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ADDRESS BY THE PRESIDENT
OF THE REPUBLIC OF KAZAKHSTAN,
LEADER OF THE NATION,
STRATEGY KAZAKHSTAN 2050
NEW POLITICAL COURSE
OF THE ESTABLISHED STATE
Today we have gathered on the eve of our Independence Day.
It has been more than 20 years since we first celebrated this great holiday.
On December 16, 1991 we, the people of Kazakhstan, chose sovereignty, freedom and openness to the world as our founding principles. Today these values have become a part of our daily life.
As we began our journey as a nation things were vastly different. Now, thanks toour joint efforts, we have transformed our country into a wholly different place.
Today we are a successful state with our own unique characteristics, perspectives and identity. We have worked hard for the progress we have achieved.
For over 20 years we have worked to strengthen Kazakhstan's sovereignty and political influence – a goal we have now accomplished. We have succeeded in building a strong foundation for our nation.
21st Century Kazakhstan is an independent and self-confident state.
We are not afraid of the ongoing changes in the world caused by the prolonged global financial crisis. Indeed, we are prepared for them. Our goal is to continue our sustainable development into the 21st Century while maintaining and building on our existing achievements.
By 2050 we plan to create a society based on a strong state and a developed economy with expanded labour opportunities for our citizens.
A strong state is especially important toensure accelerated economic growth. This is not about survival. It is about planning, long-term development and economic growth.
Today, on the eve of our Independence Day, I present to you my vision of our nation's development prospects and a new political direction for Kazakhstan.
I. OUR ACHIEVEMENTS: ESTABLISHING THE MODERN STATE OF KAZAKHSTAN
In 1997 we adopted the Development Strategy of Kazakhstan 2030.
That was fifteen years agowhen the post-Soviet chaos had not been overcome, there was an economic crisis in South East Asia and our nation faced a difficult future.
But as we faced these challenges, our 2030 strategy served as a beacon toguide our way forward and to keep us focused on our target.
After my speech in Parliament, I remember that there was some confusion and bewilderment. As I outlined our ambitious goals, people asked: “Was that propaganda? Or a promise of manna from heaven?"
Yet, as the saying goes, “the eyes may be frightened, but the hands are working". We set ourselves an enormous task – to reverse the downward trend Kazakhstan faced and to continue developing our new country.
To reach this aim we had toimprove in three areas: we needed tobuild a modern nation state by making the leap towards a market economy; we needed to lay the foundation of a social system; and finally, we needed to transform the thinking and outlook of our people. We had to define our own path. This was the path we outlined in the “Strategy Kazakhstan 2030'', a strategy that helped define our strategic goals and targets and provided a crucial breakthrough in our world outlook.
Only with a clear objective in mind can we set targets that will lead us to success. Today I'm pleased to announce that we made the right decisions all those years ago. Our resilience through the 2008-2009 global financial crisis proved that. Kazakhstan met the test. The crisis did not destroy our achievements – it made us stronger.
The political, socio-economic and foreign policy model of development that we chose proved to be the right one.
Strong and Successful State
Our key achievement is that we have established an independent Kazakhstan. We have legally formalised our borders. We have put together our nation's integrated economic space. We have recreated and reinforced the economic ties that bind our country. Our domestic regions are united in their activities.
We have implemented historically important constitutional and political reforms that have established a system of public administration based on the division of branches of power.
We have built a new capital – Astana. It is a modern city that has turned into a symbol of our country that we take pride in. We have unleashed the potential of the capital to showcase our country's capabilities to the entire world. This is exactly why the international community elected Kazakhstan to host the EXPO 2017 international exhibition. This would have been impossible without Astana. Very few cities have received such an honour. In fact, Kazakhstan is the first post-Soviet country to chair the Organisation for Security and Cooperation in Europe and to host the OSCE Summit, and will now be the first to host EXPO 2017 – a world-class event.
Sustainable Process of Democratisation and Liberalisation
We have a clear formula to follow: “Economy first, then politics". Every step of our political reforms is closely tied to our level of economic development. The only way to modernise our country and make it competitive is to progressively follow the path of political liberalisation.
Step-by-step our society is approaching the highest standards of democratisation and human rights.
We have secured fundamental rights and liberties in our country's Constitution. Our citizens have equal rights and opportunities.
Harmony and Peace among disparate Social, Ethnic and Religious Groups
We have worked to restore our historic Kazakh culture and language after many years of decline. Kazakhstan is home to over 140 ethnic groups and 17 religious faiths. We are proud of our ethnic, cultural and religious diversity, and even prouder that we have maintained peace and stability in our country.
Civil peace and inter-ethnic harmony remain key values for us. Our peace and harmony, and the intercultural and interreligious dialogue in our multi-ethnic country, have been recognised as a global model.
The Kazakhstan People's Assembly has become a unique Eurasian model of intercultural dialogue.
Kazakhstan has turned into a centre of global interreligious dialogue.
