Reflecting on President Tokayev’s State of Nation Address: One Year Later
Jerusalem, 31 August, 2023 (TPS) -- ASTANA, Aug. 31, 2023 (Kazinform) – A few days until September 1, the political season is about to start in Kazakhstan with the state-of-the-nation address to be delivered by President Kassym-Jomart Tokayev. The address laid an ambitious roadmap for the future, promising comprehensive reforms across various sectors. Now, as we stand a year after that pivotal moment, it’s time to assess the progress and impact of the reforms proposed in President Tokayev’s address.
In 2022, Tokayev delivered two addresses – first in March and second in September.
The political reboot was the key highlight of that address following the constitutional referendum in June 2022.
The nation had witnessed the early presidential elections, where Tokayev won the majority of votes. Announcing the decision to call for early presidential elections, Tokayev said it would help “lower the risks of power monopolization.”
The presidential term of office was reduced from seven years to five years. This is a significant step towards reducing the concentration of power in the presidency. Now, one year later, Tokayev has six years left in the office.
The next step in rebooting the political system was re-introducing the mixed electoral system for the Parliament. The mixed electoral system combines elements of a proportional representation system and a single-member district system. This is designed to create a more balanced parliament, with representation for both large and small parties.
Under this system, 69 members are elected from political parties on party lists in a nationwide constituency and 29 – in single-mandate territorial constituencies.
On August 13, 17 rural akims were elected in 7 regions, a follow-up to the introduction of direct elections of rural akims in 2021. Since then, 1,668 akims of villages, settlements, rural districts, and cities of district significance have been elected. Of these, 75 percent were nominated by political parties, while 25 percent were self-nominated.
On August 20, elections of 21 rural akims in 3 regions were held, and by the end of this year, elections will be held in 199 rural settlements.
“Thus, the election of rural akims has already become a familiar element of our country’s political process,” State Counselor Erlan Karin wrote on his Telegram channel on August 15.
Additionally, the government has worked to streamline the judicial system, aiming for greater independence and fairness. The Constitutional Court has been working since January, allowing citizens to challenge laws and decisions that do not comply with constitutional law, thereby giving them an opportunity to protect their rights.
According to its chairwoman, Elvira Azimova, the court received around 4,000 citizen appeals, but most are outside the scope of the court’s competency.
The political modernization reforms are still in their early stages, and it is too early to say their long-term impact. However, they represent a significant step forward for Kazakhstan and its citizens.
New Economic Policies
Kazakhstan’s ambition to transform its economic policy has been the response to the many geopolitical challenges and other external shocks the nation had to withstand.
President Tokayev has reiterated the need to reduce Kazakhstan’s reliance on oil and gas exports and foster a more robust and sustainable economy. Over the past year, the government has taken policies to attract foreign investment, support small and medium-sized enterprises, and promote innovation.
In his address, Tokayev criticized the wear and tear of the communal utilities in Kazakhstan, saying that “two-thirds of the country’s power supply networks, 57% of its heating networks, and almost half of its water supply networks are worn out.”
He tasked the government to reduce the wear and tear of networks and capacities by at least 15 percent. According to the Kazakh Ministry of National Economy, the new tariff policy, Tariff in Exchange for Investment, is meant to promote measures in this area, with an expected reduction in the wear and tear of networks by 20 percent by 2029.
Reporting on the new policy at a government meeting in July, Minister of National Economy Alibek Kuantyrov said the program plans to attract about 3 trillion tenge for 2023-2029 of investments for the modernization of 62,000 kilometers of engineering networks.
One of the tasks voiced in the address was also to ensure a transparent and predictable tax policy. The Government and the Parliament are now working on the new concepts for the Tax Code.
According to Yerlan Sagnayev, Director of the Tax and Customs Policy Department of the Ministry of National Economy, representatives of government agencies, the business community, Atameken National Chamber of Entrepreneurs, non-governmental and international organizations, as well as experts and economists are actively involved in its development.
The new Tax Code will ensure tax administration is reoriented towards partnerships and minimizing business costs through digital initiatives, VAT refund system, minimizing the risks of tax evasion, simplification of legislation, differentiation of tax rates, taking into account the avoidance of complexity for taxpayers, as well as revision and optimization of special tax regimes.
