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The Foretold Fate of the Push Toward Economic Stability – The Varied Approaches to Tackle the Crisis Converging Around Government Intervention will Create Different Paths to a Patchy and Uneven Recovery

Kazakhstan this week released further details of government-sponsored plans to cope with the global financial crisis.

The government has earmarked 20% of Kazakh GDP to the widespread range of stabilisation and growth measures that will, according to Alexander Mirtchev, director and member of the board of Kazyna-Samruk, ensure Kazakhstan is best placed among all the emerging economies to cope with the global financial crisis.

The Kazyna-Samruk fund will spend up to $4bn to acquire up to 25% of common shares of each of the country's four top banks - BTA Bank, Kazkommertsbank, Halyk Bank and Alliance Bank - and will inject a further $3bn into the banks through subordinated loans and preferred shares.

Kazakhstan's banks have $11bn-$12bn of redemptions and interest payments to meet in 2009, but, according to Mirtchev there will be no defaults among Kazakhstan's top banks.

A distressed asset fund set up with Renaissance Capital, will also buy up troubled assets. Mirtchev would not comment on the size of this fund.

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