Kazakhstan

PRESIDENT TOKAYEV'S STATE OF THE NATION ADDRESS:

PRAGMATISM, REALISM & AMBITION

State-of-the-nation addresses tend to be highly self-congratulatory and visionary affairs, where long-term ephemeral goals are spoken about in abstract terms, employing highly embellished rhetoric and lofty ideals.

This was certainly not the case with President Tokayev's 2023 State-of-the-nation address, delivered on September 1. It contained a mix of pragmatism, realism and ambition. Achievements were recognised, shortcomings identified, and instead of long-term goals, the focus was very much on structural reforms to address its short- and medium-term development challenges, with measurable and quantifiable objectives and targets. "All objectives outlined in this Address should be accomplished within three years", said President Tokayev.

President Tokayev's address took stock of global developments and trends – the acceleration of technological innovation, intensifying competition for scarce resources and fundamental transformations taking place in the global trading system (namely, de-globalization, the rise of protectionism and supply chain disruptions) – to assess how Kazakhstan can make the most of the opportunities and stay ahead of the curve in an increasingly complex and fragmented geopolitical landscape.

One of the central themes of President Tokayev's address was not novel, but not less urgent: the transition to a new economic model. Among the key points were industrialization, diversification, a move toward green energy, simplification of tax codes, and a focus on transparency and fairness in governance. Kazakhstan has long been dependent on its vast energy resources, primarily oil and gas. But with the changing global energy landscape, Kazakhstan recognizes the necessity of diversifying to a more sophisticated innovation and knowledge economy, putting to a fuller use the vast human potential and highly skilled workforce available in Kazakhstan

A pillar of this new economic model is to make the private sector and in particular Small and Medium Sized Enterprises (SMEs) the engines of economic growth, job creation and innovation. President Tokayev admitted that the development rate for medium-sized businesses is lagging. To this end, it is necessary to remove the bureaucratic obstacles and red tape that hinder the growth of medium-sized businesses.

The digital revolution is inevitably reshaping the face of the economies and societies across the world, and Kazakhstan is no exception. In the area of digitalization, Kazakhstan has already made great strides: for example, it occupies the 28th place in the United Nations (UN) Global E-Government Development Index (EGDI) for the development of electronic government. President Tokayev mentioned that an important task ahead is "to transform Kazakhstan into an IT-centric country", with the country seeking to increase the export of IT services to USD 1 billion by 2026. The effects of the pandemic, combined with the country's low population density, have accelerated the transition to e-government, in order for public services to be more effectively delivered to the citizens.

The global energy (green) transition has also turned the world's attention to Kazakhstan, due to its vast deposits of rare earth metals, which are essential for the production of high-tech chips and are used in a wide range of products, including electric vehicles, wind turbines, batteries, magnets, and electronic devices, essential for the green transition and for countries to attain ambitious carbon neutrality goals. Furthermore, Kazakhstan's strategic geographic location gives it easy access to major markets in Europe and Asia. Therefore, Kazakhstan is putting efforts in positioning itself as a reliable, stable supplier.

Developments in far-flung corners of the world could also have positive spillover implications for Kazakhstan in this regard. As we have witnessed in recent weeks, as a result of instability (e.g. in the form of military coups) across parts of Africa (in Niger, for example, which accounts for between 20-25 percent of the EU's total uranium imports), it is no secret that the EU is looking for more reliable and stable suppliers. And this is where Kazakhstan comes in. In the aftermath of the coup in Niger, Yerzhan Mukanov, the head of Kazakhstan' state-run nuclear company, mentioned that Kazakhstan is prepared to ship more uranium to Europe to fill potential shortfalls in supplies from Africa.

As is usually the case during a state-of-the-nation address, some reshuffles and readjustments in the state apparatus and government administration are announced. Here I would like to emphasize that the issue of water will no longer be dealt by a committee under the Ministry of Ecology and Natural Resources but rather by a separate ministry: the Ministry of Water Resources and Irrigation. The excessive concentration of multiple issues within one ministry sometimes means that strategic tasks are consistently overshadowed.

It is well known that Central Asia is one of the most water stressed regions on Earth, posing long-term threats to food security, people's livelihoods, and the achievements of the 2030 Sustainable Development Goals (SDGs). Water is cross-cutting and supports the achievement of many SDGs through close linkages with climate, energy, cities, the environment, food security, poverty, gender equality and health, amongst others.

The Aral Sea catastrophe and the rapid melting of glaciers illustrate the scale of the problem. Furthermore, this year, a state of emergency was declared by Kazakh authorities as the Caspian Sea fell to a critically low level. Kazakhstan heavily depends on water resources from neighbouring countries such as the mountainous republics of Kyrgyzstan and Tajikistan. Rational use of water resources and trans-boundary water cooperation will become a key policy focus for all Central Asian countries; thereby meriting the establishment of a separate Ministry, as President Tokayev announced in his address.

The last issue I would like to touch upon is a deeply divisive one: the development of nuclear power. With one of the world's largest reserves of uranium, it would be considered a no-brainer that Kazakhstan embraces nuclear power, not to mention that it is considered (also in the EU taxonomy) a clean energy technology not generating any carbon emission. Furthermore, already in his 2021 state of the nation address, the President warned that by 2030, Kazakhstan will face power shortages and ordered the government and the Samruk-Kazyna National Wealth Fund to comprehensively study the possibility of developing a nuclear power industry in Kazakhstan. But at the same time, in a country like Kazakhstan, the past weighs heavily in the collective consciousness of society, in particular the tragic legacy of the Semipalatinsk nuclear test site. Therefore, President Tokayev has decided to submit the issue to a national referendum, thereby de-politicising the issue.

Kazakhstan finds itself at a crossroads. President's Tokayev speech gives us some clues as to the direction Kazakhstan will take, with a focus on self-reliance, resilience and maximising the potential of the country. The address sends a strong message for the need for continued reforms, but as always the success hingers on the effective implementation at all administrative levels, from the largest region to the smallest village.

Diplomatic World