Address to the people of Kazakhstan

President of Kazakhstan Kassym-Jomart Tokayev delivered his second Address to the people of Kazakhstan, in which he presented a new economic course.

In his message, the President pointed out that the long oil super cycle has ended and now we need to be prepared for the new market conditions. In this regard, the need to create a diversified technological economy comes to the fore.

The new economic policy of Kazakhstan will be based on seven principles.:

1.    fair sharing of benefits and responsibilities;  
2.    leading role of private enterprise;  
3.    fair competition, opening markets for a new generation of entrepreneurs;  
4.    productivity growth, increasing the complexity and technology of the economy;
5.    human capital development, investment in a new type of education;   
6.    greening the economy, environmental protection;  
7.    adoption by the State of informed decisions and responsibility for them to society.

New model of public administration

The head of state instructed to establish a Strategic Planning Agency, which will directly report to the President.

"In the context of a pandemic and crisis, the current system of public administration operates at maximum speed. Solving operational tasks takes time and resources, but in no case should distant horizons be overlooked.

Therefore, I decided to establish a Strategic Planning Agency and Reforms with direct subordination to the President. Such a body previously existed and successfully fulfilled the assigned tasks, now it will again become the central link of the entire state planning system."

It will require a reboot of the civil service system.

"The pandemic and the transfer of most employees of state bodies to remote work mode have shown that the state apparatus can and should be reduced.

I instruct to speed up the reduction of the state apparatus and employees of the quasi-public sector. This year, they should be reduced by 10%, and next year - by another 15%. Thus, we will solve the task of reducing officials by 25% in 2021.

At the expense of the saved funds, the wages of the remaining employees will be increased.

Business climate

According to the President, the business environment needs reforms

"The situation is still difficult. In order to provide additional assistance to small and medium-sized businesses, I instruct them to provide state subsidies for interest rates up to 6 percent per annum on all existing SME loans in the affected sectors of the economy.

The subsidy will cover a period of 12 months, starting from the moment of declaring a state of emergency, that is, from March 16, 2020," - the Head of State said.

The President also touched upon the issue of the National Bank's special program to replenish working capital for SMEs in the most affected sectors.

"Previously, it was assumed that it will end its operation this year. Under the current conditions, I instruct to extend this program until the end of 2021, as well as expand its coverage. For these purposes, an additional KZT 200 billion should be provided, bringing the total amount of the program to KZT 800 billion", Tokayev said.

"I also instruct to suspend until the end of the year the charging of rent for SMEs, for real estate owned by government agencies and the quasi-public sector.

In the current conditions, maintaining employment and income is an absolute priority. Therefore, it is important for this time to reduce the burden on the wages fund for SMEs in the most affected industries. In this category of business, I instruct to cancel deductions from labor remuneration to extra-budgetary funds for the period up to the end of the year", - he added.

Competition policy

"It is necessary to seriously diversify the competitive field, create truly equal opportunities for every entrepreneur, and stop monopolizing markets. It is no secret that many market niches are densely concreted by far from market methods. Entrepreneurs cannot enter the market, and if they manage to enter, they are forced to submit to private monopolists. Anti-competitive manifestations persist in the markets… At the regional level, the main component of commercial success is often an administrative resource. We need to deal with the so-called monopolies.

It is necessary to adopt clear rules: in what cases, in what form, where the profit is spent. Strict public monitoring is required.
It is necessary to restore order with exchange trading, primarily in the field of petroleum products and electricity. Imitation of transparency on the part of large players is unacceptable, therefore, a strong independent body is needed to protect and promote competition. I instruct to establish an agency for the protection and development of competition with direct subordination to the President".

Financial sector

"The imbalance between consumer segment and business lending also remains a negative factor in the financial sector. Rampant and sometimes irresponsible lending to consumers should be regulated, which is fraught with serious social consequences. Insufficient financial literacy of citizens should not be a reason for imposing credit products".

"This year, according to my instructions, the legislative and regulatory framework was changed. The requirements for assessing the borrower's solvency have been significantly tightened. Microfinanc.organizations, pawnshops and other financial institutions that previously issued consumer loans without control have come under state regulation. But the risks remain. Especially in times of crisis and falling incomes".

"The Financial Regulatory Agency and the National Bank need to take additional regulatory measures in terms of increasing the responsibility o.organizations, as well as differentiating and lowering the limit rates. We must increase confidence in monetary policy, therefore, it was decided to create a committee on monetary policy in the structure of the National Bank. It will also include independent members. Since we are talking about the importance of fair redistribution of national income, we should develop the same tax policy that is understandable for all citizens of the country".

"We need to strengthen the stimulating role of monetary policy. Today, it is largely constrained by fears of an overflow of funds to the foreign exchange market, while banks are in no hurry to lend to the real economy, since they have a good opportunity to make money on the foreign exchange market and the National Bank's instruments.

