Kazakhs prepare austerity measures amid
slowdown
03:59 a.m. Jul 13, 1998 Eastern
By Dmitry Solovyov
ALMATY, July 13 (Reuters) - Kazakhstan's government,
ordered by the president to take urgent steps to stabilise the
economy in the wake of a global financial crisis, has agreed
a package of austere measures to reverse the economic
slowdown.
A memorandum adopted at the weekend said the
government would take ''preventive measures to
consolidate the revenues of Kazakhstan's state budget and
to cut its expenditure.''
The document, a copy of which was obtained by Reuters,
cited the financial crisis in southeast Asia and the fall in
global prices of raw materials as major factors behind
Kazakhstan's current economic slowdown.
Officials have said the resource-rich country is unlikely to
achieve its targeted three-precent growth of gross domestic
product (GDP) this year due to lower prices for its main
exports -- oil and metals. GDP grew by two percent in
1997.
Kazakh President Nursultan Nazarbayev, who has ruled his
Central Asian nation of 16 million people since Soviet
times, ordered the government last Friday to take quick
steps to steady the economy.
''Probably I am warning you for the last time,'' he told the
cabinet, appointed nine months ago after the resignation of
the cabinet of reformist Prime Minister Akezhan
Kazhegeldin.
The government's reaction has been prompt.
''This memorandum is the government's first concrete step
in response to the president's speech last Friday,'' a
government source told Reuters by telephone from the new
capital Astana.
He said the document had been urgently worked out on
Friday and approved by all economic ministries on
Saturday.
According to the memorandum, Kazakhstan, which has
attracted billions of dollars in direct investment in its
lucrative hydrocarbons and metals, will revise all contracts
with foreign firms and annul those which have been
violated.
The government also plans to hold open cash auctions for
investors to boost revenues from privatisation. Until now,
the government has been holding secretive investment
tenders.
By September 1, the number of those working for
budget-financed state organisations will be cut
''substantially.'' The government gave no concrete figures,
but the official media have said that 10,000 bureaucrats
would lose their jobs.
The cabinet will also cut spending by state organisations on
mobile telephones, business trips and purchases of new cars
and office utilities.
Rigid controls will also be applied to state bodies'
consumption of electricity, heating and communications.
The memorandum says all regional governors and heads of
state-funded bodies would be personally responsible for
debts to the budget.
The government plans to complete bankruptcies of all
insolvent enterprises by the year-end. Prime Minister
Nurlan Balgimbayev said last Friday that around 1,000 local
companies would be wound down.
Asked over what period of time the measures would be
implemented, the official said: ''All the measures should be
implemented by the year-end, but many of them -- already
in August.'' He gave no further details |
