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State programs: Government of Kazakhstan on results of activities for 2017

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In figures, the dynamics of Kazakhstan’s development for the reporting period is as follows. In 2017, the economy grew by 4%. Growth of industry by 7.1% and the services sector by 2.7%, with the exception of external factors, contributed to the steady GDP growth. The budget revenues reached 9.7 trillion tenge. Of these, 48% account for transfers. As for expenses, they were executed at 99.8% and implemented for 11.156 trillion tenge.

A number of adopted legislative changes facilitated the implementation of the tasks outlined by the Head of State. Therefore, according to the results of 2017, 93 laws were passed, for five months of the year � 25 laws. Among the fundamental ones are the Tax and Customs Codes, laws on the regulation of entrepreneurial activity. It is assumed that the tax reform will increase the amount of expected revenues to the budget in 2018 by 90 billion tenge, and in the three-year budget by 300 billion tenge.

The Government is focused on the unconditional implementation of the course set by the Elbasy in the Kazakhstan-2050 Strategy and the Plan of the Nation “100 Concrete Steps to Implement the Five Institutional Reforms.” The large-scale work on the implementation of the Third Modernization, the Address on the Fourth Industrial Revolution, Comprehensive Plan for the Human Capital of the Nation “Ruhani Zhangyru,” a new package of the Five Social Initiatives to improve the living standards of the people of Kazakhstan.

Following the results of 2017, economic growth is ensured and five months of this year also support the initiated dynamics � in January-May the economy of Kazakhstan grew by 3.9%:

The volume of investments in fixed assets increased by 25.3%;

The volume of industrial production increased by 5.4% (industrial output was significantly affected by the production of natural gas, crude oil, paper and paper products, tobacco products and chemical industry);

In mining and quarrying, production increased by 5.6%;

In manufacturing, there was an increase of 5.5%;

The growth of gross agricultural output was 3.9%;

The volume of transportation services increased by 4.8%;

The volume of cargo transportation � by 5.5%, passenger transportation � by 1.6%;

The volume of communication services increased by 6.4%.

The volume of retail and wholesale trade grew by 5.8%.

Foreign trade turnover in the end of 2017 reached $77.6 billion, which is 25% higher compared to 2016 ($62.1 billion). The first quarter of this year also marked an increase in turnover by 24.3% to $21 billion, including an increase in exports by 27%. Today Kazakhstani products are delivered to the markets of 123 countries of the world.

It should be noted that the Government is taking concrete measures to implement the President’s course on institutional and structural reforms.

The Plan of the Nation “100 Concrete Steps”

Since the adoption of the Nation’s Plan “100 Concrete Steps to Implement the Five Institutional Reforms,” 55 steps have been taken.

The first reform is the formation of a professional state apparatus. The transition to a career model of civil service gave equal opportunities to employees in advancing on competence. Comprehensive certification of civil servants was carried out. The approbation of a new system of labor remuneration based on the results has begun. All this creates conditions for the growth of competencies and the quality of public services rendered to the population.

The second reform � ensuring the rule of law. The transition of justice to a three-tier justice system ensures the timely protection of the rights of citizens and business. The quality of requirements for the judiciary has been increased, and their accountability has been strengthened. The legal proceedings on investment disputes, the International Arbitration of the Astana International Financial Center have been created. A local police service and public councils have been set up to look at complaints from citizens about the actions of police officers.

The key direction of the Government’s actions is the implementation of the third reform aimed at further industrialization and ensuring sustainable growth.

The compulsory issuance of electronic invoices for 300 large taxpayers was introduced, and from 2019 � for all VAT payers.

Eight projects involving TNCs in priority sectors of the economy were implemented.

To expand and develop the transport infrastructure, a new Nurly Zhol railway station was opened, flights with international financial centers have been launched (direct flights from Astana to Frankfurt, London, Dubai, Seoul, Beijing and Paris, Istanbul).

