Economy Minister Bakhyt Sultanov: Our budget is most socially oriented
As per the President's Address to the Nation Through Crisis to Renovation and Development, the Government must fulfill all the commitments of the state on increasing social benefits and wages of public sector employees. Will the current economic situation allow you fulfilling the President's task?
You know, today amid the financial crisis many foreign countries reduce their social commitments or fully refuse from them. But our 2010-2012 draft Budget is socially oriented document. The share of the expenses envisaged for social sphere makes over 40% in the bill. For comparison, in 2007 this index comprised 31.5%, in 2008 it was 26.4%.
Taking into account labor compensation fund and other expense items of the budget the social expenditures will hit 50%. Thus, more than half of the budget expenditures will be directed to social sphere and labor payment of the public sector employees.
As is known, beginning from July 1, 2010 and 2011 wages of the public sector employees and state scholarships will be raised significantly. Besides, the draft budget provides for no less important social activities like 25-30% increase of pension payments; 9% increase of public welfare benefits and special public welfare payments as all as raising special social payments to certain categories of the veterans in accordance with the bill "On veterans"; increasing monthly allowances for childcare and the size of lump-sum benefits for giving birth to the fourth and more child from 30 up to 50 minimum calculation indexes since July 1, 2011 and 2011.
In connection with celebration of the 65th anniversary of Great Victory the 2010-2012 draft Budget envisages funds for paying travel privileges of the veterans and invalids of the Great Patriotic War and providing them one-time financial aid. In 2010 state allowances for the Heroes of the Soviet Union, Cavaliers of the Order of three degrees will rise up to 130 minimum calculation indexes, for the Heroes of Socialist Labor- up to 70 minimum calculation indexes. There will be introduced special public allowances for the persons awarded the title of "Kazakhstannyn Garysshker-Ushkyshy" to the amount of 130 minimum calculation indexes.
When summing up the results of Kazakhstan's socio-economic development in H1 2009 it was noted that our country must raise its GDP. What are the Government's forecasts today, upon expiry of nine months?
Despite 2.4% reduction of the real GDP in the first half we expect its growth at 0.1% due to efficiency of implementing the anti-crisis measures in H2 and forecasted schedule of oil production.
Day by day we observe growing investment activity. The volume of investments in main capital rose by 7% in Sep. Over nine months the investments grew by 2.2%. Volumes of transportation rose too.
In his annual address to the nation the President informed of allocation of over KZT 2 trln 700 bln for carrying out anti-crisis activities. Do you find them good enough for solution of problems on countering the impact of the global crisis on Kazakhstan economy?
Governments' large-scale support provided to national economies has become the major factor mitigating the consequences of the financial-economic crisis which has covered in fact all sectors of economy.
By the estimation of international experts Kazakhstan's experience of anti-cyclic regulation of economic processes turned to be the most efficient among the CIS counties. We will continue our work in this direction in the following years. Thus, the draft budget provides for allocation of KZT 100 bln for Road Map Program's implementation in 2010.
The country's economy will be also supported by the Stress Assets Fund. The Fund will spend its means for supporting the businessmen working in processing industry, and housing investors. In particular, KZT 20 bln of the Fund and KZT 8.5 bln from the side of the banks will be directed to refinancing standard credits in processing industry. KZT 2 bln will be spent for financing leasing deals in processing sphere too.
The Stress Assets Fund has placed the sum of KZT 20 bln in the Development Bank of Kazakhstan which in turn will finance long-term projects in processing industry to the amount of KZT 50 bln. KZT 30 bln more will be spent by the Fund for completion of construction of problematic projects in Almaty and Astana cities which will let solve problems of more than 2.5 thousand housing investors.
Simultaneously with maintaining major banks of the country the Government set to adoption of measures on prevention of surplus of foreign loans. Some of them have already been announced in the course of the Cabinet's several sessions. Could you, please, point out the most important ones of them?
The global financial-economic crisis demonstrated shortages both in state administration and activities of the financial institutes. The problems of the financial institutes were manifested in imperfection and non-conformity of the risk management systems to the level of the adopted risks.
Within the measures on increasing the banks liquidity and lowering the risk of refinancing the Government insists on reducing the bank's foreign loans which will be limited through stepping up demands for the their capitalization.
Additionally, in accordance with the recommendations of the ministers of finance and heads of central banks of the G20 countries on financial systems strengthening developed following Sep 5, 2009 meeting in London, the Financial Supervision Agency of Kazakhstan plans to carry through several activities on further improvement of regulation and supervision over the financial market. Together with introduction of tough requirements on foreign loans there will be taken measures on diversification of the base of funding the banks in order to raise the share of deposits, especially of the individuals' ones and reduce the second-tier banks' dependence on foreign financing. We will also take measures on maintaining the ratio of the credits to the deposits by the banks.
The Government of Kazakhstan succeeded in prevention of unemployment this year due to implementation of the Road Map program and entering into agreements with the employers. But, the wages of the workers participating in the program are not high. Does the Government plan to raise their salaries next year?
Budgetary means allocated for putting into practice the Road Map Program are utilized on schedule.
As of Oct 9, 2009 KZT 139.6 bln have been utilized while implementing investment projects under the Road Map, local executive bodies inform. According to the Ministry of Labor and Social Protection, the plans on creation of jobs were based on the forecast of dismissing 136 thousand people. However this forecast was not approved. Therefore we had to employ all these people.
In 2010 the Road Map provides for creation of 130 thousand jobs by preliminary estimation. The jobs will be distributed proportionally to the population and proportionally to the allotted funds.
Thank you for the interview.