President Nursultan Nazarbayev has delivered his annual Address to the people of Kazakhstan

January 18, 2014


“Kazakhstan’s way-2050: Common Aim, Common Interests, Common future” .

Starting his State-of-the-nation Address President Nursultan Nazarbayev  said we have adopted a long-term 2050-Strategy for Kazakhstan to firm up its standing and to have a firm hold of the future.

He laid down the plan for Kazakhstan’s joining the ranks of 30 world advanced nations. According to many forecasts, the next 15-17 years will be a “window of opportunities” for large-scale breakthrough of Kazakhstan.  At the same time, he went on, the coming decades lurk many challenges and unexpected situations, new crises in global markets and in world politics.

The concept of “developed nation”, he re-emphasized, is changeable in time. In developed countries, radically new life quality indicators emerge. -The indicators of the OECD (Organization for Economic Cooperation and

Development) member-states are the basic guidelines on our way to the ranks of 30 world developed nations, he said.

In this connection the President set the task of implementing a number of OECD principles and standards in Kazakhstan that are reflected in the draft Conception. In economy the target is to achieve at least a 4-percent annual GDP growth, to increase investment from the current 18 to 30 percent of the total GDP. Introduction of knowledge-based economy model aims to increase to 70 per cent the share of non-oil products in Kazakhstan’s export potential.

Creation of new high-tech sectors of economy will require increased funding of science to the level of not less than 3 % of GDP. It is important to lower by 2 times the energy intensity of gross domestic product. By 2050, small and medium businesses will produce at least 50 percent of Kazakhstan’s GDP, instead of the current 20 percent. Labor productivity should be increased by 5 times – from the current 24.5 thousand to 126 thousand dollars.

In the social sphere, by 2050 we need to increase by 4.5 times the GDP per capita – from 13,000 to 60,000 dollars. Kazakhstan is to become a country with a predominant share of the middle class. Given the global trend of urbanization, the proportion of the urban population will grow from 55 to about 70 percent.

Healthy lifestyles and development of medicine will help increase life expectancy in Kazakhstan to 80 years and more. Kazakhstan is to evolve into a leading Eurasian center of medical tourism and one of the safest and most comfortable places to live in.

The President then listed seven long-term priorities for future work designated in the Conception for Kazakhstan’s joining the ranks of the 30 world advanced nations.

First priority is to adjust and step up the innovative trend of industrialization. The Government is tasked with drafting the Second Five-Year Plan for Accelerated Industrial and Innovative Development in 2016-2019.

It is important to increase the effectiveness of traditional mining sectors. – They are our natural competitive advantage. We need new approaches to management, production and processing of hydrocarbons while maintaining the export potential of the energy sector. It is necessary to finally resolve on possible scenarios for oil and gas, to boost the development of rare earth metals, given their importance for knowledge-intensive industries – electronics, laser technology, communications and medical equipment.

Kazakhstan should enter the world market in the field of geo-exploration. To this industry investments should be drawn from foreign engineering companies. Concrete result of each quinquennium should be creation of new industries. In the first quinquennium the auto and aircraft industries were created, also production of locomotives, passenger and freight cars. They should have a foreign outlet, the President urged.

In the second and subsequent quinquennium it is necessary to establish mobile and multimedia industries, nano- and space technology, robotics, genetic engineering, locating and discovery of the energy of the future and build the base of knowledge-intensive economy.

Second priority is putting agribusiness onto innovative rails, to invest more in this sector. The future is with creation of a network of new processing enterprises in the agricultural sector, mainly in the form of small and medium-sized businesses. Agribusiness should have direct access to long-term financing and markets without intermediaries. It also necessitates an effective system of guarantees and insurance of loans to rural producers. Kazakhstan should become a major regional exporter of meat, dairy and other products of agriculture. The volume of water-intensive crops should be reduced, replaced by vegetable, oilseed and forage cultures.

In keeping with the adopted Conception for transition to  green economy by 2030, 15% of acreage will be transferred to water-saving technologies. We need to develop agricultural science, create experimental agro- innovation clusters. It is important to keep up with the time and along with the production of natural foods to develop drought-tolerant genetically modified crops. The Government is tasked to adjust the planning of agribusiness development.

Third priority is creating a knowledge-based economy. A package of relevant bills on it is to be shortly in Parliament.

It is necessary to intensify the work of technological parks, especially in Almaty and Astana. First intellectual innovation cluster is successfully operating in Astana on the basis of the Nazarbayev University. In Almaty it is the IT Park Alatau.

Fourth priority is to ensure the dynamic development of the infrastructural triad – agglomerations, transport and energy, also to develop the sector of logistics services. First of all, it is maximizing the use of the Customs Union territory to transport our goods. Construction of the Western Europe – Western China corridor is nearing completion, the railway to Turkmenistan and Iran has been built, with access to the Persian Gulf. In future, Kazakhstan is to invest in the establishment of logistics centers in countries with access to the sea.