Regular rail container lines have been opened on 28 international routes, which enhances the country’s transit potential and Kazakhstan’s integration into world transport and communication flows.

The seaports of Aktau and the first phase of the Kuryk port have been modernized. At the completion of the second phase of modernization of the port this year, the total throughput of seaports will increase to 26 million tenge. A contract was concluded with the investor for the implementation of the Big Almaty Ring Road project until 2036.

April 1 for the development of the electronic declaration system, the Astana-1 Information System was put into operation.

The Astana International Financial Center, the official opening of which is scheduled for July 1, 2018, will become a financial hub for the CIS countries and the entire region of Western and Central Asia.

The main goal of the implementation of the fourth reform is identity and unity � the strengthening of Kazakhstan’s identity and the formation of a common citizenship.

The work is aimed at the development of the tourism industry, primarily in terms of domestic tourism, with the support of cultural and tourist clusters in Astana, Almaty, East Kazakhstan region, the Caspian region and in the south of the country. The main work is carried out under the aegis of the institutionally strengthened Assembly of the people of Kazakhstan. New social elevators for young people have been created. Work was done to promote the idea of the Society for Universal Labor.

Further implementation of steps in this direction of reforms is carried out within the framework of the Ruhani Zhangyru program.

The fifth reform is the formation of an accountable state. Transparency and accountability of the public sector to society were strengthened. An institute of public councils and annual reports to the public was created. A new model for monitoring the use of budget funds, with a reorientation to performance audit, as well as a new system for assessing the performance of government agencies. The Open Government was implemented. The State Corporation “Government for Citizens” renders state services on the principle of a “single window.” For two years, the corporation provided 64 million services.

All these steps are of crucial importance for the creation of a new model of the economy and its sustainable development in the long term. They contribute to economic growth in 2018. These are the main results of the implementation of the steps of the Nation’s Plan “100 Concrete Steps” for the reporting period.

Industrial and Innovative Development

The second stage of the program of industrial-innovative development is being actively implemented. The Government is focused on priority and the most competitive sectors. Measures were developed for the technical re-equipment of basic industries, conditions were created for the development of promising sectors of the economy. In 2017, within the framework of the Industrialization Map, 120 projects amounting to more than 1.5 trillion tenge were introduced and more than 10 thousand jobs were created.

Digitalization of the Economy

In accordance with the instruction of Elbasy in the framework of the State Program “Digital Kazakhstan,” work has begun on a large-scale digital transformation of the economy and public life.

Measures were developed for the technical re-equipment of the basic industries, which will become the basis for the transition to digital technologies.

An assessment of the readiness of more than 500 enterprises to implement the elements of Industry 4.0 was carried out.

In 2017, all schools were fully connected to digital educational resources. This is 40 thousand video lectures and interactive lessons.

The concept of development of smart cities was approved, by which pilot projects in each region will be implemented by the end of 2018.

To date, about 1,700 companies are already operating in electronic commerce, 6,871,600 people are employed.

From the beginning of the year, 107,121 new subjects of electronic commerce were registered. Only for five months of this year, according to preliminary data, about 40 thousand new jobs have been created.

It is expected that this measure before the end of the year will open 155 new online stores in all regions of the country.

Thanks to digitalization, the detection of diseases at an early stage has increased. For example, tuberculosis by 40%, lung cancer by 10%. “Live” queues decreased by 45%. The planned transfer of 450 types of government services to the electronic format will allow to save about 13 billion tenge by 2021 and reduce over 40 million paper certificates issued annually to citizens of the country.

Automation of services in order of priority for housing in akimats allowed to reduce the queue from 460 thousand to 219 thousand people � that is more than double by eliminating duplication, availability of housing and other factors.

The Digital Kazakhstan program has a great potential for creating added value and reducing costs in the economy. This will give an additional boost to GDP growth. The direct effect of the implementation of the state program will create an additional 1.7-2.5 trillion tenge of added value in 2025.

