Expert: Kazakhstan's oil revenues should be freed up for non-oil sector

Oil&Gas Materials 30 March 2012 15:43 (UTC +04:00)

Kazakhstan, Astana, March 30 /Trend D.Mukhtarov/

The Kazakh government should direct its National Fund revenues towards projects of the non-oil sector, political analyst Dosym Satpayev said.

"We should direct National Fund revenues to the projects of non-oil sector if we have declared it a priority of an industrial, innovative development programme for the economy," Satpayev said in an interview with Trend on Friday.

The President of Kazakhstan in his address to the nation earlier this year said the country needs to strengthen domestic investment using its own funds. Then in late February, it was decided to launch a bond issue from the National Fund of Kazakhstan for the Kazakh national oil company KazMunaiGas (KMG), totalling $4 billion. This was to support the Kashagan project. The national company then became a party to the North-Caspian Kashagan project receiving a 17 per cent stake.

Satpayev said it is paradoxical that the profits from the oil sector which are received by the National Fund, are now once again be directed to the oil sector, while the Republic has set a goal to move to the production of more highly processed and value goods.

"For example, why not send funds from the National Fund to oil refining? While this raises many questions about the eternal state programme for the modernisation of the three domestic refineries, which began in the 90s, how much money is invested in the modernisation of the Atyrau Refinery? We continue to hear promises that refineries will be upgraded and then we will have enough fuel quality. Even here, in oil refining, we are still marking time," Satpayev said.

According to Satpayev, today, the National Fund of the republic resembles a purse that does not work on its master which means on the economy.

More than $47 billion has accumulated in the National Fund of Kazakhstan.