By Wallace Kaufman
ALMATY, March 23
(THE GLOBE)
My business is not emigration, yet since I arrived two weeks ago more people have come to me asking how they can leave Kazakhstan and become citizens of another country than during the continuous two years I lived here from 1993 to 1995 or in the many visits I�ve made since then. More foreign men tell me that they are approached by young Kazakh and Russian women hoping to find love or at least a practical marriage with a tickle out of Kazakhstan. Maybe this is accidental, like finding yourself in a parking lot half full of Zaporozets, but I don�t think so.
�A former employee at a leading bank wants to leave to study business and then find a new homeland.
�My friend from eastern Kazakhstan whose parents still herd sheep in the mountains and live in a yurt says she has heard that maybe in New Zealand or Australia she and her husband and son could find a better life.
�A friend sends a young couple to me, the husband a laser engineer and the wife a doctor. They recently invested $450 to get the papers they need for the American immigration permission they won in the annual green card lottery.and they want to know where they can find suitable jobs in America. (While they were glad to pay the $450 charged by a San Francisco company, I could have provided the same services for $0.33, the price of an American postage stamp, which is essentially all the San Francisco company provided.)
�A friend�s son who owns a house here and provides security for a private business has bought computer programs to learn English and is paying for his daughter to take private English lessons so they will speak the language of a new homeland.
My neighbor is also paying for English lessons for herself and her 15 year old son. They don�t have specific plans to leave, but when I had been here ten days I realized that the ever increasing number of people studying English was more than recognition that English has become the main international business language. For many people learning English is like having a boat in case the flood comes.
If we exclude required courses in school, many more people choose to learn English than Kazakh. This is the case among my friends whose families are Kazakh also. Language learning is not something people do for sport. The languages people choose to learn are like a compass bearing indicating the direction of the future or the place where someone wants to spend a life.
I began asking people why they wanted to leave. I said after all here is a country where where 80 or 85% of the people voted to keep their president for another seven years. Isn�t that a sign of happy people? When I asked about this I found that it was always someone else who had voted. Just as there is a virtual economy and a virtual legal system that exist only in the imagination, on computers, and in archives, there is also a virtual voter whose actions are duly recorded in the official records and reported in the news but who seems to be a person no one has ever met, or maybe no one admits to being that person. Is it possible that although my friends and neighbors seem to be solid good citizens, nevertheless I live and move almost exclusively among people who don�t believe in voting?
The people who want to leave Kazakhstan offer a variety of reasons, but they can be summed up by saying that for these people Kazakhstan has become a virtual country. It has a constitution, a president, a parliament, a seat in the UN, and a place on the map, but for these people who want to leave, Kazakhstan is not a real place where they or their children can lead real lives. They think of Australia, New Zealand, Israel, the United States, and Canada as real places where people are paid in real money, vote in real elections, are protected by real laws, and retire with real pensions. They think of these countries as places where the future is not a number like 2030, but something that depends on their own ambition and energy.
My own experience biases me to thinking about one�s home country as a family or a team. There are problems, but this is where I belong. I sometimes complain, sometimes say unkind things about my government and my fellow citizens, but I am loyal. Because of this bias I always wonder if someone leaving home is making a mistake. Yes, of course, Canada, England, Australia and New Zealand are richer than Kazakhstan, but money isn�t everything.
On the other hand, life is an investment. What do people invest in their own country? They invest their time, the days and years of their lives. They invest their self-respect. As trustees for their children�s future, they are investing their children�s lives too. What makes a country real for most people is the same thing that makes a business deal real�the prospect that a serious investment will bring a profit. . The profits for citizens include the obvious economic benefits of a job and a living wage. They also include more valuable things like education, health, the opportunity to choose where to live, what kind of work to do, the freedom to operate a business or to speak one�s mind, and to choose who will run the national, oblast and city governments.
Think of Kazakhstan as a stock corporation. In 1991 it was created by the division of a larger corporation that was failing. The shareholders are the citizens. The government is management. Only the day before the great corporate celebration, Nauriz, the management announced it could not pay some of its debts�pensions owed to loyal shareholders themselves. The company has now been in business 8 years. The quarterly and annual financial reports which showed little progress the first few years are now showing losses. The company debt is mounting, management is driving around in Mercedes, and they have voted no dividends for the shareholders. Meanwhile they have used a lot of the company funds to build a fancy new headquarters.
