KAZAKHSTAN IN A NEW REALITY: TIME FOR ACTION
1 SEPTEMBER 2020
Dear Chairs of Chambers of the Parliament, MPs, Members of the Government!
The work of the new, the Sixth session of our Parliament has begun at a difficult time.
The fight against the COVID-19 pandemic, which poses a serious threat to the planet, is still going on in our country.
We thus have joined forces to protect the lives and health of our citizens.
At such a critical moment, our people have united as one.
The fight against the pandemic was made possible because of the noble qualities of our wise people. It became clear that it is important to help others, to be compassionate, to resist a sudden coronavirus.
I sincerely thank the doctors, law enforcement officers, servicemen, volunteers, entrepreneurs and all the citizens who have not been indifferent. You have set a bright example of exceptional perseverance and great responsibility.
I think this is a manifestation of true love for the Motherland.
In the current difficult situation, the main task before us is to maintain socio-economic stability, while securing jobs and incomes.
Two packages of operational anti-crisis measures have been adopted.
More than 4.5 million temporarily unemployed people received assistance in the amount of KZT 42,500. More than KZT 450 billion has been spent on it. Such assistance has not been provided in neighbouring countries, or even in other larger countries.
More than a million people received food and household items.
At the initiative of the Leader of our Nation (Elbasy) – Chairman of the ‘Nur Otan’ (‘Radiant Fatherland’) party, more than 550 thousand families received one-time financial assistance with the support of the ‘Birgemiz’ (‘We are together’) Foundation.
The pandemic has become a challenging period for all countries. They are having a hard time and continuing to fight the epidemic. In some places the situation is stabilizing, while in others new foci of the virus are appearing.
The Government has learned from mistakes and started to work quickly.
The main thing is that we did not hide anything from our citizens, but openly published all the information about the deaths from the epidemic. No matter how bitter it is, we are telling the truth. This is an advantage for Kazakhstan over some countries.
However, the current improvement of the situation should not be a reason for relaxation. The fight against COVID-19 is still ongoing. According to the World Health Organization, it will take at least two years to overcome the pandemic.
We will thus work hard in the coming months. We must be ready for further development of the situation.
We should not act immediately only when there is a problem but take precautionary measures and work carefully.
All decisions must be based on carefully verified assumptions, forecasts, and prognoses.
The Government is continuing to introduce specific restrictions and efficacious quarantine methods.
A comprehensive programme for the fight against the COVID-19 pandemic will be developed further in Kazakhstan.
The state will fulfil all obligations in the social sphere and those aimed at supporting our national economy. KZT 1 Trillion is allocated from the National Fund for this purpose.
Indexation of social benefits will continue. We plan to allocate more than KZT 1 Trillion to this end by 2023.
We will definitely overcome the current difficulties. However, we must not forget the long-term development of the country in the new geo-political situation.
Today, the world is experiencing the worst crisis in 100 years. According to experts, it will take at least up to 5 years for the recovery of the global economy.
However, in the future the competitive abilities (capabilities, capacities, advantages) and performance of the leading countries will be strengthened during such crises and fundamental changes.
Kazakhstan must take its rightful place (niche) in the new world.
Thanks to the far-sighted policy of H.E. Mr. Nursultan Nazarbayev, the First President and the Leader of our Nation (Elbasy), we have laid a solid foundation for economic development, and gained a good reputation on the world stage.
Therefore, at a time when a new world order is being formed, we must give a new impetus to our reforms. In this regard, we must adhere to the Nation’s Plan and the Five Institutional Reforms.
We are obliged to create conditions for a decent life for our citizens, to protect their rights, to ensure the rule of law, to strengthen the fight against corruption.
So, our Plan of Action will be as follows.
I. NEW MODEL OF PUBLIC ADMINISTRATION
Reforms in this area should be carried out systematically.
Let us start by changing the approaches to public administration, personnel policy, decision-making system and responsibility for the implementation of state decisions.
In the context of a pandemic and crisis, the current public administration system operates at maximum speed. Solving operational problems takes time and resources.
But in no case should we lose sight of the distant horizon. Therefore, I have decided to create an Agency for Strategic Planning and Reforms with direct report to the President.
Such a body previously existed and successfully carried out the tasks assigned to it.
Now it will again become the central link in the entire system of state planning.
The reforms developed by the Agency must be concrete, realistic and, most importantly, mandatory for all governmental agencies.
The Supreme Presidential Council for Reforms is being created, the decisions of which will become final.
For greater objectivity in assessing the rapidly changing situation, the Committee on Statistics is transferred to this new Agency.
It so happened in the system of state planning that the state apparatus acts as the main planner, executor, and appraiser (evaluator, assessor). It is not right.
The state planning system should ensure the mobilization of all human resources, involve the private sector and society as full partners at all stages, inter alia, planning, execution, and evaluation stages.
It is necessary to stop preparing state programs with a large number of benchmarks and indicators. It is time to move to the format of laconic national projects, understandable to all citizens.
Within the goal setting, we should determine the primacy of the result over the process.
Carrying out such a radical reform will require a revision of the activities of the entire state apparatus. Synergy in the planning and implementation of reforms becomes important here.
It will require a reboot of the public service (civil service) system.
The pandemic and the transfer of most governmental officials to remote work showed that the state apparatus can and should be reduced.
I instruct you to speed up the terms of cutting the state apparatus and workers of the quasi-public sector. This year they should be cut by 10%, and next year by another 15%. Thus, we will solve the problem of reducing the number of officials by 25% in 2021.
Depending on the results of implementation of this instruction, and taking into account the ongoing process of digitalization in our country, we will make a decision on further reductions in the state apparatus.
The saved funds will increase the salaries of the remaining employees.
Low-paid public service is too expensive for society. Misunderstanding of this issue leads to negative selection, loss of competencies and initiative, and most importantly, to corruption.
Therefore, from July 1, 2021, a factor-point scale should be introduced in the public administration. This will lead to increased responsibility and motivation of public servants (civil servants).
We are in dire need of new personnel – professional officers, with fresh views and initiatives. The public service (civil service) should not became a closed caste.
At the same time, it is important to ensure continuity and institutional memory, without letting professional and ethical demands fall.
Here I would like to dwell on the question of the institution of executive secretaries.
With the introduction of this institution, it was assumed that their permanence would free the ministers from administrative and personnel work, and ensure the stability of each and every ministry’s apparatus.
In fact, this did not happen. Moreover, there are frequent cases of lack of mutual understanding between ministers and executive secretaries. As a result, the common cause suffers.
The demand should be from one person – a minister appointed by the President.
Therefore, the institution of executive secretaries should be abolished. Their responsibilities should be assigned to the heads of the staff.
To implement the above proposals, I instruct the adoption of a package of amendments to the legislation on public service (civil service) by the end of this year.
The process of creation of regulatory acts (rule-making and standard-setting issues) should also be reviewed.
During the quarantine, the sluggishness of the legal system gave rise to a ‘bottleneck’ effect. I had to introduce a state of emergency and adopt the so-called ‘emergency decree.’
But such measures cannot be a systemic response to crisis situations.
The main problem lies in the excessive legislative regulation of the executive branch.
We demand a lot from ministers and akims (governors), but their powers are limited by detailed norms of laws and regulations.
This slows down the work of not only the state apparatus, but also overloads the Parliament. Its Chambers are forced to consider detailed norms. But they could easily become the competence of the executive bodies.
