• Sat. Jun 3rd, 2023

President Tokayev Proposes Important Modifications to Financial Policy to Enhance Development and Diversify Industries


Mar 30, 2023

ASTANA – Kazakhstan is set to alter the concentrate of its financial policy, mentioned President Kassym-Jomart Tokayev in his address to the very first session of the Kazakh Parliament on March 29, reported the Akorda press service.

Photo credit: Akorda.

Tokayev outlined the important actions to tackle the challenges facing the nation following the March 19 election to the Mazhilis, the reduce chamber of the Parliament, and maslikhats, nearby representative bodies. 

The creation of an open and self-enough industry economy remains a prime priority.

Encouraging organization activity

“Small and medium-sized enterprises really should grow to be the driving force of the economy and the labor industry. Substantially has been mentioned about this, but there are nevertheless no considerable shifts in this path. Consequently, we need to have to alter the concentrate in our financial policy,” mentioned Tokayev in his one particular-hour-extended televised address, broadly anticipated by Kazakh citizens.

There are practically 1.9 million compact and medium-sized firms operating in Kazakhstan, accounting for 33.five % of the nation’s gross domestic solution, up from 24.9 % in 2015. 

Tokayev proposed launching a complete variety of measures to help compact and medium-sized firms that would allow them to “feel a considerable part in the improvement of the nation.”

“We need to have a new wave of entrepreneurs who can take duty for the financial progress of Kazakhstan. Businesspeople who can construct a prosperous organization without the need of access to administrative sources, at the expense of entrepreneurial talent and diligence, really should grow to be its core. Such people today exist in just about every area. It is significant to give them the chance to create their firms inside the nation and genuinely aid them,” mentioned the President. 

Kazakhstan’s current financial model, he noted, heavily relies on investments, mainly in its abundant resource sector. 

“In basic, the government faces the job of attracting considerable investment in important sectors of the economy, like foreign investment. They really should give a tangible increase to the improvement of medium-sized firms. There can be no red tape in this matter,” mentioned Tokayev. 

Fair and open competitors

Safeguarding private home and guaranteeing a competitive industry is a important priority moving forward, mentioned the President. He urged the officials to continue the reforms of the judicial and law enforcement systems. 

A complete system to help compact and medium firms will aid enterprises increase their competitiveness. At the very same time, the choices on monetary help really should be transparent. 

“It is essential that the choice of projects that will acquire state help really should be transparent. It is vital to take into account the true socio-financial effectiveness of a project. In this regard, I instruct the government and MPs to create new approaches of creating medium-sized firms since they play a important part in the improvement of the country’s economy,” Tokayev mentioned. 

Financial diversification and improvement of production potential 

Diversifying Kazakhstan’s economy has extended been on prime of the national agenda, whose windfall oil and gas sources have supported substantial financial development more than the years. 

Tokayev emphasized that a competitive economy is a diversified economy. 

“The pandemic and the existing geopolitical crisis have clearly shown that the commodity industry is unstable. The days when people today depended only on wealth and did not care about it are gone. The added worth of underground sources should be maximized. It is really significant to turn it into a excellent and sought-right after solution. The preceding industrialization failed to effectively create the non-oil sector. We nevertheless acquire meals and customer goods from abroad. This is one particular of the major causes of increasing inflation,” mentioned Tokayev. 

He also emphasized the value of generating complete use of the country’s production prospective.

“Kazakhstan’s economy is nevertheless dependent on the extraction of minerals. In other words, its structure is primarily based on raw supplies, though the country’s progressive improvement needs financial diversification. Undoubtedly, we also have our competitive benefits in the worldwide industry, which should be successfully applied to resolve existing and strategic tasks,” he mentioned. 

Tokayev highlighted some of the acute difficulties accumulated in the subsoil use sector, like insufficient exploration operates, a declining price of replenishment of the mineral resource base, and the depletion of created subsoil.

“It is vital to use mineral sources effectively and rationally. This needs the improvement of legislation and simplification of vital procedures. Investments in the exploration and improvement of mineral deposits are of certain value,” he added.

