ALMATY (Reuters) – Kazakhstan’s president ordered his government on Tuesday to allocate $3 billion from the National Fund every year from 2015 to 2017 to bolster growth in an economy hit by falling oil prices and a slowdown in Russia.
The National Fund, which is replenished with windfall revenues from oil exports, stood at $76.8 billion as of Oct 31.
Kazakhstan, Central Asia’s largest economy and the second-largest former Soviet oil producer after Russia, similarly tapped its fund after being hard hit during the global financial crisis of 2007-09, spending $10 billion to cushion the effects.
“One of the main tasks of the fund is to ensure the stability of our economy against external shocks, which include a fall in world prices for natural resources,” Nursultan Nazarbayev said in a live television address to the nation.
“The investment from the National Fund must be necessarily accompanied by structural reforms … This money will be channelled to develop transport, energy, industrial and social infrastructure,” he said, without giving further details.
Kazakhstan’s total international reserves, which also include the central bank’s net gold and foreign currency reserves, now exceed $100 billion, compared to less than $50 billion when the global financial crisis struck in 2007.
International lenders, including the World Bank, the European Bank for Reconstruction and Development and the Asian Development Bank, are expected to provide additional financing totalling $9 billion in 2015-17, Nazarbayev said.
This money, along with the $9 billion from the National Fund and another $6 billion already provided by the fund for private businesses, means total investment in various Kazakh projects will reach $24 billion in the next three years, he said.