In a rapidly changing world, slow decision-making becomes a threat to national security.
Therefore, within the framework of the Concept of Legal Policy, by way of changing the legislation, a balance should be maintained between the levels of legal regulation.
It is impossible to hesitate with this.
There is also another important problem to be addressed, such as improving the corporate governance of quasi-state companies.
There are dozens of national companies and tens of thousands of state-owned enterprises operating in the country. At the same time, large quasi-state organizations are joint stock companies. Their purpose is to ensure profit.
But if part of the state functions is transferred to them, then their activities should be of a purely service, auxiliary (supportive) nature for citizens and the national economy.
In many joint stock companies, there is a confusion of concepts. Corporate governance becomes an additional bureaucratic procedure.
The reform of the entire quasi-public sector must be continued.
Some decisions will be announced today. With regard to the rest of them, the members of Government will additionally present their proposals to me.
II. ECONOMIC DEVELOPMENT IN NEW REALITIES
The long oil super-cycle appears to be over. We should be prepared for a completely new world market environment.
The creation of a truly diversified, technological economy is not just a necessity for us. This path is already uncontested.
At the same time, our national economy must work to improve the well-being of our people.
The growing public demand for a fair sharing of benefits from the growth of national income, as well as for effective social “lifts” must be maintained accordingly, in a positive manner.
Therefore, the new economic course of our country should be based on seven basic principles:
1. Equitable distribution of benefits and responsibilities.
2. The leading role of private entrepreneurship.
3. Fair competition, opening markets for a new generation of entrepreneurs.
4. Increased productivity, increased complexity, and technological effectiveness of our national economy.
5. Development of human capital, investment in a new type of education.
6. “Greening” the economy, and environmental protection.
7. Adoption of well-grounded decisions by the state, and its responsibility for them before society.
In doing so, we must proceed from our competitive advantages and real capabilities.
The most important task Kazakhstan faces currently is to fully utilize our industrial potential.
Despite our success in this area, we are still unable to fully realize the great potential of the domestic market. About two-thirds of processed goods are imported.
In order to increase the strategic capacity of our national economy, it is urgent to develop new areas of processing. These include ferrous and non-ferrous metallurgy, petro-chemistry, automotive, machinery manufacturing and mechanical engineering, construction materials and food production, as well as other industries.
The development of a quality new national industry requires a modernized legal framework.
The issues of regulation and support of the industry are reflected in various legislative acts. However, there is no common goal, no interlinkages between policies and measures.
There are also many laws that regulate individual sectors or industries.
For example, the Law on Electricity, the Law on Transport.
A consistent law on” Industrial Policy” defining the principles, goals and objectives of the development of the manufacturing industry must be developed by the end of the year.
It is also necessary to improve specific measures to support the industry. We do not have a systematic and unified position. As a result, we are wasting money on countless projects.
Of course, we will maintain broad “horizontal” measures to support the industry.
At the same time, the Government will have to identify strategically important production facilities, key export priorities, and significantly expand the toolkit of support measures.
Hence, the package of in-kind grants, concessional financing, partial guarantees, and export support mechanisms should be envisaged for strategic projects.
Some of the capital expenditures of investors can be recovered by offsetting against tax liabilities.
It is important to provide for guaranteed procurement from the state, quasi-state sectors and subsoil users.
The main novelty and innovation should be the stability of legislative conditions for the entire duration of the project.
Of course, these measures are not exhaustive. The specific level of support will depend on the volume of capital investments and the priority of the project.
In order to fix the agreements between the state and investors, a new instrument will be introduced – a strategic investment agreement.
This initiative should be implemented by the end of this year under the draft Law (bill) of the Republic of Kazakhstan “On Economic Recovery.”
The pool of projects that will be included in strategic agreements will be formed by the Government by April 2021.
The issue of full access of processing enterprises to domestic raw materials at affordable prices also requires a systemic solution.
I instruct the Government to develop regulatory mechanisms by the end of this year, in order to ensure full loading of Kazakhstani processing industries with raw materials.
Regulated purchasing has a direct effect on industrial development. Its total volume is about KZT 15 Trillion, or a one fifth of the Kazakhstani GDP.
The task of the Government and akims (governors) is to maximize this potential.
On my instructions, a new Law was adopted that improved the procurement system of government agencies.
However, procurement by national companies is still non-transparent and difficult to access by ordinary entrepreneurs.
I instruct you to develop by the end of this year a unified law, covering all purchases of the quasi-public sector.
All regulated procurement should be carried out as transparently as possible and exclusively through the Single Procurement Window.
But improvement in our national legislation will not help, if there is no appropriate law enforcement practice.
There are frequent cases, when cheap and low-quality imported goods are passed off as domestic and win procurement competitions.
The register of domestic manufacturers and industrial certificates have not yet become a real barrier against false manufacturers.
The Government, together with the National Chamber of Entrepreneurs of the Republic of Kazakhstan “Atameken” (“Fatherland”), shall prepare by the end of this year specific proposals to increase the local content.
Our common goal in the industrial sector is to increase production in manufacturing by at least 1.5 times in five years.
However, industrial policy alone cannot achieve significant progress in industrialization.
It is imperative that monetary, fiscal, and other key policies are not isolated from the needs of the real sector. I will talk about this further.
* * *
It is impossible to create a competitive economy without the development of the Agri sector.
There are pressing issues in this area that have not been solved. In particular, the lack of access to land, the lack of long-term “cheap loans”, as well as the shortage of professionals.
Urgent measures should be taken not only to increase productivity and production of raw materials, but also to develop warehousing and transport infrastructure.
I believe, it is possible to create seven large ecosystems in our country. Among their aims should be the production and processing of meat; fruits; vegetables; sugar; wheat; oilseeds; as well as dairy products. Special attention should be paid to the fisheries sector as well.
Large projects, which are the core of added value, should play an important role.
It is better to utilize the potential of private farms in the framework of vertical cooperation.
Private farming can provide income to millions of rural residents. They should be mobilized to create regional food hubs.
We must not forget the potential of horizontal cooperation in the Agri sector as well. Without it, there will be no rapid development of the agro-industrial complex.
Private farms, which are not united, are, in fact, dying. As such, it is inappropriate to talk about the production of high quality and abundant products, as well as uninterrupted supply of goods. This is the reason why we are not competitive and cannot get rid of imports.
Yet, all rights to land and other property shall be respected within the cooperation process. Hence, cooperation will allow farms to focus on the organization of procurement of raw materials, production process and sale of products.
The hard work of rural workers is underestimated. This is not a secret. Most of the revenue comes from speculators.
Therefore, it is necessary to develop a set of measures to stimulate cooperation in rural areas under the programmes of subsidies and tax benefits.
There is another important issue. Next year, the moratorium on the use of agricultural land in respect of certain provisions of the Land Code will be lifted.
Yet, our land will not be sold to foreigners. However, the Government should develop other ways to put agricultural land into full economic usage. It is necessary to attract investment in the agricultural sector.
The shortage of professionals, as well as the underdevelopment of agricultural science – these are the accumulated problems in the Agro-industry. The executive branch must take concrete measures in this direction.
Technologically outdated irrigation systems are also a big obstacle to the further development of our agro-industrial complex. Sometimes, it leads to a situation, where the irrigation process is effective for only 60% of the time (when the 40% percent of watering is useless). Our country, which is already suffering from water shortages, cannot allow this.
It is necessary to ensure the regulation of this industry and develop economic incentives for the introduction of modern technologies and innovations.
