The Board of Auditors stated that the involvement of foreign consultants in all spheres of the state’s activities has brought no benefit to the country and poses a threat to national security.

During the crisis-filled 90s, the young independent state needed friendly advice on economic development, and this was justified. As once noted by the first president of Kazakhstan, «what to do if we were not taught this? We don’t have time to learn. We need to move forward now.»

Foreign Presence Everywhere

In 2023, the international «Bolashak» scholarship celebrated its 30th anniversary. Over 12,000 Kazakhstanis received a foreign education at the expense of taxpayers, aiming to apply the best knowledge gained abroad in their homeland. On average, the education of each Bolashak scholar cost the budget between 50-60 thousand dollars. However, in the end, the main financial laws, programs, projects, and strategies for our country are still written by foreign specialists. Daniyar Nurseitov, the Deputy Chairman of the Board of Auditors of Kazakhstan, highlighted the most vivid examples of our country’s dependency on foreign opinions.

In essence, we see that the unconditional following of recommendations from foreign consultants from the World Bank, IMF, OECD, and other organizations is leading to the degradation of the civil service as a whole. Often, Kazakhstani government bodies, explaining the introduction of certain amendments, refer to global experience. This means they cite different countries and ways of solving their problems, but detached from our reality. Recommendations from international organizations often aren’t published, so we have to take the word of those who reference them,

said Nurseitov.

Legislation on Public Procurement in 2018 was presented as advanced and progressive, and Deputy Minister of Finance Ruslan Beketaev stated how heavy and complex the law on public procurement was, saying that they couldn’t develop it on their own, so Kazakhstan invited international experts for assistance.

According to the anti-corruption law, references to global experience and international experts were made starting from the Secretary of State and ending with the heads of specific departments. As a result, the opinions of non-local experts were also taken into account when drafting the law.

The Budget Code was also written following the recommendations of global organizations – the IMF and the World Bank, earning an «advanced level» rating from the IMF. This even became a point of pride for the Ministry of National Economy.

The international consulting company McKinsey developed a roadmap for Kazakhstan to enhance its competitiveness to the level of OECD countries by 2050. Ultimately, this roadmap became the foundation for the strategic plan of the Republic of Kazakhstan.

The Ministry of Environmental Protection also engaged experts from McKinsey in developing a strategy for the country’s transition to a green economy.

Big 4 (the four largest audit and consulting companies in the world: Deloitte, PricewaterhouseCoopers, Ernst & Young, and KPMG) provide recommendations to Kazakhstani food sector companies on entering the Chinese market and to the quasi-state sector on improving corporate governance.

PricewaterhouseCoopers advises government bodies on machinery issues. Deloitte provides recommendations on bank regulation.

The concept of institutional policy up to 2025, approved in Kazakhstan, was fully developed by PricewaterhouseCoopers and Ernst & Young.

Truth, But Not The Whole Truth

In 2022, Minister of Labor and Social Protection of the Population, Tamara Duysenova, sought recommendations from the World Bank. The minister’s concern was the entry into the market of Kazakhstan’s citizens born after 2000: the new generation has high demands, but the skill level compared to the older generation is very low. The World Bank is now pondering what to do with all these problems. Admittedly, the situation looks absurd.

It was the World Bank that suggested to Kazakhstan in the mid-2000s to restructure the country’s education system based on the commercialization of knowledge. The education reforms themselves (such as joining the Bologna Process, for example) were also carried out based on the recommendations of international experts.

Tax legislation is also heavily dependent on international organizations. Three years ago, the OECD expressed the view that Kazakhstan needs to raise taxes, particularly personal income tax (PIT) and value-added tax (VAT). The Ministry of National Economy has already provided justification for the increase in the VAT rate, citing international VAT rates — Russia and Belarus (20%), Denmark and Norway (25%), Germany (19%). However, whether by accident or intentionally, it didn’t mention that in Singapore, whose experience Kazakhstan greatly admires, the VAT is 8%, in South Korea, where thousands of Kazakhs have gone to earn money, it’s 10%, in Switzerland, where fugitive former officials of Kazakhstan live, it’s 8%, in the UAE and Canada — 5%, and in Qatar and Hong Kong, there’s no VAT at all.

In 2006, the independent research organization, Independent Evaluation Group, concluded that the World Bank’s work is ineffective since it is overly focused on indicators of economic growth, which often leads to a deterioration in the economic situation.

Following the recommendations of the World Bank and the IMF, the National Bank of Kazakhstan chose inflation targeting as the method for its monetary policy, a strategy to which our country does not truly align. For inflation targeting to be effective, it’s essential that there be no market monopolization and no dependence on foreign currencies or other countries. However, our economy is monopolized, and we still rely heavily on other countries’ currencies. Despite this, the National Bank continues to use this approach, and the IMF highly values the National Bank’s commitment to this targeting policy,

noted Daniyar Nurseyitov.

