Timur Kulibayev on using National Oil Fund to support small and middle-sized business

Timur Kulibayev, Chairman of the Presidium of Atameken Economic Chamber of Kazakhstan [a major business lobbying group in Kazakhstan] commented on the National Oil Fund at a press-conference following the Camber’s sitting February 22. Mr. Kulibayev elaborated that the Fund accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. According to him, its assets are the same public money as the central budget means. “The National Fund has two functions. The primary function is to accumulate, and this function is fully exercised. The Fund is a cushion to protect the nation in crisis periods through injecting money into the central budget, enabling the Government to discharge its obligations in terms of social safety network. The second function is to facilitate the national economy modernization”, Mr. Kulibayev said. “Access to loans is currently tough for businessmen in rural areas (…) and for small and middle-sized businesses in general. We do have banks. The financial system in general is recovering. However, access to loans and cost of borrowing are still an issue for small and middle-sized businesses. This is a realm where the Government could give a hand through a number of tools such as lower APR, subsidies to cover certain expenses (…) the money can be allocated out of the central budget which could be replenished out of the National Oil Fund apart from tax proceeds. There is nothing supernatural in tapping into the National Oil Fund (…) It’s a normal practice of managing public finances”, Mr. Kulibayev said. In his latest State of the Nation Address [January 27], President Nazarbayev suggested the National Oil Fund money be used in the form of loans to the national economy rather than kept with foreign banks. The National Fund of Kazakhstan was created in 2000 as a stabilization fund that accumulates windfall revenues from oil sales and ensures the economy of Kazakhstan will be stable against the price swings of oil. The assets of the National Fund assets are monitored by the National Bank of the Republic of Kazakhstan. As of February 1, 2012, assets of the National Oil Fund made up $45.5 billion. Loans from the National Oil Fund [to finance large-scaled investment projects] could be provided on the basis of public-private partnership, with the most of the financial burden placed on strategic investors, National Bank’s Governor Gregory Marchenko said earlier this month.