Kazakhs Head for Polls as Economy Struggles Amid Oil Slump (1)

Kazakhs are going to the polls in early parliamentary elections called after President Nursultan Nazarbayev warned of a “real crisis”...

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, which began at 7 a.m. on Sunday and closed at 8 p.m., saw a turnout of 60.2 percent as of 2 p.m. in Astana, 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 year’s 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 largest oil producer after Russia battles an economic crisis triggered by the slump in crude prices. The tenge has weakened 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 surging to 15.2 percent in February, the fastest since 2008.

Institutional Reform

Nazarbayev said after casting his vote in Astana that the current government “must be allowed” to complete institutional reforms and anti-crisis measures. “We will take into account the situation in the economy, in the world and in the country” to decide when to “redistribute power between president, parliament and government,” he said, according to the state-owned Kazinform newswire.

Oil accounts for more than 50 percent of the country’s budget revenue, according to Standard & 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.

“We have crisis time now – prices increase, young people have no jobs – there must be something concrete done about it,” Bota Abishbayeva, a 27 year-old economist, said after she voted for the Birlik party. The Nur Otan party made a “circus” by putting celebrities on its ballots as they don’t know how to attract voters, she said.

‘Balanced Solution’

“I tried to choose any party except Nur Otan” and voted for pro-countryside party Auyl, as I want them to help rural inhabitants to improve their poor life conditions and find a “balanced solution” to promote the Kazakh language, not the way it was done in Ukraine, said Daulet, a 29 year-old head of a state-controlled educational institute, who declined to give his last name.

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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.

“Nur Otan promotes Nazarbayev’s program,” while we expect them to keep stability, Yuliya Kadyrova, a 66 year-old pensioner, said. “There is a crisis now, but it’s easier to overcome compared with the one in 1990s” after the Soviet Union collapsed.

Devolve Power

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.”

(Updates with details of voter turnout in second paragraph and adds President Nazarbayev’s comments in fifth paragraph.)

To contact the reporter on this story: Nariman Gizitdinov in Almaty at ngizitdinov@bloomberg.net. To contact the editors responsible for this story: Alex Nicholson at anicholson6@bloomberg.net, Keith Jenkins, Amanda Jordan

By: Nariman Gizitdinov

©2016 Bloomberg News

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