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. Last Updated: 07/27/2016

Kazakhs Hope to Raise $545M From Sell-Offs

ASTANA, Kazakhstan -- Kazakhstan President Nursultan Nazarbayev said his country was planning to raise 42 billion tenge ($545 million) from privatization next year, compared to this year's forecast revenues of 45 billion tenge.

"We have to receive at least 2 percent of gross domestic product from privatization in 1999. This is 42 billion tenge," Nazarbayev told the Central Asian state's parliament in the new capital, Astana.

Nazarbayev said the budget deficit should be cut to 4.5 percent of GDP next year from this year's targeted 5.5 percent.

He said the state would try to economize next year on education and health services as well as defense and interior ministries.

Nazarbayev said this year's privatization revenues were forecast at 45 billion tenge.

He said that the budget would suffer from lower revenues due to the crisis on foreign markets and falling prices of oil, a major export of Kazakhstan.

"This influences the targets set for this year. Therefore, the government has to take adequate measures in complicated conditions," he said, without elaborating.

Nazarbayev said his resource-rich country needed to increase non-traditional exports, especially in light of falling world oil prices.

Nazarbayev said he had noted the conditions in other countries which relied only on oil and gas receipts, but Kazakhstan may live "quite well in another way," he said.

To make up for the losses because of weak oil prices, Kazakhstan needed to take adequate measures to support its exports through tariffs and encourage production in other sectors, like consumer goods and machine construction, the president said.

Nazarbayev also said his country had to cut foreign borrowing this year by 7.5 billion tenge ($97.5 million) and pursued a cautious borrowing policy.

"We should cut our borrowing by 7.5 billion tenge, and therefore special measures are needed to be taken in the second half of the year," Nazarbayev told parliament.

"I think in the next two to three years we should be strict about who should borrow and how much."

Also Tuesday, National Power PLC said it will invest up $75 million in the electricity industry of Kazakhstan, after forming a partnership with Ormat, an Israeli and U.S. based engineering and manufacturing company.

National Power said in a statement that the partnership will own, operate and develop generating plant, district heating and distribution systems supplying Karaganda, which is the second largest city in Kazakhstan.