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  • Speech by President Nursultan Nazarbayev at the 26th Plenary Session of the Foreign Investors' Council

Speech by President Nursultan Nazarbayev at the 26th Plenary Session of the Foreign Investors' Council

14.08.2013

Distinguished members of Foreign Investors Council!             

You remain committed to your business in Kazakhstan and your desire to work with us is highly appreciated.

This is the 26th Session of the Council and I permanently chair it. Previously we used to meet twice a year while nowadays our partners discuss the issues important for further development of Kazakhstan.

You eye witnessed everything taking place in our country. We have been working together already for fifteen years, while our independence is only 20 years old. The Soviet Union breakdown made our so-called “friends” say that Kazakhstan would fail to develop as a state, overcome the crisis and succeed. We proved the opposite.

Today we are the 51st in the Global Competitiveness Index and the 49th in the World Bank Doing Business rating.

As you know Kazakhstan is rich in natural resources. Several of our generations could live doing nothing without any concerns.

During the Soviet time we were being developed as a raw-material appendage, so that we could only supply raw materials. Neither machine-engineering nor processing industries were developed here.

We started saving the money we earned on resources in the special National Fund and by now we have accumulated the reserves almost equal to fifty percent of Kazakhstan’s GDP.

Investments into innovative development are needed. Innovations appear where there are excessive funds and technologies.

The first plan of the country development has already been implemented. We have built the state and made it known all over the word.  It now takes leading positions in many aspects of the world economy. Now, having the funds, opportunities, and trained people we must start the second stage which is the country’s industrialization.

At first industrialization will be developed around bigger companies you represent, while working with our national resources. We will industrialise through the development of processing sector surrounding oil and gas, metallurgy, and mining industries.

At this stage we could consider everything providing initial growth of labor productivity by 20-30% as innovations. It is also necessary to set a task to search for absolute innovations. Surely, it is difficult to achieve but we still consider it possible.

That is why we do not support the scepticism and distrust with regards to our plans, expressed during the entire history of our development. We will keep progressing and I am thankful for your support.

That is why we have developed Kazakhstan Innovative Development Concept till 2020. It was designed with the participation of known experts. The Concept is backed up with the funds and I keep personal control over its implementation.

The Concept provides that through flagman project implementation jointly with the investors we will move towards private innovation initiatives development.

The Concept of transfer to “green economy” established a new stage to our state development.    International specialized exhibition EXPO-2017 in Astana will become one of the catalysts of its implementation. We hope that after the exhibition we’ll turn it into the center of technologies transfer to all the territories of Kazakhstan. We’ll make efforts to attract the best technologies existing in the world and demonstrate what we have managed to achieve in Kazakhstan as well as our plans for the future.

We need to take several systemic measures to implement such important strategic documents.

The first is to fine tune our education system to enable it to provide the process of innovations implementation with qualified specialists. Many of the investors present here have already faced the problems associated with the lack of required specialists. We need to cover the needs in engineering and technical specialists possessing appropriate competencies of international level. It should be done jointly with the business.

But we were not seating idle. During these years Kazakhstan has trained 10 000 young people in the best universities of the world, 7000 of them are in our country now. And their number will keep growing. I consider this to be an important indicator for a population of 17 million. We have established two universities of an international level and intellectual schools all over Kazakhstan where talented children are admitted.

Special vocational schools have been constructed all over the country. And you help us with it.  Everything constructed at Atyrau, Pavlodar assists in qualified engineers training. We have several successful projects in education started with the support of foreign investors.

Total Company has been allocating grants for its employees’ training at French and local leading universities during several years. The Company founded Kazakh Institute of Welding dealing with international certification of training centers in this particular sphere.

Tengizchevroil became a sponsor of the first Kazakh Marine Academy established under the aegis of Kazakh-British Technical University.

Such tactics needs to be rolled out over all large companies within the framework of dual education system based on German experience.

I propose to consider the issue of placing a number of state-owned educational institutions into management by consortia of foreign investors and local companies.

These should be autonomous educational institutions like International University in Astana and the Intellectual Schools.

Business will participate in curriculum and methodologies design, attract leading foreign teachers. It is necessary to ensure that the graduates satisfy employers’ requirements. Engineering staff shall be established by local specialists.

The State from its side will continue funding these institutions through grants. This practice can be started with the oil and gas industry, the Atyrau Institute of Oil and Gas and the colleges we are establishing.

The Government jointly with associations of foreign investors and KazEnergy shall work on this issue.

The second is Kazakh scientific potential application.

Universities play the key role in the area of science. If in 2010 universities produced 33%of the total number of scientific and technical programs, today 67 percent of the universities’ projects have been approved.

That is why we shall continue creation of applied research divisions in the universities.  Rushing for applied projects we shall never forget about fundamental life and exact sciences, these areas do not bring profits in short run but they serve as the basis for local inventions and discoveries.

The Government should pay attention to engaging and encouraging scientists, especially young ones, to develop in these areas.

Furthermore, it is necessary to consider the set of measures to attract scientific talents from foreign states and return to Kazakhstan of the scientists, who had left the country but are willing to work here.

We have already started creating international technical center for participation in the EU research programs.

Programs on innovative cooperation with the CIO, the European Center of Nuclear Research, the Beijing Institute of Genomics, Yale and Cornell Universities and Max Plank Community of Germany are implemented.

We need to ensure efficient technologies transfer for the growing needs of the economy.

