Home First President Leader of the Nation The innovative style of management Nursultan Nazarbayev and Kazakhstan model of construction of the state (historical aspect)

Nursultan Nazarbayev and Kazakhstan model of construction of the state (historical aspect)

19 October 2016
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Realization of Strategy of development "Kazakhstan-2030" was directed on achievement of high rates of economic growth, macroeconomic stability and creation of conditions for transition to model of sustainable economic development. The strategic planning offered by Nursultan Nazarbayev, was focused on increase of economic competitiveness of Kazakhstan. Making use of experience of the advanced countries and the Kazakhstan realities, the President continued to strengthen a state role in this question. It meant that under its management planning results regarding its realization were annually carefully analyzed and further were corrected taking into account a developing internal and external situation.

For Kazakhstan actual there was a question of improvement of own economic model of further development. On the basis of experience of the developed countries of the world, Nursultan Nazarbayev continued studying of existing two main models of formation of economy which drew its attention: Anglo-American and germano-Japanese, each of which possessed the advantages, had own history of development and formation.

The Anglo-American model of development, in essence was the most liberal model and was based on the minimum participation of the state in the main macroeconomic processes and the relations within the country. Such strategy first of all, was based that neither the USA, nor Great Britain actually had no wars in the territory of the states and therefore the economy of these countries didn't need basic changes and restoration. Investments and stock market in Anglo-American model mainly belonged to securities market. The overflow of the capitals in branch came from branch thanks to the developed system of financial instruments and their sale-purchase at stock exchange.

From Anglo-American model the germano-Japanese model of economic development had radical differences. It had chance to dominate in world economy of the XXI century. The history of formation of this model leaves in the 40th years of the XX century when economy of these countries appeared in very deplorable condition owing to defeat in World War II. Formation of the state budget of these countries was directed on surplus of the budget and reduction of external loans. Besides Germany and Japan Singapore, Taiwan, Malaysia, South Korea, and also some East European countries had described model of development. The tough policy and control over development of the economic relations within the country became a distinctive feature of development of these countries. In a counterbalance to the developed securities market, the germano-Japanese model had the banking sector which allowed to make investments as within the country, and beyond its limits.

Studying of economic revival of many countries of the world gave understanding to the Kazakhstan leader that experience of germano-Japanese model more approaches to conditions of our republic. And it isn't accident. After disorder of the Soviet Union and socialist system of planning when the main economic economic relations were lost, Kazakhstan appeared practically in the same situation, as post-war Germany and Japan. Having studied theoretical postulates of model, Nursultan Nazarbayev continues development of the Kazakhstan economic concept of breakthrough development. According to the Head of state, innovative break in the field of economy was possible only thanks to efforts of the state as any, even very large, the company wasn't able to enter independently a foreign market of the knowledge-intensive production and to be fixed on it. It was necessary to begin with creation of state programs, development of innovative system, scientific and technological base, the human capital. It was faced by a task to carry out break on the international market in three directions: competitive innovative products, competitive services and macrotechnologies.

During reflections and practical realization of economic reforming the President comes to a clear understanding that the economic model of development has to decide by transformation of the state into "engine" of economic growth, creation and removal of the large backbone companies on state participation on regional and world level.

In 2000 national economy is ready will make a new round in the development. Transformation of model assumed active participation of the state in formation of the economic and political conditions stimulating creation of multinational corporations, capable to compete in the conditions of the market both within the country, and abroad. Process of formation of export-oriented model of development began.

By 2003 in the country, structural reforms in economy were generally complete: privatization of state ownership is carried out; the economic environment adequate to standards of the developed market is created. Kazakhstan among the first participating states of the CIS was recognized as the developed states the country with market economy.

2003 marked country transition from the solution of tactical tasks in economy branches to the strategic. Nursultan Nazarbayev supported Strategy of industrial and innovative development for 2003-2015, aimed at diversification of economy and overcoming of dependence of the country from a raw factor. Within this strategy the first steps directed on active restructuring of the industry and giving of innovative character to economic development of the country, creation of a favorable business environment, development of processing production, increase of competitiveness of economy were carried out. The state institutes created according to Strategy of industrial and innovative development, were allocated with sufficient financial resources to credit investment projects, and also partially to participate in an authorized capital of the created enterprises.

