Kazakh economy seriously affected by low oil price – expert

Kazakh economy seriously affected by low oil price – expert

Baku, Azerbaijan, Nov. 26

By Elena Kosolapova - Trend:

Situation in Kazakhstan's economy has turned out to be worse than forecasted early this year, according to Dosym Satpayev, director of the Kazakh Risk Assessment Group.

"Since late last year, the Kazakh government has been trying to prevent increase in unemployment," Satpayev, who is also a well-known political analyst in Kazakhstan, told Trend Nov. 26.

"Memorandums have been signed with major Kazakh enterprises for them to guarantee to preserve jobs, or in case of dismissal of an employee, to look for another job for that person," he added.

This week, Kazakhstan's Energy Minister Vladimir Shkolnik suggested that if oil price remains at a low level in 2016, the country's oil and gas sector may lay off over 40,000 people, the wages being cut by a third.

Meanwhile, major international financial institutions expect that the next year the average price of Brent oil will be $55-$58 per barrel.

"The statement made by Vladimir Shkolnik shows that the situation turned out to be worse than the government had expected," said Satpayev. "Most likely, the government expected the economic situation to slightly recover by mid-year. But it turned out that the situation got worse - the price of oil fell below $50. It is clear that it made our officials to be more pessimistic than they were at the beginning of the year."

At the same time, the analyst said that unemployment grows not only in the oil and gas sector, but almost in all sectors of the economy of Kazakhstan.

This year, an unfavorable economic environment for Kazakh businessmen has formed due to the fact that the markets of the country began to receive cheaper Russian and Belarusian goods, which made Kazakh producers uncompetitive.

"So the problem is much more serious," said Satpayev.

The foreign specialists are less interested in Kazakhstan's labor market. The reason is that the salary in dollar equivalent does not correspond to their requirements following the recent great depreciation of the tenge rate.

During three months the rate dropped from 186 tenge per $1 in July to 307 as of November 25.

The tenge exchange rate began falling after the National Bank abolished the currency corridor and switched to the inflation targeting regime to implement the new monetary policy August 20.

As a result, the tenge rate sharply decreased in value by about 30 percent.

The National Bank stopped passing to a free floating exchange rate and began selling the currency on the market in September and October.

Over the past two years, the tenge rate decreased in value by over twofold.

The tenge exchange rate reached 154.06 per $1 in early 2014.

At the same time, the expert does not think that a decrease in jobs in Kazakhstan will lead to labor migration from the country. The reason is that a similar deterioration in the economic situation is observed in the post-Soviet area and foreign countries.

The expert believes that in order to prevent the unemployment in Kazakhstan, the country needs to support the small and medium-sized entrepreneurship which could enable to create new jobs.

"State policy for concessional lending is needed for this," he added.

Satpayev expressed hope that amid the low oil prices, Kazakh officials will have to revise their attitude to economy and deeply think over developing the non-oil sector.

"The practice shows that high oil prices will not help improve the competitiveness of our economy," said the expert. "Unfortunately, over these 20 years, we did not create an alternative sector of economy, which could offset the current crisis in the mining sector."

