Implementation of tasks given at expanded government session by Head of State in focus

The Kazakh Government has approved an action plan to implement the tasks of the Head of State given at the 15 July 2019 expanded Government session. These tasks center on raising the wellbeing of the people and enhancing the economy.
Nur-Sultan23 July , 15:08

In his report, Chairman Yerbolat Dosayev of the National Bank of Kazakhstan said that continuous crediting of businesses holds back the debt load and insolvency of some enterprises in the real economy sector.

To make sure the economy has affordable loans, the National Bank improves the mechanism for providing the banks with long-term funding to credit the economics of simple things.  

He also recalled that under the mechanism approved by the Bank for writing off fines and penalties levied on unsecured consumer credit, the banks and microfinancing organizations would forgive arrears on penalties.  

In the wake of the agreement between the banks, microfinancing organizations and the Difficult Credit Fund, the latter is due to recover 30% of the forgiven arrears on written-off fines and penalties until 20 August this year.

“To avoid systematic issues and an uncontrolled increase in arrears of citizens in the future, the National Bank is about to adopt necessary legal and regulatory acts to regularize credit subjects, including online creditors, credit associations, pawn shops, by the end of this year,” said the National Bank Chairman.

He added that the law on the bank, banking laws and laws on micro-crediting organizations are about to be amended so as to ban penal damages, fees as well as other penalties on loans with long-outstanding arrears of over 90 days.

The National Bank Chairman also said that in order to complete the banking sector’s recovery, the Bank will conduct an independent asset quality study in the second half of this year using international standards. It will include foreign experts.

“Given the risk-based oversight and the conducted asset quality assessment, new approaches toward ensuring stability and development of the Kazakh banking sector will be developed,” he said.

To promote transparency and confidence of citizens and businesses regarding the ongoing currency policy is among the main objectives of the National Bank.

“Some measures have by far been taken, including the lengthening of trading days on the KASE as well as the rolling-out of cross exchange rate sessions so as to make sure participants have access to trading, allowing for broader opportunities for foreign participants when stated in the tenge,” he stated.

According to him, information about all the transactions made in the past month, including currency intervention, is disclosed.  

Guidance on future actions relating to the base rate as well as signals on the stance of monetary and currency policy are in place.

In his part, Kazakh Finance Minister, Deputy PM Alikhan Smailov said that in order to enhance the effectiveness of and control over a social and economic return for state funds spent, social spending has risen to almost 2 trillion tenge in the last two years making up 52% of the State budget expenditures.

There was the adoption of the repayment rules for unsecured consumer credit in the second-tier banks and micro-financing organizations regarding the citizens in difficulty as of 1 June 2019. To that end, in 2019 the republican budget provides 88.5 billion tenge as well as 707 million tenge for covering fees for payment services.

“The National Bank Board has submitted a mechanism for cancelling fines and penalties levied as of 2 July 2019. And, the Difficult Credit Fund will issue obligations for 17.5 billion tenge that will be then placed in favour of the Sustainability Fund,” said Alikhan Smailov.

In the near future, it is planned to come up with a legal framework in terms of the performance of strategic plans in which budget programmes’ administrators are about to argue in order to prove the need for the funds being allocated, taking into consideration targets influencing further development of a particular sector and the country.

When considering budget requests, an emphasis will be placed on a social and economic effect enabling to raise the quality of budget funds’ utilization.  

As for the implementation of “popular participation budgets,” in 2018 the Governor’s Office of the Saryarka district in Nur-Sultan rolled out the pilot project “participation budget,” allowing each citizen to take part in allocating the funds of the local budget for 500 million tenge. The same approach is due to be implemented in Almaty.

The measures aimed at increasing transparency and effectiveness of public procurements are adopted, with a focus on upskilling suppliers, supporting domestic producers as well as ensuring transparent procedures. A model for centralizing public procurements, rolling-out online procurements – shops and through framework agreements is also being worked out.

In his speech, Kazakh Prime Minister Askar Mamin said that the Head of State had given the tasks aimed at improving the wellbeing of the population and the economy.

He outlined that the Government’s main objective is to raise the life quality standards and the income of the population, create new jobs and bring investments.

“In order to develop the social sphere, certain concrete measures will be taken, including the clear and transparent procedures for providing social support to those in need and unified approaches toward a guaranteed amount of social support to citizens,” he said.

In education, an action plan to provide education and science with full funding will be worked out, and work to reform school and vocational training is under way.

“To engage the population in forming budgets, the project “popular participation budget” will be launched in a pilot mode,” said PM Askar Mamin.

This session has approved an action plan to implement the tasks of the Head of State given at expanded Government session on 15 July 2019.

“The action plan has to be implemented in a full and proper way,” the Prime Minister underlined, adding that the Government’s Project Office will be the main mean to monitor and facilitate to the tasks and election platform of the Head of State.

Author: Adlet Seilkhanov