Kazakhstan Chamber of Commerce in the USA

KazCham



Kazakhstan celebrates Tenge’s birthday 0

Posted on November 30, 2011 by Alex

Caspionet, Nov 16, 2011

Kazakhstan has celebrated Financier’s Day. This day is linked to the introduction of the Kazakh national currency – the tenge – into circulation on November 15, 1993. Since then, the tenge has been functioning under the controlled «floating» exchange rate and convertible for current transactions. The National Bank’s own national currency enabled it alongside the Kazakh Government to conduct their own economic, monetary, and exchange rate policy.

Kazakhstan’s financial system occupies an important place among the many economic levers by which the government affects the market economy. It became independent on November 15, 1993 as the country’s national currency was introduced specifically on that day. Financial system is one of the most important economic regulators within the context of market relations.

Timur Issatayev, Chairman of Board of Directors, Kassa Nova Bank JSC:

“The financial system of independent Kazakhstan was practically built from scratch. The country managed to build it in 20 years. This financial system has ridden out the crisis. This financial system provided high rates of growth in the country before the crisis. This financial system still provides good growth rates in Kazakhstan’s economy. It is the largest employer in Kazakhstan. I believe that we have achieved quite a lot.”

The political independence was followed by both economic and financial independence of the country. In 1993, such financial institutions as the Ministry of Finance and the National Bank were created in the shortest time possible on the President’s request and private financial institutions appeared in the country as well. They formed immediately since all of them were ready in political, moral, and intellectual terms. These tasks resulted from the Development Strategy of Kazakhstan as an independent state which was proclaimed by the head of state. It has a special section on the economic and financial system.

Askar Yelemessov, Chairman of Board of Directors, Troika Dialog Kazakhstan JSC:

“Kazakhstan was the 5th largest economy among 30 former socialist bloc countries from Russia to Bulgaria and Macedonia until the collapse of the Soviet Union. During all this time, Kazakhstan has developed very quickly. There was an interesting figure as from 1990 to 2010, total oil production increased by 3 times or 300% in Kazakhstan while during the same period Russia’s total oil production did not increased at all.”

After the collapse of the Soviet Union and a subsequent decay of the ruble zone, the issue of financial independence deteriorated dramatically since it was impossible to conduct an independent policy without the country’s own national currency. A very thorough, complicated and painstaking work on introducing the national currency was conducted under the leadership of Kazakh President. From the date of introducing the currency on November 15, 1993 Kazakhstan began pursuing a truly independent economic, monetary and fiscal policy. It was a perfect start of the Kazakh state’s development.

SOURCE: http://www.kazakhembus.com/index.php?mact=News,cntnt01,detail,0&cntnt01articleid=804&cntnt01origid=15&cntnt01returnid=201

Kazakhstan can withstand next wave of crisis – cbank governor 0

Posted on November 03, 2011 by Alex

Reuters, Oct 18, 2011

* C.bank governor says ready to defend tenge currency

* Says will buy all domestic gold output in next 2-3 years

MOSCOW, Oct 18 (Reuters) – Kazakhstan, the second-largest ex-Soviet economy and oil producer after Russia, has enough reserves to weather a new wave of financial crisis and keep its currency stable, the National Bank governor told Reuters Insider TV.

Central Asia’s largest economy fared relatively well during the global crisis and resumed rapid growth last year, when gross domestic product expanded 7.3 percent after a 1.2 percent rise in 2009. GDP is forecast to grow 7 percent this year.

Grigory Marchenko, a banking veteran who was once proposed to head the International Monetary Fund, said Kazakhstan was enjoying relatively high commodity prices, enabling the Central Asian state’s economy to grow 7 percent in the first six months of 2011.

Even if there was a fall in commodity prices, the cornerstone of Kazakhstan’s export-oriented economy, it would use its National Fund of $41 billion, Marchenko said on Tuesday.

