The state finance system in Kazakhstan needs a unified approach

The expert offered his vision of solving the issue

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April 23, 2024


The author of the article: Елбол Каримов

Views: 199

Kazakhstan is in a crisis of public finances. And if the authorities do not take any action, ordinary taxpayers will suffer from this. Askar Kysykov, director of the TALAP Center for Applied Research, told ZTB News about this. 

The key problem with the budget system is that it is not balanced. In simple terms, this means that Kazakhstan spends a lot. In the last three years alone, expenses have increased by 60%. At the same time, 80% of the costs are for current, not capital needs. And this does not contribute to the development of the country," the expert said.

According to him, 35% of budget expenditures are spent on payments to the population: the wage fund, pensions, social benefits, which are targeted from the budget to a specific person. The remaining 65% are construction costs, purchases, transfers, subsidies, budget loans, and so on. The expert believes that two thirds of the budget needs to be optimized and efficiency improved.

WhatsApp Image 2024-04-20 at 00.40.51

Photo: from the personal archive of Askar Kysykov

Currently, Kazakhstan finances expenses with money from the National Fund and other countries, borrowing them. As of January 1, 2024, the country's external debt amounted to $ 162.7 billion. For comparison, a year earlier it was 2 billion less.

Why Kazakhstan started spending more 

Askar Kysykov says, budget expenditures have increased for several reasons. Among them: rising inflation, increased social and pension payments, as well as an increase in salaries for public sector employees. 

We spend a lot on the quasi-public sector - development institutions, business support, etc. These programs often support a certain “select circle” of entrepreneurs and this is done at our expense. Kazakhstan also spends a lot of money on construction. And there are corruption risks in this area," says the director of the TALAP Center for Applied Research.

According to the expert, the country's expenses are not always justified. Moreover, Kazakhstan does not have a unified approach to managing the entire public finance system. 

Our funds are managed separately. The National Bank controls the National Fund, the UAPF, and the rest are accountable to the ministries. The Government is responsible only for the republican budget. When a person runs a family budget, his expenses and income are clear. He manages his money according to the principle of “one pocket". And now in Kazakhstan, one structure is responsible for salaries, another for his savings, and a third for loans. There is no common vision and understanding of the financial situation, the expert is sure.

He also added that the state finance system is the basis of any state, so Kazakhstan urgently needs to “repair" it. And if this is not done, then the “airbags” in the form of money from the National Fund will not last long. 

The state finance system in Kazakhstan is already in crisis. According to such parameters as the national debt, budget deficit and management efficiency, we do not have the best indicators. We are used to plugging holes with the help of the National Fund, but we must not forget that in a few years we may lose this “cushion”. And then what are we going to do? Kazakhstan will remain without savings and with a large public debt that cannot be closed," Askar Kysykov summed up.

According to him, if Kazakhstan loses the funds of the National Fund, the only way out of the situation will be a multiple increase in taxes for citizens of the country. This will not only cause understandable dissatisfaction among people, but will also be a shock to the economy as a whole.

Author: Елбол Каримов

Source: https://ztb.kz/kazaxstan-uze-v-krizise-cto-ne-tak-s-nasei-biudzetnoi-sistemoi
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