The Address contains the answers to numerous questions arising in the society in the curse of its progress and strong democratic state development. New goals the President set are related to changed world and inside republic climate. The main goal we have to achieve is the prosperity of the country and of the nation. Our unity and positive energy, intention to preserve stability and civil and national accord and pace in the country allow us to achieve the goal.

The President of the Republic of Kazakhstan. The Address to the Nation of Kazakhstan.

Priority aspects of home and foreign policy for 2004.

Dear compatriots! Dear Parliament Members!

The country continues developing with success following long term "Kazakhstan 2030" Strategy and ten-year strategic plan.

We have succeeded much during recent years. The world community has recognized the successes of Kazakhstan in the field of market reforms, economic progress and increased welfare standards of population.

The steps to strengthen national security and internal stability, democratization of the society, development of regional cooperation are taken.

The main thing is the search for better ways of development of the society and the state, economy and social sphere is fruitful and steady.

Main aspects of economic and social policy, further democratization of the society, development of culture, education and spiritual spheres in 2004 are presented in the Address.

I. Economic Growth.

Modern Kazakhstan possesses developed fuel and energy complex, metallurgy, and chemical complex to promote high tempos of economic growth.

At the same time, we have faced the most important task to provide development of processing industry, high-tech and science intensive enterprises, industrial infrastructure and agro-industrial sector.

1.1 Agrarian policy.

Last year Address announced 2003-2005 the period of regeneration of villages.

Resolution of main goals to regenerate and develop agriculture and the country's rural territories is the soul of socio-economic policy, carried out by the Government. Appropriate structural reform was carried out in state government system for efficient resolution of the task. Draft Land, Water, Forest Codes, draft Law "on Obligatory Insurance in Plants Breeding" were developed and submitted to the Parliament, the Laws " on Veterinary Medicine", "on Protection of Plants", "on Seed-Growing", were adopted and Plant Quarantine Act amended during last year.

In compliance with adopted program documents the state plans to invest over 150 billion tenge in agrarian economy in 2003-2005.

In two coming years additional 30 billion tenge will be allocated for public health needs. (15 billion a year). Moreover, 15 billion tenge will be allocated annually in 2004-2005 from state budget to invest rural education, public health and rural water supply objects.

Except state agrarian and food program I intend to adopt a state program of rural territories development in upcoming summer.

Since 2004 the state will allocate significant funds for its implementation.

The goal of the program is accelerated development of villages, assistance to citizens' migration from depressive settlements and employment of such citizens.

I would like to remind that growing amounts of rural economy support and land private ownership right introduction done to increase the share of agrarian sector in the country's economy and to resolve social problems of villages.

1.2 Industrial Innovation Policy.

Building the model of well-balanced development of the country we have to determine the ways of diversification of economy from raw economy to processing one.

Minerals Kazakhstan is rich for is nonrenewable natural resource, deposits will deplete somewhen. It can result in future economic dependence and later in political dependence.

That is why the Government has developed the Program of Industrial -Innovation Development up to 2015.

The main goal of the program is to achieve GDP 3,5 times increase in comparison with 2000 by 2015.

The main goal of the program is to create appropriate business climate, competitive environment system of public institutions, supporting private sector to create enterprises producing high value added goods.

In this very regard, the country's ferrous and nonferrous metallurgy, raw materials processing industry possess a significant potential to create such enterprises.

Modern methods of such enterprises establishment demand state support, and high-tech centers establishment.

We should use existing scientific basis, crate technological centers; the center of information technologies will be created in Alatau settlement in Amaty environment, the center of biological technologies will be established at Stepnogorsk, the center of nuclear energy technologies will be established at Kurchatov.

We should focus attention of machine building, oil and gas engineering and development of transport when implementing the program.

State support of the program is expressed in softer crediting, insurance of export, share holding in basic capital, spread of commercial information.

We plan annual state investment expenses to achieve 38 billion tenge (250 million dollars). A significant part of the funds will be spent to create and modernize industrial and scientific infrastructure.

In this connection it is necessary to reconsider our approaches towards scientific and innovation policy. The reform of the science should touch not only its structure, but also the amounts of its funding. The amounts of state funding of scientific and applied researches should be increased.

Set goals demand reconsideration of foreign trade principles. At present, it is clear, that the country should liberalize trade, tying it to regional integration, transfer to world standards and export orientation of goods and services produced.

The system of development institutions will be created and capitalized with the purposes to implement the Program of Industrial and Innovation Development.

The system includes National Fund, performing saving and stabilizing functions.

Kazakhstan Investment Fund will be created in nearest future. It is designed to assist establishment of local companies, producing high value added goods with its share holding in the companies' capitals.