National Economy: Our Role in the International Division of Labour
We were the first in the Commonwealth of Independent States to develop a modern market economy based on private property, free competition and openness. Our model is based on the idea of a proactive role for government in attracting foreign capital.
To date we have attracted over $160 billion of foreign investment.
We have established basic conditions for entrepreneurshi p, as well as a modern taxation system.
We have systematicallydiversified our economy. I set forward a clear task toaccelerate the industrialisation programme – to help transform the shape of our economy and to make it immune to global commodity price fluctuations within the decade.
Over the 15 years following the adoption of the 2030 Strategy, our state joined the top five dynamically developing countries of the world.
There are recognised rankings that countries use to track their development. By the end of 2012, Kazakhstan will enter the top 50 largest global economies and is already ranked 51st in terms of economic competitiveness.
Strong Social Policy to Ensure Social Stability and Harmony
A major criterion for me has always been, and will always be, the level of our people's living standards.
Over the past 15 years the incomes of our citizens have grown 16 fold, while the number of people with incomes below subsistence level has fallen seven fold. The number of people who are unemployed is twice as low as it used to be.
We have laid the foundation of a socially-oriented society.
We have also managed to achieve substantial progress in improving our nation's health.
To improve the efficiencyof our healthcare system, we have reformed its organisation, management and funding. Over the last five years, the maternal mortalityrate decreased three fold, while the birthrate has increased by 50 percent.
We have created equal opportunities for education. Over the last 15 years our education expenditure has grown 9.5 times. We have implemented an Education Development Government Programme designed to radically modernise education at all levels, from pre-school to higher education.
Thanks toour long-term human capital investment policy, we have created a talented new generation of young people.
Globally Recognised Country
In world politics, our country is a responsible and reliable partner with significant influence in the international arena.
We play an important role in strengthening global security and supporting the international community in its fight against terrorism, extremism and illicit drug trafficking.
Our initiative to convene a Conference on Interaction and Confidence Building Measures in Asia (CICA) has seen CICA grow into an organisation with 24 member countries with a combined population of more than 3 billion people. CICA is a critical element of Kazakhstan's security.
During the past three years, the Republic of Kazakhstan chaired the Organisation for Security and Cooperation in Europe, the Shanghai Cooperation Organisation, the Organisation of Islamic Cooperation and the Collective Security Treaty Organisation.
At the Astana Economic Forum we proposed a new dialogue format – G-Global. The initiative has been designed to combine the efforts of all nations to establish a fair and secure world order.
We have also made a significant contribution to ensuring global energy and food security.
Our Proactive Role in Promoting a Nuclear Nonproliferation Regime
Our initiatives tostrengthen the nuclear nonproliferation regime make a keycontribution to global stability, order and security.
Being the first in the world to close a nuclear testing site and abandon nuclear weapons, we gained strong international security guarantees from leading nuclear powers – the USA, Russia, Great Britain, France and China.
We also played a key role in establishing a Nuclear Weapon Free Zone in Central Asia and actively support creating similar zones in other regions, specifically the Middle East.
We support the efforts of the international community to counter the nuclear terrorism threat.
We firmly believe in the need to take decisive measures to eliminate the nuclear threat. We believe that the Nuclear Nonproliferation Treaty has been, and remains, the cornerstone of the nonproliferation regime. And we consider the early entrance into force of the Comprehensive Nuclear Test Ban Treaty as an important driving force to strengthen the nonproliferation regime.
Three years ago, the UN General Assembly supported my suggestion to establish August 29 as the International Day Against Nuclear Tests, a testament to Kazakhstan's role in global politics.
Kazakhstan has been recognised as a leader in nuclear nonproliferation and remains a model for other countries.
Strategy Kazakhstan 2030: Key Outcomes
In Strategy Kazakhstan 2030 we planned our country's future success, and we have progressively and persistently moved towards our aims. Even at the height of the 2008- 2009 global financial crisis, our national economy kept growing.
So today I'm proud to say that we've implemented the outcomes of the 2030 Strategy ahead of schedule, in terms of main parameters.
(1) INTERNATIONAL SECURITY. We had an aim to develop our country while maintaining its territorial integrity. We managed to do more than we initially planned.
For the first time in its historyKazakhstan has clear, internationallyrecognised borders. 14,000 km of our state border have been delimited.
Kazakhstan safely controls its territorial interests on the Caspian Sea, eliminating the threat of future territorial disputes. We haven't left disputed borders toour descendants.
We have created a strong Army capable of our nation's defence and an efficient law enforcement system to ensure the security of our citizens, society and state.
(2) We have maintained and strengthened STABILITY AND NATIONAL UNITY in a country where 140 ethnicities and 17 religious groups are represented.
We have consistently developed civil institutions based on a democratic development model. We've set up a Human Rights Ombudsman institution.
Whereas in the past we have never had a multi party system, today there are parties representing the entire political spectrum of our country. We have a multi partyParliament and a majority government.
