Current crisis shows inefficiency of Kazakh central authorities

Almaty, December 2 6 2008

Magbat Spanov, Doctor of Economic Sciences, believes that the current crisis has shown that the management methods and the performance of Kazakhstan's central authorities are inefficient.

"First of all, it (the crisis - Interfax-Kazakhstan) has shown the inefficiency of the management methods and the performance of the central authorities," he told in an interview with the Central Asia Monitor newspaper published on Friday.

"In reality the central authorities are existing somewhere in their own dimension while the regions and the population are living in a different dimension. As a result, very often the authorities are unable to adequately respond to the crises which happen in the masses. And when the central authorities try to sooth their citizens saying that the current difficulties are caused by the global crisis they make a mistake as they underestimate the intellectual level of the common people," the economist said.

According to him, the country stopped developing as many as seven-eight years ago. "It is true, the statistics showed that we were going ahead. However, if compared to the development tendencies in mid 1990-s when the reforms were truly innovative in their nature, we have obviously lost something. We have only been spending money," he said.

Spanov says that such state holdings, as Samruk and Kazyna, which are merged into one company today, have not produced any tangible results.

"They have turned into some weird organizations that are spending on themselves the money which the state allocates for economic development. Isn't their efficiency too low?" he asks.

"For me, as economist, any efficiency can be assessed as follows: you invest money and obtain results. That is what we call efficiency. Or it can be shown like this: expenses-production costs-profit. Unfortunately, we have been talking about breakthrough projects for a long time but have not done anything specific. Well, a brick plant was put into operation somewhere but I can't call that a breakthrough project. In other words SamrukKazyna is spending the public money in order to support itself," Spanov said.

Besides, he thinks, the measures the authorities are taking "are at least one year late."

According to Spanov, if the negative tendencies in the Kazakh economy are not reversed, the people may start protesting more and more vigorously, which may turn into most unexpected forms.

"Why do I think that the ordinary people may express their dissatisfaction in a most unexpected way? Because neither problem that was voiced at the beginning of the crisis in August 2007 has been resolved, the most pressing one being the housing construction financed by individual investors. Much is being talked about it, something is allegedly being resolved but nothing is changing at the local levels," he said.

"The most recent example is the last meeting of the individual co-investors in housing construction and everything relating to this problem. Everybody understands that the meeting was dispersed illegally and that nobody is tackling the problem. Everybody understands everything but keeps mumbling that everything is under control and the problems are being resolved. Though in reality nothing is being done.

In this connection he referred to the recent statement that the construction of about 3,000 apartments would be completed in Almaty by the end of the year.

"Who can believe it? If nothing has been done to date how can it be finished within the remaining ten days? It's a theater of the absurd," he said.

"Our country has a vast territory, a lot of mineral resources and its population numbers that of a megalopolis. Ideally, there should not be any barriers between the authorities and the population. Thus, the crisis is giving us a chance the re-think something and find new ways to go forward," Spanov thinks.

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