GOVERNMENT WEEK. Balanced national policy responses to economic and financial crisis
ASTANA. April 24. KAZINFORM /Balym Issenova/ This Government week started with the telephone conference where Kazakh PM K. Massimov charged to complete the use of funds under “Damu-Regions” program until May 1.The PM told the third tranche of KZT 120 bln must be used till June 1 and promised to take the money back from the banks that did not meet the schedule and transfer it to the other banks. In his turn, Head of Samruk-Kazyna National Welfare Fund K. Kelimbetov reported that KZT 52,4 billion were utilized within the program of soft crediting of small and medium businesses. To date the second tier banks have signed loan agreements with the budget of KZT 52,4 billion. Out of 1,040 loan agreements 676 were refinanced to the amount of KZT 33,1 billion. An average loan size is KZT 50,5 million, K. Kelimbetov said. The major part of utilized funds falls on Almaty, Astana, East Kazakhstan, Aktobe, Karaganda, Kostanay and Almaty regions. At present, 63% of the total amount or 120 billion tenge is aimed at refinancing, 37% - for new projects. Reports of regional akims ( governors) on the results of economic development in the first quarter of 2009 have been listened to at the same telephone conference. The governors assured that all measures required to minimize the crisis impact on the socio-economic situation had been taken. The Road Map work would allow improving main economic indexes and reducing the level of unemployment. It was also noted that the increase of Kazakhstan's content in the purchases would influence on the economy of the regions. K.Massimov noted that increased prices for some metals would influence the budget revenues. He charged the akims to control the situation in markets and make every effort to replenish the budget. At the Cabinet’s session Tuesday PM K. Massimov stressed the importance of preventing personnel reduction due to production cutback. He urged all government agencies to exert every effort to execute the anti-crisis plan and the Road Map work, especially with regards to jobs preservation. The Prime Minister also urged to continue implementation of the measures on development of domestic processing industry, particularly in agro-industry, fuel and energy complexes and construction. Minister of Industry and Trade Vladimir Shkolnik reported on the condition of the real estate market. According to the Minister, KZT 23,5 bln was allocated from the national budget and the Governmental reserve to support shared construction. 42 facilities out of 123 are close to completion. Five facilities with 1267 investors participating were commissioned early this year. Astana Mayor I. Tasmagambetov said that three more housing estates were completed within last two weeks, certain documentation were signed.The Kazakh Premier charged the top management of “Samruk Kazyna” Fund to settle the issues of shared construction financing without delay. Minister of Labor and Social Protection G. Abdykalikova told that the Government fulfills its social liabilities in full. In the first quarter of 2009 the salary of public employees increased by 25%. The average salary in February 2009 made KZT 51,800 that is 13.2% more than in the same period of 2008. Pension payments increased by 25%. To April 1 minimal pension size is KZT 15,263 and maximum is KZT 22,521. Improvement of climate for small and medium businesses were also discussed at this session. The PM emphasized that the Improvement of business climate for small and medium businesses remains a priority task for today. He admitted that the Government had reached some results in this sphere. However, it is necessary to continue working on these problems, K. Massimov noted. He stressed that the Government would constantly hold sittings on these issues. In general, indicators of socio-economic development of the country for the first quarter of this year, presented at the Government’s session on April 21, show that Kazakhstan's economy is stable against the backdrop of deteriorating global financial and economic crisis. This was possible because the Government started to pay more attention to those economic sectors that have competitive advantages potential. The growth performance in those sectors suggests a trend of turning them into leaders of the national economy in the post-crisis period. For example, in the current year in the framework of the “30 corporate leaders”, it is planned to implement “Reconstruction of Taraz Metallurgical Plant ferroalloys and steel products” project. To date, the first stage of the program is maintained in accordance with the network schedule. It should be noted that the company already shipments scarce export products. Since the beginning of the year the company has produced a commodity product to 141,158 thousand tenge. Particular attention is paid to creating conditions for sustained growth of agricultural production. This year sown area of crops will be increased by 409.8 thousand hectares, and reach 16,600. The Government also supports such branches of agriculture like horticulture and viticulture. 1.9 bln tenge has been allocated to support the development of seed production in 2009. Gross agricultural output in January-March this year amounted to 134.9 bln tenge, including livestock - 130,5 bln tenge, crop production - 4.5 bln tenge, which is higher against the last year level. An important part of the real economy is transportation. During the first quarter of this year, the number of transported passengers increased by 1.7 per cent and made 2,458 million passengers. Passenger turnover increased by 0.5 per cent and amounted to 27 billion passenger-kilometers. In the current year, 497 km long road is scheduled to be completed and commissioned. Number of routes and frequency of flights in civil aviation remains the same. Volumes of traffic through the ports of Aktau and Bautino have been increased. As a result of measures taken to stabilize the economy, the Government managed to maintain a long-term investment attractiveness of Kazakhstan for foreign investors. This is particularly important in the context of global economic crisis, when all banks in the world are experiencing difficulties and their credit policy is very prudent. Despite this, the European Bank for Reconstruction and Development granted $180 mln loan to Kazakhstan for the construction of a transit road corridor “Western Europe - Western China”. Moreover, this year the management of the Bank intends to increase investment in Kazakhstan. During N. Nazarbaev’s visit to the People's Republic of China, the agreement was concluded on China's participation in the implementation of oil and gas projects on the shelf of the Kazakh sector of the Caspian Sea. China provides loans to Kazakhstan in the amount of $10 bln. Furthermore, quite recently the representatives of the bank “Al-Hilyal” (UAE) announced the intention of the bank to invest $bln into the economy of Kazakhstan. This week PM Minister K. Massimov has held a number of working meetings. He met with representatives of “Chevron” company, headed by Chairman of the corporation John Watson. The parties discussed the issues of development of the Kazakh minefields, company’s participation in different infrastructural projects, plans of the company on further increase of productive capacities on Tengiz. Speaking on the productive successes and achievements of the company in the field of labor safety provision and environment protection the Vice Chairman of the company expressed gratitude to the Kazakh leadership for support and cooperation. The Prime Minister also met with representatives of Al-Hilal Islamic Bank. The parties focused on the measures of realization of the agreements reached by both countries’ presidents during N. Nazarbayev’s visit to Saudi Arabia. K. Massimov met with the representatives of ConocoPhillips and Mubadala companies to discuss the project on development of Kazakhstan's N Bloc oil field in the Caspian Sea. The parties noted high interest in early start of the work on the deposit. As Chairman and Chief Executive Director of ConocoPfillips Jim Malva said, N bloc was of great importance for the company. He expressed hope to enter into agreement and submit all necessary documents to the Kazakh Government’s approval as soon as possible. Karim Massimov held a meeting with Richard Gray, a representative of Aldar Properties Company and project director, Roger Gundry. The meeting agenda included discussion of construction of a multi-functional hotel Abu-Dhabi Plaza in Astana.The Prime Minister expressed hope that the Emirates would be able to start construction in the nearest time.