Expert: Financial crisis in Kazakhstan gives up for lost its integration ambitions

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“The large-scale financial crisis in Kazakhstan gives up for lost its integration ambitions in Central Asia,” an expert in post-Soviet issues who preferred to stay unnamed said commenting to a REGNUM correspondent on lowered sovereign ratings of Kazakhstan to “negative.” “It is inappropriate now to be getting to why the intensive investment boom, exploration of Kazakhstan’s richest natural resources resulted in dramatic rise of the national debt, disproportionate increase of bank loans, which now total, under some estimations, about $40bn. There is one thing that is clear: when nearly governmental or quasi-governmental corporations become instruments of communications between clans, it necessarily results if not in a default than to the ‘Kazakhstan case’ instead of ‘the Emirates case’. We in Russia know it well by our experience.”

“The problem is the long-time sincere (and not very sincere) presenting Kazakhstan as ‘the sample of reforms’ hindered, first of all, Kazakhstan from recognizing limits of their opportunities and real effectiveness of its political and economic model. One needs to recognize that the Kazakh business was first (almost as early as when SOCIUM center warned about future difficulties in October 2006) to comprehend that financial resources not provided with assets must be immediately invested – most preferably, abroad. This was the way how attractive projects in the Caspian Sea appeared, large-scale Kazakh investments in Georgia, in Moscow building sector; this is how almost all the banks in Kyrgyzstan were bought out and so on. But the moment was lost. Ratings started falling down; Kazakh owners started withdrawing their money from all foreign banks and where the dependence was too high, like in Kyrgyzstan, crediting of clients has been suspended for several months already.”

The expert concludes: “Tajikistan, Kyrgyzstan, even Turkmenistan need Kazakhstan not as mush as the leader of reforms as in a large market and, which the key thing, in a financial donor. For this sake, by causing jealousy from Uzbekistan and responding to political ambitions of Astana, they are ready for the most fantastic forms of integration with Kazakhstan. But the time is lost, there is no ‘big Kazakh money’ any longer and the main consequences of the crisis are still ahead. Meanwhile, without taking into account the costs, China is buying out Central Asian and, first of all, Kazakh assets.”