Why is the government silent on crucial reforms in Kazakhstan? The window of opportunity is closing fast.

On October 18, a round table was held in Astana, organized by Halyk Finance, which brought together participants to discuss the decree of the head of state regarding measures for economic liberalization, as reported by inbusiness.kz citing the analytical center of Halyk Finance.

The decree was published in May of this year and was prepared to accelerate structural economic and legal reforms aimed at expanding the economic potential and improving the business climate of the country.

Discussions included key stakeholders involved in the decree, such as the agency for protection and development of competition and the "Samruk-Kazyna" fund, as well as experts in economics and finance. The main objectives of the round table were, firstly, to reiterate the existence of this crucial document for Kazakhstan's economy, and secondly, to summarize the interim results regarding the implementation of the key provisions of the decree. Five months after its publication, there have been no government meetings or other events that could shed light on its implementation. Therefore, it can be said that the Halyk Finance round table was the first such event to initiate the process of public discussions.

Thanks to the presentations by the main speakers of the round table – the chairman of the ARPK and the managing director of "Samruk-Kazyna" – insights were gained regarding the status of implementing certain measures. This primarily concerns privatization as well as corporate governance within the "Samruk-Kazyna" fund. Unfortunately, representatives from other important bodies involved in ensuring the measures outlined in the decree, besides the ARPK and "Samruk-Kazyna," were unable to participate, which hindered a comprehensive overview.

"At the same time, we believe this event has initiated a very important process of public discussions, in which well-known experts participated and expressed their views. We think that thanks to the round table, new results will be achieved – all parties interested and responsible for the implementation of the decree will become more active in their communications with the public. Additionally, a non-governmental monitoring of the Decree by independent experts may start concurrently," noted analyst Madina Kabzhalyalova.

Participants in the discussion included: ARPK Chairman Marat Omarov, managing director of the "Samruk-Kazyna" fund for development and privatization Saltanat Satzhan, experts Murat Temirkhanov, Askar Kysykov, Galymzhan Aitqazin, Ruslan Sultanov, Arman Bataev, Daniyar Temirbaev, Dalel Chegenbaev, and others.

The decree outlines the main directions for further economic liberalization and includes the following key measures:

• Reduction of the share of the state sector in the economy through privatization and prevention of the growth of state enterprises
• Improvement of corporate governance at JSC "Samruk-Kazyna"
• Ensuring equal conditions and opportunities for all market entities, curbing anti-competitive actions
• Ensuring fair competition in financial markets
• Implementation of fundamental principles of entrepreneurship freedom

More details on these directions can be found in the presentation regarding the decree.

During the discussion, analysts aimed to address the following important questions regarding further economic liberalization:

• Why is the decree important for the development of Kazakhstan's economy? How significantly does the decree alter the economic policy of the state that has been in place over the last 10-15 years?
• How well do the measures in the decree align with other current strategic state documents?
• In what ways and directions can reforms for economic liberalization be expanded and improved?
• How is the decree being implemented? Some deadlines outlined in the decree have passed, yet there is no information on implementation. Why?

Considering the composition of the participants, the discussion was able to delve deeper into measures concerning the first two directions of the decree – (1) reducing the share of state participation and (2) corporate governance issues of the "Samruk-Kazyna" fund. Additionally, issues from the third block regarding ensuring equal conditions and opportunities for all market entities were partially addressed, mainly concerning tariff policies.

According to ARPK Chairman Marat Omarov, the main problems hindering the development of fair competition remain the critical state involvement in the economy and barriers created by state bodies themselves for entrepreneurship. To resolve these issues, privatization needs to be accelerated, which is why the National Office for Privatization was established under the ARPK in June of this year.

So far, the following measures have been taken regarding this office and privatization by the ARPK:

• A preliminary analysis of commodity markets has been conducted, resulting in the preliminary selection of about 500 enterprises.
• A new methodology for selecting projects for privatization has been developed, which will involve a different procedural order – now the list formed by the ARPK will be submitted directly to the Higher Council for Reforms, where decisions on the final list for privatization will be made at the level of the Head of State. This innovation will significantly speed up and simplify the process, bypassing bureaucratic barriers that could have previously been created by other state bodies.
• A request-based privatization principle is being implemented, allowing the private sector to submit its own applications for objects.
• A moratorium has been introduced on the creation of quasi-state sector entities until December 31, 2026.
• The sixth antimonopoly package has been prepared – legislative amendments that will allow the antimonopoly authority to examine the activities of not only newly established state enterprises but also existing ones for violations of competition principles.

Regarding other directions of the decree, the ARPK chairman noted the following changes:

• A norm has been developed to abolish maximum prices for fuel and lubricants to avoid price arbitrage and the resulting market imbalances. According to the agency, this will signal a move away from price regulation. Similar changes are currently being considered in the pharmaceutical market.
• Regarding further decriminalization of criminal offenses in economic activities – criminal liability will only remain in relation to cartels – the most dangerous antimonopoly violations, which aligns with global practices.

Next, Saltanat Satzhan, the managing director of "Samruk-Kazyna" for development and privatization, presented a report that included an analysis of measures for both privatization and corporate governance. It was noted that the fund, together with the ARPK, is implementing the Comprehensive Privatization Plan 2025. However, low tariffs continue to pose a challenge to the privatization of large fund assets, making these assets unattractive to the private sector. This primarily concerns companies like "Kazakhstan Temir Zholy" (KTZ), JSC NC "QazaqGaz," and JSC "Samruk-Energo." According to the fund, tariffs need to be gradually increased to avoid inflation, a sharp rise in costs for service consumers, and social discontent.

This view did not align with the opinions of most other round table participants, who believe that tariff increases should be more rapid; otherwise, private investors will not enter these markets, and the state will be unable to reduce its level of participation. Concurrently with increasing tariffs, the state should ensure adequate support for socially vulnerable segments of the population, for whom such increases will be significant. At the same time, according to the ARPK chairman and other round table participants, KTZ is quite ready for the transition of some of its subsidiaries into private hands outside the context of tariff policy. For KTZ, this primarily concerns the institutional separation of the transportation business from the railway networks (natural monopoly).

In the area of corporate governance, the representative of "Samruk-Kazyna" noted that amendments have been made to the Corporate Governance Code of the fund, stipulating that the number of independent directors must constitute 60% of the total number of board members. Changes have also been made to the search and selection of independent directors on a competitive basis with additional requirements.

It is clear that the corporate governance of the fund needs changes that would strengthen its independence and separation from the state in management matters. The greatest concern arises from the fact that most board members are state officials. This can hinder objective decision-making, as detailed in the OECD 2024 review of corporate governance of state-owned enterprises in Kazakhstan.

Following the report of the managing director of "Samruk-Kazyna," Halyk Finance, represented by the advisor to the chairman of the board Murat Temirkhanov, presented its vision of the importance of the decree for the country and the economy. Given that over the past decades, a system of "state capitalism" (distribution of oil rents and a significant role of the state in the economy) has been established in Kazakhstan instead of a full-fledged market economy, the implementation of the decree becomes a top priority for developing a fair and free market economy. The main thesis of the report was that, unfortunately, insufficient efforts are currently being made to implement the measures outlined in the decree. The following key problems can be noted:

• No government meetings have been dedicated to the decree, nor has