“The National Fund of Kazakhstan … that’s about 25 percent of our GDP, so it is quite a comfortable cushion. Even if the second wave (of the crisis) materialises, even if it is twice as bad as the previous one, that means we will have to spend only a half of our fund,” Marchenko said.

During the crisis of 2008-09, the country spent around $10 billion out of the fund to support the economy, Marchenko said.

He added that the country’s tenge currency was likely to fluctuate near the current level. The weighted average of the tenge stood at 147.89 per dollar on Tuesday, appreciating from 148.36 earlier this month, its weakest since early 2011.

“Basically, it (the tenge rate) has been extremely stable in the past two and a half years. I think it would be the same,” Marchenko said.

He reiterated that the National Bank would buy up domestic gold output from next year, indicating it favours gold over exposure to the ailing dollar.

“I think we will buy all the gold produced in Kazakhstan in the next 2-3 years, which means 20 to 25 tonnes a year,” Marchenko said.

He did not say how much the central bank was going to spend on this, adding only that it would be “as much as necessary”.

The gold assets of Kazakhstan’s central bank have grown by 29.5 percent since the end of last year to $4.0 billion as of Aug. 31, amounting to 11.1 percent of the country’s net gold and foreign currency reserves. International gold prices hit a record $1,920 an ounce in early September.

Kazakhstan’s central bank has joined central banks of other emerging economies in stocking up on gold reserves amid concerns fuelled by the ailing dollar and waning confidence in the resilience of the global economy.

The country produced 21.4 tonnes of gold, including 9.7 tonnes of refined gold, in January-July of this year. It plans to boost gold output to 33 tonnes this year from 20 tonnes in 2010. (Reporting by Kiryl Sukhotski and Katya Golubkova, additional reporting by Maria Gordeyeva in Almaty)

SOURCE: http://www.kazakhembus.com/index.php?mact=News,cntnt01,detail,0&cntnt01articleid=784&cntnt01origid=15&cntnt01returnid=201

Kazakhstan’s foreign reserves rise 5.2 percent in April 0

Posted on May 15, 2010 by KazCham

(SRI) – Kazakhstan’s foreign reserves (including the National Fund) increased by 5.2 percent to $54.7 billion in April, the National Bank reported.

Total foreign reserves of the National Bank rose by 8.3 percent to $28.8 billion (gold reserves increased by 5.9 percent to $2.78 billion). The National Fund assets rose by 1.9 percent to $25.84 billion.

At the beginning of 2010, Kazakhstan’s total foreign reserves stood at $47.0 billion.

SOURCE: http://silkroadintelligencer.com/2010/05/10/kazakhstan%25E2%2580%2599s-foreign-reserves-rise-52-percent-in-april/

Interview with Grigory Marchenko, the head of the National Bank 0

Posted on April 06, 2010 by KazCham

The crisis came down to nothing or we just got used to live in its terms, taking it as an inescapable reality? The economy is stuck at the notorious bifurcation point and what to expect now: an increase or a new wave of setback? These issues are still hotly debated in society. Discarding the emotions and looking at the situation on the basis of the indicators of bygone years, the head of the National Bank, Grigory Marchenko, offers his view.

– To remind you the key results of the economic growth of Kazakhstan according to official sources in 2009: economic growth was 1,1%, industrial growth – 1,7%. While the predictions at the start of the last year were very pessimistic. Today, experts agree that a positive result was achieved by taking proper anticrisis measures in many ways. The effectiveness of the Government, the National Bank and AFS, summing up the very difficult year, were voiced by the Head of the State in his speech: “The world financial and economic crisis affected the pace of economic growth but did not stop our development. Past economic potential provided us with stability in difficult crisis battles for three years. We have defended the country’s financial system and rescued banks. We were in a “breakout group” of countries with positive growth rates. Gross international reserves and assets of the National Fund already exceeded $ 50 billion and has increased over the past ten years for more than 25 times. It is important to note that we spent part of the funds last year, but yet today the fund is bigger than in December of last year.” Today’s priority is to prepare the economy for the post-crisis development. So, are we done with the page addressed to the crisis and its emotional perception?