Innovation Fund will be established with the purposes to provide permanent interaction of scientific-technical and entrepreneurship spheres. It will be delegated powers to develop and launch innovations, venture entrepreneurship.

Kazakhstan Development Bank has started crediting enterprises, working at real economy sector. Total sum of credits, it allocated, achieved 23 billion tenge (150 milion dollars). Its goal is to assist development of processing industry and industrial infrastructure.

The Government must create the Export Insurance Corporation, to insure political risks related to foreign trade.

State development institutions shall not substitute or push the market off but become a driving force of competitive economy, involve private enterprises in innovation processes on partnership principles.

1.2 Integration Policy.

Integration initiatives of our state will assist to speeded up economic development of our state. Russia, Kazakhstan, Ukraine and Belarus, making over 90% of total CIS economy are known to have announced the organization of regional integration formed. Our country supports practical execution of the goals of the association.

Much in this field depends upon harmonization of member-states' national legislations and active participation of MPs in the process.

1.3 Investment Policy.

I'd like to remind, that we have promised to double GDP in current decade and resolve the problems of unemployment and poverty.

On this background to achieve maximal economic growth tempos is the main task of 2004 in the sphere of economy.

Its resolution depends upon rapid growth of investments and increase of the norm of saving in GDP.

We need to make the amounts of gross savings of basic capital to DGP achieve 28% level in upcoming 4-5 years for to support high tempos of economic growth. We should achieve the growth of state investments that will make 2-4% to GDP.

At present it is obvious that state budget will be over executed and achieve to psychologically important level, making one trillion tenge. That is why there exists the need to adjust budget in upcoming May and direct above the plan receipts from the sales of strategic industries bigger state enterprises' shares in National Fund.

I this connection I charge the Government to use current surplus for social development needs.

1.4.1 State Investments.

With the purposes to create and capitalize aforementioned financial institutions promoting implementation of industrial innovation program, I propose:

- to allocate 12 billion tenge to increase the authorized capital of Development Bank and its credit resources.

- to allocate 23 billion tenge to increase authorized capital of created Kazakhstan Investment Fund

- to allocate 3 billion tege to Innovation Fund

- to allocate 7.7 billion tenge to create Export Insurance Corporation.

1.4.2 Development of Astana.

At present no doubts in strategic necessity and advisability to move the capital to the central region of the country exist.

Having started the execution of great plan to improve the architecture of our capital we should not afford the affair unfinished.

We have already discussed political and strategic profits of new capital construction for several times.

So, 2.5 billion dollars were invested in development of Astana. It gave a boost to economic growth of whole the country. It resulted in regeneration of the country's industry, new jobs created and tax collections grown.

Other the country regions' centers also changed following the example of Astana. "Development of Astana -Development of Kazakhstan" Program works.

We are grateful to friendly states, our foreign investors and local businessmen for their contribution to development of the capital.

In future we need to transfer to planned construction of the capital on budget expenses, basing on long term and midterm its development plans and programs.

The Government and Astana administration should care for the construction of social and cultural objects met the plans.

1.4.3. Private Investment.

Private sector should play greater and greater role in the economy. I'd like to remind that aggregate capital of pension accumulating system is approaching 300 billion tegnge, the deposits in banking system have exceeded 600 billion tenge.

Aggregate own capital of banks 30% grew during a year and exceeded 1 billion dollars, credits allocated to economy 4,5 times grew.

Surely, it provides and supports high tempos of economic growth. But we are interested in the growth of private savings and investments in economy.

1.5.Taxation Policy.

The less are the taxes the more are the investments is an axiom. That is why I charge the Government to submit a proposal on further reduction of several tax rates to the Parliament.

I consider that since January the 1st 2004 we should

- decrease VAT rate from 16 to 15%

- decrease Social tax rate from 20 to 7% depending upon the level of expenses of employers related to remuneration of labor on regression scale.

- -decrease maximal rate of individual income tax from 30 to 20%

- I charge the Government to study the possibility to expand the sphere of special tax regimes.

II Social Development.

Increasing the tempos of economic growth we do not only strengthen the economy but also create greater opportunities to resolve social development problems.

The most important element of social policy is the growth pensions and wages.

2.1 Pensions.

I consider it necessary to increase minimal pension up to 5,5 thousand tenge.

I am sure, the time for that has come and the country is able to set better scale of pensions, taking into consideration the contribution of every pensioner, their work experience, wages, when they retired.

It will make increase in pensions of million old people possible.

We should start resolving the problem without any delays. I charge the Government to execute differentiated increase of pensions: to re-calculate pensions since June the 1st of current year and to start paying them since July the 1st.

