What is the Transformation of the Economy in the light of the Old-New Kazakhstan Equation?

Famous economic observer, Rasul Rysmambetov, offers his view on the matter.

Nuance Not Nice

State share in economy is an old mantra, rooting out from Nazarbayev’s era. Today it is being discussed actively. But there is one nuance, that sheds some light of negativism on that matter.

It is clear, that in Kazakhstan, a significant part of assets was possessed by the so-called Old Kazakhstan and those close to it could privatize whatever they wanted.

Where Assets Go

After January events, many Old Kazakhstanis started behaving like the feathered – began to migrate to hot countries, as far away as possible from this land – gall and wormwood. They are presently selling Kazakh assets through offshore zones. The problem is that those assets are being bought not by New Kazakhstan, but foreign companies.

Let us take the Budennovskoye Uranium Deposit owned by Old Kazakhstan and bought by Russians. 

Kazphosphate also was bought by Russians. Those are the Russians, who have withdrawn their capitas from Russia, and now are seeking for a new country to conquer. 

At present, there are rumors, that a share of Kazpost will be bought by a Russian company. Looks like, that is the company that is currently negotiating the purchase of a cellular telecom operator with Kazakhtelecom. Copper deposits are going under Russian auspices. Lithium goes to Germans.

Kazakhstan as a Losing Side

We are firmly seated on our butts, while assets are telegraphically flying away. And they call it reduction of state share in economy and de-monopolization. That is more of a re-monopolization. 

I personally confront such measure, unless Kazakh companies grow fatter enough. I have nothing against foreign companies, but our economic organism is rather weak – any foreign player will become a monopolist, putting enough resources and effort into that. That done, they will grab our state by well-known anatomic locations. Fine – let them buy some hyper-complicated sectors, but! Copper an lithium – that is something we could manage pretty well.

I am not being xenophobic. I am being economically pragmatic. Foreign companies should be allowed to buy assets, but not more than 20% of the market. With a weak host, guests are Lords, while real Lords are pariahs – a Kazakh proverb says.