Independence of Regions Key to Kazakh Economic Stability, Future

In July and August 2016, Prime Minister of Kazakhstan Karim Massimov has been checking on facilities throughout the country related to the Nurly Zhol infrastructure development programme.

Photo credit: iwep.kz

Photo credit: iwep.kz

Effective management at the regional level is the key condition for successful implementation of this programme. Moreover, given both declining macroeconomic indicators and future global economic projects in Kazakhstan, implementation of all provisions of the Nurly Zhol programme plays a decisive role in the economic development of the nation. It is important to ensure that budget resources are used with maximum efficiency to increase business activity, upgrade infrastructure and enterprises and to address social regional problems.

A large number of programmes are being implemented in the regions, for instance, under the State Programme of Accelerated Industrial and Innovative Development of the Republic of Kazakhstan for 2015-2019 and the Regional Development Programme 2020. Together, they were designed to improve the situation in the regions. The fact that the state pays special attention to the Nurly Zhol programme is attributable to the strategic importance of infrastructure development for the economic growth of Kazakhstan. In this area, Nurly Zhol, as noted by Kazakh and Chinese analysts, corresponds to China’s Silk Road Economic Belt project, the operational stage of which is considered by many participating countries as a substantial component of national economic development.

Kazakhstan is no exception. Moreover, in the conditions of volatile world commodity prices, to which the economy of Kazakhstan is sensitive, development of transport and logistics infrastructure does not only help to create new jobs for citizens of the country, but also facilitates enhancement of interconnectivity between its regions. In the future, the latter must raise additional funds for the nation’s and region’s economies both through internal and external sources. This is very important, considering the fact that the majority of Kazakhstan’s regions are recipients of the national budget.

An important aspect is the problem of effective management and strategic planning at the local level. Indeed, the quality of regional management always raises questions, but local administrations know the problems and needs of the regions better. That is why they design developmental programmes for their territories for a five-year period (upon agreement with the authorised agency on public planning). It is a part of the developmental strategy of Kazakhstan, when small, but consistent steps are taken to ensure more independent local authorities.

Therefore, central authorities implement a set of measures aimed at improving the effectiveness of the regional management in general and skills of local administration officials in particular. A telling example is cooperation of the nation’s government with authorised institutions of the European Union within the project Kazakhstan’s Regional Development.

The project is mainly focused on three pilot regions – Mangistau, Kyzylorda, and East Kazakhstan. The project is being implemented in multiple directions, including such objectives as support in drafting strategies, legislation and developmental programmes, work on planning, implementation, monitoring and assessment of regional developmental strategies and assistance in creating methods on how to engage citizens in decision making. It is important that one of the project objectives is to exchange experience between pilot and non-pilot regions. As a result, all regions of Kazakhstan are covered and involved in the implementation of this project.

This cooperation can become a basis for building horizontal ties between local administrations, creating efficiency networks, also known as learning networks or experience sharing groups.

Thus, it is evident that the state takes comprehensive steps to achieve the strategic target of the regional policy – to increase independence of the regions and, in future, the role of local administrations. However, before giving this independence, central authorities must be confident that the regions can effectively distribute budget funds, fulfil social obligations and expand the tax base of the region to incentivise entrepreneurship. To this very end, the government, in “manual control mode”, creates an algorithm to implement the strategic Nurly Zhol programme and simultaneously facilitates understanding of the European managerial experience.

The author is an expert of the Institute of World Economy and Politics under the Foundation of the First President of the Republic of Kazakhstan.

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