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D. Nazarbayeva: The priority is the development of the light industry raw material base

06.03.2020 277

The Senate held Parliamentary Hearing on the topic “Light Industry of Kazakhstan: Current State and Prospects of Development of Highly-Productive Business”, which was prepared by the Committee on Economic Policy, Innovation Development and Entrepreneurship.

In her opening address, Speaker of the Senate Dariga Nazarbayeva noted that light industry is one of the most challenging sectors of industry, which has been unfairly located at the periphery of the state attention for a long time because of the prevailing role in the economy of extractive industries.

“Light industry is one of the opportunities for diversifying the economy, especially against the background of a reduction in mineral resources, declining oil prices and another approaching wave of crisis. This is a socially important industry. It provides high employment for the population, mainly among women,” she noted.

The analysis of the situation in preparation for the hearing revealed a number of barriers for the development of light industry. They include the expensive production, lack of necessary equipment, raw material shortages, poor efficiency of governmental support measures, absence of significant prospects for light industry, the presence of shadow imports that negates all efforts of entrepreneurs. 

The Head of the Senate noted that currently the functionality of light industry in Kazakhstan is mainly supported by departmental government orders that keep enterprises afloat.

“I have often heard the opinion that there is simply no sense in competing because of the business struggle level, and efforts should be focused on more promising industries.  But is this really true? Is this really the way to completely abandon the national light industry and reckon with certainty on imports, i.e. the goodwill of foreign producers? I am confident that it is not,” D. Nazarbayeva said.

According to D. Nazarbayeva, the main problem is the shortage of local raw materials, primarily leather and wool. This problem poses new challenges to the agro-industrial complex. “The new State Programme for the Agro-Industrial Complex should envisage appropriate measures to develop the raw materials base for light industry,” she added.

Deputy Manap Kubenov, who spoke at the discussion, gave a macro-economic appraisal of the situation in the light industry. “We all know that light industry now plays an important role in ensuring economic security, employment and contributes to the formation and development of small businesses,” the senator said. – “Therefore, the current situation in light industry is a macroeconomic problem.”

М. Kubenov proposed to make light industry a separate subtype of processing industry at the legislative level. “There is a need to consider establishing a separate government body responsible for the development of light industry. Even at the level of the Committee that is part of the Ministry,” he added.

In continuing the theme of light industry development, entrepreneur Saule Shauyenova mentioned the development and formation of the domestic raw material base and raw materials processing complex, improvement of the quality of raw material supply, development of upstream manufacturing semi-finished products as priority measures.

In his speech, Executive Director of the Union of Processing Industry Adilbek Bektibayev proposed to review approaches to placing government orders and toughen responsibilities when issuing certification.

Designer Madi Sypatayev offered the expansion of the Kazakhstani clothing sales market through the use of online commerce platforms such as AliExpress as one of the ways to develop the industry.

Dariga Nazarbayeva stressed in her closing speech that the current-state light industry is not ready for healthy development and rapid growth. The way out of this situation is to adopt a long-term industry development program closely coordinated with the agricultural development program. This document must envisage the development of the raw material base, the stimulation of the enterprises’ unification, the formation of clusters and consortia that would have access to the government order. “The committed error must be corrected. We will not be able to raise the industry without cooperation,” D. Nazarbayeva emphasized.

Also, D. Nazarbayeva named assistance to small and medium-sized enterprises in improving the level of professional qualifications, targeted retraining, as well as improving tax, monetary and customs policies, market protection and contraband control among measures of support and development of the industry. “Contraband and counterfeit primarily affect small and medium-sized enterprises at industrial level, making them non-competitive. It is particularly alarming that contraband brings poor-quality and sometimes just dangerous goods for children into the country,” the Head of the Senate noted.

Summing up the hearing, Dariga Nazarbayeva recommended the establishment of a joint commission under the Ministry of Industry and Infrastructural Development and the Ministry of Agriculture for the preparation of a new program for the agro-industrial complex development, closely linked to the light and chemical industry development program. She also proposed to expand the functionality of the Council on Agro-Industrial Complex established under the Senate to include light and chemical industry.

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