– There are lee emotions now and you can safely talk about it, because accusations,  made and not made, in fact, have accumulated a lot, said the head of the National Bank. – The fact that they are mostly emotions, economically unfounded or financially illiterate, is obvious. In particular, the question: why did we have the devaluation? Even today there is still some views that it could not have been done. But this is  misleading.

– Gregoriy Aleksandrovich, to be honest, some measures, particularly February devaluation, seemed very hard, painful, ill-founded a year ago.

– Shall we recall what happened before? Prices for raw materials, which is our main export item and an essential part of the economy, fell two or three times. In autumn 2008 the country’s neighbors  devalued the currency: Russia – 50%, Ukraine – almost 60%. In January 2009, our industrial production fell by 18% in a month. This reduction was for those industries that competed with cheap imports of Russia or Ukrainian (more than two-thirds of them). All that we had already passed in 1998-1999! We also had no internal reasons for the devaluation. But there was a default in Russia. There was an abrupt devaluation, and all of Russian, Ukrainian, Belarusian goods fell sharply in price in dollar terms and poured into our market. They were much cheaper than domestic goods, which costs could not compete with them. As a result, our enterprises had problems: first, they began to go to work in one shift, then began to send people to unpaid leave …
Many financiers saw the devaluation as the only exit in January and February 1999. Although, personally, I was not its advocate. At that time I was a member of the working group, and we were opposing devaluation, believing that we could solve those problems by methods of tax and customs policy of the state. It did not happen. And the National Bank introduced a freely floating exchange rate in April 1999.
In January 2009, there were similar factors and other circumstances. For example, during one month the net purchase of US dollars was amounted to two billion dollars in exchange offices! For our system is an absolute record.
In addition, during the same month the flow of deposits in tenge currency to foreign currency was 3,8 billion dollars. Thus, everybody understood what was happening and began a massive withdrawal into dollars. These factors clearly indicated that the devaluation was absolutely inevitable. The question was only how to do it. But that was what exactly I had to do in a week after taking the office; I did not come up with a scheme. By this decision, I repeat, we summed up the real situation.

– Was there an alternative to implement schemes, for example, the gradual devaluation, as in neighboring Russia?

– The decline in industrial production, the massive buying of dollars and flow of tenge deposits into foreign currency clearly said that the devaluation had to be done before and that we were already late. From the standpoint of economic theory it should have been carried out in October, when commodity prices fell. That happened, for example, in Australia, Canada, Norway. These countries, like Kazakhstan, are commodity exporters. There, the exchange rate in just a few weeks fell to 26% in Australia, at 28% in Canada and 40% in Norway. There was also a second option: to devalue along with Russia in mid-November. Neither the first, nor the second option had been made. Therefore, the only way out was to conduct a one-stage devaluation in February 2009.

– It is believed, that as a result  investors, individuals, who kept their savings in tenge, became the most aggrieved party…

