ASTANA, July 2, 2010 – The record of the crisis management in Kazakhstan is impressive, announced the World Bank today at the third annual Astana Economic Forum, which took place on June 1-2, 2010, in Astana, Kazakhstan.
The World Bank co-organized one of the Forum’s plenary sessions jointly with the Ministry of Economic Development and Trade of the Republic of Kazakhstan and the JSC “Economic Research Institute”. Motoo Konishi, World Bank Regional Director for Central Asia and Konstantin Huber, World Bank Executive Director for Kazakhstan, attended the session. John Litwack, Lead Economist for Kazakhstan, moderated the session.
World leading economists, Nobel laureates, scientists, representatives of international and research organizations in the field of economy discussed the international experience of emerging from the crisis, as well as post-crisis development of the CIS countries and shared their experiences.
“The economic turmoil of recent years is occurring on the backdrop of a shift in the geographic balance of the world economy, which reflects rapid growth achieved in a number of middle income countries in recent decades, including Kazakhstan,” said Konstantin Huber, World Bank Executive Director of the World Bankfor Kazakhstan, in his opening remarks.
“After two and a half years of crisis, we are encouraged today to see important signs of recovery in the Kazakhstan economy. The World Bank considers the record of the crisis management in Kazakhstan to be quite impressive”, he said.
The Government and the National Bank of the Republic of Kazakhstan provided the essential level of liquidity, stimulus, and social assistance to prevent financial collapse, prolonged recession, and unemployment. At the same time, they managed to avoid unconditional or complete bailouts of banks such as BTA and Alliance and other failing organizations. These achievements, combined with other important changes being made in banking regulation, resolution, and supervision, are a very promising start to the establishment of conditions that will provide for the recovery of the Kazakhstan banking sector under new and healthier principles. This can be viewed in the context of similar reform efforts underway in OECD and other economies.
“We believe that the experience of Kazakhstan with bank restructuring in a manner that avoids both outright bailouts as well as liquidations of systemically-important banks can serve as a positive example for many other countries.”, said Mr.K. Huber.
Despite the crisis, Kazakhstan continued to implement important structural reforms that represent important investments in the country’s future. This includes the areas of budgetary reform, education, and the alleviation of administrative barriers to business.
Over the medium and longer term, Kazakhstan faces a number of difficult challenges in bringing the financial sector back to health and reducing resource dependency through more diversified growth. Nevertheless, the World Bank is optimistic about the prospects for Kazakhstan to resume its position as a rapidly growing economy, and to realize a number of its very ambitious goals outlined in the Strategic Plan - 2020. The World Bank also expects that Kazakhstan, as an upper-middle income country, will occupy a more prominent place in the international and donor communities in coming years. The effectiveness with which Kazakhstan managed the crisis of the past three years gives confidence that the country will also succeed in meeting these future challenges.