14:19, 16 April 2009 | GMT +5
Crisis requires mobilization of forces and resources: Bakhyt Sultanov, Kazakh Minister of Economy and Budget Planning
ASTANA. April 16.KAZINFORM /Muratbek Makulbekov/ No doubt, today almost all national economies feel the negative effect of the global financial crisis, including Kazakhstan. Assets, accumulated during the economic growth, allowed our Government to take effective measures to reduce the impact of the global crisis. Nevertheless, this year the consequences of the crisis have touched upon all segments of the population. In an interview with our correspondent, Minister of Economy and Budget Planning of Kazakhstan Bakhyt Sultanov told about the changes in the economic situation expected in the near future.

The previous budget amendments envisage revenues half as much as it was planned last year. Do you believe the budget planning in future is possible without further amendments to such an extent?
The crisis dictates the need in immediate response, mobilization of forces and resources, search for the most effective and least costly ways to achieve tactical medium-term objectives. In terms of unstable situation in the world economy, the macroeconomic forecast for 2009-2013 was specified on the basis of the international expert analysis.
Changes of the macroeconomic indexes lead to the necessity of specification of the approved national budget parameters. In whole, the amendments to the three-year budget are aimed at implementing the package of the Government?s antirecessionary measures. In fact, the draft law ?On introduction of amendments to the Law of the Republic of Kazakhstan ?On national budget for 2009-2011?, submitted for the Parliament?s consideration, envisages KZT 371.1 billion reduction in budget revenues.
Refinement of macro-economic projections is a customary practice. Governments of many countries take such measures dependent of the situation in the world economy. In the global financial crisis the estimates of the world economy development are so ambiguous. Thus, we can not deny possible specification of macroeconomic indicators and budget parameters.
Today along with reduction in budget revenues of the raw materials sector, the volume of construction, which produced a multiplier effect upon the country?s economy, is also decreased. What sectors, programs and projects can play a role of economic ?locomotive? in the nearest future?
Instability of the world financial markets that began in the second half of 2007, another wave of the world financial turmoil turned into bankruptcy of the largest foreign banks and falls of stock exchange quotations, and then overgrew in world economic slowdown and decline of business activity.
Taking into account the influence of the external development conditions in 2009-2013 our economy will develop under the influence of the following factors: maintenance of economic activity in the spheres of oil and gas development, public sector of economy; implementation of big investment projects; improvement of banking sector through the discharge of the main amount of the borrowing costs and improvement of the assets quality under the government support, encouragement of the deposit base growth.
In connection with the increasing influence of the global crisis upon Kazakhstan?s economy, the society is worried about the pessimistic forecast in relation to prices for oil and other resources of Kazakhstan. Is it possible that the world economy will see positive changes, particularly in the hydrocarbons market?
The business climate on the world hydrocarbons market will primarily depend on the dynamics of the global economic development. Slowdown in global economic growth which started last year has led to decline in demand for energy resources and oil prices drop.
According to the WMF estimates the world economic growth made 3.2% in 2008 against 5.2% in 2007. As it was noted, the world expects global economic slowdown in 2009. Taking into consideration the prospects of economic development in 2009, sharp rise in commodity prices is not expected. At present, the prices for Brent oil comprise USD 49 per barrel. International organizations and world banks forecast growth of oil prices in 2009 up to USD 55 per barrel. The IMF expects gradual increase in world economic growth beginning with 2010. Promotion of business activity will lead in its turn to rise in prices for resources, including oil.
Recently Astana has hosted the economic forum which brought together world-known scientists and economists. How their recommendations can be complied by our country?
The economic forum aimed at finding a possibility of applying the world experience to the development of effective recommendations. The economic forum became a platform where the scientists from every corner of the world could voice their opinions, advice and recommendations regarding further development of Kazakhstan?s economy. The forum focused on many issues, for instance, the introduction of single world and regional currencies, prospects of regional integration projects etc. It should be noted that the Government will take into consideration these recommendations while elaborating the country?s economic policy. Besides, the forum participants took positive view on Kazakhstan?s anti-recessionary program.
How does the Government realize its intention to enhance tax burden on primary sector? Was it an efficient measure to reduce this burden on non-primary sectors? Will the current Tax Code be amended in the nearest time?
The amendments to the current taxation scheme of the primary sector were adopted in accordance with President?s tasks set in his last year Message to the Nation on lowering tax burden on non-primary sectors of economy, especially on small and medium businesses and compensating the expected budget losses through increasing economic returns from the extractive industries.
Thus, the new 2009 Tax Code provides for increasing total tax burden on primary sector enterprises due to increase in tax rates of subsoil users ? the tax on mining operations and rent tax on export.
For example, tax burden on primary sector has been raised from 7.3% up to 7.8% to GDP. In non-primary sector this figure was decreased from 9.8% to 7.5% to GDP.
It is supposed that the return from the primary sector will increase significantly as soon as the economic situation is stabilized.
We do not plan to introduce any amendments to the Tax Code in the nearest outlook except for specification and concretization of certain provisions.
Thank you for the interview.
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