– According to the National Bank, Kazakhstan depositor shifted to the foreign currency deposits 20% savings in four months (November 2008 – February 2009), and in Russia, despite the gradual devaluation – 18%. That is, our people had shifted more money: all who wanted to protect savings which was done before the devaluation. In that case we had no leaks of deposits. And it was in Russia: 300 billion left the banking system, but later returned. I also recall that during the last decade the National Bank has always insisted that you should not keep all your savings in one basket. It is necessary to divide the savings in the proportion of 50 to 50. And then the currency fluctuations between them are not scary. Investors who adhere to this rule were not affected by the devaluation.
If we compare the scheme of the devaluation, let’s judge their performance. In Kazakhstan GDP grew, albeit a little bit; in Russia it fell for 7,9%. Inflation in the neighboring countries was 8,8% in 2009. In Kazakhstan – 6,2%. This one and a half times lower compared to 2008 (9.5%). Although, I remind you that some of the most pessimistic “experts” promised us inflation at 25%. The forecasts of the same “experts” on the second round of devaluation were not justified as well. They frighten people that the dollar would cost 180 tenge. It’s possible even now to hear such predictions, but if the “experts” regularly mistaken before, then why do people believe them now?
I think the important lesson of the last year is that the National Bank, publicly designating its policy, was adhered to it: we did all that we promised. The National Bank marked the corridor, and it passed. And the corridor was even narrower in reality. We promised that there would be more inflation but it did not let that happen. We said that there would be a small growth in GDP, and it was so. However, even more than we planned. We have done everything correctly, and all our predictions were confirmed.
I think the situation with international reserves (gold reserves) of Kazakhstan is fully restored: the total gold and foreign assets (GFA) of the country stand at 52.7 billion dollars now. But it’s more than before the crisis, despite the fact that we spent 10 billion dollars from the national fund for the anti-crisis measures.

– It is common knowledge that you are not a fan of analysts and experts. However, the National Bank uses forecasting and planning. What is, in your opinion, permissible prediction error?

– We have no, unfortunately, serious analysts or an authoritative analytical community. However, many foreign analysts do not differ in their validity and accuracy of forecasts as well. For example, they predicted the deficit of current account balance at minus-six – eight per cent of GDP in 2008 for us, but it was actually plus five percent! Error in 12 billion dollars! However, the same experts come again and give forecasts for Kazakhstan in 2010. But if the experts do not understand the economy, do not understand its significant difference from the economies of Europe or Russia, they should not give forecasts, or give them, but cautiously, with these caveats in mind.
I, personally, and the National Bank, would gladly welcome a serious analytical community, but there are just a few good analysts. I can name one of them – Jonathan Schiffer, the vice president of Moody’s, who is responsible for Kazakhstan since 1996. Before he was a professor at the Columbia University and worked on the Soviet economy. There are just a few people who understand the nature, essence, the origins of the national economy, its specificity and the mentality of the population. Everything matters in the analysis, even, for example, the notion of “sedentary” or “nomads”. And who, for example, knows in Europe what is a nomadic lifestyle and the customs and traditions that it generates?

– For example, the Roma …

– But they do not work as analysts! But if to talk seriously, the National Bank is constantly analyzing the situation and makes predictions. It prepares and not guesses. But even in serious prognosis some errors are allowed. So, we gave the forecast for GDP growth of 0,3%, but it turned out – 1,1%. The volume of GDP at current prices, according to operative data of the Statistics Agency, reached 15.9 trillion in 2009. Let me remind you, some analysts predicted the fall of the main indicators, but in practice it was an increase. That is, first, the trend was identified incorrectly. This is a principle mistake. Secondly, there is an error of calculation – not even for a few percents, but in times. Therefore, the National Bank indicates the corridor in forecasts. And if the process goes in limits of this corridor, the exact approach is correct.

– Grigory Aleksandrovich, I remember well your interviews with our newspaper three-four years ago, when you warned about the mortgage bubble and would predict that it would burst. It happened. Many mortgage based businesses were in a difficult situation. What to do now?

– They are all adults, and if they assume such risks in the market economy, they should be responsible. And I do not see other ways but to negotiate with your bank, explain what the essence of problems is and how the debt can be restructured. There are people who really were in a difficult situation because of the crisis circumstances among the borrowers. But many of them wanted to do business on the growth of prices in the real estate market. That is another story – this is a market risk rather than social risk. In addition, we estimate that one third of borrowers could not service their loans, even if there was no crisis and there would be no devaluation. And there are many lessons to be learned for everybody, because some borrowers used dishonest tricks in efforts to confirm their ability to pay. For example, they provide banks with non-existent income statements.

