Y. Tatishev helps Kazakh economy with anti crisis headquarters

Yerkin Tatishev, co-owner, and chairman of Kusto Group addressed President Kassym-Jomart Tokayev at the annual CFO Summit on March 2, 2022. TheCFO Summit is traditionally attended by financiers, economists, and businessmen. 

As a representative of Kazakh entrepreneurs, Tatishev proposed setting up a National Anti-Crisis Headquarters under the leadership of the head of state. Over 300 people signed the appeal. Immediately following Alikhan Smailov’s announcement, such a headquarters was established. In an interview with Informburo.kz, the entrepreneur spoke about the work of the headquarters.

How Yerkin Tatishev managed to get the headquarter-initiative off the ground so fast

– Mr. Tatishev, how did you manage to bring the initiative to life so quickly?

YK: To be honest, I don’t know. But it’s too early to call it that. Traditionally, a headquarters is a place where people meet to analyze and decide upon the future. So far, this is more of a platform where experienced financiers, economists, and entrepreneurs have come together.

“Advisers at their own expense” is our mode of operation.” We are a group of experts who are well aware of the risks, the international situation, and the structure of the national economy. We know how a particular project was launched. We are aware of the risks that may arise for Kazakhstan due to the military conflict between Russia and Ukraine.

Russia is our largest neighbor. Everything that happens to Russia will have an impact on our economy. We are competent enough to see what will happen in the next few months and give proactive advice. Taking the sea as an example, imagine that there is a wave, and in order to reduce the light it emits, breakwaters are built in advance. As a result, the destructive wave does not reach the shore. This is the most important task of our headquarters. At meetings, each of us conveys our own thoughts and vision of the situation to government representatives on a variety of issues.

Organizational structure of the headquarters

– Is there already an organizational structure in place?

YK: In partnership with the government, we have created five or six ministerial-led working groups. The logistics and transport area is one of the directions. Kazakhstan, which is located in the center of the region without access to the oceans, should prioritize logistics issues.

We export all of our products to the world market through neighboring countries. Until we resolve the issues with world markets’ delivery, we cannot export and sell our products at a good price. It is now a major issue, as Russian ports through which most of our transit passes collapsed. What do we do now?

The issue of trade is another concern. Separate experts meet on this topic as well. First of all, we assess how sanctions against Russia may affect Kazakhstan’s business: banking, trade, and shipments. The topic of our discussion is how to avoid Kazakhstan accidentally being subjected to primary sanctions.

There is also the scenario analysis group. Specialists and the Ministry of National Economy collaborate here to develop scenarios for the prospects of the entire economy, and the individual sectors, over the next few months.

Next up is the agricultural industrial complex, which covers sowing, harvesting, and subsidies. Clearly, food security has become a key factor for Kazakhstan this year. Especially in light of rising prices and the Russian-Ukrainian conflict.

Infrastructure Sustainability Group. Among the infrastructures we consider are those related to energy, medicine, and others. For the entire economy to function, it is necessary to expand bottlenecks in each direction.

Members of each group include representatives from the private sector as well as ministers and vice ministers from the government. We discuss specific problems that require prompt intervention. Whenever there is something complicated or unsolvable, it is submitted to the Prime Minister for discussion.

– Do representatives of ministries listen to your opinion?

YK: The headquarters members all possess the necessary knowledge and skills. There is no doubt that we could provide more information. Nevertheless, for the first time in Kazakhstan’s history, state bodies and businesses have cooperated. The “Atameken” platform was similar, but it was relevant to that era. The world has changed a great deal since February 24, 2022. In these new conditions, we are all learning to listen to one another.

As of yet, we do not know how the government will hear about the changes it is implementing. It is the Cabinet’s responsibility to give orders and allocate money. We cannot influence this. Our role is only to warn of the problem that has already appeared or will shortly appear so that it can be addressed. Alternatively, a second problem could arise, a third, etc. Our first response is to offer ideas on how to resolve this issue.

There is a proactive approach among my colleagues; they want to anticipate risks that may arise in the near future. Changing conditions make it difficult to predict what will happen in a year.  Markets are experiencing many emotional events, and new unknowns are emerging. As a consequence, we discuss how to minimize a month’s or two’s worth of risks by creating scenarios. In other words, risk management at its best.

– What expert group did you join?

YK: I joined a few of them. To begin with, I study issues related to transportation and logistics. We are just beginning to discuss this issue in this group. Furthermore, I raise questions with colleagues in the agro-industrial complex. My third involvement is in the industrial development group.

In most cases, two or three experts are included in a group, along with a minister or his deputy. Once we understand that the problem is very serious, and requires inter-ministerial intervention, we bring it to a meeting of the Cabinet of Ministers, where interested national companies can participate.

It is possible to overcome many difficult things if we combine our knowledge and experience with the state’s resources.

In my opinion, the expert-headquarter has the potential to succeed, but we’ll have to wait and see.