Friday, December 8, 2023

Tokayev addresses Kazakhstan’s state of emergency, anti-crisis measures

Government and governors have already begun to implement the first package of anti-crisis measures to deal with coronavirus
Kazakhstan President Kassym-Jomart Tokayev has adopted several measures to deal with the crisis.

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Kazakhstan President Kassym-Jomart Tokayev addressed on March 31 the state of emergency and anti-crisis measures introduced by the government to tackle the global spread of Covid-19 in Kazakhstan.
He noted that the situation in the world remains difficult. Almost 800,000 people have been infected in 177 countries. The rate of the illness is growing daily, seemingly approaching its peak. The virus is testing the strength of all states.
“Kazakhstan was one of the first to take the necessary measures. Thanks to putting in place the state of emergency, it was able to prevent the uncontrolled spread of the virus,” Tokayev said in a statement, adding that quarantine measures have been strengthened not only in the capital and in Almaty, but also in all regions of the country. Additional measures have been announced to support those who are at the forefront of the fight against the pandemic.
“Work and life in this state of emergency always lead to significant economic and social costs. The Government and governors have already begun to implement the first package of anti-crisis measures. Further steps have been announced to support citizens and businesses,” the Kazakh President said.
Tokayev has adopted several measures to deal with the crisis. He ordered to index pensions and state benefits, including targeted social assistance, by 10% in annual terms. This means an increase in the income of the corresponding categories of Kazakh citizens totalling more than 200 billion tenge (€406.8 million.
Moreover, the Kazakh President has adopted a measure to expand the coverage of additional social benefits in the amount of one monthly minimum wage. This amount – 42,500 tenge (€ 86.44) – should be received not only by those who previously had official work and salaries, but also by those citizens who worked informally and were and remain self-employed. Overall, the measures announced on March 23 and March 31 will cover approximately 3 million citizens.
An dditional measure is to extend from April 1 to July 1 the right of uninsured citizens to receive medical care as part of the compulsory social health insurance system. During this period, the service provided by medical institutions to citizens should be carried out in full, regardless of the status of the member of the compulsory health insurance system.
Tokayev has also asked to expand the list of categories of citizens who should be provided with free grocery sets. This assistance should be additionally provided to disabled people of the 1st, 2nd, 3rd groups, disabled children and those who are officially registered as unemployed. This measure will cover more than 800,000 people. Local small and medium-sized businesses (SMEs) for production and delivery will be engaged. The Government aims to attract domestic IT companies to develop a platform that will provide an effective mechanism for monitoring the targeted spending of social support funds. In the future, it is envisaged to gradually move from products to the transfer of funds to be used to independently select and purchase such products.
A fifth measure adopted by Tokayev foresees conducting spring sowing campaign in a timely manner. For this, 70 billion tenge (€142.3 million) will be allocated from the budget and transferred to farmers through the Agrarian Credit Corporation JSC. The rate for end borrowers will not exceed 5%. An additional 100 billion tenge (€203.3 million) will be invested for these purposes within the framework of the programme “The Economy of Simple Things”. The final rate under this programme has been unified across all sectors and amounts to 6%. Small and medium-sized farms will be supported. The Government has been tasked to reduce the price of diesel fuel for agricultural producers to 165 tenge per litre (€ 0.34) or 15% of the market price. Approximately 390,000 tonnes of diesel fuel will be allocated at a reduced price for this.
Tokayev also noted that due to the quarantine measures in the capital, the cities of Almaty and Shymkent, there is an abundance of working age people, primarily young persons. “People must have a source of income so that they do not sit at closed barriers without a livelihood,” the Kazakh President said. Citizens who are ready to go to work under the “Employment Roadmap” will be given “allowances” in the amount of 2 monthly minimum wages (85,000 tenge, equalling €172.86) immediately after starting the work. This will be in addition to the regular wage. Mobile recruitment centres will be deployed, where the governors’ offices will run outreach activities, carry out rapid testing for coronavirus, and collection and transportation of workers to the new work places. Employers are required to provide all those employed under the “Business Roadmap” with decent working conditions and protective equipment.
Moreover, Tokayev said measures have been announced aimed at supporting SMEs, including tax preferences, and deferred payments on loans. A large number of proposals of representatives of small and medium-sized businesses are already being implemented by state bodies. This includes expanding types of priority business activities that can receive state support, reduction and unification of the loan rate, increase in the volume of state guarantees.  The Financial Regulatory Agency is working with banks and other financial institutions to defer and restructure payments on loans to SMEs. In order to support entrepreneurs in terms of reducing the tax burden, the accrual and payment of taxes and other payments related to payroll is cancelled for 6 months (from April 1 to October 1 of this year) for SMEs that operate in the most affected sectors of the economy. These sectors include: catering, selected trade sectors, transportation services, consulting services, IT sector, hospitality industry (hotels), tourism, etc.
The Government has suspended the payment of all taxes by SMEs for the period of three months. This means that the taxes do not need to be paid during this period, but will have to be paid later. Furthermore, the Government is working with partners in the Eurasian Economic Union to cancel import duties for the most important imports for Kazakhstan. The decision on personal protective equipment, raw materials for their production, vaccines, and diagnostic kits has already been made. Work is continuing to reduce import duties for a number of food products, for which Kazakhstan is not self-sufficient. Governors’ offices and the Government (through the “State Food Corporation”) should establish a mechanism for guaranteed purchase of products from domestic agricultural and processing enterprises at least 6 months in advance, i.e. introduce the so-called “forward purchase” system. Businesses, in turn, must assume counter obligations to ensure production volumes, maintain prices, maintain employment, etcetera.
Finally, to implement this package of measures, the Kazakh President instructed the Government and the National Bank to use all necessary sources of funds, including the State Social Insurance Fund, resources and instruments of the National Bank.
In order to quickly and accurately bring the funds to the real economy, the possibility of direct financing through state development institutions will not be excluded, Tokayev said, adding that this mechanism should be aimed at helping medium-sized fast-growing companies that are focused on export. These companies can act as the country’s “locomotives” in the post-crisis period. The Accounts Committee will be tasked with ensuring targeted and efficient spending of allocated funds, and adherence to the principles of openness and transparency in supporting citizens and businesses.

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