02.03.2006 |
Dear Kazakhstanians! Ladies and Gentlemen!
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| Photo: Sergey Bondarenko, Bolatbek Otarbayev |
Our irreversible recent progress provides our nomination for the place among fifty most developed states:
First: only competitive and transparent economy, without any raw market’s limitations is the base for prosperity and dynamically developing society.
Second: we are building socially oriented society, which is to provide high living standards for all population strata.
Third: we are developing an open and democratic community.
Fourth: we are strengthening legal state, founded on the system of political checks and balances.
Fifth: we guarantee and provide equality of all religions and confessions.
Sixth: we are keeping traditions and culture of Kazakh people, providing inter-ethnic and inter-confessional accord.
Seventh: our country is a full and responsible member of international community; Kazakhstan is carrying out important functions in provision of geo-political security in the region.
The following priorities are to provide Kazakhstan advance to most competitive and dynamically developing countries of the world.
1. First priority: Kazakhstan successful integration into the world economy is the base of qualitative breakthrough in the country’s economic development.
We are to be ready for stiff competition and use it in our interests. Kazakhstan must actively share in international economic projects, providing our integration into global economy.
The state in its turn is to eliminate legislative, administrative and bureaucratic barriers and render direct assistance to promising initiatives of private capital. In this regard our efforts should be concentrated on the following:
1.1. Implementation of breakthrough projects, development of industry, production of goods and services, competitive at certain niches of the world market.
We are to stake on creation and development of industries, oriented at final products’ export; joint ventures in oil-gas, transport and other sub-branches of engineering, metallurgy, chemistry, agro-industrial sphere. Development of bio-technical centers and Park of informational technologies is of special importance. The government must adopt concrete programs for support of competitiveness of national goods and services.
1.2. Integration into world economy via Kazakhstan participation in regional and international economic associations.
We are to share and support expansion of mutually beneficial cooperation in the frames of EuAsEC, and formation of Common Economic Space. It is also expedient to concentrate on the projects of World Bank, EBRD, Asian bank of development and recently established Eurasian bank of development.
1.3. WTO access as additional instrument of economic modernization and strengthening of Kazakhstan competitiveness at international markets.
Negotiations on Kazakhstan prospective WTO accession are underway. Considerable part of Kazakhstan laws, regulating external-trade regime, has been harmonized with WTO norms or are under consideration in Parliament. I am convinced our country’s accession will open wide opportunities for Kazakhstan competitiveness at international markets.
1.4. State support of export-import crediting.
Crediting of export of non-primary commodities and services and import of HT equipment is priority.
At present volume of goods’ export is $ 2 bln. It is necessary to increase the above figure. We are to rest on the best world practice and develop cooperation with foreign export-import agencies.
1.5. Kazakhstan as an establisher and stockholder of international companies, developing new technologies.
Additionally to our own scientific researches, we are to initiate participation in international HT business, including its initial, constitutive stage.
In this regard Innovative fund’s role is of special importance. We can follow example of other countries, which are obtaining stocks of new HT companies in the most breakthrough directions of economic development. In such way we become the owners of related authors’ rights for intellectual property. To reach the goal we are to use the institute of “honorary consuls” in other countries.
1.6. Formation in Kazakhstan favorable conditions for production of commodities with protected rights of intellectual property and trademarks.
I am sure, strengthening of Kazakhstan positions, as stiff guarantee in protection of author’s rights and trademarks will provide active development of diversification of new economic sectors. We are to hold a wide public company, targeted at elimination of counterfeit products and take administrative and penal measures against violations of rights for intellectual property.
1.7. Establishment of academic centers and institutes with high international standards.
The question is creation and development in Kazakhstan of scientific centers and “technological parks” with international share.
Development of scientific potential is to shoot at maximum closeness of applied science, production and business. To implement the idea we are to create related pre-requisites for attraction of leading Kazakhstan centers and institutes, via utilization of such instruments as “incubator projects”.
To stimulate the above, the government is to settle a range of organizational problems, including free provision with land plots, as it has been done in India for example; provision with initial capital and creation of required basic infrastructure.
1.8. Development of modern and competitive transport-communicational infrastructure.
The main task for Kazakhstan transport-communicational complex is integration into Eurasian transport system to provide utilization of advantages of the country’s geo-strategic location. It is expedient to expand agreements with neighboring states for improvement of cargoes’ transportations.