I instruct to take measures to reorient this liquidity to business lending and stop currency speculation. The authority and functionality of the Agency and the National Bank are sufficient to solve this problem. I expect a significant improvement in the situation at the end of the year", - the Head of State added.

Education and social services

"We should reorient the entire system of professional education to the formation of competencies that are in demand in the labor market. The bet will be placed on the preparation of a new wave of entrepreneurs".

In this regard, it is emphasized that the problem of comprehensive development of the child should be solved before entering school.

"I set a goal to provide one hundred percent coverage of children under six years of age with pre-school education and training by 2025. Building only state kindergartens will not solve this problem. We need to attract private business, find new forms of support, including a voucher financing mechanism", - the Head of State said in his Address to the people of Kazakhstan.

He said that parents will be able to choose any kindergarten or school, pay there with a voucher from the state.

A voucher is a written certificate, receipt, or document confirming receipt of a product or discount on a product or service.

Also, according to the President, it is necessary to pay the most serious attention to the sports and creative potential of the nation.

"There is no point in maintaining professional sports clubs, fully counting billions of tenge from the state budget and quasi-state companies. Preference should be given to mass sports and physical education.

Sports sections should be opened for children in each region and in large district centers, and children's clubs for young people should be resumed. ... Modern realities can be so dangerous that their energy and curiosity need to be directed in the right direction. Children are the future of our state".

Kassym-Jomart Tokayev said that every sixth family in Kazakhstan cannot have children.

"I instruct the government to launch a special program "Ansagan Sabi" from 2021. We need to increase the number of quotas for IVF programs to seven thousand. That is, seven times".

The Address notes that the UN forecasts for population growth in Kazakhstan in comparison with our neighbors in Central Asia are disappointing.

Medicine

The President of Kazakhstan instructed to allocate KZT 150 billion for the payment of incentive allowances to medical workers for the second half of the year when the budget is updated.

"The crisis caused by the pandemic has taught us a lot. For example, to appreciate the work of a doctor, while medical workers once found themselves on the periphery of state attention. The importance of the profession should be supported by material resources", - the Head of State said, adding that such measures are necessary on a systematic basis.

Housing program

Housing problems of waiting lists need to be solved more quickly.

"More than a hundred thousand families will receive specific assistance".

Speaking about the housing program, Kassym-Jomart Tokayev said that from 2021, 700 thousand Kazakhstan people will be able to use part of their pension savings.

"Already in 2021, 700,000 UAPF depositors will be able to use part of their savings for housing, medical treatment, or for transfer to financial companies".

Ecology

Environmental development comes to the fore.

"A draft of a new Environmental Code has been developed to solve a number of systemic problems. I ask the Parliament to consider and adopt this important document before the end of the year.

I instruct the Government to start implementing practical measures to improve the environmental situation. Long-term plans for the conservation and rational use of biological diversity should be approved.

Within five years, more than 2 billion trees will be planted in the forest fund and 15 million in localities. This action will lead to a large-scale greening of our country. There is an acute issue of building up the green belt around the capital.
It is necessary to protect national parks and other natural resources of Kazakhstan by law and regulations, and to tighten criminal and administrative prosecution of citizens who commit offenses in this area.

It is necessary to pay due attention to the environmental education of the younger generation in schools and universities. The Birge - taza Qazaqstan environmental campaign, designed to strengthen environmental values in society, should be carried out on a systematic basis".

An equally important task is to actively develop the culture of eco-tourism within the country.

Security

"We should modernize the criminal sphere following the example of the developed countries of the OECD. We need a model that ensures timely protection of citizens' rights and meets high international standards. I consider it necessary to introduce a three-tier model in Kazakhstan with a clear division of powers.
The police must identify crimes, identify those involved, and collect and consolidate evidence.

The Prosecutor is obliged to give an independent assessment of the collected evidence, to suppress violations of the rights of citizens, to prevent the involvement of conscientious citizens in the criminal process, to support the prosecution in court.

The court will consider complaints about the actions of the authorities and make a final verdict on the case".

This approach will strengthen the system of checks and balances and create effective filters at each stage.

In addition, building public confidence in the courts should be a priority goal. Its achievement is possible only through the joint efforts of the state and the judiciary itself.

The President of Kazakhstan instructed to create a single platform for online petitions.

"Thanks to social networks, problems that do not find solutions on the ground become known throughout the country. We need to create a single legitimate institution of online petitions for citizens to initiate reforms and proposals", - the Head of State said, stressing that such a mechanism should be fully protected from any manipulation.

"The Government, in cooperation with civil society, will have to develop a legal framework and resolve all technical issues related to this important project".

In the final part of the speech, Kassym-Jomart Tokayev paid attention to the aspects of digitalization. Within five years, it is necessary to increase the volume of investments in this industry to KZT 500 billion.

"We have adopted laws that allow Kazakhstan to become one of the international hubs for processing and storing "data". Over the past year alone, more than KZT 80 billion of investments were attracted to digital mining. But we can't stop there, we should attract the world's digital giants to the country. Otherwise, other states will do it".