We have already achieved some developments in several promising projects with such technologically developed states as the USA and Japan.

For instance, creation of innovative workshops creation project on 3D printing with Autodeck and TechShop companies and Industry automation center with Shinko company.

I encourage all foreign investors to create corporate scientific centers in our country.

Within innovation clusters it is important to create scientific centers in the areas of geology, medicine, 3D printing, metallurgy, energy saving and construction technologies, composite materials.

At the Nazarbayev University we already implement the “triple genetic spiral” – the Business, Science and the State.

We have implemented the mechanism when joint applications of scientists pass through international assessment and obtain approvals from the Academic Council for funding.

We have also established a business incubator, commercialization office and experimental workshop.

Based on the example of the Nazarbayev University the Government jointly with the investors need to work on the issue of research center creation in the area of agriculture of an international level.

Kazakh Agrotechnical University can become a base for the Research center.

It should unite 3 components: the university, territorial research institutes and experimental farms.

Similarly, it is possible to establish other scientific and educational clusters.

Energy Cluster – on the basis of the Almaty University of Energy and Communications.

Chemical Cluster – on the basis of the Kazakh-British Technical University.

Furthermore I take a decision to establish the State Al-Farabi Award to the scientists for break-through scientific research and implemented innovations.

The Award will be given annually in seven nominations.

The amount of the Award is 100 thousand US dollars.

We shall target scientific potential to resolve important economic tasks.

The key criteria on selection of projects’ topics are foresight research and orders from the real economy sector.

The third – creation of demand for innovations.

It is necessary to ensure that the orders for research from the foreign investors and local companies are placed in Kazakhstan.

Perhaps this should be fixed at a legislative level.

The Business is already taking first steps in this direction. For instance, I would like to note Shell.

The Oil and Gas Industry R&D Roadmap till 2025 was developed under Shell’s coordination.

This document identifies step-by-step development of the oil and gas sector, projects implementation and R&D planning.

It is huge capacity and guaranteed orders for local entrepreneurs and scientists.

The Government, “Samruk-Kazyna” Fund and KazEnergy Association shall organize practical implementation of the Roadmap.

Shell is prepared to work on one of the fifteen areas of the Roadmap.

I call for the foreign investors to take part in the other areas implementations.

From its side, the Government will undertake systemic measures to stimulate the demand for innovations.

We need to simplify innovative activities regulation.

It is necessary to develop the regulatory basis for efficient system of intellectual property protection.

Kazakhstan shall enter the list of 20 most attractive countries of the world under this indicator.

We need to establish specialised laboratories for submitted ideas and developments, transferred technologies expertise.

We also have to resolve the problem of Kazakh technical and construction standards non- compliance with the international level.

Nowadays it creates barriers for technologies transfer. 

The Government is tasked to draw the inventory of all local standards and prepare the plan for their alignment with the best international analogues by the 1st of September, 2013.

The transfer shall be fully completed by 2015.

 Separate regime for risk financing shall also be considered.

This mechanism must be transparent and clear to all; we shall not create a “feeder”.

In this regard, the Government assisted by the colleges from Deutsche Bank shall also study the issue of German best practice application to Kazakhstan.

Distinguished Partners!

You know that in accordance with current legislation, subsoil users are to spend 1 percent of profits for research and R&D.

I propose to use these funds for founding an Innovations Venture Fund with start-up capital of 200 million US dollars with the aim to top it up to 1 billion US dollars.

Active participation of foreign partners will make it a key source of innovation projects funding.

It will be used to finance international projects of the Venture Fund, R&D by the Nazarbayev University, the Park of Innovation Technologies, and regional innovations offices.

These funds can be used to finance a long list of research programs through information and communication G-GLOBAL platform.

Idea of G-GLOBAL has received its institutional solution.

The Secretariat and the Board of Trustees have been formed.

The representatives of large companies are invited to become members of the Board of Trustees .

Taking this opportunity, I invite all the members of Foreign Investors Council to take active part in its work.

Global Institute of Forecast established at the G-GLOBAL platform will allow significant expansion in the research base.

Dear friends!

Those who take part in implementing innovations will get special priority support from the state.

I encourage you to assist our business, education and science in reforms and target them to introduce innovations.

It will allow you to increase efficiency of your companies.

And local content will also become innovative.

I propose to set a common task for practical implementation of these approaches.

I would call it “Three Sevens Initiative” that can be implemented with joint efforts within one year.

The first - to attract 7 scientists with global names to Kazakhstan as a minimum.

The second – to ensure 7 Kazakh companies receive high-tech orders.

The third – to support 7 innovative start-ups.

I request Kazakhstan Foreign Investors’ Council Association to ensure coordinated execution of the initiative through the FIC’s working groups together with the Government.

We shall review the results of these efforts next year.

Traditionally I would like to propose the topic of the next session of the Council.

In 2014 it would be necessary to discuss the issues of the foreign investors’ participation in the implementation of the second five years stage of industrialization in Kazakhstan.

This stage will become innovative-industrial.

I have tasked the Government to develop its concept by November and complete the development of the program by next May.

I would like to approve it after your approval at the next session of the Council to be held in May 2014.

Today’s session is traditionally held on the eve of Astana Economic Forum.

Several important events including investment contract signing are organized within the forum.

This year the Forum is even more remarkable as the Global Anti-Crisis Conference approved by the 67th UN Assembly General is held within the Forum.

I encourage all of you to take active participation in its work.

I wish you success and well-being!