– To sum up: how does the National Bank evaluate the outcome of the devaluation, does it achieve its goals?

– The results clearly show that our decision was necessary and correct. One-stage devaluation immediately reduced the pressure on the national currency and devaluation expectations, increased the competitiveness of Kazakhstani goods by reducing their costs, improved the balance of payments, and maintained gold reserves of the National Bank and the country. In addition, despite the devaluation, the total amount of residents’ deposits in the banking system for the year increased by 19.7% to $ 6,473 billion tenge. Moreover, individual deposits grew by 28.5%, exceeding 1.8 trillion tenge.

– Your term “asymmetric apron” gave an incentive for new forecasts. In particular, it was about a more pronounced correlation of tenge exchange rate with the rate of the ruble, which includes the establishment of the Customs Union. Are these assumptions reasonable?

– In principle, the establishment of the Customs Union should not have any pressure on tenge exchange rate in relation to Russia’s ruble as well as it does not require an adjustment in the monetary policy of the National Bank. However, one of the potential risks involved with the creation of the Customs Union is a risk of rising inflation. However, if implemented, the National Bank has the necessary tools to minimize it.

– The head of the state demanded banks to cut off from overtly or covertly affiliated entities,  to ensure that they are engaged exclusively in banking activities and that their activity should be very transparent. What measures are supposed to take?

– First, it is necessary to tighten control over the ongoing intra-group transactions and prudential supervision of banking conglomerates. Secondly, it’s necessary to improve measures on transparency of the ownership structure of financial institutions and affiliated organizations. Today, there is a working group, based on the AFS, is being established to develop a bill which will ensure the transparency of banks and their exclusive affiliation with other entities. It will also include representatives of the National Bank of Kazakhstan.

– Evaluating the outcomes of anti-crisis program in 2009, do you consider it necessary to continue the state support for the banking sector?

– The main achievement of bygone years that the banking system of Kazakhstan is relatively successfully coped with the negative impact of the second wave of the crisis. Problems of individual large banks do not have the problems of the whole system, and they successfully complete the restructuring process. In general, a package of anti-crisis measures helped to overcome some of the most dangerous consequences of the crisis. In particular, to overcome the shortage of credit on the most important sectors of the economy and avoid a collapse as a result of underfunding.
If we talk about stabilizing activities in the current year, I think, success will depend on the concerted action of the Government, AFS and the National   Bank. We have already identified the main directions of work. First, to support exchange rate stability of tenge and the level of liquidity of the money market.
This is the main task of the National Bank. Secondly, it is necessary to accelerate the healing process of bank balances and to clean their low-quality assets.
Thirdly, there is a need to develop a set of measures that will stimulate the credit activity of banks in the post-crisis phase. Fourthly, it is necessary to make the transition to a countercyclical management and improved risk management systems in financial institutions. Finally, fifthly, there is a need to develop a set of measures to reduce the level of economic imbalances and systemic risks.
I think that, it is not worth to cease the direct support of the banking sector completely in 2010 because the current state of the banking sector is largely dependent on state support, which allows overcoming the shortage of funding banks. However, there should be a gradual reduction in state aid and stimulus to the process of finding new sources of funding.

The interview is taken by Alevtina DON

SOURCE: http://www.zakon.kz/165594-grigorijj-marchenko-my-sdelali-vse.html

Alliance Bank completed debt restructuring 0

Posted on March 30, 2010 by KazCham

LONDON, Mar 30 – IA News-Kazakhstan. Alliance Bank has completed the restructuring of debt declared the press office of the bank.

“Alliance Bank is pleased to announce the completion of all planned activities on restructuring the debt of the bank”, was stated in Tuesday press release of the bank.

According to the press release, the National Welfare Fund “Samruk Kazyna” produced capital increase of JSC Alliance Bank for 129 billion tenge by purchasing newly issued common shares of the bank for $ 24 billion tenge and of conversion rights to the bonds of the bank’s preferred shares worth 105 billion tenge.

