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MEASSAGE of President to people of Kazakhstan

February 2008

Address by the President of the Republic of Kazakhstan
H.E. Mr. Nursultan Nazarbayev
to the people of Kazakhstan

Growth of Welfare of Kazakhstan’s Citizens is
the Primary Goal of State Policy

Dear people of Kazakhstan!

My annual addresses to the people of Kazakhstan are always aimed at an analysisof our past accomplishments and future challenges, and, most importantly, atour joint search for the best way to achieve our great common goal.

In my 2006 and 2007 addresses to the nation I not only addressed today’schallenges, but also spoke about the future of our development. We shouldcontinue our strategic focus on Kazakhstan’s industrialization, on our joiningthe community of the world’s 50 most competitive nations and on forming aselect group of 30 corporate leaders to advise on these goals.

This year I ask that the Government present a detailed report on theimplementation of these initiatives.

Last year we took a further step toward the comprehensive economic,social and political modernization of Kazakhstan.

Kazakhstan entered 2008 with new economic achievements and a significantlymodernized political structure.

New amendments to the Constitution enhanced the role of the Parliament andpolitical parties, the institutions of civil society. For the first time inthe history of independent Kazakhstan, parliamentary elections on aproportional basis were held. Nur-Otan won a landslide victory,which for the first time allowed the party to appoint the Government.

Administrative reforms underway for some time have been enhanced by theintroduction of executive secretariats at Government Ministries. This allows usto assure the stability of the Ministries’ valuable human resources.

Last year the economy grew by 8.5 per cent. Since 2001, the economyhas been growing at an average annual rate of 10 per cent, which is quitesignificant.

We have been able to accumulate a considerable national reserve amounting to40 billion US dollars, including assets of the National Fund. Thissignificant sum played a special role in maintaining the stability of thenation’s financial system.

The social climate is also stable and favorable. Since 2000, budgetaryallocations for education, health care and social security have grown more thanfive fold. More than five million people are covered by thegovernment’s social security programs, twice as many as five years ago.

We are continuously increasing the amount of assistance provided to our seniorcitizens. The total amount of pension savings is growing steadily and hasexceeded 1.1 trillion tenge.

Social infrastructure is being strengthened. 76 schoolsand 23medical facilities were built throughout the Republic in 2007 alone.

We have managed to reverse the negative demographic trends in thecountry.

In three years, within the framework of the state guaranteed housingprogram, we have constructed more than 18 million square meters of housing.This exceeds what we had planned by 2.2 million square meters.

All these dynamic social improvements are a bright illustration of theprogress of our economy, the constructiveness of our social policy and thestability of our political system.

Esteemed deputies, attendees, and guests

Nowadays, given the global market slowdown, we have to engage domesticinvestment resources, combined with the growing role of State-owned holdingcompanies, development institutions, and social-cum-entrepreneurialcorporations.
Notwithstanding the difficulties that have emerged, the Government has acted onmy instruction to take measures toward sustainable economic growth.
We must focus on addressing short-term and medium-term objectives in thefollowing priority areas.

First – the extractive sector.
The key vector of the oil and gas industry involves bolstering theGovernment's position as an influential and responsible player in theinternational oil and energy markets.
To that end, we have been consistently enhancing government influence instrategic energy sectors. We have already increased Kazakhstan's share indeveloping the Kashagan and Kumkol oil fields, the Bogatyr open-cast coal mine,and others.
This is hugely important for us, if we are to access international marketsfor finished products with high added value.
The efforts in these sectors must continue.
Samruk Holding Company, as well as regional SECs (Social-cum-EntrepreneurialCorporations) should undertake concrete measures for efficient developmentand greater competitiveness of the mining and metals sector. To that end,we must sort out the situation around the State-owned share holdings inexisting mining and metal companies and transition to appropriate management ofsuch holdings, while assuming the subsoil use rights with regard to explorediron ore and non-ferrous metal deposits, including rare metals.
The issue of exploring new deposits is to be addressed jointly with theGovernment.

