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Kazakh Foreign Investors Council discusses future energy in Astana


ASTANA – The 30th plenary session of the Foreign Investors Council under the President of Kazakhstan took place June 22 in Astana, bringing nearly 300 participants to the capital, including top executives of world’s leading companies in various fields.

Photo credit: kazpravda.kz

Kazakh President Nursultan Nazarbayev chaired the session devoted this year to Future Energy, which coincides with the main theme of the much-anticipated EXPO 2017 that opened its doors in early June.

“This year marks the 19th anniversary of the council. Our meetings have turned into a good tradition over these years. We have done a great job. You provided an enormous help to Kazakhstan in building our economy and carrying out reforms, which we are now implementing,” Nazarbayev said during his opening speech.

He also welcomed new members of the council. “It is natural that the council is changing steadily. Before proceeding to the agenda, I would like to introduce new members of the council.  They are the Asian Development Bank’s Vice-President for Private Sector and Co-financing Operations Diwakar Gupta and Marubeni’s Regional CEO for Europe, Africa and CIS Naoya Iwashita.  They replaced their colleagues who retired. There are also new members from the Kazakh side,” Nazarbayev noted.

With Future Energy being on top of the meeting’s agenda, participants discussed the implementation of previous meeting’s recommendations and challenges that world economies are facing today on their path to clean energy.

President  of the European Bank for Reconstruction and Development (EBRD) Sir Suma Chakrabarti stressed Kazakhstan’s active role in contributing to international efforts in the field of future energy. “Kazakhstan and EBRD are writing a new chapter of this story almost every day,” he added.

Being the largest investor in renewable energy across 37 countries with the volume of investments in this area equalling $1.9 billion in Kazakhstan, the EBRD and Kazakhstan recently agreed on basic terms of the agreement on a wind power plant in South Kazakhstan region and doubled the size of Burnoe solar power plant in Zhambyl region.

Special attention was paid to the digitalisation of economy and industrial processes, which could help world economies decrease operation costs and increase productivity. “For the first time in history, digital technologies can provide us with a unified picture of the entire energy chain from energy generation to its supply and consumption,” said General Electric Oil & Gas President Lorenzo Simonelli.

He outlined GE’s cooperation with Kazakh companies, such as Air Astana, Tengizchevroil and Kazakhstan Temir Zholy, in digitalisation of their operations.

“Rich resources, human capital and modern industries help us see Kazakhstan’s enormous potential in the use of these innovations. That is why GE actively supports Kazakhstan’s vision of Industrial Internet driving future growth of Kazakhstan, which was put forward by President Nazarbayev,” said Simonelli.

German Gref, CEO of Russia’s largest commercial lender, Sberbank, also asserted the importance of keeping up with emerging trends in global economy, among which is digitalisation.

“Those who fail to stick to the digitalisation trend today will be late tomorrow and it will cost much for large structures and states. Kazakhstan needs to pay attention to several specific trends. First, digitalisation of public services. Kazakhstan is able to achieve that in short time creating a competitive state by cutting number of officials, bureaucracy and time needed to provide a service. Introducing artificial intelligence in all state sectors will help fulfilling this objective,” he said.

Gupta also highlighted Kazakhstan’s active efforts in transition to green economy, which is stipulated in the Green Economy Concept adopted by Kazakhstan in 2013. “Kazakhstan has a potential to become a green financial centre for the entire Central Asian region. ADB is ready to work with Kazakhstan in developing solutions to promote green economy,” he noted.

“Our priority is an accelerated modernisation of economy. This is what I discussed in my address (to the people of Kazakhstan). We need to develop new industries using innovations and digital technologies,” Nazarbayev said.

He also suggested the topic for the council’s next session “Accelerated Modernisation,” which was approved unanimously.

Established in 1998, the Foreign Investors Council aims to stimulate greater cooperation and interaction between Kazakhstan and foreign investors by serving as a platform for dialogue and providing favourable investment conditions.



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Sanofi consumer healthcare products spread in Kazakh households


ASTANA – Sanofi, one of the world’s five largest pharmaceutical companies, is celebrating its 20th anniversary in Kazakhstan this year. In an exclusive interview with The Astana Times, Central Asia General Manager Ranga Welaratne took a resolute stand for company’s highest-quality product.

“I would rather lose my entire business than lose the value of my company!” he said.

French-based Sanofi is a life-science company represented in more than 100 countries and employing more than 100,000 individuals. Sanofi Central Asia has a staff of more than 350 in Armenia, Azerbaijan, Georgia, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

“Everything you see made by Sanofi is highly ethical and highly compliant,” he said. “This year, we celebrate 20 years since Sanofi came to Kazakhstan.”