Civil society is being developed. Independent media outlets work in the country. There are over 18,000 non-governmental organisations of various orientations. Nearly 2,500 media outlets function in Kazakhstan, of which approximately 90% are private.
Today our nation is an important international centre of intercultural and interreligious dialogue. Kazakhstan hosted the first four Congresses of the Leaders of World and Traditional Religions.
As this century progresses, Kazakhstan should become a bridge for dialogue and interaction between East and West.
(3) ECONOMIC GROWTH BASED ON AN OPEN MARKET ECONOMY WITH A HIGH RATE OF FOREIGN INVESTMENT AND DOMESTIC SAVINGS.
We aimed to achieve feasible, sustainable and growing rates of development. Strategy Kazakhstan 2030 shifted the focus towards economic growth. As a result, within 15 years our national economy grew from 1.7 trillion tenge in 1997 to28 trillion tenge in 2011.
Kazakhstan's GDP increased 16 fold. Since 1999, Kazakhstan's GDP grew an average of 7.6% per annum, outpacing the average for advanced developing countries. Our GDP per capita grew seven fold, from 1,500 USD in 1998 to 12,000 USD in 2012. From the beginning, Kazakhstan has been a top CIS country in terms of its per capita FDI. Today that figure amounts to 9,200 USD.
We've reached a 12 fold growth of our foreign trade and a 20 fold increase in our industrial output. Over these years our oil output grew three fold and natural gas output increased five fold. We have channeled those commodity incomes intoour National Fund.
The National Fund has become a reliable shield to protect us from possible economic and financial disturbances. It is a safeguard for current and future generations.
Carrying out the accelerated industrialisation programme, we've implemented 397 investment projects worth 1,797 billion tenge and created over 44,000 jobs since 2010. 225 projects worth 101.2 billion tenge have been approved during the first two years of the “2020 Business Roadmap" programme.
Today we are a middle-income country with a dynamically growing economy.
(4) HEALTH, EDUCATION AND WELL-BEING OF KAZAKHSTAN'S CITIZENS
It was vital toradicallychange the lives of our citizens and improve their living conditions. The results of this work are evident:
The average monthly salary grew by 9.3 times. The average pension increased ten fold. The population saw their nominal return grow 16 fold.
We are creating the necessary conditions to ensure high-quality healthcare services in all regions of the country.
In 1999 Healthcare funding equaled 46 billion tenge, in 2011 the figure amounted to 631 billion tenge. We've set up a medical cluster including five innovative healthcare facilities: the Children's Rehabilitation Centre, the Mother and Childhood Centre, the Neurosurgery Centre, the Emergency Aid Centre and the Cardiology Centre.
We are developing the services of transportable medicine, which now provides healthcare services to the most remote areas of our country at a rapid pace.
Our National Screening System helps detect and prevent diseases at their early stage. We have introduced free and preferential medication supply.
Over the past 15 years Kazakhstan's population grew from 14 million to almost 17 million. Life expectancy has increased to 70 years. We progressively implemented a policy of affordable and high-quality education.
The “Balapan" Programme implementation helped us increase the number of children to be covered with early childhood education to 65.4%.
We have introduced mandatory preschool training. Today this covers 94.7% of the preschoolers in Kazakhstan.
Since 1997 we've built 942 schools and 758 hospitals across the country.
We are developing a network of academic intellectual schools and world-class vocational colleges. Over the past 12 years the number of college scholarshi ps has increased by 182%. In 1993 we adopted a unique “Bolashak" programme, which has enabled 8,000 gifted young people to study in the world's top universities.
A state-of-the-art, international-standard research university has been established in Astana.
(5) ENERGY RESOURCES. Kazakhstan's oil and gas complex remains the powerhouse of our economy, which facilitates the growth of other sectors.
We have successfully created a modern and efficient oil, gas and mining sector. Our success in this area will help us to build a new economy of the future.
The share of the oil and gas sector within the country's GDP has been growing at a steady rate, increasing from 3.7% in 1997 to 14.7% in 2006 and up to 25.8% in 2011.
We've diversified our export markets and secured our positions, thereby reducing our dependence on any particular export route.
(6) INFRASTRUCTURE: TRANSPORTATION AND COMMUNICATION
Our aim was to develop our infrastructure and we had the strength to do it. Over recent years we have launched a number of major infrastructure projects that includes highways and railroads, pipelines, logistics centres, terminals, airports, train stations and ports.
All of these projects have created many jobs for our citizens and integrated Kazakhstan into the regional and global economic system. Over the past 11 years, the highway development sector received over 1,263 billion tenge, which it used tobuild and reconstruct more than 48,000 km of public highways, as well as 1100 km of railways.
We are reviving a New Silk Road by setting up a “Western Europe – Western China" transportation corridor.
We opened access to the Gulf and Middle Eastern countries by building the “Uzen – Turkmenistan border" railroad. After creating the “Korgas – Zhetygen" railway, we opened the “eastern gate," paving the way to the markets of China and all of Asia. And we have begun building the “Zhezkazgan – Beineu" railway.
