Government • 05 February, 2020

Govt meeting this week: What was discussed?

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On Tuesday, Feb. 4, 2020, at the regular Government session, measures to stabilize prices for socially significant food products and the implementation of the state program “Digital Kazakhstan” were considered. Important issues of the current agenda were covered on the sidelines, and following the session, the Minister of Trade and Integration Bakhyt Sultanov answered questions from journalists, primeminister.kz reports.

Askar Mamin: Within a week, it is necessary to determine the financing of the system of wholesale distribution and agro-logistics centers

During the consideration of the first issue, Prime Minister Askar Mamin was informed about the ongoing work on price monitoring and response measures.

According to the Ministry of Trade and Integration, in 2019 the price increase for socially significant food products amounted to 10.4%, 67 cases of exceeding threshold prices in all regions were recorded. In January 2020, there was is a seasonal increase in prices by 0.3%. At the same time, it is two times less than in January 2019.

Minister of Trade and Integration Bakhyt Sultanov believes that the country has all the tools and opportunities for taking a number of operational and systemic measures. First of all, local executive bodies and territorial divisions of regulatory bodies need to more actively use the mechanism of setting price caps. The reason for the price increase, if we exclude all objective factors related to crop failure and export, is the lack of activity of akimats in monitoring prices and taking operational measures.

Minister of Agriculture Saparkhan Omarov reported that the department is implementing a set of measures to saturate the domestic market with food products. For all major types of foodstuffs, security is more than 80-100%.

On Jan. 15, 2020, a new Project Office under the prime minister was created to develop a network of wholesale distribution and agro-logistics centers, which holds weekly meetings with representatives of interested government agencies, financial institutions and the market.

In turn, the Regional Representative of the Asian Development Bank in Kazakhstan Giovanni Capannelli said that ADB has developed a detailed Master Plan and Roadmap for the development strategy of wholesale markets, agro-logistics and wholesale distribution centers, which will allow to reduce the volatility of prices for grocery goods, obtaining farmers a fair share of the trade margin, which in turn will allow them to generate more income.

Capannelli said that the Asian Development Bank at the moment has provided grant funds in the amount of $1 million to prepare a feasibility study for the project to create agro-logistics and wholesale distribution centers.

Having listened to all the speakers, Askar Mamin recalled that in November 2019, a number of deputy akims of the regions were brought to justice for failures in the work to stabilize prices. As a result of measures taken in December, akimats managed to achieve positive changes in containing prices. So, if in November last year, the cumulative increase in prices for socially significant food products amounted to 1.1%, in December — only 0.1%. The prime minister instructed the Ministry of Trade and Integration together with the ministries of finance and agriculture to determine the financing structure for projects to create a system of wholesale distribution and agro-logistics centers within a week.

Askar Mamin instructed to achieve a 90% automation of public services in 2020

When considering the second issue, the prime minister was informed about the implementation of the state program “Digital Kazakhstan.”

Minister of Digital Development, Innovation and Aerospace Industry Askar Zhumagaliyev reported that in 2019, 18.7 billion tenge were allocated for the implementation of the state program “Digital Kazakhstan,” which have been fully mastered.

In 2018-2019 the implemented digitalization measures brought an economic effect of 802.5 billion tenge, 32.8 billion tenge were attracted to the innovation ecosystem and 120 thousand jobs were created taking into account related industries.

Summing up the minister’s speech, the prime minister noted that in 2019 the disruption of the Plan for the integration of government information systems was committed by the ministries of internal affairs, health, industry, the national economy and defense. This work needs to be taken under special control and completed before March 1.

Askar Mamin instructed this year to achieve a 90% level of automation of public services. As soon as possible, state agencies need to work out and make the necessary changes to the register of public services, including 20 measures of state support.

In addition, the head of government noted the delay in providing the population with high-speed Internet.

“As part of the implementation of the Nur Otan Party’s Election Program event to provide high-speed Internet for settlements with a population of 250 or more, the schedule of work with telecom operators has not yet been approved. Criticism on this issue has already been voiced by representatives of the party and deputies of the Parliament,” said Mamin, instructing him to resolve this issue within a week.

On the sidelines of the Government, Chair of the Emergency Committee Vladimir Becker commented on the emergency in the capital of Kazakhstan due to weather conditions. According to him, today the difficult climate in the city persists, there is a chance of a storm warning.

“On Feb. 4-5, we again have a storm warning. If you look at the summary of Kazhydromet, this morning we have a storm warning in 13 regions. The exception was Pavlodar, Almaty, Mangystau regions and the cities of Almaty and Shymkent,” said Vladimir Becker.

The storm warning has been announced in several other regions.

“23 sections of roads, including 13 of republican significance, were closed until 8 a.m. Now all sections of republican significance are open, but I want to say that the forecasts of Kazhydromet for the coming week are disappointing. There is an increase in temperature, of course, this threatens us with snowstorms, snowstorms. In West Kazakhstan and Aktobe regions, precipitation in the form of rain was observed, that is, it is ice on the roads. Road services and emergency services operate in an intensive mode. We also did not remove the headquarters, organized in the republican crisis center, it will continue to work. Therefore, the emergency mode from the city of Nur-Sultan is not lifted. We observe that quite a lot of snow is on our streets, and the yards have not yet been cleared. On Thursday, Sunday and Monday, we expect snow precipitation. That is, the situation may worsen,” explained the chair of the emergency committee.

Becker also commented on the situation that may arise in connection with the uncleaned snow on its territory.

