaysKazakhstan’s economy is rapidly recovering from the global crisis of 2008-2009, Business Group Director for Southern and Eastern Europe and the Caucasus of the European Bank for Reconstruction and Development (EBRD) Olivier Descamps told journalists in Astana on March 13. Serious problems still exist, however, he added. The Bank’s experts believe one of the ways for Kazakhstan to successfully develop in the future is to support women entrepreneurs, since they are able to achieve even greater success than men.

The EBRD leading experts, specializing in the countries of Central Asia, have come to Astana to deliver an EBRD report on Central Asian economies. The 155-page report is entitled “Crisis and Transition: The People’s Perspective”. It gives details on how the crisis of 2008-2009 affected the population in the countries with economies in transition, including Kazakhstan.

Olivier Descamps, whose title also includes a job as EBRD Managing Director for Turkey, Eastern Europe, the Caucasus and Central Asia, stressed that “the EBRD views Kazakhstan as a success story. The country has excellent potential, but also a few crossroads ahead where it will have to choose the way its business sector will develop.”

He noted Kazakhstan remains the leader in Central Asia in terms of completing the process of transition to a market economy.

Descamps also said the EBRD has recommended that Kazakhstan reduce the level of debt and state participation in the economy.

“The Kazakhstan economy is recovering rapidly from the global crisis of 2008-2009, although serious problems still remain,” he said.

In Descamps’s words, the first step towards further development of the market economy in Kazakhstan should be to reduce the state’s role in the economy, adding that “the excessive state involvement in the economy should be scaled down”.

“This can be achieved through several methods. The first symbolic step, which has already been announced, is the People’s IPO. The second step is to try and preserve the equity value of the banks subject to restructuring. The health of the banking sector should be improved. The patient is still very weak and needs medication,” he metaphored.

“In Kazakhstan, the crisis has manifested itself more seriously than in other Central Asian countries due to a greater degree of global integration of its banking system. Another aspect which affected the situation was bank loans, especially loans denominated in dollars, which were received before the crisis,” Descamps said.

Referring to the report, Descamps said women in countries such as Kazakhstan to a lesser extent tend to start their own business, but they can achieve no less success than men if they do business.

“This fact may testify in favour of policies aimed at stimulating the potential of women entrepreneurs,” he added.

Kazakhstan’s fast recovery from the crisis had been driven by oil, services and agriculture, Head for Central Asia at the EBRD’s Office of the Chief Economist Nienke Oomes stated.

“Kazakhstan was able to recover rapidly from the global financial crisis due to high oil prices,” Oomes contended.

She noted the rapid recovery of economic output, the remarkable recent drop in inflation, and the pickup in credit growth in Kazakhstan.

“The Kazakhstan economy continues to be too much driven by oil, while heavy state intervention is slowing down the development of private non-oil businesses,” Nienke Oomes said.

Kazakhstan’s Deputy Prime Minister Kairat Kelimbetov said Kazakhstan should not be considered in isolation from the global situation.

“When talking about the challenges facing the economy of our country, we should not forget about the current global situation,” Kelimbetov said.

Today a serious crisis is raging in the eurozone, while such world powers like the United States are struggling with unemployment.

“The situation has changed even in China. Thus, the economic growth rates of China now account for 7.5 percent instead of projected 8.5 percent. All this has affected the prices of major export commodities of Kazakhstan. Such is the global situation, which cannot but have its impact on the economy of Kazakhstan,” Kelimbetov said.