Samruk Kazyna’s role in upgrading economy to be key through 2015
February 7. KAZINFORM. ASTANA
Kazakhstan’s programme of accelerated industrial and innovative development remains the cornerstone of economic policies for both the Government and the Samruk Kazyna National Welfare Fund, the fund’s CEO Kairat Kelimbetov said in an extensive interview with the Kazakhstanskaya Pravda newspaper on Thursday. In it, he outlined major priorities of the fund’s activity and shared his vision of the latest economic developments taking place in the country.
“A couple of days ago President Nursultan Nazarbayev delivered the 2011 state-of-the-nation address, in which he presented a scenario of the country’s further development in the context of economic and, above all, social reforms. The message opens up new prospects for the decades ahead. On the other hand, it continues emphasising the substance and significance of the breakthrough projects. Another key point here is that the document clearly outlines and spells out the aspect of modernisation,” Kelimbetov said.
According to Kelimbetov, the main focus in the state’s economic policy remains on State Programme of Accelerated Industrial and Innovative Development (PAIID), which was adopted in 2010. And it has already given a substantial impetus for the structural reorganisation of the country’s economy.
“Some issues concerning cooperation between state and business have been resolved. As is known, Samruk Kazyna plays the leading role in implementation of the abovementioned Programme”, Kelimbetov stressed.
“Due to the measures taken we managed not only to get through the most serious stage of the crisis, having maintained the pace of economic development, but also to keep our banks’ credibility, support small and medium-sized businesses, continue the construction of housing facilities, refinance the existing real estate mortgages and ensure the implementation of large industrial projects,” he added.
The fund’s main goal is to contribute to diversification, which the Kazakh government has committed to achieve by 2015. Private sector, however, is also involved in the process.
“We are establishing new economic sectors and implementing the investment projects. After 2015, Samruk Kazyna will become a pure holding company, which will define the development strategies of Kazakhstan’s companies, supervising their performance and financial indicators, without interfering with their operations,” Kelimbetov said.
In general, the most appropriate approach for the rapid modernisation of Kazakhstan’s economy is to follow the strategy of traditional differentiation backed by the oil and gas sector. Only a sophisticated policy shall resolve the three pressing tasks, which include the development of oil and gas industry, transition to the higher value-added production (or diversification of the first type), and diversification of the second type, Kelimbetov said.
According to Samruk Kazyna’s CEO, in 2010 a full-scale reconstruction and modernisation of oil refinery plants started in Kazakhstan. On the whole, the Fund’s institutions have financed 146 projects, of which 96 have already been put into operation. More than 20,000 jobs were created through the expansion of new manufacturing facilities. In addition, at the moment, the Development Bank of Kazakhstan is considering nearly 33 investment projects with the total cost exceeding US$ 4.2 billion.
In Kelimbetov’s words, today Kazakhstan’s economy is experiencing a critical moment. Because of the global financial and economic crisis the world is becoming less open. In this context, Kazakhstan is rightly pushing further with integration into the global and regional space.
“Of course, our major priority is the integration into the Customs Union (CU) and the Single Economic Space (SES). When it comes to big business, it has fewer obstacles, for it had long been competing in the global market. The same may be said of the natural resources sector,” Kelimbetov noted.
Samruk Kazyna and its subsidiaries are expanding cooperation with their partners abroad, he added. During a series of official visits by President Nazarbayev in 2010, the Fund signed memoranda of cooperation with strategic partners such as Finmeccanica, the European Investment Bank and General Electric. The Fund also continues its close partnership with international financial institutions such as EBRD, Foreign Trade Bank, State Development Bank of China, and the Export-Import Bank of China (China Eximbank).
Another strategic policy direction of the Fund’s activity is aimed at the improvement of its corporate governance system, the key components of which are transparency and financial discipline. Samruk Kazyna is currently implementing a large-scale and multi-stage programme to improve the quality of financial management in all its subsidiaries, Kazinform writes with reference to a bi-weekly online publication of the Ministry of Foreign Affairs of the Republic of Kazakhstan.
The plans for the future are impressive as well. “First of all, we need to work out a consolidated development plan for the next five years, and ensure the growth of the labour efficiency. The Fund’s subsidiaries are now developing “innovative-technologic” strategies and activities on asset restructuring. Following the activities of our subsidiaries in 2011-15, we are hoping to receive economic benefits up to KZT 354.7 billion, or US$ 2.4 billion”.
“At present, Kazakhstan has one of the best models of government asset management in the CIS region. But we still have much to do to achieve the strategic goals of modernizing the economy of Kazakhstan,” he concluded.