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Kazakhstan: Were the Billions of Dollars Effectively Spent on Countering COVID-19?

The coronavirus pandemic cost all countries a lot. Kazakhstan spent almost $13 billion on countering COVID-19, but the mass infection was not prevented. There was a shortage of medicines and hospital beds.

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“In general, the taken measures cost the state almost 6 trillion tenge, that is, $13 billion, or more than 8% of the gross domestic product. I will repeat, the measures were unprecedented,” the Kazakh President Kassym-Jomart Tokayev told TASS news agency this May, answering the question about the measures he is taking to reduce the impact of the pandemic.

The country was under the quarantine for already three months back then, and the number of infected people was growing slowly. However, after the restrictions and emergency lifting, people massively got infected, and the quarantine was toughened again.

The allocated amounts for countering the coronavirus are huge; the population doubted the efficient distribution of funds, suspecting corruption and collusion. However, according to the global statistics, some countries managed to prevent the outbreak with aggressive and expensive measures.

According to the BBC, Columbia economics professor Ceyhun Elgin has been working with colleagues to track the COVID-19 responses in 166 countries.

According to his calculations, Japan’s response was one of the most aggressive with a spending package estimated at roughly 20% of the country’s economy. Among the leaders in COVID-19 response spending are also the United States (about 14% of GDP), Australia (11%), Canada (8.4%), Great Britain (5%), and others.

However, these figures do not include the cost of saving the economy, as in the case of the figures mentioned by the Kazakh President Tokayev. Back in March, he claimed the state would spent 4.4 trillion tenge ($10 billion) on anti-crisis measures to support the economy. Probably, the 6 trillion tenge for countering the coronavirus mentioned by the President also include those anti-crisis funds.

In addition, the CEOWORLD magazine assessed the healthcare systems in 89 countries. In the Healthcare Index 2019, the analysts calculated an index that provides an understanding of the overall effectiveness of the healthcare systems’ work. Kazakhstan ranked 82 nd in the list along with Morocco and Egypt. This index also demonstrated that the high spending on healthcare does not guarantee its quality.

The rating is the result of a statistical analysis of the overall quality of the healthcare system, including infrastructure, health worker competencies, cost, availability of quality medicines, and government preparedness.

In 2019, the Taiwan healthcare system was the rating’s leader, scoring 78.72 points out of 100. Currently, the country is successfully coping with the COVID-19 pandemic.

By July 14, only 451 cases of coronavirus infection and 7 deaths were recorded there. However, the main achievement is that Taiwan managed to avoid a sharp increase in the number of cases. The population of the island state is about 23 million people.

Kazakhstan ranked 82 nd with low points for medical infrastructure and government preparedness. By July 20, the number of infected with coronavirus in the country, according to official data, exceeded 70 thousand people, and the number of deaths exceeded 600. These figures do not include the cases of pneumonia, which were combined with the coronavirus statistics from August 1.

“Quarantine measures are not followed in cities, which leads to an increase in the number of infected,” the President Kassym-Jomart Tokayev posted on his Twitter on May 25.

Theft, Cars and Flashmobs

Various authorities announce slightly different amounts allocated to the countering the coronavirus.

In early July, the Vice Minister of Finance Berik Sholpankulov announced at a press conference that the government allocated 191.9 billion tenge ($467.9 million). A little earlier, the new Minister of Health, Aleksey Tsoi, announced the amount of 114.8 billion tenge ($279.9 million).

Sholpankulov stated that these funds are for “strict target allocation” and are controlled from the moment of government procurement, up to the transfer of these funds to the final buyer.

“Of course, the Ministry of Health also has the control, and controls how services are provided by hospitals through the Committee for Quality Control of Healthcare Services,” the Vice Minister added (quote: Vlast.kz).

In April, the former Minister of Health Yelzhan Birtanov reported that protective suits, equipment for PCR diagnostics, test systems were purchased for 17 billion tenge ($41.5 million), and almost 15 billion tenge ($36.5 million) were allocated for the purchase of medicines.

However, by mid-June, mass infections among the population occurred, social networks were full of requests to find medicines, doctors in hospitals got infected and organizations were quarantined. People rushed to pharmacies for medicines that were in short supply. Opinions were expressed that humanitarian aid sent from different countries also ends up in pharmacies for sale to the population.

By mid-July, the authorities recognized that the mysterious pneumonia that had killed 3,327 Kazakhs since January 2020 was likely caused by a coronavirus infection. It became obvious that the authorities’ words did not correspond with the reality. Soon, the management of the Ministry of Health was replaced, and there were firings in the Social Health Insurance Fund, which distributed funds. The President Tokayev criticized akims and ministers for their work in countering the coronavirus.

