Michail SERGEEV
Beibars BATYRKHANOV
ALMATY, Sept 10
(THE GLOBE)
Recently in the republican high ranks there was a number of rearrangements. How are these events connected with the situation in Kazakhstan? What makes the authorities to make these corrections?
The co-chairman of �Azamat� party Pyotr Svoik tried to answer these questions in his interview to THE GLOBE.
Personnel rearrangements made recently inside the same circle (the dismissals of Nurlan Kapparov, Kalyk Abdullaev and the shift of Rakhat Aliev) were connected with the approaching complete deadlock in the policy, which is being followed for 10 years.
That economic platform, basing on which the government is trying to solve its tasks, is continuously getting narrower. At the present time, this platform as shagreen leather has reduced to such a dimension, when even elementary problems cannot be settled.
At the present time the competition for those places in the Kazakhstan economy, which are considered profitable, has started. For example, the post of the President of �KazakhOil� has become extremely demanded. If the economic situation were more favourite in the country, there would be at least two hundred posts for functionaries of the highest ranks.
This is not only internal problem of Kazakhstan, that makes our authorities to make such rearrangements. The external situation is both dramatic and threatening.
For example, Kyrgyzstan is absolutely defenceless before the invasion. Kazakhstan, as this neighbouring republic, may become defenceless two to three hundreds of trained and well-armed people due to the sad situation both in the army and in the entire country, as our republic is before locusts and weeds.
In this case the government tries to focus, though it has less and less resources.
In my opinion, in this situation we have to save ruins of the present policy and to set up the new one, but on a wider and stable basis.
ALMATY, Sept 9
(IIA �PoliTon�)
On August 11 �Reuters� agency announced that IMF had rejected to allot a credit to Kazakhstan. It is known that in May 1998 the republican authorities rejected from the IMF�s credit proposal. The IMF executive director agreed with the Fund�s role of an observer (proposed by N. Nazarbaev) and announced that IMF would provide an early notification in case of any threat to a macro-economic balance of the country. However, in the end of 1998 Kazakhstan received a credit from IMF for the amount of US$ 154.7 million to support its hard currency reserves. Now IMF rejected to allot the credit. Thus, we may ascertain some definite changes in the interrelations between the Fund and Kazakhstan.
In connection with this the Independent Informational Agency �PoliTon� conducted the experts� poll devoted to this problem.
The experts believe that the history of interrelations between Kazakhstan and the Fund seems contradictory only at the first glance. In fact, everything is natural. But the experts perceive this naturalness in a different way. So, some experts explain �the friendly� period (this is the expression of one of the polled experts) of the relations between the sides, which lasted till the beginning of 1999 in the following way: �In Kazakhstan from 1996 to July 1998 the program on widening the IMF�s crediting was being realised. Before that and within the mentioned period all reforms were realised strictly according to the Fund�s recommendations. The continued liberalisation of the economy, creation of conditions for foreign investors, and achievement of the balanced budget complied with the demands by IMF. The relations between the Fund and Kazakhstan were the most friendly ones�(the end of the quotation)�. Undoubtedly, negative factors (e.g. ineffective utilisation of financial means) were obvious in that period, but against the total background of the interrelations these difficulties seemed natural and quite surmountable.
Another part of the experts, while evaluating �the friendly period� was more categorical: �Having signed the Agreement on allotment a credit to Kazakhstan under definite conditions three years ago, figuratively speaking, IMF placed the country in the first class of �the civilised political-economic state construction� school. The Fund is the principal of this school. If Kazakhstan had become a hard-working pupil, it would have gone to the next class, i.e. it would have been allotted credits without any restrictions and delays. But this did not happen� (the end of the quotation).� If (this is an opinion of an expert from this group) once IMF did not notice some negative factors, this can be explained by the Fund�s expectations of some definite positive changes. But when these expectations were delayed, the reaction of the Fund was rigid.