Calculations show, that we need to allocate about 60 billion tenge including 20 million necessary to allocate in current year during a year and a half term.

As a result average pension will exceed eight thousand tenge in next year.

2.2 Wages.

Minimal wage has achieved the level of minimal pension in current year, though the first should exceed the second.

That is why since January the 1st of next year it will be increased from 5 000 to 6 000 tenge (the increase will makes 32%).

We have increased the wages of specialists working at the institutions funded from budget. The wages of teachers were 35% increased in last year.

On the background of active social policy, since 2004 the wages of specialists working at the institutions funded by the budget will be 20% increased. Further perfecting of remuneration system is also planned.

At the same time within the frameworks of new remuneration system the wages of civil servants will 50% grow.

The Government should adjust the remuneration scale. First of all the wages of lower paid specialists should be increased.

In 2004 over 50 billion tenge will be allocated from state budget to increase wages.

Moreover, pursuing the goal to support low incomed people, I charge the Government to increase non-taxable minimum for individual income tax calculation, together with 30% percents decrease of taxes.

I hope the measures to improve the welfare standards of the majority of citizens whose incomes are lower an important factor of significant decrease of unemployment rate.

There is one more issue. We need to think how to recover migration losses of our country. It is the pressing problem, realization of our plans depend upon.

That is why the Government must develop the program including

- increase in birth rate

- decrease in death rate on improvement of health

- - increase the reception of immigrants first of all former citizens of Kazakhstan.

Backing on aforementioned I am setting the task to double the quota of repatriates, with allocating additional two billion tenge for the purposes.

2.3. Preserving Cultural and Historic Heritage.

I propose to draft and implement a special midterm program "Cultural Heritage" consisting of several large projects.

Its goals are:

The first - to create the system of the nation's great cultural heritage studying, including the study of modern national culture, folklore, traditions and customs

The second - to re-create significant history, culture and architecture monuments, which are of special importance for national history.

The third - to generalize the experience of national literature and create art, scientific and biography series.

The fourth -t o crate full fund of humanitarian education in state language basing on world science, culture and literature achievements.

Among the measures of culture and spiritual development a special attention should be focused on development of cultural environment of our capital.

I charge the Government to develop appropriate decision on the regard.

* * *

All the measures, I am proposing, meet our opportunities.

That is why I appeal Mps to support the proposals. The measures, will surely, improve the welfare standards of a significant part of our country's citizens.

III. Democratization and Efficient Government.

The citizens of Kazakhstan know that we are moving to open society, following the principle: first economy then politics.

But we do know the other.

If in early nineties we had lost the country government, then in the years of severe crisis and in multinational sate conditions we would appear able even to ruin the statehood, and fail to resolve the tasks to reform economy. There are real examples proving it. But we are stating: we have achieved success.

At present our achievements in economy and development of the state allow us to focus on the issues of further liberalization of political system.

It will be the next stage of civil society development.

At present we have formed key institutes of democracy and civil society.

During recent yeas we established ombudsman institute, created National Council, Public Mass Media Council, Permanent Conference to develop proposals for further democratization and development of civil society works within the Government. The system of political parties and nongovernmental organizations with strengthen after a new law on political parties adopted. But the main thing is democratic type of political culture is growing in the society.

Carrying out our policy we shall have to take further steps.

I propose a five- priority program of political reforms

The first.

We need to modernize the system of state government. Its main goals are to determine competences of state government levels and to perfect the system of central and local budgets relations.

Amendments to the Law " on Local State Government" were discussed at yesterday meeting of National Council. They are related to further expanding of powers of local government when the issues of territorial development are resolved.

For that we need to introduce amendments in 150 laws. That is why I am setting a task to the Government to prepare appropriate amendments to legislative basis, providing efficient functioning of all government levels.

The work over draft Budget Code is almost completed. The Government will submit the document to the Parliament in May. That is why I would like to appeal to MPs with the request to study it and adopt in current year, for since 2004 we were able to start forming 2005 budget basing on new Budget Code.

A draft law on Republican Budget 2004 will be developed basing on current law "on Budget System".

As soon we have finished determining powers of government levels and their financial provision the process will be logically finished with the elections of local executive bodies.

Our main task is to make local authority more responsible.

I suppose us able to introduce elected mayors of rural districts for set period.

Then we should carry out experimental elections of district mayors.

On its results we shall determine, whether such practice is advisable or not and find the optimal model. We should remember that elected mayors is not an end in itself. The issue should be resolved in stages.

I consider it necessary to start creating conditions for to train cadres of all authority levels. Their study at best world universities, creation of elite universities inside the country and strengthening of local academy of civil service are the task.

We shall progress step-by-step preserving the values of our culture, unity, international and inter-religious accord and political stability.

