Masimov returns as Kazakh PM to face economic crisis

Reuters News
Posted: Apr 02, 2014 11:06 AM

By Raushan Nurshayeva

ASTANA (Reuters) - Kazakh President Nursultan Nazarbayev appointed Karim Masimov as his new prime minister on Wednesday, describing him as well-equipped to work with global finance and attract foreign investment in difficult times.

Nazarbayev said he was worried because the previous cabinet had not presented plans to implement a $5.5 billion programme he had ordered to support innovation and small to medium-sized businesses, and to help reduce non-performing loans.

Masimov, 48, was popular with foreign investors and led Kazakhstan's economy through the global financial crisis in his previous stint as prime minister from 2007 to 2012.

In addition to dealing with the world of global finance, he will also have to prepare the country's integration into the Eurasian Economic Union, meant to link Russia, Kazakhstan and Belarus in 2015 as a counterweight to the European Union.

"In the conditions of the global financial and economic crisis, we are likely to face difficulties," Nazarbayev said, according to a statement from his office. "We now have to be able to skillfully work with international financial institutions and attract investors to the country."

He told parliament that Masimov "possesses the necessary experience and knowledge" for the job.

Masimov, fluent in several languages including Mandarin, was Nazarbayev's chief of staff in the last two years. The lower house of parliament, dominated by Nazarbayev's Nur Otan ruling party, later voted to support his appointment.


Addressing parliament, Nazarbayev reiterated the main tasks of his ambitious programme "Kazakhstan 2050" aimed at placing the vast steppe nation among the world's 30 most competitive and developed economies by the middle of this century.

Nazarbayev, 73, who has ruled the oil-rich nation since 1991, said he had ordered 1 trillion tenge ($5.5 billion) from the strategic National Fund to be allocated to support innovation projects and small to medium-sized businesses, and to help reduce non-performing loans.

"The first quarter of the year is already over, but unfortunately the government has not presented yet its clear vision of the work that needs to be done," he said in a reference to Akhmetov's cabinet. "It worries me deeply."

The government and central bank have recently taken unpopular steps to sustain robust growth in Central Asia's largest economy.

In February, the Kazakh tenge was devalued by 19 percent to boost exports dominated by commodities, prevent large-scale foreign exchange speculation and adjust to a freer rouble float in neighbouring Russia, Kazakhstan's main trading partner.

Kazakhstan's gross domestic product grew by 6 percent last year after a 5 percent rise in 2012, and the government targets 6 percent growth this year.

Nazarbayev, a member of the last Soviet Politburo, dominates political life in Kazakhstan and tolerates little dissent in his nation of 17 million people.

The lack of an obvious successor is the main political risk in Kazakhstan, the second-largest post-Soviet oil producer after Russia.

(Reporting by Raushan Nurshayeva; Writing by Dmitry Solovyov; Editing by Tom Heneghan)