The following tasks were set for the accepted Strategy: increase of productivity of fixed assets of manufacturing industry; создание of enterprise climate, structure and maintenance of the industry; public institutes which will stimulate the private sector to make and improve competitive advantage and to master elements in a chain of a value added in concrete productions, moving ahead to elements with the greatest value added; stimulation of creation of the knowledge-intensive and hi-tech and export-oriented productions; diversification of an export potential of the country in favor of goods and services with a high value added; transition to the international standards of quality; strengthening of integration into regional economy and in world economic system with inclusion in world scientific and technical and innovative processes.

Realization of Strategy was planned in three stages. The first stage – – was characterized 2003-2005 by creation of the state institutes of development. The second stage – – was directed 2006-2010 on creation of the main preconditions and conditions of achievement of the purposes set by Strategy and tasks. And the third stage – – assumes 2011-2015 national economy transition to service technologically level and achievement of the following results: increase in gross domestic product approximately by 3-3,5 times in comparison with 2000; finishing of average annual growth rates in manufacturing industry to 8,4%; labor productivity growth in comparison with 2000 not less than by 3 times, and also decrease in power consumption of gross domestic product twice; to increase the specific weight of services of scientific and scientific and innovative activity in gross domestic product structure to 1,5%.

These measures allowed to observe high growth rate of production, sharp reduction of unemployment and increase of the real income of the population. Same 2003 the State program of development of oil fields and gas on the Kazakhstan site of the Caspian Sea for the period till 2015 was accepted.

These documents - Strategy of industrial and innovative development for 2003-2015 and the State program of development of oil fields and gas on the Kazakhstan site of the Caspian Sea for the period till 2015, defined work strategy in the field of formation of model of a sustainable development of economy. In addition to them a number of programs and the acts directed on increase of competitiveness of the Kazakhstan economy was accepted, including: formation and development of national innovative system; deepening of social reforms; microcredit development; development of housing construction; securities market development; development of the industry of construction materials, products and designs; development of road branch for 2006-2008 and others.

Work on creation of conditions for development of the non-oil branches serving oil and gas production, and also on use of part of the state income gained from export of oil, for structural updating of national economy was at the same time carried out. For this purpose Nursultan Nazarbayev aimed primary activity of the government at creation of stimulating conditions for development of new types of non-oil goods and services in the private sector.

Work on diversification of structure of economy and increase of competitiveness of non-oil branches was directed on improvement of technical requirements to production and trade, on increase in budgetary appropriations in development of infrastructure, education, science, innovations, a transfer of new technologies and health care, that is on development of the human and production capital.

At the same time with it the Head of state didn't lose sight also of a question of creation of steady financial and tax and budgetary system. He considered that activity of the government has to be concentrated on development of the system measures, allowing to provide further decrease in inflation, creation of conditions for medium-term and long-term crediting of investment projects, and also on ensuring stability of the budgetary system to sharp fluctuations of the world prices for oil, creation of conditions for development of branches of non-oil sector.

In this regard, it supported formation of National Fund Kazakhstana and Development bank of the Republic of Kazakhstan; carrying out amnesty of money; adoption of laws on financial leasing, about construction savings, about mortgage lending, about insurance activity, and also the tax code.

One of the main priorities of economic model was development of small business. It allowed to use the flexibility, mobility, market objectivity for the accelerated search of the place in innovative economy. Nursultan Nazarbayev considered that this priority will allow to create favorable conditions for realization of initiatives of the enterprise environment and will aim the help at those enterprises of small business which have the greatest potential from the point of view of the competitiveness and increase of scientific and technological capacity of the country.

This concept was considered as a transitional stage to new economic model on support and development of small business on the basis of cluster and network approach and new ideology of relationship of the state and business.

