Research Article
BibTex RIS Cite

Year 2023, , 33 - 44, 31.03.2023

Nurlan Nurseııt

https://doi.org/10.17261/Pressacademia.2023.1719

Abstract

References

  • Alsweilem, K. A., Cummine, A., Rietveld, M., & Tweedie, K. (2015). A comparative study of Sovereign investor models: Institutions and policies for managing sovereign wealth, Discussion Paper, Belfer Center for Science and International Affairs and Center for International Development, Harvard Kennedy School.
  • Arellano, M., & Stephen R. B. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies, 58(2), 277–97.
  • Azhgaliyeva, D. (2014). The effect of fiscal policy on oil revenue fund: The case of Kazakhstan. The Journal of Eurasian Studies, 5(204), 157-183.
  • EBRD (2018). The fiscal implications for Kazakhstan of worldwide transition to a greener global economy. The European Bank for Reconstruction and Development, London.
  • Government (2004). List of permitted foreign financial instruments, excluding intangible assets, for placement National Fund of Kazakhstan. (N 1236).
  • Hotelling, H. (1931). The Economics of Exhaustible Resources. Journal of Political Economy, 39(2), 137–175.
  • IMF (2007). The Role of Fiscal Institutions in Managing the Oil Revenue Boom [online], Fiscal Affairs Department, International Monetary Fund, https://www.imf.org/external/np/pp/2007/eng/030507.pdf [Date Accessed: March 05, 2007].
  • Irarrazabal, A., & Ma, l. (2018). Optimal Asset Allocation for Commodity Sovereign Wealth Fund), Norwegian University of Life Sciences School of Economics and Business, Working Papers, 11(201).
  • Kapparov, K. (2015). Targeted transfers from the National fund of Kazakhstan: short-term concessions to the detriment of the long-term. Soros Foundation-Kazakhstan, Almaty.
  • Prime Minister (2022a). Three scenarios of economic development for 2023-2027 elaborated in Kazakhstan. [online], Astana, https://primeminister.kz/en/news/three-scenarios-of-economic-development-for-2023-2027-elaborated-in-kazakhstan-1876 [Date Accessed: August 27, 2022].
  • Prime Minister (2022b). New Government fiscal policy to increase National Fund assets to $100 billion Astana https://primeminister.kz/en/news/new-government-fiscal-policy-to-increase-national-fund-assets-to-100-billion-1211352 [Date Accessed: December 12, 2022].
  • Reuters (2018). UPDATE 1-Kazakh central bank cuts oil output forecast for 2018-19 [online], England, https://www.reuters.com/article/kazakhstan-oil-idINL8N1YC26X [Date Accessed: December 7, 2018].
  • Ministry of National Economy (2017). Kazakhstan's GDP growth is projected at 3.1% in 2018, followed by growth to 4.2% in 2022 – Suleimenov [online], Astana, Press Service of the Ministry of National Economy of the Republic of Kazakhstan, http://prs.kz/press/27934/Rost-VVP-Kazahstana-prognoziruetsya-na-urovne-3-1-v-2018-godu-s-posleduuschim-rostom-do-4-2-v-2022-godu-Sulejmenov/ [Date Accessed: August 29, 2017].
  • Ministry of Finance (2017). On Guaranteed Transfer from the National Fund. Law of the Republic of Kazakhstan. (No. 111-VI).
  • NBK (2021). Counter-cyclical fiscal rule is the balance between fiscal discipline and stimulation of the economy [online], Astana, National Bank of Kazakhstan, https://nationalbank.kz/en/news/novosti/12659/ [Date Accessed: December 22, 2021].
  • Newey, W., & West, K. (1987). A Simple Positive Definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix. Econometrica, 55(3), 703-705.
  • Oshakbayev, R. (2017). What trap is Kazakhstan sitting in? https://kz.expert/en/news/analitika/607_what_kind_of_trap_is_kazakhstan_in.
  • Plokhotnikov, K.E. (2010). Fundamentals of Econometrics in the STATISTICA package. University textbook, Moscow, ISBN:
  • 978-5-9558-0114-8.
  • President’s Decree (2000). On the National fund of the Republic of Kazakhstan. The decree of the President of Kazakhstan. (No. 402).
  • President’s Decree (2005). On the Concept of the Formation and Use of Funds. The decree of the President of Kazakhstan. (No. 1641).
  • President’s Decree (2010). On the Concept of Formation and Use of the National fund of the Republic of Kazakhstan. The decree of the President of Kazakhstan. (No. 962).
  • President’s Decree (2016). On the Concept of Formation and Use of the National fund of the Republic of Kazakhstan. The Decree of the President of Kazakhstan. (No. 385).
  • Shagiyev, A., & Bukeeva, A. (2014). Under the wing of Samruk. [online], Forbes Kazakhstan, https://forbes.kz/process/probing/pod_kryilom_samruka/ [Date Accessed: July 4, 2014].
  • Shagiev, A., & Kuanshaliev, D. (2016). For what purposes did Kazakhstan spend the National Fund money for 15 years? [online], Forbes Kazakhstan, https://forbes.kz/process/probing/gorshochek_s_medom [Date Accessed: February 4, 2016].
  • Trend.az (2022). Assets of the National Fund of Kazakhstan increased to $55.8 billion in 2022 [online], Trend News Agency, https://www.trend.az/casia/kazakhstan/3680680.html [Date Accessed: December 12, 2022].