(7) PROFESSIONAL STATE. To create a modern and efficient manager corps, we had to finally get rid of the management traditions of the outdated administrative and command system. In its place, we established a system of screening and promotion that affords all citizens equal rights and opportunities, and which ensures a high professional level and the transparency of government activities.
We also have managed significant change in our public administration, shifting its focus towards improving the quality of public services.
Thus, the main goals set forth in the 2030 Strategy have been achieved, and other goals are under implementation.
Today, all of us can say: “the 2030 Strategy has succeeded, modern Kazakhstan is an established state". This is a result of our unity, steady hard work and the true realisation of our hopes and dreams.
We should all take pride in our achievements.
Despite the recent challenges of the global financial crisis, we have succeeded as a state and society. Our borders, political system and economic model are no longer subject tofundamental differences and discussion, either domestically or internationally.
Now we face a new task: we need to strengthen the course of our long-term development.
II. TEN GLOBAL CHALLENGES OF THE 21 CENTURY
Today humankind faces new global challenges.
I will focus on ten key challenges for our country and region. To ensure our ongoing development and continue on our path to success, we must take into account each of the challenges.
The first challenge is the accelerating course of history
The course of history has rapidly accelerated. The world is changing at a fascinating pace.
Over the last 60 years the population of the Earth has tri pled and will reach nine billion people by 2050. During the same period the world's GDP has increased 11 fold.
The accelerating course of global history opens up new opportunities for any country, and I'm proud that we have taken full advantage of them.
Over the last 20 years we have rapidly modernised all areas of our society. We've done things that many other countries achieved in 100 or 150 years.
However, there are still areas of society that have not shared the full benefits of the modernisation process. There are objective reasons for this: society still contains an imbalance that affects people's moral and social expectations.
We have to eliminate this disparity and provide all areas of society with the opportunity to participate in the modernisation process, find their place in the society and take full advantage of the benefits of the new political course.
The second challenge is the global demographic imbalance
The global demographic imbalance increases every day. Globally we are an ageing population. In 40 years the number of people above the age of 60 will exceed the number of children under 15. Low birth rates and aging in many countries will inevitably cause problems in the labour market, including workforce shortage.
The growing demographic imbalance has triggered new waves of migration and can increase social tensions. In Kazakhstan, we face migration pressure in certain regions of the country where illegal immigrants have destabilised local labour markets.
We should also be aware that we are very likely to deal with a reverse process – an outflow of our labour force. We are a young nation. The average age of our country is 35 years. This provides us with a great opportunity to capitalise on our human potential and rightfully position ourselves in the world.
So today we possess a substantial base on which we can rely and grow further. Anyone searching for a job in our country can get employed. Moreover, everyone in Kazakhstan is able to create employment and take care of himself or herself. That is our great achievement.
I am leading you to a universal labour society where the unemployed will not just receive benefits, but will have the opportunity to master new occupations; where the disabled will be able to actively engage in creative activities and companies will ensure decent working conditions.
Our youth should study, acquire new knowledge, master new skills and efficiently and skillfully deploy new technologies and expertise in their daily life.
The third challenge is the global food security threat
High rates of global population growth are contributing to a global shortage of food. Today millions of people starve; nearly a million people face constant food shortages. Without revolutionary changes in food production, these figures will only keep growing.
This global food shortage presents a great opportunity for Kazakhstan. We can be part of the solution to this international challenge.
We are already among the top grain exporters in the world. We possess vast “green" territories that are capable of producing eco-friendly foodstuffs.
To make this great leap forward in farm production we will need a new approach in our state.
The fourth challenge is the water shortage
Global water resources are under great pressure.
In the last 60 years global demand for drinking water supplies has increased eight fold. By the middle of this century many countries will have to import water.
Water remains a limited resource and competition for water is already becoming a critical geopolitical factor, causing tensions and conflict around the world.
Kazakhstan faces an acute water supply issue. We lack high-quality drinking water. A number of regions face shortages of drinking water.
There is a geopolitical aspect to this issue. We are already facing a serious issue of trans-boundary river use. Given the complexity of this problem, we should avoid politicising it.
The fifth challenge is the global energy security
All developed countries are increasingly investing in alternative and green energy technology. Estimates suggest that by 2050 they will generate up to 50% of energy consumed.
The era of the hydrocarbon economy is coming to an end. We face the beginning of a new era where human activities will be based not so much on oil and gas, but on renewable energy sources.
Kazakhstan is one of the key elements of global energy security.
Having world-class oil and gas reserves, our country will not depart from its policy of reliable strategic partnershi ps and mutually beneficial international cooperation in the energy sector.
The sixth challenge is the exhaustion of natural resources
The unprecedented growth in global population and consumption, and the finite level of natural resources, will bring both positive and negative outcomes.
Kazakhstan has a number of advantages in this regard. We have been blessed with abundant natural resources and other countries will need torely on us for their resource needs.
