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The Speech of the Minister of Health and Social Development of the RK at the joint meeting of the Social Council under “Nur Otan” party faction and the Committee on Social and Cultural Development of the Majilis of the Parliament of the RK

Dear members of the Social Council under “Nur Otan” party faction,

Committee on Social and Cultural Development of the Majilis of the Parliament,

deputies, members of the Government!

Let me inform you within a framework of the joint meeting on the attraction of foreign labor force, migration policy formation, its implementation, and improvement with consideration of Kazakhstan labor market situation.

Migration processes have a significant influence on domestic labor market formation, labor resources quality improvement.

Medium-term projections of labor market change indicate a significant probability of labor imbalance formation:

In the next five years there will be a slowdown in the inflow of new employees (this is due to demographic failure of the early 90-ies).

While keeping the rate of economic growth, the demand for labor force will be increasing rapidly.

With that, the labor market deficit will be mainly covered by unemployed and self-employed people, as well as by attracting foreign labor force.

Therefore, apart from improving qualification of local labor resources, today it is also necessary to provide external sources of attracting highly qualified foreign specialists.

Currently, basic conditions for attracting foreign labor force have already been created in the state.

Today foreign workers:

- are attracted by employers (according to quotas and permits, or in the framework of Industrialization Map priority projects implementation, either within a corporate transfer, or under international agreements (members of the Customs Union, as well as seasonal workers));

- arrive for self-employment according to government list of professions.

At the same time, the government is taking measures to protect domestic labor market in the form of:

- quotas and permits for foreign labor force attraction as well as for employment;

- imposing special conditions on the employer (or the requirements on training of local personnel, and creating additional jobs for them);

- having provision for obligation on local content in personnel.

If we consider the current system as a whole, we can say that today there are three main sections of areas of FLF attraction:

1) According to quotas and permits:

Here the foreigners come:

- by general order (with all measures of protection domestic labor market and only qualified foreign workers (I, II, III and IV categories));

- by countries of origin (if Kazakhstan has international agreements. In this case, the conditions for protection of the domestic market are waived, or, if necessary, provided in the agreements). To date, there are no such agreements;

- For self-employment;

- by the priority projects of the Industrialization Map (also without the Kazakh content, special conditions and test on economic feasibility);

- For projects implemented under the SEZ (without Kazakh content, but with imposing on employer specific conditions);

- And within corporate transfers (also on general terms).

2) The second section - outside the quota and without permits:

Under these conditions foreigners are attracted to work:

- In companies implementing investment priority projects (in the amount of investments over $ 20 million. (This innovation was provided by the law “On the improvement of the investment climate” in June of the current year));

- In “Nazarbayev University” cluster;

- In companies, organizing and participating in EXPO 2017;

- In the Regional Financial Center Almaty;

- in SEZ “Park of innovative technologies” “Alatau”, etc.

3) The third section - labor immigrants.

This area has been evolved since the beginning of the current year and implies attracting foreigners for work in the household of individuals.

This category of foreigners is attracted by tradeable permits (patents) in the amount of not more than 5 persons per individual (at a rate of 2 MCI for each attracted foreigner).

To date, what are the results of this system:

- The quota for 2014 has been set in the amount of 0.7% to the economically active population (about 63 thousand people.). At that, as of September, it is nearly half filled;

- Now there are about 32 thousand permits:

almost half of them (42%) - by the third category (specialists);

about 25% - by the fourth category (qualified workers);

fifth part (20%) - heads of structural units (the second category);

almost 6% - the first category (top managers and their deputies).

The existing procedure demonstrates a number of systemic shortcomings.

1. Firstly, foreign labor force attraction system does not work for self-employment:

Currently, the list of individuals for self-employment is formed without considering the needs of the labor market. It was not agreed with the employers and thus does not contain professions truly in-demand (the list includes 30 professions, including astronomers, ballerinas, museologists and others);

2. Secondly, the order of attraction FLF by employers is not effective enough:

Today, there is no direct economic effect from issuing permits on attraction FLF.

At that, the system is unnecessarily bureaucratic, which in turn provides conditions for corruption.

Furthermore, special conditions did not justify themselves, which include advanced training, training, retraining and the creation of additional jobs for local personnel. They do not allow providing replacement of foreign workers by domestic personnel to an adequate degree.

3. Thirdly, it is a low level of integration of Kazakhstan into the international labor market:

Today Institute of internal corporate transfer is not working at the appropriate level (over the last year, only about six hundred people were attracted in this way).

Internal corporate transfer procedure is also burdened with unnecessary procedures and does not correspond to the obligations of the Republic of Kazakhstan within the framework of WTO.

What we propose to improve the current system of attracting foreign labor.

Currently our Ministry develops a draft law on amendments and additions to the legislation on the issues of migration and employment.

What is provided by the draft law.

The draft law is aimed at:

on the one hand - on provision of internal security and protection of the national labor market;

on the other hand - on satisfying the needs of the economy in personnel through creation of a free market of highly qualified foreign specialists, liberalization of procedure for attracting FLF by employers.

   1. Formation of highly qualified specialists’ open market:

For these purposes, approach to foreigners will be substantially revised, coming to the country for self-employment.

What we are planning to provide:

1) Attraction of foreign independent specialists outside the quota and without permit.

Today, foreigners arriving in the Republic of Kazakhstan for self-employment must obtain permits issued under the annual quota.

At that, permit is issued in order to work for specific employer and according to the list established by the Government (at that, today the list is outdated and requires revision, taking into account the proposals of employers and local executive bodies).

