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22 February 2021

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Kuanysh Zhaikov

CRC Partner

Ministry of National Economy, an often-forgotten public entity, is going to see quite an interesting group of people joining its top ranks: a young Minister who majored from economy-related field a foreign university; a young Vice Minister with recent experience in difficult areas of important regions; Vice Minister with a lot of experience, who has gone through the "Moscow school" of the EEC; Institute Chairman  who knows Kazakh real sector very well and has great administrative experience.
Similarly to the Minister of Education case, I saw no reason to explain Macroeconomics to a Macroeconomist Minister. This was not a "report sharing meeting", so I was more focused on giving my opinion on what’s happening now to my “fellow club members”.
*** With regard to short-term measures, there is nothing to criticize the Government for. There are specific areas where a discussion with experts is possible - public administration, privatization, individual projects, etc. But, in general, there is no indication that their short-term actions will lead to some kind of collapse. Rather the opposite. "Politics is the art of the possible." ***
 I have the following hypotheses about long-term development. It will be a long story with no “polishing”.
1) "Entering the top 30 countries in the world" goal lies within our dreams, rather than something that could be achieved. There are more chances for us to roll back from 50th to 70th place than to become 30th. We are an agro-industrial, quite rural country, with a "resource curse". This is our starting point, not the distorted reality of Facebook.
2) Developed Kazakhstan equals radical institutional reforms. It is about the Rule of Law, courts, law enforcement, actually functioning parliament, advanced civil institutions, respect for property rights. The socio-economic model is unimportant in comparison to these matters. I like to about this matter as well, but one needs to understand the limitations.
Once again, "Ministry of Economics" is not equal to the "economy". It is no use demanding economic growth, low rates of inflation and unemployment from a government agency if it does not have the tools. But there is still something to ask for, which I will touch upon in points 4 and 5.
3) There will be no serious reforms, no matter how much they are wanted. As long as there is National Fund, the need for distribution of wealth will prevail. It's not about power. The push comes from bottom to top. Reforms are painful. Similar to dental problems, they go to doctor only when they need to pull the teeth out.
4) The only task is to give people a "different experience" as much as possible. Another job, another place of residence, and another environment. A person's behavior does not change based on beliefs. One needs to "feel" the difference. Economics is not mathematics. Economics is signals. If we like some type of behavior, we reward it. While other types of behavior are not rewarded. And the choice is yours.
5) Principles are more important than priorities. There seems to be an infinite amount of priorities. People want the state to be responsible for everything in their country, from giving work and reserving savings to ensuring their wellbeing and creating the ideology to go by. But even in this situation, we can establish stimulating "game rulea" in every area. And the principle is very simple - a strong and responsible citizen.
It's like a magnet. It can be long and tedious to separate metal chips from garbage. But you can use a magnet and the metal will stick by itself. Same applies to public policy.
P.S. I am the first "pillar" in the "fence" of experts, on the lower left side.

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