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  KAZAKHSTAN International Business Magazine №4, 2005
 Kazakhstan – Socially Oriented State
Kazakhstan – Socially Oriented State
A market-economy state with a strong social policy – this is the path Kazakhstan has chosen. And this defines the main socioeconomic development priority – ensuring high living standards for the people by both the state and the self-realisation of each citizen. The country is now building a comprehensive system of social assistance to guarantee that medical, educational, legal and other vitally important services are accessible.
This model is attractive to us because it is very close to our historical experience of building a state system and to the mentality of our society. The conception of the role of a strong state has taken deep roots in the people's conscience, and the population will still be stubbornly resisting any attempts to reduce this role. Without the people's support any policy is doomed to failure. Of course, there should be a reasonable balance of social benefits and the country's economic capabilities…
The main component of social development is the growth of people's incomes
 According to international experts, Kazakhstan's GDP in 2005 exceeded the combined GDPs of seven countries in Central Asia and the Caucasus. Over the next 3 to10 years, in GDP per capita, our country is expected to reach levels of medium-developed countries. This indicator grew from $700 in 1994 to $3,400 in 2005, and is expected to reach $4,150 in 2006. People's incomes have been growing in real terms as well for example; they grew by 11.6% in 2005. This is mainly thanks to the real-term increase in salaries, which was 10.9% in 2005. Moreover, the average salary in Kazakhstan is one of the highest in the CIS for example; it stood at $282 back on 1 November 2005, whereas it was $64 in Kyrgyzstan, $33 in Tajikistan, $322 in Russia, $231 in Belarus, $166 in Ukraine, $126 in Azerbaijan, $110 in Moldova and $111 in Armenia.
In Kazakhstan, over the past decade, the minimum wage has grown by almost 2,400%, the average pension by 360%, deposits placed by people in the banks and the volume of deposits per capita by almost 3,500%.
The second requirement of social development is the growth of employment and reduction of unemployment
With business activity being boosted in the country, the workforce grew from 7,181,000 people in 2004 to 7,244,000 people in 2005, whereas unemployment fell from 658,000 to 639,300 people. According to official information, over 325,000 people have been employed in the country over the past two years; the average salary grew by 26% and the per capita income by 33%. In the processing sector alone over 395 enterprises and 18,000 new jobs were set up.
The Labour and Social Protection Ministry forecasts that the unemployment rate will fall from the current 8.1% to 7.2% in Kazakhstan by 2008. In comparison, this figure stood at about 7.5% in Europe and over 6% in the USA in 2005, whereas in neighbouring Kyrgyzstan, according to various estimates and depending on the region, unemployment fluctuates between 10% and 70%.
Experts regard growth in people's educational level and the quality and accessibility of educational services as the third parameter of social development
The qualitatively new State Programme for Developing Education in 2005-2010 was drafted and approved in our country in 2004. The programme envisages switching to 12-year secondary general education in 2008. The introduction of the 12-year system is expected to switch from a knowledge-centred approach in education to a competence-based one. World trends in the modern information society mean that less stress is put on memorising endless facts and basic data and more stress is put on learning methodological knowledge and analytical skills which are necessary for learning and being able to think productively and analyse information independently.
Work to improve the infrastructure and develop a network of educational organisations corresponds to the new trends. The central budget allocated funds to build some 65 new schools in 2005. The country's secondary schools received 787 multimedia classrooms worth 4.3 billion tenge.
Along with supplying computers to schools, the process of connecting schools to the Internet was carried out extensively throughout the country. The Satellite Distance Learning Channel has been set up to link some 1,100 schools in East Kazakhstan, West Kazakhstan, Kyzylorda, Mangistau, Pavlodar, South Kazakhstan and Almaty Oblasts. In total, over 82.2% of the country's schools have access to the Internet at the moment, including 80% of village schools.
In 2005, Kazakhstan carried out the Combined National Test for the second time. A total of 81.2% of school-leavers took part in it (76.1% in 2004). The Single National Test was introduced in our country in 2004 as a procedure to combine final school-leaving exams and university and college entrance exams. The test includes four subjects – mathematics, the history of Kazakhstan, the Kazakh or Russian language, and a subject depending on the specialisation of education a school-leaver wants to receive.
Training qualified technical and service specialists is carried out in professional schools (lyceums) and colleges. Despite the fact that the state educational order (which pays for education) to train specialists of primary professional and secondary professional education in 2005-2006 was increased by 10% on average, there are still certain shortcomings in the labour market. In particular, a paradoxical situation developed: there are six graduate engineers per labourer. For comparison, in developed countries the rate of specialists with higher, secondary professional and primary professional education is 1:1:5.