The healthcare firm is considered the leader in emerging Central Asian markets. Its mission is to bring innovation to patients across the globe, he added.

“Sanofi has been growing its business in this part of the world [in the past 55 years] and such consumer healthcare products as No Shpa (equivalent to Drotaverine), Essentiale Forte and Maalox are household items in Kazakhstan produced by Sanofi that every Kazakh citizen knows,” said Welaratne.

The company supplies consumer healthcare or non-prescription products to Kazakhstan, as well as vaccines and medicine for diabetes and cardiovascular and rare diseases.

“This is also possible due to Kazakhstan’s healthcare system, as the government funds certain therapeutic areas for the population, for example diabetes products. Insulins as well as vaccines are bought by the government and distributed through proper channels to patients,” he said.

Every Kazakh citizen has come in contact and is aware of these widely-used products by the time they are adolescents, as each child is vaccinated by Sanofi products at birth.

“The children’s vaccines are as safe as they can be,” Welaratne stressed. “My children get the same vaccine. These vaccines used in Kazakhstan are the same vaccines used in Australia, France and Germany. No matter the location, Sanofi products are exactly the same everywhere. I want to be very clear on this point – Sanofi quality standards and compliance undergo the strictest regulations, including transportation. From the time it is manufactured to the time it is vaccinated, the product is temperature-controlled.”

The company wants to establish good relations with Kazakh authorities and the population.

“[With this in mind] I feel like asking – ‘How can we help?’ This is the [meaning] of our existence. So, today we are trying to work with the Ministry of Healthcare and Social Protection and other authorities to try to build a partnership that will enable us to bring our high-quality products at a very affordable price and these are not easy things to do,” he said.

Although Welaratne has travelled extensively, he admitted knowing little about this part of the world until assuming the post in Kazakhstan.

“I didn’t have many impressions about [the country], to be honest, before coming to Kazakhstan. I read a couple of books before coming. I was pleasantly surprised about Central Asia and what I observed since being here, in particular about the people and culture,” he said.

Welaratne and his family arrived in Kazakhstan in January 2016. The people, he noted, were his biggest eye-opener.

“Before coming to Kazakhstan, I read a book called ‘Why Russians don’t Smile’ and when I came here in the middle of the winter it was very cold and I did find people who weren’t really smiley. But once you get to know the people, you realise they’re very family-oriented and very warm people beyond the surface,” he said.

A native of Sri Lanka, Welaratne studied in Australia and graduated from an engineering and business school (MBA) there. He joined Sanofi in the country as a consultant and six months later was offered a full-time job.

“Sanofi had the qualities I was looking for in a company,” he said. “It’s a multi-national company with fundamentals like understanding and serving the patients and in an ethical way.”

Kazakhstan is Welaratne’s seventh Sanofi assignment. He joined the company in 2004 and had held various posts in Australia, Belgium, China, France, South Korea and the Netherlands. Commenting from experience, he noted policies in emerging markets can sometimes be a challenge for companies like Sanofi.

“The policies tend to change quickly and this is not only about Kazakhstan and this can be challenging. The funding mechanisms are not defined sometimes and pharmaceutical reforms are happening quite often, so one needs to be able to adapt the business to these challenges. There are opportunities on the other hand, being in an emerging market you get both opportunities and challenges,” he said.

“In the countries like Kazakhstan, the ecosystem in the pharmaceutical market is not mature yet but developing at a fast pace for in the past few years. Multi-national companies have been here only in the past 15 to 20 years, as opposed to such countries as the U.S. or France that have had these companies for over 150 years, so the ecosystem there is quite mature,” he added.

Welaratne noted the company is preparing for the June 28 international conference on modern approaches to managing socially-significant diseases. The conference is being coordinated with the support of the Kazakh Ministry of Healthcare and Social Protection, the French Embassy in Kazakhstan and Sanofi. The organisers are expecting experts from Russia, the International Diabetes Federation and the World Health Organisation.



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GE highlights emerging trends and technologies at EXPO 2017


ASTANA – General Electric (GE), one of the global sponsors of the United States pavilion at EXPO 2017, hosted the June 21 forum Moving Forward, Fueling the Future. The session focused on emerging trends and technologies in the energy and transportation industries, including the digital revolution that is radically reshaping the industrial world.

GE also inked several agreements with Kazakh Temir Zholy (KTZ) on digital cooperation and with Eni S.p.A. on partnering on renewable energy. The document joining the two companies and the Kazakh Ministry of Energy outlined evaluating the possibility of building a 50MW wind farm and other projects.

“GE’s long-standing relationship with Kazakhstan Temir Zholy is a testament to our commitment and innovation within the rail space,” said GE Transportation President and CEO Jamie Miller.

