Page 36 - bne_Magazine_June_2017

36 I Special focus bne June 2017
Kazakhstan emerges from salutary economic lesson
Kanat Shaku in Almaty
Over the last few years Kazakhs could be forgiven for thinking that someone out there put the hex on their economy. The oil price collapse and Russia’s longest recession in two decades knocked the stuffing out of Kazakhstan economic growth, which sank from 4.2% in 2014 to 1.2% in 2015 then to 1% in 2016.
There are, however, positive signs that Kazakhstan is on the mend. For instance, Astana originally expected growth of just 0.5% in 2016, but an oil production surge on the back of the relaunch of the giant Kashagan oil field last October has helped to strengthen the economy.
Nevertheless, the economic woes have proved a salutary lesson to anyone sug- gesting Kazakhstan can eternally rely on hydrocarbon exports and the Russian regional economic engine to drive its fortunes. Strengthening trade links with
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Russia and the other fellow members
of the Eurasian Economic Union (EEU) trade bloc – Armenia, Belarus and Kyrgyzstan – will undeniably remain
a crucial part of post-Soviet nation’s longer-term fortunes, but any new economic lift-off will remain vulnerable to a fall back to earth unless the country significantly fuels its recovery with non- oil and non-EEU activities.
Seventy-six-year-old Nursultan Naz- arbayev, Kazakhstan’s leader since 1989, has given the nod to potential “pistons” including reform, a privatisation wave, and trade and investment with China.
Reform efforts already seem to be pay- ing off. “[Kazakhstan] used to be a coun- try in which we invested about €250mn each year roughly – until about three to four years ago when they started reform- ing,” European Bank of Reconstruction and Development (EBRD) president
Suma Chakrabarti said at a press brief- ing in London on May 2. “They reformed very quickly, and this allowed us last year to invest just over €1bn.”
Rapid Kazakh business environment improvements were also noted in the World Bank's 2017 Doing Business report. According to the ease of doing business, Kazakhstan was ranked among the top 10 global improvers across 190 economies worldwide. Climbing 16 posi- tions to 35th, Kazakhstan outdid all the other Central Asian countries.
With a tally of seven business reforms realised, Kazakhstan even led the world in the implementation category for a second year. Expanding shareholder roles in company management and strengthening creditor protection by providing voting rights on reorgan- isation plans were two implemented changes.