It is critical that we reconsider our attitude toour natural wealth. We need tolearn how to properly manage it, saving our export revenues and, most importantly, transforming our natural resources into an efficient and sustainable vehicle for economic growth.
The seventh challenge is the Third industrial revolution
Mankind is on the threshold of a Third industrial revolution that will change the very notion of production. Technological discoveries are radically changing the structure and needs of international markets. We now live in a completely different technological reality.
Digital and nanotechnology, robotics, regenerative medicine and many other kinds of scientific progress will become an ordinary part of life and transform not only the environment, but also human beings.
Kazakhstan should actively seek to engage in these processes.
The eighth challenge is growing social instability
One of the greatest problems in the world today is increasing social instability. Its root cause is social inequality.
Today over 200 million people in the world fail to find jobs. Even the European Union faces unemployment – with the highest rates in decades – provoking massive civil unrest.
When we look at global employment conditions, we need toadmit that the situation in Kazakhstan is in a pretty good shape. We have the lowest unemployment rate we have ever had in our history. Undoubtedly, it's a great achievement. Yet we cannot rest on our laurels.
The global economic crisis is transforming into a socio-political one, which will inevitably affect Kazakhstan and test our durability. Therefore one of the key issues on our agenda is social security and social stability. It is important that we strengthen our social stability.
The ninth challenge is the crisis of our civilisation's values
The world is undergoing an acute crisis of outlook and values. We increasingly hear voices heralding the clash of civilisations, the end of history and the failure of multiculturalism.
It is critically important that we stay away from this kind of discourse, preserving our time-tested values. We know exactly how we turned what was called our Achilles heel
– multi-ethnicity and multi-religious reality – into an advantage.
We must learn toco-exist as cultures and religions. We must be committed todialogue between cultures and civilisations. It is only through dialogue with other nations that our country will be able to succeed and gain influence in the future. In the 21st Century Kazakhstan must strengthen its position as a regional leader and become the bridge for dialogue and interaction between East and West.
The tenth challenge is the threat of continued global destabilisation
We are all witnessing what is happening today in the world. This is not a new wave of global destabilisation, but the continuation of the 2007-2009 financial crisis, from which the world economy has yet to recover.
The global economic system may fail again as soon as 2013-2014, due to a fall in global commodities prices. Such a scenario is highly undesirable for Kazakhstan.
A recession in the EU and/or USA might lead to reduced demand for commodities in developed countries. Potential default by even one member of the eurozone might provoke a “domino effect" and bring the safety of Kazakhstan's international reserves and stability of our export deliveries into question.
The reduction of currency reserves exacerbates the pressure on the currency rate and inflation, which again might have a negative impact on social and economic situation.
Therefore we must develop a sound and coordinated policy for all aspects of the state and society to be fully prepared for any economic downturn in the international arena.
III. STRATEGY KAZAKHSTAN 2050 – IS A NEW POLITICAL COURSE FOR NEW KAZAKHSTAN IN A FAST CHANGING WORLD
1. The new paradigm of challenges
The paradigm and challenges have changed significantly.
The frameworks of Strategy 2030 are no longer sufficient for us to meet the new challenges. It is crucial for us to expand our planning horizons, and make another leap forward in our world outlook.
First, Kazakhstan is a modern state. Our society has matured. Therefore today's agenda is different from the one we had during our initial stages of development.
The nature and profound change of the transformations across the globe requires sustainable long term development. Many countries are already trying to look beyond 2030 and 2050. “Managed forecasting" is becoming an important development tool for states in today's unstable times.
Secondly, Strategy Kazakhstan 2030 was developed to build and secure our sovereignty. Its basic parameters have been accomplished.
Thirdly, we are being forced to live up to the challenges and threats of a new reality. They are universal in nature and affect all countries and regions.
When we were developing our 2030 strategy no one assumed that the world would face an unprecedented global financial and economic crisis, which would create new, totally unexpected, economic and geopolitical circumstances.
Back in 1997 the Strategy 2030 was being developed as an open document. The possibility of corrections and amendments has been part of its vision from the outset.
Being aware that the situation in the world is changing and that this might lead to adjustments, I instructed a working group to be formed that has tracked our status and worked out a viable strategy under these new economic conditions.
Taking into account the working group's recommendations, I suggest we set a new political course for the nation until 2050 that builds on the tasks set by strategy 2030. And we must be conscious that time and conditions will bring their own adjustments to our plans, as they did to 2030 programme.
2050 is not merely a symbolic date.
This is a real timeline adopted by the world community. The United Nations developed the Global Forecast on “Future of civilizations" until 2050. The Food and Agriculture Organisation issued a forecast report until 2050. More and more countries are developing and adopting long term strategies. The same horizon for strategic planning is set in China.
Even large transnational companies prepare development strategies half a century ahead.
15 years ago, when the Strategy 2030 was adopted, the first generation of citizens born after the independence was just about to enter school. Today they are already working or graduating from universities. In twotothree years we will witness the second generation of independence.
Therefore, in order to set them in the right direction, it is important for us to start thinking now.
