Kazakhs vote as economy struggles amid oil slump

Astana / Bloomberg

Kazakhs are going to the polls in early parliamentary elections called after President Nursultan Nazarbayev warned of a “real crisis” facing the Central Asian nation because of the slump in oil prices.
Six parties are competing for 98 elected seats in the 107-member parliament, which also has nine appointed delegates. Voting on Sunday begins at 7 a.m. and polls close at 8 p.m., according to the Kazakh central election commission’s website.
Nazarbayev’s ruling Nur Otan party won 83 seats at 2012 elections, with the Ak Zhol and Communist parties the only others to enter parliament last time. This election’s been “low-key” and “parties’ campaign platforms differ little in tone and substance,” observers from the Organization for Security and Cooperation in Europe said in a March 11 report.
The president called the vote after lawmakers said “social consolidation” was needed as the former Soviet Union’s second-largest oil producer after Russia battles an economic crisis triggered by the slump in crude prices. The tenge has fallen about 45 percent against the dollar since the central bank switched to a free float in August to defend reserves amid devaluations in Russia and China. The currency’s decline has hurt living standards and sent inflation spiking to 15.2 percent in February, the fastest since 2008.

Spur Recovery
Oil accounts for more than 50 percent of the country’s budget revenue, according to Standard and Poor’s, which warned in October that Kazakhstan faces “deteriorating economic conditions.” Flush with cash when crude was $100 a barrel, Kazakhstan must adjust to an “era of cheap oil” that may last five to seven years, Prime Minister Karim Massimov said in a Jan. 22 interview.
The president has demanded extensive reforms, including privatizing all state-run companies, to attract foreign investment and spur Kazakhstan’s recovery. He urged a “strengthening of the fight against corruption” as part of a “100 steps” program of institutional improvements published last year.
Nazarbayev, 75, who’s ruled Kazakhstan since 1989, also pledged to devolve greater power to parliament as part of a political transition promised after he won a fifth term in snap presidential elections last April. The country’s top political issue “remains the question of the succession” to Nazarbayev, Tim Ash, head of emerging-market strategy at Nomura International Plc in London, said by e-mail.
Moves toward “a less centralized, more parliamentary system in preparation for his departure have not materialized,” Anna Walker, Associate Director, Europe, at Control Risks in London, said by e-mail. “Intensification of the economic crisis probably made such a move appear too risky and parliament looks set to remain as beholden to the executive as ever after the elections.”