Streamlining Bureaucracy: An Eternal Challenge

Making the long-anticipated move public, President Nursultan Nazarbayev announced the country’s new government structure on Aug. 6, aimed at consolidating the work and efforts of the Kazakh government. While the move was anticipated since the time Karim Massimov again took over as Prime Minister in April, the sheer scope of changes has taken many by surprise.

The purpose of the restructuring, which affected almost all ministries and agencies, is to optimise the productivity of the ministries and agencies in Kazakhstan. During an enlarged meeting of the government, all of the ministries received a critical review of their work and new parameters within which to undertake the tasks given by the head of state.

The President spoke of the challenges civil servants face in completing presidential orders and decrees, sympathising with those who really work and scolding those who merely pretend. “I went through all the stages of leadership: from the bottom, to the enterprise, and to the national level.. In a department of 10 people, two of the 10 work, and eight are sitting around. Is this not true?” As a result, Nazarbayev announced:“I decided on a new structure of government consisting of 12 ministers, about 30 committees instead of the 17 ministries, nine agencies, 54 committees and 272 departments today. All nine agencies are abolished and transferred to the ministries in the form of committees.”

The President highlighted the fact that over the past 10 years, the bureaucracy in Kazakhstan grew by 8,500 people. The 3.5 fold increase in the costs of maintaining the large amount of state employees means that 600 billion tenge ($3.3 billion) is currently spent on 90,000 civil servants. Such expensive upkeep costs are wasteful for the government budget and usurp resources that are needed for much-needed development projects. Also, the time spent in various level government meetings doesn’t allow for work to be carried out in an orderly fashion. Work is frequently being interrupted.

The Ministry of Energy has been recreated in Kazakhstan. It is now headed by Vladimir Shkolnik, previously head of KazAtomProm. Shkolnik has twice before worked as Minister of Energy (1999-2000 and 2000-2006). However, the oil and gas sector in Kazakhstan has undergone considerable changes since Shkolnik held this office. Presumably, he will need to ensure increases from major oilfields, including Tengiz and Karachaganak to compensate for delays in oil production at the strategically important offshore Kashagan oilfield.

The KazAtomProm National Atomic Company is now under the leadership of former Minister of Environment and Water Resources Nurlan Kapparov. Kapparov’s business history and government experience promises to be a very useful mix for the company. Umirzak Shukeyev, Chairman of the Board of the Samruk Kazyna National Welfare Fund, which is the parent company for KazAtomProm, has already praised Kapparov. “I think all of these qualities will help him achieve success,” said Shukeyev. He also noted that in the future, KazAtomProm, and, in general, Samruk Kazyna will work closely in collaboration with the new Ministry of Energy.

The functions of the Ministry of Emergency Situations were transferred to the Ministry of Internal Affairs. Minister Kulmukhamed Kassymov retained the position of minister while ex-Minister of Emergency Situations Vladimir Bozhko attained the position of the Deputy Minister at the newly expanded Ministry of Internal Affairs. The Financial Police is being liquidated.

The new organisation that will be responsible for tackling corruption is the Agency for Civil Service and Countering Corruption headed by Kairat Kozhamzharov who previously worked as Assistant to the President and Secretary of Security Council of Kazakhstan, and before that headed the Financial Police.

Another new body established during the restructuring is the Ministry of Culture and Sports in Kazakhstan. Previous Minister of Culture Arystanbek Mukhamediuly retained his position as minister in the new organisation. It incorporates the responsibilities of the previous Ministry of Culture and the two Agencies: on Issues of Religion, and on Sports and Physical Culture.

The Ministry of Health Protection and Social Development replaced the Ministry of Health and Ministry of Social Protection. Tamara Duissenova has been named the minister of this new Ministry, and Salidat Kairbekova, the former minister of healthcare has been proposed as the deputy minister. Bolat Zhamishev, the former Minister for Regional Development, has been appointed the Chairman of the Development Bank of Kazakhstan.

Kazakhstan now has a Ministry for Investments and Development, perhaps the largest among all, which is headed by Asset Issekeshev.

The new ministry, established on the basis of the Ministry of Industry and New Technologies, also absorbed the abolsihed Ministry of Transportation and Communications, the Agency for Communication and Information, and the Agency on Space.

Issekeshev, known for spearheading the State Programme of Accelerated Industrial and Innovative Development,  is expected to further his work in promoting business growth and development. “Issues of energy efficiency and geology are also assigned to the new ministry,” said President Nazarbayev. Zhenis Kassymbek, appointed Minister of Transport and Communications last March, is now first deputy to Issekeshev. Askar Zhumagaliyev who was appointed Chairman of the Agency for Communication and Information last March, will also act as deputy minister in the newly expanded ministry.

A newly created and almost equally large Ministry of National Economy will be headed by Yerbolat Dossayev. “The Ministry of National Economy will envelop the functions and powers of the Ministry of Economy and Budget Planning, the Ministry of Regional Development, the Agency for Statistics, the Agency for Regulation of Natural Monopolies, the Competition Protection Agency and the Agency for Consumer Protection,” said the President.

As for deputy prime ministers, only two will remain. “The Prime Minister will now only have two deputies. The First Deputy Prime Minister will be Bakytzshan Sagintayev, while Deputy Prime Minister for human development will be Gulshara Abdykalikova,” Nazarbayev said at the meeting of the government. After hearing the report on the Kazakhstan Business Roadmap from Sagintayev, he added, “It remains to monitor the effective use of funds and the implementation of the tasks.”

“There are given tasks and allocated financing. Further work on the government’s economic policy should be based on solving problems with currently existing risks. Therefore, today we must first analyse current economic policies to develop new responses to a changing environment,” Nazarbayev said.

Such restructuring and reshuffles have become part and parcel of the state policy since independence. The President has always been eager to eliminate ministries that were underperforming or even harming overall development. The new structure is set to streamline the work of government and remove impediments to businesses. It is expected that less bureaucracy will also improve the investment climate. In light of the economic slowdown in Russia and the on-going conflict in Ukraine, these changes are meant to ensure the stability of economic management and the maintaining of law and order.

It remains to be seen whether the newly restructured and reshuffled government will be more efficient. Given the past experience of both President Nazarbayev and Prime Minister Massimov in steering the country clear of economic troubles during the 2007-2009 global financial crisis and economic slowdown, however, there are sound reasons to believe the changes will indeed help achieve the desired effect.