DEVELOPMENT AND VERIFICATION OF THE SPENDING RULE FOR THE NATIONAL FUND OF KAZAKHSTAN

Year 2023, , 33 - 44, 31.03.2023

Nurlan Nurseııt

https://doi.org/10.17261/Pressacademia.2023.1719

Abstract

Purpose- The article examines the key factors affecting the use of the National Fund of Kazakhstan (NFK) in 2005-2017, as well as the development of more effective methods and actions to improve its performance in the future.
Methodology- The study has developed a functional model of transfers from it to the state budget (spending rule), which helps to explain the observed dynamics of its use. The model was examined by using dynamic panel estimation techniques. As result it was found that transfers from oil fund to the state budget are dependent on economic activity, non-oil budget deficit and inflation in the country. An econometric test confirmed the correctness of the assumptions about the factors used in the model.
Findings- A multivariate forecast was also made for NFK's assets for the period until the end of 2022. Upon the favorable scenario, the value of the assets of the oil fund will reach 57.5 billion US dollars at the end of 2022. If world oil prices fall from 68 to 50 US dollars per barrel and remain at this level, the oil fund’s assets will be exhausted in 6-7 years. If oil prices fall to 30 US dollars, then the fund's oil assets will last only 5 years.
Conclusion- The principles of the formation and use of the NFK should be revised in order to ensure the long-term preservation of the fund's assets for future generations as originally planned.

