• KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%
  • KGS/USD = 0.01181 0%
  • KZT/USD = 0.00210 0%
  • TJS/USD = 0.09404 0.11%
  • UZS/USD = 0.00008 0%

Viewing results 1 - 6 of 2

Will Kazakhstan Manage to Save the National Fund?

Experts report that Kazakhstan's National Fund has seen cumulative withdrawals of $100 billion over the past decade. The sovereign wealth fund, managed by the National Bank of the Republic of Kazakhstan, has often been used to meet state needs. Despite this, with the National Fund for Children program set to launch in 2024, President Tokayev has instructed an increase in its assets. The National Fund was established in 2000 by a decree from former President Nursultan Nazarbayev. It consolidates state assets held in the national bank account of the Republic of Kazakhstan. The fund's income is derived from two sources: tax receipts from the oil and gas sector and earnings from managing its assets. Starting in 2024, the National Fund for Children program will receive 50% of the fund's annual income. Business analyst Abzal Narymbetov explained that the fund's initial influx came from the sale of a 5% stake in the Tengiz oil field for $660 million in 2001. At its inception, the fund was intended to benefit future generations. However, various crises and management errors have frequently forced the government to dip into what is often called the "people's piggy bank." Likening the National Fund to a similar structure in Norway, Narymbetov states that the fund's accumulation peaked at more than $70 billion in 2014. "Since then, the NF has diverted money to 'urgent current needs,' such as bailing out commercial banks, supporting national companies, and filling holes in the state budget. At the moment, less than $60 billion remains in the fund. Kazakhstan began accumulating oil money with the production of 0.8 million barrels in 2001. Norwegian and Kazakh oil production has been in the same range of 1.8-2.0 million barrels for the last eight years. In other words, Kazakhstan and Norway have been producing in the same range for the last eight years; however, we spend significantly more. "For example, the Norwegian Petroleum Fund (renamed the state pension fund) was established by the government in 1990. Money was first invested in 1996, but the first figures that can be traced are $23 billion in 1998. The oil money, in my opinion, has been wisely invested in different assets. As a result, it has reached a record level of $1.4 trillion today," said Narymbetov. The analyst pointed to research by economists indicating that if money from the National Fund of Kazakhstan had not been used for current spending needs, it would now exceed $150 billion. He also cited a study suggesting that if oil prices drop to $30 per barrel, the fund's reserves could be depleted within five years. Twenty years ago, Kazakhstan had high expectations for the National Fund, hoping it would act as a financial savior during crises and provide support for young citizens. In 2022, President Tokayev announced plans to increase the National Fund's assets to $100 billion. "Everything that rightfully belongs to the people of Kazakhstan will serve their interests. For this purpose, we will ensure effective fund management and enhance its investment income,"...

New Law Establishes a National Fund for Children in Kazakhstan

A new law that came into effect on January 1st, 2024, entitled Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan, includes provisions regarding the accrual, payment and use of funds transferred from the National Fund to the children of Kazakhstan.  According to this document, all children (up to the age of 18) will receive deductions of fifty percent of the investment income of the National Fund. The project, a first of its kind in Central Asia, is called the "National Fund for Children". The National Fund of the Republic of Kazakhstan holds the state’s assets in the form of finances concentrated on the accounts of the Government in the National Bank. It is accumulated via fulfillment of tax obligations on the extraction of mineral resources, rent tax on export of crude oil and gas condensate and royalties, as well as the share of the Republic of Kazakhstan on division of production in kind or money from their realization, with the amount being determined in accordance with the relevant tax legislation. Lower-end forecasts of savings per child under this new law are calculated to be around US$3,000-4,000. This amount is estimated taking into account the volatility of the capital market and depends on the global economic situation. Only citizens of Kazakhstan can participate in this program, and any child that changes citizenship loses the right of payment. Furthermore, these funds are exempt from taxation and when a person reaches the age of 18, he or she can decide how to use the sum. It is conceivable that these funds can be used by the new generation to finance their future education, including abroad, or for housing purposes. If the funds are not used within 10 years by the citizen holding the funds, they will be automatically credited to his or her pension account.