Under the restructuring plan, all financial obligations of the bank was restructured and canceled in exchange for money, new bonds and equities.

As a result of debt restructuring and capital increase, the bank’s additional capitalization is 547.9 billion tenge, where its regulatory net worth is 50 billion tenge, which corresponds to the prudential requirements.

The volume of debt as the result of the restructuring was reduced from approximately 4.5 billion (including accrued interest) up to 1,08 billion dollars, including: $ 850 million – the senior debt in eurobonds, 85 million – a real trade finance, 145 million – subordinated 20-year bonds.

As a result, 67% of the common shares of the bank are at FNB “SamrukKazyna”, 33% – from creditors, 67% of preferred shares at FNB “SamrukKazyna”, 33% – from creditors.

As noted in the announcement of the bank, 33% of its shares are distributed among more than 2 thousands of minority shareholders, none of which has no share of more than 3% of the shares.

Loan term lengthened to 7-20 years, with maintenance of principal will commence no earlier than 4 years.

SOURCE: http://www.zakon.kz/167578-aljans-bank-zajavljaet-o-zavershenii.html

Road to recovery 0

Posted on March 08, 2010 by KazCham

WHEN THE TWO most dynamic sectors of a relatively  small open economy nose-dive at the same time  the impact on overall economic activity can be very  depressing. That is what happened to the $100 billion Kazakh economy nearly two years ago when over- borrowed Kazakh banks became the first victim of  the global credit asphyxia which followed the US sub- prime mortgage crisis in August 2007.

Economic growth, which had been running at  around 8/9 per cent on an annualised basis over the  first eight months of the year, about average for the  last seven years, dropped like a stone. Cranes stopped swinging on construction sites and a ripple effect  spread right through the supply chain and into the  shops as tens of thousands of building workers were  suddenly laid off. Pressure on the rest of the economy rose as banks, suddenly cut off from foreign capital,  scrambled to recall loans to bank customers, or roll  them over at higher rates, as they struggled to repay  their own maturing foreign loans.

For the Kazakh economy as a whole, recourse to  cheap foreign borrowing by its entrepreneurial,  privately-owned banks in the boom years was a way  of monetising the expected future flow of funds from huge offshore oil and gas fields, such as Kashagan,  whose development is proving more expensive – and  taking longer – than originally expected. Cheap bank -loans for mortgages, large cars and consumer items  generally were a way for hitherto lowly-indebted  Kazakh consumers to access the higher standard of  living that seemed to be assured by the apparently unstoppable rise in the global price of Kazakhstan’s  main exports – oil, gas, minerals and grain.

But the second stage of the global economic  slowdown, which followed the collapse of Lehman  Brothers in September 2008, sparked off a precipitous fall in the traded prices of natural resources of  all kinds. What had begun 15 months earlier  as a construction crisis triggered off by a credit  crunch became a generalised slowdown as miners,  steelmakers and smelters mothballed marginal mines and/or cut output. Only the oil and gas producers  and the uranium miners continued ramping up  production, but even they were hit by lower prices  as oil dropped to just over $30 a barrel and copper to  below $3,000 a ton before starting to recover in the  second quarter of 2009.

The government reacted angrily to the first phase  of the crisis. Bankers said President Nazarbayev  castigated them as “greedy traitors” and, with the  benefit of hindsight, it soon became clear that  the banks had indeed financed far more palatial  mansions and luxury apartments than the number of oligarchs and aspiring middle class able to buy them- but too few flats that working people could afford  in the fast-growing cities. The short-lived craze for  buying top of the range SUVs and Porsches on credit  also looked over the top – especially as the Almaty  Metro project dropped even further behind schedule  and road construction generally failed to keep up  with the growth in traffic and air pollutions

But the real crunch in what is now an almost two  year long crisis came in February 2009, always a  bleak month in the heart of the Steppe winter, when  the government issued a blizzard of instructions –  and put the resources of the National Fund to work  shoring up bank balance sheets. The Fund, flush  with $24 billion set aside from oil revenues in the  fat years for just such a rainy day, transferred $10  billion to Samruk/Kazyna, the state holding company  and de facto sovereign wealth fund. Further billions  were shovelled into financing nearly completed  construction projects, converting luxury flats  into more affordable properties for civil servants,  especially in Astana, and replacing banks as financiers to some credit-starved construction companies.

