To forecast and slate further actions. Astana was hosting the V Astana Economic Forum in which President Nursultan Nazarbayev shared
May 25. Kazpravda
By Stepan LEMESHEV
12 Nobel laureates, 4 members of a global rating, 100 modern thinkers, prominent politicians, heads of international organizations assembled in Astana to discuss global economic transformation. The forum comprised 40 events of different format.
Options for transformation
Problems of economic development are very complex, and rapidly developing Kazakhstan faces modern challenges. In this regard, macroeconomic problems, external influences and internal challenges were widely analyzed at the forum.
– 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. The speaker noted that Kazakhstan is an example of stability and stressed the significance 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.
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.
Turkish Prime Minister Recep Tayyip Erdogan expressed confidence for expanding cooperation in G-20 frames and a joint search of solutions to global problems.
– Astana Forum is a very important venue to share general opinions on crisis overcoming at, – said R.Erdogan.
Sha Zukang, UN Under-Secretary-General for economic and social affairs read greetings from UN Secretary General Ban Ki-moon to the forum. Over the past five years Astana Economic Forum has become a very important event for discussing key economic issues and practical steps to improve international cooperation, the letter says.
– We have to go through a transformational change in our economies and our minds, – Sha Zukang said on behalf of Ban Ki-moon. – We must use financial resources to support developing countries, especially the most underdeveloped countries in order to help them achieve sustainable economic growth.
Horst Koehler, ex-president of the Federal Republic of Germany, ex-managing director of the International Monetary Fund, EBRD ex-President talked about principles of social justice and changes in economic model. He is sure that a market requires a reliable and strong ethical framework for all the players of the world economy.
Min Zhu, deputy managing director of the International Monetary Fund shared on a global and regional financial system and on what can be done by the IMF.
According to Robert Mundell, a professor at Columbia University (USA), the Nobel Prize winner, within 10 or 20 years there will be a need in a world reserve currency.
Investments and Innovations
Astana Economic Forum has become a solid ground to discuss topical economic issues and develop solutions, – said CIS Executive Secretary Sergei Lebedev, chairman of CIS Executive Committee at IV regular session of CIS ministers of finance.
RK deputy PM Kairat Kelimbetov, in his turn, added that establishment of the CU and SES gave a great opportunity for joint work of our governments. Negotiations on Kyrgyzstan’s joining the Union are underway.
II Eurasian business congress was held in the Forum frames. Leaders of industrial unions from Russia, Belarus and Ukraine appreciated the part 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 form a group for cooperation between the business entities of the Russian Federation, Kazakhstan and the Republic of Belarus and 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.
– 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 in “green technology”.
At present in Kazakhstan six concession projects, worth USD 549 million are being implemented. In near future another 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.
According to John Ferar, director of 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 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 in our country.
Olivier Descamps, director of EBRD business group for Turkey, Eastern Europe, Caucasus and Central Asia defined four problems, halting the investment flow: 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.
According to UNWTO deputy Secretary General Zoltan Somogyi, thanks to RK President’s and Government’s policy Kazakhstan has become one of the tourist leaders in Central Asian region and the country has a huge potential for further tourist development due to its natural resources, cultural and historical heritage.
VII Innovation congress “Innovative business – the way to a competitive economy” was held in the frames of the forum. Heads of research and development institutes from Germany, South Korea, Russia, USA, UK shared in a plenary session “Development of innovative entrepreneurship: problems and solutions”. Total number of Congress participants is about 300 experts, including representatives of IT parks, business incubators, business structures, introducing innovative technologies. Besides 30 innovative projects of Kazakhstan innovators and inventors were presented at the exhibition in the frames of VII Innovation Congress.
Director of the UNECE Economic Cooperation and Integration Division- Rumen Dobrinsky- presenting the project “Innovation effectiveness of Kazakhstan” marked the country’s progress in development of the national innovation system, which is a political priority at the highest level.
