President Nazarbayev on austerity measures

January 15, 2015, Kazakhstan’s President Nursultan Nazarbayev held a sitting on socio-economic development of Kazakhstan amidst the global economic downturn, instructing his Government to take austerity measures, according to his official website, Akorda.kz.

He said that the current negative economic developments result from the economic crisis of 2007-2009.

“As a result of the crises, prices for Kazakhstan’s traditional commodities have been on the decline, with prices for oil hitting a low of $50 per barrel. Prices for metals, another source of the country’s budget revenues, have been crawling down. A certain negative impact is felt due to the situation in Ukraine and adjacent economic sanctions imposed on the neighboring Russia and problems caused by the tumbling rouble. In this context, we have to come up with respective measures”, he said.

President reminded that late 2014 the Government had been commissioned to come up with various scenarios based on optimistic and pessimistic oil price estimates to prevent an economic slowdown and to maintain all the social obligations of the Government at the planned level.

“Given the drastic reduction of the country’s budget revenues, the Government will have to revisit certain parameters (…) We need to clearly formulate for common people that the Government is taking austerity measures in every realm. Since Kazakhstan gained independence [in 1991], there have been over 700 new schools constructed, as well as a similar number of new hospitals. Now it would be reasonable to have all the facilities currently under construction completed, whereas some of the anticipated projects, including investment projects, will have to be suspended. Works on new projects will be resumed after the crisis is over”, Head of State said.

“The Nurly Zhol anti-crisis program [launched in November 2014] seeks to bolster infrastructure development, creation of new jobs (…) besides, the national industrialization program seeks to have 75 industrial facilities launched with a total of 7500 new jobs created”, he said.

“Targeted social allowances, allowances for families with 4 or more children, allowances for underprivileged families shouldn’t be enjoyed by well-off families. The major task is to make sure common people are not badly hit by the crisis. [However] the Government is not a cash cow”, President said.

“Despite all the hardships, Kazakhstan’s economic growth stood at 4.3% in 2014. We should be closely watching the situation in Russia and Europe. Reducing income, strengthening social tension in neighboring nations might have a negative impact on Kazakhstan. We should prevent that”, he said.