Kazakhstan's anti-crisis experience is unique and instructive for other countries -Russian expert

Mr. Sednev, what kind of research was it and what role does your organization play in it?

 Business Solidarity was founded a year ago, and it unites small and medium-sized enterprises from different regions of Russia. One of the directions of our activity is financing the researches which we consider important for small and medium businesses. We are co-founders of the Post-Crisis World Institute which was established in the beginning of 2009. This is a small research organization which performs international poll of experts. The Institute is headed by Yekaterina Shipova. We have come to Kazakhstan to get acquainted with the Kazakh expert economists to establish contacts and probably carry out joint research projects. Secondly, our visit aims at familiarizing Kazakhstan with our second international report devoted to the financial architecture of the post-crisis world. The first report was presented in spring and covered the anti-crisis measures of the former USSR states. This time we have made global examination of the April decisions of the G20 summit and the reasons of the current crisis, scenarios of overcoming it and roles of different countries on its different stages. 

 What place does Kazakhstan hold in this research?

 We decided to come to Kazakhstan first, because your country had become a discovery for us in our first research. According to the polls, Kazakhstan turned out to be among the leaders. Many experts from different countries consider that Kazakhstan is one of the few post-soviet countries successfully realizing its anti-crisis program. The results of the second research surprised us as well. We compared Kazakhstan with the CIS as well as with the developed and developing countries of the whole world. Despite its small share in the world economy, Kazakhstan again ranked among the leading countries in this research. Therefore we came to Kazakhstan to discuss these results with our Kazakh colleagues.

 In what criteria was the assessment conducted and why did our country appear among the leaders?

 The current 2009 year is notable for development of the solutions which will impact on the future financial architecture of the world on the global level. Until today the participants of this dialogue have been primarily large countries with large economies. This year the format of discussion of these issues has been enlarged. Earlier the key ideas were worked out at G8 summit, while now this format was extended to G20.

 In our research we asked the experts one question: "What countries of the world do have real opportunities to promote their initiatives in the world community?" Naturally, they are the USA, China, West European countries, Japan, Germany which are in the top of the list. When we asked them to present their rating from the countries not entering the BRIC (Brazil, Russia, India and China) which, in their opinion, would play a key role in the global financial system, Kazakhstan ranked the fourth, thus among the leaders. Experts from both developed and developing countries participated in the research. It can be concluded that the world community has great expectations regarding your country. Therefore we took a great interest in the results, because this is an opinion of the world-known authoritative experts.

 Why did it happen? We have several explanations of this. The first reason is successful and absolutely unique experience of the Kazakh Government's anti-recessionary program.  It would not be an exaggeration to say that Kazakhstan is the first country which experienced the global crisis strike in full, whereas the USA just faced housing crash. The last two years Kazakhstan has successfully withstood all waves of the world financial crisis, economists are impressed with it. Kazakhstan's anti-crisis experience is being studied now and I hope that some of your anti-crisis measures will be adopted by Russia as well.

 It should be noted that Kazakhstan's anti-crisis plan attracts great attention of western economists and politicians. They perceive your state as a leading country in realization of anti-recessionary program. For example, Western countries have just set to discussion of the issue of the banks' capitalization. Kazakhstan has already done it. We know you implemented this measure in February, 2009.

 We have interviewed experts from the developing countries, and most of them are prone to think that the global development center moves to the East. New industrial countries are more ambitious. According to them, Asia will turn into a locomotive of economic growth in the post-crisis period i.e. Asia will attract global investments.

 Alongside, the countries possessing huge future economic potential and pre-crisis and positive anti-crisis experience do not have their country-leader. For a number of reasons Russia cannot be a leader of the developing world, because it is a member state of G8. Besides, the industrial potential of the Russian Federation was established decades ago, in the soviet period. New ventures have not been built over the last 20 years. Our country does not belong to industrial ones.

 China cannot claim the status of leadership in spite of its economic success as well. The People's Republic of China is perceived as a new super power with its great ambitions and selfish interests.  Many countries are feared of China as the country able to establish economic domination.

 In this regard it is expected that the leadership of the developing world will belong not to a large country but which will demonstrate success in its anti-crisis policy. The second reason of the world community's attention to your country is discussion of  the global currency system. All of us know that President of Kazakhstan Nursultan Nazarbayev was among the first in 2009 to initiate establishment of a new world currency. At that time this idea seemed too bold realization of which would be postponed for decades.

