By Banu MARAT
ALMATY, Jan 25 (THE GLOBE)
�According to the Agreement the regional akim obliged within the framework of his authorities not to permit illegal actions on the part of state bodies and officials in respect of the Bogatyr Access Komir association, the press-release of the Pavlodar regional administration �AT�TIME� says.
Zhakiyanov�s press-service informs about an official visit to Pavlodar of Leonard Blavatnik, the US Access Industries Inc. Company�s president, representing interests of the Bogatyr Access Komir association (BAK), with which the akim had signed the agreement.
In compliance with this agreement the BAK association undertakes liabilities to sign a contract of renting plots of land with the Ekibastuz akim at 477 million tenge per annum. The rent cost of disputable plots of fields
�9 and �10 of the Ekibastuz coal-mining deposit will be deducted from the total sum.The agreement stipulated effecting clearing settlements between the budget and the company under the rent contract. So, in particular, a T186.9-million debt of institutions, financed from the regional and city budgets, will be reimbursed against the thermal energy supplied by the Ekibastuz heat power central station in 1998.
According to the regional akim�s press-service, all financial resources, remitted by Bogatyr Access Komir on the account of the rent payment against plots of land, will be used first of all for paying wages of employees of budget organizations and institutions, in particular in the sphere of public health.
Firm �Insel�
V.B.
�My younger daughter is going to enter the university to study law and the elder daughter decided to start studying this year as well. She completed a school last year. I am utterly at a loss�, He, my chance companion complained, while driving me throughout the city from my home to the office near the Central Department Store.
�May be to sell the car? Beginning from this year everything shall be payable, there is no free education any longer�.
He did not think what his daughters would do after the graduation. However I saw in his eyes: �I should provide my children with this�. I should point out that �it is necessary to educate children� concept is very typical for Kazakh people.
He is a Kazakh, about 40, seemed to teach mechanics or motor mechanics in Djambul. He moved to Almaty and worked for a bank in �a credit department, and currently I am forced to taxi�.
�Do you know, Nazarbayev said that they would give credits to enter the universities. To receive credit I shall have to give bribes, otherwise nobody gets anything. May be they will give credits to an administration after a call. Do you know how this usually happens? An akim calls, banks obey, and then businessmen pay. Oblast banks collapse because akims have practically unlimited power there: they have to give to one and to another�, he talks.
�To get credit I shall have to pawn my apartment. You certainly know how they are going to estimate it��, he continues.
�Last year I sold a two-room apartment near the central market for $16 thousand and bought another � for $8 thousand at Ryskulov Street. $5300 was spent for this very car, and the remainder - for clothes and some other small things. May be I shall sell the apartment again and buy something in the country. Or to sell the car?�, he is distressed.
He has an old Mitsubishi space-wagon produced around 1988. �On the other hand the car maintains my family. The money earned is enough for food, petrol and repair, in such a way I make both ends meet. If I sell the car how shall we live?�
�I want to set up a service center, this would be really great�, he continues, however without any remarkable enthusiasm. Firstly, prices must be low, then when customers are used they may be increased�.
Meanwhile I thought that the enterprise might go bankrupt while customers get used to low prices indeed. I can sell bread. I had a baker�s shop in Djambul. Once I understood that sales are getting lower and lower. It appeared that people bake bread at home and go from door to door to sell it. Bread is a profitable business, He finished with a melancholic tone.
He is not a professional driver. I heard his engine pattering.
�My children should study. The fee for law department is $1200 per year, plus a bribe. Otherwise nobody shall guaranty entrance. Last year my friend paid for his son, otherwise goodness knows�� he continued talking.
Here is a chance conversation-monologue. What shall be a conclusion? There is no aim, there is no national care as in soviet times and no programs to help such people? One does not think of education, but struggles for survival. I do not want to make such conclusion, just such a conversation.
What to do?
N. A.
Translation �INSEL A.B.
Timur SATYBALDIN
ALMATY, Jan 25
(THE GLOBE)
�Immediately after appointment Nurlan Balgimbayev the Prime Minister I submitted my economic program, on which I had been working last, to the Government�, said the Chairman of the Mazhilis of the Parliament RK in Almaty on January 22.
Marat Ospanov thinks that policy of macro-economic stabilization has accomplished its mission, and therefore is drained. Saving the achieved national measures, a strategy of economic growth should replace the strategy of macro-economic stabilization.
Today the problem of devaluation of the national currency is very actual. In connection with collapse of the Russian ruble and other currencies in the neighboring states, economists and financial institutions propose devaluation of tenge as a tool to raise competitiveness of the domestic products. However, as soon as the situation stabilizes, in terms of outside factor impact, it will be a necessity to take such a step.
