GOVERNMENT WEEK: Close governmental control to help overcome crisis

ASTANA. 27 February. KAZINFORM / Muratbek Makulbekov / Small and medium businesses are free from inspections; the mining companies will get tax reduces; domestic enterprises - financial support and Kazakh goods and services are not to be neglected on the domestic market. These and other measures taken by the Government in the implementation of anti-crisis program should help Kazakhstan to overcome the crisis and reach a new stage in its development.

Maintaining the level of employment, the Prime Minister of Kazakhstan Karim Massimov announced a major objective of the current year. This was discussed at a national forum of Kazakhstan businessmen on 23 February. A pack of governmental decisions will be adopted to solve this problem, K. Massimov highlighted. In order to create effective mechanisms to increase Kazakhstan's participation in the procurement of goods, a special method of calculation has been developed. One such mechanism would be a rule requiring foreign suppliers to invest in one form or another in the industry of Kazakhstan. Another our Government?s innovation in this area is establishing rules for determining the country of origin. Regulation provides for the introduction of a new form of certification which will reflect the percentage of Kazakhstan's participation in the final product. Direct support to domestic producers is one of the most important levers for improving the competitiveness of Kazakhstan's industry. Two credit lines are open for Kazakh companies, procuring components in Russia and China. Russia's "Vnesheconombank" opened a credit line for three billion dollars in rubles for the Development Bank and Fund ?Samruk-Kazyna?. ?The products can be purchased live without spending money?, K. Massimov said. The Ministry of Energy and Mineral Resources, Fund ?Samruk-Kazyna? and other agencies have been given a task to provide work in the investment programs. In addition, the Ministry of Finance, Customs and Tax Committee requested the Premier to deal with the situation on the supply of aviation kerosene in Kazakhstan airports. As it turned out, about 300 thousand tons of this fuel goes to the airport without proper registration, and the Ministry does not know who and where to deliver it. Last week, several ministries made their proposals to support the real sector of the economy. Industry and Trade Minister said that the need to establish a temporary rate reduction to the existing tariffs for regulated services backbone railway network. In his view, this can happen without stopping numerous industries that will lead to a situation where the rail will nothing to carry. In accordance with the policy of supporting domestic production the Ministry of Industry and Trade proposes to introduce zero tariffs on imports of raw materials for food production, as well as the components used in manufacturing of electric insulating materials, cables and conductors, and glass. The Ministry proposes to establish a 15-30 per cent customs duty on imports of finished cables and wire products, steel water boilers, safety glass. In addition, the possibility of imposing restrictions on trade with countries that have duty-free import of goods to Kazakhstan is under consideration. The Minister of Energy and Mineral Resources reported that we would be able to provide a high-octane gasoline till 2014-2015. At the same time, domestic refineries will process 17 million tons of oil a year - after the modernization of production facilities. Major projects for the establishment of petrochemical industries will be also implemented. The reduction of tax on mineral extraction is among the most important measures to support real sector of the economy. Here the Minister stressed that MET was introduced in the new Tax Code when the price of oil was 60 dollars a barrel, but now it is - less than 40 dollars. On Thursday the Government took a decision on decreasing MET for mining companies. The level of this tax would be consistent with the size of the royalties paid by the industry last year. Reducing MET will allow many companies to maintain the required level of profitability and, consequently, will not reduce the volume of production and the number of staff. Despite the complexity of the economic situation in Kazakhstan, a timely and prompt government action to mitigate the impact of global crisis on the national economy makes it possible to expand and deepen its cooperation with foreign investors to develop trade and economic ties with partner states. Main partner of investment fund ?Wolfensohn Capital Partners LP?, James Wolfensohn, chairman of the Russian ?Vnesheconombank? Vladimir Dmitriev, chairman of the company ?Siemens? Peter Loescher, president of the company ?Rohde & Schwarz?Christian Lyayher negotiated different prospects of mutual cooperation with PM Karim Massimov. First Vice-Premier of Belarus Vladimir Semashko also discussed the supply of agricultural equipment to Kazakhstan. Specific projects will be developed over the coming months.