 To date the situation has changed. Heads of China, in particular, the National Bank of this country proposed to introduce new world currency. George Soros also made similar propositions. On the eve of G20 summit Russia published its platform which contained similar ideas on the single world currency establishment.  In this case, Kazakhstan, which is not a member of G20, demonstrated leadership in initiating reform of the currency system. Kazakh President sounded those ideas which were included in the today's agenda. This issue was not discussed at the G20 summit because the agenda was formed primarily by the USA and West Europe. But I am absolutely confident that by joint efforts of Russia, China and other countries the problem of reforming the world currency system will be discussed at the G20 summit. Thus due its initiative Kazakhstan has become a full-fledged member of the global discussion. Therefore your country has a chance to take ideological leadership not only in Central Asia but also among the industrial countries of the whole Asian region.

 Why do you consider that Kazakhstan was among the first countries hit by the crisis?

 First of all, it happened due to openness of your economy. Secondly, in comparison with the developed countries, like the USA, Kazakhstan's economy is small. Your economy depends mostly on the world market's conjuncture. I remember the pessimistic forecasts of the autumn of 2007 when your country experienced an inflationary surge. But Kazakhstan stood the first strike. Your country was the first among the oil-exporters which used the National Fund's means for economy rescue. That was the first revolutionary anti-crisis measure. Russia and other oil-producing countries followed your way. In autumn of the same year Kazakhstan Government pursued successful anti-inflation policy. As a result, the inflation rates were brought down. In addition, Kazakhstan launched its own system of food security. Foreign analysts observe these measures many of which were borrowed by other states. Namely owing to this, Kazakhstan felt this crisis strike and it became one of the leaders of anti-crisis policy.

 Many experts forecast the second wave of the global financial crisis. What is your opinion on this matter?

 The crisis will continue of course, until its fundamental reasons are eliminated. As for Russia, we expect the second wave of crisis in autumn. Why have I spoken on G20 summit and the attempts of changing the world currency system? Because namely this attempt will lay the foundation for future long-term growth like it was in 1944 when Bretton Woods conference was convened. 45 participating countries adopted the rules of the world financial system. These principles were observed during the decades. Such international institutions like the International Monetary Fund, the World Bank were founded. They have ensured global financial stability for long period. To my mind, the scale of the current crisis will make us adopt similar decisions. I don't know when it will happen, but I know we need it.

 What will happen to the countries which economies depend on oil export?

 Any protracted crisis leads to the growth of economic democracy. Whereas there was a tendency to unification of economic policies and models of different countries in past to date each government has to search for something new.  What we see on the CIS space can be indicated as a gap of economic models of different countries, including Russia and Kazakhstan. Initially our economies have a lot in common - by the percentage of oil revenues, budget revenues and the structure of sectors. However during the last two years we have been pursuing quite different economic policies due to which various economic models are formed.

 Experts' opinions vary; they can be either positive or negative. Let us rest on dynamics of production. What happened in the CIS from January to May, 2009? Ukraine faced 31.8% of industrial decline. This is not just a fall, but a serious financial meltdown which can be compared with a war, economic catastrophe. Russia's future worries me too. The latest data were not forecasted by any experts. Industrial decline from Jan to May made 17%. In Kazakhstan this figure comprised only 3.8%.

 Kazakh economists and businessmen whom we met in Almaty with considered there was an opportunity for economic trend's turn. Some of them as well as our experts who observe Kazakhstan are confident that your country can achieve minimum economic growth at least if it does not change its economic growth. Sharp slowdown in the fall observed in Kazakhstan is the result of efficient anti-crisis measures.

 Compared to Russia Kazakhstan has huge advantage over some issues. I mean your new Tax Code, first of all. Our businessmen express interest in your new taxation system. It is quite risky to adopt tax code during the crisis. Relieving tax burden is undoubtedly one of the measures stimulating business. This measure proved to be ambitious and efficient as we see today. In May 2009 Russia also imposed restrictions on business inspection, but this is not enough. We would like our country to announce moratorium on small and medium business inspection for some time, like it was done in Kazakhstan.

 Thank you for the interview!