FEB. 15 2014 (The Conway Bulletin) — The sudden 20% devaluation of the Kazakh tenge on Feb. 11 generated anger and despair across Kazakhstan.
Police detained roughly 50 protesters in rare antigovernment demonstrations in Astana and Almaty and rumours of an imminent collapse triggered a run on several high street banks.
In central Almaty the manager of a store selling underwear could barely constrain herself. She had no customers and was angry.
“This devaluation is terrible and we don’t want it. In our store, prices will not increase, but the cost of living will surely soar,” she said.
At a clothing store in a busy shopping mall, Gaukhar shared this view.
“This could turn into a nightmare,” said the shop assistant. “While prices will undoubtedly increase, we haven’t heard a word from our directors to raise our wages.”
One of the big fears for Kazakhstan’s policy makers is that rather than making the economy more competitive, the devaluation will simply stoke inflation. Some large industries, including the steel plant owned by the Luxembourg-based ArcelorMittal has already said it will increase its workers’ salaries by 10%.
There were mixed signals in Almaty. Many shopkeepers said that they hadn’t yet put up their prices but that they soon would.
“There’s already been a significant change in prices of between 500 and 1,000 (tenge) per pair of shoes,” said Assel as she tendered to her shop in Almaty’s Green Bazaar. “We’ve seen a lower turnout of customers this past week. They come in, try on the shoes but then go out empty-handed.”
Assel’s shoes were imported mainly from China and an increase of 500 to 1,000 tenge per pair represented a rise of roughly 20%.
ENDS
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(News report from Issue No. 172, published on Feb. 19 2014)