Wednesday, 04 September 2013

President Nazarbayev Sets New Goals Before Parliament

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By Georgiy Voloshin (the 04/09/2013 issue of the CACI Analyst)

On September 2, Kazakhstan's President Nursultan Nazarbayev officially opened the new session of the country’s Parliament after a traditional summer recess. At the beginning of his address, the head of state commended the work of the current legislature formed as a result of early parliamentary elections in January 2012. Apart from the ruling Nur Otan party, which dominated the lower chamber of Parliament for the five preceding years, two other political parties are since represented there, even if their relative weight remains insignificant. Nazarbayev’s praise also comes as a confirmation of his lasting trust in the deputies, whereas a number of experts previously predicted new snap after the controversy caused by the pension reform law.

As Kazakhstan’s economic performance in the first half of 2013 was marked by decreasing tax revenues, poor export statistics and disappointing GDP growth results, Nazarbayev has outlined a set of socioeconomic measures in response to the worsening domestic situation. In his address to the Parliament, the president urged the deputies to adopt a new law regarding entrepreneurial activities in the country, with a view to supporting small and medium businesses and ensuring their protection against administrative abuse. This proposal echoes earlier measures defended by Nazarbayev, namely the creation of regional entities entrusted with presenting the existing business legislation to potential entrepreneurs.

Another proposal regarding the pursuit of Kazakhstan’s social stability is related to the elaboration of a new law regulating the activities of trade unions. According to Nazarbayev, such legislation could upgrade the culture of labor relations by increasing the awareness of hired workers about their rights and ensuring better labor standards. The Ministry of Regional Development and Samruk-Kazyna’s Center for Social Partnership, both established in September 2012, are already pursuing the goal of facilitating the resolution of labor disputes and guaranteeing the respect of workers’ rights, together with the task of stimulating job creation. However, the role of trade unions has been mostly inconsequential on this front, and the proposed law would seek to increase their involvement in both national and local social issues.

President Nazarbayev’s address to the parliamentarians also included now-frequent references to the green economy signaling the country’s willingness to move away from fossil fuels to innovative technologies. This fall, the Parliament is thus expected to adopt a number of draft laws providing for the widest possible implementation of energy saving schemes and the rapid introduction of alternative sources of energy. The EXPO-2017 exhibition whose organization has become a matter of national pride for the Kazakhstani government is widely expected to provide further proof of Kazakhstan’s growing attention to environmental concerns and the rational use of energy resources.

This, however, does not mean that Kazakhstan would create impediments to the future development of hydrocarbon deposits which continue to represent the major source of revenues, despite the ongoing diversification of the national economy. Speaking before the Parliament, Nazarbayev once again promised to ease the delivery of subsoil use rights to both domestic and foreign investors. Already in late November 2012, he urged the regional governors to lift bans on the exploitation of new deposits in exchange for modern technologies and knowhow on the part of selected subsoil users. As Kazakhstan struggles to maintain the same high level of exports against the backdrop of pessimistic trends on the world’s energy markets, the arrival of more investors could boost industrial production and lead to the creation of new jobs in the provinces.

Overall, the Kazakhstani President’s outline of upcoming legislative proposals to be debated by the Parliament has largely concentrated on the need to ensure stable long-term economic growth and the preservation of social peace, especially in light of the December 2011 popular uprising in western Kazakhstan’s town of Zhanaozen. These very goals are defined as priorities by the Kazakhstan-2050 strategic program that Nazarbayev unveiled last December in lieu of a previous vast reform agenda of 1997. Unlike in the preceding years when the country’s prosperity was still mostly founded on the rapid development of its energy sector, today’s global economic outlook favors a different orientation of state policies. Thus, the current emphasis on innovative cooperation with Kazakhstan’s foreign trade and economic partners implies a more active introduction of state-of-the-art technologies on Kazakhstani soil.

In this regard, Nazarbayev has insisted on the need to encourage foreign companies to support Kazakhstan’s diversification agenda by sharing their best practices and investing in local businesses. However, it remains to be seen whether the country’s leadership would be able to implement its ambitious plans in practice, given the considerable share of the extracting industry in Kazakhstan’s economic well-being. The expected launch of oil and gas production at the Kashagan deposit on the Caspian Sea only complicates the otherwise arduous task of building an innovation-based economy. 

Read 3581 times Last modified on Wednesday, 25 September 2013

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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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