EurasiaNet Business & Economics - Kazakhstan: Nazarbayev Sets Ambitious Development Agenda for Astana

BUSINESS & ECONOMICS

KAZAKHSTAN: NAZARBAYEV SETS AMBITIOUS DEVELOPMENT AGENDA FOR ASTANA
Joanna Lillis 2/01/10

With Kazakhstan’s economy on the up-tick, President Nursultan Nazarbayev is setting some ambitious development goals for the Central Asian state.

Nazarbayev sketched his vision during his annual state-of-the-nation address, given in late January. Despite a longstanding controversy over Astana heading the Organization for Security and Cooperation in Europe (OSCE), stemming from the country’s spotty record on democratization, Nazarbayev presented Kazakhstan’s leadership of the group as a sign of international recognition of the country’s achievements. [For background see the Eurasia Insight archive].

"The Kazakhstani model of unity ? has received a high assessment from the heads of state of the whole world, and the leaders of religious denominations. Kazakhstan has become a strong and successful state, and, thanks to its initiatives, it has achieved high international authority," Nazarbayev said. "Distinguishing itself with its creative power, Kazakhstan has surprised the whole world with its achievements. As you know, that is why Kazakhstan has been shown great trust [in being awarded] the {OSCE} chairmanship."

In January, Nazarbayev told the OSCE’s Permanent Council that democratization and liberalization would continue in Kazakhstan, but he disappointed some observers by failing to outline any planned political reforms in a speech devoted mainly to ambitious economic goals that Astana is setting out to achieve by 2020.

The objectives for the next decade include improving economic well-being, reducing poverty and unemployment, and increasing social subsidies by 20 percent, the president stated. Nazarbayev also courted public opinion by announcing a 25 percent rise in public sector salaries starting April 1. In 2009, as Astana scuffled to contain the domestic damage connected to the global economic downturn, Kazakhstani leaders had said that pay raises wouldn’t be implemented until July 1.

News that the salary hike is being brought forward will be welcomed to low-paid, public-sector workers, including doctors and teachers. According to government figures, teachers earned an average salary of almost $300 per month in 2009, and doctors earned on average $450 per month. This year’s salary increases are projected to cost the government about $1 billion, Minister of Labor and Social Protection Gulshara Abdykalykova told the Kazakstan TV channel on January 29.

Astana did push ahead with plans to increase pensions by a quarter at the beginning of this year, bringing the average pension to $145. Another 30 percent increase is planned next year. Nazarbayev affirmed that Kazakhstan had weathered the global financial crisis, though it only posted GDP growth of 1.1 percent in 2009 -- a far cry from the almost double-digit growth that it recorded from 2000-2007, before the credit crunch hit. GDP is officially forecast to expand by 1.5-2 percent this year.

Astana’s bid to become one of the world’s 50 most competitive countries has taken a hit due to the recent economic trouble: The Central Asian state dropped one place on the previous year to rank 67th in the World Economic Forum’s Global Competitiveness Report 2009-2010. Kazakhstan has been dipping into its National Fund to prop up the economy during the crisis. But in his televised address, Nazarbayev said no more cash would be taken out of the National Fund for the foreseeable future. He set the goal of increasing the size of the fund from the current $50 billion to $90 billion by 2020.

He also called for reform of Kazakhstan’s crumbling healthcare system and set the objective of raising life expectancy from the current 67.87 years to 72 over the next decade.

In a nod to civil society development, Nazarbayev said $6.75 million would be allocated by 2020 to support NGOs and the media, and called for reform of the legal system to boost the rule of law. "It is necessary to humanize our laws and raise their quality," he said. "In the activity of the law enforcement system the stress should be shifted from the intra-departmental interests to defending the rights of citizens and the interests of the state."

Nazarbayev’s words came after a year of controversy over the increasing muscle being wielded by law enforcement agencies and suspicion that Kazakhstan’s anti-corruption drive has become a political tool to settle scores with rivals.

Nazarbayev ended his speech with a call for the country to pull together to address the challenges of the next decade: "We are achieving our mission -- we are building an independent, flourishing, politically stable Kazakhstan."

Editor's Note: Joanna Lillis is a freelance writer who specializes in Central Asia.