We learn to live without oil: Kazakhstan's Minister of Finance29 may 2015, 14:31
Kazakhstan’s Minister of Finance Bakhyt Sultanov was answering questions of foreign visitors at the VII Astana Economic Forum concerning the measures Kazakhstan had been undertaking amidst unstable oil prices, Tengrinews reports.
“Both the previous crisis and today’s fallout are a good lesson stimulating us the right fiscal policy. In the 2000s, understanding that our rich reserves (of oil and gas) could create big problems, we began to learn (…) and we have learned to live without oil. (…) We have been putting all the oil revenues into the National Fund since 2000. It allowed us to save considerable reserves on the one hand, and on the other hand - it enabled us to learn to sustain ourself within the tight fiscal rules,” Sultanov elaborated.
The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan is be stable against external shocks, including swings of oil prices. The assets of the National Fund assets are monitored by the National Bank of Kazakhstan.
Minister Sultanov explained that in terms of the interaction of the budget and the National Fund, the state had set strict rules and the budget got only guaranteed transfers for the fund, which were determined based on the needs of the country for budgetary investments into areas like education that contribute to sustainable economic growth and yield long-term strategic benefits.
“We have quite strict rules in terms of budget deficit. We have maintained a fairly low growth (of budget deficit) over the past years, at the same time we had a big growth in the economy and the GDP. Today our debt is at about 15 percent, which is a very comfortable zone for the debt," the Minister of Finance said.
"Having a third of the economy dependent on oil, it is obviously a great driver to diversify the economy. The sharp decline in oil prices is affecting our oil revenues, and this affects the National Fund, but we still continue receiving the guaranteed transfers (from the Fund into the state budget). This ensures the stability of the budget, but the (decline in) export customs duties (caused by the low prices) still have a direct effect on the budget revenues. (...) However, all the social commitments are being met, we are ensuring stability," Bakhyt Sultanov concluded.
Reporting by Asemgul Kassenova, writing by Assel Satubaldina, editing by Tatyana Kuzmina