GOVERNMENT. Weekly review. Prime Minister?s blog to address challenging problems. Energy reserves have sufficient capacity.

ASTANA. January 16. KAZINFORM. /Rizvana Sadykova/ This week for Government was in fact a first working week with intensive hectic schedule in many areas of activity. On Monday Kazakh Prime Minister Karim Massimov held a regular session of the Council of Economic Consultants under the Government of Kazakhstan.

The Council discussed mechanisms of realization of key provisions of the antirecessionary program for 2009-2010, including macroeconomic and social stability, stabilization of the financial sector, settlement of the real estate market?s problems, small and medium business support, implementation of innovation, industrial and infrastructural projects and development of agro-industrial complex. The experts supported governmental approaches and complimented their timeliness. Upon the results of the discussion a number of recommendations for the Kazakh Government, considering practical and strategic objectives, proposals on formation of a monitoring system over the process of implementation of the antirecessionary program and spending of funds, allocated for its realization were developed. Besides, working groups in key areas of the Joint Action Plan of the Government, the National Bank and the Agency for Financial Supervision on stabilization of the economy and financial system for 2009-2010 were formed within the Council of Economic Consultants. The same day Prime Minister of Kazakhstan Karim Massimov at a sitting of the board of the Kazakh Agency for Informatization and Communication informed that he opened his personal blog on the Government?s website. ?I charge the Ministers and heads of the departments to do so. Our society has a right to ask questions and you should answer them?, K. Massimov concluded. As he also noted he would control over this process. In my opinion this is a very significant if not an even outstanding example of genuine efforts to show openness and transparency among new generation of senior public servants educated abroad whom Mr. Massimov belongs too. Besides the fact that it can be a real sign of maturity of civil society, it also demonstrates that government is ready to face challenging questions, accept opposing points of views for the sake of solving current economic crisis and returning trust to banking and financial institutions. Obviously, the Cabinet Ministers should ask themselves more seriously how to deal with a flow of public opinion coming directly to their desks. Any way I am optimistic on the outcome of this phenomenon for civil servants, civil society and all Kazakh people as a whole. In January the Government of Kazakhstan will follow the economic situation in the world. Prime Minister Karim Massimov does not rule out possible corrections to the national and local budgets. ?Taking into account the global economic situation we will introduce some corrections to the country?s development strategies and national and local budgets. Minister of Economy Bakhyt Sultanov draws local executive bodies? attention to the necessity of optimization of their expenditures. ?While considering the law on the three-year national budget in the Parliament we have cut budgetary expenditures by KZT 268 bln ? for 2009, by KZT 411 bln ? for 2010 and by KZT 476 bln ? for 2011?, Mr. Sultanov reminded. Alongside, according to him, it was decided not to reduce local budgets and subventions. According to B. Sultanov, local budget revenues have grown 1.5 times since 2005, but their expenditures have increased as well ? from KZT 705 bln up to KZT 1.8 trln taking into account the national budget transfers. The 2008 plan on local budget expenditures without the national budget transfers has made about KZT 1.2 trln that is KZT 208 bln higher than it was forecasted. ?As for the budget revenues, according to 2008 forecasts it comprised KZT 620 bln. While establishing transfers for 2009 the revenues of the local budgets were expected to make KZT 694 bln. According to the local executive bodies? plans this figure is to make KZT 755 bln, that is only KZT 61 bln higher than the preliminary forecasts. ?As we see, the revenues of the local budgets decline?, the Head of the Ministry said. One of main speakers was Kazakh Minister of Energy and Mineral Resources Sauat Mynbayev. He informed that energy reserves have sufficient capacity due to reduction in electricity consumption by large enterprises. 70.6 mln tons of oil with gas condensate were mined in Kazakhstan in 2008. ?Taking into account a balance of export-import operations, use of petrol increased by 6.9 percent, diesel fuel ? by 12.3 percent, aviation kerosene - by 15 per cent, fuel oil ? by 3.3 percent?, the Minister said. S.Mynbayev noted that all prices on oil products in the domestic market are within limits put in memorandums. According to him, prices on AI-92 and AI-96 petrol decreased to KZT 76 per a litre, and diesel fuel ? KZT 86. In accordance with the data, generation of electricity increased by 4.8% in 2008, comparing to 2007 and amounted to 80.5 bln kilowatt per hour. Consumption amounted to 80.6 bln kilowatt per hour. But the Minister noted that "the last two months of 2008, electricity consumption has decreased" due to reduction in energy consumption by large