All that is to be reflected in elaboration and implementation of 2015 RK Transport Strategy.
1.9. Pursuing of open policy on utilization of natural resources.
We have initiated and are pursuing an open policy in utilization of natural resources, provision of stable and transparent conditions of cooperation with transnational companies and our main regional neighbors. It will strengthen Kazakhstan’s reputation as reliable international partner, which is contributing to energetic security.
At present we must concentrate on diversification and maintaining of sustainable connecting channels on delivery of Kazakhstan energy resources to world markets as well as on outstripping development of deep processing in oil-gas sector.
1.10. Development of Almaty as large regional center of business and financial activity.
Almaty dynamic development as the main Central Asian regional financial center is to be focused on creation of favorable conditions for large financial organizations of Kazakhstan and foreign countries.
Related infrastructure, communication first of all is to be built to provide successful financial center’s operating. It is obvious that experienced managers are to be involved in that.
1.11. Practical implementation
To implement all the above in practice the government is::
- to carry out corrections and analysis of acting normative basis, to elaborate new draft RK Law “On competition and limitation of monopoly”, laws “On Concessions” and “On regional financial center in Almaty” in 2006.
- to reform tax and custom administration and state support of domestic producers, to harmonize internal standards of technical regulation in compliance with international and WTO requirements and to proceed with reformation of financial services’ market.
- in the frames of WTO prospective accession to work out and implement special economic “adaptation program” , providing support of certain branches of economy, agriculture in particular in transitional period.
- to proceed with investigations in all sectors of world market, where Kazakhstan might be competitive supplier.
- jointly with institutes of development and leading Kazakhstan companies to form the list of large mid and long- term projects. To consider establishment of industrial zones, in Astana in particular. Special attention should be paid to development of “Horgos” commercial border center.
- to establish Managing company for coordination of institutes of development..
- to adopt 2015 RK Transport strategy, provide cooperation with business in development of infrastructure, based on state-business partnership. To create 2-3 aviation hubs for qualitative Europe-Asia transportations and to organize service center in Astana for qualitative service of aviation transportations.
2. Second priority: Further modernization and diversification of Kazakhstan economy as basis for sustainable economic growth
To maintain sustainable and dynamic economic growth the state will stimulate demand for high-quality products and services, using instruments of fiscal, monetary-crediting policy, state regulation of effective redistribution of main production factors.
For further modernization and diversification of Kazakhstan economy I deem it expedient to focus on the following directions.
2.1. Monetary-crediting policy
The aim of monetary-crediting policy is checking inflation. National bank and government are responsible for it.
Another task of the monetary-crediting policy is to maintain financial market stability, flexibility of real exchange rate so as to reduce negative consequences of inflation, at the same time stimulating economic growth.
National fund will play an important role in it. I hope the government will provide transparent and effective formation and use of the Fund’s means.
2.2. Fiscal discipline and effective tax policy
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| Photo: Sergey Bondarenko, Bolatbek Otarbayev |
It is important to pursue flexible tax and budget policy to stimulate diversification and development of new branches of economy, attraction to these spheres of foreign capital and know-how.
I think we should reduce VAT to boost production. It is expedient to establish specialized department in the tax committee of finance ministry to check tax incomes from major taxpayers. It should attract international audit companies. Strict budget and tax discipline is necessary.
2.3. Rise of effectiveness and return from fuel-energetic and extraction sectors of economy
We have to develop new niches of internal and world market at the expense of deeper conversion in oil, gas and other extracting branches.
Each oil-and-gas field should be viewed as an integral enclave of enterprise development.
Kazakhstan must be regarded as a reliable partner. I hope within the current year the Government will start practical realization of complex General plan for petrochemical production development in Kazakhstan for the nearest decade.
2.4. Effective management of state assets
The government needs to create a transparent and clear-cut system to manage state assets. Inventory of state property and a single database for the whole country, common criteria for rehabilitation and bankruptcy are required.
We ought to drop the practice of attracting one and the same bankruptcy creditors, preferring bankruptcy as the best way of state property management and create maximum competition in this area, hiring international companies, if necessary for bigger assets’ management.
2.5. Rise of effectiveness of economic interrelations between the state and private sector on market principles basis
We need to optimize state share in economy through administrative reform.
