Two mothers with children gather in front of Kazakhstan’s House of Ministries, to ask the government for additional assistance to avoid homelessness, as the KZT 42,500 in state aid is not enough to cover basic living costs for their families. Nur-Sultan, July 22, 2020.
© 2020 Assemgul Mukhytkyzy (RFE/RL)
(Berlin) – Hundreds of thousands of people in Kazakhstan may face poverty unless the government extends and bolsters economic relief for those negatively affected by the Covid-19 pandemic, Human Rights Watch said today. The pandemic has elevated inequalities in Central Asia’s wealthiest country, underscoring Kazakhstan’s weak social protection system.
On July 30, 2020, the government extended for two weeks the quarantine measures that were re-imposed earlier in July after a surge in Covid-19 cases. The authorities also extended economic assistance for people who lost income for the duration of the quarantine. But the monthly payment of KZT 42,500 (about US$100) was reduced by half for the two weeks of August and the authorities have not said the payment would be renewed beyond August 16, making a low and limited relief program even less effective in preventing poverty and economic hardship. Instead, the government announced on August 13 that it will start to ease lockdown measures as of August 17.
“Kazakhstan stands out as the only country in Central Asia to provide cash transfers to individuals during the Covid-19 pandemic,” said Lena Simet, senior poverty and inequality researcher at Human Rights Watch. “But with so many people across Kazakhstan already facing poverty, there could be dire consequences unless the government urgently extends and expands financial assistance during the quarantine and beyond.”
In mid-March, soon after the first Covid-19 cases were registered in Kazakhstan, President Kasym-Jomart Tokaev declared a state of emergency and announced that KZT 4.4 trillion ($10 billion), between six and seven percent of Kazakhstan’s gross domestic product, would be allocated toward improving access to health care, cash transfers for people who lost income, and protecting businesses from the economic fallout as part of the government’s “anti-crisis package.” In parts of Kazakhstan where quarantine measures were introduced, the authorities also handed out food packages to low-income families and people with disabilities and reimbursed utility expenses for April and May in the amount of KZT 15,000 ($36) for socially vulnerable groups. In his speech at the State Commission on the State of Emergency in mid-March, the president also said that payments on bank loans should be deferred, and that he expected “understanding and civic solidarity” from banks.
By comparison, the economic stimulus crisis response in Germany amounts to 33 percent, in the United States 12.1 percent, and in South Africa to 8.8 percent of GDP.
Starting in April, formal employees who lost jobs due to the economic situation could apply for unemployment assistance that provides a maximum of 40 percent of their former salaries for up to six months. For those who lost jobs in March or April, unemployment assistance is set to expire in October. After that, they can apply for Targeted Social Assistance (TSA), Kazakhstan’s largest poverty-targeting social protection program. Past studies identified TSA as insufficient to guarantee an adequate standard of living and too low to pay for food, shelter, and water. For the last year and a half, mothers with multiple children have been protesting for more economic support. Despite increases in TSA in 2018 and 2019, they consider the assistance as inadequate to help people in poverty, and call on the government to further increase social and housing benefits.
People who were temporarily furloughed or lost income from other employment situations during the quarantine could apply online for the KZT 42,500 in state aid. Those eligible for an April payment automatically received a second payment in May. During the initial two-month lockdown, over four million people – half the workforce – were out of work and a quarter of the population relied on the $100-a-month government aid to make ends meet, according to Reuters. In July, after the lockdown resumed, the government made a third payment of KZT 42,500.
Formal and informal workers, self-employed people, and part-time workers are eligible for the temporary state aid. But informal workers, who represent 30 percent of the workforce and are generally excluded from social protection, have to pay a non-refundable social security contribution to access the aid. The payments of KZT 1,325 in rural areas and KZT 2,650 in urban areas are considerable, given that many informal workers earn incomes below the poverty line. The payments also do not guarantee that applicants will receive the KZT 42,500.
Kazakhstan’s anti-crisis package provided its recipients much-needed support, but the relief is lower than a monthly living wage needed to cover basic expenses including utilities, mortgage payments, and rent in higher-cost cities such as Almaty or Nur-Sultan. The utility subsidies were only provided to people who could show ownership of their property or an official rental agreement, and who are eligible for targeted social assistance. Loan deferrals were at the discretion of banks and participating banks issued a 90-day debt moratorium, which expired in June.
Kazakhstan is considered an upper-middle-income country rich in natural resources. But despite its wealth, even before Covid-19, a high portion of its population was at risk of poverty. Research on chronic poverty in Kazakhstan from October 2018 found that a quarter of the population is chronically poor, and more are at risk of falling into poverty.
This situation is expected to deteriorate as oil revenues dry up due to the pandemic and the resulting collapse in oil prices. For the first time since the late 1990s, Kazakhstan’s economy is expected to contract by a projected 3 percent in 2020. The World Bank estimates that Kazakhstan’s “poverty rate may rise in 2020 from a projected 8.3 to 12.7 percent” with an additional 800,000 people experiencing poverty.
But the government can use its accumulated fiscal buffers, continuing foreign direct investments, and international assistance to protect the economically vulnerable, Human Rights Watch said. At the end of June, the Asian Development Bank approved a $1 billion assistance package to Kazakhstan to contain the negative impact of the pandemic.
Given the expected long-term negative impact on Kazakhstan’s economy, the government should extend and expand economic relief measures, and ensure that everyone living in Kazakhstan can apply for assistance of various kinds to ensure an adequate standard of living, including those currently excluded from social assistance programs, Human Rights Watch said.
The government should also ensure that the system for applying for aid is responsive, timely, and efficient. Economic relief plans and instructions for how to access that relief should be clearly communicated to the public, with both digital and non-digital means to apply, as not everyone has access to a computer and the internet.
Workers who tried to get relief in April had to apply through a cumbersome online process, which created confusion, delays, and mistrust, especially for those with poor or no internet access. Radio Azattyk reported in early April that several dozen people gathered outside a post office in Kyzylorda to submit their applications by mail, since they were unable to do so online.
Under international human rights law, the Kazakh government has an obligation to protect people’s right to an adequate standard of living, including adequate food and nutrition, the highest attainable standard of health, and social security. The Kazakh government should urgently expand relief programs and provide stronger social protection in the immediate and long term to help address the risk of prolonged financial hardship that many will face, Human Rights Watch said. The government should also consider longer-term in-kind assistance such as utility subsidies or moratoriums on rent and mortgage payments.
“The authorities are confronting a looming recession and many people in Kazakhstan are understandably on edge,” Simet said. “The government needs to quickly expand the anti-crisis program to protect people’s right to an adequate standard of living both during the pandemic and after, and to meet its obligation to guarantee people’s right to social protection.”