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Experts on the Address: Forecast Scheme will allow regions to use competitive advantages and identify reserves of economic growth

by October 20, 2018 General

In the President’s Address to the People of Kazakhstan Growing Welfare of Kazakh Citizens: Increase in Income and Quality of Life, along with improving the quality of social services for the population and creating wide opportunities for improving living conditions, special attention was paid to creating a comfortable living environment. The Head of State instructed to develop the Forecast Scheme for Territorial and Spatial Development of the country until 2030.

How is the Forecast Scheme 2020 being Implemented?

In Kazakhstan, the Forecast Scheme until 2020 has been implemented since 2011. This document is an important tool for the development of the country, defines the approaches of the state in key areas of regional development.

Acting Chairman of the Board of Economic Research Institute JSC Mukhan Bayrzhan said that the main goal of the current Forecast Scheme is to create conditions for the sustainable development of regions based on the effective use of the socio-economic potential of each region.

The main objectives of spatial development were identified:

formation of centers of economic growth;

formation of an optimal population settlement system;

development of competitive economic specialization of the regions;

strengthening regional infrastructure;

creating conditions for raising the standard of living of the population;

preservation and improvement of the ecological state.

In addition, the Forecast Scheme provides a linkage of current and long-term, macroeconomic, sectoral and regional aspects of development, allows to coordinate the actions of business, sectoral and territorial government agencies and other organizations.

The long-term focus and complex nature of the Forecast Scheme can be used to identify existing reserves and opportunities, to form on this basis, promising areas of economic growth, complementing or developing already existing areas.

At the same time, the Forecast Scheme is aimed at creating conditions for improving the well-being of the population based on the rational organization and placement of the socio-economic potential in the country.

The Head of the State in his Address to the people of Kazakhstan Growing Welfare of Kazakh Citizens: Increase in Income and Quality of Life dated October 5, 2018, ordered to introduce new approaches to the territorial development of the country.

Urbanization � One of Modern Trends in Human Development

Bayrzhan Mukhan draws attention to the fact that the new Forecast Scheme must necessarily take into account the main trend of human development � urbanization. After all, the Head of State in his Address stressed that the Forecast Scheme will become the New Map of the managed urbanization of the country.

According to Mukhan, cities are the engines of economic growth and prosperity of states. About 70% of the world’s GDP is produced in cities.

The experience of developed countries demonstrates a direct relationship between high income levels and the development of large cities.

In developed countries, urbanization is at a very high level. For example, in the US � 82%, South Korea � 83%, Holland � 90%, Australia � 90%, Japan � 94%.

Developed countries through the concentration of production, human resources, enterprises in large cities ensure their close cooperation, thereby increasing their competitiveness.

Therefore, we should also take measures to ensure quality urbanization in the country. In order to prevent signs of false urbanization, when the chaotic expansion of urban areas occurs, the development of the Forecast Scheme of spatial development until 2030 will provide approaches to managed urbanization and the formation of agglomerations, Mukhan said, noting that at present the level of urbanization in Kazakhstan is 57.4%.

Emphasis � on Development of Regional Growth Points

Director of the Center for Regional Studies of the Economic Research Institute JSC Kaisar Nigmetov, in turn, noted that as part of the development of the Forecast Scheme, it is necessary to reduce the development gap in the gross regional product per capita between regions.

According to him, today the development of the regions is uneven, as evidenced by economic indicators.

The uneven distribution of the gross regional product and real incomes of the population throughout the country shows what difference in regional development exists, the expert said.

Analysis of the distribution of GRP per 1 km� of the territory indicates that economic growth is concentrated in Atyrau, West Kazakhstan, Mangystau, South Kazakhstan, Pavlodar, Almaty regions, Astana and Almaty. The smallest economic growth is in the Kyzylorda region.

Incomes of the population are also not evenly distributed over the territory. The excess of the average republican level of GRP per capita remains at a high level in the Atyrau region (in 2017 � 3.4 times). A similar trend is observed in Astana and Almaty (in 2017 � 2 and 1.7 times, respectively), in the Mangystau region (in 2017 � 1.4 times). Regions that do not reach the average republican level of GRP per capita are the South Kazakhstan (in 2017 � 36.9%) and Zhambyl region (in 2017 � 40.8%). As Nigmetov noted, it is planned to reduce the development gap in GRP per capita between the regions from 3.3 times to 2.7 times in 2025. However, it is difficult to achieve a complete balance of the development of territories due to the existing differences in regional economies (different economic structure).