Kazakhstan’s economy has generally been open to foreign trade and investment, mentioned Tokayev. Fulfilling domestic requirements, on the other hand, really should be a prime priority. 

“First of all, we should create the processing market, oriented to the domestic industry. The processing market develops swiftly only by way of innovation and higher technologies. This is apparent. That is why Kazakhstan’s economy should be primarily based on scientific achievements. It is not sufficient to conduct investigation and get a patent. It is vital to use scientific discoveries in production. A new law really should be adopted for the complete improvement of science. I consider the MPs will help this bill,” mentioned Tokayev. 

Demonopolization of the economy

Considering that the starting of final year, Kazakhstan has been taking actions to demonopolize the economy. According to Tokayev, it is not an simple procedure, “requiring willpower and professionalism on the element of the government.” 

“We need to have to introduce clear and efficient instruments to make sure handle more than transfer pricing, international taxation, allocation of subsidies, and state sources. One particular of the very first decrees I signed right after my re-election as President was on measures to return illegally withdrawn assets to the state. The government and the Prosecutor General’s Workplace have currently ready a separate bill,” he mentioned. 

The bill, which the Parliament is anticipated to pass quickly, envisions the use of funds solely for the improvement of the nation. 

“This also applies to budgetary expenditures. Nevertheless, spending budget organizing and execution leave substantially to be preferred,” he added. 

The draft of the new Price range Code will also be submitted to the Parliament in 2023, developed to address increasing expenditures for servicing the national debt, cut down the volume of transfers from the National Fund and improve the efficiency of the use of spending budget funds.

Upgrading the power grid and infrastructure

The current accidents at the country’s significant power facilities have revealed considerable difficulties in the power sector, specifically outdated infrastructure.

“You all know how this winter went. In the midst of winter, cities and towns in many regions had been left without the need of heat. The dilapidated power infrastructure is virtually non-functional. On my instruction, a new model for the improvement of the electrical energy industry is getting ready. It is supposed to attract further investment in this sphere. This document will also make sure maximum transparency in this region,” he mentioned.

3 draft laws addressing difficulties in this sector will be thought of by members of the  Mazhilis. 

Speaking about infrastructure improvement, Tokayev recommended adopting a National Infrastructure Program till 2029. “We need to have to construct our country’s infrastructure capacity,” mentioned Tokayev, referring to various issues in the housing sector and city improvement.  

Meals security 

Although Kazakhstan possesses massive agricultural prospective, it nevertheless faces challenges in guaranteeing meals safety. Kazakhstan is recognized for its vast agricultural lands and has terrific prospective for growing meals production. The nation produces a selection of crops, like wheat, barley, corn, potatoes, vegetables, amongst other people. 

President Tokayev, on the other hand, questioned the efficiency of the agricultural sector in guaranteeing its citizens have access to secure and nutritious meals.

“Frankly speaking, the agricultural market does not completely fulfill this job. The policy in this region is inconsistent. Funds allocated by the state are spent ineffectively. There are several intermediaries involving the producer and the customer,” mentioned Tokayev. 

The President is adamant that applications such as Auyl – El Besigi (the village is the cradle of the nation) and Auyl Amanaty (heritage of the village) will advantage the improvement of the agro-industrial sector. 

As element of the Auyl – El Besigi project, three,700 social and engineering infrastructure facilities have been modernized in additional than 1,000 villages. Kazakhstan has allocated 143 billion tenge ($315 million) this year for additional than 1,500 projects.

The Auyl Amanaty project envisions the provision of microloans to rural residents for 5 to seven years at an annual interest price of two.five %. The project aims to create rural entrepreneurship by way of agricultural cooperation.

“It is vital to take systematic measures to preserve soil fertility and boost it. Strengthening handle is significant for the efficient use of agricultural land. Unique consideration really should be paid to growing the volume of output and its diversification. Reforms in agriculture need excellent laws,” Tokayev mentioned.

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