New economic policy indicated for Kazakhstan within the strategy «Kazakhstan 2050»
Table of contents: The Kazakh-American Free University Academic Journal №4 - 2012
Author: Kurmangaliyeva Aizhana, Kazakh-American Free University, Kazakhstan
In December 2012 the President of the Republic of Kazakhstan addressed new political course of the state to the people of Kazakhstan.
The new political course "Kazakhstan-2050" reflects a new
level of long-term forecasting of the economy and politics. The third phase of
the industrial revolution based on new factors of scientific and technological
progress rapidly and widely covers all countries, objectively determines the
integration of their economies and social life, modifies cultural identity of
peoples and nations. Strategy "Kazakhstan-2050" for the first time
brings global trends in scientific, technological and socio-economic progress at
the country level: or the first time, not only in the CIS, but also in the
leading developed countries of the world who are experiencing serious
difficulties of the global financial crisis, and they have no time to setting
such a long-term strategic objectives of global development. Well-known foreign
experts from Europe, America and Asia have already confirmed it. Such a
long-term strategy defines the place and role of Kazakhstan in the future of
the Eurasian Economic Union, and to a considerable extent appears to be
guarantee of its political independence.
There are various examples of small and medium-sized states with a
vast territory and small demographic potential, which reached the level of
advanced, successful cooperation in today's globalized world and confidently
defend its sovereignty: for example, Sweden, Norway, Finland, Taiwan, etc. The
new strategy of Kazakhstan is the guarantee of the successful future of our
country. The first half of the XXI century must become a passionate stage of
economic development of Kazakhstan, its state and spiritual progress.
Fundamental objectives of a new stage of development associated with the third
industrial revolution based on information and nanotechnologies, based on sound
economic potential created by the implementation of the Strategy for the years
2030 and within the framework of the Industrial and Innovation Program of the Republic of Kazakhstan.
One of the priority tasks set by the President of Kazakhstan has to
be a new formulation of the strategic long-term planning as an attribute of a
strong state, a developed economy and " society welfare ". In the
coming post-crisis the incremental dynamics of social and economic processes
will change and accelerate not only at the level of the advanced economies, but
also of reaching and catching up.
Where is Kazakhstan going? According to the goals determined in the
New political course, Kazakhstan must enter the top 30 club of most developed
states in the world by 2050. The competition among developing countries for a
place in its list will be intense. The nation must be ready to face changes in
the global economic climate, realizing clearly that the desired spot is
guaranteed only to those with the strongest economies.
The state must work with dedication and inspiration, not losing a
sight of the primary objectives:
• Further developing and strengthening statehood;
• Transitioning to new principles of economic policy;
• Comprehensive support for entrepreneurship will be a leading force
for the national economy;
• Forming the new social model;
• Creating modern and efficient education and healthcare systems;
• Increasing accountability, efficiency and functionality of the
• Setting adequate international and military policy that is
responsive to new challenges.
In accordance with these tasks the Government will need to
immediately develop the National action plan.
This important document must include all specific orders and provide
for personal responsibility of the heads of executive, legislative and judicial
branches of power. The Presidential Administration must take the preparation
and further implementation of the strategy under special control.
The major directions identified by the Leader of the Nation are
firstly concerned with determining a new economic course.
The economic policy of the new course is all around economic
pragmatism based on the principles of profitability, return on investment and
The essence of economic policy of the New course – is universal
economic pragmatism. What does this mean?
Firstly, it means adopting all economic and managerial decisions
based purely on economic feasibility and long term interests.
Secondly, it involves defining new markets where Kazakhstan can participate as an equal business partner and create new sources of economic growth.
Thirdly, it infers creating a favorable investment climate to help
build economic capacity, profitability and return on investments.
Fourthly, it implies creating an effective private sector economy
and developing public private partnerships. Kazakhstan must do this by
stimulating exports with state support.
Another key condition of success for our 2050 policy will be the
right people to back it up. To ensure these people are in place the government
of Kazakhstan must:
• Enhance the managerial resources and potential that we possess;
• Introduce modern management tools and principles of corporate
governance in the public sector;
• Exploit the benefits of international divisions of labor. In
particular, attract external cadre resource for implementation of some of the
tasks of the New course via the outsourcing programs. Kazakhstan should also attract the best foreign specialists in the open market and invite them to
work in our country.
• The use of managers with extensive international experience and
knowledge will have a dual effect: the state will modernize management of our
production and teach our own domestic human resources. This is a new practice
for the state.
