ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of June 30, 2022 No. 452

About approval of the Development program of intra country value and export-oriented productions

The government of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Development program of intra country value and export-oriented productions (further – the Program).

2. To the central, local executive bodies, state bodies, directly subordinate and accountable to the President of the Republic of Kazakhstan (in coordination), and to other organizations (in coordination), responsible for program implementation:

1) to take measures for program implementation;

To represent 2) to the Ministry of the industry and infrastructure development of the Republic of Kazakhstan information on the program implementation course quarterly, to the 15th following reporting quarter.

3. To the ministry of the industry and infrastructure development of the Republic of Kazakhstan quarterly, to the 25th following reporting quarter to provide summary information on the program implementation course in Government office of the Republic of Kazakhstan.

4. To impose control of execution of this resolution on the First deputy Premier-Ministra of the Republic of Kazakhstan.

5. This resolution becomes effective from the date of its signing.

Approved by the Order of the Government of the Republic of Kazakhstan of June 30, 2022 No. 452

Development program of intra country value and export-oriented productions

Introduction

The development program of intra country value and export-oriented productions (further – the Program) is directed to extension of the nomenclature of the manufactured goods demanded in the internal and external markets, by development of basic conditions, creation of productions of basic raw materials, rendering system, long-term incentives for upgrade and forming of new productions and increase in competitiveness of the operating and new Kazakhstan companies.

The working model of development oriented to gradual growth in the conditions of unstable environment in world economy and limited mechanisms of support of entrepreneurs (the obligation of the World Trade Organization (further – the WTO), the Eurasian Economic Union (further – EEU), requires revaluation and transition to new model of growth of economy.

In this regard it is necessary to stimulate increase in production of the Kazakhstan goods with expansion and "complication" of the nomenclature through additional charge of operating plants, updating of their fixed assets and start of new productions, productions of basic raw materials, creation of the regulatory base, elimination of barriers, providing with basic infrastructure, available financing, including due to the involved investments for increase in localization of the productions directed to saturation of the domestic market with the subsequent exit to export for the successful competition to foreign suppliers in the domestic market.

At the same time it is necessary to consider that in the medium-term period the share of public financing shall decrease consistently for benefit of non-budgetary sources.

Approach to implementation of this Program will be based on projects implementation and system measures for stimulation of the organization of new productions.

2. Analysis of industrial development of the Republic of Kazakhstan

2.1 Analysis of the previous development programs of industrialization

In Kazakhstan since 2010 the policy of industrial and innovative development directed to creation of high-productive and export-oriented processing industry which allowed to stabilize the negative processes connected with fall of share of processing industry in gross domestic product (further – GDP) step by step is implemented and to pledge basic conditions for start of process of diversification of economy.

So, from 2010 to 2021 the pursued policy of industrialization allowed to increase production of the companies of processing industry in time 3,4 with 3, to 13, of 2 trillion tenge, at the same time the gross amount for this interval made near 84, 7 trillion tenge (in the period of the first five-years period of industrialization – 26, 1 trillion tenge, the second – 58, 6 trillion tenge).

The gross value added (further – VDS) processing industry increased in time 4,3 with 2, of 5 trillion tenge in 2010 to 10, 8 trillion tenge in 2021. Production of the new types of products which are earlier not made in Kazakhstan is mastered: cargo and cars, electric locomotives, cargo, cars and buses, transformers, X-ray equipment, LED lamps, titanic ingots and slabs, separate types of medicines.

Tax assignments from the companies of processing industry became one of the main sources of considerable stable receipts in the budget for the last 11 years (2010 - 2021) and 5 billion tenges increased by 4 times with 538,2 to 2157,.

Despite positive results of industrial policy, innovative and technology development of processing industry is characterized:

wear of fixed assets at many companies of industry in 2020 – % 39,2;

low share of export of high-technology products in the total amount of export of processing industry in 2021 – % 15,5;

low innovative activity of the companies in processing industry in 2020 – 15,4 of % and shares of innovative products in GDP – % 2,1.

Within regulated purchases, the loudspeaker of share of intra country value since 2010 had the following tendency: from 2010 to 2014 – forward growth with % 48,2 to % 63,2, since 2015 - decrease with % 57,5 to % 56,1 in 2021. Observance of conditions of international treaties within integration associations of the entry of Kazakhstan into the WTO as which investigation cancellation of all preferences for domestic producers acted was basic reason.

At the same time, the processing industry is characterized by dependence on raw materials and accessories which are not made in the territory of Kazakhstan and have no further prospects to localization. The share of import of such intermediate goods in processing industries can occupy up to 50% and more.

The import volume of products of processing industry in 2021 made 38, 3 billion US dollars and is provided by the broad range of goods of processing industry consisting of 4729 goods, at the same time 3200 line items with import volume more than 100 thousand dollars of the USA. From them 80% of amount are the share of 524 goods.

The analysis of import of processing industry on broad economic categories shows that for 2021 44,6 of % of intermediate goods, 31,6 of % of consumer goods and 23,8 of % of means of production is delivered.

Import of the intermediate goods used for further production (raw materials, the spare part) consists of goods: mechanical engineering (27%), metallurgy (18%) and chemical industry (16%). Automobile spare parts (556, 0 million US dollars), flat-rolled products (418, 8 million US dollars), bodies (418, 1 million US dollars), polyethylene (257 million US dollars) are the most imported from them.

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