Kazakhstan escapes raging ruble

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ALMATY, Kazakhstan -- In the summer and fall of 1993, fewer than a dozen officials worked feverishly in complete secrecy to save Kazakhstan from raging post-Soviet inflation and create its first-ever national currency.

Then, they decided to accept Russia's offer to join the new Russian ruble, and changed direction again when Moscow withdrew the offer.

In Almaty, the country's economic capital, Kazakh central bankers reminisced last month with foreign colleagues about those heady days at a conference marking the 10th anniversary of introduction of the monetary unit the tenge, which means "money" in Kazakh.

Kazakhstan is now a model of financial and monetary stability, with a financial system considered more advanced and transparent than Russia's.

Over the past four years, it has enjoyed an average annual growth rate of 10.5 percent, the world's highest after Equatorial Guinea, which is also in the midst of an oil boom. But unlike the tiny African nation, oil accounts for only one-fifth of Kazakhstan's GDP growth, with the financial sector growing at a rate of 50 percent a year.

Horst Kohler, managing director of the International Monetary Fund, praised Kazakhstan's "sound monetary policy" and "robust growth."

In a long interview in his office after the conference, Grigori Marchenko, governor of the National Bank, Kazakhstan's central bank, recalled that in 1993 this country was still part of the Soviet ruble zone and reeling from an inflation rate of more than 2,000 percent for the second year in a row.

"The Russian economy was going downhill and so was ours," he said.

Things were so bad that "We had crisis committees, and their job was not to get the economy to grow, but to slow the decline."