“Economic Course of a Just Kazakhstan.”

Factsheet on President Kassym-Jomart Tokayev’s Address to the Nation

Overview

The President of Kazakhstan, Kassym-Jomart Tokayev, delivered his plann State of the Nation address on September 1, 2023, titled “Economic Course of a Just Kazakhstan.”

Representatives from civil society participated in the joint meeting of the parliamentary chambers alongside officials.

The President’s address primarily focused on economic reforms and a new economic course for the country.

Implemented political reforms

Kazakhstan switched to the model of a presidential republic with a strong parliament. The formula “strong President – influential Parliament – accountable Government” has strengthened.

Steps have been taken in the field of human rights protection.

Extensive work is being done to ensure the rule of law and justice.

Key points from the President’s address

Kazakhstan’s new economic course

President Tokayev outlined key aspects of the new economic course:

The defining principles of the country's new economic course will be fairness, inclusiveness, and pragmatism.

The new paradigm for the economic development of Kazakhstan will be based on the effective use of competitive advantages, as well as unlocking the potential of all key factors of production - labour, capital, resources, and technology.

As part of the new economic policy, the country will move away from the practice of setting long-term ‘ephemeral’ goals. Most tasks set out in this Address must be implemented within three years; for more complex tasks, other specific deadlines will be determined.

Key economic tasks for the government

The most important task is to form a strong industrial framework for the country and ensure economic self-sufficiency.

The main emphasis should be on the accelerated development of the manufacturing sector.

The task of diversifying the economy is becoming ever more urgent.

It is necessary to focus on areas such as deep processing of metals, oil, gas and coal chemistry, heavy engineering, uranium conversion and enrichment, production of automotive components and fertilizers.

Overall, a specific list of at least 15 major projects is required.

It is necessary to simplify and shorten the state procurement process, ensure the principle of priority of quality over price, and implement full automation of procedures.

The Government’s task is to increase the area of geological and geophysical exploration from the current 1.5 million to at least 2.2 million square kilometres by 2026.

The processes of privatization and public IPOs should be significantly accelerated.

The privatization of all non-core assets should begin in 2024 and public IPOs of companies of the Samruk-Kazyna Fund should be conducted.

To increase competition, three reliable foreign banks should be attracted to the country.

As part of the Comfortable School project, approximately 400 schools will be built.

More than 300 healthcare facilities are being built in rural areas.

Transport and logistics

The transport and logistics industry should become one of the engines of the country's economic development.

The Trans-Caspian route is key to strengthening our transit potential. In the medium term, traffic volumes along this corridor can be increased fivefold.

A holistic plan for the development of maritime infrastructure is required, in which a separate role should be given to the port of Kuryk. It will have to become a full-fledged logistics cluster, like Aktau.

The international North-South Corridor is also key, which gives Kazakhstan access to the ports of the Persian Gulf. It is necessary to gradually double the capacity of the railway part of this route.

Kazakhstan must strengthen its position as a transit hub in Eurasia and become a full-fledged transport and logistics power over time.

The realization of the transport potential depends on Kazakhstan’s constructive and good-neighbourly relations with all neighbouring countries, including Russia, China, and Kazakhstan’s neighbours in Central and South Asia.

Green and sustainable economy

Kazakhstan should focus on developing a green economy. In the long term, a global transition to clean energy is inevitable.

The share of renewable energy in total generation has grown to almost 5% over the past five years. By 2027, another 1.4 gigawatts of capacity will be added.

It is necessary to develop hydrogen generation.

New solutions are required in the field of creating balancing capacities and energy storage systems. The transition to carbon neutrality can be accelerated by carbon trading.

The Astana International Financial Centre should become the main platform in the region for attracting green funding.

The question on the potential construction of a nuclear power plant should be submitted to a national referendum.

Digitalisation

Transforming Kazakhstan into an IT country is a strategically important task.

The Government’s goal is to increase the export of IT services from around 500 million dollars this year to one billion dollars by 2026. This will be facilitated by the opening of joint ventures with large foreign IT companies.

Kazakhstan can become a platform for selling computing power to global players. It is necessary to create attractive conditions, including preferences to attract investment in the construction of large data centres and promote Kazakhstan’s interests in the field of data storage and processing.

Trade and domestic industry

To support the manufacturing industry, foreign and domestic investors should be exempted from taxes and other mandatory payments for the first three years.

The state is obliged to protect domestic producers. This is not a signal to close the economy from the outside world: it should remain open but taking into account the interests of national business.

Agricultural sector

The strategic goal of the country is to become one of the leading agricultural centres of the Eurasian continent.

A stage-by-stage transition from primary production to the production of higher value-added products is required. The goal is to increase the share of processed products in the agricultural sector to 70% within three years.

This will require a revision of tax policy, which should stimulate processing.

It is necessary to stimulate the consolidation of domestic agricultural firms, as well as to actively attract transnational corporations on mutually beneficial terms.

Gasification and energy

Further gasification of the country is important. It is necessary to accelerate the construction of new gas processing plants, as well as the full involvement of existing processing capacities.

It is important to attract investment in the exploration and development of new gas fields.

It is necessary to gradually introduce clear regulatory requirements for energy efficiency and resource conservation in general. The goal is to reduce key indicators of energy consumption and energy intensity by at least 15% by 2029.

Water security

The National Hydrogeological Service will be recreated.

The entire water management system of the country will undergo reform, including key companies.

The rational use of water resources, along with the areas of energy and transport, can become another important element of the new model of regional cooperation.

Creative industry

Kazakhstan must create conditions for the large-scale development of the creative economy in the country, including legal instruments to protect intellectual property.

Creative Industry Centres should be in every regional centre and every major city.