Kazakh leader orders $3.6 billion pre-election oil fund draw-down

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Kazakh President, Nursultan Nazarbayev

ASTANA (Reuters) – Kazakh President Nursultan Nazarbayev ordered his government on Wednesday to tap the country’s rainy-day fund for $3.6 billion in order to boost public sector salaries and social aid payouts and develop housing and infrastructure.

Nazarbayev, who has run the oil-rich Central Asian nation since 1989, might seek re-election in a vote scheduled next year and the additional spending is likely to boost his already strong popularity.

He spoke in the Kazakh capital, Astana, at a congress of his Nur Otan party, which is also preparing for a parliamentary election in 2020.

Small groups of opponents staged protests outside the party buildings as he spoke, and were quickly detained by police.

Nazarbayev ordered lowest-bracket public sector salaries raised by a quarter, and told the government to allocate about $790 million to social assistance for low-income families.

He also ordered additional spending on affordable housing, and healthcare and infrastructure development.

The 78-year-old leader, who routinely wins elections with more than 90 percent of the vote, said some of the extra spending would be financed by regular revenue reallocated from other items.

But the state will also tap its $58 billion national fund replenished by revenue from oil and metals exports for 1.35 trillion tenge (about $3.6 billion), Nazarbayev said.

As the former steelworker and Communist apparatchik spoke in Astana a few dozen protesters gathered outside the Nur Otan office in Almaty.

Police quickly broke up the protest which was organized by supporters of Mukhtar Ablyazov, a fugitive former banker and politician who now lives in France and routinely attacks Nazarbayev via social media.

A Reuters reporter on the scene saw police detain at least 20 people.