Attraction of Investments and Expansion of Commodity Markets

In terms of attracted foreign investment, Kazakhstan is an absolute regional leader. Nearly 70% of foreign investments entering Central Asia are in Kazakhstan. The control of the Government is the implementation of the agreements of the Head of State with China, Russia, the US, Japan, South Korea, Iran, Turkey and other countries to develop production capacities for a total of about $50 billion.

Work with investors is built on a new format on the principle of “single window” through the Kazakh Invest national company for investments with a network of foreign representatives and regional branches. The National Investment Strategy was adopted in 2017. The main emphasis is on attracting investments to non-primary sectors of the economy.

At the end of the year, gross inflow of foreign direct investment amounted to $20.8 billion. About 25% of foreign investment is directed to the manufacturing industry. In non-primary sectors � 50%.

The role of TNCs is very important in attracting investment capital. In 2015-2017, 8 projects for $292 million were implemented. At the design stage, there are 16 projects of TNCs at $8 billion. To create joint ventures with anchor investors in the priority sectors of the economy, 7 projects are implemented for $1.3 billion. Fifteen projects with anchor investors for $13.2 billionare in active implementation.

For the 4 months of this year, agreements were reached to implement 42 new projects with major investors, including 10 TNCs, from China, Turkey, the United States, the UAE, the United Kingdom, EU countries, etc. In total, 54 projects will be completed in 2018 $3.9 billion. The construction of 63 projects worth $6.8 billion has been started.

Nurly Zhol State Program

Thanks to the large-scale construction of transport, industrial and social infrastructure, the Program annually creates at least 100 thousand jobs. The work is carried out in three main directions.

The first is roads. In 2017, the construction and reconstruction of 4,4 thousand km of motor roads continued, of which 600 kilometers were commissioned on 22 road projects. More than 500 km of roads will be completed in 2018. In accordance with the Address “New Opportunities Under the Fourth Industrial Revolution,” special attention will be paid to the development of local roads. The volume of their financing will be brought up to 150 billion tenge, which will improve the quality of life in cities and auls.

The second is the railway and aviation infrastructure. Over the past 6 years, 1,376 km of railways have been built, increasing the carrying capacity and speed of transportation of goods to new markets, including the countries of the Persian Gulf, Southeast Asia and China. The runways of most airports and passenger terminals have been reconstructed. The increase of the transit potential of the country is facilitated by the construction of second tracks on the Almaty-Shu section with a total length of 112 km. The construction of the new Nurly Zhol capital railway station with the capacity of 35 thousand passengers per day and the reconstruction of the passenger terminal of the International Airport of Astana, the passenger flow of which for 2017 amounted to 4.1 million people.

The third is the transit potential of the country as a transport and logistics hub in Central Eurasia. The construction of the Kazakhstan section of the Western Europe � Western China International Corridor has been completed. This is 2787 km. The highway covers more than 240 settlements 5 regions with a total of about 5.5 million people, and already gives its effects for economic development.

Thus, the freight turnover between the regions increased 2.5 times (from 12 to 30 million tons), transit road transport � three times (from 350 thousand tons to 1 million tons). Forty-seven new productions were created and eight existing ones were expanded. The average speed of motor vehicles has been increased three times. An important social effect has been obtained � a 30% reduction in the death rate from road traffic accidents. The average annual effect of the project is about 180 billion tenge and will grow every year.

New logistics hubs have been built in the East and West of the country, as well as a joint Kazakh-Chinese logistics terminal in the sea port of Lianyungang. The work on filling the Transcaspian International Transport Route with cargo flows started, taking into account the completion of the Kars-Akhalkalaki railway section between Turkey and Georgia. As a result, the volume of transit cargo increased by 25% to 18.1 million tons. The volume of high-yield transit container traffic doubles annually and amounted to 347.5 thousand containers last year. Incomes from transit traffic amounted to 353 billion tenge.

Modernization of engineering networks was carried out. Over the reporting period, 765 km of engineering networks were modernized and built, with a plan of 700 km. Wear of the networks was reduced from 63 to 60%.

