On March 14, the head of the National Welfare Fund «Samruk-Kazyna» Nurlan Zhakupov, reported to the president on the fund’s performance in 2023 and plans for its further reform, as reported by Akorda. According to the message, one of the important issues was the gradual abandonment of cross-subsidization of the economy by the fund’s companies.
The Telegram channel Energy Monitor writes that unfortunately there is no data for 2023, but in 2022, the direct and hidden subsidies of the Fund’s portfolio companies amounted to 1.2 trillion tenge (the figures should be higher in 2023).
According to the channel, the total subsidies of Kazakhstan’s economy amount to 12 billion dollars annually (cheap gas, coal, petroleum products, electricity, railway transportation, etc.).
The reality is that prices will rise, but gradually. Our state budget has been in deficit for 16 years, covered by the National Fund and «loans.» In this matter, an effective mechanism for Targeted Social Assistance to those truly in need is important,
as noted by Energy Monitor.
Olzhas Baidildinov, a member of the Public Council of the Ministry of Energy, believes that «Samruk Kazyna» is not doing its job.
The task of the state holding is to increase shareholder value and pay dividends to the government, or, if companies are listed on an IPO like KMG, to retail shareholders as well. Issues of subsidization or tariff reduction are matters for the government in terms of targeted social assistance.
«Samruk» indeed bears significant expenses, has missed out on profits, and in some cases has direct losses from subsidization. I calculated that each citizen of Kazakhstan receives around 60,000 tenge per year from various subsidies provided by Samruk-Kazyna. This is a significant amount. «Samruk-Kazyna» is a state holding, of course, but it should not support and develop any loss-making projects. Moreover, it distorts the market economy,
says Baidildinov.
According to the expert, years of calculations show that unprofitable tariffs, for example, on petroleum products, electricity, and heating, contribute to the deficit.
Private business does not enter these areas because tariffs are regulated, and the state either lacks investment opportunities or for some corrupt reasons cannot efficiently implement these projects. Therefore, tariffs and prices should be market-based. Sooner or later, we will move to this, it has been repeatedly said. Goods, energy, fuel should be market-based, traded on open exchange platforms,
the expert believes.
In the opinion of Olzhas Baidildinov, Kazakhstan, as an oil and gas country, should have income and profit from oil exports. But this should not be aligned with:
- Cheap energy prices that are below production costs,
- Thoughtless fuel burning and irrational use of electricity and heating.
Market balance and market prices can lead to understanding whether we have a real deficit of fuel, electricity, etc. As we saw, equalizing diesel fuel prices to 295 tenge led to a surplus of diesel fuel in 2024, and we even made deliveries as humanitarian aid to neighboring countries.
So, the issue here is not just that prices will rise, and people will live worse. No, the issue is that the industry will attract investments, private business, and we will provide jobs and new taxes. And the task of the budget and the government is precisely to help those layers of the population who cannot afford these prices,
believes Olzhas Baidildinov.
