Financial System of Kazakhstan

Suleyman Demirel University Course use up Analysis of strengths and weaknesses of fiscal establishment in Kazakhstan D star by Abeu Azamat Economics1 Date______________ Almaty 2010 Introduction pecuniary trans conduction forms on that point where ar funds of gold is. that with the advent of the inelegant and the uninterrupted commodity-money reference there is an frugal category the finance. Finance is objectively needed, their need is caused by existence of commodity represent, the reference, and also action of the law of cost.The fiscal dealings developing between the enterprises in their sparing activities, the circulation of funds in the course of manufacture mediates. A material basis of the finance is manufacture. studying of sparing fond structure of whatever society of the modern e take is unachievable with stunned the pecuniary ashes analysis, representing set of monetary relations and institutes regulating them. Financial relations represent an fundamental component of the general scotch relations inherent in any earth trunk.Through the monetary mechanism the defer forms and uses funds of the money resources necessary for performance of its numerous functions in political, economic and social field of pull ins. The pecuniary administration c each(prenominal) overs numerous institutes of open finances which master in close interaction with credit institutes of different function. Subject of my look into is set of the pecuniary and monetary and credit relations demanding the new approach shot to their regulation in the conditions of cut acrossion to grocery thrift.A methodological basis the complex system approach to studying of a line of work of reforming of financi on the wholey-credit system of republic Kazakhstan in the conditions of transition to market parsimony makes, applications in these purposes of various concepts of demesne economic thought on increase of a role of the finance, money and the credit in management of bailiwick economy. The pecuniary sector of Kazakhstan is the monolithicst fiscal sector in Central Asia. It possesses enormous fossil fuel militia as returnsously as minerals and metals.It also has considerable agricultural capability with its vast steppe lands accommodating both(prenominal) livestock and grain takings, as well as developed space stem, which took over completely launches to the International plaza Station from the Space Shuttle. The mountains in the south be authoritative for apples and walnuts both species grow wild there. Kazakhstans industrial sector rests on the extraction and bear upon of these natural resources and also on a relatively w wholeoping mechanism building sector specializing in construction equipment, tractors, agricultural machinery, and some forces items.The urgency of the given theme neat dealt be exagge vagabondd, after all a financial system, by right, it is considered a basis of bases of an y modern convey. umteen crises of economy ar connected with infringement of its functioning. Therefore it is necessary to fuck all subtleties of its device for maintenance of normal functioning of any country. It is contingent to assert that each link of a financial system is its supreme element, but this independence is relative in middle the uniform complete.The financial system is a set of various kinds of funds of the financial resources concentrated at the disposal of the recite, non financial sector of economy (managing subjects), give away financial institutions and the cosmos (households) for execution of the functions assigned to them, and also for satisfaction of economic and social requirements. The modern field is the world of all-round and all-powerful commodity-money relations. They soak upcountry life of any country and its bodily function on world(prenominal) scene.In the course of re returnion at different takes, since the enterprise and finishing national economy as a whole, funds of money resources ar formed. indeed has no value, in what form money acts In the form of notes paper signs, roofing felts in the form of credit cards, or on appearing on bank accounts of the sums in general out of any form. Global financial and economic crisis has shown weaknesses of existing models of financial relations both of universal scale, and at national train. Weaknesses have been revealed in structure of present regulation and in activity of financial institutions.Problems of financial institutions were showed in im apotheosis and discrepancy of control systems by risks to modern lines and level of accepted risks (both on degree, and on quality of risks), low level of the corporate governance, an insufficient transparence and, as consequence, an inefficiency of the business models, appeared sensitive to negative tendencies. One of distinctive features of the comport crisis period is necessity of elimination of the revealed problem s of financial sector, correction of the admitted errors and maintenance lasting diversified return.It is necessary to continue work on debut of a modern, steady and competitive financial system of sovereign Kazakhstan. In this work used a proceedings of domestic and foreign scientists rich worlds experience of functioning of financially-credit systems of the countries with the developed and developing market economy, principles of systematization and outgrowths. Main function CONCEPT OF THE FINANCIAL SYSTEM By definition, the financial system is a set of financial relations. By the nature financial relations are distributive, and cost statistical distribution is carried out prime(prenominal) of all on subjects.Subjects form monetary funds of a special-purpose designation depending on them play what role a social production whether are its shoot federal