Download Factsheet on the Third Modernisation of Kazakhstan Overview

Factsheet on the Third Modernisation of Kazakhstan
Overview
President Nursultan Nazarbayev’s annual address was published on 31 January.
The President announced the Third Modernisation of Kazakhstan, which involves
creating a new model of economic growth that will ensure the country's global
competitiveness. The modernisation includes five main priorities, which are
designed to ensure economic growth and sustainable development to help
Kazakhstan join the top 30 most developed countries by 2050. The annual address
followed a special announcement given by the President last week, in which he set
out bold plans to increase the powers of parliament. President Nazarbayev stated
that these constitutional reforms are aimed at furthering the democratic
development of Kazakhstan, as the Government will be accountable to parliament.
Five Priorities of the Third Modernisation of Kazakhstan
1. First priority – Accelerate technological modernisation of the economy
 Cultivate new industries created with the use of digital technologies and
develop the country’s prospective sectors such as 3D-printing, e-commerce,
mobile banking and digital services
 Give impetus to the development of traditional basic industries (industry,
agriculture, transport and logistics and construction)
 Significantly increase the productivity of labour through widespread
introduction of automation, robotics, artificial intelligence and exchange of
“big data”
 Continue industrialisation with emphasis on the development of competitive
export industries in priority sectors
 Integrate into global chains of production and distribution of goods and
services by attracting transnational companies
 Implement a joint investment programme with China to establish production
facilities
 Retain strategic importance of the metallurgical-mining, oil and gas complexes
 The agrarian sector should become the new driver of the Kazakh economy
 Develop the new Eurasian logistics infrastructure and increase the volume of
transit
 Develop the construction sector, which must become a driver of the domestic
economy
 Modernise the labour market by developing new industries that will
incorporate new technologies
2. Second priority –Improve and expand the business environment
 Ensure that by 2050, small and medium business contribute at least 50% to the
country’s GDP
 Expand the use of microcredit in order to ensure entrepreneurs are guaranteed
the support they need
 Adopt measures to decrease all cost types for business, including the cost of
services in energy, transport and logistics, as well as housing and communal
services
 Achieve a decrease in the share of the state involvement in the economy to
15% of GDP
 Transfer a number of state services to business and expand public-private
partnerships (PPP)
 Do not allow price and tariff collusions
3. Third priority – Macroeconomic stability
 Achieve the phased reduction of inflation to 3-4% in the medium term
 A reset of the financial sector is needed. The National Bank is instructed to
develop a set of measures to improve the recovery of the banking sector
 Further develop the stock market and further increase the opportunities for
people to invest their savings in various types of securities
 Radically improve the efficiency of budget spending - check the effective use
of funds by ministries and departments
 Reduce step by step the size of the guaranteed transfer from the National Fund
to two trillion tenge by 2020
 Build a monitoring and control system for the external and internal quasipublic sector loans
4. Fourth priority – improving the quality of human capital
 Reform the education system and reduce the gap in quality of education
between urban and rural schools
 Start the “Free vocational education for all” project – free education that will
cover unemployed and self-employed young people and people of working
age who do not have a professional education
 Reform the health care system, including introducing compulsory social health
insurance system from 1 July
 Social security initiatives:
- From 1 July 2017 pensions for 2.1 million retirees will be increased by
20%
- From 1 July 2017 the size of a one-time grant for a birth will be
increased by 20%
- from 1 January 2018 the threshold for providing targeted social
assistance will be raised from 40% to 50% of the minimum living cost
5. Fifth priority – institutional change, security and the fight against
corruption
 Ensure that activities on the implementation of best practices and the OECD
recommendations is in the framework of the Third Modernisation
 Continue to carry out reforms aimed at protecting private property, the rule
of law and the equality of all before the law
 Ensure a secure state, free from the threat of terrorism, by preventing
religious extremism propaganda and educating the youth
 Fight against cybercrime by creating a “Cybershield of Kazakhstan” system
 Intensify efforts to identify and eliminate the causes of corruption