The current state program for the development of the agro-industrial complex will be completed next year.
I therefore instruct the Government, together with the business sector, to begin the development of a quality new national project for the development of the agro-industrial complex for the next five-year period.
That being said, our main tasks in the Agri-sector shall be: self-sufficiency in socially significant food products; a steady increase in the income of millions of rural residents; increase in labour productivity by two and a half times; as well as an increase in exports of agricultural products by two times.
* * *
The development of the transport and logistics complex remains a pressing need.
The implementation of the first stage of the ‘Nurly Jol’ (‘Radiant Path’) Programme was successful. It enabled the connection of the capital of the country with the regions according to the “ray” principle.
A new infrastructure framework of the transport system has been formed. The country’s integration into global transport corridors has been ensured. And the historical status of Kazakhstan as a link between Asia and Europe has been restored.
However, the competition in this area is extremely high. Alternative projects have appeared in the Central Asian region that can reduce the transit potential of Kazakhstan.
Therefore, the second stage of “the ‘Nurly Jol’ (‘Radiant Path’) Programme should be aimed at consolidating the leading role of the transport and transit sector of our country.
The competitiveness of Kazakhstan should grow due to breakthrough infrastructure projects, attracting new countries and companies, increasing the level of service and the speed of transit routes.
The task is to reconstruct and provide with road services about 24 thousand kilometres of our roads by 2025, i.e. all national roads of our country.
* * *
SMEs are experiencing difficult times, in fact, taking the brunt of the pandemic.
To overcome the negative economic consequences, tax breaks were provided to more than 700 thousand of our entrepreneurs. Their payments are deferred. And they are given the opportunity to refinance their loans, on more favourable terms.
However, the situation is still difficult.
As additional aid to SMEs, I hereby instruct Government to provide state subsidies for interest rates of up to 6% per annum on all existing loans to SMEs in the affected sectors of our national economy.
The subsidy will cover the period of 12 months, starting from the moment of the announcement of the State of Emergency that is from March 16 of this year.
The National Bank is implementing a special working capital replenishment programme for SMEs in the most affected sectors. Previously it was assumed that it will complete its operations this year.
But in the current crisis conditions, I order an extension of this programme until the end of 2021, as well as an expansion of its coverage.
For these purposes, an additional KZT 200 Billion will be provided, bringing the total value of the programme to KZT 800 billion.
I also order a suspension until the end of this year of 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 incomes of the population shall be our absolute priority. Therefore, it is important for this time to reduce the burden on the wage fund for SMEs in the most affected industries.
For this category of business, I order the cancellation of deductions from wages to extra-budgetary funds for a period until the end of this year.
The next question is the business climate. This area needs reforms, since the regulatory system remains cumbersome, even punitive.
The basic principles of regulatory policy must be changed. The state regulation can only be justified by protecting the health of citizens and the environment.
Legislation and practice should fix the predominance of essence over form. Common sense and content must prevail over strict legal norms.
The three-year moratorium on inspections provides a good opportunity to introduce such regulation from scratch.
We should start with the most corrupt spheres: architectural and construction activities, sanitary and epidemiological supervision, veterinary medicine, certification, and others.
I hereby order the development a new regulatory framework for SMEs within the next year.
I repeat: any illegal interference of state structures in entrepreneurial activities, as well as obstruction of the work of businessmen should be perceived as the gravest crime against the state.
In case of illegal pressure on them by officials, businessmen should feel free to contact the prosecutor’s office.
Support for entrepreneurship also means special attention to medium-sized businesses, which contain key components of market success.
Such companies should be focused not only on the domestic, but also on foreign markets. Their ability to export should be strengthened and supported.
I instruct the Government to launch an export acceleration programme aimed at medium-sized non-resource enterprises in order to provide targeted support from idea to result.
The main result of the work on the development of SMEs should be an increase by 2025 of its share of GDP to 35%, and the number of employees to 4 million people.
* * *
Reconfiguring cross-cutting government policies will be a critical success factor in our work.
A new approach to monetary policy needs to be taken.
We face a crisis of confidence in the Kazakhstani Tenge (KZT) from national and international investors.
The low level of economic diversification and high volatility of the exchange rate of KZT restrain the inflow of foreign investment, especially in non-resource sectors.
In that vein, the problems of regulating the foreign exchange market and capital movements also play a negative role. A significant part of export earnings does not even go to the domestic foreign exchange market, remaining abroad.
The Government and the National Bank should motivate exporters to sell foreign exchange earnings.
The stimulating role of monetary policy needs to be strengthened as well. Today, it is largely constrained by fears of an overflow of funds to the foreign exchange market.
Banks are in no hurry to lend to the real economy, since they have a good opportunity to earn money on the foreign exchange market and the instruments of the National Bank.
I therefore instruct you to take measures to reorient this liquidity towards lending to businesses and stop currency speculation.
The powers and functionality of the Agency for Regulation and Development of Financial Markets and the National Bank are quite enough to solve this problem.
I expect a significant improvement in the situation by the end of this year.
The imbalance between lending to the consumer segment and business also remains a negative factor in the financial sector. Rampant, sometimes irresponsible lending to consumers, which is fraught with serious social consequences, should be regulated by our relevant national norms and legislative-regulatory framework.
Lack of financial literacy of citizens should not be a reason for imposing credit products on them.
This year, in accordance with my instruction, the legislative and regulatory framework was changed, while the requirements for assessing the borrower’s solvency were significantly tightened. Microfinance organizations, pawnshops and other financial institutions that previously issued consumer loans uncontrollably, have come under governmental regulation.
But risks in this sector still remain. Especially in times of crisis and falling incomes of our population.
The Agency for Regulation and Development of Financial Markets and the National Bank need to take additional regulatory measures in terms of increasing the responsibility of credit institutions, as well as differentiating and lowering the marginal interest rates on loans.
We must increase confidence in monetary policy as well.
Therefore, it was decided to create a Monetary Policy Committee within the structure of the National Bank. It will include independent members in its composition.
Since we are talking about the importance of a fair redistribution of national income, then the similarly, a fair tax policy should be developed. This policy should be understandable to all citizens of our country.
Today, about 40 different taxes and fees are levied. At the same time, administration of these taxes is complicated and has a pronounced compulsory character.
I therefore instruct the Government, the National Chamber of Entrepreneurs of Kazakhstan “Atameken” (“Fatherland”), to revise, in cooperation with the MPs, the Tax Code of the Republic of Kazakhstan and by-laws.
Our overall goal is to radically simplify the fulfilment of tax obligations and minimize the number of taxes and payments.
We should also think about the differentiation of tax rates as an additional lever for diversifying the economy and replenishing the budget.
In the SME sector, I consider it possible to empower entrepreneurs, working in the sectors, most affected by the COVID-19 pandemic, to pay retail sales tax.
International taxation rules also require our special attention. They should maximally stimulate the inflow of foreign investment and reinvestment of profits in Kazakhstan.
At the same time, reliable control over transfer pricing and capital withdrawal from the country is needed.
According to expert estimates, about a one third of the country’s GDP is in the shadow. This is a huge potential for increasing our budget revenues.
Digitalization of the tax and customs spheres will seriously help in the fight against the “shadow economy” in all its manifestations. Moreover, corruption is often fuelled by the shadow economy.
Therefore, I hereby order the reorientation of the activities of the Economic Investigation Service of the Ministry of Finance, mainly in the fight against the shadow economy.
