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The “Through crisis to updating and development”

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The addressing of the President of the Republic of Kazakhstan N.A.Nazarbaev to the people of Kazakhstan
«Through crisis to updating and development»
(Astana, on March, 6th, 2009)
Respected people of Kazakhstan!
Dear compatriots!

Practically two decades day by day we create with you the new country.

The country is opened and prospering.

The country, which well-being people of Kazakhstan from year to year improves.

The country is politically stable and provided safety to the citizens.

The country, which never and for anybody will not be a source of external threat.

Strategy of development of Kazakhstan which have accepted for decades forward, experience of its embodiment in real successes of the country have given us confidence of own forces, we were convinced of correctness of the way chosen by us.

For this reason from the very beginning of crisis in the world financial markets, burst more two years ago, we have developed and consistently we realise complex system of anti-recessionary measures. 

We attentively trace an internal and external conjuncture, and immediately we undertake drastic measures. For this reason global food crisis did not become for us national disaster.

But today the economic crisis which has amazed already all economic, continues to test us for durability. 

Crisis has come to us from the outside. Its sources not in the country, and are hidden in misbalance economic.

Crisis could not be avoided and all to provide. 

Leading economy of the world already has spent for it’s overcoming more than 10 billion US dollars that is practically 15 percent of world gross national product. But the situation to the best for the present does not vary.

Crisis has consistently involved the American continent, Europe and Asia in the orbit. 

Apparently, it will be long. As analysts speak, the economic in the falling yet did not reach a bottom.

I have stated the sight at processes occurring in the world in article «Keys from crisis». To it there can be a different relation, but we, people of Kazakhstan, have included the thought in the general search of an exit from this crisis. Crisis not idle time, variants of an exit from it should be absolutely different.

I am convinced, that after that global crisis the world financial system will change, and can be, and political management of the states.

Many come to necessity of "hand control" economy, and regulation becomes the major business of an exit from this crisis. 

Therefore the deep and radical approach will help the world community to find those ways which will secure us in following zigzags of world market economy. 

Therefore radical measures, which I have offered, will be discussed in the world community.

My offer is a contribution to search of the decision of global problems.

But today the reality is that, that compression of business activity in the world has led to reduction in demand for oil and metals. And it is a basis of export of Kazakhstan. 

For a year the price for oil has fallen almost in 4 times, to metals - almost in 2 times. 

We have our basic trading partners and the nearest neighbours - Russia and Ukraine – devalue the national currencies for 40-45 percent. And we have been compelled to go for tenge devaluation in interests of our commodity producers. Otherwise Kazakhstan production would lose the competitiveness. We would continue to burn country gold and exchange currency reserves. 
Respected Kazakh people!

Unfortunately, a line of difficult tests and power of crisis pressure do not weaken. And you should know it.

But it should be assured that we are not simply ready to these tests.

We with them will consult and we leave this crisis by stronger and prospering state. 

We will keep the positions in the world community.

Having created National fund, we carried out purposeful to the policy of savings.

You well remember, how many has been broken copies - whether it is necessary to create this fund or to distribute to its all little by little. That we did now when on 20 % gathering in the budget have decreased, with pension and wages payment? 

Having created this fund during good times, we have arrived correctly. So the states, which think of the tomorrow, should arrive. 

Thereby we have provided safety factor of our economy before possibilities of shocks of a similar sort.

For creation of viable and flexible economy we consistently carried out uneasy structural reforms, increased an export potential and have given signal to start diversification. 

For this reason today we have a solid reserve and in a condition to carry out thought over and effective anti-recessionary to the policy.

Acceptance of packages of stimulating economic measures became a reciprocal measure of the majority of the states on the arisen global crisis.

Kazakhstan became one of the first states in the world, operatively reacted to accruing turbulence of economic and advancing measures which have started realisation.

To keep stability of a financial system we have given to banks additional liquidity. It has been made for maintenance of economic activity of small and average business, the large enterprises.

The sum of the guaranteed compensation under contributions of physical persons from 700 thousand to 5 million tenge has been increased. The state has helped to lower the risks of bank sector connected with external loan and sufficiency of own capital.

On support of housing construction and the decision of problems of parter it has been directed 545 billion tenge.

For preservation of business activity in the country we have given unprecedented financial support to subjects of small and average business in volume of 275 billion tenge. Work on resolute reduction of administrative barriers has been continued.

