Iliyas Akmaral K.

L.N. Gumilyov Eurasian National University, Kazakhstan

The role of National Fund in government management of the Republic of Kazakhstan

The National Fund of the Republic of Kazakhstan was created in 2000 as a stabilization fund that ensures the economy of the Republic of Kazakhstan will be stable against the price swing of oil, gas and metal. The assets of the National Fund assets are monitored by the National Bank of the Republic of Kazakhstan.

Created in Kazakhstan National of Kazakhstan has substantial differences from other similar funds. Such as, Alaska Permanent Fund Corporation, the Government Pension Fund of Norway - Global (formerly the Government Petroleum Fund) and Alberta Heritage Saving Trust Fund (Canada).

The National Fund was established at a time when Kazakhstan was only at the beginning of the oil era. With a huge proven reserve of hydrocarbons, Kazakhstan has not yet emerged at a fairly high level of its development. In Alaska, Alberta, Norway, the level of oil and gas production has almost peaked, and viewed the prospects for its reduction.

U.S. Canada and Norway belong to the group of developed countries that have achieved economic prosperity, so the standard of living of these countries is very high. National Fund of Kazakhstan was created when Kazakh society is in deep crisis - poverty, the vast majority of the population, unemployment, lower life expectancy, migration has been a hallmark of the social situation in the country [3].

Alaska Permanent Fund Corporation established on the basis of the constitutional amendment adopted by referendum, which was attended by the entire population of Alaska. Funds in Norway and the Alberta established pursuant to the statute of their parliaments. National Fund of Kazakhstan was established by a decision of the President of the Republic of Kazakhstan. The Parliament of the Republic was faced with a fait accompli, and he was simply asked to enact legislation to amend the budget law of the country, coupled with the creation of the fund.

The population of Alaska, Alberta and Norway took part in organizing the fund, and the most important thing in society these areas there is an understanding of goals and objectives established funds and a high degree of agreement on their organization. In Kazakhstan, the population almost did not take part in discussions on the establishment of the fund and its operation is carried out in an atmosphere of indifference and apathy of most people.

The National Fund of the Republic of Kazakhstan, established by analogy with other countries where a substantial part of budget revenues generated by income from exports of natural resources. However, it has some resemblance to the Government Pension Fund of Norway (the fund changed name in January 2006 from its previous name The Petroleum Fund of Norway) [3].

Firstly, the Norwegian fund as Kazakhstan Fund is fully integrated into the budget process. Second fund management, as well as in Norway, and in Kazakhstan by the Government and management - National Bank in these countries.

There are fundamental differences between the Government Pension Fund of Norway and National Fund of the Republic of Kazakhstan [3]:

1. Norwegian fund exists as a whole, realizing a savings function, i.e. accumulation of oil revenues and income from investments, as well as the stabilization function of transferring the fund to the budget deficit is covered with formed as a result of non-oil sector of the economy.

National Fund of Kazakhstan was originally divided into two parts - the savings and stabilization.

2. Use of the Norwegian fund is carried out only on the stabilization target. Kazakhstan Fund in addition to the cost of stabilization, but also the use for purposes defined by the President

3. Management system in the Norwegian fund runs by the Ministry of Finance and the Norwegian national bank.

Management system by the National Fund of Kazakhstan is very complicated. In Kazakhstan, a similar fund managed by: President of the Council Fund (composed of representatives of the Parliament), President's Administration and other authorities, the Government of the Republic and National Bank.

4. In the Norwegian fund are directed all the oil revenues.

The National Fund of Kazakhstan - only a part - 10% (a savings portfolio), as well as the excess of taxes, the resulting implementation of Kazakhstan's products at prices higher than planned. Moreover, all these transfers are carried out not by all, but only on the part of enterprises according to the approved list, which in addition to oil companies, including mining plants and some non-ferrous metallurgy;

5. Stabilizing function Norwegian Fund is aimed at maintaining the achieved high standards of living, which is expressed at considerable public expense.

The stabilizing function of the National Fund of Kazakhstan aimed at the average level of public spending provided by a conservative forecast of prices for Kazakhstan's raw materials.

6. Norwegian fund pays great attention to the environmental aspect of its activities. The National Fund of Kazakhstan environmental aspect is missing.

Economic interests of society protects powerful tax unit, but because of the opposition of oil companies, inadequate legislation and other factors fully to protect these interests cannot.