Second proactive infrastructure support for key sectorsof the economy.
The Government must act to develop the power sector and the transportationsystem. Today, these sectors are clearly failing to keep up with thedevelopment of Kazakhstan's economy.
Priority tasks to provide power to the economy and the populationinclude construction of the Balkhash Thermal Power Plant, Unit 3 of the EkibastuzThermal Power Plant No. 2, the Moinak Hydroelectric Power Station and others.
In 2009, construction of the second power transmission line for the NorthKazakhstan - South Kazakhstan project, as well as the power transmissionline from North Kazakhstan to the Aktyubinsk region must becompleted. That will help reduce power shortages in Southern and WesternKazakhstan.
In order to reliably provide for gas requirements of the Republic's southernregions, the Beineu-Shymkent main gas pipeline project must be examined,and its construction started.
Specific proposals should be made on the construction of a nuclear powerplant in Aktau.
At the same time, the Government ought to focus on introducing power-savingand environmentally clean technologies.
Our companies and citizens are yet to adopt power saving practices on a dailybasis. We must say bluntly that cheap energy is running out. If one wants topay less, one must save. This must be on everyone's mind.
The Government must launch this effort.
We have to provide for the construction and modernization of the railway androadway infrastructure.
As early as this year, on a concessional basis, we should complete a railwayfrom Shar to Ust-Kamenogorsk, start construction of railways fromMangyshlak to Bautino, from Yeralievo to Kuryk, and the section from Khorgos toZhetigen, while starting the electrification of the Makat-Kandyagash railwaysection.
This year, in order to reduce rolling stock shortages, we have to draft apackage of measures to develop the domestic transportation engineeringsector and start implementing such measures.
We must commence actual implementation of Kazakhstan's largest transportationproject, the transcontinental corridor "Western Europe–Western China",which will pass through our Southern regions and will then go to Russia viaAktobe, creating jobs and reviving the regional economies.
In order to reduce fiscal expenditures, the construction and rebuilding ofhighways, such as Astana–Borovoye, Astana–Karaganda, Almaty–Kapshagai,Almaty–Horgos, as well as the Greater Almaty Ring Road will commence mostlyon a concessionalbasis, with an eventual introduction of tolls.
To give concession-based projects a boost and make them more attractive, theGovernment should improve the existing legislative and regulatory framework.

Third.The program of "30 Corporate Leaders": itsimplementation is helping true development of the non-commodity sectors ofour economy.
As of now, over 100 projects have emerged with a claim to"breakthrough" status. Projects of vast importance to the economy areunderway, such as the construction of the third gas-processing plant inZhanazhol, mining and enrichment facilities and acopper smelter inthe Aktobe region, ongoing construction of an aluminum smelter, as wellas a chlorine and caustic facility in the Pavlodar region, establishmentof a sectionrollingmill and metallurgical silicon facilityin the Karaganda region, and numerous other projects.
Construction of the first integrated gas chemical complex in the city ofAtyrau is to commence shortly. Next year, construction of a gas-processingplant to be supplied by the Karachaganak field, as well as a new aluminumsmelter in the Kostanai region will start as well.
We will continue implementing the projects that call for establishing a tirecomplex in Astana, developing logistics centers in Astana andAlmaty, and establishing a polycrystalline silicon manufacturingfacility.
I have only mentioned the largest facilities. However, over these years, manyhundreds and thousands of new enterprises have sprung up in Kazakhstan.Kazakhstan had never had a facility to produce glass, a badly needed materialin high demand. Neither has Kazakhstan had an aluminum plant.
Currently, five vehicle plants are in operation, including car assemblyfacilities. Nowadays, radio equipment and computers are assembled inKazakhstan. The furniture sector, construction industry, and other sectors aresurging ahead.
All in all, the Program "30 Corporate Leaders" is expected to take theinteraction between the Government and business to a fundamentally new level.
The performance of major ministries, the Kazyna Fund and other holdings, aswell as local government offices across all levels will be evaluated, first andforemost, in terms of "breakthrough" project implementation.

