National Entrepreneurs Chamber suggests introducing trade barriers in Kazakhstan amid Russian ruble crisis

Strengthening of Kazakhstan’s tenge against Russian ruble have negative repercussions for producing enterprises in Kazakhstan, Tengrinews reports citing Kazakhstan’s National Chamber of Entrepreneurs. 

“Significant strengthening of tenge against Russia ruble negatively affects the industrial sectors of Kazakhstan’s economy. The Kazakh government is now developing measures to prevent slowdown of the economy. To do this, Kazakhstan’s National Chamber of Entrepreneurs considers it necessary to protect the domestic market by introducing temporary trade barriers that are permitted according to agreements of the Eurasian Economic Union. In addition to these measures, the National Chamber suggests subsidizing enterprises in the industrial sectors, mainly in agriculture and food processing,” the press service of the National chamber said.

Besides, Kazakhstan’s National Chamber commented on the recent joint statement of Kazakhstan’s Government and National Bank about the priority directions in 2015 that was published on December 24.

The priority directions in 2015, as defined in the statement, will be “the enhancement of the role of the national currency (tenge) in the economy, stimulating the growth of tenge liquidity in banks for further increasing of lending of the economy, recovery of the banking sector”.

The statement also said that sharp exchange rate fluctuations would not be allowed. Interest rates on deposits in dollars would be lowered. In addition, setting prices of goods and services in currencies other than tenge would be banned.

“The decision of the financial regulator to maintain the refinancing rate for commercial banks and to introduce a package of measures to increase access to liquidity - these measures will contribute to the implementation of the key tasks of the financial system to ensure the availability of credit at reasonable interest rates for businesses to hope them counter the negative trends,” the National Chamber of Entrepreneurs said.

It is time to prepare and implement a comprehensive import substitution plan within the current state-run industrialization programs in order to reduce the dependence of Kazakhstan’s economy on imports, the National Chamber said. The import substitution program should first focus on goods included into consumer basket, i.e. mainly food products.

Moreover, according to the National Chamber, this plan is complementary to the task set by President Nazarbayev in his recent State-of-the-Nation Address regarding de-dollarization of Kazakhstan’s economy.

"The range of countercyclical measures should include: an increase in orders of domestic producers and increase in the share of SMEs (small and medium-sized enterprises) in the purchases made by the government and quasi-public sectors, improving the efficiency of support of domestic producers by introducing the institute of industrial certificates, which will confirm the status of domestic producer capable of producing a certain amount of goods given its production capacity, expanding the investment subsidies program for all projects aimed at substitution of imported goods by domestic competitive products, the continuation and expansion of programs of concessional lending, including refinancing loans in tenge issued in foreign currency,” National Chamber concluded.

By Assel Satubaldina