|Kazakhstan Set to Implement Brand New Economic Program|
The Programme for Accelerated Industrial and Innovative Development (PAIID) for 2010-2014 represents a new approach to achieving the modernization of the Kazakh economy, Deputy Prime Minister – Minister of Industry and New Technologies Asset Issekeshev claimed as he explaining the project to the Majilis (lower house of the Parliament).
Issekeshev cited the results of previous programs on industrial development of the country’s economy and stressed that the experience gained in implementing them has enabled the Government to develop a more structured programme in which issues of workforce productivity and new technologies come to the fore.
He believes it is more about new economic thinking. “The principal difference of this approach is in its precision,” he said.
In previous years, Issekeshev explained, there were dozens of different programs with overlapping and confusing goals. For example, those which concerned modernization of the economy numbered 52. PAIID reduced their number to four.
The government has clear criteria for deciding whether to invest public funds into an industry, with a thorough analysis of its current state and prospects, export capabilities, focus on manufacturing products with high added value, innovativeness in low energy consumption, and environmental friendliness.
Another specific feature of the programme is a target-oriented method which is used at all levels of implementation: bringing all activities into a single format, appointing one responsible department or an official for each programme, and creating a comprehensive monitoring system. In other words, a special attention will be given on controlling the expenditure of public funds.
Issekeshev briefed parliamentarians on the essence of new approaches to state support, using metallurgy, one of the most important industries in Kazakhstan, as an example.
Currently, with the industry’s share in total volume of the nation’s industrial production equaling 17.5%, the analogous share of ready-for-use metal products is 1.2% only, while the country has to spend US$ 6.3 billion annually to import such goods. PAIID would seek to double the gross value added through reaching higher levels of processing raw materials and creating new metal conversions. The key issues would concern discouraging exports of raw materials and encouraging implementation of innovative projects, giving the SMEs access to base metals, and development of infrastructure.
This year four pilot integrated sub-programs of business support are to be launched within PAIID.
The first is called the “Investment – 2020”, and it proposes to maintain and expand investment preferences provided under the Law “On Investment”.
The second sub-program, “Productivity-2020”, suggests the introduction of better management technologies with parallel development of new products (technology transfer, funding for innovative grants, co-funding R&D developments undertaken by private companies, i.e. grants, tax deductions).
The third one, “Export - 2020”, provides export support services for commodities manufactured in Kazakhstan, including the identification of potential markets internationally, search for partners-buyers within the nation’s trade missions abroad and arranging “buyers and sellers” meeting, the calculation of optimal logistics export routes and providing information on the procedures of customs clearance, cargo insurance, and the preparation of shipping documents.
Last but not least, is the sub-program “2020 Business Road Map”. In order to support business initiatives in non-oil sectors of the economy the following activities are provided: interest rate subsidies on loans, partial guarantees on loans, development of industrial infrastructure, service support, and personnel training.
In response to queries from the MPs to the effect that such an ambitious programme requires a significant number of trained professionals, Isekeshev claimed each industrial program will be provided by a separate program of proper personnel training. The Ministry of Labour and Social Welfare and the Ministry of Education and Science are working to develop a new special programme for modernizing educational institutions.
The MPs agreed that unlike the previous programmes with somewhat similar goals, the PAIID is a fundamentally new document clearly outlining the steps the country needs to make to achieve a significant leap forward and long-awaited economic diversification.
A State Programme for accelerated industrial and innovative development for 2010-2014 is the first five-year programme to implement a 10-year development strategy of Kazakhstan developed by the government and approved by a presidential decree in March this year.