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GOVERNMENT. Weekly Review. Socio-economic development over 1st half of 2009 discussed. President Nazarbayev visits Akmola and North Kazakhstan regions.

ASTANA. August 21. KAZINFORM /Rizvana Sadykova/ The main event of the Government's week was the session on the results of the country's socio-economic development over the first half of 2009 in the Ukimet Uyi. Minister of Economy and Budget Planning Bakhyt Sultanov has defined main challenges and expected results of the current year. "In the 3rd and 4th quarters of 2009 we should solve both short-term and system tasks which would help ensure total recovery of the country's economy in the following years. Ensuring GDP growth at 1.8%-2% remains priority challenge and target index for these periods to boost economic growth", he said. Since beginning of the crisis Kazakhstan has not entered the phase of technical recession. Decline was observed only in the first quarter of 2009 while in the second quarter growth made 3%. "Thus, we can say with confidence that lowering of development indices of the Kazakhstan economy reached "bottom" and today economy comes out to the recovery phase", Mr. Sultanov noted. In the Minister's opinion, forced utilization of the funds allotted within the Anti-Crisis Program and their efficiency must be ensured to achieve this aim. Alongside, housing construction market and additional support of small and medium businesses will remain under special control. "We should be ready for possible worsening of the situation in the world economy. Two possible scenarios of development of economy and action plans on each of them have been elaborated. They will be submitted at today's sitting of the Economic Policy Council", he said. According to Minister of Finance Bolat Zhamishev, the first half of 2009 budget incomes made KZT 1 trln 701 bln and were executed by 95%. "However, it should be noted that the pace of economic development is lower than it was in the first half of the last means we have unaccounted revenues" B. Zhamishev noted. Local budget spending in the first half of 2009 amounted to KZT 967.9 bln. According to him the amount of unused budget funds against the same period of the last year increased by KZT 3.3 bln and amounted to KZT 44.3 bln. The following functional groups of expenditures having main budget non-fulfillment are: housing and utilities infrastructure - KZT 14.2 bln, education - KZT 6.6 bln, healthcare system - KZT 5.0 bln, transport and communications - KZT 4.8 bln, culture, sport, tourism and information space - KZT 3.4 bln.The Minister also informed of that relevant transfers amounted to KZT 312 bln was transferred to the local executive bodies from the national budget whereas KZT 292.3 bln was used only (or 93.7 per cent). The amount of unused budget is KZT 19.7 bln. Kazakh Minister of Industry and Trade Asset Issekeshev reported that, "compared to May 2009 the volume of Kazakhstan's industrial output increased by 7.2% in June" .Over the first half of the year the industrial output has been equal to KZT 3 636.8 billion, i.e. 97.3% as to the level of the analogous period of the last year. The indices show sharp fall in production in the first quarter of 2009 and positive dynamics since May. In June the volume of industrial output increased by 7.2% in comparison with the May and by 7% as compared to June 2008. According to him, the maximum growth falls on processing industry - 109.9%, including textile and garment industry - 107.9%, pulp and paper industry - 106%, metallurgy and production of ready-made hardware - 119.5% and etc. Ministry of Industry and Trade intensifies work on promotion of the investment opportunities of Kazakhstan and attraction of foreign investors to the priority investment projects. "USD 3.3 bln of direct investments was attracted to Kazakhstan during the first quarter that is 24% less than in the analogous period of the last year. The fact is explained by the slowdown in the world markets of capital and global tendencies of recession in direct foreign investments", Mr. Issekeshev said. 74 investment projects and productions to the amount of KZT 115 bln were launched in Kazakhstan in the first half-year of 2009, and 4, 641 jobs were created. Along with the Antirecessionary program realized by the Government implementation of the complex of measures on forced industrial-innovative development of the economy is underway. Chairman of SamrukKazyna National Welfare Fund Kairat Kelimbetov delivered a report on the Fund's activity in the first half of 2009 at the Government's sitting today. "The Fund could mobilize whole production potential of the national companies", he noted. KazMunaiGaz NC JSC is the owner of two oil refineries and a co-owner of Pavlodar Oil Processing Plant to date where the company's share makes 58%. Besides, KazMunaiGaz is the co-owner of MangistauMunaiGaz JSC and Kazakhstan Pipeline Ventures company, which is also a shareholder of Caspian Pipeline Consortium. As K. Kelimbetov noted, Kazakhstan Temir Zholy NC works quite successfully. In July 2009 the company experienced growth in volumes of cargo transportation and this tendency is kept on. Production capacity of Kazakhtelecom JSC has been expanded by 9% in the first half of 2009. The number of subscribers of mobile network of Kazakhtelecom's subsidiary companies rose twofold in this period and reached 1.8 mln clients. It was also reported on completion of construction of 21 housing complexes with 4 538 flats in Almaty and Astana cities. 