The following points were mentioned as the main reasons for the rejection to credit the country:
1. Inadequate reaction of the republican authorities to the East-Asian crisis. In particular,
- in the result of the economic losses connected with non-gained expected profits of enterprises of oil and metallurgical sectors and hence, due to the reduction of tax collections to be deducted to the budget, the Kazakhstan government took measures on financial regulation, which did not satisfy IMF. These measures were as follows:
- the introduction of the international trade import barriers (the winter prohibition on import of cheap Russian products was given as an example);
- trials to achieve the balanced state budget reducing real expenses towards social requirements, when inflation tempo was growing under the free-floating tenge�s rate, but not increasing the budget expense articles;
- IMF is not satisfied with the policy of Balgimbaev�s government. This policy is reduced to just the devaluation of tenge, but does not content any concrete measures to improve the economy, i.e. to restructurise and to stir up the manufacturing sector, to struggle against the shadow economy, which does not give any budget revenues, etc.
2. The polled experts believe that the next factor is inefficient and often � non-purpose utilisation of previously allotted loans. This did not promote stability of our economy due
- to uncontrolled utilisation of credits allotted by IMF and other financial sources,
- to excessive protectionism of the state sector in the industry and agricultural sector,
- to a low efficacy of the privatisation (in particular, the unsuccessful formation of our own stock market and the failed �blue chips� project) in basic branches of the economy.
According to the experts, all this give IMF the right to consider that Kazakhstan does not fulfil its undertaken obligations properly. Thus, doubts in the appropriateness of investments to the Kazakhstan economy and in guarantees regarding repayment became quite natural. Hence, the cooled relations and rejection to allot the credit.
3. Commenting the officially sounded reasons for the rejection (i.e. the absence of a realisable economic program), practically all experts considered this version as an objective, but a mild combination of numerous reasons (not only economic ones), which caused the present situation in our country and in its authorities. For example, one of the experts expressed his opinion in the following way: �� the absence of an economic program is just a consequence, as at the present time in the economic sphere we may ascertain an anarchical state. In particular, in respect of the managerial things. There is confusion and hesitation in the government due to the shadow economy, corruption motifs and activated political processes at the background of the last and future election campaigns�All of us remember the dismissal of some ministers, repeated debates regarding the Government�s dismissal, the collapse of the agriculture and so on� I think, possibly, IMF�s decision is correct, as the condition of economic programs is chaotic and to credit such a condition of the economy is at least unwise�(the end of the quotation).�
Grounding the weight of political reasons for the rejected credit, the experts refer to the recent example of Byelorussia, which (in these experts� opinion) was rejected by IMF due to only political reasons, as this country ignores IMF�s demands to liberalise the market even more than in our country. Considering the political life of Byelorussia as undemocratic, though this republic is in the centre of democratic Europe, one of the polled experts stated that A. Likashenko had used the IMF�s rejection as a reason for an additional propaganda of �an especial way of development�, that (according to the expert) is also being observed in our republic.
Another expert, neglecting the possibility of influence of political factors, refers to the relations between IMF and Russia. This expert believes that crediting of this country by IMF is caused by just economic reasons, despite the political instability of this country. However, the opinion of another experts, who also supports the priority of economic factors sounded in dissonance of the above-mentioned opinion: ��we cannot compare IMF�s attitude to Russia as a great power, with its attitude to Kazakhstan, a peripheral country. IMF made many concessions to Russia, while significance of Kazakhstan is not so great. The reason for the rejection is common. If a business partner does not want to fulfil the demands, he will not receive any credit� (the end of the quotation).�
According to most experts, the influence of political aspects on crediting by the Fund is very weighty. So, one of the supporters of this point of view affirms that our authorities did not wish to understand the common fact: IMF is not just an international financial structure, but a political structure which controls its clients fulfilling international standards regarding policy, human rights, election, etc. very strictly. Having understood that Kazakhstan does not wish to observe these standards, IMF immediately came to conclusion. This expert supposes the President and the government should not look for the reason for the unsuccessful negotiations on the next credit in any too rigid conditions stipulated by the Fund, but in their own unwillingness to construct a civilised political-economic system. According to the same expert, ��Kazakhstan has a peculiar feature, which make it different from many post-soviet states: all these years the country has been sincerely pretending to be an IMF�s client, who is trying to learn its lessons. But this could not last for a long time, and at last the Fund asked the international community, if Kazakhstan is going to learn these lessons to comply with requirements laid to the clients? IMF did this in the form of the rejected credit� (the end of the quotation).�
The opinion of another experts is also categorical. Characterising relations of the Fund with post-soviet countries, he says about the new stage of these relations. In his opinion, the Fund has examined �the face� of each post-soviet country and found out that these �faces� are different. The diapason of the governing systems is from western democracy to dictatorships of orient feudalism. The expert believes that the Fund�s attitude to these countries is not based according to the former common scheme: �IMF - the state�, but according to the double one: 1) �IMF - the state� and 2) �IMF functionaries � the state functionaries�, i.e. at the interpersonal level. These relations are getting more and more complicated. While taking decisions regarding the credit, now the following aspects are taken into consideration: how economic reforms and democratic processes are being realised in the country; how human right are being observed; whether both the election legislation and election practice comply with the international standards, etc. In this case the dominating factor is the policy. In this expert�s opinion, today Kazakhstan is hardly complying with the democratic standards.