Nurly Zher State Housing Construction Program

In 2017, the Housing Construction Program was launched to provide affordable housing to Kazakhstanis. At the end of the year, a record 11.2 million square meters of housing was put into operation, which is 6.2% more than in 2016. More than 100.8 thousand families improved their housing conditions, including 25.2 thousand � at the expense of state investments. In general, investments in this industry increased by 18% in 2017compared with 2016 (from 830 billion to 979.8 billion tenge).

In 2018 it is planned to provide 1.5 million m� of new housing through state investments under the Program. Now the construction of housing is dominated by non-state funds � their 84%. For 1 tenge from the budget, 5.4 tenge of private investments are attracted. Large-scale housing construction has produced a multiplier effect of the construction industry. The volume of production of construction materials amounted to more than 440 billion tenge.

Agro-Industrial Complex

The State Program for the Development of the Agro-Industrial Complex, adopted in early 2017, is aimed at the breakthrough and integrated development of the industry as a new driver of the economy.

Last year, in fulfillment of the instructions of the Head of State, work was carried out to improve the effectiveness of state support measures. Sixty-five types of subsidies were revised, 11 ineffective ones were excluded, 40 criteria were changed.

In addition, in 2017 Kazakhstan fully obtained the status of a zone free from foot and mouth disease, which enables our livestock products to enter new markets.

Thanks to the personal arrangements of the President with the leaders of China, Uzbekistan, the UAE, Saudi Arabia, Iran, the markets of these countries have been opened for the export of Kazakh products, especially animal husbandry. For today, the requirements for 11 types of agricultural products for export to China have already been agreed.

Development of Entrepreneurship

The planned improvement of the business climate, decisive deregulation and support of private business bring their results:

At the end of 2017, the share of SMEs in GDP increased to 25.8%.

In the course of the implementation of the Business Roadmap 2020 program in 2017, the production for 3.5 trillion tenge was made, 15.1 thousand new jobs were created, taxes for 217.240.7 billion tenge were paid.

160 PPP contracts were concluded for 146 billion tenge.

The output of SMEs increased by 29%.

The share of SMEs in the economy by the end of the year amounted to 26.8 25.6%.

in 2017, more than 570 thousand people became new participants of the Program of Productive Employment, of which 315 thousand are arranged for permanent jobs, including 136 thousand people � for new jobs.

About 7,2 thousand people received favorable loans, of which 4,1 thousand started their own business for the first time. 15 thousand people completed entrepreneurship training.

This year, 730,000 people will be covered by employment promotion measures, compared to 600,000 in 2017. As of June 1, only 214,000 people are involved, of whom 163,166 are unemployed and 1.921 thousand are self-employed. Together with the akimats, the Road Map is being implemented to formalize the activities of self-employed and informally employed citizens. Since the beginning of the year, information on 800 thousand people, previously not having a status in databases, has been updated. The introduction of a simplified mechanism for registration and legalization of activities, a unified definition of the employed and self-employed population in accordance with ILO standards is envisaged.

Regional Development

In order to ensure the readiness of the infrastructure of cities, taking into account the increase in the level of urbanization, the Government adopted the Interregional Schemes for Territorial Development of four agglomerations � Astana, Almaty, Shymkent, Aktobe.

In order to create favorable living conditions in supporting rural settlements, the following projects were implemented in 2017:

82 engineering infrastructure projects,

114 projects of social infrastructure,

493 projects on service and utility improvement.

Under the project “With a Diploma � to the Village!” almost 10 thousand specialists in the field of education, health care, agro-industrial complex, etc., received support for 28.4 billion tenge. An active implementation of the Program for the Development of the Regions is being carried out, for which in 2015-2017, 1.2 trillion tenge was allocated. One of the significant results of 2017 was the increase of access to centralized water supply in cities to 94%, and in villages � to 57%.

