Nazarbayev sums up first five years of Kazakhstan's industrialization program

Kazakhstan's President Nursultan Nazarbayev has summarized the first five years of state-run Program of Accelerated Industrial-Innovative Development, Tengrinews reports citing Bnews.kz. Nazarbayev discussed the results of the program during a nationwide teleconference New Industrialization of Kazakhstan: Results of 2014 and First Five-Year Plan last week. 

Five years ago, oil-producing Kazakhstan started taking active measures to redirect its economy away from dependence on raw materials and towards processing industry. The new direction has proved itself well. The years spent setting up new industries were not easy, but, despite all the difficulties, the program has yielded good results.

This industrial development program focuses on creation of new industries, development of traditional ones using innovations and new technologies and creation of favorable conditions for efficient interaction between government and businesses. It is expected to help enhance Kazakhstan's competitiveness and ensuring sustainable growth of its economy through diversification.

During the teleconference, the Kazakh president said that every journey began with first steps, and therefore, first steps and first results were very important. “Industrial innovative sector that we have created from the scratch is demonstrating very good results. What we created returns back to the state budget in trillions of tenge. Participants of Paryz contest alone have implemented 440 social projects totally worth 150 billion tenge. In fact, a new model of production and social relations emerges here,” President said.

Over 9 years since establishment of Altyn Sapa awards that are given to enterprises for producing high quality goods or services, and thus increasing the competitiveness of the domestic production, the total number of contestants has increased 6-fold. 

“We are finishing our first five years of industrialization. There is no need to talk about the results, because we have all witnessed everything that has being done in the country's regions. This has been achieved through had work of people, chieftains of businesses, mayors and executive authorities, " Nursultan Nazarbayev said.

Speaking about the results of the first five years of industrialization, Nazarbayev specified Kazakhstan’s first steps towards diversification of its economy: “First of all, we have made a decisive step to change the structure of our region.The diversification is happening not just in words, but also in deeds. The pace of growth in the manufacturing industry is for the first time much higher than in traditional mining industries. If the prices for metal and oil had not been that high (in recent years), these figures would have been even greater, but even amid those conditions the manufacturing industries has showed good results,” Nursultan Nazarbayev said.

The overall share of mining industry in Kazakhstan's economy has dropped to 16.5%, he said. "Over five years, we mastered production of completely new products that had never been produced in Kazakhstan before. During the first five years, the manufacturing sector received almost 70% of all the foreign investments injected in Kazakhstan's economy since Independence (1991). Before (the industrialisation program) it was vice versa - 70% went into development of raw materials. During these 5 years, 770 new enterprises were commissioned and 75 thousand new jobs of new level requiring higher qualification and offering decent salaries were created. This is very important. Today more than 1 million people of Kazakhstan are employed in the industrial sector," the President said.

Kazakhstan’s economy also demonstrated good efficiency during the global crisis. “Thanks to the policy that we were pursuing during the most difficult period of crisis in 2007-2009, we managed to prevent the growth rate from going into the red. But hard times are coming now. I hope we will be able to handle it together. We have continued to launch new programs amid the difficulties in the global economy even though we have not fully recovered from that crisis yet," Nazarbayev said.

Labor productivity in the manufacturing industry in Kazakhstan, according to the president, has grown by 60%. Each worker has increased his or her labor productivity by an average of $20 thousand worth of products a year. "Take a notice, it is every worker that we are talking about," Nazarbayev said.

He also added that the energy intensity of the economy had decreased by almost 19%.

"Third, major new sectors have been created: engineering, oil processing, electricity and others. The world's largest industrial giants came to Kazakhstan. Fourth, infrastructure base has significantly expanded. More than 4 thousand kilometers of roads and 1,700 km of railways have been built or reconstructed. Over the past few years, such long transportation routes have been built nowhere else in the world,” he said.

"In the field of mechanical engineering, production of rail cars has grown 10 times, production of diesel locomotives - 2.5 times. Over the five years, automotive industry increased the production of passenger cars 12 times, tractors - 6 times. We have expanded the range of products in the chemical industry. During five years the share of domestic construction materials increased almost two-fold. Currently, almost 80% of the building materials is produced in Kazakhstan, and when we started, it was only 15%. Cement production has doubled. Therefore, we prepared a new program - Nurly Zhol - that would have been impossible without all these enterprises, " the President said.

The country has also made a great breakthrough in medicine. For example, Kazakhstan began to produce nearly everything needed for domestic medicine ranging from medical gloves to CT scanners.

“The first five years of industrialization gave us priceless experience of successful crisis management during hard times," President of Kazakhstan said.

The second five-year plan of industrialization will focus more on innovations. Currently, more than 100 world's major companies are ready to invest in enterprises of the second five-year plan. However, there is no information yet about the specifics of the new businesses or their number.  

Writing by Assel Satubaldina, editing by Tatyana Kuzmina