New political course of the established state
I. Established Kazakhstan - trial by crisis of our statehood, national economy, civil society, social harmony, regional leadership and authority in the international community
II. Ten global challenges of the 21 century
III. Strategy “Kazakhstan-2050" – is a new political course for new Kazakhstan in a fast changing world
1. Economic policy of the new course – all around economic pragmatism based on the principles of profitability, return on investment and competitiveness
3.2 Tax policy
3.3 Monetary policy
3.4 Policy of managing public and external debt
8.1 Development of farming and SME in agricultural processing and trade
2. Comprehensive support of entrepreneurship – leading force in the national economy
3. New principles of social policy – social guarantees and personal responsibility
1.1. Minimum social standards
1.2. Targeted social support
1.3. Addressing social imbalances in the regions
1.4. Modernization of the labor policy
4.1. Key priorities in healthcare
4.2. New approaches in healthcare for children
4.3. Improving medical education system
4.4. Quality of medical care in rural areas
4.5. Physical training and sports
4. Knowledge and professional skills are key landmarks of the modern education, training and retraining system
1.1. Extending “Balapan" program until 2020
1.2. Developing engineering education system
1.3. Developing system of social responsibility in education
1.4. Modernization of teaching methods
2.1. Technology transfer
2.2. Cooperation of science and business
2.3. Roadmap of development prospective national clusters
5. Further strengthening of the statehood and development of the Kazakhstan democracy
1.1.Improving system of state planning and forecasting
2.1. Dividing responsibilities and power between center and the regions
2.2. Development concept of local self-governance
2.3. Election of the rural governors
3.1. Second stage of the administrative reform
6. Consistent and predictable foreign policy is promotion of national interests and strengthening of regional and global security
7. New Kazakhstan patriotism is basis for success of our multiethnical and multi-confessional society
Today we have gathered on the eve of our Independence Day.
It has been more than 20 years since we started to proudly celebrate 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 to our joint efforts we have transformed our country into a wholly different place.
Today we are a successful state with our own characteristics, perspectives and identity. We have paid a great price to achieve these milestones.
For over 20 years our country has worked to strengthen its sovereignty and political influence - a goal which we have accomplished. The formation of our nation has been successfully completed.
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 want to have created a society based on a strong state, a developed economy with universal labor opportunities.
A strong state is especially important to ensure 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.
This is a new political course.
I. Established Kazakhstan - trial by crisis of our statehood, national economy, civil society, social harmony, regional leadership and authority in the international community
In 1997 we adopted the Development Strategy of Kazakhstan 2030.
That was fifteen years ago when the post-Soviet chaos has not been overcome, there was an economic crisis in South East Asia and Kazakhstan faced a difficult period too.
As we faced these challenges and others our strategy served as a beacon to guide our way forward and keep us focused on our target.
After my speech in Parliament in 1997 there was some confusion and bewilderment. As I outlined our ambitious goals many 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 continue on the road to developing a new country.
To reach this aim we had to work to improve three areas: build a modern nation state by making the leap towards a market economy, lay the foundation of a social system and, finally, transform people's thinking and outlook. We had to define our own path. This path was outlined in the “Kazakhstan 2030 Strategy''. This strategy helped define our strategic goals and targets and provided a crucial breakthrough in our world outlook.
Only with the objective in mind can we set targets that will lead us to success. Today I'm honored to announce that we made the right decisions all those years ago. Our resilience through the 2008-2009 global financial crisis has proved that. Kazakhstan has withstood. The crisis has not destroyed our achievements, but has made us stronger.
The political, socio-economic and foreign policy model of development that we chose proved to be the right one.
1. A Strong and Successful State
Our key achievement is that we have established an independent Kazakhstan.
We have legally formalized our borders. We have put together our nation's integrated economic space. We have recreated and reinforced 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 be impossible without Astana. Very few cities have received such an honor. It's enough to say that our country turned out to be the first post-soviet nation to chair the Organization for Security and Cooperation in Europe, host the Summit of the Organization, and the EXPO 2017 – a world-scale event.
2. Sustainable Process of Democratization and Liberalization
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 modernize our country and make it competitive is to progressively follow the path of political liberalization.
Step-by-step our society is approaching the highest standards of democratization and human rights.
We have secured fundamental rights and liberties in our country's Constitution. Our citizens have equal rights and opportunities.
3. 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. Besides our ethnic, cultural and religious diversity, we have maintained peace and stability in our country.
Kazakhstan is home to over 140 ethnic and 17 religious groups.
