Kazakhstan confidently entered post-crisis development phase - results for 11 months 2010

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ANA. December 20. KAZINFORM /Muratbek Makulbekov/ Despite the financial-economic crisis which affected raw materials sector, last year our country's economy remained the tendency to growth - 2009 ended with slight increase in GDP.

A number of measures taken by the Kazakh Government from the beginning of the crisis allowed to stabilize the situation in the most important sectors of economy and prevent mass closures of enterprises and unemployment growth. From the beginning of 2010 the Government's activity was directed to implementation of the President's instructions on transition to the post-crisis stage of development, and the country's forced industrialization should be its important element.

The results of socio-economic development of the country which were summed up at the Government's session on December 14 show high effectiveness of the measures taken, including on implementation of the State Program of Forced Industrial and Innovation Development for 2010-2014. Main parameters of economic development significantly improved against the last year. The GDP growth in January-September made 7.5 percent. Short-term economic indicator in January-November has increased by 7.2 percent. Industrial production increased by 10.5 percent over 11 months. Production output in mining industry increased by 5.7 percent, including coal mining increased by 9.7 percent, extraction of oil, including gas condensate - by 4 percent, natural gas - by 3.6 percent, iron ore - by 9 percent, and copper ore - by 4.1 percent.

Increase in processing industry over 11 months made up 18.8 percent. First of all, it was reached due to significant increase in volume of output of engineering products - by 58.8 percent, metallurgic products - by 48.7 percent, chemical products - by 37.6 percent, textile goods - by 30.3 percent, food - by 13.8 percent, oil products - by 13.1 percent.

Freight turnover over 11 months increased by 12.6 percent. In 2010 KZT 219.4 bln was allocated for highway field, including the Road Map, KZT 149.9 bln out of which was spent to repair and restoration works at the national network and KZT 69.5 bln - to development of local road network. Within the framework of the allocated funds 4,972 km of roads were repaired, including 1,427 km of national roads and 3,545 of local road network.

The inflation rate decreased against January-November 2009 and made 7.1 percent.

Among the main external factors that promoted economy's growth this year, we can emphasize general revival of the world trade and recovery of demand for Kazakhstan's export products. The foreign trade turnover in January-October increased by 43.1 percent against the similar period of the last year, export during this period increased by 52.6 percent.

Recovery of demand at the internal market was an internal factor which allowed to ensure high rates of economic growth. Increase in domestic demand is due to growth of final consumption, which in the first half of the year increased by 4.3 percent. Following results of January-November 2010 the volume of retail turnover increased by 12.4 percent against the similar period of the last year.

The largest projects are: Construction of an integrated gas-chemical complex in Atyrau; Reconstruction of Western Europe-Western China international transit corridor; Construction of Bozshakol ore-mining and processing works in Pavlodar oblast; Small Vessels Repair Factory in Bautino village in Mangystau oblast; Expansion and reconstruction of the Ekibastuz GRES-2 in Pavlodar oblast; Construction of an elevator complex including a mill and feeding complex in Mangystau oblast and Production of polymer and composite materials in Ust Kamenogorsk city.

Particular attention is given to development agriculture and processing of agricultural products. Due to application of water-, resource-saving technologies and the measures on provision of farmers with working capital, fuel and lubricants and other financial resources in 2010 the country could mitigate the impact of draught and grow comparatively good harvest. The total area of croplands this year was 15, 500, 000 ha. More than 13.9 mln grain was gathered in bunker weight with 9 tons of yield per centner. This volume of harvest and the last year one will be enough for satisfying domestic demand in grain and raising the country's export potential up to 7 mln tons.

The volumes of grain and flour production allow to satisfy fully domestic demand. Gross yield of oilseeds makes about 0.8 mln tons; vegetables and melons - 3.4 mln tons; sugar beet - 340 thousand tons; potato - 2.5 mln tons.

Cattle breeding sector observes growth this year too. The sector has manufactured the products amounting to KZT 6958 bln that is 3.1% higher against the last year index. As of December 1, 2010 the number of cattle rose by 1% and made 6 mln 493 thousand head. The number of sheep was raised by 3.7% and reached 16 mln 83 thousand 900. The number of horse head increased by 3.8% and made 1 mln 563 thousand 700. The number of poultry rose by 2% and reached 34 mln 831 thousand 700 head.

Since the beginning of the year the country's authorities enhanced work on increasing local content in procurement of goods, works and services by state bodies, national companies and extractive industry companies. The Government takes such measures in this direction as amending the legislation, development of a Branch Program of Domestic Content Increase for 2010-2014. A special internet portal on domestic content is functioning now which aims at informing local producers on the state bodies and companies' procurement plans.

In January-September the total volume of goods, works and services purchased by the extractive industry companies made KZT 2 trln 5800 bln. The share of domestic content in it made KZT 1 trln 400 bln. Thus, domestic content in these purchases made 56%. In January-September 2010 the state bodies of the republic concluded 569, 891 public procurement agreements worth KZT 185.7 bln and domestic content in them reached KZT 133.2 bln or 71.7%. The total sum of the agreements concluded with the companies SamrukKazyna Fund JSC made KZT 2 trln 614 bln as of October 1, 2010. KZT 1 trln 303 bln out this sum falls on the contracts concluded with the Kazakhstani enterprises. The share of domestic content in them makes 50%.

The total volume of the goods, works and services by 87 leading enterprises of the republic in January-October 2010 made KZT 969.7 bln including KZT 500.9 bln from the domestic suppliers. The share of local content in the works, goods and services within these companies' procurement made 51.7%.

In accordance with the President's instructions, development of entrepreneurship has been in spotlight of the Government this year. In 2009-2010 the conditions of doing business in Kazakhstan improved significantly due to introduction of amendments to the legislation, simplification of the procedures of launching enterprises, getting licenses and lowering administrative barriers as well as reducing administrative pressures. Owing to adoption of several new regulatory-legal provisions in 2009, the procedure of licensing construction sphere was also simplified.

Kazakhstan ranks the 59th in the World Bank's rating "Doing Business 2011" while last year it held the 63rd position. In "starting business" category Kazakhstan's position rose by 35 points, in "taxation" indicator our position rose by 13 points, and in "protection of investors" - 13 points. Within the past two years Kazakhstan has been among top 10 countries which have achieved high results in creating favorable business climate.

Due to the huge work conducted by the country's authorities, production of goods and services by small ands medium business companies in January-November 2010 rose by 0.4% compared to the same period in 2009. The number of people employed in this sector made 21450.2 thousand as of December 1 , 2010 that is 1.3% higher against the same period in 2009.

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