Another important step is concerned with modernization of the
In order to implement an efficient budgetary policy, Kazakhstan should:
• Adopt new principles of budgeting policy. The government must
spend only within its means and reduce the deficit as much as possible. It is
necessary to build up reserves for a rainy day, ensuring Kazakhstan’s safety in the long run;
• change its attitude towards budgeting processes - it must become
as careful and thoughtful, as to private investments. In other words, not a
single tenge from the budget should be wasted.
• should focus the budget of the state on long-term, productive
national projects that include the diversification of the economy and
development of infrastructure.
Projects for investments must be selected in a strict manner, based
on feasibility and rate of return. Kazakhstan must keep in mind that even the
most modern projects become a burden to our budget if they require expenditures
for maintenance, but do not bring revenues and do not solve the problems of our
Tax policy of the state is to:
• introduce a favorable tax regime for those employed in areas of
production and new technologies. Kazakhstan must conduct a revision of all
existing tax preferences and maximize their efficiency;
• continue the policy on liberalization of the tax administration
and on systemizing customs administration. It is necessary to simplify and
minimize tax reporting;
• stimulate market participants to compete, instead of searching for
new ways of tax avoidance;
• introduce pragmatic reduction of tax supervision that will
minimize the dialogue between the economic entities and tax authorities. In the
next five years everyone needs to move to electronic online reporting;
• introduce the practice of tax credits starting from 2020. In doing this our main goal will be to stimulate investment activity among entrepreneurs;
• be socially oriented. Starting from 2015 it will be necessary to
develop a set of stimulating measures, including the practice of tax exemptions
for companies and citizens who invest their own funds in education and medical
insurance for themselves, their families and their employees.
Future tax policy must stimulate internal growth, domestic exports
and stimulate individual’s savings and investments.
Monetary policy of Kazakhstan will infer the following steps:
• Considering the unfavorable global economic environment the
government must ensure the safety of the earnings of each of our citizens and
maintain a reasonable inflation level with respect to economic growth. This is
not simply a macroeconomic issue, this is an issue of social security of the
country. This will be the major task for the National Bank and the Government
starting from 2013.
• Kazakhstan’s banks, in turn, must fulfill their purpose and meet
the demand of the private sector for loans. At the same time we must not weaken
our control over financial system. It is necessary to help clear banks from
problematic loans and start active work on solving funding issues. For that the
National Bank and the Government, under coordination from the Presidential
Administration, need to develop a conceptually different and new system of
monetary policy, aimed at providing economy with necessary monetary resources.
Policy of managing public and external debt
• Kazakhstan must constantly monitor the level of public debt and
keep it under control. Public debt must remain at a moderate level. This is a
crucial task, because only that way we will be able to ensure the stability of
our budget and national security in conditions of global instability.
• the state must strictly control the level of quasi-public sector
Touching the issues of the infrastructure development, Kazakhstan should:
• adopt a whole new approach towards infrastructure development.
Infrastructure must expand the possibilities of economic growth in two key
ways. First of all, the state should integrate the national economy into the
global environment, and secondly move towards regions within the country;
• understand how important it is to focus attention on exit routes
from the country and create transport and logistics facilities outside Kazakhstan. The nation must think outside the box and create joint ventures in the region
and throughout the world - Europe, Asia, America - building ports in countries
with direct access to the sea and developing transport and logistics hubs at
nodal transit points. In that regard we need to develop a special program
“Global infrastructural integration”;
• develop its own transit potential. Today the government is
implementing a number of large country-wide infrastructure projects that should
lead to doubling the capacity of transit across Kazakhstan by 2020;
• be oriented towards one key goal – promoting exports to world
markets where there will be long term demand for our goods and services;
• Infrastructure building must also meet the profitability criteria;
• Infrastructure should be built only in places where this leads to
the development of new businesses and jobs;
• Within the country we must create “infrastructure centers”, to ensure
coverage of remote regions and places with low population density with vitally
important and economically necessary infrastructure facilities. Ahead of that
we need to ensure transport infrastructure.
When discussing the issue of modernization of the system of managing
the state assets, Kazakhstan is not a large economy on a global scale. The
state needs to manage it very effectively. The country must work as a single
corporation, and the state must serve as its core.
The strength of corporate thinking lies in the fact that all
processes are considered as a whole. Public sector managers at all levels must
learn and adopt the same business thinking.
