CONFERENCE CALL: Astana Economic Forum focuses on home truths

By bne IntelliNews May 18, 2011

Clare Nuttall in Astana -

The "Astana Economic Forum" has usually focused on global economics, but this year Kazakhstan's president and prime minister both used the event on May 3-4 to declare they would make social policy and equality of opportunity priorities following the April 2011 presidential elections.

This is the first time the forum, now in its fourth year, has been used to outline domestic policy. With top economists and Nobel laureates among the speakers, it has been part of the Kazakh government's drive to raise the profile of the capital Astana on the global stage.

The forum, where two years ago President Nursultan Nazarbayev outlined his concept for a new global currency, has grown year by year. This time, there were yet more delegates, and panels on topics from global currency markets to Kazakh tourism; the "AstanaInvest" conference was also rolled into the main event. But as typical for Kazakhstan, the logistics were still catching up. Hungry delegates on the opening day were dismayed to find the meat course had been gobbled up by the early arrivals, leaving latecomers to lunch on rice and broccoli before cramming themselves into the aisles at an over-subscribed session on food security.

Heading off the revolution

Both Nazarbayev and Prime Minister Karim Massmov referenced the wave of demonstrations and revolutions across North Africa and the Middle East in recent months, a sign that the events are weighing on politicians' minds even in Kazakhstan, arguably the most stable country in the region. "It is one of our priorities to develop a coherent social policy," Nazarbayev said in his opening address to the forum. "The Arab world has seen the importance of paying attention to the social conditions of the people."

Massimov warned that the destabilisation of financial markets and spikes in food and fuel prices of recent months have increased unemployment and taken a heavy toll on societies around the world. "Nowhere is this inequality and lack of opportunities for new people more evident than in North Africa and the Arab World," he told the conference. "The global economy is recovering, but there are substantial risks. Food prices are up sharply for the second time in three years, threatening a new global food crisis and putting large numbers of people at risk. We must reduce inequality and give opportunities to our population."

The progress Kazakhstan has made since the break-up of the Soviet Union in 1991, when the new government struggled to provide even basic services, was also stressed. Kazakhstan has already increased per-capita GDP to 15 times its 1994 level - from $700 a year in 1994 to almost $10,000 in 2010 - and is now targeting $15,000 by 2016. "In the post-crisis decade, we want to switch the economy to a new level. We want to be one of the high-income countries by 2016," Nazarbayev told delegates.

"GDP is up, unemployment is down, and we have made major improvements to public services and infrastructure, but there is much more progress still to make," Massimov said. "We will ensure opportunities are shared broadly by narrowing development gaps around the country."

In addition to the declarations on social policy, the opening session also hit on food security - another aspect of social stability in Central Asia. This is less of an issue for Kazakhstan, the third largest grain producer in the former Soviet Union, than for the four other Central Asian republics, all of which are net importers of grain. Today, food prices are rising again to close to the high in 2008, which is already causing problems for the importing countries.

Competition for food and water is growing, especially in the Fergana Valley, which is carved up between Kyrgyzstan, Tajikistan and Uzbekistan, and is considered to be a potential flashpoint for future conflicts.

Nazarbayev referred to the need to resolve food crises in the interests of political and social stability - a view echoed by the director general of the UN Food and Agriculture Organisation (FAO), Jacques Diouf, who had been invited to the opening panel. Diouf called for greater cooperation between the Central Asian countries to help the net importers deal with price volatility, saying that Kazakhstan a big role to play here. "There is a need to examine the potential impact of regional cooperation on trade, to facilitate the free flow of food and agricultural commodities. Sharing information on food stocks and expected drops in crop production would help to increase preparedness," Diouf said.

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