We are building a 1200 km-long railway Zheskazgan- Shalkar-Beyneu to connect the East and the West of the country. This grand construction will be finalized in 2015. Through the Caspian Sea and the Caucasus it will give an outlet to Europe, and in the east – to the port of Lianyungang on the Pacific Ocean, on which we have an agreement with the PRC.

Energy will be developed in its traditional forms. The President mentioned that recently, ten EU major companies publicly opposed the EU energy strategy adopted on the well-known concept of green economy, arguing that in the four years of its implementation, 51 gigawatts of generating capacities were lost. That is why working on the green economy programme we need to take these shortfalls into account, he cautioned.

Within the preparations for the EXPO-2017 in Astana, a center should be established to study and emulate the best international practices in location and creation of future energy and green economy. An expert team under the Nazarbayev University is to take up this work. We need to create conditions for the transfer of public transport to ecologically clean fuels. The country needs a high-volume production of gasoline, diesel and aviation kerosene. We must build a new refinery too.

- At the same time we must not forget about the prospects of nuclear energy, the world need for which will be growing. Kazakhstan is a world leader in uranium mining, the President reminded, stressing that we have to develop own production of fuel for nuclear power plants and build nuclear power plants.

Fifth priority is development of small and medium-sized businesses – the main tool of the industrial and social modernization of Kazakhstan in the XXI century, he went on. -The bigger share of small and medium-sized businesses in our economy – the more stable is the development of Kazakhstan. We have more than 800,000 small and medium-sized businesses that employ 2.4 million Kazakhstanis. The volume of production in this sector has grown 1.6 times over four years to make more than 8.3 billion tenge.

According to the global rating Kazakhstan is among the countries with most favorable conditions for doing business and this trend should be augmented. Small and medium business is a sound economic basis of our society of universal labor.

The Government is to tailor the plan of the second quinquennium to the Business- 2020 roadmap.

Sixth priority is creation of new opportunities for disclosing Kazakhstanis’ potential. A developed nation in the twenty-first century is active, educated and healthy citizens.

First of all it necessitates improvement of national education quality on all the levels. Teaching at secondary schools should be pulled to the Nazarbayev Intellectual Schools’ standards, and the school leavers are required to know Kazakh, Russian and English languages and have critical thinking skills.

In the next 2-3 years it is necessary to form the nucleus of a national system of dual technical and vocational education.

Leading universities will gradually transfer to academic and administrative autonomy. From January 1, 2016 the size of student scholarships must be 25 % up.

In healthcare the top priority is development of PHC (primary health care). We need to adopt mandatory health insurance too and practice joint liability of the state, the employer and the employee for his health – the main principle of the entire health care system. Sports, proper diet, regular medical examinations underlie the disease prevention.

All-Kazakhstan culture development needs a new impetus and a long-term concept of cultural policy has to be worked out.

We need to revise social packages of professionals in education, health and social security. The Government is tasked to develop and implement from July 1, 2015 a new model for civil servants’ wages and provide increase in the salaries in health care up to 28%, in education – up to 29 %, in social protection – up to 40%.

We must pay more attention to our citizens with disabilities, to assist them in employment and get them involved in active life. The Government is instructed to increase by 25 % the size of social benefits from July 1, 2015 for disability and loss of breadwinner.

We must continue to reduce poverty and to curb unemployment and discourage at the same time the attitudes of dependency. Participation of all the recipients of state benefits and assistance in employment and social adaptation programs is a must therefore.

Seventh priority is improvement of state institutes’ performance. To be among the 30 world advanced nations, we need the atmosphere of fair competition, justice, rule of law and high legal culture, also updated tools of state’s interaction with non-governmental sector and business.

The judiciary should be transparent and accessible, resolving any disputes shortly and efficiently. People in uniform, vested with greater powers are required to have an impeccable conduct and high professionalism.

Anti-corruption strategy and administrative reform will be further developed. Meritocracy in personnel policies remains a must. The Government is requested to provide higher wages to civil servants of block “B” from 1 July 2015 – 15% up, and from July 1, 2016 – by another 15%.

Instructions to the Government and the National Bank  are:

  • First. The Government must ensure this year economic growth of 6-7%. At that GDP per capita at the end of this year should be no less than 14.5 thousand dollars.
  • Second. The National Bank and Government will work out a package of measures by May 1, 2014 to reduce inflation to 3-4 % in the medium term.
  • Third. The Government together with the National Bank will elaborate by June 1, 2014 a comprehensive program of financial sector’s development until 2030.
  • Fourth. The Government, in conjunction with Samruk-Kazyna Fund should analyze all state-owned companies and determine the list of enterprises to be transferred to private sector. The same work is to be done on the rest public sector of the country. A comprehensive privatization program for 2014-2016 must be adopted in the first quarter of the current year.
  • Fifth. By the end of this year the Government will develop a draft strategy for formation of agglomerations in Astana and Almaty for the period until 2030.
  • Sixth. By 1 September 2014 the Government must develop a program for increasing transit potential of Kazakhstan for the period up to 2030, providing for removal of barriers to international trade.
  • Seventh. Before the end of the first quarter of this year the Government should decide on placing investment sources and timing of construction of the fourth refinery and a nuclear power plant.