Our main goal is to enter the club of the top 30 most developed countries of the world.
Our achievements and our development model must become the basis of the new political course.
Strategy Kazakhstan 2050 will integrate with our previous strategy and answer the question: who are we, where are we going and where do we want to be by 2050? I am sure that the young generation is interested in exactly that.
Taking into account all these considerations, I offer a draft of a new political direction for the nation until 2050. This will be my Address to the nation of Kazakhstan.
2. Where are we going? Goals of the new political course
By 2050 Kazakhstan must enter the top 30 club of most developed states in the world.
The competition among developing countries for a place in that club will be intense. The nation must be ready to face changes in the global economic climate, realising clearly that the desired spot is guaranteed only to those with the strongest economies.
We must work with dedication and inspiration, not losing sight of our primary objectives:
• Further developing and strengthening statehood.
• Transitioning to new princi ples of economic policy.
• Comprehensive support for the entrepreneurship that will be a leading force for the national economy.
• Forming the new social model.
• Creating modern and efficient education and healthcare systems.
• Increasing accountability, efficiency and functionality of the state apparatus.
• Setting adequate international and military policies that are responsive to new challenges.
Today I will outline the primary tasks for 2013 that will ensure the successful start of the new political course for 2050.
In accordance with these tasks the Government will need to immediately develop the national action plan for 2013.
This important document must include all specific orders and provide for personal responsibility of the heads of executive, legislative and judicial branches of power. The Presidential Administration must take the preparation and further implementation of the strategy under special control.
I would now like to give my own vision of the major directions of the Strategy Kazakhstan 2050.
1. The economic policy of the new course – all round economic pragmatism based on the principles of profitability, return on investment and competitiveness
Universal economic pragmatism
The essence of economic policy of the new course is universal economic pragmatism. What does this mean?
First. Adopting all economic and managerial decisions based purely on economic feasibility and long term interests.
Second. Defining new markets where Kazakhstan can partici pate as an equal business partner and create new sources of economic growth.
Third. Creating a favourable investment climate to help build economic capacity, profitability and return on investments.
Fourth. Creating an effective private sector economy and developing public private partnerships. We must do this by stimulating exports with state support.
New personnel policy
A key condition of success for our 2050 policy will be the right people to back it up. To ensure these people are in place we must:
• Enhance the managerial resources and potential that we possess.
• Introduce modern management tools and princi ples of corporate governance in the public sector.
• Exploit the benefits of the international division of labour. In particular, we must attract elite human resources for the implementation of some of the tasks of the new course through outsourcing programmes. We must attract the best foreign specialists in the open market and invite them to work in our country.
• The use of managers with extensive international experience and knowledge will have a dual effect: we will modernise management of our production and teach our own domestic elite. This is a new practice for us.
Modernisation of the macroeconomic policy
We must adopt new princi ples of budgeting policy. We must spend only within our means and reduce the deficit as much as possible. It is necessary to build up reserves for a rainy day, ensuring Kazakhstan's safety in the long run.
The attitude towards budgeting processes must become as careful and thoughtful as it is for private investments. In other words, not a single tenge from the budget should be wasted.
The budget of the state must be focused on long-term, productive national projects that include the diversification of the economy and development of infrastructure.
Projects for investments must be selected in a strict manner, based on feasibility and rate of return. We must keep in mind that even the most modern projects become a burden to our budget if they require expenditures for maintenance, but do not bring revenues and do not solve the problems of our citizens.
We must introduce a favourable tax regime for those employed in areas of production and new technologies. Whilst this work has begun I would like to see it enhanced. We must conduct a revision of all existing tax preferences and maximise their efficiency.
We must continue the policy on liberalisation of the tax administration and on systemising customs administration. It is necessarytosimplifyand minimise tax reporting.
We must stimulate market partici pants to compete, instead of searching for new ways of tax avoidance.
Pragmatic reduction of tax supervision must minimise the dialogue between the economic entities and tax authorities. In the next five years everyone needs to move to electronic online reporting.
Starting from 2020 we must introduce the practice of tax credits. In doing this our main goal will be to stimulate investment activity among entrepreneurs.
The new tax policy must be socially oriented. From 2015 it will be necessary to develop a set of stimulating measures, including the practice of tax exemptions for companies and citizens who invest their own funds in education and medical insurance for themselves, their families and their employees.
The future tax policy must stimulate internal growth, domestic exports and promote individual's savings and investments.
Considering the unfavourable global economic environment we must ensure the safety of the earnings of each of our citizens and maintain a reasonable inflation level with respect to economic growth. This is not simply a macroeconomic issue; this is an issue of social security for the country. This will be the major task for the National Bank and the Government starting from 2013.
Kazakhstan's banks, in turn, must fulfill their purpose and meet the demand of the private sector for loans. At the same time we must not weaken our control over financial system. It is necessary to help clear banks from problematic loans and start active work on solving funding issues. For that the National Bank and the Government, under coordination from the Presidential Administration, need to develop a conceptually different and new system of monetary policy, aimed at providing the economy with necessary monetary resources.
