IMF UPBEAT ABOUT KAZAKHSTANI ECONOMIC PERFORMANCE.

Kazakhstan’smacroeconomic reforms received welcome endorsement at a May 28 meeting inAlmaty between President Nursultan Nazarbaev and IMF Managing DirectorMichel Camdessus. While Kazakhstan has borrowed a total US$500 million fromthe IMF since 1993, it has not drawn on the US$420 million Extended FundFacility approved by the IMF in 1996. That loan is designed for emergencyuse. Camdessus said he was encouraged that Kazakhstan had been able toproceed without it.

Camdessus went on to praise Kazakhstan’s overall economic successes,including (1) the continuing stability of the currency; (2) the successfulfight against inflation, which was more than halved in 1997 and is expectedto fall further in 1998; and (3) steady increases in economic growth, from 1percent of GDP in 1996 to over 2 percent in 1997 and a predicted 3 percentthis year. (Reuters, May 28) “Today is a day of great satisfaction forKazakhstan,” Camdessus said. (Panorama [Almaty], May 29)

Camdessus also used his visit to highlight areas requiring further reform.The tax system needs to be reorganized to ensure that enough taxes arecollected to plug the rising budget deficit, he told a press conference.Trade should be liberalized through a reduction in import tariffs. The IMFalso wants to see further privatization of state-owned enterprises, sayingthis will not only generate budget revenue but increase enterpriseefficiency. Responding, Nazarbaev reiterated his government’s determinationto attract foreign investment to sectors other than oil and gas. Coming asit did at a time when two other major recipients of IMF loans–Russia andIndonesia–were plunged in economic crisis, the IMF’s positive evaluation ofKazakhstan’s progress was reassuring for both sides. –SC

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