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PROFILE Banker and saviour When the Soviet Union collapsed, Kazakhstan appeared on the world stage and became a global resource supplier – until the 2008 financial crisis. Anvar Saidenov was called to rescue the country‘s biggest credit bank. Successfully, it seems so far by Alexander von Hahn In 2009, in the wake of the world financial crisis, Anvar Saidenov was appointed CEO of the BTA Bank, Kazakhstan’s biggest private banking institution, which collapsed under the USD 12.2 billion debt burden. The bank’s subsequent nationalization and successful debt restructuring – the biggest yet seen in emerging markets – makes Saidenov a rising star of international finance and one of the key figures of the Kazakh political elite. He is one of the youngest, yet most experienced of Kazakh bankers. Born in 1960 in Moscow and a Moscow State University graduate Saidenov earned his MSE in London at the School of Oriental and African Studies. Deputy Governor of the National Bank of Kazakhstan since 1996 he was appointed head of the National Investment Agency in 1998 and, in 2004, became Governor of the National Bank of Kazakhstan. There, he has been in charge of overseeing national monetary policy of one of the dynamic emerging markets of the former Soviet Union. »Our country has one of the richest and most diverse deposits of mineral resources in the world. It is also an important transport corridor. But we entered the 20th cen- 06 BusinessReport 1/2011 tury as agricultural region, with practically no industrial sector worth talking about,« observes Saidenov, who grew up in a family of Kazakh intelligentsia. The Soviet period in Kazakh history was a time of spectacular social and economic transformation. »90 years ago Kazakhstan had little in common with what it is today,« says Saidenov. »We have an extensive mining industry, a modern oil and gas exploration sector, developed infrastructure and booming telecommunications.« Saidenov’s grandparents still remember the endless expanse of virgin steppe. A few decades of industrial development have transformed our millennia old landscape. Compare 4.1 million hectares of agricultural land in 1914 with more than 21 million in 2009 and you understand what an impact technological progress has had on traditional lifestyle. »Costs are enormous,« reminds Saidenov, »we have serious problems with industrial pollution, poisoned rivers. The dying Aral Sea – one of the most graphic examples of a man maid ecological disaster. Also, the human cost: Kazakhs of the early 20th century were nomads. Now the majority lives in urban centres,« says Saidenov, reluctantly admitting horse riding is not his forte. Major industrial centres cluster around gigantic mining and processing complexes. Monuments of uncompromising drive to modernity, these were often built by hundreds of thousands of GULAG prisoners. One of the Soviet biggest concentration camps, »KARLAG«, with a territory of more than two million hectares and almost 70,000 prisoners was established in 1930 and operated continuously for almost thirty years. It laid the foundation of Kazakhstan’s mining industry by developing one of the world largest coal and copper deposits: Karaganda coal mines, as well as Jezkazgan and Lake Balkhash copper mines. Mineral extraction and mining account for almost 60 percent of this nation’s industrial output. Stalin‘s prisoners founded Kazakhstan wealth With a territory of almost three million square kilometres Kazakhstan is the ninth largest country in the world. However, with only 16.5 million inhabitants, the labour force shortage rapidly becomes its main problem. »Statistically, we have just six people per square kilometre. Compared to Russia’s eight it doesn’t look too bad, but if you look at neighbouring Uzbekistan with its 61 you realize the seriousness of the situation,« says Saidenov. A massive exodus in the early 1990s fuelled by economic shortages and radical Kazakh nationalism deprived the country of its most educated and skilled workforce. With the population declining – down 17 million in 1993 to 14.8 million 2002 – the only way forward was to attract the migrants from the neighbouring countries. But this policy doesn’t come cheap: when in 2009 President Nazarbayev proposed to lease one million hectares of Kazakh land to Chinese farmers to cultivate soya and rape pro-western Kazakh politicians protested strongly. »Then 15 million people would be immigrating from China.
picture: BTA Bank A child of the communist era Anvar Saidenov had to study again at the age of thirty. Twenty years later he is Kazakhstan‘s most prominent banker. If one of those 15 people were to give birth each year ... in 50 years, there would be 50 million Chinese in Kazakhstan,« declared Bolat Abilov of the opposition United Social Democratic Party. The idea was quietly abandoned in favour of less drastic »gradual increase of immigration quotas form neighbouring CIS countries«. Another major problem is the shortage of water – not only for irrigation, but also for communal use. »Most of the water we need for the South Kazakhstan province, where 60 percent of the population is concentrated, is received from our neighbours – from rivers, flowing out of the glaciers of Kyrgyzstan, Uzbekistan, and China. That dependence is not always mutually beneficial,« says Saidenov, referring to the failed negotiations between China and Kazakhstan over the preservation of the third largest freshwater lake on earth – Lake Balkhash. China, determined to develop the agricultural sector of its easternmost Xinjiang region, spurned Kazakhstan’s offer of heavily subsidized food for ten years in exchange for a commitment to allow an unimpeded flow of river water into the lake. »Regional cooperation is not only desirable, but vital for our future,« describes Saidenov, »short-term political gains wouldn’t change the underlying reality of our geographical location and climate. Isolationism may be an easy choice, but not necessarily the right one.« Kazakhstan has its own story of a delicate fabric of trade and economic cooperation being destroyed by politics. The collapse of the communist centralized planning system in the early 1990s brought galloping inflation, mass unemployment, and social unrest. »We had very difficult times: peoples fighting to survive, prove their independence, asserting their existence by all means available. We quickly realized, however, that the only way forward was a strict stabilization programme and structural economic reforms. Our aim was to create a new stability based on new rules«, says Saidenov. Favourable international commodity prices and world economic growth of the early 2000s allowed Kazakhstan to improve its balance of payments and accumulate substantial capital reserves. Fuelled by expansionary monetary policies and rising domestic demand, Kazakh PROFILE economy was hit hard by the global financial crisis, which also caused significant difficulties in the banking system. »We still have problems,« says Saidenov, who, after resigning his position as a chairman of the National Bank became a COB of the BTA Bank, Kazakhstan’s biggest lender, nationalized in February 2009. »I am convinced, we couldn’t afford to allow the bank go bankrupt. That would’ve been destructive for our economy, as well as our creditworthiness. These efforts were welcomed by the international financial community, which accepted the bank’s debt restructuring package worth USD 4.2 billion, proposed in September 2010.« Due to »ample resources and low public debt, the authorities were able to respond swiftly to the crisis and helped stabilize banks with a large-scale policy package,« stated the recent IMF country report, praising Kazakhstan’s government response to the worsening economic situation, as well as its willingness to save the troubled private sector. »We take our standing with our creditors very seriously. You see, banks can be bought and sold. But trust is priceless,« says Saidenov with a broad smile. BusinessReport 1/2011 07
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