One should remember that no state has created perfect state structure as nobody managed to build ideal relations of central and local budgets.

Even in developed states, the stages of liberalization and decentralization are substituted with severed state control and centralization: everything depends upon current historic conditions.

One should realize, that the efforts to copy foreign experience, as one of foreign experts said, remind transplantation of organs, when graft rejection is possible to happen.

In such issues we should be careful and consider every moment.

I charge the Government to study the issue considering foreign experience and develop own proposals.

The second.

We have to perfect election system.

Election process should be transparent and open.

A draft law "on Amending of Constitutional Law "on Elections in the Republic of Kazakhstan" was developed last year.

The recommendations of round table meetings, carried out with political parties by central election commission are taken into consideration. In early current year the draft law was discussed at the meetings of Permanent Conference. The Government has to polish it and submit to the Parliament with expressed remarks and proposals taken into consideration.

The main goal of the law is to make election process transparent and open.

The third

Further strengthening of civil society institutions is the main aspect of democratization of political system. Our goal is to assist the appearance and existence of strong and responsible parties, supported by people. It meets strategic interest of our country.

Political parties should be able to propose candidates to Lower Parliament Chamber members with the institute of self- proposing preserved.

The parties should have greater opportunities to control the process of election results calculating.

The relations with nongovernmental organizations should be changed.

I suppose the practice of economic support of nongovernmental organizations via the system of government social contractual work efficient.

We need to speed up the development and adoption of draft laws "on Nongovernmental Organizations in the Republic of Kazakhstan" and "on Government Social Contractual Work".

The Government should develop the draft laws and submit them to the Parliament.

Civil forum, which is the first republican congress of nongovernmental organizations, should start the large-scale cooperation. It should be held in the second half year.

The fourth.

We should determine the role and the place of mass media in the process of our society democratization.

During the years of independence, political, economic and legal conditions for independent mass media functioning were created in Kazakhstan. It is a reality proved with legal acts.

At present independent mass media prevail.

At present there exist significant resources for mass media financial support, which the state uses. By the way, only in current year over 50 new mass media were registered. We should think on new aspects of media space development. Mutual responsibility of society and mass media, the one of authority and journalists is meant. The problem exists not only in Kazakhstan, all modern societies have faced it. Latest developments show that the interests of national security, political stability, international consensus, inter-religious peace are the priorities not only of state but also of international levels.

We observe mass media of the most democratic states choosing the position of national interests protection, we shall not be the exclusion.

The necessity to adopt a new law on mass media has appeared. The law should consider modern realities and strengthen responsibilities of officials for interference in the activities of free press. But it is also necessary to determine the responsibilities of mass media when they violate laws. The society demands press freedom, but not the freedom of lie and disinformation.

The Government and the journalists should develop an appropriate law and submit it to the Parliament in current year.

The fifth.

To perfect the activities of law enforcement bodies is one of main problems. I suppose, the problem should be studied from citizens' human rights point of view. It is important to continue humanization of criminal law sphere.

It is the time for the Government to start creating material and legislative conditions to resolve the issue of death punishment moratorium introduction and for to substitute such punishment with lifelong imprisonment.

It is necessary to introduce the institute of jury. We shall strengthen all legal mechanisms of control over activities of courts, naturally, without interference in justicing.

It is necessary to improve the quality of judges training, it is advisable to create a special magistrates to train the judges there.

Dear Citizens of Kazakhstan! Dear Parliament Members!

I have never promised whole mountains of gold and shall never do. I've always warned that we shall have to overcome hardships. But I convinced people that somewhen the time will come and the life standards will increase.

In shortest historic period we managed to cope with economic and political reforms. We changed ourselves, as our thinking way and views did. We have realized that only our work is the source of our welfare and the state has to create conditions for that. At present I am able to say myself keeping the promises. The growth of Kazakhstan's economy serves for the main goal, which is welfare of the nation.

I have spoken about such time and it has come.

I have a honor to announce on biggest in most modern history increase in social expenses, every citizen and every family will feel it. Additional 120 billion tenge will be allocated form state treasury for the purposes. The figure is impossible to compare with the ones of previous years.

If economy is efficient, then the trend will be preserved, as it is presupposed in "Kazakhstan 2030" Program.

In difference to last years, we possess development programs, focusing on four key aspects, our economy based on. They are

- Agro - food program

- Industrial innovation program

- Development of infrastructure and energy

- Social development programs

At present we possess all necessary financial resources. The time of coordinated work of all authority branches, of efficient laws and their observance has come.

Our unity and creating energy, desire to preserve peace, stability, civil accord, provide peace in the country will guarantee the progress of Kazakhstan and its prosperity.