Financial aspect of social modernization

Dec 28. Kazpravda

By Lena Karmazina, Vice-Minister of Finance

Financial aspect of social modernizationEnsuring long-term balance and fiscal sustainability, development and modernization of income potential of the social sphere under the circumstances of financial restrictions remain the constant priorities of fiscal policy on any stage of development.

The fact that Kazakhstan is a welfare state, from year to year is confirmed by the budget parameters: the share of social spending in total government budget each year is about 50%, in absolute terms these expenses increased in 2012 compared to 2005 by 4 times.

Standard of living has been steadily increasing, as well as the needs of our citizens and appropriate expectations for further expansion of the state’s role in improving their well-being. Now we have reached such level of development, when the question is not further increase of social spending, but their structural and ideological revision: it is necessary to create conditions for improving the country’s main resource – human capital at the achieved level of support to vulnerable people.

Provision of an opportunity for quality education, improvement of health, rise of cultural level, employment and opportunity for professional growth, are primary tasks for the future.

The Government pursued this goal in the formation of the national budget for the coming three-year period (2013-2015). The rates of expenditure’s growth in the social block were stabilized compared to years of 2005-2012, with all the social commitments kept.

Thus, the costs from the national budget to the social sector in 2013 amounted to KZT 2 418.8 billion, in 2014 – 2 612.8 billion and in 2015 – 2 849.1 billion.

Most of these funds will be spent on social security and social assistance to the citizens of the republic, including the fulfillment of the State’s obligations to pay pensions and benefits, the provision of special social services to the disabled, the elderly and people who have no home.

The three-year budget provides for social sphere KZT 4 564.1 billion, of which, in 2013 – 1 340.9 billion, or 55.4% of total expenditures on social services and social assistance.

The bulk of these funds (in the three-year budget it is KZT 4 193.3 billion, of which, in 2013 – 1 236.6 billion) will be directed to meet the state’s obligations for timely payment of pensions and benefits, taking into account the annual indexing of their size.

In the result, in 2013 the size of the base pension payment will be 9 330 tenge, the minimum pension – 19,066 tenge and average pension from the State Center for Pension Payments – 32 928 KZT.

The Employment Programme-2020, in which more than 100 thousand people will take advantage of the support measures, will be continued. Among them there is the professional training, loans to businessmen, relocation of citizens to favorable settlements of gainful employment. In 2013 the state budget provided funds amounting to about 75 billion for the purpose.

The implementation of the above measures will ensure an adequate level of social security and pensions of citizens, the increase of employment and incomes, social support to certain categories of people.

The role of the healthcare and education systems is no less important in the social development of the country.

Thus expenditures for education and science in the three-year budget will amount to 1 282.4 billion, of which, in 2013 – 427.4 billion. These funds will be channeled to the State Program of Development of Education, the program “Balapan”, construction of 116 new schools, 72 kindergartens, three intellectual schools in Astana and 10 hostels. Four interregional centers will be also commissioned.

The commitments taken on the budget for the above programs will allow covering of 70% of 3 – 6 aged children with pre-school education and training, as well as the operation of 22 Nazarbayev Intellectual Schools. 926 educational organizations will have access to the broadband Internet and will improve their educational programs.

The costs for healthcare system in 2013-2015 will reach KZT 1 585.8 billion, of which, in 2013 – 517.3 billion.

These funds will be spent on the State program for healthcare “Salamatty Kazakhstan”, the program on development of cancer care, the provision of guaranteed free medical care at the national and local levels, the construction of 258 health facilities (general hospitals, clinics, cancer and outpatient clinics).

The implementation of these programs aim to improve the health of our citizens, sustainable social and demographic development by increasing the life expectancy to 70 years, reducing maternal and infant mortality, tuberculosis and retention of HIV infection’s spreading.

To achieve these purposes a differentiated payment that orients the employees to the eventual result has been introduced. The funds from the budget will be allocated:

– For the workers of organizations of primary healthcare in the form of incentive component to the capitation rate: in 2013 – 10.2 billion, in 2014 – 10.8 billion, in 2015 – 11.6 billion tenge;

– For teachers in 2013 – 2.8 billion, in 2014 – 9.5 billion, in 2015 – 15.4 billion tenge.

In addition the differentiated wages in hospitals are paid at the expense of the existing budgetary funds provided for the guaranteed volume of medical services.

Also it’s worth noting that the social orientation of the budget is not limited to the above costs, because there is another interrelated with this priority – improving the quality of life and welfare of citizens, which in addition to the above-mentioned social programs is implemented through the programs “Ak-Bulak” (providing safe drinking water to the population), “Affordable Housing”, the program of modernization and development of housing and communal services for 2011-2020 and others.

Thereby the country’s budget reinforces the main vectors of the Government’s activities in the coming period to ensure social stability, employment and economic dynamism.

Significant investments in the social sector in long time, now serve as a good foundation for the social modernization. And the word “modernization” is no longer associated with the inevitable increase in costs.

The accumulated experience should greatly accelerate the movement towards improving the efficiency of state management of social processes, linking the welfare of citizens with economic growth. Accordingly the direction in the main chain of the country will change too.

The reserves for significant economic breakthrough are in the growth of human capital of the country.