Kazakhstan has been living it up the last decade, maintaining nearly 10% growth due to high LNG and oil prices. The government built an insane new capital, as seen above, while migrants from the other Central Asian countries came to work in Kazakhstan.
Now the economy has been hit hard hard by the worldwide drop in demand for energy supplies. The government is increasingly worried about protests and according to Radio Liberty, shut down the independent paper “Taszharghan” for reporting on rising food prices.
The Kazakh government has responded to the crisis by devaluing the currency and nationalizing the two main banks. It has bought controlling stakes in others. The devaluation of the tenge has led to its freefall and the banks’ stocks have plummeted in value. $10 billion dollars have been injected into the economy in some effort to keep industry going.
Kazakhstan is clearly in a better position than other Central Asian states, as Tajikistan is already receiving US aid. But it is also closely tied to international markets and holds large debts. They are trying to project confidence as they continue to pursue nation-building projects like major subsidies to lure ethnic Kazakhs abroad back to their “homeland”. Officials have been trying to calm the population and investors by promising a swift turnaround, not unlike President Obama here. But while Americans do not have much experience with deposing leaders, the Kazakhs do. Still, I would bet that they will give the government the benefit of the doubt for now, as frankly, there aren’t many other options. Both Russia and Kazakhstan have been castrating the opposition for long enough that there really aren’t any contenders. Either way, I’ll be watching what happens there closely.
