Even though the emergency rule in Kazakhstan has been prolonged to 7 a.m. May 1, it does not at all mean that the country will go back to the normal life on that day. No one and nothing stands in the ways of the acting head of the state to impose the emergency rule again, say, starting from 8 a.m. May 1 for the duration of 30 days and then prolongate it indefinitely. And, if the necessity arises, to pass through the Parliament the law cardinally increasing his authorities in this matter.  

Nonetheless, we have no doubt that, one day, the state of emergency will end and the restoration of the normal life will begin including the economic sphere. Therefore, we would like to take it upon ourselves to forecast these developments.

In our opinion, the Kazakh economy will suffer from coronavirus less than the the economies of the developed countries due to the following:

1. It is not as complex, developed and interlinked.
2. It is largely self-reliant.
3. It is often so fragmented that a nationwide markets for many types of goods simply do not exist in the country.
4. It’s non-resources-based (not exporting raw materials) part may survive without a lot of imported components (albeit it is an option of last resort).

 Let us start with the last one. In order to argue our fourth thesis, let’s take the two main groceries — bread and meat used by the Kazakhs.

It is obvious that the country’s got more than enough grain and, therefore, flour. With that, even if the large bread-baking enterprises will start experiencing problems with importing say packaging and other components or ferments, then the small factories will be able to do without all this simply because a significant part of the citizens is ready to not only buy bread and bread products without packaging  from individual sellers but even bake it themselves, especially considering that now it can be done not only in the private houses with stoves but in apartments as well thanks to the modern technologies (all kinds of bread baking equipment).

The same can be said about meat and meat products. As of today, a significant part of the demand for them is satisfied by the non-organised trade that sells raw meat without any kind of processing. Most that the traders of this sectors do is cut the carcasses into the more or less sellable pieces. So, if the large and mid-seize meat-processing enterprises stop operating due to the absence of the imported components, they will be easily (and with great enthusiasm) be replaced by the small and middle business structures working at the market-places and in the neighbourhood shops.

As for the third thesis, Kazakhstan truly does not have and, in our opinion, will not have nation-wide markets for the majority of the groceries for years to come. Particularly, for that same meat products. Mostly because a significant part of the latter, for example, is grown, processed and sold within the limits of a single territory, often not even a region but a rural district. There is plenty of reasons for that including such crucial and irresolvable ones as a huge territory of the country and the low density of the population as well as the low effective consumer demand and the average earning potential of this type of business.

We are not going to comment on the second thesis since the self-reliance of the Kazakh economy is quite obvious. Moreover, the topic has already been discussed in the press many times with the participation of the specific state agencies that have been convincing, are convincing and will be convincing the Kazakhs that hunger is no threat to them.

As for our first thesis that the Kazakh economy as a whole is not too complex, developed and interlinked as the case may be in the developed countries, then, by way of proving it, we may recommend to our reader travelling outside the old and the new capitals in order to see personally how little knowledge about devision of labour and production chains exists in these areas.

However, despite all that has been said, the Kazakh economy would still suffer from the pandemics (perhaps significantly less so than the economies of the developed countries). And it is not at all a given that it will be able to restore itself faster than the latter and, most importantly, to ensure the restoration of the level of employment and the income of the citizens.

The thing is that, on one hand, the local business is much better prepared for such critical situations than the Western one simply because it had gone though the havoc of the end of 1980-1990s as well as the 2008-2009 and 2014-2015 crises. However, on the other hand, the effective consumer demand in Kazakhstan is significantly lower and the prospects of its revival in a short period of time are non-feasible.

Yes, today the state and the wealthiest part of the Kazakhs consisting of the members of the ruling elite and their immediate circle as well as those who have relatively high income do possess significant savings. In order to see that, it is enough to look at the deposit statistics of the Two-Tier Banks. But even if these people will suddenly get patriotic and start spending their savings, they are clearly not going to eat, get haircuts and drive twice as much.

Thus, the state support is going to become the only real way to increase the effective consumer demand in Kazakhstan; however, it will invariably lead to big problems. First of all, to the increase of the parasitic sentiments in the society that, in the case they aren’t satisfied, may lead to such an unmanageable and excessive social and political activity that Akorda and the Library will find themselves in a dire circumstances big time.

Especially since the restoration of the normal economic activity will largely depend not on the state and the population but on the business or, to be more precise, local entrepreneurs.

Clearly, the big resource-based business that mostly exports its products will be adapting to the new conditions. Among other things, it will reduce production and supply, lose some income and start economising inside the country, in other words, will do exactly what it can do and what it has already done a couple of times during the last twenty years. It is also clear that the mid-size business will be restoring slowly and survive with difficulties. But as for the small and individual businesses, it is not at al clear what’s going to happen.

In general, small and mid-size business is more than resilient, but is needs the effective consumer demand right now and in every part of the country. If the latter fails, it is quite possible that the country will repeat what has already been done in its history — the direct natural exchange of goods that had helped to survive many people at the end of the 1980s and during the 1990s.

This, in our opinion, is the main competitive advantage of the post-Soviet states including Kazakhstan in comparison with the developed countries — we are capable of surviving even in the most dire circumstances regardless of the help of the state and even in defiance of it. Simply because we have been living living like this for a long time.