We have to work out a new budgetary policy that is lean and responsible. We should finance only priority areas and projects. The period of monetary excesses has sunk into oblivion.
It is necessary to develop a set of key budget coefficients and rules.
To form a complete picture, it is necessary to introduce the so-called “extended budget”, which, in addition to the state budget, must take into account the finances of extra-budgetary funds.
The new budget planning system should support national priorities and become a subordinate part of the national planning system.
Government agencies should be given budgetary independence. This will enable quicker problems solving and reduce collective irresponsibility and red tape.
However, demand should also be tightened. To this end, I hereby order the strengthening of the functionality of the Accounts Committee for Control over Execution of the National Budget of the Republic of Kazakhstan.
In order to avoid a conflict of interest, the Accounts Committee for Control over Execution of the National Budget should be financed separately through the specialized committees of Parliament, and not through the National Budget Commission under the Government.
Competition policy is becoming increasingly important as well.
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 occupied by some monopolist business subjects in a way, which is far from free market ideals. Entrepreneurs cannot enter the market, and if they do manage to enter, they are forced to obey private monopolists.
Anti-competition behaviour persists everywhere: the market of coal, electricity, oil products, communications, pharmaceuticals, airport services, housing and communal services, logistics etc. (i.e. the list goes on).
At the regional level, the administrative resource is often the main component of commercial success.
It is necessary to clean up the mess with the so-called “monopoly players”, both public and private. It is important to accept clear rules: in what cases and in what form they are created, where their profits are spent. Hence, strong public monitoring is needed.
We require putting in order of matters related to the stock exchange trading, in the fields of oil products, electricity, and coal.
Imitation of transparency on the part of large players is unacceptable.
Therefore, a strong and independent body for the protection and development of competition is needed. I am instructing the creation of an Agency for the Protection and Development of Competition with direct reporting line to the President.
Denationalization of the economy plays an important role in the development of fair competition.
The central government agencies, akimats (local governments) and state holdings still own about seven thousand non-social facilities.
But the phrase that the state is not the best business executive is already becoming an axiom.
The Government must adopt a new privatization plan. Only social facilities should remain in state ownership, as should facilities that ensure the security and the normal functioning of the state.
In the quasi-public sector, work must continue to reduce the number of administrative staff, unprofitable costs, and overstaffed subsidiaries.
I would like to emphasize the role of National Managing Holding ‘Baiterek’ (the mission of “Baiterek” NMH JSC is to support the sustainable economic development of the Republic of Kazakhstan in the sphere of industrialization in order to implement public policies and achieve goals set by the 2050 Strategy), and National Managing Holding ‘KazAgro’ (the holding’s mission is to promote sustainable economic growth in the agro-industrial complex of the Republic of Kazakhstan in order to implement public policy and achieve strategic goals in the agro-industrial complex).
These companies have made a significant contribution to the industrialization and development of the agro-industrial complex, and have regulated the activities of financial institutions, previously unconnected with each other.
And now we are in a completely new situation. Changing their institutional structure is a matter of time. Therefore, it is necessary to unite these two organizations and create one institution of development with greater financial potential.
At the same time, the number of portfolio companies should be halved, and the number of staff should be reduced by 50%.
It is necessary to actively promote the economic interests of our country in the international arena, to ensure a constructive attitude and professionalism in the protection of national interests.
For the benefit of Kazakhstan, it is necessary to utilize the most of the great potential of the Eurasian Economic Union and the “One Belt – One Road” project.
In the times of new global situation, attracting investment to the country and exporting domestic goods and services shall be a special priority for the Government.
The potential of the Astana International Financial Centre should be realised more effectively.
The financial centre should become the main tool for attracting direct and portfolio investment.
Summing up, we cannot please everyone with the abstract growth of GDP. The population needs permanent jobs, convenient roads, hospitals, and schools, as well as quality food.
Economic reforms will be justified and supported only if they increase the income of citizens and ensure a high standard of living. We must always keep this in mind.
III. BALANCED TERRITORIAL DEVELOPMENT
It is necessary to substantially restructure the approaches to the country’s territorial and spatial development.
Our regions differ in economic and industrial specialization, living standards, and quality of public services.
Therefore, territorial development should be built by taking into account the competitive advantages of different regions.
The industrial potential of the south and southeast of the country should be more actively developed.
Half of the state’s labour resources are concentrated here. Hence, high-quality jobs are critically important for the development of these regions.
In addition to the traditional support for the agricultural sector, the most serious attention should be paid to deep processing of agricultural products, the development of the food and textile industries, the production of building materials and other industrial sectors.
Industrialization is important not only for solving social issues and raising the level of income. It also forms a new mentality of citizens, and adapts them to the modern world. And this is one of the basic factors of our nation’s competitiveness.
A new vision of the development of regions, where large metallurgical enterprises operate, is required. This is, first of all, the East Kazakhstan, Qaraǵandy and Pavlodar regions.
These regions can become centres of high-tech, science-intensive industries and technical services.
The western regions of Kazakhstan should become a centre of attraction for investment in the construction of petrochemical complexes, as well as the creation of new production cycles of a high added value. The fact that we still do not have petrochemistry and gas processing of high added value – this, as they say, “does not fit into any gate” (i.e. is totally inappropriate).
It is especially important to provide a new lease of life (as they say, a “second wind” or a “second breath”) to our monotowns. Here a great responsibility is assigned to the city-forming enterprises. This task will not be completed without their active participation.
Almost 30 million people live in the border regions of Kazakhstan and Russia, and there are several million-plus cities. Close interaction with Russian authorities and organizations to promote Kazakhstani goods, as well as to attract investment is an especially important factor in the development of Kazakhstani borderlands.
The problem of full disclosure of the potential of our villages remains a strategically important topic. The implementation of the program “Aýyl – El Besigі” (“Village as the Birthplace/Cradle of the Nation”), aimed at solving the most acute problems in the countryside, rural areas, shall be continued.
A new approach to regional development will help manage the urbanization process, ensure the phasing out of “migration waves”, as well as to avoid overpopulation and social tension in large cities.
IV. SOCIAL WELL-BEING OF CITIZENS IS A TOP PRIORITY
The social well-being of citizens is inextricably linked, first of all, to the housing issue.
In market conditions, the affordability of housing for citizens is based on the availability of income and the ability to independently solve this problem.
In the framework of implementation of my instructions, the issue of utilization by our population of a part of their pension savings for solving hosing issues was elaborated further. Nowadays this topic has become pressing issue.
Already in 2021, 700 thousand contributors of the JSC “Unified Accumulative Pension Fund” of the Republic of Kazakhstan (UAPF) will be able to utilize part of their savings for the purchase of housing, medical treatment or for transferring them to the management of financial companies.
I instruct the Government, together with the National Bank, to adopt all the necessary regulations and carry out preparatory work by the end of this year.
This reform will also become an effective tool for “whitewashing” labour relations, as well as for creating incentives for participation in the pension system.
Effective social support will be provided to our citizens with insufficient income to resolve housing issues independently.
This year the state programme “5-10-25” began to work. KZT 390 Billion tenge were allocated to this end. The implementation of this programme must be constantly monitored by the Government.
Housing problems of our citizens on the waiting list need to be resolved more quickly.
Now the akimats (local governments) independently build rental housing for them. Due to budgetary and procurement procedures, this takes a long time.