In 2005 realization of Strategy of industrial and innovative development of RK for 2003-2015 allowed to create the competitive environment in some segments of domestic market (financial sector, consulting, insurance, etc.). However the main source of economic growth of Kazakhstan there was the raw sector, developing advancing rates and accumulating the most part of investments.

2006 gave a huge impulse to reforms in the country, having become the beginning of a new stage in Strategy realization "Kazakhstan-2030". Nursultan Nazarbayev made the decision to increase competitiveness of the Kazakhstan economy on a complex basis, on a wide range of the directions. By key spheres of the state support were defined: construction sector, financing of small business, maintenance of food security. So, for the solution of a question of share construction to builders it was allocated through banks of the second level of 184,7 billion tenge. For maintenance of business activity of small business financing for the sum about 155 billion tenge was provided. For development of agro-industrial complex and ensuring food security it was allocated with 135 billion tenge. In total from the state budget it was allocated about 550 billion tenge.

As a result of reforms large hi-tech macroprojects which started changing gradually industry and export structure started taking root, created 30 corporate leading companies, competitive in the world market.

Since 2007, creation of industrial and innovative model of economy (development of processing sectors of economy) becomes priority in Nursultan Nazarbayev's policy. In this regard he considered that it is necessary to create a full cycle of production in the following industries: metallurgy, production of construction materials, food and textile industry; providing a sustainable development of agro-industrial complex, formation of processing base; creation of conditions for massive inflow of investments to non-oil branches of economy, especially in development of hi-tech, knowledge-intensive productions, modernization of capacities of the domestic processing enterprises, development of the service sphere; creation of the effective mechanism of work of institutes of development, their interaction, complementarity, increase of transparency of their activity; to lay the foundation in formation of the leading cities, the basic cities being "poles" of growth in regions; to win own "niches" in the market of Russia, China, Central Asia, the Caspian and Black Sea regions on the Kazakhstan brands.

Realization of the planned transformations in the economic sphere showed that in 2007 by the gross domestic product size per capita Kazakhstan on classification of the World bank was included into the top group of the countries with the average level of the income and in the list from 211 countries of the world moved on the 88th position, having overtaken such countries as Serbia, Bulgaria, and closely came nearer to such countries as Turkey, Brazil, Malaysia. Achievement of high rates became possible thanks to harmonious work of all branches of economy. High growth rates were reached as in production of goods, and services. The fastest rates manufacturing industry, construction, communication services and financial services grew besides mining branch.

Further reforming of economy gradually changed the Kazakhstan model, having given it striking traits: control over economy was exercised from the state not represented by the government, and represented by the large state companies, and also the companies with the state participation; the complex market of the capitals in the person of equal and complementary sectors – bank and securities market was created.

Thus, the economic model of Kazakhstan of the pre-crisis period was estimated by many experts as rather successful. Carrying out fast and resolute reforms allowed to create really functioning market economy, to carry out many successful transformations of institutional character. Positive results were yielded by reforms of public administration, provision of pensions, a financial system, the housing-and-municipal sphere. The Kazakhstan economy came to a sustained economic growth trajectory which was characterized by high rates and didn't interrupt since 1998. On many positions Kazakhstan advanced other CIS countries, and on some (to the volume of foreign investments, growth rates of gross domestic product) entered into number of world leaders.

At the request of the President on November 25, 2008 the Government of Kazakhstan developed and approved the Plan of action on stabilization of economy and financial sector for 2009-2010 (further – the anti-recessionary program). Efficiency of such step from Nursultan Nazarbayev was explained by that in world economy Kazakhstan felt crisis consequences as one of the first on space of the CIS. The country more than other states of the Commonwealth was integrated into the world community. This factor remained dominating for the economic growth of economy. So, on volumes of the mastered direct foreign investments per capita Kazakhstan – the unconditional leader among CIS countries. During independence in economy of the republic it was attracted more than 70 billion US dollars of direct foreign investments. These are 80% from all investments attracted to Central Asia.

