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Top 7 reforms for Kazakhstan in 2023

In the coming year, Kazakhstan's authorities should focus on political, judicial and antitrust reforms, as well as modernising the social security system, infrastructure (including housing and communal) and increasing the country’s defence capability.


Over the past 10–15 years, centralisation in politics and economy, which was made possible by substantial reserves of raw materials, has hampered development and provoked systemic corrosion. Attempts to reform – improvement of the spheres through the reset of the rules of the game – failed.


Inertia was broken only in 2022. After the January events, the whole year was devoted to politics and the fight against part of the old elite. The relative end was set on November 20, when the incumbent president received a 7-year mandate. The period of social and economic reforms begins.


The worst thing that can be done now is to reset the election platform and start developing new meanings. The choice has been made, the platform needs to be implemented, and there can be no other strategic documents before the next elections. But the problem is that it is impossible to do everything at once: reforms are interdependent, resources are limited, there are problems of the “urgent-important” category.


So, what should be the focus on in the coming year?


Political modernisation


This is not about indiscriminate democratisation, the appearance of which is easy to create, but about the improvement of the political arena, creation of a real counterbalance to the executive branch.


The apparatus will not make reforms voluntarily, this is a typical problem of the principal and agent. This means that there is a risk that all measures in the platform will fall victim to sabotage. Therefore, a broader and more legitimate coalition of supporters of reforms is needed, guaranteeing their irreversibility, but without sliding into an ochlocracy.


The most important measures from the platform are to ensure fair formation of the parliament and maslikhats, the system of local government through the direct election of akims of cities and regions, favourable conditions for productive discussions and civil participation on an ongoing basis.


Objective and independent court


The courts will operate within the laws issued by the Parliament, so this area is in second place. A strong judicial system can slow down the arbitrariness of the executive power, as well as its illegal expansion in the economy. Most public conflicts should be resolved in the courts, automatically, without the involvement of officials.


A full evaluation of the measures should be carried out by the legal community. However, there are already doubts about the lack of measures for genuine transparency and independence of judges from the executive branch.


Country security


Before discussing the expansion and redistribution of the economic “pie,” it is necessary to ensure its physical safety. One can chase percentage points of development, but later get involved in hostilities, destroy assets and infrastructure, and recover for another 10-20 years.


There are no direct threats to Kazakhstan yet, but all it's neighbours do not have democratic regimes. There are long-term risks, in connection with which all the measures in this section are relevant – from foreign policy to the modernisation of the army and the military-industrial complex.


Competition


This is the most important principle, which is especially disliked by state authorities, as it reduces the scope for intervention. Competition replaces government regulation. Competition protects people from rising prices and substandard products. Competition creates productive jobs and gives freedom of choice to workers. Competition is washing out the oligarchs and parasitic enterprises from the market, which have been fed from taxpayers’ money for years.


There is no ready-made block in the platform, as well as clearly defined measures. It is not indicated exactly how to fight monopolists, reduce the shadow economy or develop the Tax Code.


Social protection


Any painful economic reform will hit the vulnerable sections of society first. When citizens have nothing to lose, they will put pressure on the state apparatus. All reforms will simply be rolled back or frozen. To prevent this, it is necessary to mitigate their social consequences.


It is critical to ensure that the Digital Family Map is fully launched first to identify truly vulnerable households and their location. Further, all assistance packages need to be finalised: children from low-income families, the disabled and their caregivers, mothers on maternity leave, those in need through the cost compensation mechanism.


Public utilities


There are the most basic benefits necessary for the life and health of citizens. These include water, heat and light, and sometimes sewerage, if we are talking about cities. Without ensuring their physical accessibility for every citizen, the state has no moral right to engage in other industries.


In many ways, the problem is solved by competition and market tariffs, which is why social protection is mentioned in the fifth paragraph. However, there is a critical inter-regional infrastructure that the market will not be able to pull on its own.


In this regard, the state should pay attention to a number of measures: engineering communications, reducing wear and tear of networks, power generating capacities and transmission lines, construction and reconstruction of water reservoirs.


Connectivity infrastructure


Similarly to the previous one, the state is also important for eliminating market failures in transport, logistics and digital connectivity. This is especially true for the central government to unite regions into a unitary territory. The more easily goods move and services are provided, the greater the market and competition, the faster the country develops.


The platform has many initiatives: the Trans-Caspian international route with a container hub, border trade and economic centres, the repair of 11 thousand kilometres of railways, the Dostyk-Moiynty line, various forms of Internet access.


Education is the most important area with short-term risks of infrastructural load due to the population boom. At the same time, this problem is difficult to centralise: each microdistrict or locality has its own challenges, from lack of land and utilities to construction financing and excessive standards. This is not a reform, but simply a pool of thousands of schools with the impossibility of unification. Simply pumping money increases the risk of corruption.


Important areas were the state apparatus and the protection of the rights of citizens, but the reforms proposed in these areas were not entirely convincing. The field of medicine could also be noted, but unlike the others, its dynamics are optimistic and protect its stronger institutional groups.


“The first lesson of economics is limited resources, the first lesson of politics is to ignore the first lesson of economics.” There are many other areas, the problems of which can be solved at lower levels – ministries, akimats, businessmen, communities.


But under a centralised system, all issues flow to the very top, where there is a limited group of politicians with limited time and attention. If politicians do everything, then they do nothing. Objectively, many areas of the market and civil groups can lead independently.


At the same time, there are areas where the state has a natural monopoly right. And, as is customary in history, if it does not deal with them, then another state will deal with it later.


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