Kazakhstan is an economically successful country, which ranks first in the world in uranium production, is in the top 10 in coal, iron, gold reserves, and 11th in the world in oil and gas reserves. However, the national economy declines and the personal wellbeing deteriorated significantly in the last two years.
Aina Akisheva is a resident of Aktau, where in early January rallies were held against rising prices of liquefied gas in support of the residents of Zhanaozen. She works as a cook and earns 200 thousand tenge (457.5 dollars) per month. Most of it – 150 thousand tenge (343 dollars) – is spent on food. Although, she does not buy meat, fish and sausages. According to her, after the coronavirus pandemic, everything went up by 70-80 per cent and many Kazakhstanis have no money even for food.
“We take loans and micro loans from salary to salary. […] We do not live, but we simply exist. They took away my house, which I bought with mortgage, because I couldn’t pay off. We’re renting an apartment now. Banks steal from ordinary people, entrepreneurs set prices on products themselves. No one regulates anything,” she said.
Gulnar Zulpukharova is a pensioner from Beineu village, 400 kilometres away from Aktau. She lives with her son and his family. Neither her pension of 70,000 tenge (160 dollars) nor her children’s earnings are sufficient.
“Interests on loans are very high. Last month, I borrowed 80 thousand tenge (183 dollars), after 20 days I returned 145 thousand tenge (332 dollars). There was no other way. The children were sick, and incurred a debt because of the Covid. I understand those who participated in the rallies, they did it because of their miserable existence,” Zulpukharova said.
According to the Ministry of Finance, in 2020 Kazakhstan’s GDP declined for the first time in two decades by 2.6 per cent. In 2021, the economic recovery contributed to a 3.5 per cent growth (from January to October 2021). However, Kazakhstan failed to recover oil production in volume terms: after the decline for more than 5% in 2020, the growth in 2021 was equal to zero.
Since the start of the coronavirus pandemic, inflation rate in Kazakhstan has exceeded the National Bank’s target band of 4-6 per cent. In 2020, it was 7.5 per cent, and in 2021 it went almost 9 per cent up.
According to the deputy of the lower house of Parliament of Kazakhstan Aikyn Konurov, during the lockdown because of the Covid-19, 4.2 million Kazakhstanis lost their jobs.
“In fact, the unemployment rate jumped to 46 per cent, which is an unprecedented shocking level in our history. The current crisis is not only a health emergency, but also a work emergency. The growth of microloans was about 145 percent among individuals, and their loan arrears increased by 332 percent,” he said.
In November 2021, a resident of Almaty jumped out the window of a high-rise building with three young children. A woman and two children died instantly. Another child died in an ambulance car. It was found out that the Almaty resident had three loans. She had two of three loans overdue, and receivers were appointed. The last time, she borrowed 15,000 tenge (34 dollars) in October, but she failed to repay that amount on time.
Miras Kazbergenov is a father of many children from the village of Shubar, Almaty region. As there was no work in the village, a few years ago the whole family moved to the capital. According to him, a few years ago there was no money problem and they could afford to go to a restaurant and to buy good clothes. But now the situation has changed, they are short of money, and the number of loans and prices of everything are increasing. His salary of 500,000 tenge (1,144 dollars) is insufficient.
“I have six microloans and two more loans at the bank. My wife’s account is blocked because we owe money to everyone. […] During the pandemic, we were told that there would be loan adjourning and we would not need to pay. As I had no job, I was sure there would be no penalty. But in reality it was otherwise,” Kazbergenov said.
According to experts, many factors influence price rises: change in fuel prices, increase in tariffs, increase in feed prices, weakening of the national currency, introduction of strict restrictive measures for sellers of socially important goods, the increase in world prices and the decrease in crop areas. In late 2019 before the pandemic, the World Bank highlighted the need for structural reforms in Kazakhstan so that the country’s economy, amid stagnant productivity, could become one of the world’s 30 most developed economies by 2050.
In 2021, the Ministry of Trade, together with the Ministry of Agriculture and the Agency for the Protection and Promotion of Competition, drew up a Road Map for the stabilisation of prices of socially important food commodities, which consists of 45 measures. The Map provides for the introduction of price limits in almost all regions, a temporary 50 per cent reduction in the cost of utilities for domestic commodity producers, a restriction on imports, a reduction in the loan burden of the population and the repayment of consumer loans of people, whose monthly income is under 150 thousand tenge (343 dollars).
But, so far, this is all on paper, and the 2022 budget does not contain these measures.
Following the protests and riots that broke out in Kazakhstan in early January 2022, President Kasym-Zhomart Tokayev accused the oligarchs of the state economy issues and admitted that the society was highly stratified.
“Financial-oligarchic groups have become key beneficiaries of economic growth. The established oligopolies seriously limited the development of the free market and reduced the competitiveness of the country,” he said speaking at the January 11 parliamentary meeting.
However, Kazakhstan is the richest country in Central Asia region. It is in the top 10 in uranium production, 11th in the world in oil and gas reserves. However, according to economist Arman Zholamanov, all oil production in Kazakhstan is concentrated in the hands of foreign corporations, and sometimes the authorities invested the money into “prestige,” instead of infrastructural projects.
“For example, Kazakhstan spent 565 billion tenge (1.29 billion dollars) for five years to prepare for the international exhibition Expo-2017. There are no normal plants in the country, almost everything is exported, no diversification of the economy. It has led to poverty of the population,” Zholamanov said.
He also noted that there are many monopolists in the country and gave an example of the Air Astana, which sets exorbitant prices for air tickets.
According to economist Kaiyrbek Arystanbekov, despite the resources and a rather strong economy, a lot of money circumvent national budget. For example, between 2018 and 2020, Kazakhstan officially purchased commodities from China for 18 billion dollars. But the Chinese party provided a different figure – 36 billion dollars.
“It turns out that in two years, the commodities for 18 billion dollars were not handled. It means that the budget received no revenues. Moreover, we have rich, giant financial industrial groups. They were mostly beneficiaries. They received respective funds from the development bank for a long term at low interest. It should be stopped,” he said.
According to experts, many of Kazakhstan’s politicians are affiliated with big business. According to the instructions of Kasym-Zhomart Tokayev, now monopolists will have to contribute some amounts to the public fund “Kazakhstan khalkyna” established for the reconstruction of the country after the protests. The country’s business representatives and major banks are known to have already started to transfer money to the fund.