2) Issuance of qualification compliance certificates.

These certificates will replace permits, but the basic difference would be that:

- A certificate will only confirm worker’s high qualification level, moreover, with it the worker can be employed at any place according to qualification (formerly permission was issued in order to work for specific employer);

- The foreigner is given a 3-month period for job search over Kazakhstan (formerly permission was issued only within the one region).

Moreover, the foreigner being abroad can submit to the embassy of our republic all the documents concerning obtainment of such certificate. If the foreigner is already in Kazakhstan, he or she can submit documents to the Public Service Center.

3) Introduction of foreign workers point-based system.

Here we adapt international best practice of evaluation system, proven in the advanced countries, such as Singapore, USA, New Zealand, United Kingdom, etc.

In order to obtain qualification compliance certificate, foreigner will be passed through a point system, which will evaluate his or her education, term of employment, work experience and other parameters that allow confirming the qualification.

Thus, only those foreigners whose profession will be marked in the list of professions in demand in the priority sectors of the economy (this list will be approved by our Ministry, by agreement with the concerned central government and local executive bodies) will be accepted in such order.

The procedure for obtaining certificates for self-employment:

1. The foreigner provides application to foreign establishment or Public Service Center on obtainment of certificate with the documents confirming foreigner’s level of qualification, term of employment, work experience, profession, etc. (all that is needed to test foreigner according to point system);

2. Foreign establishment or Public Service Center sends the complete package to our Ministry;

3. We, together with MES assess foreigner’s qualification level according to the point system and make a commission decision to issue or refuse to issue a certificate for foreigners;

4. After making that decision, we prepare and, in the case of finding a foreigner on the territory of the Republic of Kazakhstan, send him or her a certificate or letter through Public Service Center explaining the impossibility of issuing such certificate. In the case of finding a foreigner abroad, we send a certificate or clarification to the embassy, at ​​the place where the foreigner filed an application.

5. Then, the foreigner submits a certificate to the foreign establishment (in case of receipt);

6. Foreign establishment issue a visa to a foreigner for a period of 3 months;

7. A foreigner on arrival in the Republic of Kazakhstan registers in the Internal Affairs bodies according to place of residence.

Once a foreigner finds a permanent job, the employer ensures his or her re-registration in the Internal Affairs bodies. The foreigner prolongs his or her visa there for a period of the duration of the employment contract.

2. Improving procedures for the attraction of foreign labor by employers:

For these purposes, ideology of permits issuance to employers will be completely revised.

What we are planning to provide:

1) According to the proposed order, the quota will be set not on the basis of the economically active population, but by sectors (types of economic activities) in percentage to the number of sector’s workers.

2) Introduction of permits payment (fee will be charged).

At the same time, interest rates on fees will vary depending on the sectors in which foreign labor force is attracted types of economic activities, as well as categories of attracted foreigners.

Introduction of payment will allow to:

- substantially simplify the procedure for attracting foreign labor force to employers, eliminating the need for taking on special conditions, the obligation on search for candidates at the domestic labor market, placement of guarantee fees, and thus speeding up permits issuance procedures many times (if now this procedure takes on average 30- 40 days, then according to the proposed order, it will take on average up to 5 days);

- Increase the revenue part of the state budget that could be spent on social and economic development of the region.

The procedure for obtaining a permit on attraction of foreign labor by employer:

1. The employer submits an application with the required documents to the Public Service Center;

2. Public Service Center collates copies and originals, visually verifies the authenticity of the documents and sends the complete package to local executive organs;

3. Local executive organs analyzes the submitted documents and makes a decision to issue or refuse to issue a permit, and then sends it to the Public Service Center. In the case of making positive decision, along with the notification to the Public Service Center the permit shall also be sent;

4. Public Service Center issues to the employer notification of the decision to issue or refuse to issue a permit. At that, Public Service Center keeps the permit until the employer makes proof of fee payment;

5. The employer, after payment of fees, submits corresponding receipt and receives a permit.

3. Improving the procedures for internal corporate transfer:

This type of FLF attraction will be brought in line with common international standards.

Now, according to the obligations of the WTO, internal corporate transfers are implemented out of quota, but according to permits.

Such permits will be issued free of charge, and through Public Service Center.

Local content in personnel will be reduced to 50% (conditions that apply to all countries which are members of the WTO).

At the same time, employers will not be placed demands on transferred employees’ level of qualification (most importantly, that they have to be leaders, managers and specialists).

The procedure for obtaining a permit on attraction of FLF in the framework of inters corporate transfer.

1. The employer submits an application with the required documents to the Public Service Center;

2. Public Service Center collates copies and originals, visually verifies the authenticity of the documents and sends the complete package to the local executive organs;

3. Local executive organs analyzes the submitted documents, and then makes a decision to issue or refuse to issue a permit. In the case of the decision to issue - sends permit to the Public Service Center. In case of refusal sends a reasoned refusal to the Public Service Center;

4. Public Service Center gives the employer the result of public service provision (permit, or a reasoned refusal).

Another area is the attraction of foreign talented youth to the country:

For these purposes, grants for education in universities will be introduced for exceptional, talented foreign youth, on equal terms with citizens.

Moreover, all the conditions will be created for these young people so that after studying they will be employed and made contributions to the overall development of the economic potential of our country.

What we expect as a result of the adoption of the measures specified.

Ensuring integration of Kazakhstan into the international labor market;

Attracting highly qualified foreign labor;

Protection of the internal labor market;

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