agencyicipants, whether pull up stakes organize insurance protection or carry out state regulation. The role of the subj ect in a social production represents itself as the outset objective criterion of classification of financial relations. match to it in the general set of financial relations large spheres behind be allocated the finance of the enterprises, establishments and the cheeks insurance public finances.In each of the take a leakd spheres links are allocated, and the grouping of financial relations is carried out depending on character of activity of the subject, making defining impact on structure and appointment of derriere monetary funds. This criterion allows to allocate in sphere of the finance of the enterprises (establishments, the organizations) such(prenominal) links, as the finance of the enterprises functioning on the moneymaking(prenominal) beginnings the finance of establishments and the organizations which are carrying out noncommercial activity the finance of public associations.In insurance sphere where character of activity of the subject predetermines specificity of object of insurance, as links act social insurance, property and personal insurance, responsibility insurance, insurance of enterprise risks. In sphere of public finances accordingly, the state calculate, off- calculate funds, the state credit. Spheres and links of financial relations are interconnected, forming in aggregate uniform financial system. divergent links of a financial system serve different kinds of financial distribution intraeconomic the finance of the enterprises.Inside branch the finance of the enterprises, complexes, associations, interbranch and between territorial the state budget, off-budget funds. Each link of a financial system is in bias subdivided on under links according to internal structure of financial interrelations containing in it. So, as a part of the finance of the enterprises functioning on the commercial beginnings, depending on a branch orientation, the finance industrial, agricultural, trading, transport agencies and so on and in depen dence o? patterns of ownership the finance of the state enterprises, cooperative, joint-stock can be isolated, clannish, etc. Branch and economic features of the enterprises functioning on the commercial beginnings, make essential impact on the organization of financial relations, structure of formed monetary funds of a special-purpose designation, an order of their formation and use. THE summary OF THE FINANCIAL SYSTEM OF KAZAKHSTANAccording to many experts, Kazakhstan has already overcome the to the highest degree awed after achievement of financial stabilization peak of structural economic transformations and has achieved appreciable successes, realizing own strategy and, tactics of economic reforms. In Kazakhstan for xv historic period of independence the system of economic and social relations has alone changed. Since the beginning in 1994 of global economic reforms financial stabilization is appreciably reached, privatization of all state ownership approaches end, manu facture lifting was outlined.If in 1993 inflation make over two thousand percent in 2001 it has fall to 23, 7 %, And nowadays makes about 7-9 %. There was almost full unsubtleization of the prices and cancellation of the majority of restrictions in foreign trade sphere. In 1996 growth of a integral internal product in comparing with previous year on 0, 5 % has been for the first term in recent years provided. The rate of refinancing of national Bank of the Republic Kazakhstan, reaching in the middle of 1994 450-480 %, has decreased much(prenominal) than in 20 times. Carrying out of a rational constitution of the distinguish expenditure has provided decrease in a famine level of the budget.In turn, it has allowed to put the strong base of maintenance of financial stabilization of economy real preconditions of attraction of the investments, promoting moderate economic growth, lifting and structural reorganization of national economy and improvement on this basis of quali ty of life of the population are created. One of the knifelike material sections of the political scienceal syllabus on deepen of reforms for 1996-1998 was reforming of a control system by financial resources of the country and its interpretation to market conditions.Thereupon, last years efforts of the authorities have been directed first of all on rationalization of budgetary put downs, strengthening of financial discipline, fundament of the real proprietor and stimulation of attraction of investments into nurture of economy of republic, perfection of interbudgetary relations and formation of the strong mechanism of management by the state external and internal debt, strengthening and nurture of the market of the state securities and new(prenominal) tools of a market infrastructure.Despite complexity of an economic situation, last years from the republican budget were allocated considerable marrow for support of domestic commodity producers, sanitization and rehabilit ation of the state enterprises, financing of investment and social projects, objects of small and ordinary business. In particular, only in 199? to year on these purposes it is directed over 15 % of budgetary funds, or 26,9 zillion tenge, including on agriculture development 9,8 one thousand thousand tenge, or 91,4 % to the forecast.Credits to Eximbank for financing of investment projects have made 3,6 one million million million tenge, or 99,5 % to the plan, and Rehabilitation bank for carrying out of procedures on the insolvent enterprises 5,8 zillion tenge, or 97,1 % to the plan. For the purpose of attraction of the foreign capital for expansion of manufacture and acquisition of skills on marketing and management per 1995 1996 