On the whole, today the program by Marat Ospanov proposes to continue implementation of the toughened monetary policy that has been implemented up to now, and even to toughen it more. However, it should be implemented till the threat of the outside crisis factor is serious. �As for long-term perspective for the nearest 5 years, as soon as such threat melts away and the situation stabilizes, it will be necessary to amend the economic policy as appropriate�, he thinks.
�The fact is just the fact: the mechanism of financing the budget deficit, formation of the budget, policy of money regulation, the process of finance flow formation and finance flow into the real sector of the economy � these are the problems, including the banking policy, taxation policy, investment and industrial policies. These problems should be reviewed from a different point of view. It is a smart thing to do in order to move forward and resist to a possible collapse�, Marat Ospanov said.
Gulbanu ABENOVA
Almaty, Jan. 25 (The Globe)
�The Volvo S80 is the most complete Volvo ever�, the General Director of SWEDISH MOTORS company said.
Karl Gustavsson represented the work of VOLVO CAR INTERNATIONAL AB Corporation in the VOLVO-Center.
According to him the car has unique and important features in terms of the driveline, safety, the environment and communication.
The general director told a story happened with him. Driving at a speed of 130 kilometers per hour he ran over a 400-kilogram elk in a wood. A policeman, arrived at the where told him if he had not driven the Volvo, he would have hardly survived.
This very accident made Mr. Gustavsson pay even greater attention to the safety of a car. He is convinced now that the best insurance is to buy a Volvo.
The new car combines innovative design, leading safety in world terms and a high technology level to the same degree and a number of other innovations.
For the first time in modern time a car manufactured has succeeded in fitting an in-line, six-cylinder engine transversely. The drive-line allowed not only enlarging a deformation zone and making a saloon more capacious, but also including the world�s shortest manual gearbox.
The new seat concept WHIPS (Whiplash Protection System) provides considerably improved protection from whiplash injures in rear-end collisions.
IC, Inflatable Curtain protects the head and neck in a side impact. IC is the third stage in the development of Volvo�s Side Impact Protection System.
Mr. Gustavsson pointed out that there are over 600 thousand Volvo automobiles in the USA and there was no any fatal accident. About 25 % of accidents are due to a side impact. Regarding this aspect Volvo S80 is the safest model ever manufactured.
The integrated GSM phone is part of Volvo systematic development of technology, which results in smooth and reliable interplay between man and machine.
The pioneering network-based electrical system with Multiplex technology has fewer cables and offers greater reliability and can handle more electrical functions, including updates than a traditional electrical system.
SWEDISH MOTORS, the official representative of VOLVO concern in Kazakstan, is the first company set up at the territory of CIS countries by VOLVO CAR CORPORATION AB and a Kazakstani businessman.
According to Volvo Concern representatives the headquarters invested huge money to premises, training, service stations equipment to guarantee the highest level quality of services, meeting the international standards of Volvo concern to Kazakstan�s customers with.
Investing to Kazakstan the company provides currency receipts and modern know-how technologies to the country, creates jobs, and organizes training for technical and commercial specialists.
The aim of the company is to create a modern center equipped with the most advanced facilities on the basis of SWEDISH MOTORS and then to develop a dealer network over the Central Asian region to sell Volvo production and render services, which would meet European standards.
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.
(Continued from # 6(324))
By Hartmut Fischer
San Francisco
Febr 7, 1998
(Specially for THE GLOBE)
(The Argentine currency board exchanges dollars into pesos and invests these dollars in U.S. Treasury bills. Similar to a central bank, the Argentine currency board is a profitable business. It earns interest from its investments in U.S. Treasury bills, but pays no interest on the peso bills.
This is also a profitable business for the U.S. government. The Fed sells U.S. Treasury bills to the Argentine currency board and uses these dollars to buy long term government bonds which usually carry a higher interest rate than short term Treasury bills. The Fed earns the difference.
Today the following countries have currency boards:
Pegged to the U.S. dollar are Djibouti (1949), eight countries in the eastern Caribbean (1965), Hong Kong (1983), Argentina (1991), and Lithuania (1994). Pegged to the German mark are Estonia (1992), Bosnia (1997), and Bulgaria (1997).
Most currency boards were established in times of crisis. In Argentina it was hyperinflation; in Hong Kong a currency crisis; in Estonia, Lithuania and Bulgaria it was the difficulty of economic transformation; in Bosnia it was rescue from the ravages of war. Now Indonesia is in crisis and president Suharto wants a currency board. He should be supported.
How do currency boards work? Take the case of Malaysia, which has a central bank and contrast that with Hong Kong which has a currency board. Speculators sensed that Malaysia had a weak currency, so they borrowed ringgits from Malaysian banks, which they sold for U.S. dollars. The Central Bank of Malaysia tried to keep the exchange rate stable and depleted its dollar reserves. Ultimately, it had no choice but to let the ringgit depreciate.
