Kazyna: portraits talking

Kairat Kelimbetov,
Chairman of Sustainable Development Fund of Kazyna:
“We are the strategic headquarters for the diversification of our country’s economy today”.
“The main issue for development institutes today is most likely a question of their corporate culture. I agree that so far, each developmental institute has been like state within a state, not suffering from excess transparency or client-orientation. In many cases, they remain as such. We want, and I hope that we can in the near future, orient developmental institutes toward supporting business. Moreover, we would like to contribute to the realization of business goals from the point of view of the competitiveness of the business community of Kazakhstan”.
“One more idea, which in my opinion has begun to be abused, is that ostensibly, all development institutes are competing with private financial organizations and businesses. Even if this is the case under certain projects, we now intend to move away from markets on which, the private sector is operating successfully, and in some ways even more efficiently. The third challenge that we are all facing today is a fight against corruption. Using my opportunity to speak at this tribune, I would like to make some comments. Naturally, fighting against corruption is difficult and it is not easy to root it out, but working with development institutes we cannot see any other alternative to resolve this problem, other than providing for the maximum level of transparency for decision-making. This is first”.
“Secondly, we are not inclined politicize relations between development institutes and financial-industrial groups. Most often, unfortunately, the state support mechanism stipulates certain conditions on the side of state agencies. Whether formally or informally, we would like to give a signal to every one present here – there is no need for any privileges from the side of the private sector, or to expect any special attitude from them. Moreover, if there are such instances, a helpline has been set up that you can call. It seems to me that the new form of relations between the top-managers of the private sector and Kazyna Fund administration envisages our openness, and we would like to express our hope for some mutuality coming from the private sector”.
“The next thing is that many of our friends and consultants believe that the number of existing institutes is extremely excessive. Thereby, we would like to move away from this element of the state mentality, and move toward optimal and efficient structures, in which, each operating unit would bring income. We will also try to decrease our expenses and transfer those business functions that are not in our core competency for outsourcing, in order to bring in more enterprises into our work, including small and medium size enterprises, so that we could focus only on those activities in which we have experience”.
“Another aspect that we have started our work on is the creation of a national export strategy, and we hope that all of business will join in this endeavor. The new CMAR special working group will systematize all problems facing exporters in Kazakhstan, starting from tariff barriers and ending with global competitive niches for Kazakhstani exports. Yerlan Sagadiev and Kairat Mazhibaev are the officials coordinating this on the side of business. I believe that these are people in whom you can trust. We would be glad if you would also join this work. In accordance with the industrial strategy, a master-plan for developing 8 industrial clusters was designed. These include the chemical industries, construction materials, wood-processing, transportation, logistics, pharmaceuticals, bio-fuel, IT services and metallurgy. This means that we are not merely talking when we say that these are our priorities. Following the example of the petrochemicals program, we would like develop a detailed master-plan that would be beneficial for the entire industry of Kazakhstan. We will discuss it and how to use it, what type of configuration Kazakhstan business should implement, both private and state, as well as how to participate in it”.

Yezhenova Karlygash,
Chief Editor of Exclusive journal:
“Certain business structures that could not be present today have requested me to address you with certain questions, Kairat Nematovich. Allow me to start by asking; when will the development concept of Kazyna be presented? What special elements will be reflected in this concept? What does Kazyna mean by “breakthrough” criteria? When will they be presented? When will the legal rules for issuing infrastructure bonds act in accordance with the law, On concession? What types of projects will be characterized as infrastructure projects? This is the first series of questions”.

Kairat Kelimbetov:
“These are conceptual questions. I am very happy to be hear them, because these questions are little understood, even among state officials. First, we should separate the activity of Kazyna from that of development institutes. The latter were created in 2003; the DBK was established in 2001, which was a preparatory stage. We do not want to say that nothing has been done or has been done incorrectly. This is not the case. Much has been accomplished. But there is one stage in the life of the nation, when it is crucial to focus the efforts of not only the state, but also of the private sector. In this meaning, if speaking of the role of Kazyna, I do not know how the other participations will look at it, but we would like to position ourselves as the strategic headquarters for the diversification of the country’s economy. Today, many efforts are being aimed at resolving this goal, and many programs have been written. But the problem of all developing countries is to actually implement program documents. They are always announced, but their implementation is not always up to standard. And we do understand that there is too little time to accept the current situation as a normal one. Therefore, we must focus on implementation, and for this reason, the government should master precisely its shareholder functions. Therefore, funds such as Samruk, Kazyna and KazAgro have been created. But whereas Samruk has a very important mission to efficiently manage those assets that the state has already created in the areas of oil and infrastructure, Kazyna’s mission is to create new assets. If the matter concerns a precise document, then we must develop an investment policy for the state in cooperation with the government.
“We really like to announce during all forums that the state has a lot of money. But if one were to analyze what money was actually working toward diversification, then, as of today, the state budget allocates money only for development institutes. When we are asked, who will be engaged in developing domestic projects, we draw-up precise criteria for “breakthrough’ projects”. These are projects costing from $50 to $100 million, the export portion of which should be no less than 30%. By the end of 2006, we hope to compile a full list. In terms of the fairness of the rules related to infrastructure bonds, this is a specific question. I do not understand what dissatisfaction exists with the existing rules, as one more goal of development institutes is to try not to dominate in the sector that it is working in. On the contrary, as soon as it is clear that the private sector can fulfill this function, we not only go after some other temporary lending niches, but we shall sell shares in our development institutes through the stock exchange, and attract strategic investors. During the upcoming 3-5 years, the process will proceed in this direction very actively”.

Karlygash Yezhanova:
I don’t have any other oligarchs for you.
“So that we don’t have a Kazyna monologue, I would like to draw our guests into the discussion. For the last few days, I have had two favorite phrases. When I was told that that I have the wrong oligarchy, I answered