under the President of the Republic of Kazakhstan
Address of the President to the people of Kazakhstan
Third Modernization of Kazakhstan
"Only those nations who manage to set the future goals and proceed resolutely facing the challenges,
instead of sitting on the hedge and waiting, are the winners."
President Nazarbayev in his Address to the Nation of Kazakhstan outlined the main causes of economic instability: these are encompassing crises in most segments of the global commodity market. For the past eighteen months, the oil prices have fallen by 66%, there has been 54% decline in wheat prices, and the price for copper has decreased by 47%, while the prices for gold and aluminum dropped by 40% and 30% respectively.
President Nazarbayev emphasized that the world economy in general experiences rather difficult period; global economic growth is slowing, the demand Kazakhstan’s exports is reducing. These are serious challenges for national economy. During the 2012-2015, some major economies, namely Japan, France, Brazil, Russia and others experienced recession.
Due to the crisis on the world commodity markets, greater attention was given to the anti-crisis measures, many of which have been of preventive character. Thus, the Address of the President in 2014 launched the Nurly Zhol and Rapid Industrial and Innovative Development Programs. These programs stipulate for the measures aimed at the support of the economy during the crisis, especially of its most vulnerable sectors such as small business, finance, and agriculture. More importantly, however, the programs outline the strategic objectives to diversify the national economy in order to overcome its dependency on raw material export and to encourage the development of cutting-edge industries. Both shall preserve Kazakhstan from the fluctuations in the world market.
The Action Plan adjusted for the difficult environment has been articulated in the Annual Address; this is a comprehensive approach for economic development during the forthcoming global crisis. The Plan includes stabilization of the financial sector that shall ensure stability of the entire economy. These measures are a new policy towards the exchange rate of the national currency (Tenge), tackling the problem of sunk loans, preventing further inflation through the interest rates mechanism by the National Bank, reduction of its regulatory functions, and boosting the profitability of pension assets via privatization. The aim is set by President Nazarbayev to increase confidence in the Tenge. To that end, among other measures, the National Bank shall provide comprehensive information on its activities.
As for the ordinary people, the decision has been taken not to regulate the exchange rate of Tenge as the previously adopted policy diverted the national stabilization funds that, otherwise, could have been used to achieve important goals given difficult economic conditions. Privatization of the National Pension Fund is also worth special mentioning as it is aimed at boosting the competitiveness for better management of pension funds and thereby increasing their profitability. The state regulator, however, remains to maintain control over the activities of the management companies.