The new Tax code which considerably has lowered the rates under the basic taxes is installed. 
In comparison with last year the corporate surtax this year is already lowered on third and makes 20 percent, and in 2011 will make 15 percent. The VAT rate is lowered to 12 percent. Instead of a descending scale of rates of the social tax the uniform rate at a rate of 11 percent is entered. For the enterprises which are carrying out the investments, are provided tax preferenz.
All became one of the major stimuli of development of not raw sector of economy, small and average business. 
The law on the state purchases gives advantage to the domestic manufacturers that also are directed on support of small and average business.

For agriculture development it has been allocated 280 billion tenge, realisation of infrastructural projects - 120 billion tenge.
As a whole to a national economy in the anti-recessionary purposes it is in addition directed over 2 billions 700 billion tenge. 
It, you see, powerful stimulus for overcoming of consequences of world crisis.
We operate resolutely and quickly, because we know, when and that it is necessary to do to reduce force of blow of world crisis by our economy and a society. 

It was promoted by joint operative work of the Government and country Parliament.
And I want, that you, dear my compatriots, understood, that all of us together should resist to an impact of this period.
The government is obliged to guarantee, that all obligations of the state on increase in social payments and wages to state employees will be kept in full.

As well as it has been planned, in 2010 the salary of state employees and the grant will be increased by 25 percent, and in 2011 - for 30 percent.

The average size of pensions will be increased in 2010 by 25 percent and for 30 percent in 2011.
Thus by 2011 the size of base pension payments will increase to 50 percent from the size of a living wage.
As you know, the state has supported the students who have remained out-of-pocket to pay study. In total state in addition allocates 11 thousand grants and 40 thousand credits for students.
Respected Kazakh people! 

Before us there are big problems on overcoming of consequences of crisis and preparation of the subsequent economic growth. 
It is everything that we have already undertaken, this decision of the current problems caused by today's crisis. 

I suggest not to stop, go further and to carry out the new plan of the further modernization of economy and realisation of strategy of employment for maintenance of post crisis development of the country. 

In the most difficult years we have started to build and have created new capital of the country - Astana when nobody believed, that we can carry out it. We have made it, it sees the entire world. Let's follow this good experience.

Yes, new means are necessary. In these purposes I consider correct incomes of raw sector which were traditionally enlisted in National fond, in 2009 - 2010 to direct on realisation of the new plan. As a whole it will make an order of 600 billion tenge in addition to already confirmed transfers of National fund. 

It is time, but a necessary measure. Thus we keep that volume of total reserves of the country which are for the present moment. That is 47 billion American dollars. It gives us confidence of stability on a case of continuation of this crisis.

Other source of means is a rigid economy under all items of expenditure of the budget and the strict financial discipline. Taking into account it I charge to the Government to spend optimization of expenses of the republican budget and literally in a mode of weekly monitoring to supervise use of budgetary funds. This reference is as well to our deputies. 

Become already habitual in rapid growth wastefulness should be replaced by reasonable consumption and economy. We will tell directly, these years when we had money, inquiries became more, states have inflated and the quantity of business trips, carrying out of various scale days of culture has increased. All should think over it. 

From infringers of financial discipline there should be a rigid demand under laws of crisis time. All not priority expenses are administrative, investment and others should be brought to naught. It concerns also local budgets.

The liberated means will give the chance to us to realise, first of all, employment strategy of Kazakh people. It not only will help us to cope with crisis shocks, but also will provide effective development of economy during post crisis time. It should give new possibilities to each Kazakhstan family.

Sufficiency of workplaces should become the basic indicator on which it will be defined ability of the Government’s members and every akim to provide stability of development of economy of Kazakhstan.

Every akim, each minister should know, how many for a week it is reduced workplaces, and how many we on places open. It is a sustainable development basis. 

For maintenance of regional employment and retraining of personnel I charge to the Government to allocate not less than 140 billion tenge. 

From local budgets resources on cofinancing employment strategy also should be allocated.

For those who will lose work, we will create new workplaces. We can provide with work at least 350 thousand Kazakh people, it, not including present public works.

There are possibilities for development of a labour market, they should not be thought out. On it we direct in addition allocated means.
First, it is reconstruction and modernization of municipal networks. These are objects and networks of water supply, a heat supply, power and the water drain.

To the government together with akim, I charge to define necessary expenses for these purposes, to provide not only financing of works, but also the most severe control over use of each tenge allocated from the budget.

It is invisible work; all of us equally should do it. It - a basis of the future development. It is possibility to create in cities and on places a large quantity of new workplaces. We will lift consumer ability of our population. If it is clever to work, released people should be retrained on new specialties. 

