Alikhan Smailov about President Address "Economic course of a Just Kazakhstan": Government sets ambitious, but achievable goals

Measures to implement the Address of the Head of State "Economic Course of a Just Kazakhstan" were considered at the Government session chaired by the Prime Minister of Kazakhstan Alikhan Smailov. 

According to the President's Address, the new paradigm of economic development of Kazakhstan will be based on the effective use of competitive advantages of the Republic, as well as unlocking the potential of all key factors of production such as labor, capital, resources and technologies. 

"Thus, the Government will need to focus on priority sectors of the economy. This is, first of all, the production of high-value-added goods, the full disclosure of transportation and logistics potential, the development of the tourism cluster and the use of reserves of the agro-industrial complex," Alikhan Smailov emphasized. 

Minister of National Economy Alibek Kuantyrov made a report on the main measures to implement economic policy, development of entrepreneurship and modernization of state administration. 

Deputy Prime Minister – Minister of Finance Yerulan Zhamaubayev reported on improving the planning of budget expenditures, Minister of Energy Almassadam Satkaliyev reported on the development of energy and gas industries.

Minister of Agriculture Yerbol Karashukeyev, Minister of Digital Development, Innovation and Aerospace Industry Bagdat Mussin made reports on the implemented and planned measures in the supervised sectors.

Minister of Education Gani Beisembayev informed on issues of improving the quality of education and child safety, Minister of Science and Higher Education Sayasat Nurbek informed on issues of science development and training.

The session also considered measures on development of manufacturing industry, infrastructure, tourism and creative industry, ecology and water industry.

Alikhan Smailov emphasized that the Head of State in his Address voiced the primary tasks to ensure economic growth and diversification. 

"The initiatives presented by the President are large-scale and are a logical continuation of the initiated reforms aimed at building a strong and prosperous state. In turn, the Government should use all its potential and focus on achieving concrete results," Prime Minister said.

Thus, to reduce the fiscal burden on business it is necessary to reduce by 30% the forms of tax reporting with full digitization of control, to support the manufacturing industry it is necessary to provide tax incentives to attract investors in the industry. 

"The Ministries of National Economy and Finance together with the Chamber "Atameken" should work out the issue of exemption of investors from paying taxes for the first 3 years," Alikhan Smailov noted.

At the same time, he pointed out that within the framework of the draft of the new Budget Code it is necessary to fix the main provisions of the pilot project on the block budget, to continue work on transferring to the second level of the budget part of revenues from taxes and other types of payments, including VAT, as well as to additionally consider the possibility of transferring to the regions the authority to determine preferences for the part of taxes that are collected in the local budget. 

In terms of resetting the tariff policy Prime Minister drew attention to the importance of introducing digital tools of control and fixing counter obligations in the form of increasing the responsibility of monopolists.

Along with this, he pointed out the need to provide legislative incentives to promote the consolidation of small businesses, to develop a comprehensive program to support SMEs by combining the Business Roadmap and Economy of Simple Things programs, as well as to timely introduce turnkey construction tools in public procurement and launch the offteik system.

Together with the business community, the issue of creating a regional commodity exchange will be worked out, and a full-fledged export promotion institute with consolidation of all necessary tools will be created on the basis of the Kazakh Export company.

Prime Minister stressed that in light of the instructions of the Head of State on further development of the transit potential of the country and expansion of transport and logistics infrastructure, the new Ministry of Transport needs to accelerate the implementation of a number of major projects in the railway industry. In addition, it is necessary to ensure the expansion of port facilities with the involvement of foreign companies and reconstruction of more than 4,000 km of roads by 2029.

Alikhan Smailov noted that in the formation of a strong industrial framework of the country, the main emphasis should be placed on the accelerated development of the manufacturing sector. In this regard, the Ministry of Industry should focus on the creation of high-processing clusters with the implementation of breakthrough and significant projects.

"In doing so, it is important to envisage maximum utilization of internal resources. It is necessary to utilize the potential offtake contracts," he said.

According to the Head of Government, in the defense industry complex it is necessary to ensure a high share of localization, transfer of modern technologies and support of domestic enterprises by financing through the Fund for the Development of the Defense Industry Complex.   