In our opinion, the task that stands within the framework of the development of the Forecast Scheme 2030 is to ensure the use of competitive advantages by the regions and to identify reserves of economic growth. In the approaches we propose, the focus will be on the development of growth points, i.e. development of regions, settlements with the greatest economic potential, the expert said.

According to him, there will be support for the growth of urbanization due to the growth of large cities, functional urban areas � as an analogue of agglomerative entities at the regional level. In this case, measures will be envisaged to improve the provision of basic standards of life support (water, heat, electricity, roads) with state and social services.

Focus on Mono and Small Cities

Another topical issue that needs to be addressed as part of the development of the Forecast Scheme 2030, according to experts, is the infrastructure of mono-towns and small cities (27 single-industry towns and 41 small cities).

According to Mukhan, single and small cities with a low level of engineering, transport and social infrastructure continue to be in a difficult situation, which requires updating the fixed assets of infrastructure facilities.

The Economic Research Institute developed a methodological approach to analyzing the development of single and small cities, which included a number of areas affecting their development: financial sustainability, SME development, the state of engineering and transport infrastructure, demography, health care, education, said Mukhan

As a result, it was found that in mono-towns there are seven cities with high potential (25.9%), 15 � with medium (55.6%) and five � with low potential (18.5%) and in small towns � 7 cities with high (17.1%), 19 � with average (46.3%) and 15 � with a low potential (36.6%). As can be seen, cities with medium potential prevail. The so-called depressive mono- and small cities were determined on the basis of an analysis of additional criteria: low potential, negative migration balance, demographic aging of the population, decline in production, high wear of infrastructure, remoteness from roads and highways.

Within the framework of the Forecast Scheme 2030, we assume that for each type of mono and small cities, depending on their development potential, differentiated packages of support measures will be proposed, the expert said.

The Task � to Increase Economic Potential of Villages

Also in the framework of the development of the Forecast Scheme 2030, issues of increasing the economic potential of rural settlements are being worked out. For this, various mechanisms of optimization of the administrative-territorial structure will be applied. For example, integration, reassignment of rural settlements within the boundaries of their areas, taking into account economic factors and distance factors, and others.

According to Nigmetov, the small population of rural settlements also negatively affects their economic potential, due to the low taxable base, which with the introduction of an independent budget at the level of rural districts retains their dependence on subventions from the higher budget.

The task of the Forecast Scheme is to determine the territories that will be the centers of attraction for the population, and to determine their infrastructural readiness to receive the population. At the same time, the population that wants to relocate from populated areas with low economic potential should be able to use state support for relocation, Nigmetov emphasized.

Population Should be Provided with Basic Quality of Life

According to Mukhan, the task of spatial development is to ensure that, regardless of the place of residence, the population is provided with a basic quality of life in all regions, within the framework of the so-called regional standards, which the Head of State said.

The main priorities of spatial development until 2030 should be:

formation of digital industries and new points of growth;

improving the quality of life of the population of the entire territory of Kazakhstan, on the basis of equal access to social services and public goods on the principle of inclusive development;

ensuring uniform minimum social standards and equal social protection of the population, regardless of the economic opportunities of the regions;

economic recovery backward regions and the development of new areas and resources;

development of local government;

the development of a regional market, the formation of interregional relations and the expansion of foreign economic cooperation;

the most complete satisfaction of the basic needs of life, both present and future generations on the principle of sustainable development.

Nigmetov noted that at present, there is a number of challenges facing spatial development: the uneven development of regions, demographic imbalances, environmental problems, water scarcity; lack of industrial and social infrastructure; formation of competitive specialization of regions.

In general, we believe that the development of the Forecast Scheme 2030 should be an applied and in-demand document that will determine the development of the country for the next 10 years, he said.

At the same time, according to him, the Forecast Scheme has 3 groups of beneficiaries:

1) the population that will know:

prospects for the development of its settlement in terms of providing social and engineering infrastructure;

a list of specific goods and services for your community within the framework of regional standards;

which industries, in which localities need labor resources.

2) entrepreneurs, investors who will know:

prospects for the deployment of productive forces, taking into account resource (raw material) security;

plans of state bodies for the provision of production and transport infrastructure in the context of regions;

the system of settlement of the population of the country by region.

Also, the Forecast Scheme will allow the business to plan its production and investment activities.

3) For government agencies, quasi-state-owned enterprises, the forecasting scheme will make it possible to comprehensively link sectoral and spatial development, taking into account the demographic population forecast, ensure continuity and consistency of decisions made, projects implemented, define clear state planning systems, ensure rational spending of budget means.

Source: The Prime Minister of Kazakhstan