We have witnessed a tumultuous year for the global economy. The spectre of the 2008 global financial crash is a constant reminder to governments of the dangers of complacency. Alongside the economic challenges of falling energy prices, political tensions between Russia and the West emphasise to us all the need to monitor the economic risks and opportunities that lie ahead and to act accordingly.
Kazakhstan, a significant player in the global economy and in close proximity to these geopolitical tensions, is wisely accelerating economic reforms in response to these challenges. Through the new Nurly Zhol economic policy, the country should be able to navigate the coming financial storm and achieve its ambition to join the 30 most developed countries by 2050.
No country is immune to the current economic challenges. Despite remarkable growth in recent decades, China’s slowing economy is undermining already-fragile global confidence. With the United States expected to increase interest rates, investors are anxious about the effect of a strengthening dollar. And sanctions on Russia continue to have an impact on the economies of Central Asia.
However, it is worth remembering that Kazakhstan managed to deal with global economic crises in the past. The country will undoubtedly do so again. The Asian Financial Crisis of 1998 and the subsequent Global Financial Crisis of 2008 took a heavy toll. But Kazakh President Nursultan Nazarbayev was proactive, and in 2009, the head of state oversaw a set of anti-crisis measures to maintain the country’s macroeconomic stability and reduce the negative consequences of external developments.
President Nazarbayev has long recognised the need to revise economic plans and make adjustments for challenges on the horizon. In 2000, a National Fund was set up to increase the resistance of Kazakhstan’s economy to external shocks. When external markets were favourable and the price of oil was high, the country diverted extra revenues to the National Fund. It is now time to tap into those resources. By fixing the roof when the sun was shining, Kazakhstan can enjoy shelter through economic storms.
In announcing Nurly Zhol one year ago, President Nazarbayev outlined five core goals that the fund would support. The first is to invest in short-term loans to small and medium-sized businesses, as well as larger enterprises. The second is to revive the banking sector by buying out “bad” loans. Third, the fund will invest in essential infrastructure, such as the construction of the “dry port,” the Khorgos-East Gate and the National Industrial Petrochemical Technological Park. The fourth goal is to continue construction of the EXPO 2017 infrastructure. Finally, the fund will assist in developing Astana’s transport infrastructure.
These reforms will help modernise the civil service, strengthen the rule of law, streamline customs barriers and draw on foreign investment to diversify Kazakhstan’s economy. Ultimately, people from all corners of Kazakhstan will be more connected and will have greater access to employment, income and high-quality services.
The global economic threat may be severe but Kazakhstan is well equipped to deal with the challenge. The Nurly Zhol New Economic Policy will be a key driver of economic growth in the coming years. It will ensure greater levels of employment and more adequate transport networks. It will have a positive effect on key economic sectors like cement, metal and machinery production. But most significantly, Nurly Zhol will be crucial to Kazakhstan sailing through these troubled waters and reaching its goal of becoming one of the world’s 30 most developed countries by 2050.