GOVERNMENT. Weekly review. Kazakhstan likely to join WTO H1, 2012

JSC Kairgeldy Kabyldin to maximally defend the interests of the state in large projects involving Kazakhstan. K. Massimov said that adaptation and regulation of exports and supplies to the domestic market of oil products in connection with the establishment of the Single Economic Space was one of the key issues for the Ministry of Oil and Gas.

According to the Ministry, oil and gas condensate output was raised by 4.2% in 2010 having made 79 mln 700 thousand tons. Gas output made 37 mln 400 thousand cubic meters having increased by 3.9% compared to 2009.

On Tuesday, February 1, the Ministry of Industry and New Technologies held a sitting of its board during which Minister Asset Issekeshev informed that the country's industrial output made KZT 11.8 trillion at the year-end. The country's index of actual volume was increased by 10%. For the first time in recent years the non-oil and gas sector observes accelerated development in the country. Thus, the mining industry growth made 5.3% comparing to 2009, growth of processing industry hit 18.4%. Along with this, the share of processing industry rose by 11.7%. KZT 800 bln was utilized within the Industrialization Map last year while in 2011 this sum is to make KZT 1.3 trln. To date, more than 500 projects have been included in the Industrialization Map. The last year was also favorable for attraction of foreign investments which volume made more than USD 13 bln. Investments in non-primary sectors comprised USD 1.5 bln that is 25% higher against the previous year index.

Summing up the session's results, Prime Minister K. Massimov noted that private sector must become the main engine of national development. "If at the time of crisis the state shouldered the main burden of economic development, now the focus should move to the private sector", he stressed. According to the Premier, the tasks set to the Government for 2011 require mobilization of all resources both from the state and entrepreneurs.

On the same day Minister of Education and Science Bakytzhan Zhumagulov held a special conference devoted to clarification of the main provisions of the President's recent address to the Nation. Particular attention was given to vocational and technical education development. According to him, a National Council for vocational and technical training will be established in Kazakhstan. "One of our systemic problems is non-competitiveness of specialists. Our university graduates do not meet the requirements of employers. In this regard, the task on reforming and modernizing the content of vocational and technical education is set in the Address. Measures on establishing contacts between educational institutions and employers must be taken", B. Zhumagulov said. The Minister informed that the National Council for vocational and technical training would be established in partnership with the business community and the association of employers.

Besides, as the Minister noted, the employers would take part in the certification of vocational education institutions. The Minister noted that the quality of training the specialists for industrial and agro-industrial sectors should be improved in accordance with the employers' requirements. In this regard the employers will be involved in certification of vocational education institutions.

On Wednesday Premier K. Massimov chaired a meeting of the Economic Policy Council under the Government

Those attending debated the issues concerning entrance of the companies with the state's participation to the stock market and attraction of currency in hand and means of pension savings funds to the equity capital of the national companies through stock market tools. In the afternoon the Premier held a working session on competiveness of domestic enterprises and development of labor productivity. Besides, the State Commission on economic modernization under the chairmanship of K. Massimov convened to discuss Business Road Map 2010 guidelines.

The same day the Ministry of Finance held a sitting of its board. Minister Bolat Zhamishev informed that over 50% of the national budget was spent for social sector. "51% of the national budget is spent for social sphere: education, healthcare, social care, social provision, culture, tourism, sport and information space. Thus, our budget is socially oriented ", he noted. "Taking into consideration the President's Address to the Nation, the expenditures for education will be increased. 400 schools must be built the countrywide in a four-year period", the Minister added. According to Zhamishev, 35 schools are planned to be built in 2011 in Kazakhstan. Construction of 18 schools will be continued and 17 ones will be completed this year. All of them will be funded from the national budget.

Touching upon the issues connected with import customs duties, the Minister informed that in 2010 Kazakhstan received KZT 42 bln more import customs duties within the Customs Union. "In 2010 we got KZT 42 bln 200 mln more payments for imported goods", Zhamishev said. The Minister reminded that the import duties are distributed among the budgets of Kazakhstan, Russia and Belarus within the Customs Union. "Such growth was provided due to increase in Russia's and Belarus' import by 36.1% and 34% correspondingly since everything is distributed by a formula independently on the volumes of payments. We have received more from Russia and Belarus than planned", the Minister explained. According to him, such dynamics will not be constant. The situation will be improved with the growth of import to Kazakhstan.

