Celebrating his inauguration yesterday for a second seven-year term as president of Kazakhstan, Nursultan Nazarbayev might have been tempted to relax. Yet he faces a much harder task than that of winning the election. By his own prediction Kazakhstan is facing at least two years of severe economic difficulties.
Western economists agree.
Also they have had a shock from the Asian and Russian crises making portfolio investors wary of Kazakhstan. For all its rich resources of oil and minerals, and attendant foreign investment, Kazakhstan is struggling to make ends meet. Low oil and commodity prices have cut revenues by a third in the last year and the economic crisis in Russia has robbed the country of its main trading partner. There is a widespread belief among the 16m weary citizens of this vast central Asian republic, that with the elections over, prices will rise, the currency, the tenge, will fall and wage arrears and power cuts will once more be a feature of life. Countries across central Asia are feeling the fallout from Russia, in particular pressure on their currencies and a fall in foreign investment as confidence wanes.