Ten Points I Liked in the President's Address

The strictness of our laws is offset by the laxity with which they are enforced. That could describe any of our policy documents. The President's latest address contains quite a few bold and powerful ideas. There are things I personally might disagree with, but if even some of the ideas are implemented properly and carried through, the overall result could be a good one. So this time I will list the 10 points from the speech that I liked:

Development of geological exploration. About 10 years ago I wrote that we need to change our attitude toward geological exploration, and that our subsoil will remain the foundation of our economy for many years to come. There are plenty of ways to provide incentives; what matters now is the detail.

Development of bank lending to the real sector of the economy. I have written a lot on this: we need to cut tax breaks, increase competition and strengthen the role of secured creditors. It seems we have been heard.

Reform of budget policy and decentralization of taxes. This is a very sound decision. It will give local authorities more weight and increase competition between regions, which will provide additional momentum for development.

Elections of akims of districts and cities of regional significance. This is a first step toward decentralizing power and making akims more accountable. Local elections are much easier to monitor than national ones. After a couple of election cycles we will see the results. There are many subtleties and dangers here, because populists often win at first and then do more harm than good. We need some mechanism to guard against that scenario.

Agriculture. There are many interesting proposals for the development of the sector: support for deep processing, and greater attention to agricultural science, which has badly deteriorated over the past 30 years. Also welcome is the move away from price controls and export bans.

Separate ministries for transport and for water. These were long overdue. More broadly, the shift to flat structures in commercial organizations has long been mainstream. We need more compact ministries that develop one function, or two at most, and do it better than anyone else. Mega-ministries are marked by a great deal of inefficiency and little oversight.

Reorganization of the Presidential Administration and a reduced role for it. This is a good step toward cutting bureaucracy, because two centers of power always slow development. Giving ministers more powers that do not require approval from the Presidential Administration will deliver far better results.

Transformation of Baiterek. I very much liked the idea of transforming the Baiterek holding, digitalizing it and consolidating business support programs. I have written a lot about this. Baiterek has a huge amount of data and should become a truly data-driven organization, since data-based decision-making will significantly improve the effectiveness of state support. Strengthening the role of KazakhExport is good international practice and should help exporters.

Occupational safety. At last, it is being talked about. People must be at the center, and every industrial enterprise must comply with occupational safety requirements. All our giants have serious shortcomings in this area, even as they earn billions of dollars.

Progressive taxation. It is being discussed for the umpteenth time, but so far everything comes down to details and design. This is a difficult question. Tax policy is one of the most complex areas in general, and with a new Tax Code on the way it requires a great deal of attention. We will have to live with this code for many years.

If even these 10 points are implemented, reaching USD 450 billion is entirely realistic. Simple arithmetic shows that growth of 5–6% a year is enough, and that is achievable, given that GDP in dollar terms is also nominal. The main thing is execution, and that requires good, well-paid personnel, less bureaucracy and room to make mistakes.