Priorities provided with funds. The Government has adjusted the national budget for the current year

March 02. Kazpravda

By Laura Tusupbekova

Priorities provided with funds. The Government has adjusted the national budget for the current yearThis week the parliamentary faction of “Nur Otan” party and the plenary session of the Majilis approved at an enlarged meeting the legislative amendments of the Government to the main financial document of the country – the Law of RK “On Republican Budget for 2012-2014”, initiated in connection with the set by the Head State in the Address tasks on socioeconomic modernization of the country. The amended budget will free up funds for new projects and programs.

As experts say, the Present’s state-of the nation address has answers to the alarming questions in this difficult for the country and world time. The President outlined 10 key areas of work, revealing the essence of the title of his Address – “Socioeconomic modernization – the main vector of development of Kazakhstan,” the fulfillment of which will create favorable conditions to promote creativity and energy of every citizen of Kazakhstan.

The new program in fact acts as outstripping step to protect the interests of Kazakhstan: it involves all aspects of our life. This is particularly important because the outcome of further industrial innovation and socio-economic development should be proclaimed in the Address national strategy of investment in human capital. Today, there are all conditions in the republic for further progress on the new stage of Kazakhstan’s way, for addressing new challenges to strengthen the economy and improving people’s welfare: these are stable employment, affordable housing, regional development, improving the quality of public services, human resources, modernization of the judiciary and law enforcement systems, quality improvement of human capital, the pension system, the industrial-innovative projects and agricultural development.

Step by step the President “marked out” the “Road map” on socioeconomic policy that will allow us to avoid a severe impact on the economy. Moreover, we can use these challenges for diversification of the economy. The agenda of 2012 includes 11 areas of the State program of accelerated industrial-innovative development. The fundamental point of this Address is the President’s instruction to use the National Fund for investment in the domestic economy. This, of course, will enable the business to gain access to the funds, which in turn will give an opportunity to develop mega projects and the national economy on the whole.

Thus in the coming period, the Government will pursue counter-cyclical economic policies aimed at reducing the negative impact of external factors, the main tool of which will be the fiscal policy: the growth of budget expenditures in the period of economic growth will be restrained in order to prevent overheating of the economy, while in the recession the costs for support of domestic demand will increase. It is important now both to preserve the fundamental principles of the National Fund and to prevent its depletion, because we can not avoid a new world financial crisis, as the global economy develops in cycles.

In this regard, apart from adjusting the size of transfers, the Government proposes to re-use crisis funds released by the National Fund and the budget in 2007-2009. By now KZT 398 billion, previously directed from the National Fund to support the economy has been already freed and another 24 billion is expected to be released in the current year. Such mechanism – the re-direction of the National Fund’s means to the economy will allow us to finance priority expenditures and to continue the accumulation of money in the National Fund for use in case of large-scale crisis.

At that the procedures of use and control of the means from the National Fund should be similar to anti-crisis program of 2007-2010, which provided thorough, hard cross-check of the Presidential Administration, Government, Parliament and operators of the Funds “SamrukKazyna” and “KazAgro”.

Also, the Government proposes to make more flexible the concept of formation and use of the National Fund’s means in relation to the size of the guaranteed transfer.

As known, the President has repeatedly stressed the need to reduce the budget expenditures. According to the Cabinet, more than 170 million dollars has been recovered in the budget of Kazakhstan after the government’s reduction of cost on celebrations and forums, as well as on the purchase of expensive foreign cars. The draft revised budget for 2012-2014 proposes cut by 20% of the budget spending on arrangement of expensive events. They also revised the sequestering of the budget costs which do not provide economic growth and employment. The Government has already optimized the costs at 25.6 billion tenge.

In his address the Head of State stressed that in implementation of the objectives to strengthen the economy and welfare of people an important role is played by the simplification of administrative procedures and reducing the list of permits. They drafted a bill to reduce the number of licenses and procedures for business by 30%. The document also provides for legislative stipulation of principle of full freedom of business – everything is permitted that is not forbidden. Concurrently a new concept of the licensing legislation is under development.

It is expected that the efficiency of the proposed by the Cabinet programs in figures will look as follows: Kazakhstan’s GDP per capita in 2012 will rise to 12.5 thousand dollars. Industrial output in 2012, according to the refined estimate will grow by 3.9%, the amount of work in construction in real terms is estimated to increase by 2.9%, in trade – by 12.7%. A stable external conjuncture, according to the Prime Minister, will boost exports up to 87.9 billion dollars. It’s worth noting that in 2011 exports amounted to 76.3 billion dollars.

According to the Minister of Finance Bolat Zhamishev, the government-submitted draft revised budget formed on the base of weighted macroeconomic indicators is balanced. What are the priority expenditure included in the draft revised budget? This is primarily the employment program-2020 on which additional 11.8 billion tenge is provided. 36 billion tenge is planned to be directed to the program “Affordable Housing 2020”. KZT 66.9 billion of additional expenditures is planned for the regional development and 5 billion for further development of agriculture.

Then: KZT 15.1 billion tenge is envisaged in the adjusted national budget for the industrial-innovative development; 39.1 billion – for the program “Qualitative growth of human capital in Kazakhstan”; 18.6 billion tenge – on healthcare; KZT 5.2 billion – to improve the quality of public services to the population. In addition, the Government proposed to increase the reserve for timely response to variety of urgent and immediate actions in the amount of 32.5 billion tenge.

No less important is the fact that the maintenance of macroeconomic stability in the country has greatly increased the margin of safety in the form of gold and foreign currency reserves and the National Fund. As the chairman of RK National Bank Grigory Marchenko noted, over near four years we can use about $ 3.5 billion from the National Fund of Kazakhstan for implementation of large industrial projects. Also, the country’s chief banker said that Kazakhstan’s international assets currently exceed 81 billion dollars, and the National Fund’s means – $ 47 billion.

As known all the tasks must be fully funded through the mechanism of public-private partnerships, and by attracting private investments. The Government has a specific plan for that. According to the Minister of Economic Development and Trade Bakytzhan Sagintayev, all the tasks assigned in the Address of the Head of State are reflected in the updated forecast and budget expenditures. The implementation of the planned activities will lay the foundation for competitiveness and sustainable development of the republic in the foreseeable future.