Civil peace and interethnic harmony remains a key value for us. Peace and accord, intercultural and inter-religious dialogue in our multi-ethnic country has been recognized as a global model.
The Kazakhstan's People's Assembly has become a unique Eurasian model of intercultural dialogue.
Kazakhstan has turned into a center of global inter-religious dialogue.
4. National Economy. Our Role in International Division of Labor.
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 a proactive role of the government in attracting foreign capital.
To date we have attracted over $160 billion of foreign investment.
We have established basic conditions for entrepreneurship, as well as a modern taxation system.
We have systematically diversified our economy. I set forward a clear task to accelerate the industrialization program – to help transform the shape of our economy, make it immune to global commodity price fluctuation 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 recognized rankings which 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.
5. Strong Social Policy to Ensure Social Stability and Harmony
A major criterion for me has always been and will be the level of our people's living standards.
Over the past 15 years the incomes of our citizens have grown 16 fold.
The number of people with an income below subsistence level is seven times as low as it was, the number of unemployed is twice as low as it used to be.
We have laid the foundation of a social-oriented society.
We have managed to achieve substantial progress in improving our nation's health
To improve the efficiency of our healthcare system, we have reformed its organization, management and funding. Over the last five years, maternal mortality rate decreased threefold, while the birthrate is 1.5 times as high.
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 Program designed to radically modernize education at all levels, from pre-school to higher education.
Thanks to our long-term human capital investment policy we have brought up a talented generation of today's youth.
6. Globally Recognized Country
In world politics, our country is a responsible and reliable partner with an indisputable weight 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 organization with 24 member countries that have a combined population exceeding 3 billion people. CICA is a critical element of Kazakhstan's security.
For the last 2-3 years the Republic of Kazakhstan chaired the Organization for Security and Cooperation in Europe, Shanghai Cooperation Organization, Organization of Islamic Cooperation and Collective Security Treaty Organization.
At the Astana Economic Forum we proposed a new dialogue format – G-Global. The initiative has been designed to combine the efforts of all to establish a fair and secure world order.
We have a decent contribution to ensuring global energy and food security.
7. Our Proactive Role in Promoting Nuclear Nonproliferation Regime
Our initiatives to strengthen the nuclear nonproliferation regime are a key contribution to global stability, order and security.
Being the first in the world to close nuclear testing site at Semipalatinsk and abandon nuclear weapons, we gained strong international security guarantees from leading nuclear powers – USA, Russia, Great Britain, France and China.
We played a key role in establishing a Nuclear Weapon Free Zone in Central Asia and actively support creating similar zones in other regions of the planet, 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. 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 announce August 29 as the International Day against Nuclear Tests.
All of this is a testament to the recognition of Kazakhstan's role in global politics.
Kazakhstan has been recognized as a leader in nuclear nonproliferation and remains a model for other countries.
8. Strategy Kazakhstan 2030: Key Outcomes
In Strategy Kazakhstan 2030 we planned our country's future success.
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 honored to be able to summarize 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 history Kazakhstan gained clear, internationally recognized borders. 14,000 km of our state border has been delimited.
Kazakhstan safely controls the situation in its Caspian water area. From now on, there is no threat of any territorial disputes to emerge in the future. We haven't left disputed borders to our descendants.
We have created a strong Army capable of defense and an efficient law enforcement system ensuring the security of our individuals, 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've never had a multiparty system, today there are parties representing the entire political spectrum of the country. We have a multiparty Parliament and a majority government.
Civil society is being developed. Independent media outlets work in the country. There are over 18,000 non government organizations of various orientations. Nearly 2,500 media outlets function in the country of which approximately, 90% are private.
Today Kazakhstan is an important international center of inter-cultural and inter-religious 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 OPEN MARKET ECONOMY WITH A HIGH RATE OF FOREIGN INVESTMENT AND DOMESTIC SAVINGS.
We aimed to achieve feasible, sustainable and growing rates of development
It was Strategy Kazakhstan 2030 where the focus has been shifted towards economic growth. As a result, within 15 years our national economy grew from 1.7 trillion tenge in 1997 up to 28 trillion tenge in 2011.
Kazakhstan's GDP increased 16 fold. Since 1999 the annual GDP growth equaled 7.6% and outgrew the indicator of advanced developing countries. Our GDP per capita grew seven-fold, from 1,500 USD in 1998 to 12,000 USD in 2012. From the very outset, Kazakhstan has become 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, natural gas output increased five-fold. We've channeled those commodity incomes into our National Fund.
National Fund became a reliable shield to protect us from possible economic and financial disturbances. This is a safeguard for current and future generations.
