Kazakhstan to Put Anti-Crisis Plans in Motion
ALMATY, Kazakhstan, Jan. 27, 1999 -- (Agence France Presse) The Kazakhstan government plans to start on Wednesday pushing a package of crisis measures through parliament to shore up the currency and economy.
New Kazakh Finance Minister Uraz Djandosov told AFP that the government would present revisions to the 1999 budget as the first of a package of measures designed to lessen the impact of the crises in Asia and Russia on the Kazakh economy.
"Part of the measures will be in the budget and the other part will be introduced in parliament by the prime minister in the course of a month," Djandosov said, adding that the "key task" would be to improve a deteriorating trade balance.
This vast, resource-rich Central Asian country of nearly 16 million people has been hard hit by the lowest world prices for decades for its most important export commodities -- oil and metals -- and by financial crises in Russia, its most important trading partner, and in Southeast Asia.
The world crisis hit just when Kazakhstan's output had been expected to grow by 3 percent in 1998. Now the country is forecasting a fall in output in 1999 of 1.5 percent, while exports are expected to decline by about 10 percent, Djandosov said.
Kazakhstan has already taken one step to improve its trade balance, introducing a ban on cheap Russian foodstuffs which have flooded across the border since Russia devalued its currency last August.
Kazakhstan hopes to keep Russian imports at early 1998 levels and plans to introduce measures to support domestic producers, Djandosov said.
"If the balance of payments improves, a big devaluation of the tenge (national currency) will not be needed," he said.
Officials fear a sharp fall would erode what public trust remains in Kazakhstan's economy after its collapse following the break up of the Soviet Union in 1991, Djandosov said.
"The public's trust in the economy is very slowly being restored and we don't want to lose
that," he said.
But there are others who think devaluating the tenge may benefit Kazakhstan's economy, mainly by attracting foreign investment at a time when much outside financing, such as Eurobonds, has proven difficult to obtain and investor interest in emerging markets is waning.
"After devaluation, their sell-offs would be more successful than before because nobody wants to invest in a currency that is expected to fall," said
Serik Zhukenov, ABN AMRO Bank's head forex dealer in Kazakhstan.Djandosov is optimistic about foreign investment receipts, which he says the government will revise upward to nearly $600 million in the 1999 budget revision.
Kazakhstan has already received $200 million from the U.S. oil giant Mobil as its 1999 payment for a 25-percent share of the giant Tenghiz oil field and there is interest in the state telecommunications firm, Kaztelekom, he said.
In addition, Kazakhstan is looking to continue previous attempts to sell shares in its 'blue chip' metals companies, Djandosov said.
"Therefore, we think that this figure (of privatization income) is realistic enough," he said.
One Western analyst, who declined to be named, was optimistic that Kazakhstan would receive the expected privatization income in 1999.
"I think it is a difficult environment, but their track record shows that if the government wishes to, it can find things to sell," the analyst said. |