The new economy calls for new management solutions, equal to modern- thinking managers only.
To develop contract relations in the society and strengthen private property institute additional legal and administrative measures are required as well as developed system of independent consideration of disputes and arbitrage procedures.
Representatives of power bodies and other agents of economic life must be subject to economic, administrative and even criminal responsibility for non-fulfillment of contract commitments.
It is important to have an appropriate legislature, protecting the rights of monitoring shareholders and founders. Legal guarantees against re-nationalization should be envisaged too.
I want to lay special accent on expediency of e-government’s speedy introduction. It will improve work of state bodies and reduce corruption and administrative barriers.
2.6. Implementation of wide-scale state support of enterprise, extension and strengthening positions of small and medium-scale business
Fund for small business development must become a real source of financial resources and expertise for different layers of the population, wishing to tap business potential and initiative. We need to expand the Fund’s representation net, enhance work in the regions, aimed at business support.
We have to put an end to so-called “latent” monopolies in metallurgy, banking, insurance, chemical industry and other branches. It should be carried out through reform of anti-monopoly legislature, creation of attractive and transparent conditions for integration into these economy sectors of new companies – both foreign and home.
Any bureaucracy attempts should be suppressed, control over industrial assets –established.
2.7. Creation of regional “engines” of economic development through formation of regional corporations for social development and enterprise
Social-business corporations (SBC), sustainable business structures, could be formed in various regions and take over management of communal property, land, non-remunerative, but working businesses, that can be used for new business creation.
Each SBC will become a kind of a regional development institute and act as a holding company, managing state assets in a particular region.
Further on with management experience accumulation and increase of SBC capitalization level we could talk of extension of their “responsibility areas”, including exit to regional and international markets.
These corporations will pursue attraction of new projects, business development and cooperation extension.
As a result SBCs will become big employers and “engines” of the country’s development.
2.8. Territorial development meeting requirements for balanced economic development
Today we need a new, modern strategy for territorial development, directed at boost of economic activity in developed regional centers, capable to become “engines” of economic modernization of the country. It must find reflection in Strategy for territorial development in Kazakhstan up to 2015.
2.9. Development of Astana, as the city meeting modern world standards and major center of international cooperation with Eurasia
Astana that in a short time has become a big fast-growing city could be a model capital on Eurasian space and serve as basis for the country’s sustainable development.
For that we need to realize a few scaled projects.
To create on the left bank a modern, innovation and dynamic cluster of medical services.
To form a unique academic environment in our capital we should create a prestigious university of international scale.
Besides we need to develop an industrial zone, concentrating construction materials production, furniture, food industry and other competitive directions.
Each building contractor will spend part of the capital for social sphere development in the town.
Special heed should be paid to renewal of the town’s image, attractive to world business, business tourism, world-scale cultural events.
2.10. Practical realization
For practical realization of Second Priority instructions to the Government are:
- Complete elaboration of sub-acts to law “On currency regulation”, facilitating currency transactions’ procedures.
- From 2007 reduce VAT by 1%, and from 2008-2009 – by another 1-2%.
- From 2008 reduce social tax by 30 % on average to stimulate employers to increase wages.
- From 2007 introduce fixed rate of income tax for all physical bodies at 10%.
- From 1 January 2007 introduce reduced single rate of taxation for small business subjects.
- In six months work out specific motions on creation of special tax service department, mentioned above.
- In 2006 start active realization of complex General plan for petrochemical production development for nearest decade.
- Make up Single register of state property, specifying its use and effectiveness criteria.
- In 2006 work out and submit for discussion a set of supplementary measures aimed at tightening responsibility for contract commitments execution.
- National bank and Agency for financial supervision is to work out law protecting rights of investors, shareholders and founders with minor shares in the fixed capital of the companies.
- Speed up e-government project.
- In six months submit motions for improvement of anti-monopoly legislature and competition protection.
- In 2006 complete elaboration of Strategy for territorial development in Kazakhstan up to 2015.
- In three months work out conception for creation of social-business corporations and by September 2006 to create SBC in concrete regions.
- In 2006 start realization of Strategic plan for Astana development up to 2030 and State program for Astana socioeconomic development for 2006-2010.
- In six months to make amendments to the legislature related to activity of “Samruk” state holding company and work out program for exit of national companies’ securities to stock market.