Carrying out the accelerated industrialization program since 2010, we've implemented 397 investment projects worth 1,797 billion tenge and created over 44,000 jobs. 225 projects worth 101.2 billion tenge have been approved over the two years of implementing the “2020 Business Roadmap" program.
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 to radically change the lives of our citizens, 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 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 – Children's Rehabilitation Center, Mother and Childhood Center, Neurosurgery Center, Emergency Aid Center and Cardiology Center.
We are developing the services of transportable medicine, which now provides the most remote areas of our country with healthcare services at a rapid pace.
National screening system helps detect and prevent diseases at their early stage. We've introduced free and preferential medication supply.
Over the last 15 years Kazakhstan's population grew from 14 million to almost 17 million. Life expectancy has increased to 70 years. We progressively implement a policy of affordable and high-quality education.
The “Balapan" (“chicken") Program implementation helped us increase the number of children to be covered with early childhood education to 65.4%.
We've introduced mandatory preschool training. Today this covers 94.7% preschoolers of our country.
Since 1997 we have built 942 schools and 758 hospitals across the country.
We are developing a network of intellectual schools and world-class vocational colleges. Over the last 12 years the number of college scholarships has increased by 182%. In 1993 we adopted a unique “Bolashak" program which 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 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 having reduced our dependence on any particular export direction.
(6) INFRASTRUCTURE, ESPECIALLY 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 centers, terminals, airports, train stations and ports.
All of these projects have created jobs for many citizens of Kazakhstan and integrated us into the regional and global economic system. Over the last 11 years, the highway development sector received over 1,263 billion tenge and has built and reconstructed over 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 East countries by having built the “Uzen – Turkmenistan border" railroad. Having put together the “Korgas – Zhetygen" railway, we have opened the “eastern gate" paving the way towards the markets of China and all of Asia. We began building the “Zhezkazgan – Beineu" railway.
(7) PROFESSIONAL STATE. We had to finally get rid of management traditions of the administrative and command system to create a modern and efficient managers corps. We established a system of screening and promoting human resources where all citizens have equal rights and opportunities that ensure a high professional level and transparency of government activities.
We have managed significant change in our public administration shifting its focus towards improving the quality of public services.
Thus, our main goals set forth by the 2030 Strategy have been achieved, other goals are under implementation.
Today every single one 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 realization of our hopes and dreams.
We should all take pride in our achievements.
The global financial crisis proved that we succeeded as a state and society. Our borders, political system and economic model are no longer subject to fundamental 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 focus on ten key challenges for our country and region. To continue our path to success we must take into account each of the challenges to ensure our ongoing development.
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 tripled and will reach nine billion people by 2050. During the same period the world's GDP has increased 11 fold.
The accelerating global course of history always 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 modernized all areas of our society at a very high rate. We've done things that many other countries achieved in 100 or 150 years.
However, we still have social groups that have not joined the overall modernization 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 social groups with an opportunity to join the modernization process, find their adequate place in the society and take full advantage of the opportunities of the New political course.
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 inevitably cause problems on the labor market, including workforce shortage.
Growing demographic imbalance generates new waves of migration and increases social tensions. In Kazakhstan, we face migration pressure in certain regions of the country where illegal immigrants destabilize local labor markets.
We also should realize that we are very likely to deal with a reverse process – outflow of our labor force. We are a young nation. The average age of our country is 35 years. This provides us with a great opportunity to capitalize on our human potential and rightfully position ourselves in the world.
So today we possess a substantial base to rely upon and grow further.
Anyone searching for a job in our country can get employed. Moreover, everyone in Kazakhstan is able to generate a new job and take care of him or herself. That is our great achievement.
I am leading you to a universal labor society where the unemployed will not just receive benefits, but will master new occupations, where 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.
Third challenge is the global food security threat
High rates of global population growth are contributing to the 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 shortage in food presents a great opportunity for Kazakhstan. We have great opportunities in terms of that 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 type of thinking in our state.
Fourth challenge is the water shortage
Global water resources are also 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, so the fight for acquiring water is already becoming a critical geopolitical factor causing tensions and conflict in the world.
Kazakhstan also faces an acute water supply issue. We lack high-quality drinking water. A number of regions face drinking water scarcity.
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 politicizing it.
Fifth challenge is the global energy security
All developed countries are increasingly investing in alternative and green energy technology. Estimates indicate that by 2050 their usage will help generate up to 50% of the entire energy consumed.
The era of hydrocarbon economy is coming to its 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 partnerships and mutually beneficial international cooperation in the energy sector.
