The oil rich former Soviet Republic has spent billions attempting to save its failing banks, and now, it is ditching the banks, and will write down its people’s debts, the exact opposite of what Geithner and the Federal Reserve did in the USA.
I expect the new Kazakh President to become Hitler of the Week™ shortly, because bailing out people and letting the banksters and their investors take the the hit is just unAmerican.
I am aware that there is very little to recommend Kazakhstan.
Kassym-Jomart Tokayev was elected in an unfair election, hand picked by his predecessor, Nursultan Nazarbayev, who is notorious for the suppression of free speech, torture, etc.
This is a case of a stopped clock being right twice a day:
Kazakh President Kassym-Jomart Tokayev said he’ll write off bad loans held by a sixth of the central Asian country’s population, while signaling a sharp change in policy to end costly state bailouts of private banks.
The loan-forgiveness program is Tokayev’s first major policy announcement since he was elected president on June 9 in a choreographed transfer of power that began when longtime leader Nursultan Nazarbayev stepped down as head of state in March. His victory was met with rare and widespread protests.
Bank bailouts are also a sensitive issue in Kazakhstan, which has been mired in a decade-long crisis in which the government has pumped at least $18 billion into lenders to keep the sector from collapsing under the weight of bad debts. The central bank is conducting a review of asset quality, prompting speculation that a new round of bailouts may be in the works.
While the debt-relief initiative may help lenders, the total cost is likely to come in at “a bit less than $1 billion,” according to Tokayev. More than 3 million Kazakhs in the energy-rich country of 18 million will get help to escape debts averaging 300,000 tenge ($790), he said. It is aimed at “people who find themselves in very difficult living circumstances,” he said.
About 4,000 people were detained by police during a rare outburst of protests against what activists said was a lack of real choice in the recent vote, which Tokayev won easily with 71% support. Leader-for-life Nazarbayev, 78, handed the presidency to Tokayev in March, who called the early election “to remove any uncertainty.” International observers criticized the conduct of the vote.
The math is pretty simple: $18 billion did not solve the problem, versus less than $1 billion to write down personal debt, and let the banks and the banksters burn.
Works for me.