Kazakhstan developments warn countries of hydrocarbon economy

It should be kept in mind that President Nazarbayev"s explanations of government"s resignation are hardly acceptable due to the fact that despite all conditions available, the Cabinet of Ministers failed to cope with difficulties and attain high rates of economy, private business and growth in prosperity".

In fact, the country is fraught with system crisis where political rather than economis, decisions are required, especially as the government, according to Kazakh experts, is none other than "collective executor of President"s commissions". Under constitutional amendments of 2017, powers were redistributed from the President to the government. Hence, not only managerial style but also country"s development priorities and its political line are to be transformed.

Political analysts opine the resignation of the government is indicative of "political field"s clearing," changes in the functions of national institutions and redistribution of powers between them. In other words, a new power design is drawing nearer. In the meanwhile, a newly appointed Prime Minister of Kazakhstan, real professional Askar Mamin is likely to face threats and risks of the previous government.

True, much depends on how fundamental political and economic forces are represented in the new government, those instrumental in changing situation depending upon their own interests. The reply was given at a congress of the Presidential party "Nur Otan", which was held on February 27.

In the words of Party Secretary Ilya Terenchenko, the congress "will offer 10 targets in all directions" and set a main goal - "improvement of welfare of citizens, industry, small and medium business".

N. Nazarbayev opened the congress declaring new tasks of the government and claiming that big investments would be allocated from the budget and national fund: "A level of social expenses has always been high to grow henceforth. In keeping with various projects and initiatives, we are engaged in huge social investments. We must not reduce spending on the development and alimentation of the poo. Note that above 45% of the Republican budget will be allocated this year for the development of social sphere".

It should be added that participants of the Astana congress thanked the President of the country while in Almaty the police detained tens of citizens. Meetings of protesters were held in several towns of Kazakhstan. Note that over the last three weeks protest sentiments intensified among mothers with many children in Kazakhstan who demanded from the authorities to improve their social conditions and solve housing question.

Political expert Dosym Satbayev comments the situation as follows: "The same faces, the same words and a feeling of collective irresponsibility. The Party congress in Astana was accompanied by crackdown of protesters in Almaty exercising their right to the freedom of speech. Note that things were moving in front of a building of the Party which, the congress claimed, "met the people"s expectations".

So then, the President of the country is a key decision-maker as with Azerbaijan. Facing the challenging task of transfer of authority, 78-years old N. Nazarbayev remained to be a unique head of the state currently in office among former Union Republics.

In due time, editor-in-chief of the "Novaya gazeta - Kazakhstan" А. Krasner noted that rumors were afloat in the country that an Azerbaijani model of the transfer of authority by the right of succession would allegedly be used.

For quite some time Aysultan Nazarbayev, a grandson of the President of Kazakhstan, has been considered to be a Presidential hopeful who disappeared from public space 1,5 year ago. His rare public appearance in virtual space sheds no light on what is happening. The family of the President prefers to sidestep a question of Aysultan.

The second son of Dariga Nazarbayeva and now late Rahat Aliyev was born in several months after his maternal grandfather N. Nazarbayev headed Kazakhstan. The boy assumed the family name of the grandfather.

In his words, the country"s elite failed to strike a compromise in the matter. Allegedly an idea arose to counterbalance opposing clans by distributing a part of presidential authorities.

Relying upon the information, it can be said that the opposing groups to take to fighting over power in the post-Nazarbayev Kazakhstan. The struggle is fuelled by intensified confrontation between the United States and Russia: strategic vicinity of Kazakhstan plays a geopolitical role for the two states. A future leader of Kazakhstan is unlikely to balance between these countries, so a new ruling figure cannot come as a surprise for rivals. Nazarbayev has already been criticized by Russian mass media for "excessive" rapprochement with the USA, and now a representative of the Russian Foreign Ministry expresses concern over rights of the Russian-speaking population of Kazakhstan due to a decree on a concept of outer appearance of banknotes and coins circulating in the country. Inscriptions in Russian with its official status of "language of inter-national communication will be removed from them. Some "brave" journalists see here a great similarity between domestic policy of Ukraine and Kazakhstan predicting a serious struggle for power after Nazarbayev"s exit with a possible Maydan and subsequent disintegration of the country.

What does the future hold in Kazakhstan? No perspectives of economy and welfare of the population is probable, since once popular slogan on the post-Soviet space "first economy, and policy next" works no longer. Policy moving to the forefront calls for essential changes, for example, a time-tested transition to the parliamentary rule in some countries. These changes come into conflict with recent amendments to the Constitution that vested the Security Council of Kazakhstan with authorities above all three branches of government. Analysts believe that the sitting President as a life-long Chairman of the Security Council may transfer presidential authorities to "go-to guy" and continue his personal rule.

In the meantime, a gradual reduction of world economy upon oil and the enhancement of the role of alternative sources of energy are likely to be accompanied by an impetuous oil demand and price contraction together with a large-scale export of capital from the country. Such a future is expected to happen in the nearest 2-3 years. So the role of reforms matters most in 2019.

Staunch pessimists believe that Kazakhstan will repeat a distance covered by today"s Venezuela with its hyper-inflation (1 000 000% a year).

There is currently a high probability of the banking crisis in Kazakhstan. Suffice it to say that the economy crediting goes down in terms of the growth of volumes of consumer credits of the population due to fall of real income. Social consequences of this tendency are predictable: inflation-fuelled explosion-hazardous situation.

Another reason for concern is a level of national debt that reached 28% of GDP last year and its servicing that took about 7% of the budget. In the meanwhile, a new US administration is steady in taking a line on toughening the monetary policy and increasing interest rates. Given the world significance of the American currency, one expects an outflow of investors from developing countries, strengthening of inflation processes and spending increase for servicing the foreign debt.

It should be concluded that the new recession is expected to occur in the world; countries are faced with impetuous growth rate reduction which, in turn, threatens raw material producing countries. It is as yet unknown who, how and when will be able to outline a way out of system crisis ...

28.02.2019