ASTANA – Following Kazakhstan’s political reset and in the context of its economic landscape, The Astana Times interviewed Aset Irgaliyev, Chairman of the Agency for Strategic Planning and Reforms, on the organization’s priority reforms, strategic vision, and its perspective on the future trajectory of Kazakhstan.
In one of your interviews, you said that the economy goes hand in hand with political transformations. The parliamentary elections were held earlier this year, what is the next step?
Yes, indeed, we acknowledge the intrinsic link between political and economic reforms. They go hand in hand, nurturing and supporting each other in a symbiotic relationship. Political reforms serve as the foundation upon which a nation’s governance structure is built. They lay the groundwork for transparency, accountability, and the protection of individual rights. By strengthening democratic principles, we create an environment where the voices of the people are heard, their rights are safeguarded, and their aspirations are realized.
Implementing political reforms in Kazakhstan will foster a society where the rule of law prevails, where public institutions are trustworthy and efficient. This will not only promote social harmony but will also attract domestic and foreign investment, bolstering our economic growth and stability. Investors seek stability, transparency, and a level playing field, and by implementing political reforms, we demonstrate our commitment to these principles, paving the way for economic prosperity.
Furthermore, economic reforms are essential to diversify our economy and unlock the full potential of our nation. By encouraging entrepreneurship, innovation, and competition, we create a fertile ground for businesses to thrive and generate employment opportunities. These reforms will promote a culture of creativity and productivity, empowering individuals to contribute their skills and talents to the growth of our nation.
Moreover, economic reforms will attract foreign direct investment, leading to the transfer of knowledge, technology, and expertise. Collaborating with international partners will not only stimulate economic growth but also enhance our global standing. By opening up to the world, Kazakhstan can position itself as a regional hub for trade, commerce, and innovation, creating a win-win situation for our nation and its international partners.
The implementation of political and economic reforms in Kazakhstan is not merely an option; it is an imperative. These reforms will shape the destiny of our nation, providing a platform for inclusive growth, social justice, and sustainable development. They will establish Kazakhstan as a beacon of progress, attracting investment, fostering innovation, and elevating the quality of life for every citizen.
Under the leadership of President Kassym-Jomart Tokayev, we united in our pursuit of a brighter future for Kazakhstan. Together, we can build a nation that is admired for its democratic principles, economic strength, and social harmony. The time for reform is now, and the rewards are boundless.
What are the agency’s top priorities in terms of reforms today?
I can mention three priority directions of our work in this area. Firstly, our Agency is a think tank that is developing structural and institutional reforms aimed at increasing the country’s global competitiveness and the well-being of our citizens. Based on rigorous analyses, we regularly present concrete recommendations for reforms to the Administration of the President and the government.
It is also very important to ensure that the implementation of reforms delivers expected results in practice. That’s why our Agency has developed a comprehensive monitoring system of reforms in Kazakhstan based on the methodology of the Organization for Economic Co-operation and Development (OECD). The main results of this work will be summarized in the National Report on Reforms that we will publish this summer.
First and foremost, an inventory of reforms has been conducted to assess their relevance. Currently, the state apparatus is working with 163 documents of the state planning system, each of which contains an average of 40 measures.
Secondly, as any investor takes a decision based on mandatory market research, effective governance starts with evidence for policy makers. In this regard, we initiated a reform for transforming the state statistical system into a comprehensive national data ecosystem, which will benefit both the producers and the users of information.
On the one hand, the Bureau of National Statistics, as the major producer and methodologist of official information, will ensure the quality not only of its own data, but most importantly of other administrative sources. Additionally new alternative sources such as mobile operators’ data will be used for the production of experimental and official statistics. These institutional transformations will be implemented by the end of 2023 within the legislative changes that are already approved by the government and will be shortly sent to Parliament.
On the other hand, it is important not only to provide full and reliable data, but also to ensure that it is used, especially for decision-making. That’s why a series of online courses on data literacy has been designed, which we uploaded on the special LMS platform and presented to the audience in May. We did it jointly with our partners – the World Bank, the Asian Development Bank (ADB), the United Nations Development Programme (UNDP) and agreed with the Academy of Public Service to make these courses mandatory for the newly appointed civil servants. This will ensure the adaptation of a data-driven approach in the public sector.
Also, to demonstrate our strong commitment to meet high international standards, we initiated the global assessment of the national statistical system. A mission of experts from the United Nations Economic Commission for Europe (UNECE), OECD and Eurostat visited Kazakhstan in March and conducted the in-depth review. The results will be available in the second half of 2023, but the experts have confirmed at the preliminary stage the high level of maturity of our system and supported the ambitious plans of our transformation.