“The officials responsible for the countering the epidemic continue to mislead the public by providing false information. This is the worst. Akims and ministers are actually unreachable to the common people: they do not respond to complaints and addresses from citizens in time, while many people are already desperate, not knowing where to seek help,” Tokayev said at a government meeting in late June (quote: Nur.kz).

The Anti-Corruption Service, at the President’s order, began a pre-trial investigation of the fraud in the Social Health Insurance Fund. It was also reported that theft by inflating the cost of purchased services is being investigated.

In early July, the wife of the Head of the Social Health Insurance Fund Aybatyr Zhumagulova announced on her Instagram page that her husband, as promised, presented her the twelfth car before her 30 th birthday.

She also shared photos of the luxury house. The story attracted the close public attention to the Fund and its effectiveness.

“Recently, there was a wide discussion about the Health Insurance Fund: more business-minded and less glamorous person should manage it, so that there would be no rumors and gossip around this Fund. The government should analyze the activities of the Fund,” ordered the Head of state at an expanded government meeting on July 10 (quote: Nur.kz).

Meanwhile, the spending on PR services from the funds allocated for countering the pandemic were also revealed. On July 9, Aigul Solovyova, the Head of the Republican Special Monitoring Group in the Anti-Corruption Service, announced at a briefing that 600 million tenge ($1.46 million) from those funds were spent on flashmobs, videos and the PR campaign.

“Yesterday, the President said that 191 billion tenge were allocated, but nevertheless, about $400 million were allocated previously. Our analytical group is investigating how this money was spent, on what kind of events. I have information that 600 million was allocated for videos, for some kind of PR campaign, which, mainly, created flashmobs. These resources could be spent for buying necessary things for the prevention of the current situations in our country,” Solovyova said (quote: Vlast.kz).

Simultaneously, she noted that it is unknown how 200 million tenge of these funds were spent.

Humanitarian Aid – Not for Everyone

Irina Smirnova. Photo: Takhir Sasykov

Irina Smirnova, the deputy of the Lower Chamber of the Parliament of Kazakhstan, spends her holidays in quarantined Almaty, leading a group of 700 volunteers. During her volunteer work, she realized that the authorities’ statements about the billions spent on the countering the virus remained only in their speeches.

“I did not see any money reaching the people. Excluding 42,500 tenge (benefits for those who lost their incomes during the quarantine – Ed.), which some people received, other people did not receive anything. They have to pay for the tests, medications, computed tomography, X-ray; there are no places in hospitals; people pay for everything themselves. People buy masks themselves. In Semey, the akimat gave one mask to a single person,” says Smirnova.

On July 17, she was one of the first to report that the warehouses of the ‘SK-Pharmacia’ company, which deals with the centralized purchase and sale of medicines, were packed with medicines and protective equipment that people searched for in all pharmacies.

The Ministry of Health admitted only in mid-July that SK-Pharmacia company, which is part of the JSC Samruk Kazyna National Wealth Fund, stored humanitarian aid for countering the coronavirus in their warehouses for two months.

There is no information about how 3.5 billion tenge ($8.5 million) were distributed: the first tranche of budget funds for countering the pandemic. According to Smirnova, she addressed the Ministry of Health, but received no response.

“There had to be a declaration of expenses so that no one could take and appropriate the money. Now, this assumption exists. It is already clear that not all the money that the state allocated for the countering the coronavirus has reached the people. The state did everything, allocated funds, but certain persons did not fulfill their tasks, they must be held responsible,” Smirnova said.

She believes that the firings of the high-ranking officials during the pandemic are fully justified.

“I consider it a sabotage, the President repeatedly said that the funds must be used effectively. Do we really need to reconstruct now, change the same curbs along the roads? Now, we have learned that officials spent money to promote themselves, so that people think they are good, while they were bad. All these funds were supposed to be spent only for countering the coronavirus,” the deputy says, implying the spending of the Ministry of Health of 600 million tenge for PR campaign.

Andrey Chebotarev. Photo from personal Facebook page

Political analyst Andrey Chebotarev believes that the public criticism by the President of the Social Health Insurance Fund, SK-Pharmacia and the Minister of Health gives the Anti-Corruption Service a chance to identify the “responsible”, and the government has the time to get out of the critical situation.

“First of all, they were given a clear understanding of the possible development of the current investigation into the certain personnel decisions. An extreme option is a change of the government. If the Prime Minister resigns, it will either be due to the coherence of the two decision-making centers, or in spite of the last of them,” Chebotarev notes.

While the anti-corruption services are investigating the misappropriation of the allocated funds, and establishing the exact numbers and responsible persons, Kazakhstan is the 29 th in the global coronavirus statistics of the Johns Hopkins University and will drop significantly if the pneumonia cases since August 1 are included.

Main photo: pixabay.com

This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project.

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