Is it surprising that more and more of the shareholders think of investing somewhere else? Like any investor they are not willing to wait ten or twenty years for the company to pay dividends. This is especially true when management seems to invest more its own salaries and opportunities and headquarters than in improving the conditions of its production force or the dividends paid to stockholders.
Many citizen-investors have begun to think they have invested in a shell company, a virtual company, a virtual country. Of course Kazakhstan only became a country in 1991, and it is reasonable to ask citizens to have patience. They might be more generous with their patience if they had a clearer indication that they were living in a real country.
When I first came to live in Kazakhstan in 1993 I assured my 74 year old landlady that she would soon see changes for the better and that life would be easier. She answered with a brief summary of her life. �When I was born there was a civil war. Then there was collectivization and we lost everything and the churches were burned and I don�t even know the date of my birth. Then we had the starvation. Then we had The Terror. Then came the war and 20 million people died. After that we had stagnation. Then we had the chaos of Perestroika. Now we have something called Kazakhstan. Who knows what that is?�
Last year her granddaughter got tired of waiting for an answer. She took her son and moved to California.
Andrei Tsalyuk,
Informational agency of
financial markets �IRBIS�
Almaty
(specially for THE GLOBE)
The topic of the previous two articles about the currency market was the uncertainty in the market regarding Tenge devaluation in 1999. Unfortunately, this theme may be continued in this week. No authorised official has commented this possibility and the market remains uninformed. The situation is so acute, that the professional participators of the securities market had to send an open letter to the President requesting him to state his point of view.
Nor do the Parliamentary disputes regarding the budget, bode well for the quiet development of the market. A proposal of the Low House speaker Marat Ospanov to introduce a tax on profit gained from securities operations had the affect of bomb explosion. It is quite obvious to both the professionals and the government that the introduction of this tax will not significantly increase budget revenues. However, such a development could prove a fatal blow to the surviving brokers� companies. In such a case, no programmes of �blue chips� would be required, as there would be no one able to realise them.
But the introduction of this tax could also prove devastating for the state securities market, which despite its weakened state, remains essential to the Finance Ministry.
For the first time within a long period, both the professional participators and the government have joined forces against the speaker�s initiative. United in the defence of the remains of our stock market, both parties won for the time being.
In the author�s opinion, nervousness of the budget disputes has gradually trickled down to influence the behaviour of our population. If previously the demand for hard currency was completely covered by supply, by the end of the last week the balance had changed. Banks began to feel a surge in demand. However, it was difficult to profit from this development.
The last week is interesting because it illustrates the impossibility of the tenge�s collapse in the current situation. Even if the National Bank had abandoned the limits and had not regulated the market rate the tenge would not have collapsed. The reason is that the so-called money aggregates indicate an already very high degree of dollarisation of both the banks and population�s assets. The monetary situation is often referred to as compressed. This means that each month the volume of money potentially available to both the Kazakh population and the banks has been steadily decreasing.
There are several ways to reduce the volume of money without affecting anybody. One of these methods was recently taken by the National Bank - to sell debt obligations to the banks. As a result, a volume of money is taken from the banks, for which they receive notes that cannot be spent to anything, including dollars.
However, the results of analyses of the dynamics of the money base, the volume of money in circulation, and the money mass during the second half of 1998, confirm that an abrupt reduction of the amount of tenge assets available in the market did not depend upon the volume of state securities emitted. The closest correlation of the money aggregates were observed with turnover of the hard currency market. Subsequently, the money compression was caused by the fact that tenge was everywhere purchased for dollars. Functions of the National Bank as the main body regulating tenge circulating mass was reduced to �the non-addition� of money to the market. As a result, the conversion of assets to the hard currency led to a deficit of tenges. As the deficit became more and more sharp, the inflation rate was influenced favourably.
According to official statistics, the volume of money mass in the country during 1998 fell by 13.7%. The volume of cash money available to the population and enterprises declined by 26%. These developments resulted in an annual reduction of the specific weight of tenge in the total money mass from 53.9% to 46.2%.