Within the framework of the Program for the Development of Regions in 2017, 297 projects have been implemented (projects on water, heat supply, sanitation, projects for the improvement of settlements, the development of engineering infrastructure and monocities for the amount of 120.8 billion tenge).

On the instructions of the Head of State, additional measures are taken to develop rural water supply (in all villages) by allocating at least 100 billion tenge from all sources annually.

Ruhani Zhangyru

To ensure the transition of the state language to the Latin alphabet, the Head of State has already approved the alphabet of the Kazakh language with Latin graphics. Under the project “New Humanitarian Knowledge. 100 New Textbooks,” 17 best world textbooks in the field of socio-economic and humanitarian knowledge were translated into the Kazakh language and digitized.

The interactive platform “Aleumettik Bastamalar Kartasy” was launched under the Tugan Zher project, according to the project “Sacral Geography of Kazakhstan,” a virtual map of sacral objects with 3D tours for objects of national importance was developed.

Within the framework of the project “100 New Persons of Kazakhstan,” a nationwide online voting determined 102 winners. Altogether, 340 thousand Kazakhstanis participated in the voting.

According to the project “Modern Kazakh Culture in the Global World,” the collection and systematization of works of Kazakh culture created during the period of Kazakhstan’s independence was carried out.

Education

In the sphere of education, systemic reforms are carried out at all levels � from preschool to higher education.

First. There is a modernization of the educational infrastructure, improvement of the personnel potential of the system, provision of the economic sectors with trained personnel and enhancement of the country’s scientific potential.

In 2017, the coverage of pre-school education increased significantly. To date, almost 91% of children between the ages of 3 and 6 visit kindergartens. This was primarily due to the increase in the share of private kindergartens to 49%, including in the PPP. Only in the past year, 849 pre-school organizations were opened, of which 717 are private and 46 were built at the expence of PPP.

Thanks to the construction of private preschools through PPP, Kazakhstan took the 4th place in primary education coverage among 137 countries. The PPP mechanism will expand with the process of introducing per capita financing, a pilot project will begin in Astana this year.

Second. Trilingualism policy and large-scale study of the English language is systematically implemented.

There is a phased work on the transition to the updated content of education. In 2017, the transition of the 1st, 2nd, 5th, and 7th grades took place. Within the framework of the introduction of per capita financing, since September of this year, 74 schools in Astana will be included in the pilot project (currently 43 schools participate in the pilot, including 5 in Astana). The full-scale implementation of a new financing model in urban schools is envisaged in 2020.

The integration of education and science allowed 8 universities in Kazakhstan to enter the international rating of QS. Since January of this year, teachers who teach in updated content have already begun to receive a wage bonus of 30%, until the end of the year more than 200,000 teachers will receive an increased salary. In the medium term, preparatory work will continue on the introduction of teaching in three languages, increasing the accessibility of higher education, expanding the autonomy of universities and other tasks set by the Head of State.

Third. An important role is given to technical and vocational education. More than 95% of employers’ demand falls on specialties of low and medium qualification.

Since 2017, the system of TVE has begun free training of personnel in technical, agricultural working specialties, as well as in the specialties of service and maintenance. More than 250 new modular programs on working qualifications have been prepared. 500 units of foreign educational literature were translated. About 100 thousand students will study under the project annually.

Health Care

In 2015 the Government started the implementation of an important reform to introduce the Compulsory Social Health Insurance. As part of the preparations for the implementation of the CSHI, work has been carried out to deregulate the health sector:

As a result of the reduction of barriers to business, the share of procurement of medical services from private providers increased from 8% in 2017 to 13% in 2018.

In 2017 the volume of investments in healthcare increased by 50%, amounting to 91.4 billion tenge.

The share of private investments increased by 90% (from 23.3 billion to 44.2 billion tenge) to the level of 2016.

In 2017, 25 long-term contracts were concluded with domestic producers to supply 873 medicines.

Thanks to measures of state support in 2017, the pharmaceutical industry showed a high growth rate of 42%.