3 831 housing investors got their flats. Around 31 thousand borrowers started to pay 30% less to the banks due to mortgage refinancing program. State Commission on Modernization of Economy has approved 128 projects with 35 thousand flats for financing. 21.6 thousand housing investors will receive new flats. Small and medium business enterprises of the republic are actively involved in purchases initiated by the national companies as well as in realization of large investment projects. Chairman of SamrukKazyna K. Kelimbetov said it at the Government's sitting. According to him, share of state financing of small and medium businesses loan portfolio of the second tier banks has risen up to 18.6% due to placement of the National Fund's means in the banks. KZT 117 bln allocated to the 12 second tier banks has been fully utilized as of July 1. Besides, the banks directed KZT 16 bln of their own funds to small and medium business sector. As a result, 4 760 working places are maintained. On August 20 Prime Minister Karim Massimov chaired a regular session of the State Commission on Economy Modernization. The session was attended by the heads of state bodies, SamrukKazyna National Welfare Fund JSC, KazAgro National Holding JSC, national companies, development institutes, akims of the regions and initiators of investment projects within the Program on Forced Industrial-Innovative Development of Kazakhstan. The members of the Commission discussed and approved KazAgro Holding's initiative on purchase of grain from domestic agricultural producers. The Food Corporation will buy up to 3 mln tons of grain on the domestic market this year. The purchasing price will make KZT 24 750 per ton (USD 165 per ton). This price will allow agricultural to producers preserve their incomes and maintain stable level of prices for flour and breadstuffs. Issues of realization of 22 investment projects in different sectors of economy financed by Kazakhstan Development Bank and those proposed to be included in Kazakhstan's Industrialization Map were discussed as well. This week the Head of the State made a working visit to Akmola region. The conference in Kokshetau of Akmola region was attended by Head of the Presidential Administration Aslan Mussin, Minister of Agriculture Akhylbek Kurishbayev, Akim of Astana Imangali Tasmagambetov, Akim of Akmola oblast Albert Rau, Akim of Karaganda oblast Nurlan Nigmatullin and Chairman of KazAgro Holding Asylzhan Mamytbekov. Development of the food belt around Astana and large cities is an important thing according to the Head of State. The agricultural complex as a whole including social entrepreneurial corporations, agricultural structures as well as mayors must work for implementation of this issue. The President noted that lack of raw material for processing of agricultural production can become the reason for work stoppage of plants. He charged the Kazakh Government to consider the possibility of refinancing of market loans of enterprises participating in the establishment of the food belt around Astana. He said that although the funds had been allocated, the financing of projects remains one of the topical issues. The President also stressed that the Mayors of Karaganda and Akmola regions must address this issue. He emphasized that Kazakhstan should develop four directions: production and processing of agricultural products, transportation, delivery and storage for development of the agriculture. KZT 1.5 bln were allotted for supporting villages and agriculture over three years announced "Years of aul" (countryside/villages). The same sum of money was allocated for supporting agro-industrial complex in 2009. "Manufacture of good agricultural products, increasing the share of agriculture in the country's economy should become a priority task for us. Much work should be carried out in order to provide the sector's development", the Head of the State stressed. Finally he charged the Government together with KazAgro Holding to address this issue. The same day Head of the State Nursultan Nazarbayev surveyed the course of reconstruction of Astana-Petropavlovsk highway. Minister of Transport and Communications Abelgazy Kussainov and Head of BI-Group Holding Aidyn Rakhimbayev reported to the President on the stages and terms of commissioning the road which reconstruction is carried out within the Road Map. Kazakhdorstroy Company (general constructor) entering the BI Group Holding plans to complete reconstruction of the section from the 240th to 280th km of Astana-Petropavlovsk highway by 2010. A four-lane road of 1B category will function in this section. Kazakhdorstroi also plans to complete reconstruction of Astana-Borovoye highway with the length of 47 km. Besides the company builds 12 road junctures and overpasses in its sections. The total cost of the project is KZT 46 bln. More than 2 000 people and 400 units of transport vehicles are involved in building works on Astana-Petropavlovsk highway. Today President Nursultan Nazarbayev is paying a working visit to North Kazakhstan oblast. This is one of the largest grain-producing regions of Kazakhstan which has already started its harvesting campaign. At present the region grows and process up to 13% of all agricultural products of the country. The gross agricultural output reached KZT 29.5 bln over seven months of 2009 here. 3.9 mln hectares of lands have been planted with grain crops this year. That is 200 thousand hectares more than the last year index. Despite bad weather conditions agrarians of North Kazakhstan oblast expect to gather good wheat harvest due to up-to-date agricultural equipment and implementation of resource-saving technologies.


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