Partnership for Prosperity

May 23. Kazpravda

By Rysty Alibekova, Laura Tussupbekova, Assel Mukanova, Yulia Mager, Yulia POLONSKAYA

Partnership for ProsperityYesterday in Astana V Economic Forum started its work. Within three days “The Global Economic Transformation: Challenges and Prospects” will be discussed. Representatives of science, business, government officials and international experts – more than 500 guests, over 300 journalists – are among the attendees. The program includes over 40 events in various formats with more than 6 500 delegates from 85 countries.

Rules above rights

“Rules are above rights” says Nobel laureate Edward Prescott, professor of Arizona University (USA). What are these rules, and who wrote them and how applicable are they to the national economy? Answers to these questions were sought by the forum participants at the panel session “Macroeconomic policy, tools of macroeconomic forecasting and control”, organized by K.Satpayev Kazakh National Technical University and Institute of informatics and management problems under RK ministry of education and science.

– Economists’ and mathematicians’ tasks are to forecast and determine further actions, – professor Rahman Alshanov, doctor of economy, rector of Turan university said opening the forum.

According to Finn Kydland, professor of Santa Barbara University, California (USA) such key factors as capital accumulation and technological breakthrough are of special importance.

Speaking about the countries of our region, in particular about Kazakhstan and Azerbaijan, the speaker noted that both countries are an example of stability. The main problem of both countries, perhaps in spite of continuing economic growth, will be economic vitality and development of human resources. The scientist stressed the importance of education, opening of new and development of existing universities.

Professor of Arizona University (USA) Edward Prescott, a Nobel Prize winner in Economics in 2004 “For contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles” shared his recommendations on macroeconomic politics: to invest into productivity improvement, respect and consolidate the owners’ rights, to create economic and legal institutions, supporting effective management, promote entrepreneurship, to form a big group of owners.

Professor Sailau Baizakov, doctor of economic sciences, supervisor in JSC “Institute of economic research” presented an anti-crisis management model for financial system in developing countries. Supervisor of the state scientific-technical program, doctor of technical sciences, professor, academician of RK National Academy of sciences Abdykappar Ashimov informed on elements of theory for parametric control of a national economy.

Strategy and tactics of success

At the sidelines of the forum a roundtable “Model of strategic planning for transition to a sustainable economy”, organized by Nur Otan Party School took place under support of UNDP in Kazakhstan and the Institute for green growth (South Korea).

– Strategic planning, based on indicators of sustainable economic growth creates a model of economic development harmonized with environment – said Bakhyt Yessekin, director of the Party School.

According to Dina Shazhenova, executive secretary of RK ministry of economic development and trade, no economic development is possible without an effective model of strategic planning and RK Government is actively working in the direction.

– Strategic planning in economy provides a long-term vision and sets priorities for economic development. For example, in a Strategic plan for Kazakhstan development up to 2020 five key areas have been identified, they are preparation for post-crisis development, sustainable economic growth through accelerated diversification of industrialization and infrastructure development, HR development, provision of our population with housing and utility services, strengthening of inter-ethnic harmony, security and stability in international relations – said D. Shazhenova.

The “roundtable” was attended by prominent scientists, international and Kazakhstan experts, politicians and public figures, including Deputy Secretary General, executive director of UN Human settlement program (UN-Habitat) Joan Clos, a chair of a Central Asia parliamentary group in a House of Lords in British Parliament Lord Waverley, director of country programs of the Global Green Growth Institute (South Korea) Lee Myung Kyoon, permanent representative to the UNDP in Kazakhstan Stephen Tull, as well as other official representatives and deputies of RK Majilis.

Recommendations will be sent to the G-20 and Kazakhstan government.

Nothing personal – only business

Eurasian Business Congress in the AEF frames is being held a second time. According to deputy- PM Kairat Kelimbetov the fact shows the actual process of integration, that started in the post-Soviet space. RK ministry of economic development and trade and KNEC “Atameken” initiated discussion of economic and investment cooperation.

– Recently we have seen a steady trend of communication between business and economic cooperation in our countries. The most advanced format of integration is now the trio of Russia, Belarus and Kazakhstan. After creating the Customs Union a huge work has been done for making a Single Economic Space. And until 2015, we are planning to ease business conditions, – said K.Kelimbetov.

Deputy Prime Minister also focused on horizontal cooperation between entrepreneurs, as well as further economic integration without politicization. “Nothing personal – only business” – K. Kelimbetov offered to work in this format.

Leaders of industrial unions from Russia, Belarus and Ukraine stressed the importance of Astana Economic Forum in an emerging business dialogue. Eurasian Economic Commission has been functioning since January 2012; a memorandum for greater coordination between business communities, the three governments and the EEC is expected to be signed in June.

According to vice-president of Belarus Confederation of industrialists and entrepreneurs Vladimir Basko, it is high time to make businesses of the three countries more involved in macro programs’ elaboration. He offered to create a group for cooperation between the business entities of the Russian Federation, Kazakhstan and the Republic of Belarus and governments to specify collaboration between government and business.

First executive vice-president of RF Union of industrialists and entrepreneurs Alexander Murychev believes that it is necessary to use national currency instead of American dollars.

Alexander Gabuev, deputy chief editor of “Kommersant” newspaper raised a number of uncomfortable questions about the CU. The II Eurasian Business Congress was rounded up by awarding medals from “Atameken” KNEC.

Improving living standards

Public-private partnership is an advanced administrative system, which can be adopted by the state, participants of I Congress for business-state partnership, held in the framework of the V Astana Economic Forum, believe. The main mission of this tool is to improve living standards and provide a sustainable economic growth.