Policy of managing public and external debt
We must constantly monitor the level of public debt and keep it under control. We must reduce the budget deficit relative toGDP from 2.1% in 2013 to1.5% in 2015. Public debt must remain at a moderate level. This is a crucial task, because only that way we will be able to ensure the stability of our budget and national security in conditions of global instability.
We must strictly control the level of quasi-public sector debt.
We must adopt a whole new approach towards infrastructure development. Infrastructure must expand the possibilities of economic growth in two key ways. Firstly we should integrate the national economy into the global environment, and secondly move towards regions within the country.
It is important to focus attention on exit routes from the country and create transport and logistics facilities outside Kazakhstan. We must think outside the box and create joint ventures in the region and throughout the world – Europe, Asia, America – building ports in countries with direct access to the sea and developing transport and logistics hubs at nodal transit points. In that regard we need to develop a special programme, “Global Infrastructural Integration".
We must develop our transit potential. Today we implement a number of large country-wide infrastructure projects that should lead to a doubling of transit capacity across Kazakhstan by 2020. By 2050 this figure must increase 10 fold.
Everything must be oriented towards one keygoal: promoting exports toworld markets where there will be long term demand for our goods and services.
Infrastructure building must also meet the profitability criteria.
Infrastructure should be built only in places where this leads to the development of new businesses and jobs.
Within the country we must create “infrastructure centres" to ensure coverage of remote regions and places with low population density with vitally important and economically necessary infrastructure facilities. Ahead of that we need to ensure transport infrastructure.
I instruct the Government to develop and adopt a state programme on infrastructure development in 2013.
The modernisation of the system of managing the state assets
Kazakhstan is not a large economy on the global scale. And we need tomanage it very effectively. The country must work as a single corporation, and the state must serve as its core.
The strength of corporate thinking lies in the fact that all processes are considered as a whole. Public sector managers at all levels must learn and adopt the same business thinking.
I repeat once again: it is necessary not simply to allocate the country's budget, but to invest funds thoughtfully and accurately.
Our main criterion for effectiveness is the rate of return from our investments. The quicker we build up the production potential of the country, the faster Kazakhstan will become a key player in the global market.
The driver of this economic policy will be the National Fund.
Resources of the National Fund should be directed at long term strategic projects. In 2013 the accrual of money in the National Fund must be continued, but we need to use those funds in a very rational and thoughtful manner.
The state, represented by national companies must stimulate the development of the economy of the future and consider the sectors that will emerge as a result of the Third industrial revolution. Domestic industry must consume the newest composite materials that we must produce in our country.
The state must stimulate the development of transit potential for information technologies. We must ensure that by 2030 at least 2-3% of global information flows go through Kazakhstan. This figure must double by 2050.
It is necessary to stimulate private companies toinvest funds in research and innovation. I want to highlight that whilst the introduction of innovation is important, it is not an end in itself. The country can reap real benefits only where there is demand for our new technologies. In the worst case scenario, innovation becomes just a waste of money.
The policy of selective support for specific companies and industries needs tocome to an end. We must support only those industries that execute socially important, strategic functions and can demonstrate their effectiveness.
New system of managing natural resources
As an important strategic advantage of Kazakhstan, we must exploit resources to provide for economic growth and large external political and economic agreements.
It is already apparent that we need to increase access to international markets for our commodities, which in the event of a new financial collapse would be destabilised. Our major importers might significantly reduce the purchases of commodities, and prices could fall sharply. Our strategy will allow us to stay ahead of the curve and accumulate resources before potential market destabilisation begins. These resources will then help the country overcome difficult times.
Technological revolutions change the structure of commodity consumption. For example, the introduction of composite technologies and new types of concrete cause depreciation of iron ore and coal reserves. This is another motivation for us toaccelerate the pace of extraction and delivery to world commodity markets to exploit the current global demand.
Maintaining the status of a big player on hydrocarbon commodity market, we must develop the production of alternative energy sources, actively seeking to introduce technologies using solar and wind power. By 2050 alternative and renewable energy sources must provide for at least a half of country's total energy consumption.
If the nation wishes to have revenues from commodities in 35 years, it needs to start preparing now. We need to develop a strategy to plan out work for the years ahead, which defines our priorities and partners in keeping with the practice of large corporations and conglomerates.
This is the key lesson from our own history: we started preparations and negotiations on the Kashagan field almost 20 years ago, and are only now starting to see results.
Developing a new commodities strategy
We must move from the simple delivery of commodities toforming partnerships in the area of energy resource processing and the exchange of new technologies.
To ensure that regions are able to attract investments, we need to ban the moratorium on subsurface use permits.
All extracting enterprises must use only ecologically sound production techniques, and by 2025 we must satisfy our own internal market with fuels and lubricants, in line with new ecological standards.
We must attract investors to our country on the condition that these partnershi ps bring the transfer of modern technology for extraction and processing. We must allow investors to extract and use our raw materials only in exchange for the creation of new production facilities in our country.