* * *

The contemporary development phase is putting anumber of new essential tasks on the agenda of the nation's agro-industrialcomplex.
Over the past five years, Kazakhstan has achieved notable results in developingits agricultural sector. Gross agricultural output has almost doubled since2002. Investment has more than tripled. This has been made possible thanks tomassive government support to the agricultural sector. You are well aware ofthe three-year support program for rural communities, which we have nowcompleted. It has provided a powerful impetus.
Thanks to modern technologies used in recent years, grain crop harvests haveimproved dramatically.
Mandatory crop insurance, introduced in 2004, has guaranteed that farmers makemoney even in drought years.
These measures have contributed to the near-quadrupling of combined sales inour agriculture, which have exceeded US$4 billion.
Improving the quality of life in our villages and rural communities will remaina government priority.
Given the evolving global trends and its existing potential, theagro-industrial complex should develop into a key revenue earner for oureconomy.
Agricultural product prices have been rising; in general, this sector is becominghighly lucrative and we should invest in it. I am sure that rural communitieswill respond with impressive labor and higher returns.

First. The country's food security must be assured.
To that end, it is imperative to attract greater investment in agricultural andfood processing.
Kazakhstan meets its domestic demand for key staple foods and has exportpotential.
Close attention must be given to providing incentives for production ofessential staples that do not yet meet the nation's demand. Those include, forinstance, vegetable oils, fruits, sugar, and others. We are capable ofaddressing these problems.

Second. It is important to focus on those agricultural sectorsthat export their products. In particular, the channels for grainexports via Caspian and Black Sea ports, as well as exports to China must beexpanded.

Third. The livestock sector likewise offers a great exportpotential. In a further step, our veterinary system should transition tointernational standards.
I am instructing the Government to take further measures for systemicsupport of agriculture across all levels.
Special attention must be paid to the processing of raw materials.

* * *

Macroeconomic policy priorities.
The Government, the National Bank, and the Financial Supervision Agency mustestablish effective mechanisms for systemic and prompt government responsesto any threats of financial instability and must bolster the internationalmarkets' confidence in Kazakhstan's economy.

First. Systemic enhancements are needed in the operations of the FinancialSupervision Agency.
The primary goal of the Agency, as well as the National Bank and the Ministryof Finance, should be improving the competitiveness and stability of thenation's financial system, particularly its banking sector. Vagaries oflife will call for adjustments to our plans. We should be ready for that.
We must learn the lessons of the U.S. sub-prime loans crisis, which hasseriously affected our banks.
The Financial Supervision Agency should monitor the situation in each bank moreclosely and should employ preventive and effective measures, if need be.
Government support can not be a one-way street, and the banks shouldassume their portion of risks. If bank shareholders are unwilling or unable toraise extra resources for the banks' development, the Government should beready to take necessary action.
Meanwhile, the process of regulatory intervention should be extremelytransparent and predictable to the entire banking sector.
We view the advent of foreign capital to the banking sector as a vote ofconfidence in Kazakhstan, as a source of much-needed financial support and ofbest international practices in the area of banking services.
Structural reforms of our financial system must continue. These involvethe development of the securities market, advanced financial instruments,improved bankruptcy legislation, and a profound reform of the judiciary.
We should develop systemic risk management in private and public sectors alike.TheGovernment, the Fiscal Supervision Agency, and the National Bankought to construct a flexible and reliable system of risk management.
Furthermore, asystem of rapid response measures is to bedeveloped for contingencies.
The degree of confidence on the part of the general public and the businesscommunity, including foreign business, should become a key performancecriterion for the nation's financial authorities.

