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Early Elections Again. Will they solve the country’s problems?
On September 1, President Kassym-Jomart Tokayev announced a Message to the people of Kazakhstan in Parliament.
In the economic block of his address, he stated the need to stimulate private entrepreneurial initiative and move away from state capitalism and excessive state intervention in the economy, proclaiming a course for the development of competition as ensuring equal opportunities for all. According to him, the state will gradually abandon pricing regulation in all industries and spheres, except for non-competitive markets.
The head of state instructed the government to develop and adopt a new Tax Code next year. "As part of the tax reform, it is important to consider the possibility of introducing a so-called "luxury tax," the President said. "It will be charged for purchasing expensive real estate and vehicles and will not affect the middle class."
Tokayev announced the creation of a new, more transparent system of public procurement and the reform of the National Welfare Fund Samruk-Kazyna. According to him, the fund is being transformed into an investor owning only majority stakes sufficient to control key sectors of the economy. Other assets and shares owned by the fund will be privatized, including through the "People's IPO" mechanism. As a co-investor, Samruk-Kazyna will participate only in critically important projects that private investors cannot implement. The head of state will determine such projects.
The President also instructed to "significantly simplify legislation and procedures for attracting investments in the development of mineral resources. It is necessary to complete the creation of a unified database of geological information."
"I instruct the government to increase the investment attractiveness of the industrial sector," the head of state said. – Last year, on my instructions, an assessment of the effectiveness of all special economic zones was carried out. According to its results, problem areas were identified, and new approaches were outlined. Now we need to move on to a fundamentally different policy for the development of SEZ. This issue is fundamental in relocating foreign enterprises to Kazakhstan. The provision of investment benefits for SEZ should be approached differentially. The main principle here should be the more investments, the more benefits. At the same time, investors who do not fall under priority activities, but implement important industrial projects, can be given land plots without applying tax and customs preferences."
A distinctive feature of the 2022 Message was its focus on social policy. The President promised to increase the minimum wage and pensions and lower the retirement age for women. In addition, he said that social payments and the volume of medical care to the population would increase, and all children would begin to receive money directly from the National Fund (50% of the fund's investment income will be allocated for these purposes). The mechanism is already known. A special personal savings account will be opened for each child who is a citizen of Kazakhstan, money from which cannot be used until adulthood.
The government has also been instructed to expand agricultural subsidies, preferential financing of entrepreneurship, and preferential funding for young people will be additionally introduced. The President announced plans for additional government spending on the construction of education and healthcare facilities and transport, energy, and water infrastructure assets.
Such generosity (and in the medium term, government spending on new initiatives, according to experts, can reach two trillion tenge) in the face of difficulties with filling the budget and completely vague geopolitical prospects more resembled not an annual Message but an election program.
And so it turned out. The expected sensation of this day was the announcement of early presidential elections. Mr. Tokayev explained this step as the need for "a comprehensive reboot of key state institutions following the new strategy."
"I propose to hold early presidential elections in the autumn of this year. A new mandate of people's trust is required to successfully implement drastic and comprehensive reforms aimed at building Fair Kazakhstan," the head of state is confident. – For me, the interests of the state are above all. Therefore, I am ready to go to early presidential elections, despite reducing my term of office. In addition, after much reflection, I concluded that there is a need to revise the number and duration of the president's terms of office. I propose to limit the president's mandate to one term of seven years without the right to re-election."
As known, Kassym-Jomart Tokayev came to power in the country as a result of early elections on June 9, 2019, having thus worked for a little more than three years out of the five-year term defined in the Constitution. However, the spring-summer of 2022 turned out to be intense – the military actions in Ukraine reshaped the global political landscape. Rampant price growth, the fall of the national currency, the closure of import channels for several goods from Europe through Russia, problems with the export of Kazakhstani oil, the shortage of diesel and liquefied gas – all these factors directly affect the well-being of the Kazakhstani economy and lead to the impoverishment of Kazakhstanis. Hence the strengthening of the protest potential.
In the political sphere, things are slightly loose, but they are still in place. The fresh memory of the January events in Almaty, where blood was shed and mayhem broke out, is holding people back from going to protests. But by the time of the next election, the pain and fear will subside, and the situation in the country may become even more critical. Then, the opposition, which is scattered now, can unite, agree on a straightforward program of action and nominate a single candidate for the next elections. Then, in the early elections, Tokayev's victory is beyond doubt this autumn.