Kazakhstan urgently needs to adopt a fiscal consolidation strategy and refocus its macro-fiscal policy to promote more diversified growth and high-quality job creation, says the World Bank in its Kazakhstan Public Finance Review.
The Review aims to help the authorities identify key areas for improvement of Kazakhstan’s fiscal policy framework to ensure fiscal sustainability in the medium-term and support economic transformation in the long-run.
“Fiscal consolidation efforts to be undertaken over the medium-term would provide an opportunity to review the Kazakhstan’s fiscal policy framework and the work of institutions with the goal of strengthening their coherence, credibility, and flexibility,” says Ato Brown, World Bank Country Manager for Kazakhstan. “Successful fiscal consolidation would require two things: reducing inefficient expenditure that distorts private sector incentives which will allow redirecting savings toward productivity-enhancing spending; and eliminating inefficient tax benefits that result in an uneven playing field for investment.”
Kazakhstan benefited greatly from the oil boom of 2000–14, which led to income growth and poverty reduction and helped build a fiscal cushion to stabilize the economy during downturns. As oil output more than doubled during the oil price super-cycle, the Government of Kazakhstan accumulated substantial fiscal savings in its oil fund, the National Fund of the Republic of Kazakhstan (NFRK). These savings were used for anti-crisis programs in 2007–10 and 2014-17. As a result, the NFRK balance has fallen from a peak of US$73 billion in 2014 to a projected level of US$53 billion by the end of 2017.
The oil-price shock in 2014 highlighted a structural shift to a “new normal” that requires more structural rather than countercyclical fiscal measures. Unlike a temporary crisis that can be managed by a countercyclical response to restore the macroeconomic stability, this structural shift—to a new, low oil-price environment—may persist for many years.
To adjust to the new normal, the authorities moved to a floating exchange rate regime in the second half of 2015 to stop the drawdown of foreign exchange reserves. However, an accompanying fiscal adjustment has not materialized yet. Some policy makers may still believe that the shock is cyclical and maintain hope that oil prices will recover.
The countercyclical fiscal stance adopted in 2014 led to an increase in the non-oil fiscal deficit, which is too high to ensure medium-term fiscal sustainability and threatens the long-term growth potential of the non-oil tradable economy.
The key challenge for economic policy now is to enhance the fiscal policy framework, improve efficiency and effectiveness of public spending, mobilize non-oil revenue, and strengthen fiscal policy institutions.
China-Eurasia Council condemns aggression of Azerbaijan
China-Eurasia Council for Political and Strategic Research strongly condemns Azerbaijani aggression which Baku started on July 12, 2020. Azerbaijani Ministry of Defense is a threat for the entire World as it is speaking about its aims to strike Metsamor Nuclear Plant, which is located in Armenia. Baku must understand that this is a crime against humanity, and it is equal to nuclear strike.The destruction of Metsamor Nuclear plant will be a disaster not only for Armenia, but also for Iran, Georgia and Azerbaijan, it will harm World’s environment and stand a real problem for several generations of the World. It is worth mentioning, that this time Baku attacked the Northern borders of Armenia, which are sovereign territory of the Republic of Armenia according to International law. Azerbaijan violated the principle of territorial integrity of a sovereign state, which is one of the important pillars of International law.
China-Eurasia Council for Political and Strategic Research condemns Azerbaijan for using force against civilian population of Armenia and calls for peaceful negotiations. Baku must show solidarity and join global ceasefire initiated by the UN secretary general Antonio Guterres and must not try to escalate the situation on the border to deflect public attention from the situation concerning the outbreak of Covid-19 in Azerbaijan. We call official Baku to take care of Azerbaijani people in the hard times of Coronavirus and not send its soldiers to real death. Being multinational Council, for us It’s terrible to hear about lossfrom both sides and we express our sincere condolences. Hopefully peace will come to South Caucasus, which is an important crossroad in Eurasian mainland and it can stand a very important link for Belt and Road Initiative, if all problems solved in a peaceful way.