The time has come to make changes to this scheme. Funds should be directed not only to construction, but also to subsidize rent. In the first year, the coverage of this measure will increase 10 times, while more than one hundred thousand families will receive specific assistance.
I instructed “Otbasy Bank” (“Family Bank”), which is being created on the basis of the former “ZhilStroySberBank”, to streamline this work. The bank’s management is personally responsible for this issue.
The “Nurly Zher” (“Radiant Land”) programme is being implemented slowly in terms of the construction of individual housing.
This is mainly due to the low rates of development of territories, since, according to our legislation, land can be provided only if there is water and electricity supply.
A house on land is not only housing; it can become an economic aid for low-income citizens, especially for large families.
The Government and akimats (local governments) are obliged to accelerate the provision of communications for plots for social private houses, including through public-private partnerships.
I ask the MPs to take the resolution of this important problem “under their wing” (under their control). Can’t we provide affordable housing for rural workers, by forcing employers to build rental houses through subsidizing costs and, ultimately, improve the quality of life of our many fellow citizens?
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The family and demographic situation is a matter of serious concern as well.
Unfortunately, every sixth family in Kazakhstan cannot have children. Opinion polls show that about 20% of Kazakhstanis consider this a weighty reason (convincing argument) for divorce.
The United Nations forecast for the growth of Kazakhstani population, compared to our Central Asian neighbours, are disappointing.
I therefore instruct the Government to launch in 2021 a Special Programme “Ańsaǵan Sábi” (“Much-Desired Child”). It is necessary to increase the number of quotas for extra-corporal fertilization IVF programmes to 7 thousand, that is, 7 times.
Special attention should be paid to issues of safety and protection of children’s rights.
We have significantly increased the criminal liability for acts of a sexual nature against minors. But the problem remains acute.
Such criminals deserve more severe punishment, without the right to pardon (amnesty) and early release. They should be kept in facilities of maximum security.
Each such case should be under the special control of the Prosecutor’s Office. Inaction or negligence on the part of social and law enforcement agencies will be severely punished.
In general, we need a new paradigm of social policy.
The sphere of social security is regulated by 17 laws and dozens of bylaws of the Republic of Kazakhstan. This has led to the complexity and fragmentation of regulation. The result is a blurring of the responsibility of the state, as well as a lack of understanding by citizens of their own rights.
I therefore instruct the Government to start developing the Social Code of our country.
Measures should be taken to digitize social payments. To this end, it is necessary to introduce a digital “social wallet” of a citizen, as well as to create an appropriate distribution system of goods.
Our society will have to change the perception of labour values, teach the young generation to value work, and not to divide labour into prestigious and non-prestigious.
Unfortunately, young people want to get rich instantly. Hence their craze for lotteries, as well as betting in bookmakers. And also, unfortunately, inappropriate anecdotes about guest workers, a derogatory attitude towards their work have become popular in everyday life.
During these troubling months, we saw first-hand the enduring importance of each and every labourer.
A huge front of work has been done by our junior medical personnel, public utilities and service workers. This is a real labour feat. The people, who performed it, will not be left without the attention of the state.
V. QUALITY EDUCATION FOR ALL
As a result of the coronavirus epidemic, the vast majority of schoolchildren and students around the world have moved to distance learning. This is radically changing the way work is done and the content of work.
We are well aware of the mistakes, made by our Government in the organizational arrangements for distance learning.
Frankly, there is still no specific online platform for distance learning in our country. Hence, teachers, students and parents will not give up WhatsApp application all day and night.
There is an urgent need to develop a single online educational platform in our country, with all the necessary functions for a full-fledged learning process.
However, in order to receive quality education, it is important to attend classes and interact with teachers and classmates as usual. Therefore, it is necessary to develop a procedure for the transition to the traditional way of education, in compliance with sanitary requirements. This is especially important for schools.
In addition to solving everyday problems, it is necessary to take systematic measures to create equal opportunities for all children. Our children need quality education, no matter where they live or in what language they take education.
One of the main problems in the field of education is the low salaries of teachers.
I have decided to increase teachers’ salaries by 25% from January 2021. And wages will continue to rise in the years to come.
An additional amount of KZT 1.2 Trillion will be allocated for this purpose over the next three years.
We need to solve the problem of the comprehensive development of the child before entering school. I set a task to ensure 100% coverage of children under 6 years of age with pre-school education and training by 2025.
Building public kindergartens only will not solve this problem. We need to attract private businesses, as well as to find new forms of support, including a voucher financing mechanism. Parents can choose any kindergarten or school and pay with a voucher, given by the state authorities.
Experts reasonably argue that state support for only gifted schoolchildren can increase the social distance between children. It is unacceptable.
In this regard, the state authorities will support the so-called “ordinary” schools. It will also help to bridge the gap in education between urban and rural areas.
In order to increase the level of literacy of our citizens, as well as their digital knowledge, I instruct the Government to develop a Concept of Ongoing (Continuous, Permanent, Recurrent, Life-Long) Education. This document should provide for the active introduction of alternative options for non-formal education, recognition of the results of independent learning, as well as certification of professional skills.
We must also reorient the entire vocational education system towards the formation of competencies in demand on the labour market.
The stake will be placed on preparing a new wave of entrepreneurs. Therefore, the subject “Fundamentals of Entrepreneurship” should be studied at all levels of education – from schools to universities.
It is necessary to pay the most serious attention to the sports and creative potential of the younger generation.
In conditions of a shortage of financial resources, it makes no sense to support professional sports clubs entirely at the state expense. Yet, Billions of KZT from the state budget and quasi-state companies are spent inefficiently.
Priority should be given to mass sports, physical education and, of course, children. In each region, inter alia, in large district centres, sports sections should be opened.
It is required to resume the activity of children’s study groups (clubs, “circlets”), where representatives of the young generation could comprehend the basics of creativity and handicraft.
Modern realities are so dangerous for children that their energy and curiosity need to be directed in the right direction. After all, children are the future of our state.
We will evaluate the work of akims (governors) by this criterion.
A few words about the quality of higher education re in order. Last year, I ordered the closure of educational institutions involved in “printing” diplomas.
This job is difficult because of the resistance of influencers involved in the lucrative educational business. But the problem needs to be solved. The Prime Minister must take this issue under special control.
I also want to talk about the development of science.
We need a new approach this issue and new methods, while relying on international experience.
I instruct the Government to provide internships for 500 scientists in the world’s leading research centres on an annual basis, as well as to allocate 1,000 grants for research under the “Young Scientist” Project.
An important source of funding and support for science is the funds of large enterprises, especially companies in the field of raw materials.
The requirements of the current regulations on the transfer of 1% of income to the development of science and technology are not met. In most cases, these funds are distributed among companies.
I instruct the Government to centralize the accumulation of these funds and ensure that they are allocated through the budget in accordance with national scientific priorities.
It would be great if big business representatives would take care of the research activities of regional universities.
We need a special policy document for the scientific and technological development of the country. Its main task will be to use the potential of science to solve specific problems at the national level.
VI. DEVELOPMENT OF HEALTHCARE SYSTEM
The pandemic crisis taught us a lot. For example, to appreciate the work of a doctor. But medical workers before were on the periphery of state attention.
Of course, the importance of the medical profession must also be supported financially.
I order the allocation of KZT 150 Billion for the payment of incentive bonuses to medical workers for the second half of this year, when our budget is revised next.
We are doing this now, during the crisis. But we must do this on a systematic basis.
