Politics and Macroeconomics -- Kazakhstan Weekly News

Kazakhstan's 2000 Budget Drafted

Last week the Cabinet finalised and submitted to the parliament a draft of the Kazakhstani budget for 2000. According to the government’s press service, Prime Minister Nurlan Balgimbaev called the budget "difficult but most realistic." The new budget anticipates receipts in excess of KZT 340bn or 16.8% of the GDP. Of this sum, revenues are expected at around KZT 290bn. Budget spending plus loans will total around KZT 404bn. The budget deficit, therefore, is planned at KZT 63.8bn, or 3% of the GDP. The government forecasts that the country's GDP will grow 1% to KZT 2,128bn (USD 13.6bn) next year. One of the key assumptions behind the budget figures is that the average Tenge/Dollar exchange rate will be KZT 157.0 per USD 1. Servicing the government debt in 2000 will total around KZT 46bn. (Interfax)

President Nazarbaev Criticises the Government …

Speaking at a parliamentary session that opened in Astana on 1 September, President Nursultan Nazarbaev criticised the government severely saying that Kazakhstan could have suffered far fewer losses in the past year if the government hadn’t made such serious mistakes. He blamed the government and the National Bank for what he called “tactical mistakes” in connection with the switch to a free float of the Tenge [last April]. He said, in particular, that the National Bank has failed to set up an adequate refinancing rate. He said also that Kazakhstan should have postponed launching or readjusted promptly the parameters of the pension reform in view of the threatening budget crisis. He called unjustified the government’s attempts to restrict imports in the first half of 1999 and accused the government of mishandling USD 100m earmarked to support the domestic production of import-substitutes.

…and Sets Forth Major Tasks for the Future

The president called on the government to "pay more attention to the processing industry." Specifically, he quoted investment projects in the chemical and petrochemical industries, including the reconstruction of the Atyrau oil refinery and the completion of the blueprint for a liquefied gas plant. The president urged the government to boost light industry and agriculture. He stressed the importance of strengthening the tax and customs services through their computerisation

and said that the main task of the government and local authorities should be the development of "clear and customised" programmes to combat poverty and unemployment. (Interfax & Kazakhstanskaya Pravda )

Kazakhstan's Economy Shows Signs of Improvement

Giving an assessment of Kazakhstan's economic performance in 1999 at a parliamentary session, President Nazarbaev pointed out certain signs of revival. For instance, the average monthly industrial growth reached 5.5% in June-August compared to May. Certain positive tendencies have also occurred in the agricultural sector. According to Nazarbaev, tax collection "has notably improved," with the average monthly tax receipts exceeding KZT 30bn (around USD 230m) in June-August, whereas they were at KZT 18bn (some USD 200m) in the first quarter of 1999. (Interfax)

Kazakhstan Goes Ahead With the Sale of Blue Chip Companies

The State Property and Privatisation Committee has announced a new tender to select government advisers to sell government shares in several blue chip companies. The latter include two oil producers—MangistauMunaiGas (30% to be sold) and AktobeMunaiGas (25.2%), two mining and metal producing companies—Ust-Kamenogorsk Titanium and Magnesium Plant (15.5%) and Kazzinc (27.64%), and the copper producer Kazakhmys Corporation (35%). Bids for the tender will be received until 20 September 1999. The terms and conditions of the tender are outlined at the web-site: www.kazinvest.com. (Kazakhstanskaya Pravda)

100 Years Since the Discovery of Oil in Kazakhstan

Celebrations were held on Friday to commemorate one century since oil was discovered in Kazakhstan. Oil was first located in the country in 1899 on the east coast of the Caspian Sea. The celebrations took place in Atyrau, a city of 150,000 inhabitants in the west of Kazakhstan. Today Atyrau is the base for a number of international oil companies operating in Kazakhstan. Kazakhstani government officials, western and local oil executives, as well as the governors of several Russian provinces gathered in Atyrau for three days of celebrations. "I believe Atyrau is the third capital of Kazakhstan—the oil capital. Astana is the administrative centre, Almaty the commercial capital and Atyrau is the oil capital,'' Prime Minister Nurlan Balgimbaev said, inaugurating the festival. Atyrau’s mayor, Imanali Tasmagambetov, said that Atyrau had

accounted for half of Kazakhstan's oil output this year adding that 8.2 million tonnes had been drilled this year compared with last year's 11 million. The Atyrau region’s oil reserves are estimated at 23 billion tonnes, he said. (Golden Eagle Partners)

President Nazarbaev Calls on Foreign Investors to Follow Contracts

Visiting the city of Atyrau for the celebration of the 100^th anniversary of Kazakhstani oil last week, President Nazarbaev met with the heads and representatives of foreign oil companies operating in Kazakhstan. He said that he had only one request of foreign investors— "to comply with the terms and obligations of their contracts." He mentioned, in particular, that Chevron had committed to build a polypropylene pipe plant, and Philips Petroleum Co. had committed to build a liquefied gas plant. Also, Agip and British Gas pledged to construct a plant to process the gas and gas condensate they recover from the Karachaganak oil and gas field. The president called on investors to be "more active" in the issues of Kazakhstani oil transportation. In this connection he called the Caspian Pipeline Consortium's project (the construction of an oil pipeline from Kazakhstan's largest oil field, Tengiz, to the Russian sea port of Novorossiisk) "Kazakhstan's primary hope." Nazarbaev also reported that Kazakhstan will continue working on a pipeline project to carry oil from Western Kazakhstan to China, for which a general agreement with China was concluded in 1997. He proposed that a council of investors be established under the Kazakhstani government to assist it in selecting optimal oil transportation routes. (Interfax)

Government Reshuffling

According to a governmental decree dated the 31^st August 1999, Dulat Kuanyshev replaced Anvar Saidenov in the post of chairman of the Kazakhstani Investment Agency. Anvar Saidenov was appointed vice finance minister. (Kazakhstanskaya Pravda)

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