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Economic Newsletter on Kazakhstan |June 2019

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Economic Newsletter on Kazakhstan |June 2019 Economic Newsletter on Kazakhstan |June 2019 CONTENTS MACRO-ECONOMICS & FINANCE ......................................................................................2 ENERGY & NATURAL RESOURCES ......................................................................................5 TRANSPORT & COMMUNICATIONS...................................................................................8 AGRICULTURE ................................................................................................................. 10 WATER SECTOR .............................................................................................................. 12 MEDICAL SECTOR ........................................................................................................... 13 EXHIBITIONS IN KAZAKHSTAN (September - October 2019) .......................................... 15 CONTACTS ...................................................................................................................... 17 The Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan intends to distribute this newsletter as widely as possible among Dutch institutions, companies and persons from the Netherlands. The newsletter summarises economic news from various Kazakhstani and foreign publications and aims to provide accurate information. However, the Embassy cannot be held responsible for any mistakes or omissions in the bulletin. ECONOMIC NEWSLETTER, June 2019 Embassy of the Kingdom of the Netherlands MACRO-ECONOMICS & FINANCE Kasym-Zhomart Tokayev sworn in as new Kazakh president Kasym-Zhomart Tokayev has been sworn in as Kazakhstan’s new president on 12 June after his landslide victory in the 9-June election. His inaugural speech was broadcast live by the country’s mainstream TV channels, including the state-run Khabar TV. “I solemnly swear to honestly serve the people of Kazakhstan, to protect the Kazakh constitution and laws, to guarantee protection of Kazakh citizens’ rights and freedoms, and to carry out the honourable duties of the president of Kazakhstan given to me,” he said in Kazakh and Russian. The ceremony was attended by the former president Nursultan Nazarbayev, who resigned in March after nearly 30 years in power but remains head of the country’s powerful Security Council and chairman of the ruling Nur Otan party. Tokayev was elected for his first five-year term after stepping in as interim leader to replace Nazarbayev. Kazakh Government list According to Government.kz, the current Government of Kazakhstan is represented by the following officials: Kasym-Zhomart Tokayev, President Askar Mamin, Prime Minister Alikhan Smailov, First Deputy Prime Minister – Minister of Finance Gulshara Abdykalikova, Deputy Prime Minister Zhenis Kassymbek, Deputy Prime Minister Saparkhan Omarov, Minister of Agriculture Aktoty Raimkulova, Minister of Culture and Sport Nurlan Yermekbayev, Minister of Defence Askar Zhumagaliyev, Minister of Digital Development, Innovation and Aerospace Industry Magzum Mirzagaliyev, Minister of Ecology, Geology and Natural Resources Askhat Aymagambetov, Minister of Education and Science Kanat Bozumbayev, Minister of Energy Alikhan Smailov, Minister of Finance Beibut Atamkulov, Minister of Foreign Affairs Yelzhan Birtanov, Minister of Health Roman Sklyar, Minister of Industry and Infrastructure Development Dauren Abayev, Minister of Information and Social Development YerlanT urgumbayev, Minister of Internal Affairs Marat Beketayev, Minister of Justice Berdibek Saparbayev, Minister of Labour and Social Protection of Population Ruslan Dalenov, Minister of National Economy Bakhyt Sultanov, Minister of Trade and Integration Two new ministries created in Kazakhstan President of Kazakhstan Kassym-Jomart Tokayev on June 17 signed the Decree on Measures for Further Improvement of the State Administration System, the president’s press service said in a press release. The Decree establishes a Ministry of Trade and Integration which takes over the functions and authority of the Ministry of National Economy including “development and implementation of policies concerning domestic and foreign trade, international economic integration, protection of the customers’ rights.” It also assumes the functions of the Ministry of Industry and Infrastructure Development, covering such areas as technical regulation, standardization and uniformity of measurements. In addition, the Kazakh Ministry of Foreign Affairs hands over its export promotion functions to the Ministry of Trade and Integration. 