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Economy diversification needed to facilitate rapid post-COVID recovery in Kazakhstan

Business Materials 23 July 2020 12:35
Economy diversification needed to facilitate rapid post-COVID recovery in Kazakhstan

BAKU, Azerbaijan, July 23

By Nargiz Sadikhova – Trend:

Economy diversification needed to facilitate a rapid recovery and achieve sustained growth in the coming years in Kazakhstan, Nicolas Blancher, IMF Mission Chief for Kazakhstan told Trend.

Talking aspects make Kazakhstan different from other Central Asian countries and how these differences can play a role in faster recovery from post-COVID crisis, Blancher said that Kazakhstan is endowed with many natural resources, including oil, gas and mineral reserves, as well as strong agricultural production capacity.

“Based on this and on the implementation of prudent fiscal policies in the past, the country has accumulated significant buffers which, as noted above, provided valuable policy space to support the economy during the crisis. If the authorities’ stimulus package is well designed and implemented, it could help lay the foundation for a prompt economic recovery and support longer-term economic growth,” Blancher said.

Commenting on Kazakhstan’s government measures to support the economy amid COVID-19 Blancher said that the authorities have acted early and put in place measures to limit the spread of the coronavirus, including travel restrictions, bans on gatherings, closure of schools and non-essential businesses, remote working and quarantines of the largest cities.

“Yet, given the complexity of the pandemic and the recent resurgence of coronavirus cases, continued efforts are needed to contain the outbreak. The authorities also quickly implemented a large policy package against the economic crisis in March, allocating additional spending for the health sector and providing support to households and businesses,” he said.

Blancher said the measures adopted, including cash transfers, targeted support to small and medium-sized businesses, loan and tax deferrals, are substantial and well-targeted, and they will go a long way in mitigating the adverse impact of the shocks. It will be important to monitor the implementation of these measures carefully and to make adjustments as needed given the fast evolving epidemiological and economic situations.

“Most measures taken so far by the authorities aim to provide temporary relief to vulnerable households and businesses. To facilitate a rapid recovery and achieve sustained growth in the coming years, they need to be anchored around longer-term priorities. Such priorities include the need to strengthen governance, limit moral hazard, diversify the economy, reduce the state’s footprint, and integrate more deeply both regionally and globally,” Blancher said.

In all these areas, he said, it will be essential to preserve the gains achieved in recent years, including by phasing out some of the emergency measures that had to be implemented this year to address the crisis situation, and to use new opportunities to accelerate reforms in other areas.

The International Monetary Fund (IMF) is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

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