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“We are excited to expand our relationship and are confident in the value our digital solutions provide and excited to bring the most advanced digital rail solutions to the CIS (Commonwealth of Independent States) region,” she added.

More than 100 top officials, senior business executives and global leaders came together for an interactive discussion on the transportation industry, focusing on Kazakhstan as an important trade hub between Europe and Asia. The experts highlighted the critical importance of digital technologies in transforming the rail industry.

The agreement with KTZ will implement GE Transportation’s digital solutions, including Trip Optimiser and Smart Intermodal Terminal, to lower fuel costs, enhance power distribution and increase terminal productivity.

Senior business and government leaders discussed the country’s oil and gas sector and noted its critical role in ensuring Eurasian energy security and the potential for a new virtual pipeline and LNG (Liquefied Natural Gas) technology to better leverage Kazakhstan’s abundant gas resources to support sustainable development.

“Rich in resources and a key trade corridor, Kazakhstan and the broader Central Asia region are hugely important to the global oil and gas industry,” said GE Oil & Gas President and CEO Lorenzo Simonelli.

“This is the perfect place for a global discussion and we welcome the opportunity to continue collaborating with our partners in the region,” he added.

The company had the opportunity to show the interactive electricity value network to more than 20,000 visitors to the pavilion in the past two weeks. The display focuses on the growing importance of renewables in the global energy mix.

After the forum, the guests were invited to Lokomotiv Kurastyru Zauyty (LKZ), a GE joint venture in the capital that manufactures high-efficiency, heavy-haul Evolution-series locomotives customised for the CIS market. To date, the facility has produced 300 TE33A locomotives, dozens of which have been exported to neighbouring Azerbaijan, Kyrgyzstan, Tajikistan, Turkmenistan and Ukraine.

“GE has been contributing to infrastructure development in Central Asia for 70 years. We’re happy to be supporting Kazakhstan as the host of EXPO 2017 by providing a platform for open dialogue with our local partners about some of the most pressing challenges in the industrial world. Together, we’re taking concrete steps to reboot industrial productivity and help support the region’s long-term growth,” said GE Vice President Ron Pollett.

The announcements reaffirm GE’s long-term commitment to help some of Kazakhstan’s most challenging energy and transportation projects, as well as supporting the country as it embarks on the journey of digital transformation laid out in a 2017 address by Kazakh President Nursultan Nazarbayev to harness the power of the Industrial Internet as an engine to accelerate growth.

GE is major digital industrial company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. The company is organised around a global exchange of knowledge, where each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry, according to the company website.

 



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Kazakh-built high-speed electric locomotives to be exported to Belarus


ASTANA – The Kazakh Invest National Company announced plans to export 20 passenger electric locomotives to Belarus at the recent meeting of the Trade Mission of Kazakh Producers in Minsk. The event was held with the participation of Belarusian Chamber of Commerce and Industry and export contracts worth $20 million were signed.

“We are currently working on the electrification of the railways in Belarus and we are interested in Kazakhstan’s electric locomotives,” said Belarusian Railways Chief Engineer Valeriy Shubadarev.

Ten domestic manufacturers of food products, construction materials, machine-building, metallurgical, chemical products and more than 70 Belarusian companies took part in the forum.

“We discussed issues of delivering Kazakhstan’s passenger electric locomotives to Belarus and we plan to export 20 KZ4AT passenger electric locomotives for the needs of the Belarusian Railways,” said Deputy Director General of Electric Locomotive Manufacturing Plant Andrei Yershov.

Management of KazAzot and Temir-Service, Kazakhstan agrochemical producers also met with Belarusian Deputy Minister of Agriculture and Food Vladimir Grakun as part of the business forum. Following the negotiations, it was agreed that Kazakh companies will be included in the register of fertilizer suppliers for the needs of agricultural producers of Belarus.

Kazakhstan will also supply the food products for the Vitalyur, the largest Belarusian supermarket chain.

The KZ4AT, a high-speed electric locomotive at a top speed of up to 200 km/h had its initial track test in July 2016. The new single-section multifunctional locomotive was developed by Alstom, a French multinational company, and has the widest range of operation in the world. The convenient conditions, including climate control, seat heating, floor heating, microwave, refrigerator, toilet and other services are provided in the cab for the driver and assistant.



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EBRD to continue supporting Kazakhstan in economic endeavours, says EBRD official


ASTANA – The Kazakh capital is readying to host the June 22 annual Foreign Investors’ Council (FIC), chaired by President Nursultan Nazarbayev and co-chaired by the president of the European Bank for Reconstruction and Development (EBRD), Sir Suma Chakrabarti.

The city has enjoyed the spotlight in early to mid-June as it hosted the Shanghai Cooperation Organisation (SCO) summit and the Astana Economic Forum and launched the long-awaited EXPO 2017. Multiple international delegations are coming over for yet another no-less-important event.

