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Frequently asked questions

Question: What are the main causes for our country‘s too high GDP power consumption?

Answer: 1) Kazakhstani economy’s structure where power-intensive industries dominate: extractive sectors, mining & metallurgical companies, oil & gas sector, coal energy;

2) Climate conditions, with about 9 months’ heating period in northern parts of the region. Hence, our heat supply sector is rather energy-consuming and energy-intensive one;

3) General technological underdevelopment of many economy sectors and/ accordingly, products’ high power-intensiveness which in some sectors exceeds many-fold the same European indicator;

4) Relatively low prices for energy carriers that does not motivate most consumers to cautious attitude towards energy resources.

Question: How is the energy efficiency policy implemented in regions?

Answer: Since 2012, regions have been implementing successfully the regional systematic energy-saving plans towards 2015 at the first stage and towards 2020 – at the second stage. In general, all regional plans contain energy saving activities in a wide range of sectors: industry, housing & utilities sector, transport, energy, as well as promotion and human resource training actions. Also, in terms of Law “On Energy saving and Energy Efficiency Improvement”, Ministry maintains the annual rating of Akimats as to the energy efficiency policy implementation. We see the policy implementation level increasingly enhancing year by year.

Question: What support is contemplated for enterprises on the part of government when performing energy audit?

Answer: On January 14, 2015, the Law “On Amendments to Some Legal Acts of the Republic of Kazakhstan on Energy Saving and Energy Efficiency Improvement” was enacted, contemplating prolongation of energy audit period by a year, i.e. till July 2016.

Also, in July 2015, Ministry made amendments to the Program: “Performance 2020” providing for compensation of 50% energy audit costs incurred by an enterprise, however no more than KZT 8 million for SMEs and no more than KZT 16 million – for large enterprises.

Question: What will the 59th step’s implementation provide to businesses and to the entire economy of the country?

Answer: Energy saving and energy efficiency improvement refer, first and foremost, to efficient administration of the major part of economy’s costs, i.e. the power resources expenditure side of budget. That is, efficient use of energy resources would enable reduction of production cost and allow enterprises’ improving competitiveness, which is significant in terms of entering WTO.

In addition, with energy service market developing, the new SME cluster will be created.

As to public sector, the annual saving of up to KZT 10 billion is planned after having fulfilled all actions, with no expenditures from budget.

Question: Major part of loans for innovation projects implementation was provided in USD. Many businessmen-innovators sound fear that the new leap of KZT-USD rate would lead to their bankruptcy. Are there any real measures to support their businesses in case of devaluation?

Answer: Ministry for Investments and Development presents the government support to industrial innovation activity under the Law of the Republic of Kazakhstan “On Government Support to Industrial Innovation Activity” as of January 9, 2012.

The primary governmental tool to support innovation activities is represented by innovation grants. Note that such innovation grants are provided on a free-of-charge basis and in national currency.

Question: In what way did the conditions for government innovation support change in the new econo0mic situation?

Answer: Currently, as part of enhancement of mechanism for provision of government support to innovation activity entities, it is planned to increase the amounts for certain types of innovation grants: up to KZT 400 million to technology procurement and up to KZT 100 million for grant for commercialization of technologies. In Furthermore, the implementation of target-oriented technology programs through industrial research grant will be contemplated, which grant will be provided to consortium consisting of members of science, business, and state on the terms of reimbursement of expenses up to 80%, yet no more than KZT 800 million.

Alongside with that, the number of documents to be submitted will be reduced to 7-9 (previously this number was 11-19) and to 2 copies (previously, 4).

Question: Last year, Kazakhstan had a strong lead in manufacturing industry export among CIS countries. For the first time ever, Kazakhstan started to supply not only raw materials, but also high-tech products to the outside markets. What is the exporting enterprises’ situation today?

Answer: In 2014, the devaluation had a negative effect on the sector because of higher cost of imported raw materials and component parts. An additional negative point was the fall in the exchange rate of ruble in the last months 2014 that caused re-distribution of demand not in favor of domestic manufacturers.