Second. The taxation system must be aligned with theobjectives of this new phase in Kazakhstan's development. The existing TaxCode has played a positive role in supporting economic growth. However, itspotential has been largely exhausted by now. The Code includes in excess of 170exemptions and preferences which continuously proliferate on an ad hoc basis.
The Government should draft a new Tax Code designed to promote modernizationand diversification of the economy while bringing business in from the shadows.
The new Code should have the character of a direct action law thatprevents arbitrary interpretation of its rules by tax authorities, whilecombining high quality tax administration with taxpayer interests.
Most importantly, though, it should provide for areduction of thetotal tax burden on non-commodity sectors of the economy, particularly smalland medium-sized businesses. Theexpected shortfall in governmentrevenue should be offset by greater economic returns from the extractivesector.

Third.TheAgencyfor Protection of Competition,newly established on my instructions, is to perform a special mission ofensuring our economy's efficiency and competitiveness.
The Agency's broad powers should guarantee success in fighting collusion onprices, bad faith competition, and certain market players who abuse theirdominant or monopoly status, while enhancing the positions of Kazakhstanibusiness globally.
A new competition law is needed, to provide serious impetus for thegrowing entrepreneurial activity in this country.

Fourth. We should redouble our anti-inflation efforts.Given rising inflation, which is exacerbated by pressures from global economicdevelopments, the Government should take well-considered and appropriateaction.
I expect that theNational Bank, too, will achieve substantialresults in the fight against inflation.
The Government should proactively control the situation in the context ofglobal economic instability. All the necessary resources are in place.
Therefore, theGovernment and the National Bank should have anoperations plan of stabilization actions in case the global economyexperiences the expected slowdown and the prices of certain exports weaken.
First and foremost, until the financial sector's problems are overcome, theGovernment should temporarily reduce government expenditure across all areasand programs other than social ones.
All of the above-mentioned plans must follow this requirement.
Anything that can wait should be suspended. This concerns all regions, too.Such austerity will be instrumental in reducing inflationary pressures whileenhancing the nation's reserves in case energy and commodity prices decline.

Esteemed attendees,
We shall continue on the path of improving Kazakhstan’s political model andsystem of government by combining the generally accepted tenets of democraticdevelopment and our society's traditions.

First. Over the 16 years of our independence, we have implementedour own model for securing public stability and inter-ethnic accord, moldingthe Kazakhstani identity and shared Kazakhstani patriotism.
This is our Kazakhstani know-how, of which we are justly proud andwhich we must carefully guard.
Within the Constitutional Reform context, thestatus and power ofKazakhstan’s People's Assembly have increased.
As they represent the interests of all people across our multi-ethnic nation,deputies elected by the Assembly are called upon to play a special role inconsolidating inter-ethnic peace and accord in Kazakhstan.
Currently, the role of this Kazakhstan’s unique institution needs strengtheningthrough all means available. Deputies elected by the Assembly should feel thisresponsibility and maintain close links with the Assembly and its localorganizations.
As I have always said and as I would like to reemphasize with fullresponsibility, Kazakhstan needs long-term stability, peace and accord forfurther strengthening of the nation and its security, for sustainable economicdevelopment and for a better standard of living for our citizens.

Second.The development of a modern political system shouldcontinue in Kazakhstan.
Political parties, non-governmental organizations, and other publicinstitutions should play the lead role in such process.
The strengthening of party mechanisms will promote the establishment of moderncivil society and the general public's broad involvement in social processes.
Presently, themodel based around Nur Otan as the dominant partymay be viewed as the optimal form of political system for Kazakhstan.
Thanks to this model, all other political parties are able to run in elections,get elected to the Parliament, and take part in all political developments.There are no obstacles to the emergence of new parties or to expression ofone's own opinion.

