THE RIGHT TRAJECTORY

Kazakhstan 2018 | DIPLOMACY | INSIDE PERSPECTIVE

Nursultan Nazarbayev, President of Kazakhstan, on areas of growth, the need for a sustainable future, and the 20th anniversary of Astana as the capital.

Nursultan Nazarbayev
BIOGRAPHY
Nursultan Nazarbayev began his working career in 1960 at the Karaganda Metallurgical Industrial Complex. He entered politics in 1969 in the Karaganda region. In 1979 he worked as Secretary for the Central Committee of the Communist Party of Kazakhstan. In 1984 he then became Chairman of the Ministers Council. Between 1989 and 1991 he served as the First Secretary of the Central Committee of the Communist Party of Kazakhstan and Chairman of the High Council of Kazakhstan. He has served as the President of Kazakhstan since the nation received its independence in 1991.

In 2017, Kazakhstan became a non-permanent member of the UN Security Council. We also became the first state among the countries of the CIS and Eastern Europe to be chosen by the world community to host Expo 2017. A successfully functioning model of a market economy has been built in Kazakhstan. In 2017, the country, having overcome the negative consequences of the global crisis, returned to the trajectory of strong growth. At the end of the year, GDP growth was 4%, and industrial production grew by more than 7%. In addition, the processing sector exceeded 40% in the total volume of industry. Kazakhstan's successful development has allowed the formation of a middle class.

The era of “oil abundance" is almost coming to an end. The country needs a new quality of development. Global trends show that it should be based primarily on the broad implementation of Fourth Industrial Revolution (Industry 4.0) elements. This brings both challenges and opportunities. I am confident that Kazakhstan has all the necessary attributes to join the ranks of leaders in this new world. Industrialization should become the flagship of the introduction of new technologies. Its results became one of the main stabilizing factors in the crisis years of 2014-2015, when oil prices fell sharply. Therefore, the focus on the processing sector with high labor productivity remains unchanged. At the same time, industrialization should become more innovative, taking advantage of Industry 4.0. It is necessary to develop and test new instruments aimed at modernizing and digitizing our enterprises with a focus on exporting products. They should primarily stimulate the transfer of technology. A pilot project on the digitization of several of Kazakhstan's industrial enterprises should be implemented, and then this experience should be widely expanded. The most important issue is the development of our own ecosystem of developers of digital and other innovative solutions. It should take shape around innovation centers, such as the Nazarbayev University, the Astana International Financial Centre (AIFC), and the International Technology Park of IT Startups. The main factors for the success of the innovative ecosystem are stimulation of the demand for new technologies by the real sector and the functioning of the private venture financing market. In addition, the development of IT and engineering services is of particular importance. It is necessary to adapt education, communication, and standardization systems to the needs of the new industrialization. In 2018, it is necessary to begin the development of the third five-year industrialization period devoted to the emergence of digital-age industry.

The world of the 21st century still needs natural resources, which will have a special place in the development of the global economy and the economy of our country in the future. It is necessary, however, to critically rethink the organization of commodity industries and approaches to the management of natural resources. It is necessary to actively implement integrated information and technology platforms. Expo 2017, held in Astana, showed rapid progress in the sphere of alternative and clean energy. Today, renewable energy sources (RES) account for a quarter of the world's electricity production. According to forecasts, by 2050 this figure will reach 80%. We have set the goal of increasing the share of alternative energy in Kazakhstan to 30% by 2030. Today, we already have 55 renewable energy facilities with a total capacity of 336MW, which generated about 1.1 billion kWh of green energy in 2017. It is important to stimulate business and to invest in green technologies. Regional governors should take measures on the modern disposal and recycling of solid domestic waste with the broad involvement of small- and medium-sized enterprises. These and other measures will require the updating of legislation, including the Environmental Code.

Smart technologies are a chance for a breakthrough in the development of the agricultural industry. The agrarian policy should be aimed at a radical increase in labor productivity and growth in exports of processed agricultural products.

It is necessary to ensure the processing of raw materials and enter world markets with high-quality end products. The development of agrarian science is a priority and requires significant attention. It should focus primarily on the transfer of new technologies and their adaptation to domestic conditions. The state, together with the private sector, should find strategic niches in international markets and promote domestic production in these areas. Intensification of agriculture should take place in line with the preservation of quality and mindful of the ecological compatibility of products. This will create and promote a brand of natural food products. “Made in Kazakhstan" should become recognizable across the world. It is necessary to overhaul ineffective subsidies to reduce the cost of bank loans for agribusiness entities. I therefore gave the order to ensure the increase of labor productivity in the agro-industrial sector and the increase of the export of processed agricultural products by at least 2.5 times within the next five years.

Today, several transcontinental corridors pass through Kazakhstan. In general, the transit of goods through Kazakhstan in 2017 increased by 17% and amounted to almost 17 million tons. The task is to bring annual revenues from transit in 2020 to USD5 billion. This will make it possible to return the funds spent by the state on infrastructure within the shortest possible timeframe. It is necessary to ensure the large-scale introduction of digital technologies, such as blockchain, to track the movement of goods online and to ensure their unhindered transit, as well as to simplify customs operations. Modern solutions allow us to organize the interactions of all links of the logistics chain. The use of big data will help provide high-quality analytics, identify areas of growth, and reduce excess costs. To achieve this, it is necessary to introduce an intelligent transport system. This will allow us to effectively manage transport flows and determine the requirement for further infrastructure development. To improve intra-regional mobility, it is important to increase funding for the repair and reconstruction of the local road networks. The total budget allocated annually for this should be increased to KZT150 billion in the medium term. It is necessary to ensure the active participation of all regional governments in this work.

2018 is the 20th anniversary of our capital, Astana. Its formation as one of the most important centers of Eurasia's development is a source of common pride. Modern technologies provide effective solutions to the problems of a fast-growing metropolis. It is necessary to introduce comprehensive management of the urban environment based on the smart city concept and the development of competences of those people moving to the city. The world has come to an understanding that it is cities that compete for investors. Therefore, based on the experience of Astana, it is necessary to form a benchmark standard for a smart city and start expanding best practices and an exchange of experiences between the cities of Kazakhstan. Smart cities will be the engines of regional development, spreading innovations and improvement to quality of life throughout the country.