2000-01-10 Kazak Politics & MacroEconomics

Kazakhstan Weekly

Politics & Macro Economics

Monday January 10, 2000

PM Confirms The 2000 Privatisation Programme

The government of Kazakhstan will continue to implement the privatisation programme in 2000.  “Neither a roll-back, nor a slowing down in the pace of privatisation can be allowed,” Kazakh Prime Minister Kasymzhomart Tokayev told the cabinet at its first meeting this year on Tuesday. He confirmed that the privatisation of state property will be continued this year and that the blue chips programme will be implemented. He said that Kazakhstan is expected to gain over USD400 million from privatisation in 2000.

The blue-chip government programme for privatisation intended for the period until the end of 2000 includes the privatisation of the Aktubemunaigaz and Mangistaumunaigaz oil companies, Kazakhmys (Kazakhstan’s largest copper producer), Kazakhstan Chromium, Kazakhstan Zinc, the Ust-Kamenogorsk titanium and magnesium plant, the Sokolovsko-Sarbaiskoye mining plant, and the Kazakhstan Aluminium co. (Interfax, Bloomberg)

Kazakh Oil Producers Report 1999 Output

Kazakhstan produced 30,043,323 tonnes of oil and gas condensate in 1999, 0.8% above target and 15.8% more than in 1998. Gas production totalled 7,173 million cubic meters (1.1% below target and 30.4% more than in 1998). Subsidiaries of state oil company Kazakhoil produced 5,528,052 tonnes of oil and condensate (4.7% above and 3.8% more respectively).

Nine companies in which Kazakhoil owns a stake produced 10,274,838 tonnes of oil (2.4% below and 14.1% more), of which the lion’s share was produced at the Tengizchevroil joint venture - 9,575,553 tonnes (1.7% below and 13.2% more). Other oil producers in Kazakhstan extracted 14,240,433 tonnes (1.7% above and 22.7% more).

Gas production at Kazakhoil companies totalled 1,425.4 million cubic meters (2.8% below and 6.3% less). Companies with Kazakhoil participation extracted 1,617.5 million cubic meters (0.8% below and 1.7% more). Other organisations produced 4,130.0 million cubic meters (0.6% below and 72.8% more), of which the Karachaganak field yielded 3,603.3 million cubic meters (0.4% below and 55.4% more).

In December 1999 Kazakhstan produced 2,674,045 tonnes of oil and condensate (2.3% above target) and 708.806 million cubic meters of gas (1.6% below). (Interfax, Bloomberg)

Inflation Grows 17.8% in 1999

Kazakhstan saw 17.8% inflation in 1999, the Kazakh Statistics Agency has reported. According to its figures, food prices in the republic  increased 20.6% in 1999, prices for non-food products 19.8%, and consumer services 9.9% over the year. (Interfax, Bloomberg)

GDP and Industrial Production Climb 1% and 1.8% Respectively in 1999

Kazakhstan’s GDP grew 1% this year from 1999, Kazakh Prime Minister Kasymzhomart Tokayev said at an expanded government meeting which President Nursultan Nazarbayev attended on Wednesday.

The outgoing year was “not easy” but GDP went up despite a projected decline, Tokayev said. Industrial production climbed approximately 1.8% and agricultural expansion reached 22%, he said. Growth was also registered in transportation and communications.

Kazakhstan is likely to attain a zero trade balance in 1999, Tokayev said. The National Bank’s gold and foreign currency reserves increased rapidly and reached almost USD2 billion. This is a record high level since Kazakhstan introduced its national currency in November 1993, he said. The Cabinet of Ministers obtained the International Monetary Fund’s approval for its new policy, Tokayev further  said. This enhanced the investment climate and cleared the way for the release of planned loans. The state budget was fulfilled for 92%-93% and 99% of tax and non-tax revenues were collected, he said.

The government cleared pensions as well as social and special benefits arrears. Regions received 99% of their planned subventions from the state budget.

A new Tax Code will be adopted in mid-2000, Tokayev said. It will be favourable for entrepreneurs and ensure “a real economic freedom”, while maintaining the budget revenue level, he said. The next year’s strategic objective is to transfer from “patching holes” to systematic economic planning, which should ensure consistent growth, he said. The government aims to create new working places and to decrease poverty, he said. (Interfax, Bloomberg)

Oil Export Limit for 2000 Is Set at 22 m Tonnes

Kazakhstan will limit oil exports in 2000 to no more than 22 million tonnes, Kanat Bozumbayev, head of oil and gas at the Ministry of Energy, said on 29 December. The limit aims to ensure that domestic refineries receive adequate supplies of crude, he said. Deliveries to the domestic market declined steeply in 1999 due to rising world oil prices. In the first 11 months of the year Kazakh refineries processed just 5.35 million tonnes of oil, 32.1% less than in the same period last year. Domestic refineries need to receive at least 9.5 million tonnes of crude oil in order to produce enough gasoline to meet domestic demand, he said.

In the first 10 months of 1999 Kazakhstan exported 19.2 million tonnes of oil.

The nation's three refineries - Atyrau (in the west), Pavlodar (north) and Shimkentnefteorgsintez (south) - have capacity to refine 19 million tonnes of crude a year. The Pavlodar refinery is geared to process oil produced at Russian fields in Siberia. It was idle for much of the year due to shortages of crude.

Last year Kazakhstan produced over 26 million tonnes of oil and condensate. It expects that figure to rise to 28.5 million tonnes in 2000. (Interfax, Bloomberg)

Minister Against Privatisation of State Pension Fund, Points at Mistakes in Pension Reform

The Minister of Labour and Social Protection Nikolay Radostovets says he is against the liquidation of the State Pension Fund (SPF) and the distribution of its assets between private pension funds. He said many pensioners still trust their savings to SPF and this cannot be ignored. Radostovets emphasised the necessity of adopting two laws “On solidary pension system” and “On cumulative pension system” instead of the existing common law “On pension system”.
About 1.6 million accounts in cumulative pension funds were opened by mistake, Radostovets said. These mistakes were largely caused by computer programmes, though they are not related to the Y2K bug. There were also mistakes made by accountants and banks. He said the pension payments will be cross-checked by 1 April 2000.

The Minister noted that the recent session of the International Monetary Fund’s board of directors called the pension reform in Kazakhstan generally successful, but indicated a negative point of low involvement of pension money in the real sector of the economy. (Interfax)

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