FIC’s 30th session since its founding in 1998 and the expo’s theme Future Energy very much underline the priorities the organisation has set for the country, said EBRD’s head for Kazakhstan Agris Preimanis in an exclusive interview with The Astana Times in the run-up to the meeting.

“If you think of EBRD’s strategy and our priorities for the country, we fit very well. We want to continue developing the green economy, investing in renewable projects. Indeed, the current theme of the expo, ‘Future Energy’, is very close to EBRD. We are going to continue working in infrastructure and logistics, which is something that will help to connect the country even more and take advantage of the initiatives such as the One Belt One Road (OBOR). The work will have a particular emphasis on developing opportunities for women, and youth the regions.”

Future energy will top the council’s agenda, where the EBRD will play one of the key roles. The topic was chosen for a reason, said Preimanis, as every year the council seeks solutions to existing critical issues in the country’s development.

“I am personally a part of the Operating Committee of FIC. I have seen all the materials and I am looking forward to having those discussions. This year we have many foreign speakers and there are some excellent ideas being brought forward. The range of topics starts from the renewable energy, green financing and how to approach that, the greening of the Silk Road, and using new technology to make the Silk Road project greener,” he said.

EBRD’s President Sir Suma Chakrabarti is to attend the event along with Ben van Beurden, CEO of Shell, Lorenzo Simonelli, President of General Electric Oil&Gas, Tim Gitzel, CEO of Cameco, to name a few.

Since its formation, the council has addressed a wide range of Kazakhstan issues including improving the legal regime for foreign investment, improving the judicial system, optimising the taxation system, attracting foreign labour and improving the investment image.

The FIC includes 35 heads of large transnational foreign companies and international organisations. During the sessions, the companies will provide their recommendations to the council.

“On top of that, the council will address topics of nuclear energy, emissions trading and how they can provide the right incentives to the country’s companies. This will be an opportunity for the president of Kazakhstan to listen to these esteemed speakers and get a sense, first of all, of what is the current global thinking, but then also how it applies to Kazakhstan. Therefore, I think it will be a relevant event,” said Preimanis.

“When one thinks of the FIC, it’s important not to forget that the plenary session is just a culmination of the work done by the FIC,” he continued. “The working groups meet regularly throughout the year; there is regular interaction with the government and many issues are resolved through the FIC outside the theme of a particular plenary session.”

Preimanis believes Kazakhstan is “on a pivotal point in history, whereas, as a result of the One Belt, One Road initiative and other initiatives, the country can become much more integrated and connected regionally and globally.”

Integration would bring more opportunities and more competition to the country, he noted.

“On the other hand, there are still challenges within the country in terms of some regions, including socio-economic difficulties. It means that the country needs to continue accelerating efforts to take advantage of the opportunities brought by better connectivity,” he said.

Preimanis underlined the work on improving the opportunities for women and youth to make the country more inclusive, particularly in the regions, is another pivotal point for EBRD.

“We have a very successful programme, in that where we channel the financing is to the women who manage businesses whilst at the same time providing advice and aid to them to build capacity and technical know-how. The mentoring programme is the part of that which allows them to connect and learn from successful Kazakh businesspeople through the networking events that we also organise,” he said.

“There are also vocational training elements where we train the women and develop their skills and help them increase opportunity and give them more confidence to work and develop,” he added.

Another priority for the EBRD is the agricultural sector.

“Last year, we supported five projects worth $130 million in the agribusiness sector. In addition to all the investments, we are deeply engaged with the government in some of the key reform elements,” said Preimanis.

Signed in May, EBRD’s $180 million irrigation project in the southern part of Kazakhstan will create thousands of new jobs and small businesses involved mainly in agriculture, he added.

According to EBRD’s official statistics dated in April, the organisation had 225 projects. EBRD’s current portfolio in Kazakhstan is nearly $2.8 billion, of which 43 percent is in infrastructure, 40 percent in the energy sector, 11 percent in industry, commerce and agribusiness and 6 percent in financial institutions.Screen Shot 2017-06-20 at 12.02.43

The work of the FIC “acquires even greater urgency in light of the recent instructions of the Kazakh head of state. Since we are faced with a very ambitious task to enter the list of 30 most developed countries, the council plays an important role as a consultative and advisory body,” Preimanis added.



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ASTANA TOWER Business Center awarded BREEAM In-Use Excellent rating


Astana Tower Ishletme LLP announces that the ASTANA TOWER Business Center has obtained a BREEAM In-Use certification applied to existing non-residential buildings. The first A class office building met high international technical standards to achieve the highest BREEAM ratings: “Very Good” in Asset (performance characteristics of the building) and “Excellent” in Building Management (practices related to the operation of the building).