In spite of some decrease of demand for the dollar at the end of January and its almost total absence in February, the money mass compression has not stopped. In January this mass reduced from tenge 149.9 milliard to 131.7 billion, cash money � from tenge 68.7 billion to 58.2 billion (the later data are not available at present). But from the beginning of the year the National Bank had paid off the state securities for tenge 10 billion more than it was sold!
All this information is given solely to explain the events in the hard currency market in the twelfth week.
As it was previously mentioned, the banks felt a rising demand from the population. This demand was the main reason why the banks shifted from a positional game at the stock to the organised purchase of dollar. The events are recurring.
On Monday, March 15 the second level banks demonstrated a very highly organised demand, purchasing more than nine million dollars at the AFINEX. The traders were so active, that no prior auction, which usually takes almost all the session time, was required. The proposed price of the American dollar, 87.5000 tenge per unit satisfied the buyers, and transactions were concluded during the twelfth minute of the session. Resolute actions of the seller �exhausted� the buyer with a high dollar price during the first half of the auction, allowing only a gradual reduction of the proposed price. By the end of the session, the agreed price was 87.4001 tenge per dollar without any significant increase of sales volume. In comparison with the results of the previous auction, the dollar increased by only 10 tiyn.
Money, which the banks received to pay off the state securities on Thursday and Friday had an influence on demand. Only a part of these means were reinvested in the notes placed on March 12. The largest proportion of money was involved in the hard currency sector.
However by Tuesday, this supply of money was exhausted. The demand of the stock market changed abruptly. There was no sign of the recent demand; the participators who had actively purchased dollar on Monday, began to sell it on Tuesday. It was not necessary for the Central Bank to maintain the dollar rate by its interventions, for the banks �managed� to do it themselves.
Wednesday: a new surge in demand. Though the banks were not as active as on Monday, the American currency was purchased in an organised way. On Thursday this process was continued, however the banks seemed tired: the auction volume did not exceed US$ 3.545 million; the transactions were slack. Friday. The last day of the cycle was like Tuesday. Even paying off the state securities did not influence the traders� activity, who again maintained the exchange rate themselves, selling dollars purchased for two previous days.
The weekly results are as follows: For the five days the total auction volume at AFINEX came to US$ 22490 000 with an average session volume of US$ 4 498 000. In the previous week the indices were USD 5490 000 and US$ 1373 000 respectively. This means the participators� activity increased significantly. The same trend can be observed in the non-stock market, where daily volumes stabilised at the rate of US$ 17 000 000, while during the last two months they were steadily falling.
The most interesting thing is that during the pre-election �hard currency-rush� and a little later the banking resources were sufficient to sustain the purchase of not only one to two days, but for the longer period. Though further they always had to sell the purchased dollar due to tenge� s deficit and necessity to fix the profits. Today the banks cannot stay firm for long. An extremely limited quantity of circulating money does not allow one to keep a long hard currency position.
In other words, by compressing the money mass the government literally smothered inflation. However this was accomplished by increasing the size of arrears on salaries, pensions and of the enterprises before each other. Presently the same mechanism is obvious in both the banking sector and in the financial market. With this mechanism�s help we can control devaluation. The speed of devaluation has been steadily slowing for the last three weeks. During the tenth week, the rate of devaluation was 28.46%/year of annual, in the eleventh it was 22.75%, and in the last week the annual rate was only 14.31%. Since the beginning of the year this index is 19.43%/year. This rate is significantly lower than the current trend (for the last month tenge� s devaluation rate was 28.1%/year).
Thus, for the time being the National Bank is keeping tenge devaluation at the planned rate (10%/year). This is achieved mainly due to the deficit of tenges in the market.
At the end of the article I would like to revert to its beginning re: the abandoned tax on operations with securities. For it was no mere chance that I mentioned it.
As has been demonstrated, the compressed money base and money mass has both positive and negative consequences. On one hand the shortage of money tames the inflation rate and promotes the stability of the national currency (if this currency is annihilated or not given to anybody, there will not be any devaluation at all). On the other hand there is a weakened economy, non-payments, and a great deficit of working capital in industry as well as in the banking sector. This is why the move of the parliamentarians is clear: a tax on state securities will force the banks to abandon the useless circulation of money in the turnover of securities, thereby freeing up currency required by the economy and the population.