In the working records made by Nursultan Nazarbayev in operating time over the text of the Message to the people of Kazakhstan "Through crisis to updating and development" (on March 6, 2009) he wrote: "There are two ways: or we sit and passively we look how crisis destroys, or actively through crisis we work for the future. That is if losses from crisis are inevitable, destructive forces it we direct to release from all unnecessary. We expand sites for construction of the new. … We put forward idea of the plan of radical updating as much as possible to use the opportunities opened by crisis. Let's act, and we will win".

As a whole the anti-recessionary program provided injection in economy of Kazakhstan about 2,2 trillion tenge that made about 20% of gross domestic product of the republic, also 10 billion dollars. The USA from National fund which, accumulated the income from export deliveries of oil and gas resources to the world markets. As a whole it testified to exclusive importance for Nursultan Nazarbayev of adoption of this document which provided a further sustainable development of Kazakhstan.

On behalf of the state the National welfare fund "Samruk-Kazyna" which main task was assistance to development of the Kazakhstan economy in the conditions of global crisis with attraction of financial resources of national institutes of development acted. In 2008 for capitalization of Fund of stressful assets from the republican budget the first tranche it was allocated with 52 billion tenge. In 2009 authorized capital of Fund was equal to 122 billion tenge.

The second important direction of the anti-recessionary program were problems in the real estate market. The state allocated 5 bln. dollars of the USA (3 billion US dollars – from National fund, and still potentially 2 billion – from pension system).

And at last, for implementation of innovative, industrial and infrastructure projects from National fund it was allocated with 1 billion US dollars. In 2009 the foreign investments attracted on these purposes made 3 billion US dollars. In 2009-2011 the world rating of competitiveness of the country was on the 72nd place.

Kazakhstan, solving the problems which have been given rise by a world economic crisis, I gained the corresponding experience. In conditions when external sources of financing were closed, strategic approaches were developed and the decisions which are based on own opportunities and resources were made. It gave to confidence of further forward development of the country. The measures offered by Nursultan Nazarbayev allowed Kazakhstan to resist threats of globalization and to leave crisis, having qualitatively new level of development.

As a result in 2007-2008 in Kazakhstan economy growth proceeded — the gain of gross domestic product averaged about 4%. Low unemployment rate remained and didn't exceed 7%. The rate of inflation made no more than 10%. The trust to a banking system remained: economy crediting by banks of the second level remained at the level of the end of last year, and deposits in banks in ten months 2008 increased almost by 21,8%, including population deposits — for 2%.

Total amount for November 1, 2008 of stocks of gold and foreign exchange reserves and National fund made more than 47 billion US dollar. The size of a public debt didn't exceed 1,5% of gross domestic product, the budget deficit was at a low level and didn't exceed 2% of gross domestic product.

Thus, despite world financial and economic crisis, Kazakhstan accepted a new call — as possibility of improvement of economy and creation of bases for its effective functioning in the future. Crisis helped to bare limits of development of former model of the economic growth hoping for favor of "an invisible hand of the market", a dominant position of oil production and a considerable distortion towards the trade and intermediary operations which further reproduction was inefficient and threatened still with big deepening of the crisis phenomena.

Becoming more active and growing globalization which considerably changed the principles of the organization of business and views of efficiency of development of the country and its economy, compelled the Head of state to make the decision which he sounded in May, 2009 at extraordinary XII congress of NDP "Nour Otan".

The head of state set a strategic objective for all institutes of public administration - to replace model of economic development of Kazakhstan in the next five years. In a general view the triad of the development appeared: the future project – crisis of former formats of activity – "switching" in a new situation. This model assumed a position of the designer who set contours and an image of future situation. In Kazakhstan the function connected with development of the project of the future, strategic reorientation of system of public administration, was carried out by the Head of state.

The plan assumed carrying out a five-years period of the forced industrial and innovative development of the country, creation of the economy focused on internal consumption since January first, 2010.

