Kazakhstan May Recover Faster Than Russia, Ukraine, Citi Says

By Paul Abelsky

Sept. 11 (Bloomberg) – Kazakhstan will see a faster recovery than Russia and Ukraine after the government pushed through more effective reforms to help businesses, Citigroup Inc. said, citing two global surveys published this week.

“We believe the country that is more advanced in addressing structural imbalances will be the first to move forward,” Elina Ribakova, Citigroup Inc.’s chief economist in Moscow, said in a report today. “These most recent surveys therefore match our expectations for economic recovery in the region with Kazakhstan being the first, followed by Russia and then Ukraine.”

Kazakhstan, which holds 3.2 percent of the world’s oil reserves according to BP Plc, has strengthened financial oversight and “re-oriented” budget spending in the aftermath of the crisis, Citigroup said. Russia was slow to address its banking industry’s lack of capital and has focused stimulus on current spending even as capital investment slumped. Ukraine has been hobbled by political uncertainty, according to Citigroup.

While Russia was ranked above Kazakhstan in the World Economic Forum’s Global Competitiveness Report last week, it dropped 12 notches from last year to 63rd place. Kazakhstan slipped one level to rank 67th and Ukraine fell 10 places to 82nd.

Kazakhstan rose to 63rd place in the World Bank’s Doing Business Report, which ranked Russia 120 and Ukraine at 142 among 183 nations. The report, which is designed to help investors decide where to direct funds, weighs changes in easing business regulations.

“As emerging markets will be increasingly competing for a smaller and longer-term pool of global resources, foreign investors are likely to pay more attention to the pace and quality of economic reforms,” Ribakova wrote.

To contact the reporter on this story: Paul Abelsky in Moscow at pabelsky@bloomberg.net.