TBY interviews Economy Minister; discusses Strategic Plan 2025, economic outlooks
In an exclusive interview with international publisher The Business Year, Suleimenov stressed the successful privatization efforts of key state assets and how an increase in non-natural resource exports would play a key role in the government's Strategic Development Plan for 2025. The plan-which is considered an important milestone in the wider Kazakhstan 2050 strategy- aims to ensure qualitative and sustainable growth of the economy of at least 4.5-5% per year.
However, the minister added: "another driver is moving from a centralized economy, where all the decisions are made in Astana, to a more decentralized model. We would like to give our regions more economic freedom... The way to do so is to give them greater taxation authorities, though we have yet to finalize the mechanisms we will use for this. This change will not only provide additional tax revenues and mechanisms for the local authorities, but also incentivize them to work closely with taxpayers and investors."
Suleimenov, who completes his first year as head of the national economy ministry in December 2017, further explained that currently, only four regions of Kazakhstan-Almaty, Astana, Atyrau, and Mangystau-are contributors to the republican budget, whereas the other 10 regions, or oblasts, are net beneficiaries. "We have to funnel large amounts of money back into all the other regions and we would like to change this."
Since 2016, The Business Year has taken the editorial line to also shed light on the growth and sustainability of individual regions. In the already-released The Business Year: Kazakhstan 2017 edition, the publisher focused on ongoing developments in South Kazakhstan region, interviewing Governor Zhanseit Tuimebayev and a number of emerging business leaders from the city of Shymkent. In the upcoming The Business Year: Kazakhstan 2018, the focus will switch to the oil and gas-rich West Kazakhstan region.
In addition to discussing strategies, Suleimenov also highlighted his outlook for the country's overall economic performance in his interview. He commented that expectations for Kazakhstan's GDP to grow by around 4% in 2017 are "positive and in line with our positive scenario." He singled out strong performances by the energy and mining sectors as key to this growth, while an increase in manufacturing output by 7% and external trade by about 35% have also made significant contributions.
Looking ahead, Suleimenov admits that due to the higher base, "YoY growth will be more difficult in 2018 because we will have to expand more in absolute terms than we did in 2017." Nonetheless, he hopes that targets of 3.5% -4% will still be manageable for 2018, largely due to upcoming reforms in the financial sector. "Our program to assist banks to become more solvent and ready to lend is on the way and with any luck the financial sector will be much more active. Everything else should be business as usual."
Present in over 30 countries, TBY provides first-hand access to the people and ideas shaping business and policy throughout the world. Each country-specific edition contains a comprehensive range of interviews and analyses, offering an inside look at doing business in the world's most dynamic economies. TBY's interviewees, readers, and partners comprise an international network of thought leaders who are helping to define the future of the global economy.