One of priority problems of a five-years period of post-crisis development consisted in significant increase in a value added, capitalization of business assets of a number of key industries of economy. It is agrarian and industrial complex and agricultural processing, the construction industry and production of construction materials, fuel and energy complex (oil processing and infrastructure of oil and gas sector), metallurgy and production of finished metal products, the chemical, pharmaceutical and defensive industries, power, including development of pure power, transport and telecommunication infrastructure.

Design of new, more competitive scheme of the organization of activity of the population which would provide necessary transition to the following phase of social development became a priority of the Head of state. The methodology of carrying out public changes was for this purpose developed, the "switching" infrastructure in the future is created, the echeloned system of transitions to more effective system of activity is built. The main operator of this process I acted as JSC FNB Samruk-Kazyna together with the republic government. It was offered to them to develop the following administrative tools: the scheme of territorial and spatial development of the country and the Card of rational placement of the capacities, urged to provide coherence demographic, migratory, town-planning and other the politician.

As key elements of this infrastructure six special economic zones which could become a place of concentration of new technologies acted: "Seaport Aktau", "Astana – the new city", "Park of information technologies" (management company – Alatau IT City Management LLP), "Оңтүстiк", "National industrial petrochemical science and technology park" and "Burabay".

On their base industrial parks in Astana, Temirtau, regional technological zones in the cities of Almaty, Karaganda (Tekhnopark UniScienTech LLP) and Uralsk (Science and Technology Park Algoritm LLP) began to be created. During activity of science and technology parks arrived about 280 design offers issued in a free form. Advisory councils considered 40 projects, from them 34 are approved for realization with assistance of science and technology parks.

About the country under control of the Government 382 projects within the Plan of industrial and innovative development were implemented and studied. Total amount of their financing made 8,5 trillion tenge, 59,2 thousand workplaces were thus created. From them 37 projects for total amount of 6,5 trillion tenge were innovative, on them 11,4 thousand workplaces were created.

Kazakhstan turned into huge space of realization of design ambitions of different degree of power, laboratory of the big and small business projects aimed at increase in capitalization of various business assets and assets, their inclusion in a set of chains of production of a value added.

At the beginning of September, 2012 one of the most significant on a global scale ratings of competitiveness of the countries – the World economic forum (Davos, Switzerland) for 2011 presented the assessment in the report to Kazakhstan including difficult system of the statistical and expected analysis of various branches of economy. This year Kazakhstan rose by the 21st position and took place on the 51st place. The strategic understanding of the major role of business in economic development of Kazakhstan gradually led to sustainable economic development and increase of level of life support of the population.

Small and medium business (MSB) of the republic managed to occupy an essential niche in state economy. More than a third of active businessmen (40%) were occupied in business, whereas in the industry sphere – only 11,4%. The share taken from the total number of the population about the country increased in small business from 23% in 2009 to 29% in 2011. In 2012 business provided employment to 2,5 million Kazakhstan citizens.

In new conditions conceptual there is a question of search of optimum model of modernization of economy on the basis of the rich oil resources, new approaches to effective integration of the domestic capital into global economy, a choice of options of use of the opportunities given to being formed model of global economy along with prevention of its negative influence on stability of development of Kazakhstan. Will depend on the solution of these tasks what way national economy what "filling" of its new model, the model focused on a sustainable development in strategic prospect, measured will be decades will develop.

Thus, for a short period, Kazakhstan could make country breakthrough from Post-Soviet chaos in liberal society with its economic and social values, make a contribution to formation of positive image of the state on the international scene.

The Kazakhstan economic model characterized throughout the last decade by high dynamism and sustained economic growth, in medium-term prospect will continue organic and flexible development in the global environment, directed on stage-by-stage increase of competitiveness of the country and growth of welfare of her citizens.

Source: Ayagan Burkitbay, Auanasova Alima. Nursultan Nazarbayev and Kazakhstan model of construction of the state (historical aspect). – Almaty: Litera-M LLP, 2012. – Page 85-102

The material is provided by Institute of history of the state of KN of MAUN of RK


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