Experts have been talking about the difficult economic situation in Kazakhstan for the second year already. Despite attempts to minimize the effects of negative factors affecting the financial well-being of the country, in mid-2015, the authorities recognized the fact of the crisis. In particular, this was noted by the President of the Republic, Nursultan Nazarbayev. There are different assessments of the current situation in the economic sphere of the country, however, the question of whether there is a crisis in Kazakhstan today is no longer standing. It is felt both by ordinary citizens, and business at all levels, and by representatives of industry. One part of the analysts believes that the situation will worsen in the coming years, but other economists associate the hope for improvement with the activities of the new government.
Features of the current crisis
The weakness of the economic base of Kazakhstan made itself felt back in 2008, and then in 2013. To some extent, the severity of the current situation is due to problems that were not resolved in those years. Nevertheless, the crisis in Kazakhstan in 2015 has its own characteristics. It is characterized by external causes, which, in turn, influenced the aggravation of internal contradictions. In addition, it is important to note the scale of the crisis, affecting almost all areas. According to experts, exporters, as well as participants in medium and small businesses, have already suffered serious losses.
A distinctive feature of the current crisis is the coverage of the commodity sector. And here we can distinguish two aspects at once. The first is a general trend in the global economy - a move away from exporting resources with a focus on the domestic market, which is painful for any economy. And the second point is that the republic’s economy is closely connected with the Russian one. Therefore, we can say that in 2015, the oil crisis in Kazakhstan began, which is influenced by world market participants. For a deeper understanding of the specifics of the current crisis and possible ways out of it, it is worth considering in more detail the factors that contributed to its development.
External causes
One of the main reasons many experts call the US game in the oil market. At the moment, the American strategy has two goals: strengthening its own currency in the world market, as well as intentionally lowering the price of “black” gold in order to weaken Russia's position. At the same time, do not forget about the global crisis. In Kazakhstan, almost the same processes are observed that occur in Brazil and China. Despite differences in economic models, the modernization of commodity industries is affecting a decrease in GDP. In particular, the transition to the domestic market inevitably entails problems in the financial sector. This process can be considered as natural and necessary for any developing economy. But there are a number of other reasons why the crisis arose.
Intrinsic factors
Nevertheless, a considerable part of experts believe that it was the inept management of the economy in the republic itself that led to current problems. The internal causes of the crisis in Kazakhstan are associated with the improper disposal of the monetary stock, which was accumulated in the 2000s against the backdrop of the economic boom. As they entered the regional and world markets through the WTO and the Eurasian Union, it became increasingly clear that Kazakhstani products were not able to participate in fierce competition due to technical and moral obsolescence.
Another factor that influenced the deterioration of the situation was government intervention in business. This process began back in 2005, when small and medium-sized entrepreneurs were forced out of the market. Partly, an increase in the share of the public sector has led to the fact that today in Kazakhstan there is a crisis that has affected entrepreneurs themselves.
Indirect factors
We have already talked about the close connection of the Russian economy and the financial situation of the republic. It is the influence of a large neighbor that determines the factors of a political nature that contribute to the complication of the economic situation in Kazakhstan. In particular, these are the same sanctions, the indirect effect of which ultimately leads to low competitiveness of Kazakhstani enterprises, increasing dollarization of finance and distrust of citizens in tenge. That is, it can be said that the crisis in Kazakhstan is multifaceted, since it is developing under the influence of both economic and political factors. In fairness, it should be noted that the negative impact of the difficult situation of the Russian economy affects other partner countries, forming in a sense a vicious circle in which there are no stable supports for overcoming the difficult situation.
What happens to tenge?
The crisis led to a sharp drop in the value of tenge against the dollar. A few days after the statement by the head of the republic, the rate increased from 188 to 255 tenge per dollar. With regard to prices, the financial crisis in Kazakhstan did not affect food products, but machinery and equipment went up significantly.
Among the main reasons that led to the fall of the tenge are changes in the monetary policy of the republic, which, however, were announced in advance. In mid-2015, the government announced the start of a monetary strategy under the new rules. The main difference between the amended plan is the abolition of the currency corridor and the free floating of the rate. This once again confirms that in Kazakhstan the crisis does not imply a quick resolution and can last quite a while. In any case, the head of government noted that in the next 5 years the republic will live in the absence of rising prices for raw materials.
Forecast for the future
There are different assessments of the current situation, but they all coincide in the fact that at least in the next 2 years no improvement should be expected. Already now there are such phenomena as a decrease in GDP, inflation of more than 4%, an increase in unemployment, rising prices and a drop in living standards. Speaking about when the crisis in Kazakhstan will end, a considerable part of experts connect the process of the start of improvement with an increase in oil prices. Most experts rely on global market conditions in the commodity segment. The economic situation in Kazakhstan depends on the situation in this segment.
Even the most favorable scenario does not imply an early economic recovery. It is likely that a way to increase indicators in the production of goods can only be realized in a few years. It is difficult to say whether the crisis in Kazakhstan will be protracted. Much depends on external factors beyond the control of the authorities of Kazakhstan. Nevertheless, the government is still preparing to implement some efforts to solve the problem.
Crisis management strategy
At the moment, several plans for the "recovery" of the economy are being implemented. First of all, these are measures aimed at minimizing unpleasant consequences for citizens of Kazakhstan. To this end, the authorities seek to reduce the volume of speculative transactions in the foreign exchange market and the money supply in consumption. However, the answer to the question of when the crisis in Kazakhstan will end, many experts recommend considering in a deeper manner, understanding the internal causes of its occurrence. In this sense, it is worth noting the second part of the strategy, which is aimed at improving the competitiveness of the country's products.
Dependence of the crisis on US elections
As 2012 showed, political processes in the West have a great influence on the economy of the Eurasian region, in which Russia and Kazakhstan also participate. So today, experts who consider energy prices to be a decisive factor in overcoming the crisis, note the significance of the US election. However, the economic crisis in Kazakhstan will change depending not on the change of president, but on the nature of political relations that will be formed in the future.
