InfoHub Logo

Economist Kuat Akhmetov has proposed a radical solution to address social inequality and stimulate the re-industrialization of Kazakhstan: a monthly universal basic income (UBI) of 200,000 to 300,000 tenge for every adult citizen.

This proposal comes at a time when a significant portion of the Kazakh population struggles to afford basic comforts typically associated with a middle-class lifestyle, such as regular travel, cultural outings, and quality dining, while the nation's National Fund holds billions of dollars.

Understanding Universal Basic Income

Akhmetov, a leading figure at the Spik.kz analytical center and a former advisor to China's CCICED, defines UBI as a system where the state provides a regular, unconditional sum of money to each citizen. He points to Kazakhstan's "Keleshek" program, a state savings system for children's education, as a flawed precursor, noting that the accumulated sums are insufficient for a full education after accounting for inflation.

For UBI to be an effective tool for development, Akhmetov argues, the payments must be substantial. He estimates that approximately 200,000-300,000 tenge per month, or roughly $700 USD at current rates, would be necessary for the country's 13 million adults to make a tangible difference, moving beyond symbolic gestures.

Addressing Social Inequality

The economist believes this measure would initiate a more egalitarian redistribution within the country. He challenges the notion that owning an expensive smartphone signifies middle-class status, emphasizing that true quality of life involves consistent access to good food, cultural experiences, and travel, which are out of reach for most Kazakhs.

Akhmetov highlights the precarious nature of employment in Kazakhstan, characterized by instability and a lack of social security. UBI, he suggests, could liberate individuals from the "trap of unemployment," where the fear of financial ruin stifles development, and the "trap of employment," forcing people into undesirable jobs merely to survive. This financial security would empower citizens to pursue education, engage in creative work, and potentially compel employers to offer better wages and conditions to attract and retain talent.

Funding the Proposal

The financial implications of such a program are significant, with estimates suggesting over 31 trillion tenge annually for 13 million citizens, exceeding the current national budget. Akhmetov argues that the National Fund, currently invested in foreign securities, represents a potential source of funding. He criticizes the current model as a "rent-oligarchic" system that benefits a select few, citing the 2009 bailout of private banks with $10 billion from the National Fund as an example of wealth concentration.

He views UBI as a "rocket booster" for deep structural reforms, essential for initiating a new economic policy in Kazakhstan. Akhmetov warns that without such changes, Kazakhstan's national wealth could be vulnerable during future global crises, potentially leading to the seizure of National Fund assets.

To support UBI, Akhmetov proposes progressive taxation, taxes on luxury lifestyles and inheritances, and nationalizing land to be leased, with rental income directed to the National Fund. He believes these measures would create a system that necessitates working for everyone's benefit.

Countering Inflation Concerns

Addressing concerns that UBI payments could fuel inflation and increase prices, especially given Kazakhstan's import dependency, Akhmetov dismisses these as persistent neoliberal myths. He argues that classical economic theories have historically been used to justify inequality, citing concepts like the "benefits of poverty" and the "wage fund" theory, which posits that any excess payments lead to inflation.

He contrasts the growing number of billionaires with the stagnant real incomes of the majority, asserting that wealth distribution is driven by power, not just market forces. Akhmetov stresses the need for comprehensive reform, with UBI implemented alongside accelerated re-industrialization. By fostering strong domestic demand directed towards local goods, he believes UBI can provide a significant economic stimulus.

Integration with Existing Social Programs

Akhmetov emphasizes that UBI should be paid to all citizens regardless of their salary or income level, serving as a supplement to, rather than a replacement for, existing social assistance and benefits.

Global Precedents and Pilot Programs

He points to experiences in Mongolia, Iran, and pilot programs in Finland as evidence of UBI's viability. The Finnish experiment, involving a thousand participants over a year, reportedly showed improved well-being and no increase in deviant behavior.

For Kazakhstan, Akhmetov sees UBI as a crucial "rocket booster" that will compel the political elite to initiate genuine, progressive socio-economic reforms, aligning both political and economic goals for the nation.