Tokayev Envisions AI Turn, Parliamentary Reform, and More Nuclear Plants in Kazakhstan

In a 100-minute long speech on September 8, Kazakhstan’s President Kassym-Jomart Tokayev set the agenda for the next few years.

Speaking before deputies, senators, cabinet members, and other institutional actors, Tokayev laid out ambitious plans for the digitalization of the country, as well as further economic liberalization, fueled by spending cuts in welfare.

One of the most important items on the agenda was voiced towards the end of the speech. Tokayev said he wants to abolish the Senate and steer towards a single-chamber parliament.

“Having chaired the Senate for a total of 10 years, it’s not easy for me to talk about parliamentary reform,” Tokayev said.

Kazakhstan has had a Senate since 1995. While he did not point out a specific reason for the change from two to a single chamber, Tokayev stressed the importance of moving forward with political reforms.

“This is a very serious question and it would be wrong to hurry about it. This reform will be discussed among the public, the expert community, and with the two chambers of Parliament,” Tokayev said. “This would take at least a year.”

By the end of the term of the lower chamber (the Majilis) in 2027, a referendum would be called to adopt the unicameral reform.

Business Through Digitalization

Tokayev also argued for a legal reform aimed to simplify and, in some cases, reduce bureaucratic hurdles.

“We have made significant progress in the digitalization of government services, but bureaucratic procedures remain a serious barrier for business,” he said.

The head of state called for more agile legislation and for a registry that would collect corporate requirements and reduce the need for inspections.

Tokayev suggested the creation of an internal index for investment attractiveness that would trace the business climate in the regions with the ultimate goal to attract foreign capital.

While more than a dozen special economic zones have been established across the country, Tokayev said that “the work of most of them leaves much to be desired.”

Crypto, Nuclear Kazakhstan

Tokayev urged the government to establish a new ministry, poised to take on some of the portfolio previously managed by the ministry of digital development, innovation, and aerospace. The newly-minted ministry of artificial intelligence “should be headed by a specialist in the field, who will also receive the rank of deputy Prime Minister,” Tokayev said.

The government was also tasked with establishing a state fund for digital assets within the Central Bank. The goal is to liberalize the circulation of digital assets while accumulating a strategic reserve of digital financial instruments.

Also, Alatau City, the newly established special economic zone that was dubbed “Crypto City,” will obtain a special status and operate directly under the central government’s supervision.

“Alatau will become the first fully digital city in the region. There will be a smart city management system and services can be paid for with cryptocurrencies,” Tokayev said.

In the next six months, a separate law will be drafted to stipulate the city’s management regime and financial model.

Tokayev also talked about the controversial partnership with Russia’s Rosatom for the construction of Kazakhstan’s first nuclear power plant and set ambitious goals for future plants.

“The project for the first nuclear power plant in cooperation with Rosatom […] is not enough for stable economic growth. We should already begin planning the construction of a second and even third nuclear power plant,” Tokayev said.

He added that he reached an agreement with China on strategic nuclear partnership during a meeting with Chinese President Xi Jinping earlier in September.

Eroding the Welfare State

Tokayev acknowledged that the country is living through a tough economic situation.

“Today, the main problem is high inflation, which eats away at the growth of economic indicators and the population’s income. There is no ready-made recipe for solving this problem. But we need to break out of this macroeconomic vicious circle,” Tokayev said.

He added that the government and the Central Bank should “act as one team,” indirectly referencing the recent tug-of-war between the two institutions towards macroeconomic policies.

A high rate of migration from other regions to Astana was fueled by uneven social contributions across the country, according to Tokayev, who pointed to regional and city governors who performed poorly.

The result, over the past three years, was an inflow of 250,000 new residents in Astana, now a 1.4 million-strong city.

“It is necessary to analyze the reasons behind internal migration and to create alternative centers of social and economic attraction in the country,” Tokayev said.

In his speech, he also condemned the long-lasting policies of social assistance.

“A short-sighted social policy led to the emergence of more than a hundred different types of benefits, which are being absorbed by the so-called ‘people on welfare’ – these people [doubled-down] by enjoying another kind of benefit, the one for single-parent families. And this resulted in a sharp increase in the number of divorces,” Tokayev said.

“We have encouraged laziness and dependency.”

With reporting by Dmitriy Mazorenko, Tamara Vaal, Akbota Uzbekbay, Almas Kaisar, Viktoriya Natachiyeva, and Nazerke Kurmangazinova.

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