By 2023, the salaries of doctors will be twice higher over the average salary within our national economy.
The issue of medications supply has been resolved, but the domestic pharmaceutical industry needs to be rebuilt. All basic medicines and medical devices must be manufactured in Kazakhstan. This is a matter of national security.
I expect real results in this direction from next year.
Another issue is the development of medical infrastructure.
By the end of this year, 13 new hospitals for infectious diseases will be built in the regions of our country.
By 2025, 20 modern multi-disciplinary healthcare facilities will be commissioned. This means that about KZT 1.5 Trillion will be invested for this purpose.
At the initiative of the Leader of our Nation (Elbasy), two multi-disciplinary medical centres will be built in Nur-Sultan and Almaty. These centres will become the leading institutions of the country, and give a new impetus to innovative growth and development of applied medicine.
The Government will have to radically reconsider approaches to the organization of primary healthcare.
The primary healthcare should become more mobile and accessible to a wide-range of populations, including villagers.
Measures should be taken to revive transport of medicines to remote regions.
To create effective rural healthcare within three years, we need to provide all rural settlements with feldsher-obstetric stations and medical outpatient clinics.
The pandemic has sharply raised the issue of training doctors of rare specialties: epidemiologists, infectious disease specialists, resuscitators, pulmonologists, and cardiologists.
I therefore instruct the Government to draw up a long-term (maybe ten-year) forecast of staffing medical institutions.
Measures for the further development of the national healthcare system will make it possible to fully equip all medical organizations with the necessary equipment, renew the bed fund by 50%, replace outdated infrastructure, and bring the life expectancy in our country to 75 years.
VII. PROTECTION OF ENVIRONMENT AND BIODIVERSITY
Environmental protection and ecological development come to the fore on the Kazakhstani agenda.
The whole civilized world is dealing with this issue, and we should not stay away from the main trend.
A new draft Environmental Code of the Republic of Kazakhstan has been developed to solve a number of systemic problems. I ask the Parliament to consider and adopt this important document by the end of this year.
I instruct the Government to start implementing practical measures to improve the environmental situation. Long-term plans for the conservation and sustainable use of biological diversity should be approved.
Over the next five years, more than 2 billion trees will be planted in the forest fund, and 15 million – in settlements. This action will lead to a large-scale greening of our country. There is an acute issue of building-up the green belt around our capital.
Legislatively and normatively, it is necessary to protect national parks and other natural resources of Kazakhstan, as well as to toughen the criminal and administrative prosecution of citizens, who commit offenses in this area.
It is necessary to pay due attention to the ecological-environmental education of the younger generation in schools and universities. The Environmental Campaign “Birge – Taza Qazaqstan” (“Let us make Kazakhstan cleaner together”), designed to strengthen environmental values in our society, should be carried out on a systematic basis.
An important task is the active development of a culture of eco-tourism within our country.
In the mid-term, economic growth should become increasingly green. Therefore, the foundation for deep decarbonisation should be laid now.
I instruct the Government, in cooperation with the scientific community and the private sector, to develop a package of proposals for “green growth.”
The Government, together with the civil sector, will also have to develop a draft Law (bill) “On the Protection of Animals”. The attitude to animals is a measure of the civilization of any state, and we are far from all right with that.
VIII. A JUST STATE SHALL PROTECT THE INTERESTS OF ITS CITIZENS
Without the rule of law and without ensuring security of our citizens, no task of socio-economic development of Kazakhstan will be successful.
“A state that listens to the voice of its people” (the Concept of the “Listening State”) is, in fact, the Concept of Creating a “Just State”).
It is not enough to just listen and see the problems of citizens. The main thing is to make the right and fair decisions.
We need to work hard to develop new state standards that serve the interests of citizens. In this context, the law enforcement and judicial systems have a key role to play. This area is in dire need of reform.
Reality is changing rapidly. The more security forces rely on best practices, the more likely they are to fit into the context of international practice.
The current situation in the country imposes new requirements on law enforcement agencies, which must meet the demands of citizens.
However, due to the inertia of the past, an accusatory bias still prevails in the work of the law enforcement system. There are frequent cases when citizens are unjustifiably involved in the orbit of criminal prosecution.
Operational officers, who detect crimes and investigators, and those officers, who make procedural decisions, work under the same superiors. For their supervisors, the main task is to solve the crime and send the case to court. But the rights and freedoms of citizens should not suffer for the sake of indicators.
As for the prosecutor’s supervision, it is belated. Prosecutors get acquainted with the circumstances of the case only before this case being sent to court.
The criminal sphere should be modernized, following the example of the developed OECD countries. We need a model that ensures timely protection of citizens’ rights and meets high international standards. I consider it necessary to introduce in Kazakhstan a three-tier model with a clear division of powers.
The police must detect crimes, identify those involved, as well as to 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, as well as to support the prosecution in court.
The court shall consider complaints against the actions of the authorities, and issue a final verdict on the case.
This approach will strengthen the system of checks and balances, and create effective filters at every stage.
I emphasize once again: legality and fairness must be ensured by default. It must be remembered that the fate of people depends on mistakes in criminal cases.
In criminal cases, starting from 2021, the prosecutor should be legally charged with agreeing on key procedural decisions affecting human rights and freedoms.
It is important to ensure the stability of criminal legislation, as well as criminal-procedural legislation.
Their frequent adjustments have a negative effect on law enforcement, and do not allow for the development of a uniform investigative and judicial practice.
Decisions regarding the application of legislation are often made without proper analysis and forecasting, based on the convenience of law enforcement officers. Therefore, it is necessary to develop new concepts of “administrative” and “criminal” offenses. Hence, the logic of establishing punishment for offenses will become clearer to society and the legal community.
Throughout the progressive world, the police institute is developing on the basis of a service model. We also announced the transition to such a model, but so far, the work has led only to fragmentary results.
A more holistic reform of the local police service on the principle of “walking-distance police” is ripe, where the key role is assigned to the local police inspector (district inspector).
It is necessary to legislatively raise the status of the district inspector, as well as to provide him/her with all the opportunities for productive work. The district inspector must be recognizable, accessible, and authoritative for citizens, and actively defend their rights.
It is important to teach law enforcement officers to conduct an open dialogue with people. This direction should become a priority in the system of training and selection of police personnel.
Much is said about the development of video surveillance systems, but at the same time, the premises of the law enforcement agencies themselves often remain “blind” zones.
I therefore order the introduction of continuous video surveillance in penitentiary institutions, as well as in police offices.
The structure of the Ministry of Internal Affairs needs to be revised, freeing it from non-core functions. This will increase the efficacy and efficiency of this important governmental agency.
Considering that we have entered the era of natural and man-made disasters, I believe it is necessary to recreate the Ministry of Emergencies.
There are also problems in crime prevention work. It is necessary to reorient the supervision of the Prosecutor’s Office to effectively address the problems faced by citizens and businesses.
It so happened in our country that as soon as a respectable investor appears on the horizon, law enforcement and regulatory authorities immediately run to check him.
The Government and the Parliament will have to legislatively protect business from excessive interference by law enforcement agencies.
The current thresholds for bringing businesses to criminal liability for tax violations require revision.
Any investigative actions against registered entrepreneurs can be carried out only with the approval of a court or prosecutor. This option should also be considered.
An important criterion for the rule of law is impartial and fair justice.
The court must be adversarial, and the judge must be free from the pressure of prosecution bodies. To this end, it is necessary to ensure the equality of the advocate (attorney, lawyer) and the prosecutor.