At the same time, there is a need to develop flexible regulatory and fiscal conditions for the development of geological exploration.

Alikhan Smailov pointed out that the Government has set tasks for further gasification of the country, construction of new gas processing plants and full utilization of existing processing capacities. In this regard, it is required to take measures to attract investment in the exploration and development of new gas fields, as well as to finalize the draft Comprehensive Plan for the development of major oil and gas and petrochemical projects until 2027. 

According to him, one of the main tasks will be to carry out a comprehensive reform of the water industry. For this purpose, a new Ministry of Water Resources and Irrigation has been created.

"The main priorities of its work will be the widespread use of advanced water-saving technologies, cooperation on joint management of transboundary river resources, introduction of new tariff policy and regulations, construction of modern water infrastructure," Alikhan Smailov said. 

At the same time, he added that special attention should be paid to ecological safety and environmental protection. In this regard, the Ministry of Ecology together with interested government agencies and the business community is required to discuss and develop a roadmap to improve the environment around large-scale industries.

In terms of ensuring food security, the Ministry of Agriculture is instructed to spread the experience of the North Kazakhstan region on the construction of dairy farms to poultry farms, vegetable storages and other areas.

"The President has set a task for the Government to increase the share of processed products in the agro-industrial complex up to 70%. It is necessary to adapt the achievements applied in the world practice to increase the productivity of the domestic agro-sector. Special attention should be paid to the renewal of the fleet of agricultural machinery by 8-10% per year," Prime Minister said. 

He also reminded that an important stabilizing role is assigned to the Food Corporation, which will intervene to curb price growth in the food market.

Alikhan Smailov emphasized that the Head of State sets new ambitious tasks for the Government to bring the export of IT services to $1 billion. 

"One of the mechanisms for the realization of this task is the creation of enterprises together with large international companies, as well as the development of venture financing. In this regard, the Ministry of Digital Development together with interested government agencies need to develop an appropriate set of measures for further digitalization of the economy, development of IT infrastructure and innovation," he said. 

Prime Minister also pointed out that as part of the transformation of the Baiterek holding it is necessary to reorient the activities of Otbasy Bank to provide housing primarily for residents of districts, single-industry towns and villages.

Proceeding to the social block, Alikhan Smailov highlighted the importance of raising the minimum wage to 85 thousand tenge from Jan. 1, 2024, the adoption of the Comprehensive Labor Development Plan until 2030 with regulation of the sphere of platform employment, the Concept of safe labor until 2030 to prevent and eliminate occupational risks at workplaces. However, he added that it is necessary to promptly make proposals for legislative fixation of special social benefits for persons employed in harmful industries.

Prime Minister also noted that the basis for the well-being of the citizens of the republic is getting quality education. In this regard, he demanded to take measures to improve the competence of teachers with the development of courses on new topics and demanded competencies, to continue work on increasing the speed of the Internet and providing free access to digital educational resources, as well as to ensure quality implementation of the Comprehensive Plan for the protection of children from violence and prevention of suicide.

Along with this, Alikhan Smailov instructed to take additional measures in terms of strengthening psychological services, providing assistance to victims of violence and bullying, to increase the state order for technical and working specialties, as well as to work out flexible funding mechanisms within the state order depending on the priorities of the economy, specifics of regions and industries.

"The Ministry of Science should promptly work out together with government agencies and second-tier banks the issues of implementation of the Keleshek Unified Voluntary Savings System," he said. 

Prime Minister also emphasized that 3 universities should be identified, on the basis of which it is possible to provide training in the field of artificial intelligence.

In addition, Prime Minister instructed the Ministry of Culture and Information together with akimats to make specific proposals on measures to support participants of the creative industry and the establishment of creative industry centers in each region, and the Ministry of Tourism and Sports - to identify a specific list of at least 15 major projects in the tourism sector and develop a detailed road map for their implementation.

Summarizing the results of the session, Alikhan Smailov noted that the Head of State has set ambitious but achievable goals for the Government. All necessary tools and resources are available for this purpose.

"Each of you is responsible for the effective implementation of the presidential reforms. The work should be coherent and constructive. We must make every effort to solve the set tasks," Prime Minister said.

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