BREEAM In-Use assessment assists the improvement of the existing buildings and its operational efficiency. The ASTANA TOWER Business Center prior to receiving the certification, introduced a comprehensive environmentally friendly policy for the building’s operation.

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Tenants and visitors of the business center enjoy the most favourable working conditions: a thermal comfort, air quality, natural lightning and high safety standards. The second floor of the building offers a convenient multifunctional space for social interaction. A convenient parking area and six bus stops are within a walking distance from the business center.

Zhanar Yseneeva, General Director of Astana Tower Ishletme LLP said, “Creating comfortable conditions for tenants is one of our priorities in building management. However, the environmental efficiency – energy saving and technologies reducing the environmental impact – is no less vital. We have introduced the advanced technologies that allowed us to meet high environmental standards and obtain certification.”

 



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Kazakhstan to reduce tax inspections


ASTANA – The Kazakh government will reduce the number of tax inspections 37.5 percent in 2017, Minister of Finance Bakhyt Sultanov said during a June 19 joint session of both houses of Parliament.

“The implementation of the 2016 budget was aimed at reviving the economy through stimulating entrepreneurship and creating jobs. The economy grew 1 percent by increasing the volume of services provided in the transport sector, increasing output in agriculture, construction, including housing construction. The budget revenues reached 7.7 trillion tenge (US$23.96 billion). This is 1.5 trillion tenge (US$4.6 billion) more compared to 2015. Of these, transfers account for 30 percent,” Sultanov said.

According to the minister, measures are planned this year to grow and develop the economy.

 

“For the effectiveness of this work, we must create favourable conditions for business, while maintaining a high tax return. Increase in tax revenues will take place amid the reduction in tax inspections. For example, this year the inspections will be reduced 37.5 percent. In addition, the draft Tax Code provides for the exclusion of 56 percent of regulations for inspection. As a result, 14 norms will remain instead of current 32 ones,” Sultanov said.

 

Horizontal monitoring is being introduced in tax audits based on the principles of trust, transparency and mutually beneficial cooperation, the minister said.

 

 

“In addition, it is planned to revise tax preferences in order to reduce the number of ineffective benefits. As part of the legislation humanisation, it is envisaged to make appropriate amendments to the code ‘On Administrative Offences.’ The most important thing is the reduction in the volume of administrative fines and the widespread use of the institution of prevention instead of punishment,” the minister added.

Earlier, Sultanov reported that the budget funds, undisbursed by one state agency, would be transferred to others.



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Kazakh Ministry for Investments and Development recaps foreign investments, new subsoil code, improving transport potential


ASTANA – A recap of the previous year’s work, including attracting foreign investments, a new subsoil code and improving the nation’s transport and logistics potential were the main talking points of a June 12 presentation by Kazakh Minister for Investments and Development Zhenis Kassymbek, according to Kapital.kz. The meeting with the population was held in the capital.

Gross inflow of direct foreign investments increased 40 percent last year to $20.6 billion. Consequently, the nation is considering various ways to insure outside interest continues.

“As a result of last year, we received about 5,500 requests through the single-window system and we have provided about 8,000 public services. The investment ombudsman has received more than 50 new applications from foreign and domestic investors. We have put forth more efforts to attract investment at the external level. In particular, special advisors for attracting investments in 10 priority countries have been identified. At the regional level, councils for attracting investments under the mayors of the regions were created. Now, on insutrctions of the head of state, there is a process to reform the system of attracting investments. The ministry faces a number of current tasks. Until the end of June, a national strategy for attracting investments will be developed. For this work, we attracted experts from the World Bank. Today, we are negotiating all the nuances with state bodies,” said Kassymbek.

The ministry drafted the code on subsoil and its use currently being deliberated in the working group.

“We plan to submit it to the government in August and in September we will submit it to the Mazhilis (lower house) of the Parliament for consideration. Within the draft code, the transition to international standards for the calculation of mineral reserves is envisaged. The adoption of the code should increase the investment attractiveness of geological exploration and give impetus to the development of domestic junior companies. The plan is that the code should come into force on January 1, 2018,” he said.

He added Kazakhstan is looking forward to adopting the plan for the technical modernisation of basic sectors of the economy in December. Its key area is investment attraction.

Regarding the transfer of new technologies, foreign projects were launched in Kazakhstan in 2016 with the assistance of the international technology transfer centre. Based on the selection results, four projects were awarded innovative grants totalling 800 million tenge (US$2.5 million). There are plans to implement two more pilot projects this year, said the minister.

