Economy news in brief

The 10 member states of the Central Asia Regional Economic Cooperation (CAREC) programme will build new key road and rail routes linking Central Asia to China and South Asia between now and 2020 to tap huge, unexplored trade potential according to an Oct. 28 report. “To increase trade outside of the region, CAREC will need to align its corridors with new routes and develop long distance multimodal transport services that combine road and rail,” said Asian Development Bank (ADB) President Takehiko Nakao in his keynote address at the 12th meeting of CAREC ministers. The plan endorsed by the ministers involves road, rail, logistical, and border facility projects in priority corridors and requires an investment of $38.8 billion in the coming seven years. In a statement issued after the meeting, the ministers echoed Nakao by calling for a more integrated approach to transport and trade. This means improving logistics services to support manufacturing networks, more modern and integrated customs and border controls and linking roads and railways to key ports. CAREC’s members are Afghanistan, Azerbaijan, China, Kazakhstan, the Kyrgyz Republic, Mongolia, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan. The ADB-supported programme promotes regional integration in trade, transport, and energy to boost economic growth in the region.

The World Islamic Economic Forum took place in London on Oct. 29-31. Officials and businesspeople from more than 100 states took part in the event. Deputy Prime Minister and Minister of Industry and New Technologies Asset Issekeshev represented Kazakhstan at the forum. He delivered a report on the investment climate and development of Islamic financing in Kazakhstan. In his report, Issekeshev said that along with the development of the traditional financial system, work on the establishment of regional Islamic financial centres aimed in Central Asian and CIS states is being conducted in Kazakhstan on orders from President Nazarbayev. In particular, a road map forIslamic financing development for 2020 was created. A national partnership strategy for 2013-2015 was signed with the Islamic Development Bank. The country is improving its legal framework to better accommodate Islamic financial institutions. Besides, Kazakhstan plans to enter the Islamic Financial Services Board and is considering opportunities to enter the International Islamic Financial Markets Organisation. Issekeshev also held several business meetings on the sidelines of the forum including with Prime Minister of Malaysia NajibBin Tun Haji Abdul Razak and President of the Islamic Development Bank Mohamed Ali. On the first day of the visit, Issekeshev took part in a roundtable organised by KAZNEX Invest JSC where the implementation of Kazakh-British investment projects was reviewed. The sides also discussed execution of agreements reached during the recent visit of British Prime Minister David Cameron to Kazakhstan.

Member of the Senate Committee for Finance and the Budget Sergey Plotnikov elaborated upon the concept of budget expenditures for the priority direction of social and economic development of the country at a CCS media briefing on Nov. 7. “An audit of current and investment expenditures is needed to increase efficiency. As a result of the audit, the financing of those activities that do not promote economic growth of the country will be reduced. In 2015, limits on current expenditures and the budget as well as the limits on new initiatives will be introduced. The approach to the state bodies’ financial reporting on execution of the budget will be changed. The effectiveness of budget funds spent should be defined by the results displayed in the strategic plans of state bodies. Current public expenditures will be optimised and joint liability of the private sector will be expanded. It is crucial to improve the efficiency of the tax system. The goal is to increase investments in the private sector through maximizing tax efficiency in key sectors of the economy. Ineffective tax exemptions will be cancelled,” Plotnikov said.

At a Nov. 1 press conference at the CCS, Akim (Mayor) of Almaty Akhmetzhan Yessimov discussed promising economic development initiatives. “There are three of them [promising projects]. The first being the President’s own initiative, the special economic zone “Alatau Innovative Technologies Park”, which was established in Almaty several years ago. Two years ago, amendments were made to the legislation. There is now a special tax and customs regime for this zone. Thanks to this, the number of participants increased fourfold over the last two years. Accordingly, budget revenues from the zone have increased twofold,” Yessimov noted. “Second, we built the industrial zone on a 490 hectare site in the Alatau district. This is a site where infrastructure is now being built. Construction contracts will be allocated via tender. Presently, about 180 companies have expressed their desire to work there. This zone will allow the creation of about 20,000 jobs,” the Akim added. “The third thing is tourism. This is what the President said in his address to the nation, we need greater economic development in our mountain regions. We have great opportunities in this sphere,” Yessimov noted, adding that tourism provides anywhere from 10 to 15% of the GDP in developed countries and in Kazakhstan it makes up less than 1%.

“64% of city budget revenue comes from small and medium businesses,” the Akim (Mayor) of Almaty, Akhmetzhan Yessimov said at a CCS press conference on Nov. 1. “We pay great attention to the development of small and medium-sized businesses, because 64% of the city’s budget comes from this sector. We have a business council under the Akim for this purpose. The council includes representatives of all business associations, heads of state and law-enforcement bodies. We discuss and find ways to solve problems,” Yessimov said. “Over the years, we have greatly improved the investment climate in our city. We removed a lot of barriers and we significantly simplified the process for permit issuance,” he added. The number of active entities of small and medium-sized businesses in Almaty as of September 1, 2013 was 103,455, the number of employed people in this sphere is 374,750. Small and medium-sized enterprises manufactured products worth 148.8 billion tenge ($970 million ) over the first eight months of the year.

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