Among other political factors the experts consider the authorities� attitude to the opposition and the situation around the election campaign in Kazakhstan which has aroused an unprecedented for Kazakhstan rigid criticism by the West, as the most significant ones. Moreover, one of the experts directly connects the Fund�s rejection to credit the country with the activated internal political struggle in Kazakhstan and with the giving up of achieved positions in democratisation of the country. This expert supposes that namely one of the opposition�s leader, A. Kazhegeldin �� has initiated the pressure by USA, European Commission, IMF and other international organisations on Astana�(the end of the quotation).�
Anyhow, according to another expert,
�� with its rejection IMF makes our President and the government reduce the expense articles of the budget, abandon import and tariffs restrictions. The Fund also calls for the honest election, and for permission to take part in the election for all democratic opposition�s leaders, including A. Kazhegeldin. If all these demands are fulfilled, the next credit will undoubtedly allotted. If these requirements are not fulfilled, the Kazakhstan economy will be in a condition worse than the present one� (the end of the quotation).�
The stopped co-operation between IMF and Kazakhstan may result in a) reduced international financial ratings of Kazakhstan, hence, more difficult crediting by other financial structures; b) more abrupt strengthening of the budget crisis; c) an abrupt worsening of the country�s balance of payments; d) strengthening crisis of monetary credit system; e) more abrupt reduction of capacities of manufacturing economic structures of RK due to reduction of the circulation money; f) worsening solvency and fall of the population�s standard of life; g) strengthening political crisis of the authorities which will have to pump out everything from the population �to cover the holes�. Naturally, this will not add popularity to the authorities.
A part of the experts believes possible the strengthening of negative consequences to catastrophic ones. These negative consequences may be default, repeated sequestration of the budget, and total economic collapse of some regions. Besides, the experts consider both economic and political embargo in respect to RK possible (something like the Yugoslavian variant). Possible the present authorities will become completely unable to control both political and economic situation in the regions. The struggle for the power may sharpen both inside the governing structures and between them and the opposition. This may finally make the existence of the present authorities doubtful.
At the same time, there is an opinion that the reduction of the investment rating of RK will be hardly able to influence soon significantly the interrelations between Kazakhstan and other investors, as these processes are very inertial. Besides, those investors who have invested something to the Kazakhstan economy, are not interested to spoil their relations with the country�s authorities. Most probably, they will continue to invest, in order to save the invested means, though some conditions may be toughed and the control may be strengthened.
One more point of view is regarding possible serious changes in the government. These changes are either directly or indirectly connected with IMF�s decision. The opinion of the expert, who considers IMF may soften its demands to the Kazakhstan authorities. This expert connects his supposition with the last events in the south of Kyrgyzstan, which may destabilise the entire situation in Central Asia. In his opinion, the West is not interested in this, hence it will have to support economically and politically states bordering on Kyrgyzstan in order to avoid more dangerous situation.
Nevertheless, the majority of the experts agree with one of their colleague that we will not have such �friendly relations� between the authorities of RK and IMF, as they were by May 1998.
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