The number of items supplied by Kazakhstan manufacturers of medicines has doubled.

The total life expectancy of Kazakhstanis has grown to almost 73 years.

The overall mortality decreased by 3%, maternal mortality � by 5.5%, infant mortality � by 7.7%, detection of cancer � by 4.8% and tuberculosis � by 11.8%.

The President’s Five Social Initiatives

In March the Head of State issued a new Address to the people of Kazakhstan. The government started the implementation of the tasks set by the President. Thus, the Road Map has been approved, within the framework of which in 2018 amendments will be made to 4 codes and 7 laws.

The first initiative � “New Opportunities for Purchasing Housing for Each Family.” May 28, 2011, the Concept for the Development of Housing Mortgage Lending for the Program 7-20-25 was aproved. Banks will proceed directly to the issuance of new mortgage loans on the terms of the Program in July 2018. April 28, a special subsidiary organization of the National Bank � JSC Baspana Mortgage Organization was established.

The second initiative � “Reducing the Tax Burden to Increase the Wages of Low-Paid Workers.” The goal is to support the working people of Kazakhstan with relatively low incomes.

In accordance with the instructions of the Head of State, the tax burden on employees with wages up to 25 MCI is to decrease by 10 times. Corresponding amendments to the tax legislation are included in the bill on social security issues, have already been approved by the Majilis on May 23 and submitted for consideration to the Senate of the Parliament. The mechanism will work from the beginning of the next tax period � from January 1, 2019.

The third initiative � “Increasing the Accessibility and Quality of Higher Education and Improving the Living Conditions of Students.”

To finance 20 thousand new grants and increase their value from September 1, 2018, 5 billion tenge is allocated with the specification of the republican budget.

For the construction of dormitories to ensure that no less than 75,000 places were provided until 2022, an appropriate mechanism was developed. Each university, college, together with investors, develops design specifications and estimates for their dormitories, concludes an agreement on state order placement with Financial Center JSC under the MES RK, hires a developer and builds a dormitory. After commissioning of the facility by placing the state order, the appropriate amount will be transferred to return the investment within 8 years.

An interactive map of the need for places in student dormitories in the context of universities and colleges was developed. It will be posted on public sites, to obtain all the necessary information online.

The fourth initiative “Expansion of Microcredit” � will allow thousands of villagers to open or expand their own business.

In the current year 62.6 billion tenge was allocated for the provision of microcredits, taking into account the additional 20.1 billion tenge. Of these, 45.3 billion tenge will be directed to the credit of the village and 17.3 billion tenge � to cities. For effective implementation of this initiative, amendments and additions were made to the Program for the Development of Productive Employment and Mass Entrepreneurship.

The size of microcredits will be determined differentially. So, for projects implemented in the countryside, the size of the microcredit will be up to 6 million tenge, for anchor cooperation � 12 million tenge, and in cities and monotowns � ranging from 15.6 to 19.2 million tenge. At the same time, the priority right to receive microcredits will be provided to the participants of the Program who have completed the training in the basics of entrepreneurship under the Bastau Business project initiated by the Atameken NCE.

In general, the measures taken will make it possible to cover 14,000 people by microcrediting, including 11,000 in villages, 3,000 in towns (in 2017, with the plan of 5,800 microcredits issued, 7227).

The fifth initiative “Further Supply of the Country with Gas” � will improve the ecology and living conditions of our citizens. All the preparatory work has been completed, and in early July this year it is planned to launch the construction of the first phase of the Saryarka gas pipeline.

The first stage of the project along the route Kyzylorda – Zhezkazgan – Karaganda – Temirtau – Astana with a length of 1081 km is 267.3 billion tenge. The akimats of Akmola, Kyzylorda and Karaganda regions are carrying out work to divert land along the route of the planned gas pipeline. For today, a scheme and terms for financing the first phase of the Project have been worked out.

Source: The Prime Minister of Kazakhstan

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