Kazakhstan has hosted the Third Astana Economic Forum at which 2,000 economists from 50 countries discussed ways to avoid a repeat of the recession and financial downturn.
As one of the biggest victims of the crisis, Europe received quite a bit of advice.
Former Canadian Prime Minister, Jean Chretien, told euronews: “There are some countries which are too heavily in debt and which have deficits that are far too big and what happens with that is that it has slowed down the private sector investment, because the government takes too much and then that creates uncertainty and so the private sector stays away. So then, Canada’s experience in 1993-94 was that we were in the same situation, but we put the government’s finances in order in any case and doing that created a climate of trust and private sector investments picked up.”
The European Investment Bank is one of the organisations trying to get the European debt crisis under control.
In Astana, its president, Philippe Maystad, defended the need for austerity measures to ignite a recovery.
He said: “Obviously, one must implement in Europe a strategy of budgetary consolidation, because it is the only way to restore market confidence. So we must start that consolidation, but obviously each country’s specific situation is different and you shouldn’t apply the same measures everywhere, to the same extent.”
Lack of growth and increasing debt have taken a toll on the euro. Its swift depreciation is not necessarily a negative though, according to Noble Prize winner in economics, Robert Mandell, one of the intellectual fathers of the European single currency.
He explained: “It hasn’t gone down a great deal. If bad news comes out it might go down two or three or four cents but it is not a big deal. And the euro has recovered from its low point. I think it overshot in the downward direction and nobody can tell what is going to be like on a day to day basis because that depends on emotions and speculation and news that comes out, but I would say that the euro is well priced right now.”
At the forum, host president Nursultan Nazarbayev pointed out that the best way to exit the crisis is through more economic integration, including a world common currency.
That concept was defended by Spanish economist, Ramón Tamames, from Madrid University: “From the year 1944 until 1971, the world had a universal currency without realising it! It was the International Monetary System governed by the IMF, but that was destroyed (with the removal of the gold standard) and instead we got floating rates that have caused so many crises. The advantages of a global currency are: wide financial stability and the removal of transaction costs. Besides it would allow less developed countries, that now have worthless domestic currencies, to have a real currency.”
More economic integration, not less, is key to attracting foreign investment, that is why Kazakhstan recently formed a customs union with Russia and Belarus, a single market with common rules, as the country’s Economic Development and Trade Minister Zhanar Aitzhanova explained: “We have introduced a single customs duty, with common imports duties and now we have the same non-tariff measures like licensing (obtaining licences) for imports being applied by these three countries.”
Kazakhstan has big ambitions and wants to play a major role in globalisation. Work will start next year on a 5,000 kilometre highway through Kazakh territory. When completed it will connect China to Europe presenting big opportunities.
But what is the main point of entry to investing in the country? For that euronews spoke with a key player, Kairat Kelimbetov, the head of the country’s huge sovereign wealth fund, Samruk-Kazyna.
He said: “Let’s say that the channel between the government and the corporate sector is our organisation which is the sovereign wealth fund – Samruk-Kazyna. The government assets we manage are estimated at 70 billion US dollars. We are shareholders of the national uranium, oil and gas company, national aviation, national railway system, we are owners of several banks and I think we are a good and reliable partner for big companies. So we could consider different opportunities to create joint ventures and equity funds, to provide debt financing, everything.”
euronews correspondent Constantino de Miguel in Astana concluded: “It’s said that both language and ideas travel faster over the sea and the vast steppes. And here the two big ideas from the Astana Forum: to take advantage of the vitality and resources of emerging countries and to create a true world currency.”