ALMATY, Kazakhstan -- With a strongly reformist cabinet, a tight-spending central bank and a pledge of a billion dollar World Bank credit, President Nursultan Nazarbayev is set to revive the moribund economy of Kazakhstan as he moves to defuse ethnic tensions.
He has a tough task. The World Bank predicts the economy will decline in 1995, bottom out in 1996 and start expanding in 1997 -- if all goes well.
Growing popular anger over the plummeting living standards has made the parliament an unreliable partner. This week, Oil and Gas Minister Nurlan Balgimbayev is battling for an oil law that will attract more oil companies to Kazakhstan's vast oil riches, key to its long-term future.
World Bank president Lewis Preston announced $977 million in new credits for the next three years during a three-day visit to Almaty on Nov. 10 to 12.
"It's clear reforms have a new momentum under (new) Prime Minister (Akhezhan) Kazhegeldin," he said. "The program is moving very quickly."
A senior Western diplomat said approvingly: "Kazhegeldin is the most reformist prime minister in the CIS."
Another bright spot is oil. Exports from the giant Tengiz field near the Caspian Sea are set to double in the next year to six or seven million tons, oil minister Balgimbayev said in an interview.
This will significantly increase revenue and may encourage other oil companies to buy lesser fields now in the process of privatization. Tengiz is being developed by Tengizchevroil, a joint venture between the Kazakh state oil company and U.S. oil giant Chevron, whose $700 million investment is the largest in the former Soviet Union.
Tengizchevroil's travails -- the company has been forced to cut back exports due to Russian-imposed quotas -- are closely watched as a litmus test of Kazakhstan's commitment to capitalism.
Balgimbayev, a second-generation oilman, ended a two-year stint at Chevron headquarters in San Ramona, California, to take his present post.
The man considered to be the chief architect of reform, National Bank chairman Daulet Sembayev, has assembled a team of bright, young Western-educated deputies.
One of them, Grigory Marchenko, told The Moscow Times that monthly inflation, 11 percent in November, would drop below 5 percent in the first quarter and steady at 1.5 percent by midyear.
He admitted that the parliament's ignorance of economics was a problem.
"They don't accept that inflation came from credit," he said. "This is a painful operation, the patient is shouting, and the deputies only care that the patient stop shouting, without looking at the operation itself."
International observers have complained that the March 7 parliamentary elections were rigged, but the joke in Almaty these days is that they weren't rigged enough: Popular discontent with the shrinking economy led to a symbolic vote of no-confidence a month later.
Today, the mood among legislators is one of confusion and anger. "I'm afraid to go back to my constituency," said deputy Viktor Suleimanov. "This isn't shock therapy, this is shock surgery without anesthetics."
As the Kazakh economy -- long run by Russians and controlled from Moscow -- fights for survival in inexperienced Kazakh hands, ethnic concerns have taken a back burner. The government, in a show of evenhandedness, has cracked down on Kazakh nationalists.
Nazarbayev also appointed a commission to re-examine a 1992 edict that made Kazakh the official administrative language, with Russian as the interethnic language. The law, which is widely ignored since only half the Kazakhs -- and almost no Russians -- can read and write Kazakh fluently, still offended many Russians and was used as a tool for removing Russian administrators and replacing them with Kazakhs.
Nine hundred thousand ethnic Germans have left Kazakhstan in the last two years, German diplomats say, and the estimate of emigrating Russians is in the hundreds of thousands.
Spot interviews in Almaty, an overwhelmingly Russian city, indicate that most Russians want to leave, but for economic, not political reasons.
"Salaries are three times higher in Russia," said Nikolai Kamenev, an unemployed agronomist. "What future is there here for us?"
"The ethnic issues are no longer dominant," said a Western diplomat. "In the parliament," where Kazakhs form two-thirds of the 177 members, "there's plenty of strong opposition from the Kazakhs, not only from the Russians."
Observers say Nazarbayev wisely distanced himself from his own government by sacking the entire cabinet last month, placing himself, de Gaulle-like, above the fray.
He won election in December 1991 with an overwhelming 98 percent of the vote and is not up for reelection until December 1996.
But, in a country where most people blame the government for failing to stem the free-fall of their living standards, Nazarbayev will need all his political capital to steer Kazakhstan -- the only ex-Soviet republic where the titular nationality is a minority -- through the shoals of economic collapse and ethnic strife, Kazakh and foreign observers agree.
