Time to Spend the Reserves

I don't think any of us expected the coronavirus to affect everything happening in the world as it has. And the worst thing about this whole story is the uncertainty. We don't know when it will end. It may be a month, it may be two, or it may be a year. For now, many of us do not grasp the full seriousness of the situation, and we think about the here and now, a week or two ahead at most. China's experience shows that a quarantine can last 3–4 months. This has a major impact on the global economy, and we will not be spared. For now, we are dealing with the basics: safety and food. We have stocked up on food for about two weeks and are protecting ourselves through isolation and disinfection, but we do not yet have time to think about what will happen in a month or two.

The realization will start to dawn after a couple of weeks of sitting at home, when the question arises of what to buy food with next and how to earn money when everything is closed. And this is the main risk of the current situation: workers losing their income. What is needed here are radical measures to support people, not employers.

To provide funds for new projects at a time when everything is shut down in the country's two largest cities (which are the main sales markets) is, in my view, utopian. It would mostly fuel speculation, especially in forex. Launching new projects amid such uncertainty is a risk so high that hardly anyone will take it on. Meanwhile, companies hit by the coronavirus and by oil prices (which are partly also a consequence of the pandemic) will not be able to solve their problems with sales, and in some cases with the supply of raw materials. For them, it is now more important to provide their employees with a minimum income and cut costs to the bone, because new money will not bring demand back.

Therefore, in my personal opinion, it would be logical to direct resources now to payments to Kazakhstanis who have been hit by the coronavirus. I think the easiest way to do this is through employment offices: if a person has no pension contributions, pay them the minimum wage. If a large family has no income, pay a benefit for each child. But these are details, and we need to work them out together.

If new projects are to be developed at all, they should be in areas that will be useful right now: online retail, delivery and logistics, and agriculture.

For businesses, it is more important now to provide relief on taxes, on monopoly services, and on interest payments on existing loans. Now is the time to spend the reserves. This is exactly the moment, and we need to realize it before it is too late, before something is already destroyed. Rebuilding a ruined house is always harder, because besides clearing the wreckage, you then have to build a new one. What we need to do now is reinforce the walls and the foundation.

The foundation of business is effective demand, which must be maintained at the necessary level for those companies that have not yet been directly hit by the coronavirus and oil prices. As for the companies that will certainly be hit, they need full and direct support so that they do not disappear altogether.

Our problem is also that we are indecisive, because our decisions are subject to too many audits and inspections. Now, more than ever, our officials need to be given the confidence to act decisively. Initiative should not be killed; on the contrary, it should be encouraged, and officials should not be punished for measures that fail.

The speed of decision-making is, right now, the main factor in winning this fight.

I am very pleased that the president and the government reacted very quickly to the global threats, declared a state of emergency, and imposed quarantines in two cities. Various support programs are being adopted very quickly. But it is probably also important now to bring in people from the market for a brainstorm on what is best to do, because sometimes a different perspective on a problem can produce a better solution.