– This Congress for government-business partnerships in Astana, initiated by SPE of Kazakhstan, Japan and Ukraine is an outcome of previous dialogues within Astana Economic Forum, – Bakytzhan Sagintayev, RK minister of economic development and trade said. SPE in infrastructure projects can become a tool for modernization and innovation, creation of new jobs and strengthening of social policy. A special attention is paid to cooperation between business and government “green technology” interaction.

At present in Kazakhstan, six concession projects, worth USD 549 million are being implemented. In near future additional 11 projects – totaling $ 2.8 billion – will be launched. Sir John Statterd, ex-mayor of London and deputy chairman of «PricewaterhouseCoopers» advisory board tells that 900 SPE contracts in economy, transport, education, environment have been implemented in the United Kingdom. The key point here is responsibility and control of risks, – he added.

– Kazakhstan is a promising country for investment, and the only necessity is to determine a convenient strategy for business-government partnership – said the expert.

Professor Eric Maskin from Princeton University shared ideas on such strategy: a government can provide private companies, investing into training of their employees, with preferences in the form of tax cuts or various subsidies.

– Those who do not have education are outside globalization and the SPE can reduce this inequality, – said Eric Maskin.

Lee Yon Ho, Korean ambassador at large for international economics and trade talked about Korean experience in SPE: since 1980s, his country has effectively used this system as a strategy for public administration. The state should make every effort to improve the legal framework. SPE attracts external service providers through opening of joint ventures, – said Lee Ho.

Transport outlook

Another topic raised on the first day of V Astana Economic Forum was the prospects of Kazakhstan transport infrastructure development. They were discussed at a “roundtable” organized by RK Ministry of Transport and Communications, attended by representatives from Economic Cooperation Organization (ECO), International Road Transport Union in Eurasia (IRU), TRACECA, USA Columbia University, as well as heads of national companies and subordinate enterprises.

According to Azat Bekturov, vice-minister of transport and communications, today RK Government strengthens the role of transport sector and realizes that transit and logistics development between East and West is of special importance.

A professional review and analysis of the geopolitical trends in Eurasia, investment opportunities for new trade routes’ development and stimulation of new markets were also discussed there.

Another topic raised was implementation of “Model highway” project – construction of a modern highway and removal of administrative barriers through harmonization of transit countries’ transport legislation. Vice Minister Azat Bekturov confirmed Kazakhstan’s interest in the project.

In addition, ECO Secretary General Mohammed Yahya Maroufi spoke on activities in transport and communication. Leaders of JSC “NC” Kazakhstan Temir Joly “, JSC” Kaztemirtrans “, JSC “Kedentransservice “and RSE ” Aktau international commercial seaport” made presentations on transport development and infrastructure projects, implemented in the country.

Attracting funds

Kazakhstan is among top three fastest growing economies in the world after Qatar and China, with 8-% GDP growth in 2000-2010, and further prospects of 6-7%, – said John Ferrar, director of Ernst & Young. Deputy PM Kairat Kelimbetov chaired the panel session.

– Rapidly growing markets such as Kazakhstan are important because they are more resistant to development: they have a low level of public debt, growing middle class and trade and financial flows. In general, a positive outlook is there, but the progress will not be smooth as they have to solve several problems, – said E. Ferrar.

According to Ernst & Young research 35% of respondents indicated that Kazakhstan investment climate has improved thanks to RK Government’s will to have an open and constructive dialogue with investors, ability to maintain macroeconomic stability, appearance of additional features in the CU. 85% of investors, working in Kazakhstan consider it as the most attractive CIS republic. According to 43% of respondents Kazakhstan investment attractiveness will increase in the next three years.

Lars Nyberg, president of “Telai Sonera” (shareholder of Kcell company) and Lorenzo Simonelli, CEO of GE Transportation company shared their experience in successful investing into our country.

Olivier Descamps, director of EBRD business group for Turkey, Eastern Europe, Caucasus and Central Asia defined four problems, halting the investment flow: they are custom service, corruption, lack of technical and managerial skills and of interaction between large, medium and small businesses. As for Kazakhstan, it is a big country, and much work should be done in infrastructure development, said Mr. Descamps.

Idea for progress

Another important socio-political event in the frames of the forum was presentation of “Nursultan Nazarbayev’s Eurasian Project, embodied in life” book, written by EEC Secretary General, doctor of political sciences Tair Mansurov.

– This book is a valuable resource for historians who will analyze and describe history of Eurasian Economic Community and future of Eurasian Union – said Yermukhamet Yertysbayev, RK President’s advisor. – I would recommend it to high schools of Kazakhstan, Russia, Belarus and to those political scientists who are interested in the ideas of Eurasianism.

Five thousand copies in Russian language have come out, in summer publications in Kazakh language will appear, and then – in English.

In the frames of the Global forum “Kazakhstan’s energy-ecological initiatives”, an international conference “Vernadsky readings”, arranged by Kazakhstan National Academy of Natural Sciences, Russian Academy of Sciences and JSC “National scientific and technological Holding Parasat” was held.

Scientists from Russia and Kazakhstan offered to establish a Burabai Eurasian Center for sustainable development “Noosphere” named after V.I. Vernadsky and open Vernadsky museum in Burabai as the scientist lived and worked in the village. The scientists expressed their readiness to prepare various actions in 2013 in honor of the 150th anniversary of Vladimir Vernadsky.

The main outcome of the V Astana Economic Forum with Kazakhstan President Nursultan Nazarbayev – an open letter to the governments containing recommendations for world economy’s improvement and development – will be sent to G-8 and G-20 organizing Committees, the UN, International Monetary Fund, the WB, and to the Organization of economic cooperation and development.