The head of IMF called upon Kazakhstan to improve business climate, to initiate reforms

/REUTERS, Almaty, Olzhas Auyezov, November 14, 03/ - The Managing Director of the International Monetary Fund (IMF), Horst Kohler called upon authorities of Kazakhstan other Central Asian countries to improve business climate, initiate structural reforms and not to be locked in economical blocks. The main task of the majority of countries of this region for the nearest years is to continue structural reforms and supplement them with large scale measures on social protection of the population", - Kohler said on Friday at press conference, dedicated to 10th anniversary of national currency of Kazakhstan- tenge. Another important direction is improvement of businesses - the area, in which, according to the latest report of European bank for reconstruction and development, Central Asian countries lag behind other countries with transition economies", - IMF head stated. "In particular, business climate in many countries still suffers from poor policy on competition protection, and insufficient transparency, including taxation issues", - Kohler thinks. In IMF director's opinion, in order to provide stable economic growth in future, Central Asian countries should achieve diversification of the economy, by encouraging the development of small and medium enterprises, as well continue liberalization of external trade not by just signing bilateral agreements and regional trade blocks. "Our experience indicates that they (bilateral and regional agreements) are not real alternatives to comprehensive approach. Thus, for example, creation of a common free market zone by Byelorussia, Kazakhstan, Russia and Ukraine shall not weaken their efforts on joining World Trade organization or negatively influence their integration into world economy", - Kohler said. Moreover, in IMF head's opinion, regional cooperation should develop not only within trading arrangements, but spread as well, including at joint development of infrastructure. Kohler also pointed to the fact that rational management of mineral resources will require from Kazakhstan authorities large efforts, and recommended drawing special attention to policy on management of foreign exchange rate. "Macroeconomic policy should guarantee insensitivity to inevitable price fluctuations at world raw materials market, and more flexible foreign exchange rate may play a vital role by softening external shocks", - the head of IMF said. Kazakhstan within next 12 years plans to triple oil production up to 150 million tones of oil per year, and become one of the largest oil producers in the world. At the same time, increasing inflow of exporters' revenues makes the National bank restrain tenge more aggressively. [2003-11-14]