Massimov: Kazakhstan's growth potential is yet to be realized fully

None
None
ASTANA. February 18. KAZINFORM Many international scholars have noted the effectiveness of Kazakhstan's strategy in overcoming the global financial crisis. During the past three years, the state has managed to accumulate its resources and direct them in a way to sustain the economic growth and stability, as well as make some other significant achievements at this hard period of time.

Kazakhstan has managed to successfully chair the Organisation for Security and Cooperation in Europe, in fact giving a new impetus to the organisation; the country currently chairs the Shanghai Cooperation Organisation; prepares to chair the Organisation of Islamic Conference later this year, as well as provides assistance to countries in need, attracts investment, develops economy, improves the standards of living, and much more.

In a recent interview with Komsomolskaya Pravda, one of Russia's most widely read newspapers, Kazakhstan's Prime Minister Karim Massimov drew attention to some of the key aspects which determine Kazakhstan's stable growth, progress and development

Massimov praised the formation of the Customs Union between Kazakhstan, Russia and Belarus in 2010, which has served as a clear example of countries moving forward, supported by the signing of all the necessary documents related to the establishment of the Single Economic Space (SES) which will become operational in 2012.

"The potential of this development has not been fulfilled entirely yet," the Prime Minister commented. "Since all three countries, Russia, Kazakhstan and Belarus, are in the process of joining the WTO, the Customs Union gives us a great chance to prepare for this in a more competitive way. We have created a market, similar to the European Union one, but where the economies are more comparable with each other in their quality. Therefore, the Customs Union has already shown its effectiveness," he added.

"Personally, I think it is a great opportunity and a very good chance for our economies to go through this period and move forward," Massimov stated.

Commenting on President Nazarbayev's decision to hold early presidential election, the Prime Minister believes it was one of the most important decisions taken by the president, comparable to the declaration of independence or the renunciation of nuclear weapons.

"Once again, the President stressed the importance and necessity of building a democratic state. I believe the adoption of such an important policy decision will further strengthen the political stability in our country," Massimov commented.

Talking about the summit of the Shanghai Cooperation Organisation (SCO) which will be held on June 15 this year in Astana, the Prime Minister emphasised that the organization holds great potential, especially due to the its membership including Russia and China, members of the G20.

"I am confident that the upcoming summit in Astana will be a milestone in the development of both the organisation and the SCO member-states," he stressed.

Also, according to Massimov, the construction of a road corridor from western China to western Europe through the territory of Kazakhstan and Russia is an especially noteworthy project bringing together many nations.

Furthermore, Kazakhstan expects to present a list of state-owned companies whose shares will be placed on the stock market in the near future.

"We plan to approve the list by the end of February. This trend is associated with the so-called people's IPO (Initial Public Offerings), where shares will be purposefully placed for the citizens of Kazakhstan, mainly, individuals and pension funds. We believe it is a very good time to place these shares. Of course, shares will be at a lower price than their market value; however, at the secondary market, when a citizen will be selling shares, and the placing will be free, everyone will be able to purchase them," Massimov said.

[Speaking at the Nur Otan party's congress on February 11, President Nazarbayev instructed the Government to proceed with such IPOs this spring.]

The causes of the world financial crisis are still being researched and studied, some have not been eliminated completely, but some lessons have been learnt and are now being taken into account. According to Massimov, the country's financial reserves have to be accumulated during the "good times", while in "bad times" these reserves should be used boldly in order to mitigate the effects of a financial downturn.

"During this crisis, we have spent about US$ 10 billion out of the National Fund in order to compensate for global financial recession," he said.

Kazakhstan's Prime Minister believes the diversification of the economy and industrialisation are among steps which also bear great importance.

"We have a special industrial programme which, contrary to the sceptics, is very successful. Last year, more than 150 major facilities have been opened across the country, and if one counts those of a smaller scale, there were about 800 such facilities. I think in 2011 we will maintain approximately the same rate," Massimov said.

In addition, the Prime Minister particularly highlighted three aspects to keep in mind in a situation of crisis.

The first is the development of human capital, where in order for a state to develop, the government has to provide the conditions for education, health and social welfare of the people to be adequate and comply with all market-based mechanisms.

The second is the development of hard infrastructure such as roads, railways, energy and so forth.

The third, the most challenging according to Massimov, is the development of soft infrastructure such as the implementation of structural institutional reforms.

"There is a notion of 'a partial reforms trap', where implementation of only some reforms leads to a very rapid growth, however, when these reforms catch up at some point, problems arise. Since the crisis occurred, we have very clearly understood the direction we need to move to and where the reforms are not adequate enough. Now is the time when we must vigorously work on this, it is not something to be happy about, but the effects will occur after," Massimov commented. "I think now is the time when it is necessary to continue the administrative reform, where the presence of the state in the economy has to be smaller, and the government has to be more professional."

Prime Minister highlighted the importance of raising the quality level of the state apparatus, stressing the need of the professionalism of state employees. He commended the systems which are present in Singapore and New Zealand, and the way how talented young people and the best forces of society are being attracted to the public service in those countries, the press service of the Kazakhstan Foreign Ministry reports.

"We are on the way. We have not solved the problem yet, but it is our goal, and some steps towards it have been made," the Prime Minister concluded.

Currently reading