LIKE all countries in the world, Kazakhstan has been hit by the Covid 19 Pandemic that turned all 2020 plans on their head and sent every country’s leadership scampering back to the drawing board.
Thus its sixth session of Parliament took place at a difficult time. The fight against the COVID-19 pandemic, which poses a serious threat to the planet, is still going on in the country. Ironically, it has become a rallying point causing the nation to join forces as one in a bid to conquer the scourge and save the lives of Kazakhs.
The fight against the pandemic was made possible because of the noble qualities of the wise people of Kazakhstan. It became clear that it is important to help others, to be compassionate, to resist the sudden coronavirus. This has included doctors, law enforcement officers, servicemen and women, volunteers, entrepreneurs and all the citizens who have taken responsibility and illustrated exceptional perseverance.
In the current difficult situation, the main task before the country is to maintain socio-economic stability while securing jobs and incomes. In this regard, two packages of operational anti-crisis measures have been adopted. More than 4.5 million temporarily unemployed people have received assistance to the tune of KZT 42,500 per person. More than KZT 450 billion has been spent on this initiative.
Furthermore, more than a million people received food and household items and, at the initiative of the Leader of the Nation (Elbasy) - Chairman of the ‘Nur Otan’ (‘Radiant Fatherland’) party, more than half a million families received once-off financial assistance with the support of the ‘Birgemiz’ (We are together) Foundation.
The pandemic has become a challenging period for all countries which are having a hard time and continuing to fight the pandemic.
In Kazakhstan, the government started to work quickly. The key has been to avoid hiding anything from the citizenry, but openly publishing all information about the pandemic. No matter how bitter it is, the leadership is telling the truth. The country will continue to use carefully verified assumptions, forecasts, and prognoses to make decisions. This is in light of the fact that the World Health Organisation (WHO) expects that it will take at least two years to overcome the pandemic.
A comprehensive programme for the fight against COVID-19 ill be developed further in Kazakhstan. KZT 1 Trillion is allocated from the National Fund for the purpose of social and economic obligations.
SMEs are experiencing difficult times and to overcome the negative economic consequences, tax breaks were provided to more than 700 000 entrepreneurs. Their payments are deferred and they are given the opportunity to refinance their loans, on more favourable terms.
As additional aid to SMEs, the government will provide state subsidies for interest rates of up to 6% per annum on all existing loans to SMEs in the affected sectors of the national economy. In the light of the crisis the programme will be extended to the end of 2021.
For these purpose, an additional KZT 200 billion will be provided, bringing the total value of the programme to KZT 800 billion.
In the current conditions, maintaining employment and incomes of the population becomes the absolute priority. Therefore, it is important for this time to reduce the burden on the wage fund for SMEs in the most affected industries. For this category of business, deductions from wages to extra-budgetary funds is suspended for the period until the end of this year.
However, the country has learnt that out of the ashes of tragedy are born opportunities. The worst crisis in 100 years has revealed both our strengths and weaknesses as a nation. To achieve our long term economic growth and development trajectory requires capitalising on the strengths and mitigating risks associated with the weaknesses.
In light of current demands and future opportunities, this article focuses on two key areas from the President’s address:
A New model of Public Administration
Reforms in this area will be carried out systematically to enable speedy responses to crises such as the current one and to improve operating efficiency over time, especially with respect to human capacity.
The new Agency for Strategic Planning and Reforms, with direct report to the President, will spearhead this. The Supreme Presidential Council for Reforms is also being created. The state planning system must ensure the mobilization of all human resources, involve the private sector and society as full partners at all stages, inter-alia, planning, execution, and evaluation stages. The legal framework must also become an enabler and not a constraint.
Economic Development Drivers
The long oil super-cycle appears to be over. Kazakhstan should be prepared for a completely new world market environment. The creation of a truly diversified, technological economy is a necessity. Therefore, the new economic course should be based on seven basic principles:
* Equitable distribution of benefits and responsibilities.
* The leading role of private entrepreneurship.
* Fair competition, opening markets for a new generation of entrepreneurs.
* Increased productivity, increased complexity, and technological effectiveness of our national economy.
* Development of human capital, investment in a new type of education.
* “Greening” the economy, and environmental protection.
* Adoption of well-grounded decisions by the state, and its responsibility for them before society.
Reforms in Government Procurement, improved transport infrastructure, enabling legislation, accessibility to technology, new funding models and redirection of investment will all underpin rural development and stimulate entrepreneurship.
Fiscal and monetary policies must also facilitate investment flows from speculative stock market activities to the real sectors of the economy such as agribusiness.
The goal in the industrial sector is to increase production in manufacturing by at least 1.5 times in five years. This will create the economic resilience to withstand calamities such as COVID- 19 in future.
* This article is based on the State of the Nation address by His Excellency Kassym-Jomart Tokayev, President of the Republic of Kazakhstan on September 1