OREANDA-NEWS. February 14, 2008. In 2007 growth rate in mining sector made up 2,6%; oil and condensed gas production grew by 3,8%; natural gas production output increased by 9,7%, reported the Official website http://en.government.kz.

The Government increased its stakes in Kashagan and Kumkol fields, as well as in Bogatyr coal mine. This work will be continued. The President’s instruction to bring back under the state control resources currently operated by unconscientious subsoil users and land owners will be enforced in the current year.

The new Tax Code will clearly define “rules of the game” for subsoil users and the payoff from the extraction industries will be increased. All the talks with subsoil users have been suspended until the new Tax Code is enacted.

According to preliminary data, GDP growth in 2007 made up 8,5%, with growth being ensured in all sectors.

At the same time, turbulence at the global financial markets in the second half of 2007 did have an effect on the growth rates. And the reason for that is that Kazakhstan is more integrated into the global economy. We were the first in the region to experience the negative fallout. But the economy strengthened through the years of independence has proved its viability.

The Government has taken a package of stabilizing measures to bolster economic growth. To this end, over KZT 403 billion was earmarked: over KZT 143 billion in 2007 and almost KZT 260 billion in 2008.

The Government along with the National Bank and the Agency for Financial Supervision will be closely watching financial situation in each bank and taking urgent actions. Should financial institutions or their owners fail to solve the arising problems, new managers will be introduced as prescribed by applicable legislation as well as new investors, including foreign ones, will be attracted. All this will be done openly and in accordance with clear procedures prescribed by the law, K. Massimov said.

Herewith he emphasized that “to save the banks through extending one-way support is not a goal in itself for the Government. It is the financial institutions that will still bear the burden and undertake the risks. Our task is to ensure stability and soundness of the financial system as a whole and to protect interests of depositors”.

The Government is already elaborating a plan of comprehensive real-time response to threats posed to the financial stability; approaches are being enhanced to macroeconomic forecasting and system risks management. In 2008 a number of effective measures will be taken to expand structural reforms in the financial sector and to develop the equity market, Prime Minister said.

When dwelling on the 30 Corporate Leaders Program, the Prime Minister noted that “we have already launched specific investment projects. The State Committee for Economy Modernization has approved of a list of 97 break-through projects. 22 of the projects were launched in 2007”.

Among these projects one could single out construction of a gas processing facility, mining integrated works, a copper smelter, an aluminum smelter, a pant to produce chlorine and caustic soda; construction of a section rolling facility and a metallurgical silicon-producing facility.

Actual setting of these facilities in operation will enable us to be speaking of substantial diversification of the economy, the Prime Minister emphasized.

In 2007, growth rate of the processing industries made up 6,7% which is higher than in mining industries.

The efforts taken by the state to diversify the economy makes the economic system more resistant to external shocks. State holding companies and social enterprises established pursuant to respective presidential decrees are bringing tangible results. Measures are being taken to support S&MBs and remove the red tape barriers.

Institutes of development have approved of 76 investment projects totally worth USD 4,6 billion. 41 facilities totaling USD 790 million have already been placed in operation.

According to the Prime Minister, over 1100 Kazakhstan-based enterprises have already adopted international quality standards. For the past year over 240000 jobs have been created, including 115000 in rural areas.

However, low efficiency remains a factor that still contains the competitive edge enhancement; according to preliminary data, efficiency only grew by 7% last year.

According to the Prime Minister, “the strengths and weaknesses of the Kazakhstan’s economy have been clearly defined and there is a clear vision of how to strengthen the current positions and bolster the nation’s potential. Our strengths are stable financial and fiscal positions, K. Massimov noted.

“Kazakhstan’s financial system remains stable and efficiently operating. However, turbulence at the global financial markets has exacerbated some internal problems of the Kazakh financial sector. Structural reforms of the financial sector and more effective regulation of the sector are the two major issues on the agenda”, the Prime Minister noted.

Low budget deficit, stable growth of budget revenues and accumulated international reserves enable to accomplish the state tasks in full. The 2008 budget already envisages real-time response to changes in economic situation.

Pursuant to the President’s instructions, the Government will cut down all the ineffective budget expenses. Fundamental factors of economy growth in the current year will remain unchanged. Economy growth rate in 2008 is expected at 5-7%.