The Kazakh system of higher education is now switching to the so-called open education that is based on a credit system. In 2004, the country's 40 higher educational establishments adopted a credit system in teaching economics. The transition to this system is being generated by the world trends in reforming national education systems, and it aims to improve the quality of training specialists. This also helps create a common international system of recognition of degrees, which is necessary for academic exchange with students and professors. In addition, the recognition of Kazakh degrees will make it possible to ensure the demand for graduates from local universities not only in the domestic market but also in the international labour market.
In addition to adopting a credit system, work is being carried out to improve the structure of the state order in the education sphere. At the same time, greater stress is being put on specialists with higher education for hi-tech and science-intensive productions. In general, the state order for the 2005-2006 school year was increased by some 5,500 specialists (up by 21.4% from the previous year).
A total of 1,756 people received Bolashak presidential grants – this is the result of the work done by the National Commission for Training Specialists Abroad in 2005. Young Kazakh students had the unique opportunity to study at some of the world's prestigious universities. The largest number of them usually ends up studying in the USA and Britain – 623 people (36%) and 509 people (29%) respectively. Large groups of students will also study in Russia, China, Germany, the Czech Republic and now France for the first time. They may even go to the green continent – Australia.
The fourth mechanism of social development is the improvement of the quality of healthcare and medical services
A key task in the social sphere, especially in Kazakhstan, with its unfavourable environmental situation, is to develop the healthcare system. In his speech made in September 2005, President Nursultan Nazarbayev stated that in 2005 Kazakhstan "increased its spending on healthcare by over a third against 2004 and it totalled 2.7% of GDP". In addition, the figure is expected to grow to 4% of GDP over the next three years. The state spending on healthcare alone will exceed $1bn.
The State Healthcare Reforms and Development Programme for 2005-2010 envisages building an efficient healthcare system on the principles of solidary responsibility for protecting the health of people between the state and the people themselves. Therefore, over the next three years, Kazakhstan will fully transition to a mixed public-private model of funding in the healthcare sphere which requires not only funds from the state budget but also introducing compulsory and voluntary medical insurance. Special attention is also being paid to ensuring guaranteed medical services, mainly for the vulnerable strata of the population. Thus, spending on guaranteed free medical services per capita grew by about 40% in 2005. The programme is, of course, a progressive step to boost citizens' confidence in the government's ability to solve complicated social problems.
Positive changes have also taken place in the demographic sphere. The natural growth of the population has been increasing since 2000. As of 1 December 2005, the country's population grew by 130,400 to 15,205,100 people against 1 January 2005.
The well-known Kazakh demographer, Makash Tatimov, believes that Kazakhstan's path towards solving demographic problems is one of the best in the CIS. "We are not facing depopulation as it is happening in Russia, Belarus, Georgia and Ukraine. We are also not observing such a great outflow of people such as in Armenia or Azerbaijan. At the same time, we do not have rural overpopulation as exists in Uzbekistan, Tajikistan, Turkmenistan or Kyrgyzstan. This means we are at the very 'golden mean' which makes it possible to call our demography golden," he said.
It is also important that the country had a migration surplus in recent years. Since independence, according to the Labour and Social Protection Ministry, over 433,000 ethnic Kazakhs have returned to their historical homeland from foreign countries. In addition, the dynamic development of the economy brought great numbers of labour migrants to Kazakhstan, in particular, from Uzbekistan, Kyrgyzstan and Tajikistan. The economic boom also caused the influx of illegal migrants. The precise number of illegal migrants cannot even be estimated. Experts give figures, which exceed a million people.
The social progress is impossible without expanding social reforms and developing a social protection system. And this is the fifth incentive for a constructive social development
A compulsory social insurance system was adopted in Kazakhstan from 1 January 2005. The system aims to compensate for lost incomes due to social risks (losing ability to work, bread-earner or job). According to information from the Kazakh Statistics Agency, the number of people involved in the system stood at 80% of the workforce in the country in December 2005. They have transferred almost 12 billion tenge to a special fund.
In 2004, the 100% government-owned State Social Insurance Fund was set up in Kazakhstan. Its objective is to introduce the system of mandatory social insurance in the country, accumulate social taxes, transfer money for welfare payments in a timely fashion, place idle cash in financial instruments and conduct annual audits. According to the Fund’s president, Sansyzbai Zholdasbayev, the fund’s assets as of 1 April 2006 were 18.967 billion tenge
The Independent Kazakhstan pension system marked its eighth anniversary on 1 January 2006. In 1998 the country started a gradual switch from the state pension system to a mixed funded/pay-as-you-go system. It operates at three levels: state-funded, compulsory and voluntary. It is worth noting that no pension fund has faced bankruptcy in recent years, and pension money is not only being preserved but also growing, although, we should admit, the return on it has been falling in recent years.
