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August 31, 1998
Kazakhstan to Switch Economic Base to Manufactured Goods
During a visit of Kazakhstan's giant steal production plant, Ispat-Karmet, President Nursultan Nazarbaev said that Kazakhstan would be switching its economic priorities to production of manufactured goods instead of the production of mostly raw materials. He disclosed that the government is currently working on an industrial development programme to encourage local manufacturing of durable goods. While favouring domestic production of manufactured goods, the president said that it would be wrong to close Kazakhstan's markets for foreign imports. He emphasised that Kazakhstan's manufacturing industry "must learn to work under severe competition and to enter global markets" (Interfax)
NBK: Kazakhstani Financial Markets Remain
Stable"Kazakhstani financial markets remain stable despite the challenging situation in Russia", said Batyrbek Alzhanov, the Director of Monetary Operation Department of NBK (the National Bank of Kazakhstan) to Reuters. The demand for hard currency grew notably in
recent days with traded volumes increasing to US $7-8m from usual US $3-5m. However, according to Mr. Alzhanov, this has been attributed to the increased cash currency operations. He said in addition that, given the situation in Russia, Kazakhstani banks are holding on to hard currency in expectation of higher rates of the Tenge devaluation. The overnight rates have reached 25-26% from 12%.According to NBK, the proportion of non-residents in the government securities market has decreased to 9.5% from 14.8% in early summer. NBK explained
that investors have migrated to the Kazakhstani Eurobond market where the average yield is about 22.0% compared to that of 19% for 6-month T-bills . (Reuters)The GDP Growth in 1998
According to President Nazarbaev, Kazakhstan is expecting
a 2% GDP growth in 1998. The average wage has grown by 9% over the past 7 months. Individual deposits in Kazakhstani banks have increased by KZT31bn (some US$39m).Tax collection figures have exceeded those of the last year. According to President Nazarbaev, this allows Kazakhstan to pay timely pensions and as well as pay back wages to teaches and doctors by the year-end. (Interfax)Oil Production to Increase in 1998
During a recent visit to the oil fields in Western Kazakhstan, Prime Minister Nurlan Balgimbaev told journalists that Kazakhstan intended to increase its oil production in 1998 by 1 ¼ million tonnes, approximately 5% more than in 1997.He said that oil accounts for 30% of Kazakhstan's budget revenues and "once the price of oil is up we will increase oil production." He noted that Kazakhstan is capable of recovering 220 million tonnes of oil per year, according to proven reserves, but future oil production is dependent upon the global market situation at that time.(Reuters)
Tax Incentive Procedures for Investors
The State Investment Committee has issued a resolution to facilitate procedures for investors seeking tax incentives. The resolution suggests a standard approach to investment projects valued at not more than US $10m provided that the projects relate to priority sectors. Projects with a value of more than US $10 million will be tackled individually. Tax incentives will include exemption, full or partial, from the VAT, land tax, and tax on property for a period of up to 10 years. (Interfax)
Five Regional Electric Power Companies to Be Sold
Of the existing 15 regional electric power companies (REKs), the Kazakhstani government intends to sell 5 through bankruptcy by the year-end
, according to Mukhtar Ablyazov, the Minister of Energy, Industry and Trade. The minister didn't disclose the names of the REKs to be sold, but did say that the government is currently working out a resolution to regulate the sale. Both foreign and local companies have shown interest in the REKs, but it is too early to say which companies might submit bids. Mr. Ablyazov would like to see "large companies who have funds and are familiar with the Kazakhstani energy market," submit bids. (Interfax)Kazakhstan Weekly News is also available free of charge on E-mail. To subscribe via E-mail, please contact us on Lydia@kazks.kz or Madina@kazks.kz.
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