According to calculations, conducted by �IRBIS� agency, the wiping out of securities by �the non-pension� investors, if the Finance Ministry and the National Bank refuse to adequately increase the profitability of their debt obligations after introduction of the tax, it will broaden the money base by approximately 20 billion tenge, i.e. by 25%. It is obvious that this amount will not settle our economical problems. Moreover, it won�t reach the economy, as all the released means will be spent to purchase dollars with all of the respective sequences.
ALMATY, March 23
(AFP)
Tuberculosis strikes nearly one of every eight convicts jailed in Kazakhstan, but a WHO program to fight the potentially fatal disease has so far failed to prove itself, officials said Tuesday.
Stopping the spread of infectious diseases is one of the main problems facing the country�s prison system, said Maksut Zhumanov, deputy head of the department of corrections under the interior ministry.
At the end of last year, the government introduced a World Health Organisation (WHO) program to treat the disease in prisons nation-wide, Zhumanov said.
�Now it�s still early to make conclusions, but they say the results will be ... very good,� he said.
Of the 85,000 prisoners in Kazakhstan � a country of 15.6 million people � about 10,000 suffer from tuberculosis, Zhumanov said.
Morbidity rates among prisoners suffering from the disease are 65 times higher than for the rest of the population, a 1998 UN Human Development report said.
Local media describe the former Soviet republic�s prisons as overcrowded, and report that cells lack heat and prisoners are not properly clothed nor fed � factors that contribute to the spread of tuberculosis.
Earlier this month, 26 prisoners in a correctional workers� colony in the western Kazakh city of Atyrau tried to commit suicide by slitting their stomachs to protest inhumane conditions, local media reported. They all survived.
Two prison officials were dismissed in connection with the suicide attempts and several were fined, Zhumanov said.
But he otherwise defended the interior ministry�s prison record.
�We dress, feed and educate (prisoners) as far as that�s possible for a criminal ... we�re responsible for him,� he said.
Gulbanu ABENOVA
ALMATY, March 17
(THE GLOBE)
�It appears as though the court and legal reform begun in Kazakhstan has been completed and the society calmed down. This is not so. At present the court system works worse than during the soviet period, as far as professionalism, as well as incorruptibility and the judges� faithfulness to the law are concerned�, the ex-Minister of Justice stated at the press-conference in Almaty.
Professor Nagashybai Shaikenov, a rector of the Kazakh State Juridical University considers reform in several main directions to be necessary at present. This means the development of the right-economical base of the entire society and reformation of the legal system. Some special parts of the civil, juridical and labour codes have not yet been approved. The next direction is reformation of the structural-organisational legal system.
According to Mr. Shaikenov, first of all we should reform the Supreme Court, reduce a number of its members to 10 to 15 qualified specialists. He considers the majority of today�s judges, who became the members of the Supreme Court �thanks to protection�, to be just illiterate.
It is required to establish five or six circuit courts in Kazakhstan. In his opinion, jurisdiction of the circuit courts should not coincide with jurisdiction of the executive authorities, especially with governors� power. Hence the courts should not be created by the administrative order.
�The matter is that a map of the courts and the Kazakhsan administrative map should not be identified, should not coincide,� he believes. Paralllelly with the circuit courts we have to create the appellation courts, which practically are to be the final court instances, while the Supreme Court is to be an exclusive measure�.
Professor Shaikenov considers that at present there is no organisation in Kazakhstan officially interpreting the Constitution. To make it possible the high-qualified jurists able to interpret the Constitutional spirit as well as the codes should work at the Constitutional Court. He mentioned that he as rector receives from the high juridical instances the documents which are illiterate from the juridical point of view. Moreover, they contain a lot of spelling mistakes.
How the criminal statistics is executed
An objective criminal statistics should be one of the fundamental directions of the legal reforms. According to his statement, for the time being control for criminality and the criminal statistics are executed by a single organisation. �It is obviously a faulty system. If a chief regularly reports to the society and to the higher authorities about the status of struggle with criminality and at the same time he executes the criminal statistics, how can we hope for objectiveness of such a statistics?� Mr. Shaikenov supposes that the criminal statistics is done in a very simple way: it is difficult not to mention the serious crimes, e.g. murders , while the small crimes are just not paid attention to.