An environmental and economic interest of protecting the environment is not protected at all. In Kazakhstan, eliminated the previously established system of environmental funds, as a result of measures for its protection are financed on a residual basis, and as a consequence of the state actually completely eliminated from the solution of environmental problems, focusing on social issues

7. The Norwegian fund is open to the public its quarterly and annual reports are published on the Internet at the National Bank of Norway.

The openness of the Kazakhstan stock is difficult to judge, as the report on the activities of the fund is not fully published.

In October 13, 2008 by Kazakhstan’s president Nazarbaev Nursultan officially introduced the Sovereign Wealth Fund Samruk-Kazyna. Sovereign Wealth Fund «Samruk-Kazyna» is established in order to enhance competitiveness and sustainability of national economy and prevent any potential negative impact of changes in the world markets on economic growth of the country [5].

Samruk-Kazyna accumulates shares of major national companies, development institutions and social entrepreneurship corporations — more than 400 companies in total.

The main purpose for Samruk-Kazyna is modernization and diversification of national economy in the framework Annual Addresses of the President of Kazakhstan, Strategy of Industrial and Innovation Development of Kazakhstan 2003-2015.

Samruk-Kazyna is to provide maximum support to the Government of Kazakhstan, promptly and efficiently responding to the needs in attracting investments into real economy, becoming more active in the regions, strengthening inter-industry and inter-regional links and making maximum use of available advantages and opportunities [4].

Samruk-Kazyna fund activity aimed at achieving the objectives within the framework of government policy to increase competitiveness of Kazakhstan, including in such key areas as energy security and investment activities.

The Fund is qualified to give maximum assistance to the Government of the Republic of Kazakhstan in achieving the goals on diversification and modernization of the national economy.

The role of the Fund and its companies consists in the solution of the following strategic tasks: financing and assistance in the implementation of the projects providing an increase of the added value in the industry; financing and assistance in the implementation of the projects providing infrastructure development; establishment of new non-oil and gas production and promotion of small and average entrepreneurship development.

To increase the long-term cost of the companies, the Fund is qualified to expedite development of the economy through management professionalism and increase of efficiency of its portfolio’s companies.

The Fund’s activity is focused on the following strategic tasks: optimization of the assets structure; introduction of efficient corporate management; introduction of transparency in implementation of noncommercial (social) projects [5].

The Fund will invest the revenues received from asset sales, together with other finance sources, to the creation of new strategic advantages for the country and further diversification and modernization of the economy.

For the optimal model of savings of the National Fund will make the appropriate changes in the relevant regulations of the Republic of Kazakhstan regulating the activities of the National Fund. Policies to balance the budget and the National Fund will be to reduce non-oil deficit (less than 3% of GDP) and reduce operating costs from the National Fund. According to forecasts by the National Fund in 2020 should increase to $90 billion, which is not less than 30% of GDP [5].

National Fund at the end of 2009 amounted to $30,91 billion, of which $5,09 billion placed in domestic assets (bonds of joint stock company Sovereign Welfare Fund " Samruk-Kazyna " and JSC " National Holding KazAgro"), $24,4 billion - in foreign assets. Yield of the National Endowment for the last nine years was 55%, which annualized is 5.2% [2].

According to the report for the IMF in 2010 in the longer term beneficial effects on the economy of Kazakhstan will contribute to the mineral resources, and plans for diversification of the economy and business climate. Medium-term strategy of the authorities provided a basis for increasing the share of manufacturing in GDP, increase productivity in agriculture and the reform of health and education systems [1].

Reference

1.Доклад МВФ по стране №10/241 Республика Казахстан (июль 2010).s.1. http://www.imf.org

2. КАЗАХСТАН, УКАЗ ПРЕЗИДЕНТА РЕСПУБЛИКИ. ОТ 2 АПРЕЛЯ 2010 ГОДА №962. Концепции ФОРМИРОВАНИЯ И ИСПОЛЬЗОВАНИЯ СРЕДСТВ НАЦИОНАЛЬНОГО ФОНДА РЕСПУБЛИКИ КАЗАХСТАН 2010 года . ОТ 2 АПРЕЛЯ 2010 ГОДА №962.

3. Проблемы и перспективы Национального фонда Республики Казахстан. Материалы исследования/Под редакцией С.М. Злотникова – Алматы: ОФ «Транспаренси Казахстан», 2004. -128 с.

4. Report, Government Reviews Annual. 2011. Samruk Kazyna National Welfare Fund. s.l. : www.mfa.kz, 2011.

5. Summary, executive. 2009. Strategic development priopities of SWF Samruk-Kazyna. s.l. : www.samruk-kazyna.kz, 2009.