Housing and communal services to put in order for a long time it was necessary. Give now to these we will be engaged. 
Secondly is that this building, reconstruction and repair of highways of local value, and also updating of a social infrastructure, first of all schools and hospitals. 

It is already problem of SPC which are obliged to provide the maximum employment of the population. A question financial side is behind the Government and akims.
We should agree now and directly tell to the population: schools and the hospitals which building has begun, we will complete. New as a situation such, we will postpone, but we will direct means for repairing operating schools, hospitals, medical aid stations. Besides, we will create workplaces. 

Also on main automobile and to the railways which building we planned, it is necessary «braking». But money to start up on a putting in order of roads round the regional centers, cities, interregional roads. Thus we will tighten our backs. 
Thirdly, objects of local value in each concrete settlement. It can be an accomplishment and gardening, repair of roads, clubs or other objects at the discretion of local authorities. Target transfers should be allocated for these purposes.
Regional Maslihat as to local governments, means should be allocated. Let they solve, where these means to direct to solve local problems and employment questions

Personal responsibility for efficiency of this work as a whole I assign on akims.

For realisation of all listed projects we should use potential of local manufacturers as much as possible. If necessary manufactures are not present today, they should be created, and it opens new possibilities for business.
We after all stand on the eve of the 20 anniversary of our independence. Across all Kazakhstan work should be developed - as we will meet this date. These are unforgettable years for our generation, for our people. Such in history of the Kazakh nation and all Kazakhstan was not. 

Therefore this work to us should be begun now. I consider that we should give small means, probably 50-100 million to the tenge every akim of village that they under the control regional maslihat have solved current problems for the population which suffers any disaster, gave out micro credits.

Thus, we not only solve employment questions, but also we create stimulus for occurrence of new manufactures in our country.
Fourthly, this expansion of social workplaces and the organization of youth practice.
The law in force about population employment allows us to use means of the budget for these purposes. In 2008 more than 13 thousand persons realised the possibilities under these programs. 
Our problem-expand today frameworks of existing programs.

I charge to allocate for these purposes of 8,6 billion tenge in addition. Then we will provide with work about 96 thousand persons.
Simultaneously with it we should increase the maximum period of payment of the unemployment benefit from the State fund of social

insurance with 4 about 6 months.Our strategy of employment in conditions of world crisis is directed for full-scale work on conversion training and retraining of personnel.

I charge to the Government together with akims to organize retraining of experts on the basis of existing educational institutions.
Our population should study, in the world people study all life. In this case there is a possibility and necessity to be retrained and receive other trade which is claimed today.

We now oblige all large building enterprises to allocate means for training of people to other trades. So should be everywhere. If the government and akims will normally organize work - people will sit down for school desks and will be trained in new trades. 
System work on retraining and conversion training of shots should pursue following aims.
Everyone who wishes to work by a new trade should have possibility to be trained.
It is maintenance of the future requirements of economy with manpower, first of all, in agriculture.

There is stage-by-stage replacement of foreign workers by domestic shots. We are going to reduce and replace half them ours. 
Besides, despite world crisis, difficulties of the period worried by us, we do not presume to concentrate only on their decision. Our future depends on the further modernization of economy and development of a base infrastructure.
We will continue financing and realisation of operating perspective investment projects.
First of all, it is modernization of oil refining factories.

We have three oil refining factories and till now we buy oils and are not provided by aviation kerosene. It is necessary to these to be engaged now.
We should provide completely gradually internal requirements for this mineral oil. 
We will continue building of a petrochemical complex in Atyrau. We will finish building of Mojnaksky HYDROELECTRIC POWER STATION this year; we will continue works on expansion and reconstruction of the Ekibastuz state district power station-1. There instead of eight four blocks work. It is ready, not using electric power. We will continue work on the Ekibastuzsky state district power station-2 on building of the third power unit, this year we will begin building Balkhash WES.

In our plans - building of main gas pipeline "Bejneu-Bozoj-Akbulak", the reconstruction of road transit corridor «the Western Europe - the Western China». This year we begin spadework. Will work there 5 thousand persons, and in 2010-2012 - to 50 thousand persons. 
It will be an artery which will make Kazakhstan a transit corridor from Europe to Asia. 
We have started to the organization of factories of electric locomotives, passenger and freight cars, road bitumen, the chemical industry.

Especially I wish to tell about agriculture thanks to which development we simultaneously solve two major for the problem country - maintenance of food safety and diversification export.