enterprises. On January 13 the Kazakh Government has adopted an action plan on realization of the Joint Action Plan of the Government, the National Bank and the Agency on Financial Supervision on stabilization of the economy and financial activity for 2009-2010. ?I believe the Plan has been comprehensively worked out and contains answers on the questions that arose after the program was introduced?, Kazakh Prime Minister K. Massimov said. He did not exclude that in accordance with the world situation, corrections can be introduced to the adopted action plan of the antirecessionary program. Kazakh Prime Minister also charged ?SamrukKazyna? National Welfare Fund to work out joint measures with the governors of the regions and mayors of Astana and Almaty cities within the anti-recessionary program. According to the Prime Minister ?the lion?s share of the anti-recessionary measures falls on Astana and Almaty cities? financial sectors, small and medium business and real estate markets?. Mr. Massimov reminded that three months have passed since the President took a decision on establishment of ?SamrukKazyna? National Welfare Fund. Head of the Fund Kairat Kelimbetov has informed of elaboration of the mechanisms of participation of Kazakhstan Stress Assets Fund in purchase of soured mortgage loans. ?During the first months the Stress Assets Fund will proceed to development of the mechanisms of transfer of assets to the banks, reconciliation of the partner banks? lists, estimation of their assets and issuing notes. Mechanisms of the fund?s participation in purchase of soured mortgage loans are being elaborated as well?, he said. Mr. Kelimbetov reminded that the Fund was established ?for improvement of the quality of the banks? assets and focusing of their activity on crediting of economy?. ?The process of the Fund?s activity covers 4 stages?, K. Kelimbetov noted. These are estimation of the banks? assets, purchase of assets, management of assets and their sale. To date the Fund is negotiating this issue with the banks. The Fund was capitalized to the amount of KZT 52 bln. Mr. Kelimbetov offers to use means of ?Damu - Regions? program for micro-crediting of rural population. ?This will allow to extend access of rural entrepreneurs to the state funds?, he thinks. K. Kelimbetov also notes that representatives of regional akimats support this approach. As reported earlier, ?Damu - Regions? Program is implemented by the subordinate organization of ?SamrukKazyna? Fund ? ?Damu? Fund together with the akimats for support of small and medium business. According to the ?SamrukKazyna?, about KZT 8 bln was disbursed for the present moment. The part of fund?s means in the amount of KZT 22 bln will be disbursed till March 15. Related agreements have been already signed by the banks. The issue of unemployment and rural issues are still high on the government?s agenda. In fact Mr. Karim Massimov announced that prevention of the growth of unemployment will be the main issue in the activity of the Kazakh Government in 2009. Besides, it was announced that despite possible reconsideration of budget forecasts due to the reduction of oil and metals prices, financing of agriculture should not undergo sequestering. This week the Chairman of ?SamrukKazyna? National Welfare Fund also informed that from January-February of the current year the Fund would start financing the country?s top four banks by recapitalization program. ?We have started negotiating this issue with the banks not waiting for the results of auditing that we plan to conduct in order to conclude an agreement?, K. Kelimbetov said. This will be ?a short term deposit or a convertible loan? he added. As Mr. Kelimbetov explained, the point at issue was USD 1 bln or purchase of 25% of shares in each bank. Namely this sum will be allotted in the nearest time. In whole, according to him, the program on recapitalization of the banks provides for USD 4 bln. As reported earlier, the Government of Kazakhstan proposed the top four banks of the country (Alliance Bank, BTA Bank, Halyk Bank and Kazkommertsbank) to replenish their stock capital due to injections from ?SamrukKazyna? National Welfare Fund amounted to USD 5 bln. As for the external relations, we must mention that Minister of Economy and Budget Planning Bakhyt Sultanov met representatives of the mission of the International Monetary Fund. At the meeting the head of the Ministry briefed about the current macro-economic and financial situation in Kazakhstan, familiarized the IMF reps with the Government?s anti-crisis plan, in particular on support of different sectors of economy, sources of financing. ?As a result of the taken anti-recessionary measures we managed to lower negative impact of the world crisis on Kazakhstan?s economy. According to preliminary estimation GDP growth in 2008 is to make 3%?, the Minister said. The measures on foreign debt reorganization taken by Kazakhstan as well as economic forecast of the Government and possible scenarios of oil prices fall were discussed. According to the Minister in 2009 the Government forecasts average economic growth rate at 1-3%. Head of the IMF mission in Kazakhstan (Middle East and Central Asia department) Timothy Callen noted that the IMF had similar viewpoint on the prospects of Kazakhstan?s development in 2009 as the Government.