Kazakhstan is in a crisis of public finances. If the authorities do not take any action, ordinary taxpayers will suffer as a result. This was stated to ZTB News correspondent by Askar Kysykov, director of the TALAP applied research center.
The key problem of the budget system is that it is not balanced. In simple terms, this means that Kazakhstan is spending too much. Over the past three years, expenditures have increased by 60%. At the same time, 80% of expenses are for current, rather than capital needs. This does not contribute to the country's development, - said the expert.
According to him, 35% of the budget expenditures are spent on payments to the population: wages, pensions, social benefits that are directly allocated from the budget to specific individuals. The remaining 65% are expenses for construction, procurement, transfers, subsidies, budget loans, and others. The expert believes that two-thirds of the budget needs to be optimized and efficiency increased.
Photo: from Askar Kysykov's personal archive
Currently, Kazakhstan finances its expenditures through the National Fund and loans from other countries. As of January 1, 2024, the country's external debt amounted to $162.7 billion. For comparison, a year earlier it was $2 billion less.
Why Kazakhstan has started to spend more
As Askar Kysykov states, budget expenditures have increased for several reasons. These include rising inflation, increased social and pension payments, as well as salary increases for public sector employees.
We spend a lot on the quasi-public sector - development institutions, support for entrepreneurship, etc. Often these programs support a certain 'circle of chosen' entrepreneurs, and this is done at our expense. A lot of money in Kazakhstan also goes to construction. And there are corruption risks in this area, - notes the director of the TALAP applied research center.
In the expert's opinion, the country's expenditures are not always justified. Moreover, there is no unified approach to managing the entire system of public finances in Kazakhstan.
Our funds are managed separately. The National Bank controls the National Fund, the Unified National Pension Fund, while the others are accountable to the ministries. The government is only responsible for the republican budget. When a person manages a family budget, their expenses and income are clear. They manage their money based on the principle of 'one pocket'. But now in Kazakhstan, one structure is responsible for salaries, another for savings, and a third for loans. There is no common vision and understanding of the financial situation, - the expert is convinced.
He also added that the public finance system is the foundation of any state, so Kazakhstan urgently needs to 'repair' it. If this is not done, the 'safety cushions' in the form of money from the National Fund will not last long.
The public finance system in Kazakhstan is already in crisis. By such parameters as public debt, budget deficit, and management efficiency, we do not have the best indicators. We are used to plugging holes with the help of the National Fund, but we must not forget that in a few years we may lose this 'cushion'. And what will we do then? Kazakhstan will be left without savings and with a large public debt that will be impossible to close, - summarized Askar Kysykov.
According to him, if Kazakhstan loses the funds of the National Fund, the only way out of the situation will be a multiple increase in taxes for the citizens of the country. This will not only cause understandable discontent among the people but will also be a shock to the economy as a whole.