As for the state budget, "it received KZT 4.388 trln of revenues in 2010. That is 105.7 percent of the plan. The plan was fulfilled by 106% and the targets were exceeded in all underlying taxes", B. Zhamishev noted and added that the state budget expenditures made KZT 4.934 trln in 2010. KZT 37.5 bln was not fully disbursed. This is KZT 22.6 bln less compared to 2009. KZT 14 bln was saved in public procurements.

Summing up the results of the meeting K. Massimov noted that the President's policy aimed at accumulation of financial resources during the economic growth helped stabilize Kazakhstan's economy in crisis period.

Yesterday, February 3, a sitting of the board of the Labor and Social Protection Ministry was held. Prime Minister K. Massimov participated in it. According to him, the Government plans to resettle the population from regions with low economic potential to centers of economic activity. He noted that the President in his Address to the Nation charged the Government together with regional governors to work out a program on regions' development. National and regional centers of economic activity and regions with low economic potential will be defined within this program. "Our task set in the program is to create conditions for people willing to move from regions with low economic potential to the centers of economic activity", K. Massimov said. In this regard, the Premier charged to provide construction of lease housing for participants of the program near the centers of economic activity. K. Massimov emphasized that the housing should be cheap. According to him, additional state support measures such as move subsidy assistance, lease payment deferral, training, employment, etc should be provided as well.

The Prime Minister informed also of development of a new employment program which is planned to be launched in a pilot regime in 2011. Presenting the program Minister Gulshara Abdykalikova said that the program aimed at widening availability of payable employment and reduction of unemployment level, increase of labor market flexibility, creation of jobs and provision of the forced industrialization program with labor resources. Besides, the program will include measures on increasing the competitiveness of Kazakhstanis at the national labor market and on optimization of foreign labor use for the benefit of the country. The program will be implemented in three major directions: activation of unemployed, self-employed and low-income groups of the population; labor mobility; rural population's employment. Noteworthy to say, that the new employment program is expected to cover about 1.5 mln Kazakhstani people in the next five years.

The Prime Minister charged G. Abdykalikova to take into consideration the issues of population's training and retraining in the new program, which would let our citizens to participate in the country's industrial-innovative development.

On Friday, February 4, the Ministry of Economic Development and Trade held a sitting of its board. As Minister Zhanar Aitzhanova reported, in 2010 growth in the processing industry was faster by 3.5 times than in the mining sector. "In 2010 production in the processing sector increased by 18.4 percent that exceeds growth rates in the mining industry. Changes in the structure of economy are the result of implementation of the State Program of Forced Industrial-Innovative Development", she said. The Minister noted that last year the economic growth was promoted by favorable external environment of energy resources and metals, the state anti-recessionary program as well as measures on formation of the basis for the post-crisis development. Real GDP growth made up seven percent in 2010.

According to the Minister, Kazakhstan's external trade turnover increased by 13.5 percent and amounted to USD 81.3 billion. It was linked to the 32.5-percent growth of exports, which made up USD 57.2 million. Significant excess of exports over imports provided external surplus of USD 33.2 billion. This is 2.2 times than in 2009.

Besides, she said that Kazakhstan would likely join the World Trade Organization in the first half of 2012. "We will try to finish the work this year, since we have all conditions for it. I cannot claim that Kazakhstan will join the WTO until 2012, because it depends not only on the technical work being conducted by our Government, but also on the coordination with Congress, Senate, European Union member states, our trading partners. It's impossible to predict how much time they will need", Minister Aitzhanova said and noted that Russia was negotiating accession to the WTO along with Kazakhstan.

At this session Prime Minister Karim Massimov tasked Zhanar Aitzhanova to prepare a plan of administrative reforming for 2011. K. Massimov reminded that the President outlined the directions of the administrative reform aimed at improving the state planning, budgeting, raising quality of public services, civil service reforming, effective management of the economy's public sector, monitoring the results of work of state bodies and economy's public sector. According to the Premier, it is necessary to return to these issues with account of the accumulated experience. Thus, Mr. Massimov urged Minister Aitzhanova to present a plan within two weeks.