The quicker we build up the production potential of the country, the
faster Kazakhstan will become a key player in the global market. The driver of
this economic policy would be the National Fund. Resources of the National Fund
should be directed at long term strategic projects. In 2013 the accrual of
money in the National Fund must be continued, but the country needs to use
those funds in a very rational and thoughtful manner. The state, represented by
national companies must stimulate the development of the economy of the future
and consider the sectors that will emerge as a result of the Third industrial revolution.
Domestic industry must consume the newest composite materials that we must
produce in our country. The state must stimulate development of transit
potential in sphere of information technologies. The country must ensure that
by 2030 at least 2-3% of global information flows go through Kazakhstan. This figure must double by 2050. It is necessary also to stimulate private companies to
invest funds in research and innovation. The country can reap real benefits
only where there is demand for our new technologies. In the worst case scenario
innovation becomes just a waste of money. The policy of selective support of
specific companies and industries needs to come to an end. The government must
support only those industries that execute socially important, strategic
functions and can demonstrate their effectiveness.
Introducing the new system of managing natural resources means that
the state must exploit resources as important strategic advantage of Kazakhstan to provide for economic growth and large external political and economic
agreements. It is necessary to accelerate the access for our commodities on
international markets, which in the case of a new financial collapse would be
destabilized. Kazakhstan's major importers might significantly reduce the
purchases of commodities so that the prices could fall sharply. Kazakhstan's strategy will allow to stay ahead of the curve and accumulate resources before
potential market destabilization begins. These resources will then help the
country overcome the hard period. Technological revolution changes the
structure of commodity consumption. For example, the introduction of composite
technologies and new types of concrete - causes depreciation of iron ore and
coal reserves. This is another factor for us to accelerate the pace of
extraction and delivery to world commodity markets exploiting the current
global demand. Maintaining the status of a big player on hydrocarbon commodity
market, we must develop the production of alternative energy sources, actively
seeking to introduce technologies using solar and wind power. By 2050
alternative and renewable energy sources must account for at least a half of
country’s total energy consumption.
If the nation wishes to have revenues from commodities in 35 years,
then it needs to start preparing now. Kazakhstan needs to develop a special
strategy – defining priorities and partners, in order to plan out the work for
years ahead, as this is done by all large corporations and conglomerates.
Main directions of strategy development are the following:
• To ensure that regions are interested in attracting investments,
it is necessary to ban the moratorium on subsurface use permits.
• To move from simple delivery of commodities to forming
partnerships in area of energy resource processing and exchange of new
technologies. By 2025 we must fully satisfy our internal market with fuels and
lubricants in accordance with new ecological standards.
• To attract investors to the country only on the conditions of
transfer of modern technology for extraction and processing. Kazakhstan must allow investors to extract and use our raw materials only in exchange for creating
new production facilities on the territory of our country.
• Kazakhstan must become the regional magnet for investment. The country
must become the most attractive place in Eurasia for Investments and technology
transfer. This is crucially important. To do this Kazakhstan must demonstrate
to investors its advantages.
Kazakhstan was the first CIS country actually
initiated a policy of "green development path" at the level of state
policy. "Energy of the Future" - a worldwide problem, and pushes the
state with immense natural energy resources in the name of global security and
stability. Movement of the "green revolution" acquires a new content
not only as a product of the modern scientific and technological progress but
also as an objective process of energy saving. It is at the same time it is an
objective for sustainable development of the world community and the primary
condition being of the population, not only of the industrialized developed
states, but also of those that are still developing their economies that have
alternative sources of non-conventional and renewable sources of energy.
The upcoming EXPO 2017 in Astana will provide a powerful impetus for
transition of the country towards the “green” path of development. The world’s
best achievements in science and technology will be presented in the capital of
our country. Our citizens would be able to witness the “energy of the future”
with their own eyes.
Theoretical, methodological, social and political development and
justification of its stages, ways and means to strengthen the economic
potential of Kazakhstan and its sovereignty at the new phase of the industrial
revolution will require the joint efforts of scientists, political leaders, administrative
and planning bodies.
1. “Governmental Program on Accelerated
Industrial-innovative development of the Republic of Kazakhstan for the years
2010-2014” from May 15, 2009.
2. Address by the President of the Republic of Kazakhstan, Leader Of the Nation, N.A. Nazarbayev: «Strategy Kazakhstan 2050 - New Political course of the established State» from 18.12.2012.
3. The Report of the Government of the Republic of Kazakhstan on the results of social and economic development of the country
over the years 2010-2012.
4. The Message of the President of the Republic of Kazakhstan "Social and economic modernization - the main vector of development
of Kazakhstan" from 27.01.2012
Table of contents: The Kazakh-American Free University Academic Journal №4 - 2012