GOVERNMENT: Kazakhstan developed anti-crisis program

An enlarged Government sitting chaired by President Nursultan Nazarbayev was held last week. In his speech Minister of National Economy Erbolat Dossayev informed that the new model of development of the economy of Kazakhstan would be based on maximum use of the competitive strengths, advanced human capital assets, prevalent role of the private sector and favourable investment climate.

The main measures of the economic policy have been proposed to concentrate in two directions, which are systemic measures on formation of the new structural economy and urgent anti-crisis measures.

It was proposed to have several priority directions in formation of the new structural economy. Those are development of competitiveness and private sector capital, ensuring of macroeconomic stability, structural reforms and diversification of the economy. The Government implements the plan of urgent measures on ensuring the economic growth in 2015-2016 in order to prevent the downfall of production.

Chairman of the Board of Baiterek Holding Kuandyk Bishimbayev informed that the plan on construction of housing would be overfulfilled this year. Instead of 400 thousand sq meters of housing planned for commission this year, 430 thousand sq meters of housing will be commissioned including 7.5 thousand rental apartments. Moreover, the rental price for one square meter of housing is about 900 tenge. In other words, the monthly payment for people renting an apartment of about 50 sq meters within the framework of the program will be around 40 thousand tenge which is due for payment for 20 years for a complete buyout of an apartment. According to K. Bishimbayev, this type of housing will be very affordable for people with the average salary of 120 thousand tenge.

Upon completion of the sitting, the President gave a number of instructions. In particular, N. Nazarbayev ordered to more actively work on attraction of foreign and domestic investments. Besides, N. Nazarbayev criticized the work of the Government on privatization of public property.

"In order to give an impetus for business initiatives, I instructed the Government to hold the second phase of privatization, like the one we held during the first ten years of our independence. However, the pace of this work cannot be considered satisfactory," N. Nazarbayev said.

As the President noted, 213 properties have been privatized since the beginning of the campaign, which is just 28% of the planned volume. In general, 80 percent of the economy of Kazakhstan is owned by the public sector, while this indicator is about 15 percent in the OECD countries.

Besides, the Head of State charged the Government to update the second five-year program of industrial and innovative development having noted that the world sees decline in investment activity and demand, while competition toughens. Therefore, while changing the program, the Government must select productive, effective and export-oriented projects only.

The Government reviewed the national budget for 2016-2018 this week. Minister of National Economy Erbolat Dossayev said it presenting the draft budget in the Majilis. According to him, fiscal revenues (excluding transfers) will reach 3 trln 665 bln 300 mln tenge in 2016, i.e. 152 bln 100 mln higher compared to the August forecast. In 2017 this figure is expected to make 3 trln 866 bln 900 mln tenge (+142 bln 700 mln tenge), and in 2018 it will reach 4 trln 195 bln tenge (+ 63 bln 500 mln tenge).

The volume of the annual guaranteed transfer from the National Fund in 2016-2018 will make 2 trln 400 bln tenge without 15% rise. Target transfers from the National Fund will be raised raise from 461 blln 500 mln tenge to 567 bln tenge. The amount of the NF target transfer for Nurly Zhol program's implementation will make 900 bln tenge in 2017.

Budget deficit in 2016-2018 remains at the previously defined range (723 bln 400 mln tenge in 2016 or 1.6% against GDP, 600 bln 800 mln tenge in 2017 or 1.2% against GDP, and 552 bln 300 mln tenge in 2018 or 1% against GDP). As a result, budget spending in 2016 is forecast at 7 trln 666 bln 700 mln tenge (+347 bln 800 mln tenge compared to the August forecast). In 2017 this figure will be 8 trln 124 bln 400 mln tenge (+393 bln 300 mln tenge) and in 2018 it will make 7 trln 621 bln 100 mln tenge (+ 164 bln 100 mln tenge).

Chairman of the National Bank Daniyar Akishev told that the Bank and the Government have developed special measures to keep inflation rate at 6-8% in 2016. "Prices stability is a priority of the National Bank. In this view, we plan to launch a package of measures to lower the inflation rate, including monetary policy, interest rates regulation, liquidity of the tenge and flexible exchange rate," he said. By the end of 2015 inflation will exceed the corridor of 6-8%, earlier fixed by the National Bank. Therefore, its goal will be to stabilize the inflation expectations and return inflation level to the designated corridor as soon as possible.

While discussing the draft national budget at the Majilis' plenary session, Prime Minister Karim Massimov said that the Government had developed a unified anti-crisis program for the forthcoming three years. The Head of State had charged the Government to develop a new anti-crisis programme which will be based on the previous anti-crisis plan for 2007-2009. "The document is almost ready and it requires only additional revision and adoption. The programme will consolidate all our decisions and measures taken in 2014, 2015 and 2016," he said. In PM's opinion, the adoption of the three-year budget for 2016-2018 will also help the country get out of the crisis.

According to the PM, by January 1, 2016 the Government will adopt all required resolutions and decisions, based on the bills approved by the Parliament under the Nation's Plan "100 Specific Steps."