KAZAKHSTANI PEOPLES� ASSEMBLY TO HOLD ITS 5TH SESSION. Astana, January 21, Kazakhstani Peoples� Assembly is scheduled to hold its 5th session at the Kazakh Parliament. The main issue to be discussed at the session is reportedly on current political situation in the country and new Cabinet�s staff. Later today Kazakh Parliament�s both Chambers (Senate and Majilis) are schuedled to hold a joint session on the new Cabinet�s staff too, at which the recommendations of the Kazakhstani Peoples� Assembly will reportedly be taken into account. The Kazakhstani Peoples� Assembly was created by the Kazakh Presidential Decree in 1995. Kazakhstan�s re-elected President Nursultan Nazarbayev said earlier last week that Kazakh Premier Nurlan Balghymbayev, as well as, the main part of the former Cabinet, would remain in the Office, mentioning though that some of the Kazakh Ministries would be merged. It is not clear though which of the Ministries are going to be merged.
REGIONAL ADMINISTRATORS TO BE RE-APPOINTED. Kazakhstani President Nursultan Nazarbayev signed a Decree yesterday, according to which all the regional akims (governors) were announced as freed of their positions, and allowed to continue the current jobs temporarily till the new akims were appointed. According to the Kazakh Constitution�s Chapter 87, paragraph 5, all the regional governors of the country are supposed to be re�appointed by the newly elected president.
KAZAKH PREMIER NURLAN BALGHYMBAYEV MET WITH HIS UKRAINIAN COUNTERPART VICTOR PUSTOVOITENKO. Kazakh Premier Nurlan Balghymbayev met with his Ukrainian counterpart Victor Pustovoitenko in Astana yesterday, January 20. The latter participated to the ceremony of the re-elected President Nursultan Nazarbayev�s inauguration. RFE/RL correspondents report that the sides discussed Kazakh�Ukrainian trade perspectives. Possibility of the Kazakhstan�s participation in tenders on privartization of the Ukrainian oil refineries in Lissichansk and Kherson, ways of the Kazakh crude oil trasportation to the West through the Ukrainian territory were reportedly taken under discussion. Delivery of the Ukarinian tractors and combains to the Kazakh agriculture sector, railroad cars and trams to the cities of Kazakhstan was also discussed. The sides signed joint communique on trade and economic cooperation. Kazakh Ukrainian intergovernmental session was announced to be held in Kiev in March this year.
AKEZHAN KAZHEGELDIN�S PARTY APPLIED FOR REGISTRATION AT JUSTICE MINISTRY. Astana, Republican People�s Party led by the former Prime Minister Akezhan Kazhegeldin applied for official registration at the Kazakh Justice Ministry. Vitaliy Voronov � one of the newly established party�s Executive Committee members, told RFE/RL correspondents that according to the Kazakh laws, Kazakh Justice Minuistry should inform the Party leaders about the party�s registration or its having not been registered. Akezhan Kazhegeldin � Kazakhstan�s former Premier, failed to particpate in the presidential elections, due to his having been found guilty for some minor law breaking.
by Heather Clark
ASTANA, Jan 20 (AFP)
Kazakh President Nursultan Nazarbayev, his hand placed on the constitution, was sworn in Wednesday as the first head of state of this giant Central Asian republic to be elected in a contested race.
Nazarbayev, 58, who won a landslide victory in a January 10 poll that was widely criticized for being unfair, said he would broaden market reforms and further boost democracy during his seven-year term.
�As a person, I am happy to win these elections and am fortunate that my people showed great trust in me to lead us forward in a difficult period of our history,� Nazarbayev said in Kazakh through a translator after taking the oath of office.
The gala ceremony was attended by Russian Prime Minister Yevgeny Primakov, Uzbek President Islam Karimov, Kyrgyz President Askar Akayev and CIS executive secretary Boris Berezovsky, among others.
Russian President Boris Yeltsin, in hospital undergoing treatment for a bleeding stomach ulcer, congratulated his Kazakh counterpart on the �display of wide support from the Kazakh people� for Nazarbayev in the elections.
In his acceptance speech, Nazarbayev admitted Kazakhstan would experience tough economic times over the next few years due to the knock-on effect of the Asian and Russian crises.
But he said he hoped that during his new term further market economic reforms would bring prosperity to the former Soviet republic�s 15.6 million people.
�During the next seven years, the people will have to have the results of the reforms in their pockets and on their tables,� he said.
Nazarbayev also admitted Kazakhstan�s fledgling democratic system is �far from the ideal model of an electoral democracy,� and that the country has a lot of work to do to live up to international democratic standards.
�We clearly see what we need to do to take this path toward democracy,� said Nazarbayev, pledging to allow all political parties to participate in parliamentary elections scheduled for this fall.
Western observers have criticized Nazarbayev for stage-managing the campaign from the start, when his rubber-stamp parliament voted to hold the election nearly two years early, giving opponents little time to prepare.
