Kazakhstan, located in Central Asia, has implemented a program to help nearly 500,000 citizens get out of bank debts. The program started in June 2019 and will cost over $274 million to execute. President Kassym-Jomart Tokayev hopes that by forgiving bad loans given out by the country’s banks, Kazakhstan’s bank debts will decrease, releasing some of the strain on the economy. This policy will also help increase business in the banking sector of the economy, opening up more jobs for individuals below the poverty line.
4 Facts About Kazakhstan Bank Debts
Kazakhstan’s economy has fallen in recent years. The country’s economic system rated 59 overall in 2019. The country has fallen by 3.7 points in the past few years and this is because of a steep decrease in its fiscal health. The unemployment rate is at 4.9 percent and the annual GDP is $477.6 billion. However, the economy’s fiscal health has faced a sharp decline. Over the past year, the country’s financial stability has steadily decreased due to poor working environments and high prices on goods. The country’s goal is to reduce Kazakhstan’s bank debts and increase financial security.
Private banks caused the bank debts. One-sixth of Kazakhstan’s population holds bad loans written by private banks. Bank bailouts have been occurring in the country for a decade. The government provides at least $18 billion in private banks to keep their businesses running. Since Tokayev’s election in June 2019, he has introduced a policy to stop bank bailouts that the government provided.
This is not necessarily a bad thing for poverty. Although the citizens holding bank debts may be living under the poverty line, the government’s forgiveness is a positive change. By ending Kazakhstan’s bank debts, the country’s monetary freedom should increase. Although this freedom grew in 2019, there is still plenty of room for growth. In 2018, 4.3 percent of the population lived below the poverty line. The debt release policy will help alleviate the debts of about 18 million people. About 500,000 people cannot manage their debts because of bank loans. The loan forgiveness policy will help individuals get rid of their debts so they can spend more money on essentials. By forgiving the loans, the country hopes to balance its economy. This will help individuals escape the poverty line, both through their lack of debts and through pay increases.
The debt forgiveness policy is based on the amount owed. According to Kazakhstan’s president, Kassym-Jomart Tokayev, individuals with up to $800 of debt will have it forgiven completely. Individuals with over $800 will have $800 erased from their debt. This will help individuals like Anara Ryskulova, who has four small children and only makes $400 a month. Because of her low income, Ryskulova is dependent on credit and loans to provide for her family and pay her rent.
Since his election in June 2019, President Kassym-Jomart Tokayev has implemented a policy to stop bank bailouts. For a decade, the Kazakhstan government has been bailing out privately owned banks. The policy will not only increase the banking sector of the government but will also help the individuals who live below the poverty line. By decreasing the bank debts, affected individuals will have more money for essentials. By implementing this policy, Kazakhstan’s president will not only increase the country’s GDP but ultimately, help the citizens live above the poverty line.
– Destinee Smethers