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3 February 2017
Expanded meeting of the Government with participation of the Head of State
Astana, The House of Government

During the meeting the sides discussed the key goals and objectives of the Address to the Nation of Kazakhstan "Third Modernization: Global Competitiveness." The President instructed to take into account the target indicators of "Kazakhstan-2050" Strategy when developing the Strategic Development Plan until 2025.

The meeting heard reports by the National Bank Chairman, the Deputy Prime Minister - Minister of Agriculture, the Ministers of National Economy, Finance, Investment and Development, as well as the akims of East Kazakhstan, Almaty and West Kazakhstan regions.

Nursultan Nazarbayev noted in his speech the need for sustainable GDP growth at 5%, pointing to the existing potential for the national economy’s further development.

- Import substitution in the coming years can give up to 5% of GDP growth. Growth only in the priority industrial sectors with the active measures of state exports may reach $ 6 billion. That can provide an increase in exports of up to 20% and an increase in GDP of up to 5%. Kashagan’s contribution only is estimated at 2-2.5% of GDP in the medium term, the President of Kazakhstan said.

The Head of State turned attention to the projects standing idle in the region implemented in the framework of the industrial-innovative development state program. Nursultan Nazarbayev instructed the akims together with development institutions and other public authorities to rectify the situation.

The President also stressed the relevance of a number of problematic issues to be addressed by the Government and akims.

Business Climate

Nursultan Nazarbayev paid special attention of the present at the meeting to the declining trend in small and medium-sized businesses’ output of goods and services, reduction of SMEs and employment of citizens in them.

The Head of State noted the presence of a large number of normative legal acts regulating business, and requested to reduce excessive barriers, unrelated to the security and protection of citizens' health.

- The Cabinet reports that it canceled scheduled inspections, implemented new risk management system, and the state services have been converted into electronic format. However, there is no actual reduction in the number of employees of inspection bodies. I charge the Government, together with the General Prosecutor's Office and "Atameken" National Chamber of Entrepreneurship to conduct large-scale audit of control and supervisory functions with the deadline until the end of the quarter, the President of Kazakhstan said.

At the same time, Nursultan Nazarbayev instructed to work on humanization of the existing legislation in the field of business, as well as simplification of administrative procedures in elaboration of the new Tax Code.

- It is necessary to revise and cancel all inefficient tax breaks and preferences. Tax legislation should stimulate business activity, investment and reduce the share of the shadow economy, the President said.

Business Expansion

Nursultan Nazarbayev noted the need to reduce the proportion of state-owned enterprises, the importance of establishing an accurate list of organizations that reasonably remain in state ownership based on the results of privatization.

- I charge the Government to prepare a comprehensive list of organizations and businesses, which need to stay for the State in accordance to «Yellow Pages» principles. Those  not included in the list of enterprises to be privatized or liquidated until 2020. Previously approved list of Comprehensive Privatization Plan needs to be implemented before the end of 2018, instead of 2020, the President of Kazakhstan instructed.

The President also pointed out the lack of activity on developing public-private partnerships, emphasizing the direct responsibility of akims for that area of ​​work.

- PPP should be developed; especially in the communal and social spheres. At state order stage the public institutions and contractors should not be privileged before the private ones. The government should provide all necessary support, including facilitation, coordination and methodology, and infrastructure. It should offer clear business conditions, provide a guarantee of public procurement on a long term basis, Nursultan Nazarbayev said.

Public Procurement        

The Kazakh President has made a point of the need to establish public procurement environment that  enables import substitution and development of domestic production.

In this regard, the President instructed the Government together with the local administrations and the business community to institute specific target codes to increase the local content in large enterprises.

At the same time, Nursultan Nazarbayev noted the importance of measures to support domestic producers by the state.

- We should make provision for long-term contracts, so-called "offtake" contracts. It is necessary to introduce modern technologies and innovations. During development of the budget facility design and estimate documentation  it is critical to mention domestic products, first of all. We should create a single platform for the purchase and producers, the President of Kazakhstan instructed.

Agro-Industrial Complex Development

The President of Kazakhstan emphasized the issue of insufficient use of the agricultural sector potential in the economy, noting a slight increase in production last year, compared to the level five years ago.

- Financial status of agricultural holdings is in poor condition. Large funds are allocated for subsidizing the purchase and leasing of agricultural machinery. At the same time, the work has not been systematized and organized as required. Purchase of agricultural equipment in the country is carried out by different manufacturers. Therefore, there is no standardization of parts. Equipment fleet is not efficiently used. In one region there are complete harvesters, and they are not enough in the others,  he said.

In that connection, the General Prosecutor's Office together with the Audit Committee have been instructed to carry out the relevant checks, and the Deputy Prime Minister - Minister of Agriculture is to radically change the situation.

In addition, Nursultan Nazarbayev instructed to March 1 the current year to work out coordinated decisions of three grain regions’ akims with respect to the problem of agricultural holdings.

Healthcare

The Head of State stressed the importance of ongoing healthcare reforms, pointing to the expected increase in the quality of services in accordance with the reform results.

At the same time, the President of Kazakhstan emphasized the low efficiency of budget funds allocated for the sphere development.

- The equipment purchased from different countries is not being used in a number of regions. As to service, there is no unification. There are questions about the drug supply. I would like to emphasize the state provides free standard medicines. At the same time, new pharmaceutical facilities are prohibited to be constructed, fear of competition, the Head of State said.

Nursultan Nazarbayev ordered the Health Minister to review and take decisions on all issues of concern to ensure quality implementation of reforms and to conduct personnel audit in "SK Pharmacy" enterprise.

Education

The Head of State stressed the importance of switch to 12-year education, trilingual education and new UNT system, at the same time pointing to the lack of effective disseminating information to the public on the content of these reforms.

In this regard, the President of Kazakhstan instructed the responsible state authorities to take corresponding measures.

State Budget Efficient Use

Nursultan Nazarbayev underscored that to date all the reforms have been provided with the necessary funding sources. At the same time, according to the Audit Committee, the financial irregularities in the amount of more than 160 billion tenge were identified during the previous year.

- 47 civil servants have been imposed administrative liability and 223 - disciplinary. When compared to 2015, the amount of revealed inefficient use of public money tripled and amounted to 382 billion tenge. I instruct the Government to create a Special Commission to examine the facts of criminally reckless disregard of public funds. There is a need to examine the Ministry of Education and Health first, the President of Kazakhstan said.

The President also proposed to endow the government agencies’ executives with the right to optimize human resources and to reassign the released funds to pay other employees.

At the end of the meeting Nursultan Nazarbayev reminded the audience of the upcoming international exhibition "EXPO-2017" in Astana and the need for efficient use of its infrastructure in the future; he pointed to the personal responsibility of every leader of the reforms and the implementation of tasks.


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