Kazakh law enforcement officers gather in a square during a protest against LPG cost rise following authorities’ decision to lift price caps on liquefied petroleum gas in Almaty, Kazakhstan January 5, 2022.
Pavel Mikheyev | Reuters

Rising food and fuel prices pose serious challenges for emerging market countries, according to one economics risk analyst, who pointed to the current mass protests in Kazakhstan that were sparked by fuel hikes.

“A lot of countries are facing a challenge of rising food and fuel prices, particularly, since it is also dovetailing with supply chain restrictions and a variety of other issues,” said Rachel Ziemba, founder of Ziemba Insights, a research firm. 

“The challenge is that a number of emerging markets that are already struggling to grow even before the pandemic and throughout it… you’re seeing fiscal tightening and monetary tightening at the same time,” she told CNBC’s “Squawk box Asia” on Friday.

As a result, countries in the region are struggling on how to distribute to their wealth, Ziemba noted.

This is especially true for a major energy producer like Kazakhstan.

“Even for [a] country like Kazakhstan, that’s a commodity exporter… they really have struggled to distribute some of that income,” Ziemba explained. 

The unrest started after Kazakhstan’s government announced plans to remove the price cap on liquefied petroleum gas, which is used as a common fuel for cars in the Central Asian country. The move caused prices of LPG to double.

While the government has since restored the price cap in an attempt to appease the public, protests are still continuing and have now taken a more political tone.

Ziemba underlined that Kazakhstan, is one of a number of oil producing countries that had been reluctant until recently to pass on higher prices to their population. But the “way they did it was very ham-handed in a sense,” she said, adding the government hasn’t really addressed some of the other economic grievances.

“But it really isn’t just food and fuel prices. it’s also other grievances and real challenges about economic welfare at a time when some parts of the government and elite are doing really well,” she noted.

CNBC’s Natasha Turak contributed to this report

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