Productivity 2020 – Progress Update
Jan 11. MFA
51 projects approved for funding to date
The Kazakhstan Institute for Industrial Development has reported that over 25 projects were approved during 2012 for funding from the “Productivity 2020” program, the Prime Minister’s website announced on January 4. The projects, spread across six industrial sectors, will ultimately receive aggregate funding of KZT 74.3 billion (USD 493 million).
This brings to KZT 152.6 billion (USD 1 billion) the total amount of investment approved since Productivity 2020 was launched in April 2011. The funds have benefitted 51 innovative industrial projects in eight industrial sectors across 15 regions of Kazakhstan.
Productivity 2020 is among a range of programs set up within the framework of the State strategy to support innovative industrial development. While Kazakhstan was one of the top three most rapidly growing economies in the world in terms of annual GDP growth between 2000 and 2010, and the economy has proved resilient to the global economic crisis, industrial innovation has a key role to play in ensuring continued economic growth into the future. Government policy is focused on diversifying economic development beyond the extractive industries which have driven economic growth and encouraging business innovation and entrepreneurship.
The main focus of the Productivity 2020 program is on assisting large and medium-sized Kazakh companies in modernizing existing production facilities and managerial processes and, where appropriate, developing new facilities. Modern facilities and processes serve to increase the efficiency of the companies and enable them to meet the quality and production demands of global export markets.
Target indicators of the program include: a 50% increase in labor productivity by 2015 and a 100% increase on 2011 levels by 2020; an increase in capacity usage to 80%; and a reduction of between 30-40% in energy consumption by participating companies.
Productivity 2020 provides a wide range of business support, including: innovation grants; reimbursement of the costs of engaging highly-qualified foreign engineers and design-engineering companies, purchasing licenses, technical documentation and new technologies; and long-term leasing of industrial equipment at incentive rates.
Funding from Productivity 2020 has so far been most actively deployed in Almaty and its regions, South Kazakhstan, Karaganda, Kostanay, Aktobe, East Kazakhstan and Pavlodar. The Institute for Industrial Development expects the majority of approved funds in the coming year to be allocated to the development of detailed business investment plans, innovation grants and long-term financing.
The other principal programs within the industrial innovation frameworkinclude the Business Roadmap 2020 (which supports stable growth of regional enterprises) and programs focused on assisting companies in attracting investment funding and increasing exports. All in all, over 100 business support tools are available to Kazakh companies across the range of programs.
In January 2012, a new law formalized the legal framework for state support for innovative industrial activities, which has made it easier for companies to access financing. The law defines state support measures and how they are to be organized and regulated. Among the measures outlined are the conditions and mechanisms for appointing financial agents to projects and financing projects in priority economic sectors by disbursing State funds through approved financial institutions.