Speaking about the country’s transport and logistics progress, Kassymbek said the volume of services in the transport sphere grew by 3.8 percent in 2016. Transit and container shipments from China-Europe-China increased more than twofold to 104,500 containers, calculated as twenty foot equivalent units (TEUs), compared to 47,000 TEUs in 2015.

Construction of the infrastructure facilities for the dry port of the Khorgos-Eastern Gate special economic zone was completed in October. Work is also underway to build transport and logistics centres in various regions and terminals in the ports of Lianyungang in China and Klaipeda in Lithuania.

“Work is continuing to increase container traffic to two million containers by 2020. In 2017, a double increase in the number of containers is expected. In the direction of China-Europe-China, we see a growth of almost 2.6 times for the first four months [of this year]. The share of domestic freighters in the internal market in 2016 increased to 46 percent. We believe at least 50 percent of the international transportation should be carried out by Kazakh carriers,” said Kassymbek.

The number of transit air passengers increased from 250,000 to 478,000 in 2016 and is expected to reach 600,000 this year. The main flows are through Kazakhstan to and from Asia and Europe.

“By 2020, there are plans to open new flights from Astana and Almaty. Just recently, flights to Warsaw from Astana were launched and Chinese air carriers started to fly from Beijing to Astana. Now, taking into account the flights that Air Astana is making, flights from Almaty and Astana to Beijing are almost daily. Daily flights depart to London and the imminent plans are Budapest and Helsinki. In July, the Astana-Delhi launch is planned,” he added.

Within the Nurly Zhol programme, 920 kilometres of significant highways involving about 75,000 workers were completed in 2016. Fifteen new projects totalling 3,200 kilometres are expected to be started this year. In total, work will be conducted on nearly 4,400 kilometres of roads by approximately 100,000 individuals.



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Kazakh President proposes international currency, climate solutions at AEF


ASTANA – Kazakh President Nursultan Nazarbayev said during a June 16 plenary session of the 10th Astana Economic Forum that the forum is being held at a historically crucial moment for the Eurasian space.

“A new global player with a market capacity of 3 billion people was created with India and Pakistan’s joining the Shanghai Cooperation Organisation (SCO). The SCO countries’ participation in the development of the New Silk Road programme creates a new economic sub-region. United Nations Secretary General Antonio Guterres noted that ‘the organisation is an important foundation of today’s world order’ and inclusive development is the most powerful tool for preserving peace. Inclusive and sustainable development is in the focus of today’s forum,” Nazarbayev said in his remarks.

The head of state said the unprecedented speed of changing the modern world and the advent of an era of new discoveries and scientific and technical solutions radically transform the nature of economic growth and life. But global economic policy does not fully meet modern challenges, including a critical level of environmental pollution and growing imbalances in global energy consumption.

“A gradual transition to a new economic model is needed. It should be based on clean energy, joint efforts and collective responsibility, taking into account the interests of the whole world,” he said.

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The President suggested revising the methodology to calculate per capita gross domestic product as it is one of the important aspects of the development of the world economy.

“It is necessary to put on the international agenda the issue of developing new methods for calculating indicators that measure the wealth of countries and the welfare of their citizens. The GDP indicator has a number of significant flaws. It does not reflect the long-term nature of economic activity. It does not take into account the damage to the environment, including the depletion of natural resources. And it does not reflect the quality of life in a particular country. GDP per capita does not show the citizens’ well-being and it does not take into account population stratification by income,” said Nazarbayev.

The traditional GDP creates a false perception of economic prosperity.

“I believe that an updated methodology for calculating GDP can be adopted on the basis of green GDP and indices such as the Human Development Index and the Organisation for Economic Co-operation and Development (OECD) Better Life Index. It should adequately reflect the needs for balanced development of countries,” he said.

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Transformation of the world financial architecture should also be considered.

“It’s time to consider the introduction of the global payment unit. This will save the world from currency wars, speculation, avoid distortions in trade relations and reduce volatility in the markets. The currency should have a simple transparent mechanism of emission, subject to its consumers. A payment unit of account can be created in the form of a cryptocurrency taking into account digitalisation and block-chain development,” he said.

The introduction of a global currency is possible by creating a pool of central banks, for example, the Special Committee at the United Nations (UN), he added.

President Nazarbayev also proposed to create a unified information system for greenhouse gas emission accounting to cover the countries of Eastern Europe, the Caucasus and Central Asia.

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“Kazakhstan is the first country in the Eastern Europe, the Caucasus and Central Asia that launched the greenhouse gas emissions trading scheme. We developed and adopted the appropriate regulatory base and we are ready to share our experience in this area,” he said.

The head of state noted economic growth should be based on clean energy development and environment preservation. In the context of the ecological future of the planet, the concept of a nuclear weapons-free world is of great importance.