2 ECONOMIC NEWSLETTER, June 2019 Embassy of the Kingdom of the Netherlands President Tokayev also signed a decree appointing Bakhyt Sultanov as a minister of trade and integration. Sultanov, 47, earlier worked as mayor of Nur-Sultan, minister of finance, minister of economy and budgeting, head of the Statistics Agency, and deputy head of the Kazakh president’s administration. The Decree also establishes a Ministry of Environment, Geology and Natural Resources, which takes over the functions and authorities of the Energy Ministry including such areas as development and implementation of national policies concerning environment protection, domestic solid waste disposal, control over natural resources management; from the Ministry of Agriculture covering water resources management and protection, water supply and forestry; from the Ministry of Industry and Infrastructure Development – exploration of mineral resources. Mr Magzum Mirzagaliyev was appointed as a minister of environment, geology and natural resource. Mirzagaliyev, 40, has been a deputy minister of energy since August 2014. Earlier, he worked as a deputy minister of oil and gas and a top manager at National Company KazMunayGas. Kazakh Mazhilis reviews Government’s report on execution of 2018 budget On 5 June, Kazakh Mazhilis reviewed the Government and Accounts Committee’s report on execution of the 2018 budget. According to the Mazhilis Finance and Budget Committee, the Government provided over 9.3 trillion tenge in 2018 to finance various programs, of which 99.8% was spent. The Government budget deficit was at 729.2 billion tenge last year or 1.2% of GDP, compared with the deficit target of 883.3 billion tenge. In 2018, the Government debt amounted to 15.387 trillion tenge or 26.2% of GDP, which demonstrated an increase of 13.9% from a year earlier. In addition, in 2018 the Internal Audit Committee conducted 686 audits and identified violations worth 355 billion tenge. The report will be now reviewed by the Senate and adopted during the joint session of the Parliament, according to Interfax-Kazakhstan. Kazakh GDP showing steady growth Kazakh GDP growth, calculated at 4% from January-May, is maintaining positive dynamics, noted Minister of National Economy Ruslan Dalenov. “The dynamics in investments outpace GDP growth rate. The growth advanced from 7.8% against 6.7% within four months. Investments in agriculture and construction rose one and a half percent. Investments in industry grew by 17.5%,” he said at a June 12 government meeting. Industrial production grew by 2% during the five-month period. “At the same time, oil exploration declined by 3.2%, which was due to the planned reparation works. The processing industry grew by 3.6%, which compensated the decline in oil production,” he said. The highest pace was recorded in light industry and drinks and machinery production, where car assembly demonstrated 46.4% growth. Domestic car production continues to grow, as the country recently announced plans to double manufacturing to meet the demand within the Eurasian Economic Union. Kazakhstan also recently began building a Hyundai car assembly plant in the Almaty Region with a production capacity of 30,000 vehicles per year. The facility will supply the domestic and neighbouring markets except for Russia, which has its own plants. Dalenov also reported 8.8% growth in the construction industry. Approximately 4.6 million square metres of housing were commissioned during the five-month period. “Forty thousand, five hundred and forty-six housing units were commissioned nationwide. The increasing construction and commissioning of housing is continuing in 15 regions of the country. Local administrations need to step up their work to meet the annual targets,” Minister of Investments and Infrastructure Development Roman Sklyar told the same gathering. 3 ECONOMIC NEWSLETTER, June 2019 Embassy of the Kingdom of the Netherlands Inflation is estimated at 5.3% as of May. The growth in fixed capital investments was 7.8%, while international reserves made $86.7 billion. The trade turnover was $28.7 billion. Exports reached $18.5 billion; imports, $10.2 billion. First Deputy Prime Minister and Minister of Finance Alikhan Smailov also reported positive indicators in budget use. The national budget received 3.8 trillion tenge ($9.9 billion) from January-May, or 105.4% of the plan. Budget payments increased by 510 billion tenge ($1.3 billion) during the same period last year. “The plan is overdone primarily because of taxes. The following key factors impacted it, including increasing export customs duty rates and the growth of production of goods and services in a range of industries,” said Smailov. Budget use was more efficient compared to the same period in 2018. This year’s 4.9 trillion tenge ($12.7 billion) exceeded the previous year by 1.2 trillion tenge ($3.1 billion). Smailov noted the ministry undertook 1,462 measures to audit 292 billion tenge ($761 million) of budget funds. The analyses
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