Third. In the context of a democratic society, the fight against crimeand corruption is assuming great significance. The past years have seensubstantial improvements in the ability of the nation's law-enforcement andjudiciary system to combat criminal phenomena, and to protect our citizens'lives and rights.
However, their operations are not free of significant shortcomings.
These were discussed at a recent Board Meeting of the Prosecutor General'sOffice in the presence of all law-enforcements authorities.
The law-enforcement system and the judiciary must assure fair and effectiveprotection of Kazakhstan citizens' rights, while protecting business fromunlawful interference.
In this area, crime preemption and prevention, rather than punitive actionshould be a priority. Therefore, a bill "On Prevention of Offences"must be drafted and submitted to the Parliament this year.
I am instructing the Presidential Administration to ensure the implementationof all these measures, to carry out anadministrative reform of thelaw-enforcement authorities and all entities reporting to the nation'sPresident.

Fourth. The Government must promptly implement the measuresenvisaged by this administrative reform for the development ofKazakhstan's government administration system in keeping with the principles ofeffectiveness, transparency, and public accountability, and with due regard forbest international practices.
These new approaches should be tried and tested in 2008 within pilotgovernment agencies such as the Ministry of Justice, the Ministry ofEconomy and Budget Planning, the Ministry of Finance, and the Governor’s officeof the South Kazakhstan region.
Greater efficiency and better performance of the administrative apparatus mustbe the primary goal of the administrative reform, so that officialsserve the people properly.
A new nation-wide human resources policy must become a key aspect of administrativereform. At the current phase of development, the human factor is becomingcrucial.
Modern approaches must be developed to establish aprofessional coreof new-style managers within the public administration system.
The Nur Otan party should play a major role in this process. The party shouldtake an active part in developing human resources for the public administrationsystem, acting as a "social elevator" for deserving citizens.
An important role should be assigned to the younger generation, includingthe Bolashak program graduates.
Young professionals should find their place in the developments taking place inthe nation, and should take a very active part in building the future. Workwith the human resource pool slated for potential promotion should beraised to a new, higher level.
The Presidential Administration must lead the human resources effort.

Fifth. As of the next year, for the first time in our nation'shistory, the new system of government budget planning will be based on athree year budget. To that end, the Government must draft a newBudget Code this year.
We must also redouble efforts to modernize and improve the planning system,boost the effectiveness of budget expenditure, and improve the management ofgovernment assets.

Sixth. The Government must conduct a targeted audit or, if youwill, anaudit with prejudice, of government funds allocatedunder the Government's major socio-economic programs.
The objective of this audit is to assess performance and dramaticallyimprove the efficiency of managing and expending government funds.

Seventh. The Government should continue its consistent efforts atproviding incentives for greater competitiveness of small and medium-sizedenterprises.
Operations of micro-credit institutions should be supported, includingwith public funds. Such institutions aid hundreds of thousands of our citizensin establishing their own businesses. We should devise measures to make micro-creditmore accessible and create new jobs for a greater number of Kazakhstanis.
A well-developed entrepreneurial sector is the basis of any economy.
In this regard, I am instructing the Government, in theadministrativereform's context, to radically reduce the administrative burden on businesses, andto further simplify the approval system, mostly in terms of licensing,certification, and accreditation.
Let me offer anexample. According to the latest World Bankreport "Doing Business", it takes 89 days to perform allexport-related procedures in Kazakhstan, whereas it only takes five days to dothe same in Estonia.
Various inspections, contemplated by more than 50 laws, have turned into a truecalamity for businessmen.
Certain agencies use various pretexts to "inspect" a business severaltimes in violation of the law. This seriously distracts enterprises from theirbusiness. Furthermore, it runs counter to the policy that I have been pursuing.
The number of inspections carried out by law-enforcement authorities andother inspectors should be significantly reduced, and such inspectionsshould be streamlined.

Dear Kazakhstanis,

Continued improvement ofthe social well-being of the Kazakhstanis, all elements and social groups ofKazakhstani society have been and will remain at the forefront of governmentpolicy.
Quality-of-life standards should become an effective market-based tool forhuman capital development and social modernization of Kazakhstan, withoutgiving rise to free-rider attitudes.
The Government's social policy can only be effective if it seeks to createjobs and bring the able-bodied population into the national economy. Wehave followed this principle until now and we intend to observe it goingforward.
We have every reason to further improve the living standards ofdisadvantaged members of the public, in keeping with the electionplatform of the Nur Otan party, which has a five year horizon.