During the campaign, Nazarbayev�s most able opponent, former prime minister Akezhan Kazhegeldin, was banned from the race for a minor administrative violation and the media was reined in to boost the incumbent�s image.
Following the January 10 poll, a local electoral commission member told AFP that they were forced to change ballot totals in favor of Nazarbayev or risk losing their jobs.
Similar fraudulent practices were reported to other western observers.
Officially, Nazarbayev won the election with 79.78 percent of the votes, with Communist leader Serikbolsyn Abdildin a distant second at 11.7 percent.
Nazarbayev was first elected in 1991 shortly before Kazakhstan became independent in an unopposed race. In 1995, his term was extended to 2000 in a national referendum.
Nazarbayev�s inauguration was proclaimed a national holiday.
Thousands of Kazakhs came to the capital city�s main square in sub-zero temperatures to cheer on their president as he walked from his modern residence to a concert hall where the inauguration took place.
Nazarbayev was expected to meet in private with Primakov, Karimov, Akayev and other delegations Wednesday, his press spokesman said.
Gulbanu ABENOVA
Almaty, Jan 21
(THE GLOBE)
�Pension funds do not affect the tariffs of natural monopolies�, state representatives of the pension fund of the Halyk Savings Bank RK.
Kamila Arstanbekova, the Chairwoman of the accumulative pension fund of the Halyk Savings Bank of Kazakstan (HSBK) informed that amendments to the Law on Natural Monopolies were being prepared that would enable the latter to remain their positions of promoters of the non-state pension funds (NSPF).
As is well known, the Law on Natural Monopolies does not permit such companies to be promoters of any funds or enterprises in purpose of cutting their tariffs.
�Under no circumstances do we affect either prices or tariffs for the goods produced by natural monopolists. As far as I know, now an amendment to the Law on Natural Monopolies is being prepared, and we really hope it will be passed�, she said.
According to Mrs. Arstanbekova, the accumulative pension fund of the HSBK was established two years ago. In 1998 it attracted about 400 thousand depositors. The volume of pension assets goes beyond 2.5 bln tenge. �Nowadays, the pension fund of the HSBK is the largest in the republic and exceeds similar indices of other non-state pension funds 5-6 times�, she claimed.
As Mrs. Arstanbekova believes, the fund gained such a success owing to its promoters, which are the National Oil Corporation Kazakhoil, the National Oil Transportation Corporation Kaztransoil, JSC KEGOK, the republican state enterprise Kazakstan Temir Zholy, and first of all the Halyk Savings Bank of Kazakstan.
�In the event the amendment is not passed, the pension fund under the HSBK will lose the two of its significant promoters � KEGOK and Kazakstan Temir Zholy, which will complicate the functioning of the fund�, the Chairwoman thinks.
She said that normally all the pension funds for three years should be unprofitable for the companies that had established them. Therefore, most of the largest enterprises are not interested in purchasing out their controlling interest.
�To protect the deposits of the savers we allocate them in securities, which profits are denominated in currency, i.e. devaluation is excluded�, informed Nurzhan Alimukhambetov, Deputy Chairman of the NSPF Board.
According to him, today 44% of the fund�s portfolio is allocated in state securities nominated in the national currency, and 56% is allocated in eurobonds.
Kamila Arstanbekova said that issuance of the eurobonds was connected with the crisis in Russia. She emphasized that in September last year profitability comprised 26%. As for the annual results, the profits amounted to 100 mln tenge.
The authorities of the pension fund are sure this year the number of depositors of the fund will increase by 700 thousand. The representatives of the fund pin their hopes on the international audit, which is currently being conducted. Upon the audit completion the fund intends to bring its services into accord with the international standards through following the recommendations of the foreign auditors.
Translation � INSEL
N.K.
1. State establishment
From the very beginning of the rain of sovereignties on the territory of the former USSR after 1991 it became clear that exactly in Kazakstan the state establishment would be the most difficult problem. This was connected not only with the considerable orientation of Kazakstan�s economy to enterprises of the former Union, and first of all to Russia and absolute obscurity of the country in the international community. The most important problem in a making of a new state has been (and it is!), as we think, an internal reason: feeling of belonging to this very establishment by the citizens and, to be more precise, by the population of the country, was the crucial issue in the process of the new state formation.
None of newly independent states ever faced the problem of self-identification so seriously. Russia inherited the all-union tradition of multi-national formation, while in other republics the native population prevailed over the others and, first of all, over the Russian population - did not bring the issue to agenda. Baltic countries referring to their pre-war state organization moved the same way of development and during the first years they just limited rights of the non-indigenous population.
The problem of self-identification in Moldova, including in the aspect of its difference from Romania led to bloody opposition in the Pre-Dnestr. Other local and rather serious conflicts in the Abkhazian part of Georgia, Karabakh and of course in Chechnya in Russia are well known to our readers. One can dispute Russian influence upon these conflicts, but this is not the issue.
