Kazakstan: Fears Over WTO Plan

Fast track membership of the international trade regulation body may deal a serious blow to the country's economy.

Kazakstan: Fears Over WTO Plan

Fast track membership of the international trade regulation body may deal a serious blow to the country's economy.

Monday, 21 February, 2005

A push by Kazakstan's leaders to speed up entry to the World Trade Organisation could harm the country's fledgling market economy, analysts fear.

Parliamentary deputy Valentin Makalkin, the country's recently appointed representative at the International Operative Group of WTO legislators, has been talking of admission before the end of next year.

Political scientist Maksat Ramazanov says local enterprises will be hit hard if Kazakstan joins the free trade body at such a fast pace.

"Small and medium businesses, described by President Nursultan Nazarbaev as the most important in the development of the economy, will suffer first of all," said Ramazanov. "Kazak entrepreneurs, who are just beginning to build their businesses, will not yet be in a competitive position against producers from WTO member states".

As of July 1, more than 100,000 small firms, employing around half a million people, had been registered by the Kazak Statistics Agency.

Serik Turjanov, director of the department of small businesses in the municipality of Almaty, believes Kazakstan realistically needs another 10 to 15 years before it is ready for the WTO.

"Membership is beneficial for developed countries, but it is still very early to consider Kazakstan as such, since very few of our local products conform to international standards," said Turjanov.

What opponents of fast track entry mainly fear is that local producers, who are struggling with outdated equipment, will not be able to cope with a flood of cheap goods on the market.

While President Nazarbaev has said that Kazak-produced consumer goods would be given preference for a period of five to ten years, analysts doubt that such a clause would actually be approved. "If China wasn't able to get significant concessions from the WTO leadership, what chance has Kazakstan?" said Ramazanov.

Jangeldi Shimshikov, director of the centre of socio-economic studies, argues that the country could simply become a "neo-colony" of the developed nations. "Kazakstan is still regarded primarily as a supplier of raw materials," he warned.

Indeed, the director of the Kazak Institute of Social and Political Studies, Sabit Jusupov, feels that not nearly enough research has gone into all the possible consequences.

"It is necessary to conduct sectoral analyses of domestic production. It is impossible to make any conclusions or forecasts when we don't have any such data to hand," he said.

Kazakstan applied for membership of the WTO in January 1996, before it was officially acknowledged as a country with the market economy.

Makalkin, while accepting fears that membership could cause a rise in unemployment, argues that further delay would actually harm the country's prospects "since later we will have to negotiate with a larger number of countries".

Supporters of the process say that a quick entry will help to bring investment to the Central Asian nation a decade after it gained independence from the Soviet Union.

"Kazakstan cannot remain outside the process of globalisation, and joining the WTO is a real step on the road to integration," argued Nikolai Kuzmin, director of the Centre of Foreign Policy and Analysis.

Sergey Smirnov, senior researcher in the economic security department of the Kazak Institute for Strategic Studies, believes membership will provide a powerful stimulus and increase efficiency of production.

However, he agrees that if the country joins hastily, its economic security could be threatened.

No real public debate seems to be involved in the current process, and analyst Vasili Komarov believes the population's seeming ignorance of the WTO and the implications of membership is symptomatic of the prevailing political climate.

"It has become a tradition that the government adopts decisions without paying attention to its people," he said.

Victor Yambaev, vice-president of the Almaty Association of Entrepreneurs, told IWPR that the move seems to be driven by political ambitions, with those in power keen for the country to become a full player on the international stage.

He believes that reform the country's legislative base, which currently "contradicts not only international standards, but also common sense", is a far more urgent domestic priority.

Asan Kuanov is an independent journalist and Saule Amirbekova is the editor at the Prodovolstvennyi sector Kazakstana newspaper in Almaty

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