The luxury tax, which has been attempted to be introduced in Kazakhstan for many years, is also one of the recommendations of the World Bank. Japan, the USA, Austria, Denmark, and Germany have abandoned it due to the migration of high-value assets to other countries. Still, Kazakhstan remains enamored with the idea of «targeting the wealthy.»

Any Whim For Our Money

The adoption of international financial reporting standards was done on the recommendation of the World Bank. As a result, instead of attracting investment to the country, we received additions and distortions in the consolidated financial statements and manipulations with the financial statements of the «Samruk-Kazyna» companies. At the beginning of 2023, the Board of Auditors already stated in the media that the entire quasi-public sector is audited exclusively by the Big4, and, at the same time, 30% of «Samruk’s» subsidiaries theoretically have a high risk of manipulating financial statements.

Reforms in social insurance and the creation of an accumulative pension system based on the Chilean model, as well as the creation of the «Samruk-Kazyna» fund based on the Singapore model, are results of recommendations by international experts. The latest example is that consultants from the World Bank recently presented a tariff methodology project to the Ministry of National Economy. This methodology aims to stimulate utility services to improve the quality and reliability of the services provided and to increase the investment attractiveness of natural monopoly entities. There’s no doubt that these new methods will put a burden on the population, as utility tariffs have already increased.

The services of foreign advisors, of course, are not free. But the total amount Kazakh taxpayers have paid them over 32 years of independence is not available in open sources. There are individual expenditure items.

For example, in 2017 the government allocated 350,000 euros to the OECD for a review of the budgetary system of Kazakhstan and for making suggestions and amendments to the Budget Code. The government also approved the recommendations of international experts on the development and modernization of healthcare infrastructure. The introduction of the institution of ethics commissioners in state bodies also follows the recommendations of international experts.

On October 4th, the Ministry of National Economy signed an agreement with the OECD to review the governance system of Kazakhstan. Funds will be allocated, but the same function exists within the Ministry of National Economy, which for some reason shifts its work onto the shoulders of foreigners.

From the very beginning, Kazakhstan actively used the services of the IMF and the World Bank, but a significant shift occurred with the 2015 president’s message «100 Concrete Steps». In the 11th step, it was discussed about admitting foreign managers and staff of international organizations to work in public service. This is what we observe now. In addition, there is a government resolution approving the rules for the cabinet’s legislative work, which states that the development of legal acts can be preceded by recommendations from international organizations. They might seem like just recommendations, but an appendix to the resolution implies a mandatory requirement for state bodies to involve international organizations and global practices,

says Daniyar Nurseitov.

Harmful Advice For Masses

According to him, the dependence of officials on foreign consultants can be traced not only in ministries and departments but even in the parliament. He referred to the words of the Senate Speaker Maulen Ashimbayev about the attention with which the parliament treats the recommendations of international organizations, foreign politicians, and experts — the laws adopted to a large extent take into account such recommendations.

It doesn’t mention the influence of society’s interests on the laws being passed, but rather the recommendations of foreign experts. In the end, the effectiveness of the application of the laws and regulations themselves isn’t evaluated, but rather the conclusions of foreign consultants,

noted the Deputy Chairman of the Auditors’ Expert Panel.

A team of Kazakh auditors analyzed the experience of foreign consultants working in Kazakhstan and concluded that, over the years, they no longer simply give recommendations to Kazakh authorities but directives. They cited the words of the U.S. ambassador to Kazakhstan about conditions for attracting foreign investments into Kazakhstan, which will ultimately be used to improve legislation.

The «harmful advice» from international consultants was dubbed by the Auditors’ Collegium of Kazakhstan as man-made causes for crises in many countries – in Argentina, Colombia, Mexico, Russia, Slovakia, Turkey, Chile, and Thailand.

We have doubts and fears about allowing foreign consultants access to Kazakhstan’s strategic assets. The question concerns not only the audit in the quasi-public sector. In 2023, experts from KPMG-India, at the invitation of Energy Minister Almasadam Satkaliyev, visited all power stations for a technical audit. These are strategic assets, I remind you. The result of this audit is presented as a success, but in reality, it shows a disregard for the country’s national security. If we assume a scenario where an ordinary citizen passes information about the operation of strategic assets to some other state, the consequences are known. But this, apparently, does not apply to ministers,

noted Daniyar Nurseitov.

In 2022, President Kassym-Jomart Tokayev questioned the benefits of employing foreign specialists. Still, as we see, his words went unnoticed, and officials and deputies continue to be guided by directives and consultations of international organizations.