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President of the Republic of Kazakhstan

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President of the Republic of Kazakhstan

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Akorda

President Kassym-Jomart Tokayev held the Expanded session of the Government of the Republic of Kazakhstan

26 january 2021 year

The session was attended by Prime Minister Askar Mamin, State Secretary Krymbek Kusherbayev, Chief of Staff of the Presidential Administration Yerlan Koshanov, as well as members of the Government, akims of regions, cities of Nur-Sultan, Almaty and Shymkent, and heads of central state bodies and national companies.

In his speech, Kassym-Jomart Tokayev noted that the main task of the Government is to restore economic growth, attract investment and increase the real incomes of Kazakhstan people. The President pointed to the importance of supporting SME that have been most affected by the pandemic, restrictive measures and the destruction of trade ties.

“This year, the focus should be given on supporting SME. I instruct the Government, together with “Atameken” National Chamber of Entrepreneurs, to develop the necessary package of measures within a month. The “Enbek” (labour) state program is the main tool for ensuring employment of the population. More than 150 thousand people have been trained on “Bastau-business” project. However, only 10% of them received loans, and 19% grants. More than 100 thousand people were left without a state support. Especially there are not enough funds for those who studied under this program in rural areas. Therefore, we must review not only the financial scope of the program, but also the principles and mechanisms of its implementation. The rate of micro-loans to the population should not exceed 6%,” the Head of State noted.

President Tokayev criticized the Government members and akims for drawbacks on the increase the share of local content in procurement. For 9 months of 2020, the total volume of regulated procurement of goods, works and services amounted to 12.5 trillion tenge. About 6.5 trillion tenge, or 52%, was allocated for local goods and services. The economy has lost almost half of this amount.

“We have no right to subsidize imports with trillions of budget funds. Therefore, the budget administrators will be taking personal responsibility. At the same time, we do not need inflated figures, the correct score is of a great importance. There is information that the “credit” often includes any products of a legal entity registered in Kazakhstan, and it does not matter whether he delivered his own goods or imported ones. I instruct the Ministry of Industry to double-check the stated figures in accordance with the approved methods,” the President said.

There are also significant discrepancies in the employment reports. 1 trillion tenge was allocated for the implementation of the Employment Roadmap. 98.2% of these funds have been disbursed. The program has played an important role in providing employment and supporting business activity. However, there are discrepancies being found when it comes to checking information about the opening of tens and hundreds of thousands of jobs.

“Citizens had been employed only on paper. Information about a single person was entered into the unified information system several times. 15 thousand such cases have been recorded. It turned out that a third of those who got a job did not transfer funds to the pension fund. Such cases are especially frequent in Turkestan (79 %), Kyzylorda (43 %) and Zhambyl (36 %) regions. About 40 % of the employed remain “in the shadows”. Of the 1 trillion tenge allocated for the Employment Roadmap, only 5.5 billion tenge of taxes were paid. That is half a percent! The authorities responsible for state revenues should take the issue under strict control. If necessary, law enforcement agencies should also be involved in this work,” Kassym-Jomart Tokayev stressed.

The Head of State instructed the Government to develop proposals for improving the fiscal policy. In 2020, the share of tax and customs revenues in the total amount of income decreased to 47%, although a year earlier it had amounted 65%. There is a low level of collection of customs payments. Only on the border with China, there about 50 thousand facts of false declaration have been revealed. The discrepancy in the mirror statistics with China is more than US$ 5 billion.

The President demanded to systematically strengthen the work with false enterprises and malicious defaulters. According to official estimates, about a quarter of GDP, and according to the World Bank 40%, is in the “gray” zone. The Agency for Combating Economic Crimes will be created in order to implement measures to combat the “shadow” economy.

“Significant budget funds are spent on the maintenance of the fleet for the management of the central authorities. Thus, as an average, more than 6 million tenge is spent on the maintenance of one car per year. A number of countries have introduced the practice of monetary compensation instead of personal official transport. We use this experience in a number of institutions, in particular, in the Mayor's office of the capital. This approach has been successfully tested in the Samruk-Kazyna that made possible to significantly reduce the number of official vehicles and reduce administrative costs by 1.5 billion tenge. I instruct the Government, together with the Presidential Affairs Office, to make proposals on a new scheme for providing heads of state bodies with official vehicles, which needs serious reduction,” the Head of State said.

The newly appointed Deputy Prime Minister-Minister - Foreign Minister Kassym-Jomart Tokayev instructed to make concrete proposals on reforming the investment management system by the end of February. It is necessary to conduct an analysis of the feasibility for each free economic zone to develop a new model of its functioning.

“I would like to emphasize that akims who are not engaged in the real development of their special economic zones are at great risk. We will simply close such zones and not spend budget money on them. We need to solve this problem as soon as possible. The second source of investment in economic recovery is bank loans and the stock market. However, it is also “limping on both legs”. A steady decline in inflation and the stabilization of inflation and devaluation expectations are important conditions for easing monetary policy. Therefore, the Government and the National Bank should return inflation to the target range of 4-6% in 2021-2022 and reduce it to 3-4 % in 2025. The stability of the financial sector is a defining factor in the development of the economy,” President Tokayev believes.