Condemnation Of Armenian Aggression By Friends Of Azerbaijan (FoA)
Friends of Azerbaijan (FoA) strongly condemns the coward act of Armenians aggression in the Tovuz district of Azerbaijan that is a sheer violation of international borders and law. The act is an attempt of Armenia to drive global attention from the peaceful dialogue and negotiation process on Nagorno Karabakh.
In an online meeting of the delegates of the Friends of Azerbaijan (FoA), a joint declaration of condemnation has been issued by the honorable members of Friends of Azerbaijan (FoA).
According to this declaration, Armenian aggression can jeopardize the whole South Caucasus region. The incident on July 12, 2020, is being considered as a direct attack on Azerbaijan and the repercussions of this incident can result in massive catastrophe in the entire region.
The delegates of Friends of Azerbaijan (FoA) stressed the global powers to come forward and take serious action on Armenian intervention by violating the international border of Azerbaijan. The act of Armenia is an open challenge to the sovereignty of Azerbaijan.
Malik Ayub Sumbal founder of Friends of Azerbaijan (FoA) termed that Armenia is losing its legal and moral position on Nagorno Karabakh and there is mounting pressure on Armenia by the international community for the peaceful solution of Nagorno Karabakh according to the UN Resolutions. At this time to get rid of such kind of diplomatic moves, Armenia has launched another major front in Tovuz.
When the whole world is busy against the Covid19 Armenian Prime Minister has chosen a very dangerous path that can take the whole region into war and bloodshed.
Friends of Azerbijan (FoA) is firmly standing with shoulder by shoulder to the people of Azerbaijan and martyr’s families at this hour.
Kyrgyz Republic to Enhance Quality of Education with World Bank Financing
The Kyrgyz Republic will receive World Bank financing for the Learning for the Future Project in the amount of $50 million, on highly concessional terms. $25 million is allocated in the form of a grant, which requires no repayment, while the other $25 million is credit with a 0.75% interest rate, with repayments eased over 38 years, and a six-year grace period.
“The Learning for the Future Project aims to help raise the Kyrgyz Republic’s human capital through enhancing school readiness and teacher effectiveness,” says Bolormaa Amgaabazar, World Bank Country Manager for the Kyrgyz Republic. “The project puts special emphasis on distance and online learning, increasing digital literacy and building teacher capacity for best teaching-learning practice. Such support will help the country’s education system better respond to learning from home during the current school closures and recovery period from the COVID-19 pandemic. In the long run, this approach will help better prepare children for learning and adapting to a fast-changing future economy.”
The project has four main areas of support: expanding school readiness for underserved children; increasing effectiveness in teaching practice; enhancing technology-enabled support for learning; and enhancing measurement of learning. In the coming five years, the project will specifically help:
- Establish 500 fully equipped community-based kindergartens in rehabilitated premises, thus enabling a successful transition to school for 20,000 children aged 3-5 years, in poor communities countrywide;
- Build teacher competencies for more effective teaching of reading, mathematics and sciences in primary and secondary schools, through training in effective pedagogy and assessment, provision of digital learning content, resources and materials in 1,200 schools (53 percent of the total number of schools in the country);
- Provide digital literacy training for 36,000 teachers to enhance their capacities to use digital technologies for professional development and effective teaching;
- Equip 1,200 schools with an IT platform to support technology-enabled teaching and learning. The Republican Institute of In-Service Teacher Training will assist in developing digital content for teaching and learning;
- Introduce a new criteria-based assessment instrument and methodology, develop and introduce standardized tests aligned with new learning standards, conduct the National Learning Assessment in 2023 for grades 4 and 8, and participate in the Program for International Student Assessment (PISA) 2024.
The project will be implemented by the Ministry of Education and Science of the Kyrgyz Republic during 2020-2025, using its existing institutional structures and in compliance with relevant World Bank procedures and standards.
The project supports the World Bank’s 2019-2022 Country Partnership Framework for the Kyrgyz Republic and is closely aligned with the National Education Sector Strategy-2040 of the Ministry of Education and Science, which is now under development. The project was approved by the World Bank’s Board of Executive Directors on March 31, 2020 and was ratified by the Parliament of the Kyrgyz Republic on June 11, 2020.
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