Reuters and other news agencies have reported on a dispute over amendments to the 1999 budget which arose last week between the Kazakhstani parliament and government. According to some officials in Astana, this may result in a governmental crisis. The speaker of the lower house of parliament, Marat Ospanov, criticised the government for trying to force changes on the 1999 budget which foresee reducing social spending by KZT 8bn (about USD 100m) and unemployment funds by KZT 3bn. The original 1999 budget was approved by the parliament in December 1998 with a deficit of 3.1% of the GDP. It posted revenues of KZT 282bn (USD 3.3bn) and expenditures of KZT 328bn (USD 3.8bn). However, Prime Minister Nurlan Balgimbaev urged parliament in early February to reduce spending by KZT 31bn (USD 360m), or by 10% of the budget, to cope with the threatening financial crisis.

According to the Kazakhstani Constitution, if parliament votes down a governmental proposal twice, a vote of confidence in the government must follow. The Kazakhstani president would then be forced to choose between dissolving the parliament and sacking the government. (Reuters)

On 25 February, Kazakhstan and Russia signed an agreement which allows Kazakhstan to send an additional 1 million tonnes of crude oil to world markets via Russia each year. Kazakhstan's annual oil transit export quota will now total 9 million tonnes. Of this amount, 3 million tonnes will go to CIS countries and 6 million will go beyond. (Interfax)

In 1998, pension deposits in Kazakhstan amounted to KZT 22.3bn (over USD 260m) and made up 1.47% of the GDP and about 17% of the net domestic assets of second-tier Kazakhstani banks. Of this total, State Pension Funds accounted for 79.6% and private pension funds accounted for 20.4%. This information was released by the Director of the National Pension Agency, Saken Amanzholov, at a seminar dedicated to analysing the results of the first year of Kazakhstan's pension reform. According to the Ministry of Labour and Social Protection, the investment income accounts for 6.7% of the total pension deposits and the yield on the pension assets (less 1.9% for inflation in 1998) reached 14.4%. (Interfax)

Kazakhstan has 14 pension funds to date: one of them is state-owned and thirteen are private. There are eight asset management companies (AMC) including the National Bank of Kazakhstan (NBK) which acts as the AMC for the State Pension Fund. As of 1 February 1999, the investment portfolio of all of the pension funds was mostly composed of 6-month T-bills—41.04% of the total assets. Three-month and 12-month T-bills accounted for 17.71% and 12.09%, respectively. Pension assets have also been invested in sovereign Eurobonds (20.25%), 2-year and 10-year T-bills (4.22% and 1.09%, respectively), as well as in NBK notes, bank deposits, and shares listed on the A Listing of the KASE. (Reuters)

President Nursultan Nazarbaev issued a decree on 24 February to appoint Dr. Azamat Dzoldasbekov as head of the National Securities Commission. The 37-year-old Dzoldasbekov had previously been an executive director of the Commission, and in 1997 he headed up AFINEX, the Almaty currency exchange. (Kazakhstanskaya Pravda)

At a press conference following his appointment, Dzoldasbekov predicted a boost in corporate bonds on the domestic market in 1999. He also said that the public placement of Halyk Savings Bank's shares (amounting to KZT 301.2mn or USD 3.5m) will be another main event on the Kazakhstani stock market this year. (Interfax)