GOVERNMENT. Weekly review. Efficient management of state funds to support economic stability. Optimism - natural feature of Kazakhstan?s people: President Nursultan Nazarbayev

ASTANA. January 9. KAZINFORM /Rizvana Sadykova/ Right after new year holidays, President Nursultan Nazarbayev chaired the session in Almaty where the report of the Government and the National Bank on the outcomes of 2008 and forecast trends in socio-economic development for 2009 was delivered.

Though it seems that Kazakh authorities started new year 2009 in such business like approach, I would like to draw attention of our readers to the meeting of Kazakh President with the heads of the leading mass media (among them was Head of Kazakh national information agency ?KA|INFORM? on the eve of new year interview (full version) . It is my personal opinion that all what he said during this interview was one of the most informative, warm and close to the heart of every Kazakhstani combination of statements and messages. Speaking about the current financial crisis he reminded to all of us how we started our independence years. ?The crisis we remember is one which happened in the former Soviet Union, the enormous collapse, destruction of a huge country. We, former citizen of the ex-USSR, suffered from it most of all, the rest of the world did not feel it. We survived it with huge losses?? he stated. And later he noted ??.I remember words of L. Tolstoy: ?Good deeds unite people. Evil divides people? I feel together we will survive.? Answering to the question, what was the most important in the departing year, President said that it ?was an issue of the social welfare of our citizens, which is based on political stability, friendship, tolerance. I always pay attention to it, because this is a background of state welfare. If we do not maintain interethnic consent, tolerance of our people in this hard period, the country will not be able to show economic growth, raise in pensions, wages and improvement of living standards. This is the most crucial thing?. Finally he emphasized that the first task is the successful implementation of the antirecessionary program ? Action Plan on economic stablilization of the Kazakh Government. I should note that according to many experts Kazakhstan was one of the first CIS countries along with Russia, which proposed such comprehensive measures to influence the financial crisis. In this connection Prime Minister Karim Massimov informed the Head of the State of the results of the country?s socio-economic development in 2008. According to the preliminary estimation, GDP growth has hit 3%. Inflation has made up 9.5%. The national and local budgets have been realized by 99.5% ? in revenues, and by 99% ? in expenditures. The President was also informed of the system of measures on implementation of 2009-2010 Joint Action Plan of the Government, National Bank and Financial Supervision Agency to stabilize economy and financial sector. It provides for certain mechanisms for realization of thekey anti-crisis program, including ensuring macroeconomic balance, social stability, stabilization of the financial sector, solution of the problems in real estate market, support of small and medium business, implementation of innovation, industrial and infrastructure projects as well as development of agro-industrial complex. Despite aggravation of the world financial crisis, the real growth of GDP upon the results of 2008 is forecasted as over 3%. Index of consumer prices in Nov. 2008 has made up 109,2% as compared to Dec. 2007; The dynamics of inflation processes in Jan.-Nov. 2008 shows that the inflation will be kept within the planned parameters of not higher than 10%. Investments in capital stock in Jan.-Nov. 2008 made up KZT 3299,2 bln, that is by 16,6% more than in the relevant period of 2007. Within the realization of measures on state support of investments for the reported period, 42 investment contracts providing with the investment preferences were concluded with enterprises (investors). The total volume of investments amounted to KZT 875,4 bln. Kazakhstan enters the period of global economic slowdown with solid gold and foreign currency reserves and the National Fund, which continued to grow within the first half of 2008 due to the world oil price rise, in spite of other unfavorable external factors. Their total volume to Nov. 1, 2008 is over USD 47 bln. The amount of the state debt does not exceed 1,5% of GDP, the budget deficit does not exceed 2% of GDP. One of big achievements of the Kazakh Parliament was an adoption of the new Tax Code and the new Fiscal Code, which is to promote modernization and diversification of economy, the business going out from the ?shadow?. The new Tax Code foresees: realization of the principle of the directly applicable law; reduction of overall load on non-primary sectors of economy; creation of conditions supporting modernization and diversification of economy; improvement of conditions for business through the improvement of the tax administration and simplification of tax procedures. The Tax Code became a directly applicable law, it combines the quality of administration and the interests of the taxpayer. In this context the Tax Code maximally includes legal acts in the sphere of taxation; the tax procedures are simplified. The new Fiscal Code envisages introduction of new methods of result-oriented budget planning, transit to the three-year budget and is aimed at harmonization of economic and budget planning and