Economic news in brief

The Atameken National Chamber of Entrepreneurs (NCE) has proposed introducing three industries to the list of goods exempt from government procurement, reported atameken.kz. The chamber, along with the business community, has created a list of light and furniture industry items and building materials and is preparing corresponding justifications for their request. Last year, Kazakhstan introduced an exemption tool in government procurement procedures for foreign cars, transformers and cables. In March, the government supported the Atameken NCE initiative to introduce exemptions in all roadmaps to develop sectors of the simple things economy. Since 2015, businesses have repeatedly called on government agencies to increase the share of Kazakh products in the public procurement system, according to Atameken Manufacturing Department Director Arman Mambetayev.

In August, Kazakhstan is introducing a ban on exporting cattle hides by road from the country for a period of up to five years, reported the Kazakh Ministry of Industry and Infrastructure Development press service. At present, the ban applies only to exporting hides by road introduced in the first paragraph of the light industry roadmap for 2019-2021. The ban aims to prevent budget losses, regulate export and develop production with high added value and, as a result, increase tax payments and create new jobs, especially as the hides are transported without customs duties.

As part of the lending mechanism for prioritised projects (the economy of simple things), second-tier Kazakh banks approved 14 light industry projects through July for 2.8 billion tenge (US$7.21 million), reported the Ministry of Industry and Infrastructure Development. In conjunction with the Ministry of Agriculture, it is working to restore the procurement network and, as part of existing programmes, solve the financial support issue for raw material procurers and leather enterprises. As of May, 1,025 enterprises were operating in light industry, 96 percent of which are small businesses. Light industry manufactured products are divided among textile production (51 percent), clothing (38 percent) and leather and related goods (11 percent). In the first half of 2019, product volume grew by 16.7 percent. The growth in textile products and clothing is due to an increase in the production of cotton fibre, finished textile products and outerwear.

The Atameken National Chamber of Entrepreneurs has organised a pilot project from July 30-March 31 to mark shoe products in Kazakhstan, according to an order by the Ministry of Industry and Infrastructure Development. The purpose is to understand and analyse the appropriateness of introducing marking and its effect on shadow economy imports and counterfeit goods. The project will be carried out on a voluntary basis by issuing free marking codes. Atameken NCE compiled and provided the ministry with the list of companies participating in the project, which included both importers and manufacturers.

The National Bank of Kazakhstan initiated an independent asset quality review (AQR) Aug. 1 of the 14 largest banks in the country, which have approximately 87 percent of banking sector assets, reported the bank’s press service. According to the bank, the assessment is being completed consistent with the European Central Bank methodology in compliance with common international quality standards. AQR will help to determine the bank’s need for capital, assess the quality of loan portfolios and analyse lending practices. The plan is to complete the assessment by December. According to the results, the National Bank will devise an action plan to adopt corrective measures.