On March 31, President Kassym-Jomart Tokayev addressed the state of emergency and anti-crisis measures introduced by the government to tackle the global spread of COVID-19 in Kazakhstan.
“Kazakhstan was one of the first to take the necessary measures. Thanks to putting in place the state of emergency, it was able to prevent the uncontrolled spread of the virus,” Tokayev said in a statement.
“Work and life in this state of emergency always lead to significant economic and social costs. The Government and governors have already begun to implement the first package of anti-crisis measures. Further steps have been announced to support citizens and businesses,” the Kazakh President said.
The Kazakh government has adopted several measures to deal with the crisis. In particular, Tokaev ordered to index pensions and state benefits, including targeted social assistance, by 10% in annual terms. This should lead to an increase in the income of the corresponding categories of Kazakh citizens totalling more than 200 billion tenge (€406.8 million).
Another adopted measure is to expand the coverage of additional monthly social benefits in the amount of one monthly minimum wage. This amount – 42,500 tenge (€ 86.44) – will be received by those who previously had official work and salaries as well as those citizens who worked informally or were (and remain) self-employed. These measures will cover approximately 3 million citizens.
One more measure adopted is the decision to allocate 70 billion tenge (€142.3 million) from the budget to farmers through the Agrarian Credit Corporation JSC. The rate for end borrowers will not exceed 5%. The government will invest an additional 100 billion tenge (€203.3 million) for these purposes within the framework of the programme “The Economy of Simple Things”. The final rate under this programme amounts to 6%.
The government will also support small and medium-sized farms will be supported. Plans are to reduce the price of diesel fuel for agricultural producers to 165 tenge per litre (€0.34) or 15% of the market price. About 390,000 tonnes of diesel fuel will be allocated at a reduced price for this.
At the same time, Kazakh citizens who are ready to go to work under the “Employment Roadmap” will be given “allowances” in the amount of 2 monthly minimum wages (85,000 tenge, equalling €172.86) immediately after starting the work. This amount will be provided additionally to the regular wage.
Small and medium businesses will receive tax preferences, and deferred payments on loans. This includes expanding of priority business activities that can receive state support, reduction and unification of the loan rate, increase in the volume of state guarantees.
Kazakhstan’s Financial Regulatory Agency is working with banks and other financial institutions to defer and restructure payments on loans to small and medium buisinesses. The accrual and payment of taxes and other payments related to payroll is cancelled for 6 months (from April 1 to October 1 of this year) for small and medium buisinesses that operate in the most affected sectors of the economy. These sectors include: catering, selected trade sectors, transportation services, consulting services, IT sector, hospitality industry (hotels), tourism, etc.
Moreover, the government has suspended the payment of all taxes by small and medium buisinesses for the period of 3 months. In other words, the taxes for this period will be paid later.
As to the quarantine measures, they have been strengthened not only in the capital and in Almaty, but also in all regions of the country. It should be noted that the government works with the general population by advicing and informing it rather than threatening people with an administrative pressure (as of April 4). Penalties for violations of the self-isolation regime are employed only in the cases of intentional violation of the quarantine barriers between cities and settlements. However, people that that returned from COVID-19-affected countries or contacted with infected people) are quarantined at special medical facilities.
Kazakhstan and Russia are two key countries in the post-USSR space. They have quite similar parameters of the economy and political system (both of them have a conditionally ‘authoritarian’ system of the governance). The population of Russia and Kazakhstan has a similar mindset. At the same time, the Kazakh economy is weaker than those of Russia. However, the country is employing much effective measures to secure its economy and economy from the COVID-19 crisis.