“Kazakhstan is a leader in the struggle for a world free of nuclear weapons. We are the first and the only country that closed the nuclear test site and abandoned its nuclear arsenal. We will continue these activities and encourage everyone to support us. By this we reaffirm our commitment to the global cooperation and peace,” he added.

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This annual platform facilitates the transfer of knowledge and speeds up the process of making strategic decisions, said JP Morgan Chase International Chairperson Jacob Frenkel who moderated the session.

“Kazakhstan’s development strategy is well known, well appreciated, well recognised by the global community. By the year 2050, it is expected to be among the world top 30 developed countries. And the third modernisation of Kazakhstan will be the right force to achieve it … It is enough just to look around the development of Astana and to recall what it was then and what it is now, to appreciate how can one reach high with vision, determination, commitment and with a sense of leadership,” he said.

Nazarbayev also met with the Nobel Prize laureates and top-level experts at the Akorda presidential residence.

“Meetings with experts are important and always interesting. Especially when important changes take place in the world,” he said. “Kazakhstan is in the centre of world attention regarding the development of new technologies due to EXPO 2017. The world around us is revolutionising with the technology development. We considered such futuristic technologies as electric vehicles, unmanned vehicles, nanotechnologies and new types of energy. Now this is reality.”

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Nazarbayev said it is important to consolidate efforts to solve global problems.

“The U.S. withdrawal from the Paris agreement and the situation around Qatar complicates sustainable development. Environmental problems, processes of de-globalisation, migration flows, and paternalism in different countries hamper trade, mutual relations and integration,” he said.

Global challenges in leadership, integration of the transit and water potentials of Greater Eurasia, corporate governance as a factor of investment attractiveness, world energy system were also on the forum’s agenda.

The model and roadmap for the country’s green financial system development workshop was initiated by the Astana International Financial Centre (AIFC). Participants spoke about the role of financial centres in green finance development, the conditions for investing in the green economy of Kazakhstan and considered the best world practices for introducing green finance.

More than 2,500 delegates, including politicians, Nobel laureates, chief financial officers of Fortune Global 500 companies, scientists and economists took part in the 20 panel sessions, round tables and conferences at the forum.



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Developers, software and cyber security specialists, IT managers in shortage, expert says


ASTANA – The Digital Kazakhstan state programme is available for every Kazakh citizen who has a computer with Internet access. A professional presentation and the draft programme can be found on the Zerde National Information and Communication Holding website. Since the holding manages its implementation, The Astana Times spoke with its chair of the board Assel Zhienbayeva, who answered a number of questions regarding the chosen topic as a skilled IT professional.

Assel Zhienbayeva

What is the status of the Digital Kazakhstan programme?

The digital topic is relevant and not only because the rapid development of technology is one of the key challenges for business and state in any country. For our country, digitalisation can become a real platform for maintaining competitiveness in the future. That is why the accelerated technological modernisation of the country was a number one priority in the January State of the Nation Address of President Nursultan Nazarbayev. At the moment, the concept of Digital Kazakhstan is ready and the draft has been preliminarily agreed upon by all state authorities; it means we are consistently moving in the given direction.

Nevertheless, when the talk is about creating and developing high-tech digital infrastructure in the country, isn’t it taking it too lightly that the majority of villagers (40-45 percent of the country’s population) perceive the Internet almost only as a way of quick exchange of messages via e-mail or messengers?

It is only partially true. The high-speed Internet will provide an opportunity to render high-quality health care and education services to people who live in remote areas; moreover, it will become an electronic trading platform. People will be able to sell goods and services online and distances will no longer be a barrier to the provision of services.

The Alibaba platform in China, which has connected international buyers with small and medium-sized businesses, is a striking example. The business, which 15 years ago was located in an apartment, contributed to the creation of 100 million jobs and a 10 million army of entrepreneurs! Today, Alibaba controls 80 percent of the Chinese e-commerce market and generates 2 percent of the GDP.

Digitalisation as a world trend also inspires domestic business to create similar analogues. Kazakhstan has a developed agribusiness and the objective set by the state – increase in the gross output of agricultural products by 30 percent – is based on the idea of a consistent digital transformation of the industry.

Yes, indeed, digital technology became available to villagers through mobile phones and applications. However, digitalisation is making villagers master their IT skills more and more. If you want to trade, go to an online fair! Here, you can sell your goods and buy what you need on the farm.

A drip irrigation system, for example, which is managed from one centre, will facilitate the cooperation of villagers, leading to the consolidation of farms. In turn, a large farm constitutes a great opportunity for the development of agricultural producers, labour productivity growth and cheaper products for the end user. With regard to our mentality, we can say that we “harness our horses slowly but drive them fast.” That is, life itself will motivate villagers to be braver in mastering IT technologies.

