Amid a perfect storm of depressed commodity prices, recession in Russia, a slowdown in China’s industrial expansion, and sparks flying between the Kazakh government’s allies in Ankara and Moscow, President Nursultan Nazarbayev has made some personnel changes in key positions intended to signal that the government is taking action to address the problems.
Perhaps the most prominent political casualty is Kairat Kelimbetov, the former governor of the central bank, who was shown the door after changes to exchange-rate policy made to cope with the negative oil shock and the competitive devaluations of the currencies of trading partners triggered a steep slide in the value of the tenge. Nazarbayev blamed Kelimbatov’s injudicious use of foreign currency reserves to support the sliding tenge for a lack of foreign exchange to pay for imports. His replacement by Daniyar Akishev, a trusted adviser of the president, is intended to ensure that monetary policy is henceforth kept tightly in line with the president’s broader policy aim of enhancing the country’s appeal to foreign investors.
More recently, the president promoted his eldest daughter, Dariga Nazarbayeva, the deputy speaker of the lower house of Parliament, to the position of deputy prime minister. The president will be 80 years old when his current term expires, and Nazarbayeva’s prospects for succeeding her father will ultimately depend on how well and faithfully she handles her current duties. The role is a high-profile one and extremely challenging in the current context, as it will entail dealing with growing social problems and executing reforms to revitalize the economy. If she proves capable of meeting the challenge, she can put herself in pole position to take the reins of power from her father.
Policymakers have been tasked with implementing an anti-crisis plan that consists of a mix of mostly market-orientated policies alongside a fiscal stimulus program that focuses on infrastructure development and resolving problems in the banking system that are constraining lending. An unprecedented privatization push is planned, with some 60 large companies slated for sale, among them Kazakhstan Temir Zholy (rail), Kazatomprom (nuclear), Kazakhtelecom, and the Samruk Energy Company. The government can be expected to retain a controlling share in the firms, and in many cases substantial restructuring will be required to make them attractive to private investors.