Keywords

Sovereign wealth funds oil fund asset management Kazakhstan

References

  • Alsweilem, K. A., Cummine, A., Rietveld, M., & Tweedie, K. (2015). A comparative study of Sovereign investor models: Institutions and policies for managing sovereign wealth, Discussion Paper, Belfer Center for Science and International Affairs and Center for International Development, Harvard Kennedy School.
  • Arellano, M., & Stephen R. B. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. Review of Economic Studies, 58(2), 277–97.
  • Azhgaliyeva, D. (2014). The effect of fiscal policy on oil revenue fund: The case of Kazakhstan. The Journal of Eurasian Studies, 5(204), 157-183.
  • EBRD (2018). The fiscal implications for Kazakhstan of worldwide transition to a greener global economy. The European Bank for Reconstruction and Development, London.
  • Government (2004). List of permitted foreign financial instruments, excluding intangible assets, for placement National Fund of Kazakhstan. (N 1236).
  • Hotelling, H. (1931). The Economics of Exhaustible Resources. Journal of Political Economy, 39(2), 137–175.
  • IMF (2007). The Role of Fiscal Institutions in Managing the Oil Revenue Boom [online], Fiscal Affairs Department, International Monetary Fund, https://www.imf.org/external/np/pp/2007/eng/030507.pdf [Date Accessed: March 05, 2007].
  • Irarrazabal, A., & Ma, l. (2018). Optimal Asset Allocation for Commodity Sovereign Wealth Fund), Norwegian University of Life Sciences School of Economics and Business, Working Papers, 11(201).
  • Kapparov, K. (2015). Targeted transfers from the National fund of Kazakhstan: short-term concessions to the detriment of the long-term. Soros Foundation-Kazakhstan, Almaty.
  • Prime Minister (2022a). Three scenarios of economic development for 2023-2027 elaborated in Kazakhstan. [online], Astana, https://primeminister.kz/en/news/three-scenarios-of-economic-development-for-2023-2027-elaborated-in-kazakhstan-1876 [Date Accessed: August 27, 2022].
  • Prime Minister (2022b). New Government fiscal policy to increase National Fund assets to $100 billion Astana https://primeminister.kz/en/news/new-government-fiscal-policy-to-increase-national-fund-assets-to-100-billion-1211352 [Date Accessed: December 12, 2022].
  • Reuters (2018). UPDATE 1-Kazakh central bank cuts oil output forecast for 2018-19 [online], England, https://www.reuters.com/article/kazakhstan-oil-idINL8N1YC26X [Date Accessed: December 7, 2018].
  • Ministry of National Economy (2017). Kazakhstan's GDP growth is projected at 3.1% in 2018, followed by growth to 4.2% in 2022 – Suleimenov [online], Astana, Press Service of the Ministry of National Economy of the Republic of Kazakhstan, http://prs.kz/press/27934/Rost-VVP-Kazahstana-prognoziruetsya-na-urovne-3-1-v-2018-godu-s-posleduuschim-rostom-do-4-2-v-2022-godu-Sulejmenov/ [Date Accessed: August 29, 2017].
  • Ministry of Finance (2017). On Guaranteed Transfer from the National Fund. Law of the Republic of Kazakhstan. (No. 111-VI).
  • NBK (2021). Counter-cyclical fiscal rule is the balance between fiscal discipline and stimulation of the economy [online], Astana, National Bank of Kazakhstan, https://nationalbank.kz/en/news/novosti/12659/ [Date Accessed: December 22, 2021].
  • Newey, W., & West, K. (1987). A Simple Positive Definite, Heteroskedasticity and Autocorrelation Consistent Covariance Matrix. Econometrica, 55(3), 703-705.
  • Oshakbayev, R. (2017). What trap is Kazakhstan sitting in? https://kz.expert/en/news/analitika/607_what_kind_of_trap_is_kazakhstan_in.
  • Plokhotnikov, K.E. (2010). Fundamentals of Econometrics in the STATISTICA package. University textbook, Moscow, ISBN:
  • 978-5-9558-0114-8.
  • President’s Decree (2000). On the National fund of the Republic of Kazakhstan. The decree of the President of Kazakhstan. (No. 402).
  • President’s Decree (2005). On the Concept of the Formation and Use of Funds. The decree of the President of Kazakhstan. (No. 1641).
  • President’s Decree (2010). On the Concept of Formation and Use of the National fund of the Republic of Kazakhstan. The decree of the President of Kazakhstan. (No. 962).
  • President’s Decree (2016). On the Concept of Formation and Use of the National fund of the Republic of Kazakhstan. The Decree of the President of Kazakhstan. (No. 385).
  • Shagiyev, A., & Bukeeva, A. (2014). Under the wing of Samruk. [online], Forbes Kazakhstan, https://forbes.kz/process/probing/pod_kryilom_samruka/ [Date Accessed: July 4, 2014].
  • Shagiev, A., & Kuanshaliev, D. (2016). For what purposes did Kazakhstan spend the National Fund money for 15 years? [online], Forbes Kazakhstan, https://forbes.kz/process/probing/gorshochek_s_medom [Date Accessed: February 4, 2016].
  • Trend.az (2022). Assets of the National Fund of Kazakhstan increased to $55.8 billion in 2022 [online], Trend News Agency, https://www.trend.az/casia/kazakhstan/3680680.html [Date Accessed: December 12, 2022].
There are 26 citations in total.

Details

Primary Language English
Subjects Economics, Finance, Business Administration
Journal Section Articles
Authors

Nurlan Nurseııt This is me 0000-0002-7911-4777

Publication Date March 31, 2023
Published in Issue Year 2023

Cite

APA Nurseııt, N. (2023). DEVELOPMENT AND VERIFICATION OF THE SPENDING RULE FOR THE NATIONAL FUND OF KAZAKHSTAN. Journal of Economics Finance and Accounting, 10(1), 33-44. https://doi.org/10.17261/Pressacademia.2023.1719

Journal of Economics, Finance and Accounting (JEFA) is a scientific, academic, double blind peer-reviewed, quarterly and open-access online journal. The journal publishes four issues a year. The issuing months are March, June, September and December. The publication languages of the Journal are English and Turkish. JEFA aims to provide a research source for all practitioners, policy makers, professionals and researchers working in the area of economics, finance, accounting and auditing. The editor in chief of JEFA invites all manuscripts that cover theoretical and/or applied researches on topics related to the interest areas of the Journal. JEFA publishes academic research studies only. JEFA charges no submission or publication fee.

Ethics Policy - JEFA applies the standards of Committee on Publication Ethics (COPE). JEFA is committed to the academic community ensuring ethics and quality of manuscripts in publications. Plagiarism is strictly forbidden and the manuscripts found to be plagiarized will not be accepted or if published will be removed from the publication. Authors must certify that their manuscripts are their original work. Plagiarism, duplicate, data fabrication and redundant publications are forbidden. The manuscripts are subject to plagiarism check by iThenticate or similar. All manuscript submissions must provide a similarity report (up to 15% excluding quotes, bibliography, abstract and method).

Open Access - All research articles published in PressAcademia Journals are fully open access; immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Open access is a property of individual works, not necessarily journals or publishers. Community standards, rather than copyright law, will continue to provide the mechanism for enforcement of proper attribution and responsible use of the published work, as they do now.