bissenova, alima

The Boom, the Bust, and the Mediating State: Housing Bailouts and the Discourse of Fairness in the Wake of Financial Crisis in Kazakhstan

Much like the US and leading democratic countries of Europe, the state in so-called authoritarian country like Kazakhstan also had to deal with the excesses of the boom period and had a particular role to play in mitigating the financial crisis – bailing out banks, companies, and individual home owners threatened by the prospect of bankruptcy and foreclosure. This paper investigates some peculiarities of post-crisis management in an authoritarian context in Kazakhstan and finds that a major goal of state intervention and bailouts after the crisis was the support of a “deserving” middle class. The local character of the real estate and construction boom in Kazakhstan in 2000-2007 consisted of mass popular investment in “share-holding” participation agreements (dolevoe uchastie) in housing projects that had been designated for completion within the period of 1-2 years after initial investment. When, however, the financial crisis hit Kazakhstan at the end of 2007, many of these investors/buyers were left with unfinished housing as construction companies went bankrupt before completing their projects. In the aftermath of the crisis, the state took upon itself the responsibility of completing and re-distributing the unfinished housing projects. However, the helping hand of the state was not extended to everybody to the same degree –some investors had to lose. Inevitably, the politics around the bail-outs has provoked debates about how much is enough, what is fair, and who deserves help in today’s Kazakhstani society. In the process, a new category of middle class – the ultimate beneficiary of the state’s paternalist policies has been crystallized.  While state policy has clearly been directed at supporting this middle class, it also took some time to design the institutional mechanisms for the bailouts and for the state machine to start channeling public money through the newly created institutions.  Inevitably, this delayed delivery of promised housing to the deserving middle class turned out to be a disciplining method – creating expectations within it and inculcating the mechanism of delayed gratification.

Thursday 25 October 10:15-12:15 Panels IV, Panel 10 Social Welfare and Civil Society in Transformation (Hall 7)