Can economy be strong with a weak tenge?
August 23, 2018
During the meeting of representatives of ministries and state agencies with the business community of Almaty, promising industries for the city were mentioned, the correspondent of IIA (International Information Agency) "Kazinform" reports.

Heated discussions in the conference hall were triggered by the speech of Bakytzhan Sarkeyev, a Projects Director at the Center for Strategic Initiatives (CSI). He started with the hot topic of the last days - the exchange rate:

- Many of those present may be wondering about the extent to which the topic of our meeting is relevant, since first of all everyone cares about such a question as the change in the dollar rate. But I would like to say that our agenda - "Competitive business - competitive economy" - exactly corresponds to the issue. Because, we need to build a stable and strong economy and it will not happen without a strong and stable business. In fact, the topic of our meeting can be called as "Strong business is strong economy".

Among other issues, one of the main problems of the domestic economy Bakytzhan Sarkeyev called the ratio of exports and imports of products:

- Why is our currency unstable? Because, we are still mainly exporting raw materials. More than 90% of our exports are oil and metals. And, at the same time, we import more than 70% of manufactured products. And after all, we can produce a lot of these ourselves. Why do we limit ourselves? It is necessary to concentrate our efforts in this direction. It has a great potential for the development of the entire economy.

"Our main task is to increase the share of manufacturing production, increase the number of suppliers, improve the quality of their products, and develop clusters. In order to have in Almaty clusters of light and manufacturing industries, on tourism, where different companies could work together, they could have a common price policy; due to this they would attract tourists. And, of course, the transport potential ", - said Bakytzhan Sarkeyev, Projects Director at the Center for Strategic Initiatives (CSI) in his speech to the business community of Almaty.

In the development of small and medium enterprises (SMEs), Almaty is leading in comparison with other regions. However, even here its share does not reach the parameters of developed countries.

"If we want to achieve a high level of welfare, then the share of SMEs in the economy should be at least 50%. Today, the share of SMEs in GDP of the country is 27%, in Almaty - above 30%. We need to increase this share to make the economy more stable. Today our business is concentrated in the construction and trade sector; this is 43% of the business. The share of the manufacturing industry is 12.4%. Almaty has the potential for the food industry, all kinds of food products, it is possible to produce machinery, building materials, and light industry is well developed, pharmaceutical, chemical, electronics. There are energy and transport potentials for this, the city has combined heat and power supply plants, hydroelectric power stations, and Almaty is located on the main transit corridors. Tourism is promising", - said B. Sarkeyev.

He also cited data on Kazakhstan's positions in international ratings and on their basis stated that the country still exports more raw materials and metals, while at the same time it imports mainly the product of manufacturing industry.

«There is potential, we can produce a lot ourselves, more clothes, food, and medicine. There are some companies that enter the Russian market successfully. The main task is to increase the share of SMEs in the manufacturing industry so that the economy of Kazakhstan will not be vulnerable to external shocks, as it is now", - concluded the Projects Director at the Center for Strategic Initiatives (CSI).

Source: forbes.kz link 1, link 2

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