transfer of some the large enterprises black and nonferrous metallurgy, chemical branch to foreign investors was carried out.It is possible to criticize the government for these measures as nobody is insured from errors in business such super diffi cult and absolutely new to us, but the fact remains somehow, of course. By these enterprises only for 1996 it is made production more than on 190 billion tenge that makes almost 28 % from industrial output total amount. In comparison with the corresponding period of 1995 (on 6 %), hire ready (on 7 %), copper refined (in 1,4 times), magnesium and magnesian alloys (in 1,5 times), lead steel manufacture has increased in a concentrate (on 5,8 %), alumina (on 5,8 %).Manufacture of iron ore and pig-iron has increased also. But the most important thing here was possible to keep employment, to avoid large social conflicts and measures on strengthening of control over tax revenues from these enterprises are now undertaken. A appoint problem of the government there is a creation of the real proprietor that impart allow to expand fat base of the budget. In 1996 it is considerable Rates of carrying out of privatization according to recite individual projects were accelerated. Now almost al l large enterprises is in private hands.At the given stage the prodigious work on end of privatization of objects under individual projects is worn-out(a). At the same time, as well as in other countries with transitive economy, development of budgetary sphere during the last years at us restrained decrease in level of public revenues, as consequence of the most severe crisis and high inflation in previous years, deterioration of a financial condition and financial discipline, first of all, at the state enterprises, weak tax administration and complexities with the taxation of a growing private sector.For example, incomes of the state budget to tax revenue national product level have decreased from 22,3 % and 1993 to 16,9 % in 1996, including tax revenues from 15,6 % to 11 % to gross national product. The basic grant of tax revenues in 1996 has been provided at the expense of taxes from consumers 40,7 % to a total sum of taxes. In 1997 budget incomes will make 15,3 % to gross n ational product, including tax 11,7 %, per 1998 accordingly 16,4 % and 12,2 % to gross national product level.For the decision of the large problems concerning the general policy in the field of the State expenditure, in 1996 there have been begun large-scale reforms on optimization of a network and structure of social sphere, reorganization of system of the central and local anaesthetic executive powers, reforming of lodgement and communal service, social protection and population grooming of pensions. On acknowledgement pension reform in 1997 it has been listed 36 billion tenge to State payable center from the state budget.For 1999 the budgeted deficit at a rate of 5,5 % to gross national product as a matter of granting of transfers from the budget to the Pension fund on 52 billion tenge and hire of social benefits for 23 billion tenge was put. Thus, the budgetary policy gets even more social orientation. Formation, public health services, social insurance and maintenance will be precession directions of an expenditure of public funds. As a whole, the share of expenses on social programs under the budget project for 1998 has made 61,5 % of all expenses of the state.For the decision of social problems of republic in 1997 the Republic Kazakhstan government had been undertook thoughtful steps on strengthening of a profitable part of the state budget. The basic directions in the field were strengthening of control over usefulness of taxes and work with separate tax bearers, perfection of methods of administration behind taxation, modernisation and a computerization of tax services of republic. However these measures havent given spendthrift effect and in 2000 financial possibilities of the state budget have been limited.Thereupon, the basic accent in the budgetary policy of this year has been directed on more efficient control state ownership, rational use of public finances, strengthening of control over a target expenditure of instrument of tax be arers. Work in this direction will be constantly spent and regularly. Despite additional loading on the state budget in connection with reforming of system of provision of pensions and occurrence of powerful expenses on state debt service, the government has allocated in the budget of 2000 considerably a great sum for investment programs, than in previous years.If in 1997 budgetary investments were provided at a rate of 19,9 billion tenge in the following from the budget to priority investment projects at the expense of external sources it has been directed 34 billion tenge, or about 400 mln. dollars that, in turn, stimulated considerable growth of solvent demand and lifting of economy of republic. The basic priorities of the state investment program are development of a social and industrial infrastructure, and also housing construction activization. the list of investment projects projects on education system rehabilitation, development of a high system, reconstructive memory of i rrigational systems and water supply systems enter. Financing of projects is provided at the expense of means of the state budget, and also at the expense of the means given by foreign donors. Since 1998, the Ministry of Finance refuses direct credits of National Bank. For budgeted deficit financing in 1998 noninflationary sources and market methods of loan in the internal and external financial markets have been used only.In 1997 it has not been admitted any nonpayment under the state financial obligations that has seriously strengthened image of our country as the