Is there a crisis in Kazakhstan? Causes of the crisis in Kazakhstan

Experts say about the difficult economic situation in Kazakhstan for the second year. Despite attempts to minimize the consequences of negative factors affecting the financial well-being of the country, in mid-2015 the authorities recognized the fact of the crisis situation. In particular, this was noted by the President of the Republic Nursultan Nazarbayev. There are different assessments of the current situation in the economic sphere of the country, but the question of whether there is a crisis in Kazakhstan is no longer worth it today. It is felt both by ordinary citizens, and by business at all levels, and by representatives of industry. One part of the analysts believes that the situation will deteriorate in the coming years, but other economists pin hopes on improving the situation with the activities of the new government.

Features of the current crisis

The weakness of the economic base of Kazakhstan made itself felt in 2008, and then in 2013. To some extent, the severity of the current situation is due to problems that were not resolved in those years. And yet, the crisis in Kazakhstan in 2015 has its own characteristics. It is characterized by external causes, which, in turn, have had an impact on the aggravation of internal contradictions. In addition, it is important to note the scale of the crisis that affected virtually all areas. According to experts' observations, exporters, as well as participants in medium and small businesses, have already suffered serious losses.

A distinctive feature of the current crisis was the coverage of the commodity sector. And here we can distinguish two aspects at once. The first is a general trend in the world economy - a departure from the export of resources with an orientation to the domestic market, which is painful for any economy. And the second point is that the economy of the republic is closely connected with the Russian one. Therefore, we can say that in 2015 the oil crisis in Kazakhstan started, which is influenced by the participants of the world market. For a deeper understanding of the specifics of the crisis and possible ways out of it, it is worthwhile to consider in more detail the factors that contributed to its development.

External causes

One of the main reasons many experts call the US game in the oil market. At the moment, the American strategy pursues two goals: strengthening its own currency in the world market, as well as deliberately lowering prices for "black" gold, in order to weaken Russia's position. At the same time, do not forget about the global crisis. In Kazakhstan, there are almost the same processes that occur in Brazil and China. Despite the differences in economic models, the modernization of the raw material industries affects the decline in GDP. In particular, the transition to the domestic market inevitably leads to problems in the financial sector. This process can be considered as natural and necessary for any developing economy. But there are a number of other reasons that caused the crisis.

Internal factors

Nevertheless, a considerable part of the experts believe that it was the mismanagement of the economy in the republic itself that led to current problems. The internal causes of the crisis in Kazakhstan are associated with a wrong order of the money supply, which was accumulated in the 2000s against the background of the economic boom. As it entered the regional and world markets through the WTO and the Eurasian Union, it became increasingly evident that Kazakhstan's products were not able to compete in the competition due to technical and moral obsolescence.

Another factor that influenced the deterioration of the situation was government intervention in business. This process began in 2005, when small and medium-sized entrepreneurs were forced out of the market. Partly increasing the share of the public sector and led to the fact that today in Kazakhstan, a crisis that affected the entrepreneurs themselves.

Indirect factors

It has already been said about the close connection of the Russian economy and the financial situation of the republic. It is the influence on the part of a large neighbor that determines the factors of a political nature that contribute to the complication of the economic situation in Kazakhstan. In particular, these are the same sanctions, the indirect influence of which in the end determines the low competitiveness of Kazakhstani enterprises, the growing dollarization of finance and mistrust of citizens to tenge. That is, we can say that in Kazakhstan the crisis is multifaceted, as it develops under the influence of both economic and political factors. For the sake of justice, it should be noted that the negative impact of the difficult situation of the Russian economy affects other partner countries, forming in a certain sense a vicious circle in which there are no stable supports for a way out of the difficult situation.

What happens with tenge?

The crisis led to a sharp drop in the value of tenge relative to the dollar. A few days after the announcement of the head of the republic, the rate increased from 188 to 255 tenge per dollar. As for prices, the financial crisis in Kazakhstan did not practically affect food products, but equipment and equipment increased significantly.

Among the main reasons that led to the fall of the tenge, note changes in the monetary policy of the republic, which, however, were announced in advance. In mid-2015, the government announced the launch of a monetary strategy on the new rules. The main difference between the changed plan is the cancellation of the currency corridor and the free float of the course. This once again confirms that in Kazakhstan the crisis does not involve rapid resolution and may last for a long time. In any case, the head of government noted that in the next 5 years the republic will live in the absence of a rise in prices for raw materials.

Forecast for the future

There are different assessments of the current situation, but all of them coincide in that at least in the next 2 years, there is no need to improve the situation. Already now, there are such phenomena as a decrease in GDP, inflation of more than 4%, an increase in unemployment, rising prices and falling living standards. Speaking about when the crisis in Kazakhstan will end, a considerable part of experts connects the process of the beginning of improvement with the rise in oil prices. The majority of specialists are counting on the world conjuncture in the commodity segment. The economic situation in Kazakhstan depends on the situation in this segment.

Even the most favorable scenario does not imply an early recovery of the economy. Probably, the output on the increase in the indicators in the production of goods will be realized only after a few years. It is difficult to say whether the crisis in Kazakhstan will be protracted. Much depends on external factors that are beyond the control of the Kazakh authorities. Nevertheless, the government is still preparing to implement some efforts to solve the problem.

Strategy for overcoming the crisis

At the moment, several plans are being implemented to "improve" the economy. First of all, these are measures aimed at minimizing unpleasant consequences for citizens of Kazakhstan. To do this, the authorities are trying to reduce the amount of speculative transactions in the foreign exchange market and the money supply in consumption. However, the answer to the question of when the crisis in Kazakhstan will end, many experts recommend to consider in a deeper manner, to understand the internal causes of its occurrence. In this sense, it is worth noting the second part of the strategy, which is aimed at improving the competitiveness of the republic's products.

Dependence of the crisis on the elections in the United States

As it was shown in 2012, political processes in the West have a big impact on the economy of the Eurasian region, in which Russia and Kazakhstan also participate. So today, experts, according to which the decisive factor for the way out of the crisis are energy prices, note the importance of elections in the United States. However, the economic crisis in Kazakhstan will change depending not on the very change of the president, but on the nature of the political relations that will form in the future.

Conclusion

Despite all the negative consequences of the crisis, including the drop in the standard of living, it can have positive features. For example, from the moment of his recognition, the head of the republic made many proposals aimed at improving the quality indicators of the economy. The fact is that the crisis in Kazakhstan in 2015 showed a weak production efficiency of the country. The products produced, other than oil and raw materials, do not represent a serious interest for Europe, the market of which the republic was integrated, but could not take a firm position. In case of successful implementation of the planned business support programs and the production sector, it is possible that Kazakhstan will not only be able to overcome the crisis in the coming years, but also reduce the impact of external economic factors.