Building public confidence in the courts should be our priority. Its achievement is possible only through joint efforts of the state and the judiciary itself.
The judicial system cannot be a closed corporation. The High Council of the Judiciary and the Supreme Court should intensify efforts to recruit new professionals to administer justice.
The judicial system needs specialists in the field of taxation, subsoil use, intellectual property, and corporate law.
The selection of judges should be accompanied by media, coverage so that the public knows for what merits one or another candidate was hired.
It is also necessary to develop alternative ways of resolving disputes, which will make it possible to find compromises without the participation of the state. Such institutions have shown themselves well in developed countries.
Almost ten years ago we adopted the Law “On Mediation”. But to date, not a single state body is engaged in its development, and there is no intelligible state policy on the ground.
This state of affairs should be corrected.
A representative Commission for the reform of the law enforcement and judicial system is being created under the Presidential Administration.
The fight against corruption is becoming more systematic. More attention is being paid to the causes of corruption, and preventive work is being done.
Now it is necessary to conduct a special analysis of governmental agencies and quasi-public sector regulations for work processes in terms of combating corruption. This is important to identify the factors that lead to corruption.
At the same time, the fight against corruption should not deprive the qualities of independence, initiative, and efficiency of our officials, who are afraid of being prosecuted.
We need to create an appropriate legal framework, supporting the institution of control from society (social partners) as an alternative to state control.
I therefore order the development and adoption of a Law “On Control from Society (Social Partners)” which will allow to ensure transparency and accountability of governmental agencies, as well as the quasi-public sector to the society.
The role of councils of social partners should be increased. It is necessary to involve them in the work of the commissions organizing the procurement. It is also necessary to consider the possibility of establishing councils of social partners in the quasi-public sector. The relevant bill shall be considered by the Parliament and adopted by the end of this year.
In addition, it is necessary to involve representatives of various social groups in the composition of councils of social partners. For example, we need to make it possible for people with disabilities to participate in the work of such councils of social partners, and make their voices heard.
These various social groups should always be in the focus of the state’s attention.
It is especially important to create a single information resource to make to the information on the financial and economic activities of quasi-government agencies, on the use of budget funds as well as other valuable data, available to our citizens, our society.
Transparency of information on government decisions will contribute to a constructive dialogue with civil society.
The draft Law (bill) “On Access to Information” should be desirably adopted by the end of this parliamentary session.
I also think that it is necessary to introduce new methods of combating corruption.
From 2021, it is necessary to introduce new restrictions within the fight against corruption in relation to the storage of cash and valuables by civil servants, MPs, and judges in foreign banks.
In case of detection of dual citizenship of a public servant (civil servant) or the head of a quasi-public institution, they shall be dismissed.
It is necessary to amend the Criminal Code in terms of toughening penalties for corruption of law enforcement officers, judges, bribe-givers, and supporters of corruption.
Conditional early release from punishment will not be applied to those, who have committed corruption-related crimes.
The principle of a lifetime-ban on corruption detainees from working in the public service (civil service) and the quasi-public sector must be strictly adhered to.
We need to create a system of legal protection for those, who report corruption.
It is also critical to take new measures to protect human rights.
This problem is a priority for me.
Like the rest of the world, Kazakhstan is also faced with the vulnerability of citizens from bullying on the Internet. First of all, children suffer from this. They are especially sensitive to cyber-bullying, which, unfortunately, has dire consequences.
It is time to take legislative action to protect citizens, especially children, from cyber-bullying. Other measures to protect children’s rights need to be strengthened, in particular to accede to the Optional Protocol to the Convention on the Rights of the Child on a Communications Procedure.
The issue of improving national legislation to combat torture remains relevant as well.
This document, which criminalizes torture, needs to be harmonized with the provisions of the International Convention against Torture and Other Cruel, Inhuman Acts.
The fight against human trafficking is also on our agenda. Here Kazakhstan does not look good in the eyes of the international community.
Our law enforcement agencies will have to improve the procedures for investigating such crimes. They must be severely punished by the courts.
This important task requires coordinated action of governmental agencies.
I hope for the speedy adoption of the relevant laws in the Parliament.
The fight against human trafficking is also on our agenda. Here Kazakhstan does not look good in the eyes of the international community.
Our law enforcement agencies will have to improve the procedures for investigating such crimes. They must be severely punished by the courts.
This important task requires coordinated action of governmental agencies.
I hope for the speedy adoption of the relevant laws in the Parliament.
IX. DIGITALIZATION AS THE BASIC ELEMENT OF ALL REFORMS
Digitalization is not a fashion trend, but a key instrument for ensuring our national competitiveness.
First of all, it is necessary to eliminate the digital divide, ensure maximum access to the Internet and high-quality communication for all our citizens.
Today it has become a basic need, similar to roads and electricity.
Children from socially vulnerable families should be provided with computers and high-quality Internet. By the end of this year, each village with a population of over 250 people will have access to the Internet.
We do see what problems people face when assigning pensions and social benefits. They need to collect a heap of papers, walking back and forth (one long ordeal).
These processes need to be fully digitized. Data should “run”, not people.
We must strive to abandon the use of paper in inter-agency interaction and when communicating with citizens.
I hereby order the cancelation of the “most popular” certificates and paper confirmations by the end of this year, as well as the provision of digital confirmation of information.
There is already a good practice for address, property, and other similar certificates.
Identity cards, diplomas and licenses must be accepted by governmental agencies in electronic form (soft copies).
To simplify the interaction of the population with electronic services, biometrics should be widely used at the level of public services and in private business.
Working with “data” must reach a new level. Providing a unified database system, as well as their further development is one of the main tasks of our Government.
So far, this work has not been properly structured, due to the dominance in the IT industry of a number of state-owned and affiliated companies.
Ministries and akimats (local governments) also have information and analytical or IT structures that protect only narrow departmental interests at the expense of the overall strategy.
The development of the IT market, engineering and other high-tech services is not only the creation of added value and jobs within the country, as more opportunities appear for the export of such services abroad. It is important to unleash this potential.
We see the interaction between the IT industry and the national business as a promising area.
Large state and private companies of Kazakhstan spend tens of billions of KZT on the applications elaborated abroad by foreign actors.
Our Government therefore should establish mutually beneficial cooperation between industry and the IT sector. This will create digital technology platforms that can drive the digital ecosystem of every industry.
We have passed laws, allowing Kazakhstan to become one of the international hubs for processing and storing “data”. Last year alone, more than KZT 80 Billion of investment was attracted to digital mining. But we cannot stop there. We should attract the world’s digital giants to our country. Otherwise, other states will do that.
Within the next five years, it is necessary to bring the value of investment in this industry up to KZT 500 Billion.
Х. PARTICIPATION OF CITIZENS IN PUBLIC ADMINISTRATION
We have started to create a “state that listens to the voice of the people” (“Listening State”). As I said before, this does not mean that governmental agencies should be responsible only for the daily problems of citizens. This is, first of all, a constant dialogue between the government and society.
The National Council of Public Trust has given a new impetus to the development of civil dialogue and social cohesion. The Council has fulfilled its mission of establishing a process of national dialogue in the country. As a result, a series of political reforms is being implemented.
In particular, a completely new law “On the Organization and Conduct of Peaceful Assemblies” was adopted, while the laws “On Political Parties”, “On Elections”, “On the Status of the Parliament and its Deputies” were amended.