Therefore we ave made decision to continue financing of investment projects on development of the export-focused manufactures, such as the organization and development of dairy product farms, integrated poultry farms, feeding platforms, the organization of manufacture of fruit-and-vegetable cultures with application of a drop irrigation, manufacture creation on agricultural machinery assemblage, development meat - processing manufactures, processing of a thin wool, an infrastructure of export of the Kazakhstan grain and its deep processing. 

It is necessary to consider other significant projects for building. This is continuation of a construction of the Koksaray water basin, other large irrigational objects.

We had a problem on Kyzylkum’s file to enter 60 thousand hectares of the irrigated earths. Now it is necessary to start to work on those objects where there is a FEASIBILITY REPORT and access roads. Processing of production of agriculture is the major branch. We deliver today 80 % of tinned fruit-and-vegetable production, half of meat products, 53 % of dried milk. If it is all to do - people from a city should go to work to the rural industry. 

By our estimations, export specialization will allow creating in the long term more than 500 thousand new workplaces and will provide about 8 percent of an additional gain of gross national product the next five years.
Thus, following the strategic choice, we consistently continue work in those sectors of economy where we can be really competitive, occupy the niches on foreign markets.

* * *

Present difficulties are not the first test which has dropped out on our share.

We have overcome the deepest crisis of a transition period in the early nineties. 

Then the economy collapse reached 60 percent, inflation was estimated in thousand percent a year.
The second world crisis caused by the Asian financial markets, we have overcome in the late nineties. The price for oil has decreased then to 9 dollars for one barrel. We could not pay pension and wages. We have overcome these difficulties.
There will pass time, and we will already speak about overcoming and present crisis. 

In our hands - all possibilities to leave the developed situation with objective losses, but prepared for new growth. 
Crises will repeat also our purpose - to learn to operate them. While at us it turns out. 
Today we are compelled to rearrange the forces and resources, and we do it under the influence of external circumstances. But it at all does not mean that we have changed the course. This course is certain by Strategy of development of the country till 2030. The life introduces corrective amendments. But I underline, it is former. 

Prosperity, safety and well-being improvement of all people of Kazakhstan remain the major triune problem for our state.
We have an anti-recessionary plan; sufficient means from the state reserves are allocated. The government as a whole and the Prime minister, heads of the state bodies, akims bear personal responsibility for performance of the planned measures on an exit from crisis. 
Today's problems and how we with them consult, is an examination on a maturity and stability of our society and the state. I think that we will sustain this examination. We should enter into a new stage of the development and to increase greatly our achievements. It is assured, that we will consult.

For achievement of the planned purposes rallying of our people is necessary. 
Therefore I address to all people of Kazakhstan-undertake realisation of the named measures, to show diligence and aggressiveness, to be economical, to help and care of relatives, about those who requires the help.
I address to deputies of Parliament, Maslihats, party «Nur Otan». The voters, who were voting for our party, have rendered us huge trust. And now, during the difficult crisis period, we should justify, become it at the head of wide anti-recessionary movement in a society. 
Together with the Government and local bodies it is necessary to solve concrete problems of people, to take on the special control realisation of anti-recessionary measures, an expenditure of budgetary funds allocated for these purposes.
I address to Assembly of the people of Kazakhstan, to all political forces. Now not in words, and it is in practice checked, who really thinks of the people and who - is not present. 

Let's unite for the sake of overcoming of the most severe in history of a planet of crisis! 
Let's not embitter people, we will help them a word and business. It now does the state. The important problem there is a world and consent preservation in the country.

I address to all civil servants. Now responsibility of each manager before the people to which all of us serve repeatedly increases. It is necessary to leave is more often on places, to meet labour collectives, the population. It is necessary to explain the measures undertaken by the state, to unite people, to lift them on the decision of problems.

I address to workers of law enforcement bodies. The calmness depends on you in streets of our cities and villages. It is necessary to struggle resolutely and rigidly with criminality, corruption, swindle, infringement of laws. During this hard time it is necessary to make everything to provide safety of our citizens, all society.

I address to mass media to show an active civic stand! You not casually name «the fourth power»! 
Now mass-media should represent itself as "adviser" for people in a question, as it is better to overcome difficulties how to survive, how to stand during this hard time. It is necessary to learn citizens on positive experience of other people. The same role is taken away also our scientific and creative intelligence. 

It is necessary to give more often materials which confirm such moods, as confidence, personal activity, patience, patriotism, love to the Native land. 

Party members «Nur Otan» should happen more in families, to explain on what specialties it is possible to be retrained how to receive credits and micro credits that it is necessary to do in difficult years. It is important to bypass each house, each family, to become assistants and advisers of simple people. To explain that anything terrible is not present, the country big, is a lot of work.

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