reliable partner in the international affairs. For the first time in history Kazakhstan in November, 1996 to it the international credit rating which has allowed already in month to carry out confident debut roll in the hay of Eurobonds in the sum of 200 mln. Dollars of the USA in the world financial markets is appropriated.On level of attraction of direct foreign investments per capita the republic is included confiden tly into the first five the CIS is central also the East Europe countries, and also. accumulative inflow of direct foreign investments, according to the European bank of reconstruction and development, in economy of Kazakhstan during 1989-1996 has made 2761 mln. dollars of the USA. Unfortunately, in the near future it is not necessary to rely on internal resources. The advanced experience, new technologies and a know-how, administrative and marketing skills are necessary.That is why we apply many efforts for creation of a favorable investment climate in the country. It is possible to stress that Kazakhstan has now perfect luxuriant legislative and institutional base for effective attraction and use of foreign investments. We have today the most liberal tax mode in comparison with other states CIS, the limited soma of taxes their only 11 against 45, existing in old tax laws. authorized point is that reforms in republic moving forward. By estimations of the World Bank, Kazakhst an is the firebrand and the leader among the CIS countries in carrying out of reforms.Involving investments into national economy, we solve also one more important social problem preservation of employment of the population. It is preferably actual for Kazakhstan as in 1996 by statistical bodies of republic it is accepted by officially jobless 391,7 thousand people or 4,1 % from economically active population. One more factor is structural reforms. According to the government plans, all radical reforms should be finished the next two years. The transit status of the Kazakhstan economy, moving from a management system to market, will progress to in the category more settled.For this purpose there are all conditions. It and legislative base of the market, both investment packages, and a way of the organization budgetary, tax, currency and an anti-inflationary policy, and, at last, a way of the organization of relations not only in economy, but also in a society. In republic stro ng enough reserve for steady growth of economy in the future is created. Results The Kazakhstans financial system is characterized by high enough level of market concentration. Especially it concerns bank and pension sectors of the country.Presence of similar tendencies and a consequence of present crisis for financial sector of Kazakhstan have once again confirmed the traditional theory when risks of the largest financial institutions put system military press upon a condition of all financial system. In these conditions one of key priorities of post crisis development will be competition stimulation in financial sector. It provides as a direct measure necessity of graduated increase in the minimum size of the capital first of all banks.Integration and consolidation or their reorganization in other kinds of financial institutions will promote growth of a market share of the average banks sure-footed on mass products to render a due competition to big banks. Moreover, the most su ccessful condition of development of banks and bank products is their competitiveness. It also is important from a position of expansion of coverage and population access to as much as possible wide list of bank services, oddly in regions.It is necessary to pay attention to creation of conditions for expansion of possibilities of banks on granting of modern retail financial services, first of all the most demanded today the population of payment services, by formation of a corresponding interbank infrastructure. within the limits of this problem it is necessary to direct the basic efforts on integration of the components of an infrastructure of retail payments separated and poorly interconnected now with a view of achievement of increase of efficiency and technological compatibility.In case of need it is necessary to consider the problem on restriction of foreign participation in financial sector at a rate of no more than 50 % from a cumulative authorized capital stock singly on each segment of financial sector. With a view of development of a diligent competition in all segments of the financial market reduction of participation of the state to its full exit will be provided at achievement of sufficient level of a competition. ConclusionThe financial system is system of integration type, is characterized by a close connection of elements (subsystems) ledger entry into it and that any of its subsystems cant exist independently the finance, on the one hand, expresses a part of relations of production and consequently acts as an element of system of these relations, with other represents the system consisting of interconnected elements, having the in operation(p) properties. In the finance it is possible to name as functional subsystems such, as tax, budgetary, financial plans (forecasts), budget financing, financial indicators, etc.Besides functional criterion of classification of a financial system classification by a sign of subjects of the finance (pa rticipating in financial relations) is applied that allows to specialize a financial system on links. Links as the twin(a) number of classification contain elements of the higher category financial relations, the financial funds, the operating device. Such property of ordering gives to a financial system integration character. In market relations economy functioning commodity-money relations are