One of the main topics of the congress was financing of innovation. As international experience shows, attractive conditions are required to stimulate private investment sector in a state.
– Potential business investors in Kazakhstan, contributing their own funds, have become a reliable source of innovation funding in early stages of technological entrepreneurship development in our country, – said Aydin Kulseitov, an authorized representative of JSC “National Agency for technological development “.
Another topic raised on the first day of V Astana Economic Forum was 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.
Implementation of “Model highway” project was tried at the forum- 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 it.
At the panel session on fossil energy and environment, global experience was shared on the use of innovative technologies in industry, development prospects of the domestic “oil industry” with regard to changes in the structure of demand and spread of new technologies and alternative energy.
Lady Barbara Thomas Judge, Chairman Emeritus of the Agency of Atomic Energy, UK, called Kazakhstan a lucky country for several reasons. Firstly, due to its strategic geographical position, secondly because it is resource-rich. In addition, she praised a strong leadership and a stable political system in Kazakhstan, educated population, and the legal system working to meet the world standards.
Crowdsourcing was the topic of one of the panels within the AEF. The author of this term – professor in journalism Jeff Howe, Northeastern University (USA), explained this term and technology. Crowd-sourcing is when a task or problem is outsourced to an undefined public rather than a specific body to solve problems. The benefit of such collaboration to business is enormous, as it saves that fundamental costs and facilitates access to a vast human potential.
Board Chairman of Sberbank of Russia Herman Gref, the panel organizer, said the bank uses crowd-sourcing in the production system; the staffers, users and shareholders are involved in the pool of ideas and it benefits by it. In Kazakhstan this technology is actively applied by JSC “Kazakhtelecom” – employees and customers offer the ideas.
Crowdsourcing could be applied in state management too. – Many governments are adopting the practice of public involvement in making certain decisions, – said Deputy Prime Minister Kairat Kelimbetov. – It is a very democratic technology, showing the population’s needs and understanding of the pursued policy.
In the frames of the V AEF, the first Congress of Central Asian Business Women was organized by the National Commission for Women and Family-Demographic Policy under the RK President, Kazakh-British Chamber of Commerce and the Nomad Media Group. It was attended by Deputy Prime Minister Kairat Kelimbetov, Minister of Labor and Social Protection – chair of the National Commission for Women, as well as businessmen and heads of public organizations.
– Astana Economic Forum is the most suitable venue for such a congress, given Kazakhstan’s significant progress in the gender policy over the years of independence, – said K. Kelimbetov. – In early April this year, an international organization Social Watch published a Gender Equality Index- 2012, in which Kazakhstan is 33rd in the world, ahead of almost all the CIS members and is 8 positions up against the last year’s ranking.
The main topics of the Congress are women’s political involvement and development of gender policy.
Listing achievements in this area, Gulshara Abdykalikova, RK minister of labor and social protection – chair of the National Commission for women and demographic policy under RK President noted that Kazakhstan women form about 40% of GDP. Due to President Nursultan Nazarbayev’s political will and support, systematic gender policy is pursued. She informed the Congress on measures taken in Kazakhstan to ensure gender equality.
The workshop on intellectual property in economic development tried international cooperation in legal protection and enforcement of intellectual property, which is now becoming a major strategic resource of the country. As the Justice Minister Berik Imashev said, this topic is first brought up in the Astana Economic Forum, pointing to the country’s desire for further development of industrial-innovation area.
Such topical issues as renewable energy, clean and alternative energy, attitude to nuclear power and much more were also raised.
The three AEF pavilions, hosting the debate were organized by CNN, “Kazakhstan” TV channel and Eurasian economic club of scientists.
The main outcome of the forum was an open letter to the governments, containing recommendations for improvement and development of world economy, which is to be sent to G-8 and G-20 organizing committees, to the UN, the International Monetary Fund, the WB and the Organization for economic cooperation and development.