---

Follow the author on Twitter: @E_Kosolapova

Iran's trade turnover with Turkmenistan down
Iran's trade turnover with Turkmenistan down
Turkmenistan should closely monitor bank balance sheets for asset quality risks - IMF
Turkmenistan should closely monitor bank balance sheets for asset quality risks - IMF
IMF continues to promote Turkmenistan's structural reforms aimed at economic diversification
IMF continues to promote Turkmenistan's structural reforms aimed at economic diversification
Loading Bars
Latest
Date of next interest payment on SOCAR bonds announced
Iran's Ilam Gas Refining Company discloses its production data
Microsoft implementing projects with Azerbaijan's educational institutions
Everything we agreed on will be implemented - President Lukashenko
Turkey hopes US won't recognize so-called "Armenian genocide" - Turkish FM
Azerbaijani PASHA Bank's Q12021 total assets grow
We are ready to share vaccine with Azerbaijan - President of Belarus
We reaffirmed strategic nature of relations between Belarus and Azerbaijan - President Lukashenko
President Ilham Aliyev is the best educated, civilized person of all presidents of post-Soviet space - President of Belarus
Nagorno-Karabakh conflict has now been resolved - President Aliyev
Culprit of what happened to Armenia is precisely Armenian leadership - Azerbaijani president
What Minsk Group will be doing is still unknown to us - President Aliyev
Iran's trade turnover with Turkmenistan down
We clearly defined our goals - Azerbaijani president
Companies from three friendly countries already working on reconstruction projects in Karabakh - President Aliyev
Turkish Energy Ministry prolongs Acacia Mining Operations license for oil, gas exploration
Belarus is our friend, trusted partner - Azerbaijani president
Turkish Airlines suspends flights to Russia
Russia reports over 8,900 daily COVID-19 cases
Kazakhstan resumes supplies of scrap metal to Russia
Russia's 2020 exports of chemicals to Azerbaijan disclosed
Кazakh Electricity Grid Operating Company to buy hydraulic press via tenders
Azerbaijan's AzerGold names winner of tender for purchasing ingot purity machine
Cargo movements in Iran's Genaveh port decline
Georgia reports 1,030 coronavirus cases for April 15
Kazakhstan’s KazMunayGas pays out coupon on its international bonds
Iran declares production data for sugar beet
Share of exports of Russian machinery, equipment, vehicles to Azerbaijan unveiled
Oil market may need extra supply in 2H 2021
War Trophy Park in Baku symbolizes heroic Azerbaijani people's triumphant victory - MP
Facebook signs first deal to buy renewable energy in India
Georgia to spend significant funds on tourism infrastructure in Akhaltsikhe
Top German health official says need to break third COVID-19 wave now
Iran's bitumen exports decrease
Azerbaijan sees increase in prices for silver, platinum, palladium
Turkmenistan should closely monitor bank balance sheets for asset quality risks - IMF
Minsk IT holding voices interest in Azerbaijani-Belarusian smart projects
European oil demand sees largest fall since April 2020
Cargo transportation volumes down in Kazakhstan
Moscow ahead of regional partners in terms of exports to Azerbaijan
Azerbaijan boosts exports to Iran
Azerbaijan expanding co-op with Turkey on mail, money transfers
Kazakhstan’s Tengizchevroil to possibly face criminal case
Former heads of state, gov't call on President Biden to waive intellectual property rules for COVID-vaccines
CPI up 0.6% in March, housing prices still rising
Uzbekistan looks to build first pumped storage power plant
IMF continues to promote Turkmenistan's structural reforms aimed at economic diversification
Process begins for inviting financial bids for AI, deal to conclude by Sep
India, France discuss boosting cooperation, greater collaboration in diverse sectors
German COVID-19 cases jump by most since early January
U.S. vows to help bring investment to assist India’s mitigation efforts
Azerbaijani oil prices continue to rise
Wizz Air forecasts gradual flying recovery into late summer
PM: Despite local constraints, India sent doses to 80 countries
Oil steady near one-month highs as IEA, OPEC raise forecasts
Footage from Azerbaijani Zangilan's Agh Oyuq village (VIDEO)
Kazakhstan’s oil-producing company opens tender to buy pumps
Russia to finance modernization of 14 oil refineries
Azerbaijani currency rates for Apr.15
France's 1Q2021 chemical imports from Turkey rise in value
Iranian currency rates for April 15
Azerbaijan sees growth in securities market
Minsk Group worked ineffectively for 30 years on Karabakh - MP
SOCAR, Belneftekhim to expand opportunities in oil products’ output, sale
Azerbaijan continues to compensate workers employed in COVID-hit areas
Thailand reports record daily rise with 1,543 new coronavirus cases
Geely's EV unit Polestar raises $550 million
Iran resumes flights to UK
Uzbekistan talks projects implemented on improving country's energy sector
Central Bank of Iran continues its foreign currency policies
US IDC eyes organizing int'l forum on applying best 'smart' practices in Azerbaijan
Yemen's Houthis say they attacked Aramco, Patriot targets in Jazan
Iran stresses achieving $20-billion trade with Iraq
Georgian Bus and Omnibus Express to transport passengers free of charge in movement-restricted period
Daily COVID-19 case count at 2,641 in Kazakhstan
EU helping in modernization of Georgian Railway
Turkey provides Libya with 150,000 doses of Sinovac COVID-19 vaccine
S.Korea reports 698 more COVID-19 cases, 112,117 in total
Construction of Russian helicopter service center in Azerbaijan running steadily - trade representative
One dead, 12 missing after vessel capsizes in Gulf of Mexico
NATO allies to leave Afghanistan along with U.S
Belgium to ease COVID-19 restrictions
Instagram launches test where users can choose to see likes
Japan seeks to establish agricultural working groups in Georgia
Azerbaijan's First VP gives instructions in regards to Tunar Bagırov suffering from SMA
Turkey reports over 62,000 COVID-19 cases
UK records another 2,491 coronavirus cases, 38 deaths
Turkmenbashi Oil Refineries opens tender for purchase of metal products
Georgian company eyes building of airdrome in outskirts of Tbilisi
Kazakh-German oil extracting JV opens tender to buy pumps
Iran launches National Productivity Network to connect businesses
Kazakhstan’s subsoil users subsidize domestic market of fuel and lubricants to keep gasoline prices
Production of Sputnik V vaccine launched in Serbia
Armenian gov't didn’t want foreigners to see devastation, their hatred to Azerbaijanis - President Aliyev
Georgia tightens entry rules for Indian visitors due to pandemic
Brent prices above $66/bbl first time from March 18
Uzbek deputy PM, Saudi Arabian minister discuss implementation of joint projects
Azerbaijani Foreign Ministry responds to French ambassador to Armenia
Uzbekistan’s Mubarek gas processing plant launches sodium sulfide production
Azerbaijani PM, Turkish ambassador hold meeting
All news