Sixth challenge is the exhaustion of natural resources
Combined with unprecedented population and consumption growth and the finite level of natural resources this will fuel 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 to rely on us for their resource needs.
It is critical that we reconsider our attitude to our natural wealth. We need to learn how to properly manage it, saving our export revenues and, most importantly, transforming our natural resources into sustainable economic growth that delivers maximum efficiency.
Seventh challenge is the Third industrial revolution
Mankind is at the threshold of the 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.
Eighth challenge is the growing social instability
One of the greatest problems in the world today is the 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 unrests.
When we look at global employment conditions, we need to admit 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.
Ninth challenge is the crisis of our civilization's values
The world is undergoing an acute crisis of outlook and values. We increasingly hear voices heralding the clash of civilizations, 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 to live in co-existence of cultures and religions. We must be committed to dialogue between cultures and civilizations. Only in dialogue with other nations our country will be able to succeed and gain influence in the future. In the 21st century Kazakhstan must strengthen its position of a regional leader and become the bridge for dialogue and interaction between East and West.
Tenth challenge is the threat of a new global destabilization
We are all witnessing what is happening today in the world. This is not a new wave of global destabilization, but the continuation of 2007-2009 financial crisis, from which the world economy has not yet recovered.
The Global economic system may fail again as soon as 2013-2014, due to a fall in global commodities prices. Such 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 Euro zone 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 power branches, for 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 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 horizon, and make another leap forward in our world outlook.
Firstly, 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 require sustainable long term development. Many countries are already trying to look beyond the 2030s and 2050s.
“Managed forecasting" is becoming an important development tool for states in today's unstable times.
Secondly, Strategy Kazakhstan 2030 was developed for the period of formation of 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 for correction has been incorporated in it from the outset
Being aware that the situation in the world is changing and this might lead to adjustments, I have 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 tasks set by strategy 2030. We must realize clearly that time and conditions will bring their own adjustments to our plans, as they did to 2030 program.
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. Food and Agriculture Organization 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 go to school. Today they are already working or graduating from universities. In two to three 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 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 will 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.
Considering all of this, 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, realizing 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 principles of economic policy.
• Comprehensive support for entrepreneurship 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 policy that is responsive to new challenges
Today I will also outline the primary tasks for 2013 that will ensure the successful start of the New political course 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. Economic policy of the new course – all around 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 participate as an equal business partner and create new sources of economic growth.
Third. Creating a favorable 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 principles of corporate governance in the public sector.
• Exploit the benefits of international divisions of labor. In particular, attract external cadre resource for implementation of some of the tasks of the New course via the outsourcing programs. We must also 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 modernize management of our production and teach our own domestic cadres. This is a new practice for us.
Modernization of the macroeconomic policy
• We must adopt new principles 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 to 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 favorable 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 maximize their efficiency.
• We must continue the policy on liberalization of the tax administration and on systemizing customs administration. It is necessary to simplify and minimize tax reporting.
We must stimulate market participants to compete, instead of searching for new ways of tax avoidance.
• Pragmatic reduction of tax supervision must minimize 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.
• 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.
Future tax policy must stimulate internal growth, domestic exports and stimulate individual's savings and investments.
• Considering the unfavorable 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 of 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 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 to GDP from 2.1% in 2013 to 1.5% 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.
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 program “Global infrastructural integration".
• We must develop our transit potential. Today we implement a number of large country-wide infrastructure projects that should lead to doubling the capacity of transit across Kazakhstan by 2020. By 2050 – this figure must increase 10 fold.
• Everything must be oriented towards one key goal – promoting exports to world 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 centers", 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 program on infrastructure development in 2013
Modernization of the system of managing the state assets
Kazakhstan is not a large economy on a global scale. And we need to manage 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 would 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 development of transit potential in sphere of 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 also to stimulate private companies to invest 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 of specific companies and industries needs to come 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
We must exploit resources as important strategic advantage of Kazakhstan to provide for economic growth and large external political and economic agreements:
• Already now it is necessary to accelerate as much as possible the access for our commodities on international markets, which in the case of a new financial collapse would be destabilized. 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 destabilization begins. These resources will then help the country overcome the hard period.
• Technological revolution changes the structure of commodity consumption. For example, the introduction of composite technologies and new types of concrete - causes depreciation of iron ore and coal reserves. This is another factor for us to accelerate the pace of extraction and delivery to world commodity markets exploiting 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 account for at least a half of country's total energy consumption.
If the nation wishes to have revenues from commodities in 35 years, then it needs to start preparing now. We need to develop a special strategy – defining priorities and partners, in order to plan out the work for years ahead, as this is done by all large corporations and conglomerates.
