Kazakh Government, National Bank to Adopt Plan to Recover Economy

NUR-SULTAN –  The Kazakh government and the National Bank will adopt a plan to help restart economic growth following the fallout of COVID-19, said Kazakh Minister of National Economy Ruslan Dalenov during a July 14 government meeting. 

Kazakh capital Nur-Sultan. Photo credit: Kazakh Foreign Ministry

“First of all, following the instruction of the head of the state to develop a package of additional measures to support the economy in case the situation worsens, the joint action plan of the government and the National Bank is now being prepared. It has been suggested to consider a draft plan at the economic policy council meeting and to adopt it if the participants are in favor,” said Dalenov. 

He also noted the measures that would be taken to ensure the maintenance of investment conditions for strategic investors and to attract direct investments. The amendments to the legislation will be submitted to the Majilis, the lower house of the Kazakh Parliament, said Dalenov, though he did not specify what areas these amendments would affect. 

To improve the efficiency of the budget revenues, the ministry will consider increasing dividends paid by state companies to the budget and analyze tax preference schemes. 

During the recent government meeting, Tokayev stressed that transfers from the National Fund that accumulates the nation’s windfall oil revenues and whose assets are currently estimated at US$58.5 billion, will only be used to target social issues and infrastructure development starting next year. This year, the amount of guaranteed transfers from the National Fund amounts to 4.7 trillion tenge (US$11.4 million).

Public-private partnerships will also be developed as part of the nation’s plan to restart economic growth. The legislation will be amended to include measures that will “enhance social and economic impact.”

As of July, there are 1,356 projects, 800 of them are already signed and ready, while the total volume of the investments amounts to 1.19 trillion tenge (US$2.9 billion). The projects primarily focus on transport, infrastructure, energy, housing and communal services, education and healthcare sectors.

The plan will also include revising the country’s Economy of Simple Things program designed to develop domestic production of daily consumed goods and services. The program has received one trillion tenge (US$2.4 billion) of funding but was recently criticized by Tokayev for not having key targets and obligations that businesses need to meet in the plan itself. 

“This program was meant to become the most important tool for import substitution and employment. However, over a year and a half since its launch, the program was revised six times, and only a fifth of the total volume was used, just over 200 billion tenge (US$483.1 million). The number of manufacturing enterprises and the share of imports of consumer goods remains the same and it turns out we allocated money without ensuring targets and counter obligations (from businesses) are in place,” said Tokayev during the expanded government meeting, reported Akorda press service. 

Dalenov also said the government will launch a “government for business” service to support businesses and simplify the procedures they need to receive state services and consultations. He also promised the new plan will incorporate digital technologies. 

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