A villager should be familiar with the computer even to open a small poultry house, as the incubation process is fully automated and everything is regulated at the push of a button. And if a project is planned with a full production cycle from breeding to processing, one cannot do without strong IT skills!

For this reason, the programme also includes online platforms in public service centres and Kazpost so that our citizens can access basic IT skills.

There has been talk about broadband Internet access in villages and auls for several years, but where is the result? The programme indicators also show when it is fully implemented, only 81 percent of the population is expected to use the Internet and the corresponding percent of digital literacy is similar. Why is that the case; why will every citizen not be able to use the Internet?

Today, in the most active segment of the population, the age group between 6 and 74, about 77 percent of the population has access to the Internet. When it comes to 81 percent, this is an increase in the number of Internet users for this age group. The state, business and households are definitely interested in having 100 percent coverage as soon as possible. Economic digitisation will help to accelerate the population’s involvement in the Internet.

Who will finance the programme and related projects?

Related projects will be financed through public-private partnership or through the informatisation service model. PPP financing is regulated by the Law On Public-Private Partnership. The service model we are talking about implies a centralised approach to informatisation based on the provision of information and communication services to state authorities. Such services are provided by the IC infrastructure operator with the involvement of IT companies. Details are available on our website zerde.gov.kz.

“Human capital development” is the phrase that came into this report, but not into people’s lives. Kazakhstan still does not have adequate distant schooling and high school online education, there are no electronic textbooks, it is impossible to receive additional knowledge using digitalisation and there are no catalogues of video lectures, since there is no video lectures database. What is your position on this matter?

You raise a very relevant topic. Today the whole world actively discusses the issue of education, its quality and the development paradigm. The long-term world trend is the promotion of mass education based on its accessibility. This trend sets the main parameters of the future education and becomes the development driver of additional alternative education in Kazakhstan.

This year, the WikiBilim Public Foundation with the support of Kazakh universities has launched the Open University of Kazakhstan project (analogue of the well-known Coursera). The educational platform offers free access to online courses from leading university teachers in the country.

In fact, this project is a greenfield project, where all the content is Kazakh. More than 80 percent of the courses are taught in the state language. Anyone can freely study through the online courses housed on the platform when and where it suits him or her. This project is purely social, not commercial. We are discussing with WikiBilim the possibility of implementing a project to increase the digital literacy of the population.

Needless to say that today distance education in Kazakhstan is imperfect, but there are positive aspects. Distant learning has been practiced for more than one year. Both public and private universities provide online learning tools for students from other regions. Some universities provide the opportunity to receive a double degree, one of which can be obtained through distance learning. Distant education graduates receive state-recognised diplomas without any indication of the mode of study (distant/extramural.) However, only people who already have a degree in secondary vocational or higher education can study in the university by distant learning.

Why does the nation need to improve the skills of specialists in information and communication technology if it can attract super professionals who could work in remote access mode?

Let me repeat myself. In the January state of the nation address, the head of state defined the number one priority – accelerated technological modernisation of the economy. And economic transformation is directly related to IT-technology.

Yes, our economy has long been experiencing a labour shortage, but this applies not only to Kazakhstan. The U.S. economy alone will have up to 50,000 vacancies for IT professionals each year. According to the global study 2016 Manpower Talent Shortage Survey attended by 42,000 employers from 43 countries, IT specialists are the second highly demanded professionals. We are in severe shortage of developers, software specialists, architects, data and cyber security experts, IT leaders and managers. This means that we cannot and should not rely on the external market to attract specialists!

Labour shortage has a negative side as well: the lack of competition among specialists in any industry leads to a decrease in competition, and, therefore, to a decrease in labour productivity of specialists in demand. Therefore, until we solve the problem of “nurturing” our own talents for the IT industry and streamline it, this issue will be a serious obstacle for the development of business and production in the country.

How does the holding participate in solving this problem?

Among other things, we create and introduce an IT qualification system. The system should change the relationships of all sides represented in the skilled labour market: education, professionals and business.

We have already developed an industry qualification framework that allowed us to inventory occupational categories in order to establish qualification levels in the IT industry. Professional standards have also been developed, the main function of which is to set the requirements for the quality of work, knowledge and skills. Educational standards in universities will be built on their basis. In fact, professional standards are needed by the labour market in training IT professionals who will be in demand in the economic sectors.

It is also important to cooperate with foreign partners. Thus, in April 2017, during the working visit of Prime Minister of Kazakhstan Bakytzhan Sagintaev to the United States, an agreement was signed between Cisco International Limited and National Infocommunication Holding Zerde JSC. One of the areas of cooperation is the training and retraining of personnel for digital work. Ten thousand students will be involved in the programme by 2020 with the support of Kazakhstan’s institutes and universities.



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