He has a tough task. The World Bank predicts the economy will decline in 1995, bottom out in 1996 and start expanding in 1997 -- if all goes well.
Growing popular anger over the plummeting living standards has made the parliament an unreliable partner. This week, Oil and Gas Minister Nurlan Balgimbayev is battling for an oil law that will attract more oil companies to Kazakhstan's vast oil riches, key to its long-term future.
World Bank president Lewis Preston announced $977 million in new credits for the next three years during a three-day visit to Almaty on Nov. 10 to 12.
"It's clear reforms have a new momentum under (new) Prime Minister (Akhezhan) Kazhegeldin," he said. "The program is moving very quickly."
A senior Western diplomat said approvingly: "Kazhegeldin is the most reformist prime minister in the CIS."
Another bright spot is oil. Exports from the giant Tengiz field near the Caspian Sea are set to double in the next year to six or seven million tons, oil minister Balgimbayev said in an interview.
This will significantly increase revenue and may encourage other oil companies to buy lesser fields now in the process of privatization. Tengiz is being developed by Tengizchevroil, a joint venture between the Kazakh state oil company and U.S. oil giant Chevron, whose $700 million investment is the largest in the former Soviet Union.
Tengizchevroil's travails -- the company has been forced to cut back exports due to Russian-imposed quotas -- are closely watched as a litmus test of Kazakhstan's commitment to capitalism.
Balgimbayev, a second-generation oilman, ended a two-year stint at Chevron headquarters in San Ramona, California, to take his present post.
The man considered to be the chief architect of reform, National Bank chairman Daulet Sembayev, has assembled a team of bright, young Western-educated deputies.
One of them, Grigory Marchenko, told The Moscow Times that monthly inflation, 11 percent in November, would drop below 5 percent in the first quarter and steady at 1.5 percent by midyear.
He admitted that the parliament's ignorance of economics was a problem.
"They don't accept that inflation came from credit," he said. "This is a painful operation, the patient is shouting, and the deputies only care that the patient stop shouting, without looking at the operation itself."
International observers have complained that the March 7 parliamentary elections were rigged, but the joke in Almaty these days is that they weren't rigged enough: Popular discontent with the shrinking economy led to a symbolic vote of no-confidence a month later.
Today, the mood among legislators is one of confusion and anger. "I'm afraid to go back to my constituency," said deputy Viktor Suleimanov. "This isn't shock therapy, this is shock surgery without anesthetics."
As the Kazakh economy -- long run by Russians and controlled from Moscow -- fights for survival in inexperienced Kazakh hands, ethnic concerns have taken a back burner. The government, in a show of evenhandedness, has cracked down on Kazakh nationalists.
Nazarbayev also appointed a commission to re-examine a 1992 edict that made Kazakh the official administrative language, with Russian as the interethnic language. The law, which is widely ignored since only half the Kazakhs -- and almost no Russians -- can read and write Kazakh fluently, still offended many Russians and was used as a tool for removing Russian administrators and replacing them with Kazakhs.
Nine hundred thousand ethnic Germans have left Kazakhstan in the last two years, German diplomats say, and the estimate of emigrating Russians is in the hundreds of thousands.
Spot interviews in Almaty, an overwhelmingly Russian city, indicate that most Russians want to leave, but for economic, not political reasons.
"Salaries are three times higher in Russia," said Nikolai Kamenev, an unemployed agronomist. "What future is there here for us?"
"The ethnic issues are no longer dominant," said a Western diplomat. "In the parliament," where Kazakhs form two-thirds of the 177 members, "there's plenty of strong opposition from the Kazakhs, not only from the Russians."
Observers say Nazarbayev wisely distanced himself from his own government by sacking the entire cabinet last month, placing himself, de Gaulle-like, above the fray.
He won election in December 1991 with an overwhelming 98 percent of the vote and is not up for reelection until December 1996.
But, in a country where most people blame the government for failing to stem the free-fall of their living standards, Nazarbayev will need all his political capital to steer Kazakhstan -- the only ex-Soviet republic where the titular nationality is a minority -- through the shoals of economic collapse and ethnic strife, Kazakh and foreign observers agree.
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