3. Third priority: Modern social policy, protecting most vulnerable population layers and supporting economic development
Priority directions in this area are the following.
3.1. Support of most vulnerable population layers
The state will grudge no means for it. I find it possible and necessary to increase state support to regional military conflicts’ participants and other categories of the population.
Distortions in pension payments must be eliminated.
Private sector should be involved in social services provision.
3.2. Re-orientation of social support in keeping with market economy conditions
In social support focus should be laid on training employable individuals, stimulation of their retraining. In August during the live air there were many offers on pensions and social benefits’ payments to a month. We will work at it.
We need to define list of guaranteed and additional social services and make amendments to their procedures.
State standards are to be introduced in social service, mandatory licensing of organizations involved in the area, accreditation of their workers.
3.3. Housing construction and estate market development
In the three years of housing construction program we could appreciate its advantages.
In 2005 alone over 5 mln housing square meters were commissioned at the previously envisaged 3 mln.
We need to analyze achievements and shortcomings in this work, create incentives for wide-scale development of individual housing construction, further develop system of construction accumulations for the citizens who cannot afford accommodation on mortgage basis.
Lease accommodation market must be developed in the country in compliance with world standards.
3.4. Transition to modern principles and standards in healthcare organization
Realization from 2005 of State program for healthcare development and reform proved we are on the right path.
However with regard to new tasks I think it expedient to complete, already in this year, work on implementation of the package of legislative and administrative reforms in the branch.
We need to attract leading foreign companies to creation and management of modern clinics in Kazakhstan.
New approaches should be applied to medical workers’ payment with account to quality, amount and qualification of their services.
3.5. Environmental protection and ecological security in compliance with international standards
In 2006 Ecological code must be adopted, aimed at harmonization of our ecological legislature to advanced international acts, transition to new standards, improvement of state control system. On the whole by 2010 we have to create basic ecological standards of sustainable development in the society.
3.6. Introduction of International standards of the business’ social responsibility
Kazakhstan business has gained a firm foothold and is growing more aware of its social responsibility. Our national companies and major investors contribute means to charity actions, projects in education, healthcare, sport and culture, support of socially vulnerable citizens. This practice should become a norm.
I think it is time to work out common rules of social accountability of business and raise its social responsibility in national tasks solution.
Standards of social business responsibility are determined in Global UN treaty.
3.7. Effective system for labor resources development
We need modern conception of migration policy. The existing favorable socioeconomic situation in Kazakhstan attracts inflow of foreign work force.
The Government needs to work out mechanism of holding one-time action for legalization of illicit labor migrants by having them registered in interior and other related departments.
Besides we need to work out mechanisms for attraction to Kazakhstan of skilled workers. We should not forget at that about proficiency of our own workers.
Accent should be laid on centers for adaptation and integration of oralmans into our community.
3.8. Practical realization
For implementation of the above items instructions to the Government are the following:
- From 2007 to increase wages to budget workers by 30% on average;
- From 1 July 2006 to increase states benefits to:
war participants - by 2,4 times;
war invalids - by 1,3 times;
widows of the war participants fallen in action – by 1,6 times;
families of fallen military servants - by 1,5 times;
spouses of deceased war invalids - by 2,7 times;
holders of orders and medals of former USSR for selfless work during WW II, rear workers, working no less than six months in the rear – by three times; Chernobyl participants – by four times.
- From 1 July current year to make one-time differentiated rise of pensions for retirees from force structures.
- In 2007 to work out draft Code on people’s health and healthcare system.
- Work out program for training national cadres in working trades at vocational training institutions.
- In 2006 adopt labor code, complying with international standards, ILO.
- In 2006 the Government is to work out objective criteria for inclusion in immigration quota of oralmans.
4. Fourth priority: Development of modern education. Rise of cadres’ qualification and retraining and further prosperity of Kazakhstan people’s culture
4.1. Development of modern education and skilled cadres’ training
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| Photo: Sergey Bondarenko, Bolatbek Otarbayev |
We need modern system of education. In the frames of transition to 12-year schooling we cannot exclude 10-year school education for those wishing to receive vocational and technical training after school.
In higher education optimization of university net is required with accent on technical education development. To train modern state managers on the basis of state management Academy we need to build up national school of management meeting requirements of high international standards.