The new three-year budget should provide for:
Overall rise of average pensions by the factor of 2.5 between 2007 and 2012,including a 25% rise in 2009, a 25% rise in 2010, and a 30% rise in 2011.Meanwhile, base pension benefits should reach 50% of the subsistencelevel by 2011;
A 9% annual average increase in government social benefits and specializedgovernment benefits starting in 2009;
A phased increase of the monthly child care benefit once the child reachesone year of age, to exceed the 2007 benefits by an average factor of 2.5 by2010-2011;
An increase of one-offbenefits for the birth of the 4thchild and more, in excess of 4 times the 2007 amount, starting as of2010;
Salary increases for government employees, to gradually doublesalaries by 2012, including a 25% increase in 2009, a 25% raise in 2010, and a30% raise in 2011.
In 2009, the annual quota for resettlement of Oralmans to theirhistorical homeland should be raised by 5 thousand families to 20 thousandfamilies a year.

Work in support of social wellbeing should come hand-in-hand with a higherquality of life and a higher quality of the nation's human resources. This isthe primary mission of the nation's research, education, and health sectors.

* * *

The main challenge in our educationsystem is to expand high-quality education services through the implementationof the State Program on the Development of Education through 2010.

First, I commission the Ministry of Education and regionalgovernors to establish within three years a viable education infrastructureto provide modern education and to increase the use of advanced technologies.
This year we will complete the construction of 88 schools for 68 thousandstudents, and in 2009-2010 some 102 more schools for 69 thousand pupils are tobe completed.

Second, I commission the Government and national entities, incooperation with regional governors and the governors of Almaty and Astana, todevelop and implement the program on the further development of professionaland technical education.
This program should provide for the attraction of foreign scientists andteachers to the areas of education most useful to the national economy.
Therefore, first and foremost, employers and their associations, in otherwords, businesses that are in need of such well-trained human resources shouldbe actively involved in the process.

Third, the Government should speed up the implementation of the"Unity of three Languages" cultural project. I would like to drawyour attention to the urgent need to increase the quality of Kazakh languageteaching, as this language unites the entire society.
Having carefully studied relevant international experience, we should developand introduce the most advanced programs and techniques for teaching Kazakh. Itis vital to develop innovative methodological and practical manuals and audioand video materials to promote the effective learning of our national language.
There are only one or two publishing houses that constantly win bids to publishtextbooks in Kazakh. Do we actually have the kind of competition thatcontributes to the improvement of the textbooks’ quality? The quality oftextbooks in Kazakh does not meet the standard. The books do not entice peopleto learn Kazakh, on the contrary, they push them away from the language.Relevant government agencies should take all appropriate measures to resolvethis issue.

Fourth, a breakthrough in providing our citizens with preschoolfacilities has not yet been achieved. The Government and governors shouldexplore the problem in detail and find an appropriate solution.
We should pay particular attention to the preschool education system, as thisis the first element of continuous education for our youngest citizens.Effective programs for the development of their creative and intellectualabilities should be introduced at this stage. We should bear in mind that it isexactly at this age that their attitude towards learning, working andunderstanding the outside world is being formed.
Our healthcare system today does not yet meet the requirements of Kazakhcitizens. This is our main challenge in the healthcare system. Weare not satisfied with the current infrastructure, quality and management ofmedical services.
First, the Government should re-energize its work on the refurbishment anddevelopment of healthcare facilities. This year we will build nine nationallevel healthcare facilities and 112 local facilities.

Second, taking into account that prevention is cheaper thantreatment, we should review current programs with a view to increasing the useof the most advanced techniques in early diagnostics, detection and treatment.We should analyze and estimate the real price of medical services in order toassure that sufficient financial resources are allocated for healthcare.

