Minister sacked as Kazakhstan rethinks pensions reforms

By bne IntelliNews June 11, 2013

bne -

With growing opposition to the Kazakh government's plans having helped scupper a draft law on pension reform, the presidential office announced on June 10 that the country's Minister of Labour has been sacked.

The dismissal of Minister of Labour and Social Protection Serik Abdenov follows hot on the heels of President Nursultan Nazarbayev's return of a controversial draft law on pensions reform to the Kazakh parliament. That move came amidst the rise of rare protests against the government.

Plans to reform the system - in particular the decision to raise the retirement age for women - have provoked a grassroots movement, with both men and women mobilising through Facebook, collecting petitions and heckling Abdenov and other public figures. Kazakhstan's investor community has also criticised plans to merge Kazakhstan's eleven pension funds into a single state-controlled fund, and to temporarily restrict where funds can invest.

Nazarvayev returned the law to parliament on June 7, proposing that the start of phasing in the five-year increase in the retirement age for women be put back from 2014 to 2018. In a televised address, Nazarbayev said that while the reforms are economically sound, the government - in particular the labour and social protection ministry - had failed to get the population on side. He criticised the "clumsy" handling of the issue by government officials who had "ignored the social significance" of the bill.

The following day, Prime Minister Serik Akhmetov announced that a new working group would be set up, to draw up measures to modernise the pensions system, and to effectively invest pensions assets into promising sectors of the economy, according to Kazinform. Deputy Prime Minister Kairat Kelimbetov, rather than Abdenov - who until now has been the main spokesman for pensions reforms - will head that body. Deputy Labor and Social Protection Tamara Dyisenova will replace Abdenov until a new minister is appointed.

The sacking comes as the minister - the main target of the anti-pensions reform campaign - has attracted mockery. Attempting to defend the plans at a public meeting in April, Abdenov told a crowd: "You have to work and work ... because, esteemed fellow countrymen, because, because ..."

A video of the meeting has gone viral on YouTube, and sparked an online campaign featuring photos of women carrying signs pronouncing: "I must work and work until 63 years ... Pa-ta-mu-chto, Pa-ta-mu-chto". Campaigners have also pointed out that as recently as September 2012 Abdenov said there was no need to raise the retirement age.

Public protests are rare in Kazakhstan, and the growing opposition to the pensions reforms have caused concern in Astana. The Facebook page dedicated to the campaign carries other controversial posts including comparisons of pensions payments to the income of top officials and oligarchs, and the expected costs of hosting the EXPO-2017 world fair in Astana.

However, reform is unlikely to be put off entirely, as Astana aims to make the pensions pot available for financing infrastructure projects. The Kazakh state statistics agency has also warned that the birthrate is likely to start declining from 2015 - although Kazakhstan is a long way from facing the kind of demographic crisis seen in many European countries.

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