Kazakh president warns of economic crisis

Kazakh president warns of economic crisis
By bne IntelliNews October 20, 2015

President Nursultan Nazarbayev has warned Kazakhs to prepare for an economic crisis worse than that in 2007-09, in a sign that conditions in the country are deteriorating fast

In a statement, Nazarbayev said he had discussed the economic situation with Prime Minister Karim Massimov and ordered the government to prepare counter-measures.

The president noted that budget revenues decreased by 40% because of the drop in energy prices. He also pointed out that "prices decreased for other basic types of export products, including ferrous and nonferrous metals, coal". Nazarbayev warned that "fast improvement of the situation is impossible to predict" because of the difficult situation in the world economy. He stressed that "our people must know the current situation, that means reduction of profits of our enterprises, reduction of income and possible job cuts".  

Nazarbayev instructed the government to analyse the situation and plan anti-crisis measures. He reiterated that no reduction of social wellbeing would be carried out by the government. But he warned that "companies should not expect that the state will provide them with the funds. I do prohibit the use the money from the National Oil Fund for the construction of new facilities, as well as support or subsidising poorly performing enterprises."

Nazarbayev has been warning about the crisis and urging the government to take anti-crisis measures for a year. But the ruling elite's fear of the population's reaction prevented the authorities from carrying out the devaluation of the national currency for months.

The recent statement has several goals. Firstly, it is a traditional way of preparing the public for the worsening economic conditions and therefore it has been widely circulated in the media. Secondly, Nazarbayev is demonstrating that he is a "good tsar" and has already given specific instructions to Massimov. Therefore, the latter should be blamed in case of the aggravation of the economic crisis. In this context,  Massimov can serve as a scapegoat, with many experts predicting snap parliamentary election in the near future.