Speculators bought back the ringgit at a much lower price. They paid back their debt to Malaysian banks and pocketed the difference. It is easy money and transfers a country\rquote s hard earned international reserves into the pockets of speculators. No wonder that Malaysian Prime Minister Mahatier is so upset.
Compare that to Hong Kong. Speculators also sensed a weakness in the Hong Kong dollar so they borrowed Hong Kong dollars from banks in Hong Kong. As they sold Hong Kong dollars for U.S. dollars, the monetary base in Hong Kong automatically shrunk. This caused interest rates to soar and made speculating against the Hong Kong dollar very expensive. The high interest rates also attracted buyers of Hong Kong dollars, and this automatic mechanism stabilized the value of Hong Kong\rquote s currency. Speculators were taught an expensive lesson.
So why is a currency board a good first step on Indonesia\rquote s way to economic recovery?
First, it will restore confidence in the rupiah. Confidence in a currency means low risk and therefore low interest rates. Indonesia needs low interest rates to resume its economic growth. A period of adjustment may bring temporary inflation and high interest rates, but that will subside.
Indonesia will protect the real value of its money. The rules are simple and transparent. They protect the little person who can exchange local currency into a reserve currency at a fixed rate and on demand. Central banks often protect the big financiers at the expense of common folks who cannot afford to speculate. A currency board is a populist move.
After an initial period of adjustment, Indonesia\rquote s economic growth will resume. Once again, we can look at Argentina. It\rquote s growth rate is now one of the highest in the world. Argentina\rquote s experience is relevant to Indonesia. Both are large countries. Sometimes the argument is made that currency boards are only applicable to small countries. Not true.
Currency boards have excellent records. More than 60 countries have had currency boards at one time or another. They all maintained currency convertibility at a fixed exchange rate. Unfortunately, most currency boards were converted into central banks for political reasons.
(To be continued)
The Russian version of the article �Monopolists to Enfeeble the Anti-
monopolistic Committee, - Nikolay Radostovets,� incorrectly translated the Russian-American Council as the Kazakhstan-American Council.
The United States-Kazakhstan Council is in no way connected with the submitted proposal by Hagler Bailly to the President, the Parliament and the Government of the republic to re-organize the Anti-monopolistic committee.
ALMATY, Jan 25
(THE GLOBE)
During inauguration of President Niazabayev in Astana recently, many foreign diplomats were invited including leaders of CIS, representatives of neighboring countries, as well as the Heads of Foreign Diplomatic Missions and Representatives of International Organizations.
The latter group was divided into categories, namely the �first class� diplomats who are full fledge Ambassadors and Representatives of important International Organizations such as UNDP and the World Bank (representative of IMF always avoid from attending such occasion).
The �second class� diplomats are the Heads of Diplomatic Missions at the Charge d� Affairs level, as well as representatives of �unimportant� organizations. They are about 15 of them. Instead of joining the �first class� diplomats for dinner given by the President, they were entertained by the First Deputy Foreign Minister to the billiard and bowling games. They were told that the reception hall at the Presidential Palace in Astana could not hold additional 15 seats for them. Perhaps the President should build larger palace.
�Well, according to our Eastern tradition, we will never complain for what kind of hospitalities offered by the host�, said the Malaysian Embassy Charge d� Affairs.
Anyway, that was not the first time the President has shown his favoritism. In September last year, the government invited all Heads of Missions to Astana to listen to the President�s Keynote Address in Parliament. However, at this occasion, the President personally met with a few selected Ambassadors from donor countries and Representatives of International Organizations who have control over the disbursement of funds and credit facilities.
The President should be more tactful in dealing with the Diplomatic Corps in the future. Sometimes, the value of friendship is more important than material wealth.
By the way, one foreign diplomat from the West said that representatives of the Almaty Diplomatic Corps were absolutly sure not the 15-seats trouble predetermined the Astana authorities� behaviour; that was the way Astana chose to demonstrate its dissatisfaction with the US State Department�s evaluation of the past election in Kazakhstan.The new American Ambassador has not yet officially taken office which is so far run by a Charge d� Affaires.
So an intricate method was chosen to sting at the reception hall level: all Charges d� Affaires were not let in.
ALMATY, Kazakhstan
Jan18 (AFP)
About 200 food merchants demonstrated Friday in protest at a controversial ban on most Russian food imports to Kazakhstan, Interfax reported.
The unsanctioned protest, for which participants could be imprisoned under Kazakh law, was staged in Uralsk, near Kazakhstan�s 1,800-kilometer (1,100-mile) border with Russia.
In an official letter, the merchants complained of �growing dissatisfaction among the city�s population at the loss of their sole source of income� following the ban, which took effect Monday.
Stocks of goods in local markets have fallen sharply and prices have shot up, the news agency said.
Kazakhstan and Russia agreed in late December temporarily to bar imports of most Russian produce, including dairy and meat products.
Almaty officials hope the ban will stem the growing tide of cheaper Russian goods that are competing with domestic producers.