To stimulate education system development we have to strengthen partnership between private sector and the state, improve system of state-private education crediting.
We should consider differentiation of state grants’ worth depending on the University status and specialization.
4.2. Strengthening of the part of culture on multi-national and multi-confessional basis
Time has come for optimization of state-private involvement in cultural development, i.e. creation of conditions for our talents, provision of worthy living conditions to creative people. It is state support of major international art bids in the country, support of gifted musicians.
Employment in culture is a powerful source of flexible local demand, telling on our population’s welfare.
5. Fifth Priority: Further democratic development and modernization of political system
As you know discussion of National program for democratic reforms started in 2005. National commission for democracy and civil society summed up results of the discussions.
We will continue scaled political reforms in the republic, aimed at improvement of political system and Kazakhstan state structure.
We are to take into account common principles of construction of democratic and prosperous states, important cultural-historical features and traditions of our society.
Unity, demonstrated by Kazakhstan residents at the presidential elections proves that our people consider it as necessary condition for the country’s stable development. Kazakhstan residents were concerned about possible destabilization in the republic. We remember how our residents heaved a sigh of relief.
We should recognize that absence of traditions of democratic culture, understanding of freedom as permissiveness can destabilize situation in the republic, ruin all our plans for future and hamper our development.
Some people consider liberalism of power as its weakness and inability to veto “whims” of self-willed ambitious individuals. We should get rid of such illusions.
We should at last tighten responsibility for defection of laws, define penalization for slander, bribery, violence. Special laws will be envisaged for it if necessary.
Observance of the Constitution and laws in the country is law enforcement bodies’ responsibility. To them there must be no question like: “what will they say to it here or there?”. But there is a definite rule: “if you brake the law you incur responsibility for it in compliance with its provisions”.
Failure of this or that law enforcement authority to comply with this rule will entail his retirement. Otherwise we will hardly be able to build legal-based and democratic society.
Brake should be put to religious extremism.
NGO should be actively involved in control over execution of program for the country’s development. At the same time their activity, not provided by the law, should not be allowed.
I think part of Kazakhstan peoples’ Assembly in the society should be strengthened. State commission for democracy will consider the above issues.
6. Sixth Priority: Implementation of Strategy for national security, adequate to modern threats and challenges
6.1. New 2006-2010 Strategy for national security
Strengthening of statehood, national sovereignty and Kazakhstan integrity must be realized on the base of new military doctrine. It should provide establishment of professional combat-effective army, meeting high international standards.
RK Military forces must be provided with modern military-technical support; they figure on defense technologies, specific for Kazakhstan and new international situation.
The required means should be calculated and taken into account in the military doctrine.
6.2. Policy, aimed at countering religious extremism, fighting international terrorism and drug-trafficking
Strengthening and expansion of international cooperation in fighting terrorism, organized crime, unlawful arms’ proliferation, drug trafficking and other threats calls for Kazakhstan active participation in elaboration and practical realization of appropriate international contracts and agreements. We are to strengthen cooperation among Central Asian states for countering such modern challenges, including holding of joint trainings in the frames of CSTO and ShOC and joint anti-terrorist initiatives and operations with NATO.
6.3. Consistent implementation of complex national program for fighting corruption as threat to national security and public stability
We are working on fighting corruption and improving the situation, but non-transparency of money flows of some financial-industrial groups and unlawful enrichment at the expense of income defrauding, transfer of finance and property to foreign countries, tax evasion and shadow economy are serious brakes to our development. Their representatives call for fighting corruption. At the same time it is these organizations that account for main budget losses. It is time to act.
Amendments to legislature, providing transparency of activity and financial flows of national companies and state businesses and large private companies should be made. They are: provision of transparency in privatization process, tax policy, subsoil use and land relations.
I think it is time to consider the problem of capital and property amnesty, withdrawn from legal turnover. This process may become one of the important elements for construction of open Kazakhstan economy. Speaking about amnesty of capital I do not mean incomes from drug-trade, banditry, unlawful trade of arms, etc.
Amnesty of capital cannot be free. Assets, transferred abroad and withdrawn from legal turnover were not taxed and did not replenish state budget. These debts must be compensated via special 10-% tax of legalized assets, which will come to the state budget. It is not a big price for revenue, received from revealing of capitals from legal turnover.