Thirdly, we are working very actively on improving the effectiveness and debureaucratization of the state planning system. Currently, our Agency is working on renewing Strategy-2050, which was adopted in 2012. As you know, there have been so many changes that have taken place externally and internally in our country in the last 10 years. The document should be amended to take these changes into consideration when planning the long-term development of our country.
As a first step towards implementing the new Strategy-2050, the Agency will develop the national plan of development for our country until 2029, which will outline all the structural and horizontal reforms in a systemized way that are needed to navigate Kazakhstan towards a higher level of long-term development.
Could you tell us about the current economic reforms being implemented in Kazakhstan? In your recent interview, you mentioned that certain changes are to be implemented in the budgeting process, the tax code, as well as the procurement procedures. Can you tell us more about the changes that are being revised?
Kazakhstan’s economic reforms are driven by a vision to diversify its economy, reduce reliance on extractive industries, and foster innovation and entrepreneurship. The nation recognizes the need to transition to a knowledge-based economy that harnesses the power of technology, human capital, and innovation. These reforms aim to create a favorable business environment, attract investment, and promote sustainable development.
One of the key pillars of Kazakhstan’s economic reforms is the development of a robust and diversified industrial sector. By promoting sectors such as manufacturing, information technology, renewable energy, and high-value-added services, Kazakhstan aims to reduce its dependence on commodities and create a resilient economy. These efforts will not only generate employment opportunities but also enhance the country’s competitiveness in the global market, attract foreign direct investment, and contribute to sustainable economic growth.
Furthermore, Kazakhstan is committed to improving its business environment and fostering entrepreneurship. Streamlining bureaucratic procedures, enhancing transparency, and strengthening the rule of law are critical components of these reforms. By creating a favorable ecosystem for businesses, Kazakhstan aims to stimulate innovation, promote startups, and empower entrepreneurs to seize opportunities in emerging sectors. These reforms encourage private sector growth, job creation, and the development of a vibrant entrepreneurial culture.
Moreover, Kazakhstan’s economic reforms emphasize the importance of regional integration and connectivity. The nation is strategically positioned at the crossroads of Europe and Asia, and it seeks to leverage this advantage to become a key player in regional trade and logistics. By investing in infrastructure, including transportation networks, logistics hubs, and digital connectivity, Kazakhstan aims to enhance its connectivity with neighboring countries and beyond. These reforms foster regional cooperation, open new markets, and create opportunities for trade and investment along the historic Silk Road routes.
Additionally, Kazakhstan recognizes the significance of sustainable development and green initiatives. The nation is actively pursuing renewable energy projects, promoting energy efficiency, and implementing environmentally friendly policies. These reforms align with global efforts to combat climate change and reduce carbon emissions. By embracing sustainable practices, Kazakhstan not only contributes to a greener future but also positions itself as an attractive destination for environmentally conscious investors and businesses.
It is important to note that economic reforms require strong leadership, effective governance, and the engagement of all stakeholders. Kazakhstan’s commitment to transparency, inclusivity, and collaboration is commendable. By fostering public-private partnerships, engaging with civil society, and listening to the needs of its citizens, Kazakhstan ensures that economic reforms are equitable and benefit all segments of society.
Kazakhstan’s economic reforms represent a bold and ambitious vision for the future. By diversifying its economy, fostering innovation, promoting entrepreneurship, and embracing sustainability, Kazakhstan is paving the way for long-term prosperity and resilience. These reforms position Kazakhstan as an attractive destination for investment, a regional economic powerhouse, and a partner for global collaboration.
What is the agency’s strategy for social reforms in Kazakhstan, and how is the agency contributing to achieving these goals?
In a world marked by evolving challenges, social reforms play a crucial role in shaping societies, fostering equality, and ensuring the well-being of individuals. These reforms are not merely policy changes; they are catalysts for positive transformation, paving the way for a more just, inclusive, and progressive society.
The Agency does not execute sector specific strategies. It serves as a central entity in the state planning system while providing the necessary guidance in that system and formulating a long-term vision for the development of the country.
I have already discussed economic reforms. However, a nation’s greatest asset lies in the skills, knowledge, and capabilities of its people. By prioritizing human capital development, Kazakhstan can unlock its true potential, drive sustainable economic growth, and secure a prosperous future for its citizens. As it was mentioned by President Tokayev at the Astana International Forum (AIF), we understand that political reforms and investments in human capital can save us from the middle-income trap and make our economy more resilient.
