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Kazakhstan: President Announces Debt-Forgiveness Program for Poor Families

2 MINS READJun 26, 2019 | 21:55 GMT

What Happened: Kazakh President Kassym-Jomart Tokayev announced on June 26 that the government would write off up to $800 in debt for low-income families. Up to 3 million people would be eligible for the program, and the total cost would come in at "a bit less than $1 billion," according to the president. He also said that the state would stop bailing out banks. "My assessment of this issue as a president is that the government should not get involved any more, any longer, with its loans as far as private banks are concerned," he said.

Why It Matters: This move is Tokayev's first major policy shift since he assumed the presidency. Growing socio-economic problems and their related protests are some of the biggest challenges facing the Kazakh government. The president has decided to take a more populist approach to the problems. It will be important to see whether such measures are able to defuse the social tensions seen in demonstrations and to improve the country's economy. However, the banking sector remains a problem. The government has injected at least $18 billion into ailing banks, which have been mired in nonperforming loans over the years. The central bank has been conducting a review of the quality of assets in the sector.

Background/Context: The country had a presidential election on June 9, when Tokayev, the chosen successor to long-serving ruler Nursaltan Nazarbayev, won with nearly 71 percent of the vote.

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