“All approaches are aimed at simplifying the activities of the taxpayer. I believe that there will be no complications. The new Tax Code should become more stable than the previous ones. It will differ from the current one by simplicity of tax payment, predictability, convenience for application,” Sagnayev said.
So far, about 700 proposals have been received. More than 140 meetings have been held since the beginning of the year.
Returning illegally acquired assets was one of the major tasks assigned by Tokayev to his Government in 2022. In July, he signed the law under which the return mechanisms will be applied to those implicated in large-scale corruption and oligopoly groups that have colluded with persons who have administrative and authoritative resources (connections, influence).
The assets seized from corrupt officials are directed to building schools, per Tokayev’s address.
According to the Kazakh Government, funds seized from corrupt officials will be directed to construct 72 new schools. To date, the Education Infrastructure Support Fund has received 121.7 billion tenge. 72 projects worth 106.7 billion tenge were supported, including 94.1 billion tenge to complete the construction of 69 schools for 85,000 student places and 12.6 billion tenge for constructing three new facilities.
Agricultural Entrepreneurship
Kazakhstan possesses abundant natural resources that allow the country to grow its agricultural sector, yet structural obstacles and lack of funding inhibit the growth. In his address, Tokayev said the state of the industry directly affects the country’s food security.
“The strategic task of increasing the volume of production and increasing the added value of domestic agricultural products needs to be solved. The time when you could just sell grain and livestock is a thing of the past. The Government must prepare new long-term approaches to subsidizing the industry,” said Tokayev.
The Auyl Amanaty program aimed at supporting rural agricultural producers received more than 12,000 applications from villagers worth 73 billion tenge, and 4,600 microcredits have been issued for 25 billion tenge. Overall, 100 billion tenge was allocated for preferential microcrediting this year. The loan term is up to 5 years, and for livestock projects – up to 7 years.
Since the beginning of the year, the Agrarian Credit Corporation, a subsidiary of the Baiterek national holding, which together with KazAgroFinance account for over 70 percent of the financing of the agricultural sector, allocated more than 271 billion tenge and nearly 9,000 farmers have been supported.
This year, 3.5 million hectares of land have been sown, 15 percent of all sown areas of the country. To strengthen food security and reduce import dependence, more than 131 billion tenge was allocated for crediting investment projects in agriculture. It should be noted that compared to the same period last year, the volume of actual financing exceeded by 86 billion tenge, ahead of last year’s results by 40%.
President Tokayev said the country’s agro-industrial complex should work under new and stable rules. Seizure of unused land is part of the process.
Since the beginning of 2022, 7.8 million hectares of unused and issued agricultural land have been returned to the state, including 1.5 million hectares in the Karaganda region.
The officials conducted 2,410 unscheduled inspections of land users on an area of 5.5 million hectares. Based on the results of inspections, 1,597 orders were made on an area of 3.1 million hectares to eliminate violations of land legislation, while 246 cases are under consideration in the courts.
Social Welfare
Addressing social issues was another central theme of President Tokayev’s speech. The Government pledged to improve healthcare, education, and social welfare systems.
One of the initiatives was the annual transfer of at least 7 percent of the net income of the Samruk Kazyna Sovereign Wealth Fund to the Qazaqstan Halqyna public fund. As of the end of 2022, it was decided to send 66.6 billion tenge to the fund. More than 35 charitable programs are implemented in six areas, including medicine, education, sports, and social support.
At least 324 Kazakhstan’s citizens with severe life-threatening and orphan diseases are provided with expensive medicines totaling more than 24.9 billion tenge. 20 patients received treatment abroad worth 585.1 million tenge, and four Early Intervention Centers were opened in four regions.
From January 1, 2023, the minimum wage increased from 60,000 to 70,000 tenge, affecting nearly 1.8 million employees.
While progress has undoubtedly been made in various areas, it’s essential to acknowledge that a year is a relatively short span in the context of comprehensive reforms. Challenges and obstacles are inherent in any ambitious transformation. Some critics argue that the pace of change could be quicker, while others stress the need for more comprehensive strategies to address environmental concerns and reduce socioeconomic disparities.