This is the key lesson from our own history: we started preparations and negotiations on Kashagan field almost 20 years ago, and are only now starting to see the results.
Main directions of strategy development:
• To ensure that regions are interested in attracting investments, it is necessary to ban the moratorium on subsurface use permits.
• We must move from simple delivery of commodities to forming partnerships in area of energy resource processing and exchange of new technologies. By 2025 we must fully satisfy our internal market with fuels and lubricants in accordance with new ecological standards.
• We must attract investors to our country only on the conditions of transfer of modern technology for extraction and processing. We must allow investors to extract and use our raw materials only in exchange for creating new production facilities on the territory of our country.
• Kazakhstan must become the regional magnet for investment. Our country must become the most attractive place in Eurasia for Investments and technology transfer. This is crucially important. To do this we must demonstrate to investors our advantages.
• All extracting enterprises must introduce only ecologically harmless production techniques.
In the interests of the nation's future and state security, it is necessary to create a strategic “reserve" of hydrocarbon commodities. The strategic reserve will serve as the foundation of the energy security of the country providing another line of defense in troubled economic times
Plan for the next phase of industrialization
The first five year action plan of the accelerated innovative industrialization program will come to an end in two years time. The Government must develop a thorough plan for the next phase of industrialization. We need a development scenario of technological trends with high potential.
As a result the share of non-energy export in total export must double by 2025, and triple by 2040.
What needs to be done for that?
• By 2050 Kazakhstan must apply the latest technology standards to all of its production assets
In most competitive sectors we need to develop strategies for domestic producers on forming new market niches. This will allow Kazakhstan to avoid the potential destructive effects from deindustrialization, especially considering the perspectives of entering 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 combined GDP of 2 trillion US dollars and 170 million consumers forcing our business to compete. Our political sovereignty remains guaranteed.
• We must develop new industries with an emphasis on expanding export oriented non-energy sector.
• We must focus the state program of forced innovative industrialization on importing industrial capacity and exchanging technology. For that we need a sub-program for creating and developing joint international companies and beneficial partnerships.
• By 2030 Kazakhstan must expand its niche on the world market for space services and bring to fruition a number of current projects. These projects include the assembly and testing facility of spacecrafts in Astana, a remote sensing space system, the 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 innovation technologies. We need to make an accelerated transition towards low carbon economy.
To do this I suggest we create an international organization “Green Bridge" in 2013, and also launch the Green4 project based on four satellite cities around Almaty.
The upcoming EXPO 2017 in Astana will provide a powerful impetus for transition of the country towards the “green" path of development. The world's best achievements in science and technology will be presented in the capital of our country. Our citizens would be able to witness the “energy of the future" with their own eyes.
Now I have raised the most fundamental issues, which would determine the preparedness of the country for the Third Industrial Revolution.
Modernization of the agricultural sector
We need large scale Modernization of the agricultural sector, especially under the conditions of growing global demand for agricultural products.
For us to become a global leader on agricultural market and build up agricultural production, we need to:
• Increase sowing area. I note that not all countries are able to do so.
• Ensure significant rise in crop yield, primarily by introducing new technologies.
• Creating a world class livestock forage base.
• Create nationally competitive brands with a focus on eco-friendliness.
As a result I set the task before our agricultural industry – to become a global player in area of eco-friendly production.
Development of farming and SME in agricultural processing and trade
In this area 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 management.
• Determine which products we are going to produce in large quantities to win major export markets.
As a result of adopting these measures the share of agriculture in GDP must increase 5 fold by 2050.
I instruct the Government the following tasks for 2013:
• Adopt a new development program for agricultural sector of the country until 2020.
• Increase state support for agriculture by 4.5 times by 2020.
• Set out the system of legal and economic incentives for creating medium and large agricultural enterprises, oriented on applying new agro technologies.
• Introduce an increased tax rate on those lands that remain undeveloped for longer than certain period since they were provided.
Policy regarding water resources
It is necessary to develop a new policy regarding water resources of our country. We need colossal volumes of water for our agricultural purposes. In this regard we must:
• Carefully examine the best practices in addressing water supply issues in other countries, such as Australia, and modify them to our conditions.
• Introduce the most advanced extraction technology and prudent use of underground water reserves that are abundant in our country.
• To move to modern water-saving agricultural technologies.
Our society needs to change its overall thinking. We must stop wasting water, which is one of our most precious natural wealth. By 2050 Kazakhstan must once and for all solve the water supply problem.
I instruct the Government to develop a long term state program on water, which will resolve the supply of drinking water by 2020, and then the supply of irrigation water – by 2040.