With a view to supporting the exporting enterprises, Government of the Republic of Kazakhstan endorsed the Joint Action Plan with National Bank of the Republic of Kazakhstan to ensure financing to domestic manufacturers and exporters in 2015 – 2016. In terms of the Plan, the exporters will be funded through the existing instruments in accordance with terms of internal acts of Kazakhstan Development Bank JSC and KDB Leasing JSC, including via crediting the financial institutions and organizations of importer of products manufactured within the Republic of Kazakhstan. Total amount of funding is KZT 35 billion in 2015 and 15 billion in 2016.

Question: What does MID do to revive Kazakhstani consumer goods industry? Do you think Kazakhstan will, in the medium term, manage to win back at least 10% of domestic market of consumer goods industry products?

Answer: The Republic of Kazakhstan’s consumer goods industry is represented by 3 types of economic activity: manufacturing textile products, manufacturing clothes, and manufacturing leather and related products. As of May 1, 2015, 1534 enterprises were registered in consumer goods industry of Kazakhstan, of them 20 – large, 35 – medium, and 1479 small enterprises. The majority of enterprises (874) are in the clothes manufacturing sector; 476 enterprises produce textile products, and 184 enterprises manufacture leather and related products.

On the whole, despite the instable trend in the last decade as to investment into the fixed asset on Kazakhstan’s consumer goods industry, the investments increased 2 times in January-April 2015 as compared to the same period 2014, which amounted to KZT 712, million (mostly through surge in investments into manufacturing the textile products, 25.5 times). The import of consumer goods industry has increased to USD 2 234.5 million within the recent 7 years, which is 4.9 times higher than in 2008. The output of products of consumer goods industry has grown 2.4 times as compared to 2008. Manufacturing clothes has shown stable growth within the recent 6 years.

Nevertheless, I have to acknowledge that currently, the share of consumer goods industry in overall structure of Kazakhstan’s industrial production amounts to only 0.36%, and in manufacturing industry – 1.1 %.

Of all active enterprises in consumer goods industry, over 90% are small ones. Such trend has been conserved for the recent 7 years. Large businesses are most resistant to market fluctuations, while small ones that, as above mentioned, amounts to 90% of total number of active enterprises, do not sustain competition as to prices, including with foreign companies importing consumer goods in Kazakhstan and other countriesв.

Given all these factors, we are intensively working at government support to the sector development.

In recent years, as part of “Roadmap for Businesses 2020”, over 109 projects have been signed for funding in consumer goods industry; National Agency for Technology Development JSC, in terms of technological support and innovation development, provided innovation grants to a number of projects and the support on technological business incubation to consumer goods industry enterprises; as part of the “Performance 2020” program that contains a set of instruments for stimulating and supporting the modernization of active consumer goods industry enterprises, the cost of leasing item was reduced 2 times for this sector enterprises (from KZT 150 million to 75 million).

The work is in progress to provide consumer goods industry with raw materials. The domestic enterprises’ need for raw materials is being identified. The service/procurement centers are being established.

The customs rates were raised for importing the untreated skins of bovine cattle or horses from € 200 to € 50 per ton.

With a view to protecting the country population against unhealthy products, in collaboration with Byelorussian and Russian parties, the Technical Regulation of Customs Union “On Safety of Consumer Goods Industry Products” was worked out and endorsed with the decision by Customs Union Commission where the requirements are set forth to the consumer goods to protect human life and health and also to prevent the actions circumventing the consumers.

As part of stimulating the export, the effort is underway to promote to outside markets such types of domestic goods as cleaned cotton, woolens leather articles, footwear, sewn products, children’s and adults’ textile, sportswear, etc.

The sector’s enterprises established as part of Industrialization Roadmap are also contributing to development of consumer goods industry and the country economy on the whole. In 2014, as part of Industrialization Roadmap, the consumer goods industry enterprises manufactured the products for KZT 7.3 billion. As a result, the share of products manufactured by them in the sector’s overall output amounted to 11%.

Question: Are all the newcomers to a dangerous production site subject to training to industrial safety, or only technical managers and officials?

Answer: For working in dangerous production sites, all specialists and workers are subject to training and re-training to industrial safety.

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Ministry of Industry and Infrastructural Development of the Republic of Kazakhstan