improvement of budget relations. For the first time on the basis of the new Fiscal and Tax Codes the three-year state budget for 2009-2011 has been approved. It reflects main indices of social and economic development of Kazakhstan and is aimed at realization of tasks defined by the Head of the State in his annual address. Specified forecast of incomes of the republican budget (without transfer revenues) due to alteration of macroeconomic indices has made up KZT 1 900,6 bln for 2009, KZT 2 017,5 bln for 2010, KZT 2 177,8 bln for 2011. The state budget proposed raise in wages to public servants, pensions and student stipends by 25% in 2009, by 25% in 2010 and by 30% in 2011; raise in living wage and basic pension payments with account of their upgrading to 50% from the amount of living wage; raise in state social and special allowances, monthly allowance for care of a child and single-time benefit for the newborn. The next important governmental and social problem is housing construction which has enormously suffered due to global financial crisis. Nevertheless Kazakh Government has taken unprecedented measures to get out from this crisis; it seems to me these plans look very optimistic. The total area of housing commissioned in Jan.-Nov. 2008 is 5.8 mln sq m that comprises up to 102.4% to11 months of 2007. It is necessary to note that there is an upward tendency in the housing construction. So, in comparison with the analogous period of 2007, 92% of housing was commissioned over seven months of 2008, 93% ? over 8 months, 96% - over 9 months and 101.7% - over10 months. KZT 7.7 bln were allocated to akimats (local administrations) for construction of rental housing. KZT 7.5 bln or 98% out of these funds have already been disbursed. KZT 6.4 bln were allotted to akimat of Astana city for construction of housing for public servants. The means were completely disbursed. KZT 7.7 bln were allocated to the akimats for construction of housing for the workers of 100 schools and 100 hospitals that under construction today. KZT 6.4 bln or 84% out of this amount have already been disbursed. Aktobe, Atyrau, Karaganda, Kyzylorda regions and Almaty city fully disbursed allocated means. Following up the session, the Head of the State gave a number of instructions to the Government in realization of a wide range of additional measures on provision of the population employment, support of socially vulnerable groups, solution of the interest holders? problems, accelerated realization of 30 corporate leaders program and formation of competitive and export-oriented productions, development of entrepreneurship and reduction of administrative barriers. The Cabinet was also charged to orient state purchases of state bodies and national companies on domestic producers, including small and medium business. The President particularly pointed out efficient management of the state funds allotted to support the economic stability, highlighted the necessity to develop regional programs on employment considering peculiarities of each region, increase financing of training and re-training of personnel to meet the needs. According to the above-mentioned instruction, a new working group of the Government will be engaged in operational consideration of issues on prevention of job cuts and adoption of stabilization measures in the labor market. Kazakh Minister of Labor and Social Protection Berdybek Saparbayev will head it. The group includes heads of the Ministry of Economy and Budget Planning, Ministry of Internal Affairs, Ministry of Education and Science, Ministry of Industry and Trade, Ministry of Energy and Mineral Resources, Ministry of Agriculture, Ministry of Justice, National Welfare Fund ?SamrukKazyna?, National Holding ?KazAgro?, Astana and Almaty Deputy Governors and Deputy Mayors and etc. The working group will realize analysis and forecast of the situation with the employment in regions, ensuring additional measures of social protection and etc. This week President Nursultan Nazarbayev has visited Information Technologies Park ?Alatau IT City? and exhibition ?Science and Innovations? in Almaty. The exhibition was dedicated to development of the innovation system and interaction between participants of the process of innovative development in Kazakhstan. 50 exhibitors ? universities and industrial parks, state structures, venture funds, which finance research and development activities, companies, which implement innovations to production ? from six regions of the country took part in it. Over 120 scientific elaborations and innovative projects were introduced. The host and organizer of the exhibition is ?National Innovation Fund? JSC, which enters the structure of the National Welfare Fund SamrukKazyna?. As is known, Kazakhstan approved a program on formation and development of the national innovation system in 2005. There were formed four elements of the innovation system in the country: science, innovation infrastructure, infrastructure for innovations financing and companies, which implement innovations to production. It is important to note that Kazakhstan builds the innovation system of the open type. It means the transfer of technologies and public private partnership. I can?t help coming back to the above mentioned interview of Kazakh President Nursultan Nazarbayev on the eve of New Year 2009 and I would like to finish this review with his words ?I feel that optimism is a natural feature of all Kazakhstan?s people. I am excited about our future.? Let it be.