A big problem for any citizen is registration of a crime, because the right-enforcement organisations are not interested in registration of the crimes which are not perspective for reveal. The ex-Minister of Justice mentioned that it took ten days for him to suit a case of his brother� s murder.
In his opinion the criminal statistics should be executed by organisations not responsible for the criminality level. In this case only there will not be any problems concerning concealing of the real facts, and registration of the crimes will be executed properly.
Execution of the court decisions and liquidation of the criminal business
Information about the court decisions and sentences should be available for any person. It will give an opportunity to study a decision thoroughly, to compare it with similar ones and to be confident that it is right. He admitted that when he was the Minister of Justice he could not get a decision of the Supreme Court. The judges are afraid of being exposed as incompetent. Beside that, if a court take a decision or sentence it does not mean that it will be executed obligatorily.
Nagashybai Shaikenov informed that when he was the Minister of Justice he proposed a method widely accepted in the world. The bodies executing the court decisions on civil cases should be commercial. At present in Kazakhstan execution of the court decisions, fulfilment of agreements, repayment of debts and credits are strove by the criminal structures, as the court is forceless.
However, the Minister�s proposal was not accepted at that time. Instead of this 30% deductions to the special account of the right enforcement organisations were introduced.
Personnel policy and qualification boards
�Further development of the personnel policy will create a basis of the court-legal reform. The Constitution provides a good structure of the qualification board. It is actual for our situation, when a lot of juridical institutes and faculties have been established, when there is a lot of juridical diplomas which are not supported by proper real knowledge�, professor Shaikenov says.
According to him, those who want to become a judge, should pass through the qualification board. Hence, honest people should work in it, and the exams are to be real. He gave an example when he was the Minister of Justice, only 30% of the practice judges could pass the qualification exams, and the rest 70% managed to pass them literally in a month.
Today the court department is headed by a person whom he recently dismissed from the legal activity with great difficulties. �We may create a fine construction, but if there are no professionals, this construction will fail�, the professor states.
The revolution was done by the jurists or about reformation of the high juridical education and the whole high education
As it was mentioned by Nagashybai Shaikenov, during the last years we had an obvious tendency of a mass of juridical diplomas which are not supported by knowledge. It is clear enough that quality of the high education is worsening, while teachers work simultaneously at several institutes. High education requires reformation. Every newly established institute considers it to be its duty to open juridical or economical faculties. For example in the agricultural university or in the Kazakh University of world�s languages. By the way at one of these institutes jurisprudence is taught by a specialist of military training.
If a teacher works at five institutes, that means the five institutes have no teachers. They think, that quality of education worsened due to decrease of investments. But the system has not been narrowed, on the contrary it has widened. Along with the budget financing the institutes are invested by the students� parents.
As far as licensing is concerned: first of all the state should control those juridical persons that receive the licence and assure that they are able to fulfil this activity qualitatively. Educational functionaries naively suppose that specialists from Saint-Petersburg, Tomsk, professors from Germany, United States, etc. will come to the new private institutes.
Secondly, the Ministry of Education while granting a license should know how many institutes and graduates of different specialities we require. Why should we increase unemployment?
Within the next years the financing of the high education against the budget will be reduced. Hence we should invest to those institutes and faculties which are able to prepare qualitatively the most necessary specialists. The rector also proposes to introduce the state order, which will allow to invest money rationally and to liquidate global unemployment.
Speaking about the quality of education, Mr. Shaikenov reminded that recently at one of the forums concerning educational problems he proposed his colleagues to test students� knowledge of a single subject.
The procedure would not take much time and its objective was just check in what institutes the students knew the subject better. He offered three computers free of charge to check the answers. His colleagues, rectors of the institutes seemed to support his proposal at the forum, but later they began to call him; �We are not ready.� �What do you mean, there is no lecture-hall? No students?� They keep silent.
�They want to live quiet�, he resumed.
All Over the Globe is published by IPA House.
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