According to the Head of State, the task of ensuring food security has become extremely important. During the 2020, when the income of the population was declining, while the cost of food on the contrary had continued to grow. The measures taken by government agencies to curb prices, including concessional lending to retail chains and the establishment of trade surcharges, have not yielded positive results. Prices for socially important foodstuffs increased by 11%. Its contribution to the overall inflation was more than 60%. The Government should develop a set of measures to address the above problems on the basis of market mechanisms.

The President also drew attention to the completion of the moratorium on certain provisions of the Land Code this year. In this regard, the Government was instructed to resume the work of the Land Commission and ensure the adoption of amendments by November. It is necessary to carefully consider all the proposals and make a final decision.

“In addition, I would like to touch upon the pastures issue. Such lands should be accessible, first of all, to the villagers. Local akimats failed to organize this work. As a result, the villagers have difficulty finding pastures for grazing. Especially many complaints come from the Almaty and Turkestan regions. 99% of pastures are managed by peasant farms. However, only 36% of them are grazed by cattle. The remaining 46 million hectares of pasture are empty. I instruct the Government, together with the Prosecutor General’s Office, to return such pastures by the end of this year. It should be given for the benefit of rural residents,” Kassym-Jomart Tokayev said.

President Tokayev called the preservation and effective use of water resources a matter of ensuring national security and sustainable development. In this regard, the state authorities will have to accelerate the adoption and financing of the national project on water resources management. Environmental issues should be under the constant control of the Government and society.

“As a tool of public control, it is necessary to prepare an interactive map. Thus, it will be possible to monitor the progress and effectiveness of the work carried out in the field of ecology. I instruct the Government to develop the National Project “Jasyl Kazakhstan” for 2021-2025. In particular, one of the important tasks necessary for environmental protection is the digitalization of all indicators,” the Head of State noted.

In the speech, the President touched upon the issues of practical implementation of the initiative on the use of pension savings to improve the living conditions of Kazakhstan citizens. As far as Kassym-Jomart Tokayev believes is concerned, now it is necessary to take effective measures to curb the hype and prices in the real estate market. He called on state agencies to conduct explanatory work with the population and developers to limit speculative operations in the market. The Government has been instructed to submit a new package of proposals to improve the housing policy within two weeks.

The development of the healthcare system remains under special control. It passed a tough test of strength during the pandemic and highlighted all the systemic problems of the area. Last year, 156 mothers died, and the death rate increased by 2.8 times.

“I instruct the Government, together with the akims of the regions and with the engagement of the professional community to conduct an inventory of all health care organizations. At the same time, it is important to focus on maternity and resuscitation services, as well as take measures to equip them with medical equipment, medicines and products. The Prosecutor General’s Office has already been instructed to conduct random checks on this issue. According to its results, it is necessary to take measures against the guilty persons,” the President demanded.

The Head of State believes that it is necessary to take lessons from the current situation. Almost a year has passed since the beginning of the pandemic, and we need to respond based on the experience gained. The Government, together with the Atameken National Chamber of Entrepreneurs was instructed to work out the issue of introducing QR codes with information about the immune status within a month in order to ensure a balanced approach to anti-epidemic measures.

“Certainly, the most effective and systematic measure to overcome the crisis is mass vaccination. It is important to create all the conditions for its high-quality implementation. The analysis of the preparatory work revealed the missing amount of refrigeration equipment for storing the vaccine. The most difficult situation is in the West Kazakhstan, Mangystau and Turkestan regions. I instruct the Government, together with the akims, to provide full-fledged training and start mass vaccination from February 1. We hope for a positive result of testing the domestic vaccine. In this case, I will be vaccinated with the Kazakh vaccine,” Kassym-Jomart Tokayev emphasized.

The President also drew attention to the international assessment of the education system, which indicates a systematic deterioration in the quality of knowledge in schools. In his opinion, drastic measures are needed in this area.

“Currently, there are a lot of initiatives to include new subjects in the school curriculum, it is 9 subjects over the last ten years. Learning is not a field for experimentation. All this leads to a reduction in the number of hours devoted to the study of the main disciplines. At the same time, we have the highest training load by 67 hours, while in Finland and South Korea it is only 39 hours, and 55 in the United States. A healthy balance between learning and other types of student development is of a great importance. Given the global trends, special attention should be paid to such priority subjects as mathematics, languages and computer science,” the Head of State said.

It is also necessary to develop and implement unified school textbooks on the history of Kazakhstan and world history. As part of the Nur Otan party's election platform, it was promised to build 800 new schools by 2025. The President stated the need to immediately kick-off this work and build 200 new schools this year.

In addition, Kassym-Jomart Tokayev stressed the importance to restart the work with citizens’ appeals within the implementation of the “Listening-State” Concept. To improve the quality of work with applicants, he instructed to deploy a new information system “E-appeal” and “Natizhe” (outocme) centres. By July 1, the system should be launched in all government agencies.

At the end of his speech, Kazakhstan President once again stressed that the main task is to improve the quality of life and increase the income of our citizens. As he said, every decision, every action of state bodies should be aimed at the development of the economy and for the benefit of the people.

Read the full original speech of the President in Kazakh and Russian languages here.


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Tokaev

The President of the Republic of Kazakhstan