Factsheet on the State of the Nation Address by the President of Kazakhstan Nursultan Nazarbayev

Nursultan Nazarbayev, the President of Kazakhstan, gave an annual state of the nation address on 30th November at the Palace of Independence in Astana. The President focused his speech on the external factors and challenges currently facing Kazakhstan and specified seven anti-crisis strategy steps on how the country plans to overcome these:

  1. A second five-year plan of innovative industrial development
  2. Infrastructure development (Nurly Zhol)
  3. Implementation of the Plan of the Nation: “One hundred specific steps to implement five institutional reforms”
  4. Accumulation of the necessary state funds and foreign exchange reserves
  5. Design of different scenario based action plans
  6. Ensuring that the new sectors of the economy created in the framework of innovative industrialization are becoming the drivers of economic growth in Kazakhstan
  7. An increase in productivity

President Nazarbayev also stated that Kazakhstan needs to implement comprehensive anti-crisis and structural changes in the following five areas:

  1. Stabilisation of the financial sector
  • Ensure efficient functioning of the financial sector under a floating exchange rate of the tenge. There will be no return to the practice of infinite maintaining of the national currency rate at the expense of the National Fund. The banks that were unable to solve the problem of capitalisation should leave the financial system.
  • The National Bank should reduce the level of inflation to 4% in the medium term
  • Need to eliminate the existing institutional deficiencies of the National Bank. The management of the Unified Pension Fund, Problem Loans Fund and other similar financial institutions should be removed from the National Bank’s responsibilities
  • Starting in 2016 retirement assets must be managed by private Kazakh or foreign companies

 

  1. Optimization of fiscal policy
  • A practice of using National Fund resources for covering current expenses should be discontinued
  • The Government must develop a new concept for the formation and use of the National Fund in 2017. It will be necessary to introduce sales tax instead of VAT. All inefficient tax exemptions should be abolished. Optimization of tax regimes is required to leave only three levels
  • The government should increase fiscal transparency
  • The Government should once again analyse the terms of legalization and, if necessary, strengthen the guarantees for those involved in it
  • In 2017 arrangements will be made to disclose accounts and assets in order to find out their origin and taxation
  • The Government must conduct a full audit of all budgetary programs and review the system of public expenditure and subsidies
  • Elaboration of additional measures to encourage private investments in priority sectors of the economy is required

 

  1. Privatization and the promotion of economic competition
  • To ensure stable economic growth, large-scale privatization and the enhancement of competition is necessary
  • The Government must develop a new program of privatization, which would include all the companies owned by the state
  • The Government must cancel the pre-emptive rights of shareholders to acquire disposed assets
  • The Government must prepare concrete proposals for strengthening anti-monopoly activities, including a separate law on the anti-monopoly agency
  • The Government should continue the transition to market principles of pricing in all sectors of the economy
  • The Government must develop a clear and simple procedure of bankruptcy for individuals and legal entities. Policies to promote competition must go hand in hand with effective regulation of the bankruptcy process and the rehabilitation of inefficient companies

 

  1. A New Investment Policy Framework
  • The Government must submit within three months a detailed plan on the improvement of the investment climate.
  • A Government Council will be established, aimed at attracting investors and improving the investment climate
  • Regional drivers of economic growth need to be developed. The business support programme, Business Road Map 2020, must be part of the investment programs of macro-regions
  • It is necessary to conclude a free trade agreement of the Eurasian Economic Union with key regional markets. The Ministry of Foreign Affairs needs to mobilize Kazakhstan’s diplomatic missions abroad to facilitate this
  • The creation of training centres in cooperation with Germany, Canada, Australia and Singapore is required to develop the training of technical professionals
  • The country needs to develop expertise in smart technologies, artificial intelligence, integration of cyber-physical systems, future energy generation, design and engineering through the establishment of an efficient research and innovation system

 

  1. New Social Policy
  • From 1 January 2016, the Government will increase public healthcare workers’ salaries by 28%; public educators’ salaries by 29%; and the salaries of social protection workers by 40%. From next year, the government will provide a 25% increase in social benefits in the event that a worker becomes disabled or loses their ability to earn. Certain civil servant salary bands will increase by 30%
  • The Government must develop a new Roadmap of Employment until the end of March 2016
  • The Government needs to outline a proposal for optimizing the social security system
  • From 2017, the “Free Vocational Education for All” will be implemented. The government must begin the preparation for this project

 

President Nazarbayev concluded his address by noting the following successes in bilateral relations with other countries and organisations:

  • An agreement on cooperation in the non-primary sector worth $23 billion was reached with China
  • Deals worth $11.5 billion were signed during recent state visits to Paris and London
  • After the recent visit of the Prime Minister of Japan, Toyota will for the first time manufacture automobiles in Kazakhstan
  • International financial institutions have provided $9 billion of financial resources to Kazakhstan
  • Kazakhstan signed an agreement with the European Union on enhanced partnership and cooperation

 

The full text of the Address is available at the Kazakhstan President’s official website.

http://www.akorda.kz/en/addresses/state-of-the-nation-address-by-president-of-kazakhstan-nursultan-nazarbayev-november-30-2015