Kazakstan positively differs from any other country concerning this aspect. However, the figure of migration from the country speaks for itself: according to different estimations from 1, 5 to 3 million people left the country during the years of independence. Russians and Germans made the mainstream of immigrants.
Kazakstan�s authorities and first of all the president clearly preferred external problems independence attributes and we are not going to discuss their failures and success. The problem of civil self-identification from the different points of view takes its course or put under the slogan �Kazakstan for Kazakh people�. One may say that the illness, driven inside led to the original and rather harmful bloodletting. For example the following fact witnesses in favor of the slogan: the department, where my daughter studies (it is clear why I do not name it) from 56 images of professors on stand of honor, only 6-7 persons are not natives.
As for representatives of ministries, akims and other officials, 70 % are natives (The Energy of Kazakstan, 1998).
Kazakstan has to increase its population up to 25-30 million, many experts think.
As a result of this unclear policy of Astana, experts in different regions of the republic evaluate Nursultan Nazarbayev a follower of the equal rights of all the nationalities of Kazakstan in very different way (see The Globe # 100-1, as of December 31, 1998). In the Shimkent region, the center of mainly Kazakh population only 13, 3 5 of experts evaluated the president an upholder of equal rights for all the nationalities.
The same figure in Russian Ust-Kamenogorsk and Petropavlovsk made respectively 20, 0 % and 23, 3 %.
It is obvious, that it is not possible any longer to ignore principles of policy and not to follow them. What will happen then?
N. A.
Translation � INSEL A. B.
From the editor
Hereby we attract kind readers� attention to the article �Indonesia Wants a Currency Board against IMF Opposition, Kazakhstan Ought to consider the Same� by Hartmut Fischer, which had been published in our newspaper on March 6, 1998.
The last events revealed the necessity of solving problems concerning local currencies.
The author presents one of the interesting versions. But there are some doubts about it. Mr. Fischer believes that tenge pegged to the US dollar and establishing the system of currency boards in Kazakhstan would help stabilize the rate of exchange and prices and strengthen the economy of Kazakhstan. But it ought to be taken into consideration that from August to October 1998 six hundred million dollars had been spent for the maintenance of the course of tenge. Furthermore, the trade deficit constituted one billion four hundred million US dollars. So Kazakhstan�s hard currency reserves in gold were effected. Some Kazakhstani experts consider that the whole volume of Kazakhstani currency is too pressed to be able to stimulate the economic growth. The protracted crisis of oil prices as well as insufficient activity of foreign investors make one doubt that the system of currency boards can be effective in Kazakhstan.
By Hartmut Fischer
San Francisco
Febr 7, 1998
(Specially for THE GLOBE)
In December 1994 the Mexican peso fell under speculative attacks. As the crisis spread to other Latin American countries one currency remained stable - the Argentine peso.
Argentina, known for its hyperinflation, made a radical change in 1991. It established a one-to-one exchange rate with the U.S. dollar. After initial problems, Argentina\rquote s rate of inflation is now near zero. Today everyone can still exchange one peso for one dollar. Argentina did not need a rescue package and has become one of the world\rquote s fastest growing economies.
Now we have the Asian crisis and to date the International Monetary Fund has committed more than $100 billion in rescue packages aimed at stabilizing Asian economies, including $43 billion for Indonesia. In the present turmoil one currency stands\emdash the Hong Kong dollar. It has remained stable, even under fierce speculative attacks.
So what do the Argentine peso and the Hong Kong dollar have in common? Why are they strong enough to hold up under relentless attack while other currencies succumb? Why do they not need an IMF rescue?
The simple answer is that they don\rquote t have central banks; they have currency boards.
A currency board differs from a central bank in that the central bank has the right to print money based on its policies. A currency board can only create money if it is backed 100 percent by a reserve currency. A central bank does not guarantee a fixed exchange rate, but a currency board does. A central bank can lend money to banks, while a currency board can only lend money to banks if its reserves exceed the 100 percent minimum reserve requirement. A central bank can print money to cover a government deficit, a currency board cannot. A central bank makes decisions in secrecy; a currency board follows transparent rules.
One might ask why Argentina did not simply adopt the U.S. dollar as its own currency, instead of creating a currency board system. There are two reasons: The first relates to the powerful symbolic value of a currency. Not having their own money would be hard for proud Argentines to stomach. Secondly, they would give a huge, interest free loan to the U.S. Federal Reserve Bank, something they certainly do not want to do. Let me explain.
When the public holds dollar bills it gives an interest free loan to the U.S. Federal Reserve Bank. To simplify, the Fed buys U.S. government bonds and pays with dollar bills. The Fed earns interest on the bonds and pays no interest on the dollar bills. This is a profitable business for the U.S. government.
People around the world buy U.S. dollars when their own currency\rquote s value is unstable. They make an interest free loan to the U.S. government. While an individual can do nothing about this, a whole country can avoid it by using a currency board.
(To be conyinued)