The social reforms in Kazakhstan are driven by a vision to enhance the well-being and quality of life of its people. They aim to strengthen social protection, promote equal opportunities, and ensure that no one is left behind. These reforms encompass a wide range of areas, including education, healthcare, social security, gender equality, and the protection of vulnerable citizens.
Education lies at the heart of Kazakhstan’s social reforms. Recognizing that quality education is the cornerstone of personal and societal development, Kazakhstan has invested in improving educational infrastructure, curriculum development, and teacher training. These reforms aim to provide equal access to education, enhance the quality of learning, and equip students with the skills and knowledge needed to succeed in a rapidly changing world.
Healthcare is another critical area of focus for social reforms in Kazakhstan. The nation has made significant strides in improving healthcare infrastructure, expanding access to quality medical services, and implementing preventive healthcare measures. These reforms aim to enhance public health outcomes, reduce health disparities, and ensure that every citizen has access to affordable and comprehensive healthcare. By promoting a holistic approach to well-being, Kazakhstan is nurturing a healthier and more productive population.
Furthermore, Kazakhstan’s social reforms prioritize social protection and the empowerment of vulnerable populations. The nation recognizes the importance of creating a safety net for those facing economic hardships, including low-income families, the elderly, and persons with disabilities. Through targeted social assistance programs, Kazakhstan aims to alleviate poverty, reduce inequality, and foster social cohesion. These reforms also seek to empower women, promote gender equality, and ensure that all individuals have equal opportunities to participate in economic, social, and political life.
How does the agency plan to contribute to Kazakhstan’s aims in attracting foreign investment? What steps can be taken to make the country more attractive to international investors?
We continually analyze trends in the global economy, based on which we make recommendations to improve the investment climate, among other things. For example, we recently conducted a detailed analysis of the country’s investment policy and identified a number of pressing issues of concern to investors, based on which certain measures have been developed to improve the investment climate.
Recognizing the immense potential that foreign investments hold for the country’s development, it is crucial for Kazakhstan to implement a range of strategies and reforms to create an even more favorable investment climate.
First and foremost, Kazakhstan should continue to prioritize economic diversification. While the country has made progress in reducing its reliance on the extractive industries, there is still room for further diversification across sectors. By focusing on emerging industries such as renewable energy, technology, agriculture, and manufacturing, Kazakhstan can attract a wider range of investors and leverage its competitive advantages in these areas. This diversification will not only create new opportunities but also help mitigate the risks associated with commodity price volatility.
To attract foreign investments, Kazakhstan should enhance its regulatory framework and reduce bureaucratic hurdles. Streamlining administrative procedures, improving transparency, and simplifying licensing processes are key areas that require attention. Creating a more efficient and investor-friendly business environment will instill confidence in foreign investors, allowing them to navigate the regulatory landscape with ease. Adopting international best practices and learning from successful investment promotion experiences of other countries can further enhance Kazakhstan’s attractiveness.
Kazakhstan should also prioritize the development of critical infrastructure. The presence of modern transportation networks, reliable power supply, efficient logistics, and digital connectivity are essential prerequisites for businesses to operate effectively. By investing in infrastructure projects, Kazakhstan not only improves its domestic business environment but also enhances its connectivity with neighboring countries and global markets. These investments will create an enabling environment for businesses and facilitate the movement of goods, services, and ideas.
Another crucial measure is the development of a skilled and educated workforce. Kazakhstan should continue to invest in human capital development, focusing on education and skills training that align with the needs of the emerging industries. We should ensure that our workforce possesses the necessary skills and knowledge to meet the demands of foreign investors. Additionally, fostering a culture of innovation, entrepreneurship, and research and development will further enhance Kazakhstan’s appeal to foreign investors.
Kazakhstan should also pay attention to legal and institutional reforms. Ensuring a transparent and predictable legal framework that protects the rights of investors is essential. This includes strengthening intellectual property rights, improving contract enforcement mechanisms, and establishing effective dispute resolution mechanisms.
Additionally, Kazakhstan should enhance corporate governance standards and promote ethical business practices, which will build trust among investors and demonstrate a commitment to international business norms.
These measures will not only bring in foreign capital but also create jobs, transfer technology and knowledge, and contribute to the overall economic prosperity of the country.
Could you discuss any upcoming reforms or initiatives that the agency is working on that will contribute to the long-term development of Kazakhstan?
I have outlined the general framework of the reforms, but I would like to emphasize that their implementation is not possible without ensuring genuine rule of law and having a professional and efficient state apparatus.
We have developed recommendations and proposals regarding the forthcoming reforms in these areas.