ALMATY, Kazakhstan — The International Monetary Fund’s representative in Almaty, the country’s economic capital, ended a two-year assignment this month and was not replaced — testimony of the IMF’s faith that this former Soviet republic won’t need to borrow money anytime soon.
The representative, Geoffrey Oestricher, a soft-spoken Canadian with a trim beard, said that while IMF teams would come to Kazakhstan two or three times a year to provide technical assistance and discuss economic policy with the country’s financial leadership, the closing of the resident representative office was “a reflection of their success.”
At independence in 1991, Kazakhstan’s per-capita gross domestic product was less than half that of Russia, and an economic crisis two years later sent Kazakhstan reeling with 1,600 percent inflation.
But in the past four years, Kazakhs have caught up with their former colonizers to the north, inflation has dropped to 6 percent and the economy has grown 40 percent.
Kazakhstan’s per-capita GDP, adjusted for local prices, was $6,855 for 2001, the most recent figure available on the U.S. State Department’s Web site.
The department’s Web site listed Russia’s per-capita GDP, when adjusted for local prices, at $8,800 in 2002.
“The locomotive of growth,” says Budget Planning Minister Kairat Kelimbetov, is the oil sector, even though it accounts for less than one-fifth of the economy.
Production has risen past 1 million barrels a day and is expected to triple in a decade or so, the fastest increase expected of any country.
The government has created an offshore oil fund similar to Norway’s that has reached $2.7 billion, and plans to keep the cash flowing into it until it attains $4 billion. The fund is intended to cushion the economy from oil price drops.
Strides in the banking and financial sector are also impressive, foreign observers say. Private bank deposits grew five times in the past three years and the volume of credit card transactions grew sixfold in four years, the central bank said.
The economic boom that began in 2000 has begun to show results in the disadvantaged tiers of the country’s 14.7 million people, who are roughly half Kazakh, half Russian.
Since 1997, the infant mortality rate has fallen from 25 deaths per 1,000 births to 18, a World Health Organization official said. The number of people living below the subsistence level has fallen from 34 percent in 1999 to 24 percent last year, says the United Nations Development Program office in Almaty.
Many consider these gains too modest. After lending the country more than a half-billion dollars and being repaid early, the IMF’s final role in Kazakhstan has been unusual.
Instead of advocating belt-tightening, as it often does, the IMF — along with other organizations like the World Bank — has been urging the government to spend more to improve health, education and social assistance.
In these sectors, expenditures are lower than among its neighbors or even in Latin America, World Bank figures show. Life expectancy is one of the lowest in the region, anemia is rampant, and the country’s prison system has an epidemic of tuberculosis.
Non-oil foreign investment remains low because the business climate is considered difficult, analysts say.