Expert Warns of Economic Risks Amid Falling Oil Prices

In his Telegram channel, economist Galym Khusainov notes that the situation on international markets looks alarming, including for Kazakhstan, Orda.kz reports.
The authorities need to calculate possible risks and consequences now, primarily in connection with the sharp drop in oil prices and the depletion of the National Fund.
The price of oil, a key indicator for our economy, is currently at $60 per barrel, and the latest news from OPEC+ does not add optimism. At such a price, revenues to the National Fund will be significantly reduced, and therefore to the country's budget, since indirectly, revenue from the oil and gas sector affects the state budget through contractors and export customs duties,
the economist points out.
Withdrawals from the National Fund may significantly exceed receipts this year.
Tax revenues in the fund are shrinking, and the new Tax Code will not come into effect until 2026.
Meanwhile, the budget deficit continues to grow. According to Galym Khusainov, the current economic model in Kazakhstan is flawed. It is unstable and heavily dependent on resources.
While "oil" money is being used to implement essential infrastructure projects, imbalances remain in areas such as state involvement, the investment climate, and asset recovery.
Privatization and denationalization of the country's economy could not only provide additional income to the budget, but also generally increase the efficiency of certain industries. We have been hearing about privatization and specific plans and lists for about 15 years now, and it is obvious that there has been little progress in this. And some national companies are increasing their presence and increasing their share even more: for example, QTJ. In general, there is some progress, and there are good examples of the state reducing its presence in companies. For example, the sale of Bereke Bank, the sale of Tele 2, the IPO of Air Astana, the IPO of Kazatomprom. But, as it seems to me, in this matter we need to be more bold and leave only strategic industries with the state, and transfer everything else to the market,
Galym Khusainov writes.
He lists potential assets for privatization, including Kazpost, non-strategic enterprises of KMG (such as refineries and small fields), and stakes in ERG.
Khusainov believes private ownership would improve efficiency and increase tax revenues, but resistance from top managers in the quasi-state sector remains strong.
Unfortunately, every manager at his level thinks about how to protect their business and not transfer it to the market, since it is a huge resource for them. And there will always be 1,001 reasons why it is impossible to privatize this or that object, although world practice shows that this is the only right way,emphasizes Khusainov.
He also highlights the importance of improving investment attractiveness. Kazakhstan must strike a balance between increasing tax revenues, combating corruption, and attracting private investors.
The return of assets from representatives of old Kazakhstan is quite fair from a moral and social point of view, but the clumsy implementation of this process greatly increases the nervousness of current domestic investors. Here, it is not only the factor that this or that oligarch will be included in the list for the return of assets, but more from the point of view of new investments: to what extent will new investments be protected in the future and will they not be challenged in 10 years in the event of a change in political course. This is a very important aspect,
Galym Khusainov believes.
The economist notes that these are only some key problems facing Kazakhstan.
The issues of privatization, National Fund replenishment, and investment climate improvement require urgent solutions. The state, he argues, must act within a year, rather than rely on uncertain future recovery.
Original Author: Nikita Drobny
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