But the clearest sign of a new determination to  tackle an economy heading for zero growth – or  worse – came with the appointment of Grigori  Marchenko as chairman of the National Bank. One  of his early acts, in February, was to decree an 18  per cent devaluation of the Tenge, with a 3 per cent  fluctuation margin either side of the new Tenge  parity of KZT150 to the US dollar. It was KZT120  before devaluation. This helped the export orientated minerals sector – but aggravated the foreign debt  burden of the banking system.

The most controversial move was virtual  nationalisation of the country’s biggest and hitherto  fastest-growing bank, BTA, as Samruk defenestrated  the bank’s former president, Mukhtar Ablyazov, and  injected $1.7 billion in return for a controlling 76 per cent stake. At the same time Samruk poured another h $3 billion into the two remaining ‘big three’ banks – Kazkommertzbank and Halyk Bank, in return for  a quarter of their equity, and warned creditors of  Alliance Bank that re-financing the smaller of the top six banks would only happen if they first agreed debt-n restructuring terms.

Samruk’s role in the bank re-capitalisation  underlined the accumulation of wealth and power  into its hands over the last three years or so. Set up  ostensibly to improve the standard of management  in state owned companies, critics see its hydra-like  control over the ‘commanding height’ of the Kazakh  economy – railways, telecoms, power distribution,  airlines and the state oil and gas corporation KMG – as a reincarnation of Soviet-style control over the  economy, a sort of Gosplan designed by McKinsey.

Inside the arched Astana headquarters of Samruk, h and the ‘Golden Horn’ building housing formerly  autonomous Kazyna, now merely the financial arm of the merged Samruk/Kazyna, planners and strategists  have swapped the obtuse language of Soviet  bureaucracy, which older staff grew up with, for the  equally impenetrable jargon of US-style management consultancy speak. Samruk, say some of its fiercest  internal critics, has become like the UK’s BBC – a system of outdoor relief for the children of the elite,  setter at analysing problems than deciding and  executing decisions.

One of the big questions over the future of the  economy is whether the rise of Samruk/Kazyna,  headed by Kairat Kelimbetov, points to ever greater  state control over the economy, and a more crypto- soviet future, or whether the accumulation of  economic and financial power in its hands –  Kazatomprom was the latest big corporation to come  under its control – marks a temporary expedient  until a new generation of political leaders emerges  md controls can be relaxed.

Whatever the outcome, which is of great interest to foreign investors, the macro-economic developments  of the last two or three years already point to the  possibility that a much stronger and better balanced  economy will emerge from this crisis.

The big developments now taking place include  major modernisation of the road, rail, port and  Dther transport infrastructure to create a shorter,  modern transit route between China and Europe and  an to Iran. At the same time Kazakhstan’s export  pipeline arrangements are being transformed with  new 3,000km-long oil and gas export pipelines from  the Caspian Sea to Western China, expansion of the  ZPC and other pipelines through Russia – and a new  southern energy transit route across the Caspian Sea  to Azerbaijan and Georgia. China is rapidly raising its  profile and weight in the economy alongside Russia,  Europe and the US. Next year Kazakhstan will become the world’s biggest producer of uranium. All these  themes, and more, are treated, in greater depth,  inside this edition.

Invest in Kazakhstan An official publication of the Government of the Republic of Kazakhstan, 2009. Pages: 23-24.



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