Third, I commission the Education and Health Ministries to launchjointly a programto improve the professional skills of medicalpersonnel through additional training and retraining, certification andlicensing.
In addition, the number of grants allocated to medical universities and thequota for medical training under the Presidential “Bolashak” scholarship shouldbe increased.

Fourth, particular attention should be paid to providing ourpeople with medicines. The quality of imported medicines should bethoroughly scrutinized and controlled. And we need to be more active inattracting foreign investments for the construction of national pharmaceuticalfactories.

Fifth, it is particularly important to develop the appropriateinfrastructure for the “Healthy Nation” project. We should emphasize andprovide every possible opportunity for physical and sports training forour citizens from an early age.
Governors should restore existing and build new stadiums, sports facilitiesand athletic fields for children and adults, thus providing opportunitiesfor exercise for citizens of all ages to get in shape and live longer lives.
Ministries and governorates should launch extensive campaigns for a healthylifestyle. This is an issue of national importance, and the Governmentshould approach it on a larger scale.
A package of measures must be devised for a demographic turnaround. Thisshould be the keynote issue for the coming session of the National Council.
The nation's health is a national goal. Thedomestic businesscommunityshould actively contribute to attaining this objective.
Here, I would like to note with satisfaction that the business community hasactively responded to my appeal for greater social responsibility on its part.
Last year alone, such entities as Kazakhmys Corporation, the EurasianIndustrial Association, KazZink, Tengizchevroil, Agip, as well as the nationalcompanies KazMunaiGaz, Kazatomprom, and Kazakhstan Temir Joly, spent in excessof 30 billion tenge on the development of social facilities, including schools,medical and pre-school institutions, rehabilitation centers, disabled persons'rehabilitation centers, as well as culture and sports faculties.
This is avivid example of good corporate citizenship. Suchpractices should become common, and the media should support them.

* * *

Accessible high-qualityhousingfor our citizens, particularly for new families, is an issue that has alwaysbeen and still remains among the Government's most vital priorities.
It is high time to make the following amendments to the National HousingProgram.

First. Extension of provisional housing loans at a ratenot exceeding 4% per annum to government employees through abuilding-savings system.

Second. We should emphasize construction of rental housing,including for government employees. For the benefit of citizens wishing tobuild their own homes, the Government will set up a private homebuildinginfrastructure.
SECs should get actively involved in this process under the program.

Third. We should legislate to ensure operational transparencyof construction companies and greater competition in that sector. Greater protectionshould be provided to the rights of the individuals who make equitycontributions to housing projects.
Simplified rules are needed for allocation and documentation of land plots inorder to provide incentives to private home construction.

Fourth. The introduction of industrial, affordable, andenvironmentally clean technologies of private home construction shouldbecome a priority. The latest international experience should be used.

Fifth. Further development of Astana, which, this year,will mark ten years as the nation's capital, is a highly important task.
The construction of advanced transport and utilities infrastructure, as wellas power sources for the capital city must continue. To secure a reliablepower supply for the city, a power complex development program should beimplemented along the lines of a public-private partnership, which wouldinclude the construction of Thermal Power Plant No. 3.
The Government must redouble its efforts at creating a food belt aroundAstana, in order to saturate the capital's consumer market and stabilizeprices.
In 2008, the Government and the Astana Governor’s office are to complete theestablishment of a health service cluster, making sure that all facilities arecommissioned as scheduled by the capital city's 10th anniversary.

* * *

Improvement in the population's well-beingshould remain a priority for Governors at each and every level. Focusedefforts are needed in the following areas.

First. Improved fiscal performance. We must cut back on allexpenditures unrelated to the population's social well-being.
At the central level, work is already underway to implement result-orientedbudgets. This work must also be expanded to the local level. The public shouldfeel that regional authorities truly care about them.
New social facilities, such as medical institutions, schools, and sportsfacilities should become centers for providing the public with high quality, state-of-the-artand, most importantly, mass-scale services.

Second. The Governors must ensure proactive development of infrastructure,in particular, local roads.

