Wednesday, 02 October 2013

Nazarbayev Unveils Kazakhstan's Development Agenda

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By Georgiy Voloshin (the 02/10/2013 issue of the CACI Analyst)

On September 10 and 11, Kazakhstan’s capital hosted the annual meeting of the Eurasian Forum of Emerging Markets. This non-profit organization was founded in 2005 and aims to facilitate a direct dialogue between governments and the private sector in order to establish socioeconomic conditions favorable to growth and shared prosperity. While the plenary session of the Forum was attended by such prominent world leaders as the former Prime Ministers of Italy and Israel, Romano Prodi and Ehud Olmert, as well as the former President of Poland, Alexander Kwasniewski, it was Kazakhstan’s President Nursultan Nazarbayev who chaired the high-level meeting.

In his welcome address, Nazarbayev reiterated the key priorities of his country’s upcoming development stage, as they had earlier been outlined in the Kazakhstan-2050 Strategy of last December. Building on Kazakhstan’s latest success in becoming one of the world’s 50 most developed nations, Nazarbayev suggested that more efforts be invested into consolidating this international standing. Thus, the new strategy foresees that Kazakhstan should gain a place among the world’s top 30 countries by 2050. “This is not some kind of utopia for our society. It is a clear historical milestone that we need to attain and leave behind,” summarized the Kazakhstani leader.

As regards the concrete ways to achieve this ambitious objective, President Nazarbayev identified the two core areas on which his country plans to focus most of its future endeavors. First, Kazakhstan is expected to make a breakthrough in developing its human potential. While the enhancement of highly qualified human resources is currently viewed as the main vector of national development, education has already become a privileged area of state policies. As the latest economic crisis has shown, the inability of jobless workers to rapidly obtain qualifications in new fields represents a serious constraint for Kazakhstan’s recently proclaimed innovative development agenda. For this reason, the Ministry of Education is increasingly focused on the implementation of lifelong learning programs taking full account of ongoing transformations in the real economy and of the actual needs of the country’s industry.

The second area of the Kazakhstani government’s expanding involvement concerns the regulation of economic activities and the relationship between the business community and the state. Earlier in September, Nazarbayev already touched upon this topic in his address to the Parliament by promising increased legal protection for business people against administrative abuse and corruption. This promise was further reiterated at the Eurasian Forum of Emerging Markets, in a context where the success of socioeconomic reforms is now closely associated with the state of affairs in small and medium companies, which are set to become the major drivers of national growth in the post-crisis era. However, it remains uncertain whether the central government would be capable of holding regional authorities accountable to the business community, given its own limited ability to effectively control their work.

Nazarbayev also said that the share of the state in large infrastructure projects would progressively decrease in favor of fully private participation, ensuring better efficiency and optimized spending. Currently, Kazakhstan’s sovereign wealth fund, SamrukKazyna, is in the process of withdrawing from the BTA, Alliance and Temir banks, nationalized in the wake of the 2008 credit crunch to avoid bankruptcy. The government is also considering the adoption of new privatization packages aiming to alleviate the burden of poorly performing companies on the national budget and to redirect resources towards priority areas where private financing has been mostly inadequate due to the lack of incentives.

Nazarbayev also mentioned agricultural development as a priority field for the next few years. Thus, Kazakhstan is slated to boost the establishment of innovative agricultural companies oriented towards exporting their produce to the world market. Besides Kazakhstan’s leading position in the production and export of grain products, it also strives to become a key player on the regional meat market, especially with regard to the possibility of increased exports to neighboring Russia and China.

Other plans include the introduction of energy saving schemes into the industrial practice, the creation of a state agency in charge of clean energy issues as well as the development of alternative sources of energy. At the same time, Kazakhstan is committed to further tapping its vast oil and gas reserves, while the attraction of the most progressive technologies in this sector is hence a precondition for foreign companies’ participation in joint hydrocarbon projects. According to Nazarbayev, even the worst-case scenario can be considered as acceptable for Kazakhstan’s development goals. As the president said, the production of not more than 2 million barrels of oil per year could be sufficient to sustain the Kazakhstani government’s future undertakings.

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