OREANDA-NEWS. October 21, 2009. Extracts of the speech delivered by Kazakhstan’s Prime Minister Karim Massimov before the Nur Otan fraction, reported the Official website government.kz.

… As the year approaches its end, I can assert that instructions set forth by President [Nazarbayev] have been effectively brought to life…

We have preserved macroeconomic stability, that is stability of the banking system, and confidence of the population in domestic banks. For the 9 months of the year, deposits with the banking system have grown nearly 20%. Inflation for the period under review has been halted to make up 4.7%.

Gross international reserves and assets of the National Oil Fund [accumulating windfall oil revenues] have been stable at USD 40 billion. …

We are expecting positive growth as of the year end.

…Pensions, student allowances, salary of public sector employees have grown in 2009 by 25%, with social allowances growing by 9% on average.

In September unemployment rate stood at 6.3%. The indicator is better than in the years of robust economic growth. And that is our challenge to the crisis.

… We have decided to widen the package of education loans provided by the state to well-performing students.

We have set new parameters for the economy modernization… This year we have successfully implemented 22 large-scaled investment projects totally worth USD 2.5 billion.

… Another 69 large-scaled projects are under way totally worth over USD 32 billion.

…Construction of the Balkhash thermal plant, Ekibastuz district power station, Moinak power station, main gas pipeline Beineu-Bozoi, railway links Khorgos-Zhetygen and Uzen-Turkmenistan border, reconstruction of the West Europe-West China motor corridor, construction of modern cement-making plants, a gas chemistry plant, an asphalt-making plant, metallurgy finished products manufacturing facilities, overhaul of oil processing plants – these are real projects and contribution to modernization efforts.

For the 9 months, capital investments have grown by 2.2%, with investments out of the state budget growing by 5%.

The inflow of FDI in the H1 2009 made up USD 8 billion, with trade credits making up USD 20.3 billion.

Agreements have been reached with our foreign partners to attract investments within join projects: USD 13 billion has been attracted from China, USD 5 billion – from South Korea, USD 3 billion – from Russia, and over USD 2 billion – from France. These are not abstract investments: these are concrete and well-thought-through projects.

… Our agriculture has been rendered an unprecedented state support: investments grew 1.5 times against 2008.

Estimated gross grain harvest made up about 22 million tons.

… For the whole period of anti-crisis measures launched in the fall of 2007, the economy has been injected a total of about USD 20 billion.

KZT 550 billion of the funds were channeled to fund and augment net capital of the 4 largest banks.

State guarantee to depositors has been increased from KZT 700000 to KZT 5000000. This safeguard will be in place up to Jan 1, 2012 to boost the people’s confidence in the banking system.

As for the situation around Alliance Bank: the debt restructuring plan was approved by the creditors two weeks ago. As a result, external debts of the bank decreased 4.3 times to make up USD 1 billion.

The restructuring plan is being implemented without any state guarantees.

What concerns the BTA bank, the ultimate decision on its debt should be taken by December 7.

Preventing the banking system from a collapse, we removed catastrophic risks for the socio-economic development of the country.

The same is fare of the real estate market: since 2007 over KZT 564 billion has been injected to support the sector.

450 housing construction projects suspended by construction companies due to lack of financial resources and 62000 people suffering from the suspension and ready for social protest – it was a tough challenge. But we have successfully met it.

We have already 217 housing projects completed…

The program enabling people to refinance their mortgages is being effectively implemented. …

S&MBs have been also assisted: 8700 respective projects totally worth KZT 262 billion have been financed for 2007-2009.

… Another unique anti-crisis project is the Road Map [Program of Industrial Development of Country Regions]. As per President Nazarbayev’s instructions, KZT 191 billion has been channeled to finance the Program. … The overall effect of the Program is over 400000 new jobs.

The Program is to be further implemented next year. We plan to earmark another KZT 100 billion to this end. Local budgets will also contribute.

There is another important decision that we took the other day – to support the economy out of the Distressed Assets Fund. The funds will be channeled to extend loans to processing industries and participants of pre-paid construction projects…

Now let us focus on prospects.

The latest economic forecasts instill cautious optimism. …

The Kazakh Government expects economy growth of 2.4% in 2010, provided that Brent oil barrel will stand at USD 50 in 2010 and at USD 60 in 2011-2014.

… As of today, out of 223 schools and 130 healthcare facilities to be constructed in 2007-2011, 112 schools and 11 healthcare facilities have already been commissioned.

This year, another 111 schools and 80 healthcare facilities are under construction, including 60 schools and 63 healthcare facilities being constructed within the frameworks of the 100 schools, 100 hospitals Project. Out of these, 63 schools and 23 medical facilities are to be commissioned by the year end.

… I want to stress that overall budget expenses for social projects in 2010 by 0.8% of the GDP (up to 9.1% of the GDP).

… The time of record high prices for commodities has gone. It is a time for drastic measures to diversify. One of the major tasks set before the Government for the years to come is to ensure accelerated economy diversification, development of non-extraction industries.

… in November we will complete drafting an industrialization map and industrial master plans. They will be the core of the 5-year Program of Accelerated Industrial Development.

I want to dwell on another important issue – that of investment climate.

The Government is fully aware that a favorable investment climate is a solid foundation for the nation’s competitive edge. … Our goal is to put in place the best in the region conditions for doing business.

In the nearest time a package of respective measures is to be submitted for the Parliament’s consideration. Notably, for SBs, there will be a suggestion to abolish requirements to minimum authorized capital and the current requirement obliging to have a duly registered stamp. …

Plans are there to enhance protection of minority shareholders and ensure greater transparency of joint stock companies.

… When opening the 3rd session of the 4th Parliament, head of State instructed the Government to draft a Strategic Plan for the country’s development for the next 10 years. The President identified five major vectors of the country’s development: accelerated preparation for economy turn-up; accelerated diversification; forward-looking investments; high-quality public services; strengthening of the inter-ethnic accord and stability of foreign relations.

These vectors set a new vision of Kazakhstan with a diversified economy and high living standards for the population. Along each of the vectors we have almost drafted a comprehensive package of long and short-term measures to bring the President’s instructions to life.

I suggest meeting in December to detailedly discuss the draft Strategic Plan of Country’s Development up to 2020 and submit it to the President.