Kazakhstan: Tokayev victory will ensure continuity of economic policy
June 4, 2019
Acting President Kassym-Jomart Tokayev is on course to win the snap election scheduled for 9 June, with the tightly controlled and opaque electoral process meaning that opposition candidates stand little chance. As the head of the Nur Otan party and chair of the National Security Council, former President Nursultan Nazarbayev will continue to exert significant leverage over the policy direction of the country and Tokayev’s victory will further ensure a continuation of the status quo and should thus have little impact on the economy.
While two of Nazarbayev’s prominent challengers Amirzhan Kosanov—leader of the Ult Tagdyry (Conscience of the Nation) party—and fugitive billionaire Mukhtar Ablyazov have been theoretically allowed to contend the election, this is likely just an attempt to squelch protests rather than allow any viable opposition the chance at competing fairly. Any shifts in economic policy are thus more likely to be influenced by oil prices, changes in petroleum production and evolving external conditions.
While the economy has been growing at a solid pace over the past two years, after a dive in oil prices swerved growth off track in 2015–2016, the economy is set to slow moderately this year as overhauls at the Kashagan, Karachaganak and Tengiz oil fields curb oil production and weigh on export performance. Looser monetary conditions and a boost in fiscal stimulus, however, should bolster domestic demand by buttressing household spending and stimulating increased investment. While efforts to diversify the economy away from its reliance on the energy sector are underway, supported by robust FDI inflows, progress has still been sluggish on this front and the economy remains highly exposed to the whims of the global commodity markets.