“There is an article of the administrative code that says that the owners of their territories are required to keep them in good condition. Owners of the local area should remove the snow inside their territory. Further it is removed by the akimat. You see, the situation is aggravated a little. I think that in some regions there really is a lot of snow. And I believe that the fight against snow and floods is a common cause. Including citizens. If you are the owner of a private house or some object, you must take measures to clean up the territory,” said Becker.

At the same time, nobody immediately punishes citizens. First, they provide a notice and ask to clear the snow at a certain time.

“If they don’t remove it, administrative punishment measures will be applied. Here it is necessary to consider each particular case separately. If this is the territory of a trading house or similar facility, of course, they must take out the snow themselves. If these are residential buildings, the akimat asks for snow from residential areas to be removed to the carriageway or to special sites,” added Becker.

Deputy Chair of the Administrative Police Committee of the Ministry of Internal Affairs Serik Tussupov explained to reporters about the application of the rules to drivers of cars entering Kazakhstan from the countries of the Eurasian Economic Union.

“We do not carry out any sanctions, because we are committed to dialogue with the population, to give them the opportunity to legalize their transport. Therefore, when we see a car with foreign accounting, we initially mean that he is a member of the international movement,” Tussupov said.

According to him, the state’s policy consists, first of all, in explaining to citizens their rules and the possibility of compliance with the law.

“We will not carry out targeted raids and any punitive measures. If a citizen has not registered his vehicle and committed a traffic violation in the police visibility zone, she will be responsible and the issue of the need to register a vehicle in Kazakhstan will be considered,” Tussupov added.

Minister of Healthcare Yelzhan Birtanov told reporters about the current number of patients in hospitals with suspected coronavirus. To date, 33 patients still remain in hospitals.

“Patients who were hospitalized with suspected coronavirus are being treated. They were tested, the coronavirus was not detected. But due to the fact that they have an acute respiratory infection, the flu, they continue treatment, they are under observation. The diagnosis of coronavirus is excluded, but they are continuing treatment,” said Birtanov.

At the same time, the minister noted that there is no need for all citizens arriving from China to undergo laboratory testing for coronavirus and it is not worth creating excessive hype around this disease.

“This study is only carried out if a person has signs of the disease. In 99% of such symptoms, we are dealing with common flu. Now there is no need to check all 18 million people for coronavirus. It does not make sense. To do this, there must be symptoms, this is an expensive analysis. We just developed this test, it gives a positive result. We will be replicating it, and this means that all patients with suspected coronavirus will be immediately examined,” said Birtanov.

The minister also emphasized that all arrived citizens from China, and there are already 30 thousand of them, are under monitoring.

Following the government session, the Minister of Trade and Integration Bakhyt Sultanov spoke at the press center site. He spoke about the measures taken to stabilize prices for socially significant food products and the creation of wholesale distribution centers.

According to him, price fluctuations are affected by the loss of producers during production, displacement and various barriers to their delivery to consumers, in general, the lack of a fully-fledged effective system for distributing food and other goods through a wide network of intermediaries.

“For example, a product from a garden is 4 or 5 times more expensive. We lose value added, it remains tax-free. This is a big problem. Ultimately, this leads to an unreasonable and often increased price increase,” Sultanov said.

As the minister noted, speaking of price stabilization, it is necessary to completely solve the problem from production or import of products to the correct distribution and delivery to the consumer. In this regard, special attention must be paid to the creation of wholesale distribution centers.

“We are carefully studying international experience. Just recently, I personally visited countries such as Spain and France, got acquainted with the systems of wholesale distribution centers. This is one of the big elements that affects prices. These countries had an interesting experience,” said Bakhyt Sultanov.

So, according to him, large wholesale distribution centers with state participation were created in Spain and France. Such centers have already existed for more than half a century. They affect the saturation of the market with the necessary products, created a transparent, understandable contact between manufacturers and wholesale buyers. This affects the possibility of expanding the competitive network of objects of trade and product access to the consumer.

Kazakhstan has already begun work on the creation of such wholesale markets. Together with the Asian Development Bank (which has extensive experience in implementing such projects), work is underway to predict the flow of goods from producer to consumer.

Sultanov also informed that in the future it is planned to carry out a lot of work with neighboring countries to create an efficient commodity distribution infrastructure.

“There was a similar experience in neighboring countries — in Uzbekistan and Kyrgyzstan. It is very important to note that we must also cooperate with our southern neighbors. Because we are in similar climatic conditions and very often we have the same problem — seasonal foods ripen at the same time, we try to realize all this together, to compete incorrectly, although it could be spread out in time, in sales markets. Therefore, we together with our neighbors will cooperate in this work and create an effective commodity distribution system,” the minister said.

These measures will allow producers to obtain guaranteed sales and reduce losses. As a result, the money they lose today can be invested in technology, the productivity of their production, and storage infrastructure. According to the ministry, this will ultimately lead to lower costs for manufacturers.

Answering a question from a republican newspaper correspondent about the threat of coronavirus spreading due to the movement of food products across the border with China, the Minister of Trade and Integration said that the trade borders between Kazakhstan and China are operating normally. The movement of goods will not affect the spread of the virus.

“Therefore, today the border for the movement of goods is not closed. The contracts that were concluded continue to work. The share of Chinese imports is only 0.1%. Even if they stop supplying goods from China to the markets of Kazakhstan, this should not affect the pricing of products,” the minister of trade and integration said.

Already on the sidelines after the briefing, Sultanov commented on the journalist’s question about the regulation of gas prices.

“If we try to restrain the price, then we will lose gasoline itself. It just won't be there. It is harder to keep the border because neighboring countries, where the price of gas is higher, will simply take out our gas. It’s better not to do this. We do not have an economic border with Russia as such. One customs territory, and therefore we can’t control it,” the minister summed up.

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