Third. The practice whereby non-transparent arrangements are usedfor land allocation must be discontinued. All land must be allocated by way of publicauctions. The only exception will apply to special-purpose land plotsintended for SEC operations.
As seen from audits carried out by the Government, land around Astana andregional capitals have been bought in advance in the name of front companiesand individuals. Nowadays, by selling those lands at market prices, certainpersons, including quite a few officials, are getting rich at the Government'sexpense without having invested anything. They should be given the option ofvoluntarily returning such lands to the Government; otherwise, law-enforcementauthorities should invesitgate whether such actions were lawful and whethersuch persons are liable.
It would be great if the Nur Otan party and its parliamentary faction undertookto monitor this issue.
In general, Nur Otanbranches and grassroots organizations, as wellas local Maslihat deputies should become a serious factor for regionaldevelopment and economic modernization. They must take an active part inimplementing this package of measures and keep a close watch over the tasksenumerated above.

Esteemed Members of the Parliament,
Ladies and Gentlemen,

Since it gained its independence, Kazakhstan has become a full-fledged memberof the international community whose initiatives have almost withoutexception received broad support and have been translated into reality.

Intergovernmental entities established at the initiative and with directinvolvement of Kazakhstan have demonstrated that there was indeed a needfor them. Such intergovernmental entities have laid down the foundation for aneffective regional security system and include CICMA, the SCO and CSTO.

We must continue to strengthen our economic and political cooperation with Russia,China, and the Central Asian countries. We must create a firmfoundation for stability, an open dialogue and interaction in the region.
We are also expanding our constructive interaction with the USA, EU, andNATO with a view to strengthening security in the Central Asianregion.

As of now, this country has reached a qualitatively new level ofinternational recognition as convincingly demonstarted by the decision togrant Kazakhstan the rotating chair at the Organization of Security andCooperation in Europe in 2010.We are grateful to the members ofthat organization, especially to the CIS heads of state who have collectivelynominated us for that position.

In this regard, it is necessary to devise a special program, “Path toEurope.” The program would be intended to promote economic cooperation,bring in technology and management experience, improve our legislation, developour own agenda and a strategic vision for our chairmanship of the OSCE.
On the whole, our foreign policy and security priorities remainunchanged.

First. Our foreign policy is built on a quest for commonalityof fundamental interests, understanding the need for compromise solutionsto all, including the most difficult issues.

Second. Kazakhstan intends to continue strengthening, in everyway, its position as an active member of the international coalition againstinternational terrorism and religious extremism.

Third. We will continue the modernization and combatpreparation of the Kazakh Army.

Over the past few years this nation’s Armed Forces have significantly enhancedtheir military and technical capabilities.
It is necessary to form a professional, military and command corps of the ArmedForces capable of confronting modern security challenges.
On the whole, this country’s Armed Forces are being tasked to continue to raisetheir combat readiness and competitiveness in accordance with the newMilitary Doctrine. The Government, the State as a whole must provideresolute support to our Armed Forces.

* * *

I would like to specifically note that over the next few years a number of majorinternational events of global importance will be organized.
I am referring to the Third Congress of World and Traditional Religions in2009, the Conference on Confidence and Security Measures in Asia in2010, work in the OSCE Troika starting in 2009, and chairing theOSCE in 2010.
Serious preparatory work, both organizational and substantive, muststart now. This is a job both for the Foreign Ministry and the Government andfor all government agencies.

Dear compatriots!
Members of Parliament and Government Ministers!

As you are well aware, the number of our goals increases from one year to thenext. We all work for the sake of strengthening of our country’s independenceand the nation’s prosperity and for improving the standard of living of ourpeople. I am confident that we shall justify the people’s trust and reach thegoals we have set for ourselves.
That’s all that I wanted to tell you today.
Thank you for your attention.

Changed on 6 February, 2008 - 00:00
Achievements over the years of independence of RK
Targeted social assistance
Best social projects implemented in Kazakhstan
The Republican contest «Enbekzholy»
Skills and jobs