Kazakh Borrowers Protest Against Foreclosures and Repossessions

Posted on March 24, 2009
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Kazakh borrowers protested against foreclosures and repossession. Twelve borrowers in Kazakh are defaulting on their mortgage loans. They staged a hunger strike demanding a halt by the banks to repossess their homes. This was a rare outburst in a Central Asian state.

Reports came in that banks devalued the currency by 18%. This was because of falling prices of crude oil. It has led to an increase in foreclosures, as the global downturn is not sparing any part of the globe.

Activist Ainur Kurmanov read out the demands of the protestors and said, “Stop the banks and collectors from repossessing homes pledged as collateral and filing eviction lawsuits.”

The deluge of foreclosures in the USA was the first indication of the economic downturn that is now affecting every country. In Almaty the median price of a two bed roomed apartment varies from $50,000 to about $200,000. The price depends on the location. The average income of the residents is around $400 per month.

The consumers borrowed heavily from the banks in Kazakh. The transactions were mostly in US dollars. This was during the time of the credit zoom and boom. But today everyone is struggling to meet repayment schedules.

Most of the activists were women. They were huddled together in a small apartment of Almaty. A jumbo poster on one of the walls screamed, “Government, help your people!” All the demonstrators sported headbands with “hunger strike” stamped across these.

The group was modest in size but vociferous and loud in their demands. Many had purchased off-plan apartments that never got to be completed. This has led to the swift drawing of public attention in a country known for its tight control and stifling of all show of protest.

Experts say that there have been protests only on a small scale. Nevertheless it is a source of worry for the government of President Nursultan Nazarbayev. The latter’s popularity had risen astronomically during the booming years stretching from 2000 to 2007.

During these seven years the economy of Kazakhstan had grown by 10% annually. It slowed down to 3.2% in 2008. It is feared by the government that this year the number will drop to 2%. Some are apprehensive of an onset of recession.

The government has set aside $3 billion to help the construction companies complete those units that had been pre-sold. In Astana the capital and in the business centre of Alaty the skyline is dotted with silent cranes. The state has also come forward with offers to refinance mortgages to affordable lower rates.

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