Rapid growth in the country's economy made it possible to increase the minimum and average pensions from 1 July 2005. The average pension, including a basic allowance, reached 10,461 tenge in 2005. In his state-of-the-nation address delivered on 1 March 2005, President Nursultan Nazarbayev stressed that pensions would grow further.
The results of the implementation of the State Housing Construction Programme
Kazakhstan adopted the State Housing Construction Programme for 2005-2007 in order to provide the country's people with housing. It includes building affordable housing under a mortgage system and providing the needy and other people with housing. The notion “mortgage” which was at first unusual to Kazakhs is taking roots in the country. There is now a real possibility of buying housing. The initial fee to receive a mortgage loan was cut to 10% and its repayment term was extended to 20 years. In 2005, 241 billion tenge was invested in building new housing.
The involvement of NGOs in developing Kazakhstan's social sphere
The main requirement in drafting an efficient social policy in order to improve living standards is the involvement of citizens in decision-making. There are some 4,500 NGOs in Kazakhstan at the moment, which are operating almost in all spheres in the life of society. Gordon Johnson, the UNDP deputy resident representative in Kazakhstan, has said that Kazakhstan's non-governmental sector covered about 2 million people and was a leader in the Central Asian region.
The state has adopted national and regional programmes for supporting NGOs in 2004-2005 and President Nazarbayev said that over the past two years, under regional programmes, 173 million tenge had been allocated for social projects and the ministries had allocated a further 300 million tenge.
The country acquired experience of cooperation between NGOs and local legislative and executive bodies. The Almaty city budget allocated 70 million tenge for 43 projects in 2005. The city also managed to help the socially vulnerable strata of the population including disabled people, pensioners, WWII veterans, single mothers raising children and homeless children through NGOs. In total, these projects covered 60,000 people.
It seems that the process of developing a partnership between the authorities and NGOs is serious and will remain so for a long time to come. The Culture and Information Ministry intends to double its spending on funding NGOs' social projects to 128 million tenge.
A charity culture is being gradually cultivated in the Kazakh society; in which the Civil Alliance Association of Legal Entities has created a unique model of cooperation between the state, businesses and NGOs. It is precisely such a partnership that can be called a social partnership which meets the interests of the whole of society.
An important instrument in defining the state of the public's mood is found in the opinion poll. Improvements in living standards, growth in incomes and the state's strong social policy cannot but accompany the growth in citizens' confidence in the future. This is proven by opinion polls, which were carried out in Russia, Belarus, Ukraine and Kazakhstan several years running. The 2005 opinion poll showed that our country was leading in almost all indicators of social moods. Specifically, this can be seen in such indicators as the level of adaptation, the dynamics of positive moods, the level of social optimism and the assessment of household living conditions.
The main conclusion we can draw from these opinion polls is that the level of social adaptation in Kazakhstan is the highest in the CIS. This means that the ability of our citizens to survive and live their lives is the highest in the CIS. Three-quarters of those polled said that they were satisfied with their lives. This figure is very close to the level in the EU, which is at 79% and 25 percentage points more than in other CIS countries. Opinion polls established a very clear trend: the situation in Kazakhstan is improving.
All these facts and figures prove that social programmes fulfilled in our country in recent years have helped to improve the welfare of the Kazakh people and ensure the necessary level of social protection for the vulnerable people. It was not by accident that on 18 January 2006 an announcement was made regarding the strategic task for Kazakhstan to join the world's top 50 most competitive countries by President Nursultan Nazarbayev who stated that "a modern social policy which protects the weak and supports the development of the economy and the country" was one of the main development priorities.
By Roza Zharkynbayeva

Table of contents
Democracy Is a Development Priority  Yerbulat Seylkhanov, Aygul Abylgazina 
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· 2012 №1  №2  №3  №4  №5  №6
· 2011 №1  №2  №3  №4  №5  №6
· 2010 №1  №2  №3  №4  №5/6
· 2009 №1  №2  №3  №4  №5  №6
· 2008 №1  №2  №3  №4  №5/6
· 2007 №1  №2  №3  №4
· 2006 №1  №2  №3  №4
· 2005 №1  №2  №3  №4
· 2004 №1  №2  №3  №4
· 2003 №1  №2  №3  №4
· 2002 №1  №2  №3  №4
· 2001 №1/2  №3/4  №5/6
· 2000 №1  №2  №3

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