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10 February 2016
Participation in Extended Session of Government

 

During the meeting, the results of socio-economic development for 2015 were summed up, and further measures to ensure economic growth were identified.

The head of state noted that one of the key areas of work as part of the Anti-Crisis Action Plan for the years 2016-2018 is maintaining financial stability.

“The National Bank should ensure an effective monetary policy, while maintaining the level of free floating exchange rate, avoiding sharp exchange rate fluctuations and continuing with de-dollarisation. There are no restrictions on the receipt of liquidity by banks. I believe that the National Bank is pursuing a correct policy in the current circumstances. It is necessary to carry out daily monitoring of the financial situation and together with the Government promptly take appropriate measures,” the President of Kazakhstan said.

Nursultan Nazarbayev stressed the need for special attention to further diversification of the economy through the implementation of state programmes of industrialisation and the Nurly Zhol programmes, the implementation of the priority projects of agriculture and support for small and medium-sized businesses, providing employment and business activity.

The President of Kazakhstan noted that, taking into account the financial possibilities, including economies of tenge exchange rate correction, it was decided to allocate additional funds for the anti-crisis measures in the following areas.

Stimulation of housing construction

In order to facilitate further development of the sector, the President instructed to allocate 360 billion tenge by transferring to the 2016 the funds planned for the realisation of Nurly Zhol programme in 2017.

From these funds, 53 billion tenge are to be used for continuing the construction of rental housing through the Baiterek Holding, 149 billion tenge – for construction of mortgage housing, including 22 billion tenge for crediting the depositors through local executive bodies and Zhilstroisberbank. In addition, to support private developers 97 billion are to be allocated through the Samruk Kazyna on a returnable basis. It was noted that the requirements for developers should include co-financing, the availability of land and design and estimate documentation, as well as a fixed sale price.

The head of state said that the akimats are to be allocated 61 billion tenge to build supporting infrastructure for new areas of mass housing.

“The responsibility for this work is laid personally on each akim, in whose region this activity will be carried out. I especially draw your attention to the fact that the cost of housing should be socially oriented,” Nursultan Nazarbayev said.

The President of Kazakhstan noted that these measures will allow for the commissioning of an additional 1.5 million square metres of housing in 2016 and will contribute to GDP growth.

Accelerating the implementation of infrastructure projects

The head of state instructed to allocate 194.5 billion tenge, formed due to exchange rate differences in relation to the funds of the National Fund, which had been planned for the implementation of the Nurly Zhol state programme in 2016. From these funds, 78 billion tenge are to be used for the acceleration of infrastructure projects provided for in Nurly Zhol for 2016, out of which 28 billion tenge will be directed at the construction of 42 new schools, which would help to eliminate schools in state of emergency and those with three shifts by 2017.

Support for small and medium businesses and key economic sectors

In order to guarantee safety and profitability of the Single Accumulative Pension Fund (SAPF) depositors’ savings before its transfer under the management of private companies, the President of Kazakhstan instructed the Government to invest free pension savings equaling 1.45 trillion tenge into a number of directions in 2016. In particular, 500 billion tenge will be converted into foreign currency to be invested on external markets in order to diversify the SAPF portfolio and increase profitability of the citizens’ pension savings.

Additionally, 600 billion tenge will be allocated to purchase conditional bonds from the second-tier banks and national holdings on a recoverable basis and under a market interest rate, which would increase profitability and safety of pension assets. Further, these funds will be invested for stimulating the most important sectors of the economy. Among the key areas, first of all, there is conditional financing of SME needs in working capital and refinancing of loans, which will allow financing 700 business projects, result in creating 14,000 jobs and the sale of 540 billion-tenge-worth of goods, and provide tax revenues of about 60 billion tenge. Second, this will allow accelerated implementation of the “North-East-South” project of the JSC KEGOC national electric grid operator in order to reduce power deficit in South Kazakhstan. Third, this will allow funding of priority agribusiness projects, including in the production and processing of meat and milk. Fourth, it will secure broadband access to the Internet for 3,456 rural settlements.

Supporting economic activity and employment

Nursultan Nazarbayev noted that the priority of social policy is to maintain and create new jobs. In this connection, he charged to allocate in 2016 an additional 100 billion tenge from the special reserve of the Government.

From these funds, 63 billion tenge are to be allocated for the implementation of the updated Employment Road Map, including the repair of social infrastructure and housing facilities, by analogy with the Roadmap 2009-2010, the increase in micro-credit, construction of hostels for working youth, as well as subsidising the cost of employers for preserving jobs.

“It will provide coverage of measures to promote employment of about 60,000 people, including the creation of 18,000 jobs through the implementation of 1,000 infrastructure projects,” the President said.

In addition, he instructed to allocate an additional 15 billion tenge to completing the missing infrastructure facilities for small and medium-sized businesses under the Business Road Map 2020 programme.

The President of Kazakhstan noted that the allocation of significant funds for the maintenance of the national economy during the crisis was made possible thanks to the timely creation of the National Fund, the reform of the pension system and economy as a whole, as well as the transition to a freely floating exchange rate of tenge.

“Full and effective utilisation of funds allocated for the implementation of these measures will stimulate economic activity, support employment and add one percent into economic growth in 2016,” Nursultan Nazarbayev said.

In view of the prevailing external conditions, the Government has been instructed to ensure strict control over spending. The head of state drew attention to the importance of the implementation of these requests in the regions, and therefore the akims of regions should mobilise all available resources to ensure the effective use of resources.

Nursultan Nazarbayev also discussed the issues of the need to adjust the national budget for 2016 and to make appropriate changes in the government and industry programmes.

The Presidential Administration was instructed to monitor the implementation of these instructions.

In conclusion, Nursultan Nazarbayev noted that the kind of anti-crisis measures undertaken by Kazakhstan are unavailable to other states.

“Many countries have found themselves in a difficult situation and are forced to cut social spending, suspend projects, resulting in rising unemployment. Yet we continue building industrial facilities, opening new markets. Our anti-crisis economic policy is directed not only at looking for and finding new sources of economic growth. At the centre of all my orders are the needs of the common man, his well-being and stability,” the President of Kazakhstan said.

During the meeting, Minister of National Economy Yerbolat Dossayev presented a report on the results of socio-economic development for 2015 and plans for the current year, Minister of Finance Bakhyt Sultanov reported on the execution of the state budget for 2015, while Chairman of the National Bank Daniyar Akishev reported on monetary policy.


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