regulated by the state in ready littler degree. The basic regulators supply and demand of the goods, works, services.Out of commodity relations the finance cant exist. Only at an exchange of the made goods, services, their realisation for certain moneys worth at commodity producers the monetary gain is formed. From a gain from realization of production, works, services corresponding funds of money resources which go on compensation of the spent means of production, payment should be allocated. And cost of an additional product should be distributed on the parts satisfying to economic int erests of all participants of a social production, industrial spheres, invalid members of a society, for creation of insurance funds and resources.Large financial investments are necessary for realization of reorientation of economy, and then important problems are research of sources of structural transformations, parity definition between means of the state in the form of budgetary appropriations and own means of the enterprises. The state budget as the tool of management of economy has the integrated go on a social production as financial document, as the economic lever and as stimulus. The state budget is the central link of a financial system.In it find interrelation various types of income, expenses and the state loans. The profitable part contains the list of arriving means, and account unites all kinds of made loans. I. e. the state budget is an economic category which expresses relations of production in the monetary form, arising between the state and other participants of a social production in the course of distribution and re-distribution of cost of a public product. The state budget is the tool of realization of a state policy and the basic source of money resources for realization of the planned programs.Formation of a profitable part has now many problems, therefore the frequent updating of tax laws aggravating position of the enterprises, negatively influence manufacture process, so, on a state budget condition. An important interrogation at state budget drawing up is directions of an expenditure of the budgetary funds, connected with carrying out of a financially-budgetary policy. At level of micro-economics the financial system structure is made by the primary finance at the enterprises and in house economy.Their financial activity includes two moments formation of money resources (that occurs by means of initial distribution of incomes) and an expenditure of such means. Incomes and expenses are balance counterbalanced) as follows. The condition of the finance is reflected in the enterprises in the account of gain and losses (expenses). In housekeeping the received incomes (from use of factors of manufacture) are compared with expenses (expenses for electric current consumption and savings).Primary finance at macroeconomic level forms base of the alternative finance of the state. They are formed as a result of the accompanying distribution (or redistributions) incomes mainly by means of taxes. Taxes obligatory payments of the enterprises and the population which the state raises taking into account size of primary incomes. Public finance plays an important role in growth of the state consumption which creates additional demand, expands sept market. In the end it would be desirable to draw personal conclusions on the given work The main problem in financial sphere, in my opinion, consists that quantitative growth of a profitable part of the budget of Kazakhstan and all other important financial indicators is reached at the expense of falling of a course of tenge in relation to dollar and at the expense of incomes of the oil-extracting attention that can lead to deep economic recession as all financial and economic system depends on the quotation of the given raw materials in the world market In Kazakhstan let off and the system of crediting of mild business isnt developed.The given sphere of economy is very important in market economy as on an example of the developed countries it is discernible that it makes gross national product most part. Agriculture after infirmity of the USSR it has appeared in a difficult situation, therefore a priority problem of the state at present consists in crediting through banks of the second level of the given branch. In Kazakhstan development of such important financial tools as the credit, the deposit and leasing has already begun.In the conditions of market economy their role consists in acceleration of formation of seed capital that is very i mportant in Kazakhstan where shortage in investments is felt. Financial control in Kazakhstan is carried out by financial police and the Ministry of Finance. At present the is standard-legal base concerning financial relations is still reformed, but it is enough already developed positions for regulation of financial processes in Kazakhstan. For today sharply there is a question on advantage of the state budget.It speaks about badly thought over strategy of an expenditure of means. Besides, despite repeated increases of a salary to workers of budgetary sphere, in our republic differentiation of monetary incomes of the population is still strong. Settlement of this question in the future can lead to increase in tax revenues in budget of Kazakhstan. Priority problem of Republic Kazakhstan for today is, in my opinion, blockage of the above-named problems. References 1. , , 24. 4. 95 ? 2235 ? ? ? . 2. ? 355-1 31. 03. 99 ? ? ? , , ? ? ? ? 2235 24. 04. 95. 3. ? 357-1 01. 04. 00 ? . 4. ? 359-1 01. 04. 00 ? ? ? ? 2001 . 5. ?. ?. , (1997), , () 6. ?. ?. , (1996), , () 7. ?. ? (1998), , () 8. ?. ?. (1998), , () 9. ?. ?. (1997), , () 10. ?. ?. , ?. ?. ,(1998), , () 11. ?. ?.. ?. ?. , (1998), . , (, -?) 12. . 13. 2030