(Reuters)
* Opposition set to gain parliamentary seats in 2012
* PM says education, hope key to avoiding Arab-style unrest
* Raises GDP growth forecast to over 6 percent
* Institutional reforms still needed
Kazakhstan needs an opposition presence in its one-party parliament to ensure democratic reform matches economic growth in the oil-rich Central Asian state, Prime Minister Karim Masimov told Reuters in an interview.
Wary of popular uprisings across parts of the Arab world, the government also is sponsoring education programmes and will offer millions of citizens the chance to own stakes in state companies through a "people's IPO", Masimov said.
"The government of Kazakhstan is watching very carefully what's happening in North Africa and the Middle East," he said.
"What is the biggest difference between them and us? People in Kazakhstan, the young generation in Kazakhstan, have hope and they have an opportunity to go forward."
Kazakhstan, whose $147 billion economy is the largest in Central Asia, will vote on Sunday in a presidential election certain to be won by 70-year-old incumbent Nursultan Nazarbayev.
Kazakhstan has the second largest oil reserves as well as the second largest production among the former Soviet republics, after Russia. It is aiming to become one of the world's top oil exporters in the next decade, based on the development of three major oilfields.
In power for two decades, Nazarbayev has never held an election judged free and fair by international monitors and brooks no dissent in his nation of 16.4 million people. Critics accuse him of stifling democracy and muzzling the media.
The country's fragmented opposition has dismissed Sunday's vote as a "farce", but a parliamentary election scheduled for 2012 should allow at least one opposition party to enter a legislature populated exclusively by the ruling Nur Otan party.
Changes to the electoral law will permit the second-placed party to gain entry to parliament even if it falls short of the 7 percent threshold that automatically guarantees a presence.
"We should have a free and fair parliamentary election in 2012 and we strongly need opposition parties to be represented in parliament," Masimov said in the interview late on Friday.
"Pluralism is a necessary element for democratic development. We definitely need criticism from opposition parties," he said. "I will strongly vote for that."
Kazakhstan has avoided the public unrest that toppled the long-serving authoritarian rulers of Tunisia and Egypt and is threatening the regimes of other Arab nations.
Masimov said education played a large part in this. Thousands of young Kazakhs have studied abroad on courses paid for by the government, while a new programme is under way to build technical schools around the country, he said.
"The young generation should have the opportunity to be successful in their own country," he said.
Masimov also said the "people's IPO", a plan to sell stakes in state-owned enterprises to the public in the next few years, would allow ordinary citizens to share in the country's wealth.
"We strongly believe that millions of our people will participate. This is very important to show the people that the government is fair to them," he said.
MIDDLE CLASS
Per capita gross domestic product in Kazakhstan has risen twelvefold since 1993 to more than $9,000, which Masimov said was comparable to Malaysia. It is four times the level of Egypt.
Masimov told Reuters that he had revised his forecast for GDP growth in 2011 to "over 6" percent, from an earlier forecast of 5 percent. He said he was confident inflation this year could be contained within the official target of 6-8 percent.
But Kazakhstan must do more to reform its legal system to foster the growth of a middle class, he said.
"The biggest challenge for us is to avoid middle-income trouble," he said. "For future development, institutional reform -- independence of the court system, judiciary reforms, property rights -- are necessary for us."
He forecast that Sunday's vote, held the year after Kazakhstan chaired democracy and rights watchdog the Organisation for Security and Cooperation in Europe (OSCE), would be more transparent than previous elections.
But he urged caution in ushering in too many democratic reforms too quickly.
"We have come a long way from a Communist autocratic country into a free market economy in the direction of a Western-style democracy," he said.
"Continuation of political reform, together with economic reform, is needed. But at the same time we should do this step-by-step.
"If you do it too soon, or too quickly, it may reflect on the goals of the country and the creation of the middle class," he said. "The middle class is the basis for future political modernisation."
(Editing by Michael Roddy)
Thomson Reuters
