Kazakhstan in 2016: Edge Takes a Look at the Kazakh Year to Come

By Yerbolat Uatkhanov

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The year 2015 was definitely not an easy one for the Kazakh government and citizens: several devaluations and the drop in oil prices hurt the economy. The circumstances occurred in conjunction with the Ukrainian and Syrian crises and, in the background, strained situations between Russia and Turkey with aftereffects in the form of various types of sanctions. Add to that the fact that these events have lingering consequences and an effect on all social groups and state programmes. At an enlarged meeting of the government on Nov. 18, Kazakh President Nursultan Nazarbayev said the crises give Kazakhstan new opportunities to restructure its economy, noting taking steps towards competitive growth is, in many cases, met with a mixed reception.

“Every reform is a problem for leaders,” he said. “But a brave leader takes on challenges, because the resulting changes lead to people’s benefit.”

His comments posed the question of the ways in which the government will face those challenges in 2016.

The healthcare system achieved excellent results in recent years as a result of the Salamatty Kazakhstan national programme, which was started in 2011 and will be completed by the end of 2015, according to the Ministry of Healthcare press service. To be more exact: the life expectancy index increased from 70.4 years in 2013 to 71.62 years in 2014; maternal mortality index was reduced by half in 2014 compared to 2010 (2010 – 22.7 per 1000, 2014 – 11.7 per 1000, first 9 months of 2015 – 11); child mortality index decreased 1.7 times (2010 – 16.5 per 1000, 2014 – 9.72, first 9 months of 2015 – 9.49) and total mortality index declined 14.7 percent (2010 – 8.97, 2014 – 7.57, 9 months of 2015– 7.69). The mortality index for cancer decreased 15.7 percent; tuberculosis, 2.3 times, and traumatism, 15.3 percent. The achievements in healthcare were quite impressive.

Further development of medical and sanitary aid as the central element of state healthcare is one of the Ministry’s top priorities. It determined that development of a healthcare system which promotes the health of healthy people and advocates preventive measures and early disease intelligence is the most efficient way to deal with the issue. Flexibility will also be one of the advantages of the new healthcare system. It will be achieved through a phased transition to family service, which will provide monitoring the healthcare of every person during his or her lifetime, taking into account all constitutional peculiarities specific to aging.

Nazarbayev launched an initiative to create a social medical insurance system which will be financed by the state, employer and employee. The programme will be implemented on a phased basis and provide several channels of financing, financial stability and shared responsibility of all participants in the healthcare system. The next year is considered to be very important for developing the national informational healthcare system, which includes implementing electronic health passports for all citizens. The passports will become a very useful tool for everyday healthcare coordination.

The Ministry of National Economy press service reported that in the medium term, the priority of its policy will be austerity of budget funds and an increase of government expenditure effectiveness. An efficient cost saving of budget funds will be achieved through investments to the projects with high social and economic returns.

Plans are also underway to continue investing in all major projects under the Nurly Zhol successprogramme, including construction of 11 roads in different regions of the state, the Borzhakty-Yersai railroad and ferry line in Kuryk harbour. Nurly Zhol is a very important programme created to develop the infrastructure of the state and decrease the unemployment level, but it isn’t the only one. Development of the service industry and entrepreneurship programmes is also anticipated to strengthen an economy facing challenges in the next year.

The industrialisation programme will also be financed. The Ministry plans to begin operation of a railroad wheels plant and extracted acid production plant in 2016.

Taking into account the oil price forecast of $40 per barrel, real economic growth is expected to be 2.1 percent in 2016, with the GDP per capita recalculated at approximately $8,500 (it hovered around $12,500 in 2014-2015. The Ministry of National Economy plans to keep the inflation level at 6-8 percent and the unemployment level not to exceed 5 percent.

In connection with the tricky situation in the world economy and transition of the Kazakh economy to inflation targeting, the government will take the most effective and reasonable measures to soften the social effect and prevent economic stagnation. In 2016, the government hopes to save the positive development rate and social stability, providing the necessary employment level and stimulating economic growth. There are also plans to continue economic diversification and development of its competitive ability.

The Ministry of Energy does not consider the following year a special one in the field, as it plans to continue working on state policy in the oil and gas sector, transportation of hydrocarbon crude, electric energy, coal industry, nuclear energy and development of renewable energy sources, reported the Ministry press service.

The Ministry plans to implement projects to maintainthe already-achieved level of oil and gas production: Tengiz site expansion, Karachaganak and development of the Kashagan site and Eurasia project.

The Atyrau, Shymkent and Pavlodar refineries will be modernised under the State Programme of Accelerated Industrial and Innovative Development to provide high-quality diesel fuel and gasoline for the state’s internal market. Plans are underway to finish the modernisation by the end of 2017 and enable improved raw material processing and launch the production of Е-4 and Е-5 ecological class fuel.

Gas KazakhstanDevelopment of gas production and the delivery field is also very important. In 2016, the Ministry of Energy plans to increase gas production and improve the stability of the gas supply system in the regions. The third line of the main gas pipeline, which starts in Turkmenistan and passes through Uzbekistan and Kazakhstan to China, will be constructed in the next year, with plans for completion by 2017. The construction works at the Beineu-Bozoi gas pipeline will be continued in 2016, with the expectation it will also be operational in 2017. The abovementioned gas pipelines will help diversify export routes of Kazakh gas to China and ensure safety of the energy supply in Kazakhstan, delivering natural gas from West Kazakhstan to the southern regions and decreasing dependence on imported natural gas.

The Ministry will continue next year with construction of the Balkhash thermal electric power station and reconstruction of the existing power stations. Moreover, the state’s electric grid will be seriously modernised, because development of the energy infrastructure is considered to be a government priority in 2016. A good example is the construction by KEGOC of 500-kilowatt power line from Northern to Southern Kazakhstan under Nurly Zhol.

Up to ten renewable energy plants will be launched in 2016. The biggest project is a 53.75-kilowatt wind power station in the Kordai district of Zhambyl region.

Kazakhstan obviously must face big challenges in 2016, but it seems the government has an action plan and is encouraged by its own people to face all those challenges and solve many of the problems.

 

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