KAZAKHSTAN'S ECONOMIC STRATEGY
Astana, February 15: On February 8, Yerbolat Dossayev, Minister of Economy and Budget Planning, addressed a meeting of his Ministry’s Collegium attended by Prime Minister Serik Akhmetov. The first part of his speech analyzed the economic performance of the country over the previous year. The second part summarized the measures undertaken to implement the tasks set out in President Nazarbayev’s National Address of December 2012.
Finally, the Ministry’s priorities were outlined in support of Strategy 2050, which aims to elevate Kazakhstan to the ranks of Yerbolat Dossayev, Minister of Economy & Budget Planning the top 30 most developed economies.
The economy grew by 5 percent in 2012, a figure somewhat lower than planned, the Minister said. The shortfall is explained by shrinkage in external demand, a dip in agricultural production and a fall in the extraction of oil to 79.2 million tonnes against a planned volume of 81 million tonnes. At the same time, the decline was mitigated by several internal factors: a growth in services,wholesale and retail trade (up 14.6 percent) and internal market investment.
Despite the decline in external demand, foreign trade maintained its positive trajectory. At USD125.2 billion, it was up 10.9 per cent in the first 11 months of the year (exports rose by 6.3 percent and imports by 21.9 per cent), with a positive trade balance of USD44.6 billion. Inflation also declined to 6 percent as compared to 7.4 percent in 2011. Finally, Kazakhstan advanced 21 points in the rating of the World Economic Forum to 51st place out of 144 countries.
In 2012 a raft of measures was undertaken to improve the business environment, cut regulation and licensing requirements and refocus tax and tariff policy in order to stimulate competitiveness, equalize conditions and provide better support for the population. Regional policy has been given added impetus by the development of a number of key urban centers, reform of local government, expansion of public-private partnerships and efforts to diversify one-company towns. The Minister believes that internal trade will be the principal driver of future economic growth.
2012 also saw the start of the People’s IPO Program led by the sale of a stake in KazTransOil.
This was also the year in which the Single Economic Space, comprising Belarus, Kazakhstan and Russia, became operational and the rules of the Customs Union came into effect. Enormous work is being undertaken to harmonize legislation across the three economies. Trade in the first 11 months of 2012 totalled USD22.1 billion, up 4.8 percent from 2011.
Minister Dossayev went on to explain that in accordance with the President’s directive and Strategy 2050, the Ministry will focus on the following directions of activity in the coming years:
• Modernization, with emphasis on advanced and green technologies;
• Stable macroeconomic policy and growth, offsetting weak global markets climate through export diversification and greater emphasis on the internal economy;
• Targeted support of investment, privatisation and infrastructure in order to facilitate the long-term diminution of the state’s role in the economy;
• Balanced budget policy and increased effectiveness of state expenditure;
• Tax incentives for the non-raw materials sector, including agriculture;
• Improving state direction and planning; shifting responsibility from the center to the regions;
• Better social policy, enhancing human capital and improving migration policy;
• Further development of global integration, removal of trade barriers and preparing for WTO membership.