Amendments were also made to remove Article 130 of the Criminal Code from the category of crimes and to humanize its Article 174.
I thank the Parliament for the quality and speed of work.
This is just the beginning of our political reforms. Modernization of the political sphere will continue. Almost all institutions of the state need to be reformed.
The main purpose of modernization is to increase the efficiency of the state system as a whole.
If we really want to improve the well-being of our citizens, we must actively involve them in this work. All future political reforms should be aimed at greater involvement of the population in public administration.
For example, opinion polls show an increase in the demand for rural mayors to run for office.
This important step should be carefully considered and implemented consistently. We need to know exactly how such a system works.
However, the solution to this problem should not be postponed.
The term of office of akims (heads) of a number of rural districts will end next year. I think it is possible to hold direct elections of village akims (heads).
In addition to being elected by local authorities, we need to define the division of powers between levels of government and local self-government.
One of the most important issues is the development of a model of budgetary financing of the regions.
At the same time, in addition to the relationship between “centre and region”, special attention should be paid to the distribution of funds within the region.
It is necessary to strengthen control over the approval of local budgets. This is due to the fact that the allocated funds are often not spent on the real needs of the population.
Our citizens are dissatisfied with the fact that only one or two streets are repaired every year on local level, and, additionally, with the inefficient spending on image activities. This is quite appropriate dissatisfaction.
Public expertise should be conducted to allocate funds from the budgets of districts and settlements for infrastructure and social initiatives. In this case, it is recommended to conduct an online survey.
It is necessary to strengthen the financial capabilities of local governments. To this end, it is necessary to expand property rights and increase the revenues of the budgets of rural districts.
This should be the next stage in the development of “budgets with public participation”.
By December 1 of this year, the Government will develop a regulatory framework and mechanisms for solving this important problem.
Maslikhats, our local representative bodies, are called upon to monitor the optimal use of local resources. But their opinions are often ignored. This is already a political anachronism.
I believe it is possible to endow maslikhats with the function of collecting signatures and drawing-up petitions on the development of the region or local problems that have not been solved for decades.
It is also necessary to strengthen the auditing commissions of maslikhats. I instruct the Government and the Accounts Committee for Control over Execution of the National Budget of the Republic of Kazakhstan to prepare a package of relevant amendments to the legislation.
It is necessary to introduce mandatory online broadcasts of the meetings of maslikhats. Discussions of people’s representatives, as well as their socio-political appearance should not be a secret for society.
It is proposed to gradually differentiate the powers of local government bodies and local self-government bodies.
It is necessary to improve the status of local self-government bodies – gatherings and meetings. Their opinion on topical problems on the ground should be taken into account by regional maslikhats for making specific decisions.
We should dwell separately on the issue of self-government in cities.
A reform was launched to introduce the institution of associations of property owners. A corresponding law has been adopted. All the apartment complexes will gradually switch to this form of management.
The reform is designed to take into account the views of residents on property management, as well as to raise accountability in spending funds on maintenance and repairs.
The government and akims (governors) must ensure that this important reform is implemented. After all, associations of property owners are, in fact, basic elements of the institution of self-organization and self-government.
The time has come to develop a new Concept for the development of local self-government. Parliament on its basis will adopt a package of relevant laws.
It must be admitted that formality and lack of efficiency are still widely present in the work of governmental agencies. Citizens are forced to demand the solution of their local problems from the central government, as well as to file complaints and submit them to the Head of State.
Therefore, it is time to delegate more authority and responsibility to local leaders.
Problems that cannot be solved locally, are made known all over the country through social media.
It is necessary to create a single legitimate institution of online petitions for citizens to initiate reforms and proposals. Such a mechanism must be completely protected from any manipulation.
The government, in collaboration with civil society, will have to develop a regulatory framework and resolve all technical issues related to this important project.
Political parties will continue to play an important role in protecting the interests of our citizens.
The ‘Nur Otan’ (‘Radiant Fatherland’) party has proved through its actions that it is a leading political force in our society. The party will take an active part in the implementation of future reforms and utilize its full potential.
At the same time, as the Head of State, I am obliged to make efforts to develop a truly multi-party system.
We are not standing still. We are gradually adapting our political system to the new situation and develop it. Our society needs political reforms, so they will definitely continue.
The main enemies of democracy are ignorance and populism. That fact must be taken into account.
I hope that our citizens will support the reforms. I hope that they will not allow the rise of hype in society due to new political opportunities.
The successful implementation of all these reforms and changes depends on the unity, patriotism, and civic responsibility of all of us.
XI. THE NEW LIFE AND NEW BEING OF THE NATION
The current task is to form a new identity of our people, to improve the quality of the whole nation.
Life itself shows the need to modernize people and society.
Only a renewed nation can show the world the success of a revived country.
I want our people to have more exemplary qualities the world could take as an example.
For our nation to move to a new quality, our daily life principles must change.
New principles and new directions should be solemnly established in the Kazakh society.
The great teacher of our nation, Ahmet Baitursynuly, has said once: “It is necessary to study to be educated. It is necessary to have a profession to get rich. It is necessary to achieve unity to be strong. We need to work to implement these needs. “
This approach is particularly important today.
First of all, the generation of the twenty-first century should be deeply educated.
Secondly, it is necessary to adapt the younger generation to work hard.
Thirdly, nowadays any work should be done with professional skills.
Fourthly, we must all have an iron discipline and a high-level of responsibility.
Fifthly, we must not deviate from justice. Justice is an important condition for the development of our society. Justice is an important quality, especially for deciding the fate of the people.
Sixthly, we need honesty, accuracy, and thoroughness. We all want to see entire Kazakh society really developing in such a way. Only then can we build a competitive state, an intellectual nation.
The task of the Kazakh intelligentsia at a new stage is to establish new principles of our nation, as well as to contribute to improving its best qualities.
A modern society must gradually get rid of bad habits.
Extravagance and luxury tarnish the image of both society and people. Irresponsibility and negligence afflict the whole country. And empty vocabulary and arrogance hinder the development of society. As the great Abai openly said about this: “One only paints the face of truth with false pride”. This issue is relevant even today.
We should instil in the minds of every citizen the great concept of work that leads to high ideals.
In our country, the system entitled “Responsible State – Responsible Society – Responsible Person” must be established firmly.
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We have large-scale and complex tasks ahead of us. Their successful implementation requires a new approach, innovative thinking, nation-wide solidarity and accord, and mutual support.
Our strategic direction is clear. We are well aware of our problems and shortcomings.
Today I presented to the Kazakhstani society the Plan of Action to be taken in the current crisis conditions. Its successful implementation depends on each of us.
We all need to make every effort to develop ourselves. The challenges of the contemporary times demand from us constant movement and activity, strong efforts and hard work.
Therefore, the happy and bright future of our country will depend on the hard work of every citizen.
Every generation is predetermined to meet different challenges.
In our own history, we have always smoothly addressed life’s challenges. Our nation can solve even the most difficult tasks. We are ready for that.
We are a generation that has achieved the centuries-old dream of our people on the path to independence.
Next year will mark the 30th Anniversary of our independence. This jubilee is an especially important milestone for our sovereign country. This will be the beginning of a new historical period.
We have a great responsibility for the future of our state.
When our unity, solidarity and accord are strong, we will overcome all difficulties and achieve our goals.
We can do it.
I am convinced of that.
May our country always be safe.
I thank you all.