In this way the state offers to make small contribution to development of the republic. We will not make them return the assets to Kazakhstan if they pay 10% tax. It is natural that the assets are not just hidden; they work for the owner and bring him revenue. According to international practice they must pay.
If people want to return money to Kazakhstan amnesty mechanism should provide such opportunity too.
Many people conceal their real estate property, companies. Legalization of the whole property is profitable to people and the country.
Simple and effective mechanism, guaranteeing to the owners of legalized assets protection from any pursuits should be elaborated. We have already carried out one amnesty and it brought positive results. The mechanism must be understandable to every Kazakhstan resident and world community.
After the amnesty we will hold other actions, aimed at search of means, earlier withdrawn from legal turnover. The work will be carried out jointly with international law enforcement bodies.
The Government is to elaborate and submit to Parliament consideration an appropriate draft, providing clear mechanism of amnesty.
RK President Administration and RK Government are to work out a complex of actions on explanation of goals, mechanism and significance of the action.
7. Seventh Priority: Further implementation of balanced and responsible external-policy course, taking into account Kazakhstan interests and dynamics of regional and world development
Our priorities in external policy are the same. Kazakhstan will always be a responsible and reliable international partner.
7.1. Development of strategic partnership relations with Russia on the basis of wide integration processes between our countries
Kazakhstan-Russian relations enjoy high level of trust and strategic partnership.
Russian vector is an important priority of Kazakhstan foreign policy.
There are no problems between Kazakhstan and Russia, that could not be discussed via constructive dialogue, taking into account mutual interests, as well as political and economic issues.
At present main goals are expansion of trade-economic cooperation and development of regional integration in the frames of EuAsEC, EES, ShOC. Kazakhstan and Russia have similar or close positions in many spheres.
7.2. Strengthening of mutually beneficial cooperation with China
We are to continue bilateral agreements with China on economic and political cooperation. Economic cooperation with the country should be supported by active political dialogue on international security.
We are to coordinate policy on migration problems and regional security in ShOC frames and on the basis of concrete bilateral initiatives and agreements.
7.3. Strengthening of relations with US
Kazakhstan and US established long-term and stable partnership relations, characterized by wide range of interaction in international energy stability and security, fighting terrorism and religious extremism, continuation of democratic reforms.
Further development of cooperation in economic area, creation of favorable conditions for attraction of American investments and introduction of new technologies in Kazakhstan are on the agenda.
7.4. Development of cooperation with European Union
Kazakhstan is interested in strengthening of cooperation with EU in regional and international security, economy, social and cultural development. We are to create favorable conditions for investment activity of our European partners, realization of large international projects, attraction of new technologies and knowledge to our republic.
We should strengthen cooperation with OSCE in solution of modern problems and challenges, provision of peace and security and basic human freedoms.
7.5. Cooperation with Central Asian states
Integration rates in our region must not be reduced. We should develop multi-lateral relations with neighboring countries of Central Asia. Our interaction in trade-economic and culture-humanitarian sphere has a promising outlook.
Our efforts must be aimed at their further development.
7.6. Development of relations with Muslim countries
It is natural that Kazakhstan actively shares in international and cultural cooperation with Muslim countries. We develop mutually beneficial and profitable bilateral relations with majority of Islamic countries and states of Arabic East.
Our policy, pursuing tolerance, inter-confessional and inter-cultural accord of all nationalities, residing in Kazakhstan has already been recognized by international community. People are constructing modern and competitive secular state.
That is why I want to confirm Kazakhstan readiness to be one of the centers for inter-cultural and inter-confessional dialogue on international scale.
I think jointly with several Muslim countries, interested in expansion and strengthening of so-called civilization dialogue we could offer some international initiatives, aimed at approximation of understanding between East and West in key problems of the modern world.
Dear Kazakhstan residents! Dear deputies and Government members! Ladies and gentlemen!
Not much time has passed since you have entrusted in me the fate of our Homeland.
Our views have basically coincided in many issues. I have always kept my promises and your support was sincere, inspiring and encouraging.
Today I presented the Strategy, allowing Kazakhstan to be ranked among 50 most competitive and developed states of the world.
When the nation is united, live in peace and accord, there are no unattainable goals for us. We have proved it.
I rely on your understanding and support in these great undertakings and wish success.
Thank you.