Kazakhstan must become a magnet for investment in the region. Our country must become the most attractive place in Eurasia for investment and technology transfer. This is crucially important. To do this we must demonstrate our advantages to investors.
In the interests of the nation's future and state security, we must create a strategic “reserve" of hydrocarbon commodities. The reserve will serve as the foundation of the country's energy security, providing another line of defence in troubled economic times.
Plan for the next phase of industrialisation
Kazakhstan's first five year action plan for accelerated innovative industrialisation will come to an end in two years' time. The Government must develop a thorough plan for the next phase of industrialisation. We need to ensure a development scenario of technological trends with high potential.
As a result of this new industrialisation plan, the non-energy share of our total exports must double by 2025, and tri ple by 2040.
How will we achieve this?
• We must develop new industries with an emphasis on expanding our export- oriented non-energy sector.
• By 2050, Kazakhstan must apply the latest standards of technology to all of its production assets.
• In the most competitive sectors we need to develop strategies to help domestic
producers identify gaps in the market. This will allow Kazakhstan to avoid the potentially destructive effects of deindustrialisation, especially given our upcoming membershi p of the WTO.
• Domestic goods must become more competitive. January 1st 2012 marked the start of the single economic area between Kazakhstan, Russia and Belarus. This is a huge market, with a combined GDP of 2 trillion US dollars and a total of 170 million consumers forcing our businesses to compete. However our political sovereignty remains guaranteed.
• We must focus the state programme of accelerated innovative industrialisation on importing industrial capacity and exchanging technology. To achieve this we need to establish a sub-programme to create and develop joint international companies and beneficial partnerships.
• By 2030, Kazakhstan must expand its position in the world market for space services and bring to fruition a number of projects. These projects include an assembly and testing facility for spacecrafts in Astana, a remote sensing space system, a national space monitoring system and ground infrastructure, and our high-precision satellite navigation system.
• We need to continue the development of our two leading innovation clusters:
Nazarbayev University and the Park of Innovative Technologies.
• We need to move swiftly towards a low carbon economy. To do this, I suggest we pursue an international initiative in 2013 called “Green Bridge", to promote green economies. We should also launch the Green 4 project, based on four satellite cities around Almaty.
The upcoming EXPO 2017 in Astana will provide a powerful impetus for the country's transition towards the “green" path of development. The world's greatest achievements in the fields of science and technology will be presented in our capital, allowing our citizens to witness first-hand the “energy of the future".
I've touched upon the most fundamental issues which will determine Kazakhstan's preparedness for the Third industrial revolution.
Modernising the agricultural sector
We need a large scale modernisation of the agricultural sector, especially as we face growing global demand for agricultural products.
For us tobecome a leader in the global agriculture market and build up our agricultural production, we need to:
• Increase the sowing area in the country. Not all countries are able to do this, but we can.
• Ensure a significant rise in the crop yield, primarily by introducing new technologies.
• Creating a world class livestock forage base.
• Create nationally competitive brands with an eco-friendly focus.
Our agricultural industry must become a global player in eco-friendly production.
Development of farming and SME in agricultural processing and trade
To develop farming and SMEs in agricultural processing and trade, we need to:
• Change the culture of farming and revive our tradition of animal breeding using the latest techniques and achievements in science, technology and agricultural management.
• Determine which products we are going to produce in large quantities to win over major export markets. Through these measures, the share of agriculture in Kazakhstan's GDP must increase 5 fold by 2050 I am setting the Government the following tasks for 2013:
• Adopt a new development programme for the agricultural sector until 2020.
• Increase state support for agriculture by 4.5 times by 2020.
• Set out a system of legal and economic incentives for creating medium and large agricultural enterprises, focused on applying new agro technologies.
• Introduce an increased tax rate on land that remains undeveloped for longer than a specified period.
Policy regarding water resources
We need to develop a new policy regarding our country's water resources.
We need colossal volumes of water for agriculture, and it is therefore important that we:
• Examine international best practices in addressing water supply issues and modify
the experience of countries such as Australia to our conditions.
• Introduce the most advanced extraction technology and be prudent in the use of our country's abundant underground water reserves.
Ultimately, our society needs to change its overall thinking. We must stop wasting water, which is one of our most precious natural assets.
I instruct the Government to develop a long term state programme on water, which will resolve the supply of drinking water by 2020, and the supply of irrigation water by 2040. By 2050 Kazakhstan must have once and for all solved the water supply problem.
2. Comprehensive support for entrepreneurship – a leading force in the national economy
Domestic entrepreneurshi p is a key driving force within Kazakhstan's new economic policy. Overall, the share of small and medium enterprises must double by 2030.
1. Development of small and medium enterprises
First, we must create the right conditions to enable people to develop businesses and become true partici pants of the country's economic transformation, rather than having an overreliance on the state to resolve our problems. We must therefore strengthen our domestic business culture and stimulate entrepreneurial initiative.