On the real rate of unemployment

The real unemployment in Kazakhstan is nowhere near 5% as stated in the statistical bulletin “Socio-economic development of Republic of Kazakhstan. January-december 2017”, and is 22.6%. This means that one in five Kazakhstanis doesn’t have a job or they do one time jobs.

On Jan 16 2018 at the government meeting of RK under presiding of prime-minister of RK Bakytjan Sagintaev a project of “All-national events on implementation of the message of the head of the state from Jan. 10 2018” was reviewed and then unanimously approved.

As part of the discussion of “Human capital – the foundation of modernizing” a subject of productive employment, lowering of the unemployment rate in the country and solving of the issue of so-called self-employed, was raised. More on this can be found in the press-releases of the Labor ministry and social protection of RK:

“In 2017 around 573 thousand people were involved in employment efforts” (http://enbek.gov.kz/ru/node/347958);

“Minister of labor and employment Tamara Deysenova spoke about employment of informally employed people in 2018” (http://www.enbek.gov.kz/ru/node/347981);

“Around 105 thousand social contracts were made under the new format of ASP” (http://www.enbek.gov.kz/ru/node/347978).

By our estimates, government of RK and ministry of labor and social security of population of RK as its agency won’t handle the issue of unemployment in Kazakhstan neither in the current year nor in the coming decade. Let us clarify why.

As of the end of last year, overall number of “officially” unemployed in the country was 442 thousand people (estimates of the committee on statistics of the ministry of national economy of RK as of lat Dec. 2017). 1.55 million people should be added to them – those underemployed, i.e. de facto unemployed, uncovered during the investigation. Thus, an overall number of people in the republic who don’t have a job is around 2 million people.

This means that a real level of unemployment in Kazakhstan is far from 5% as indicated in the first edition of the short statistical bulletin “Socio-economic development of the republic of Kazakhstan. January-december 2017” but rather 22.6%. Which means around one in five people in Kazakhstan doesn’t have a job or does one-time jobs.

Since unemployment, as such is unavoidable in the free market, moreover, it is necessary for raising the flexibility of reaction of such factor of production as labor to dynamic of national economy, we will assume that the government of Kazakhstan must put to work around a million and a half Kazakhstanis, i.e. every sixth citizen of working age.

In the backdrop of this shocking number we must give props to ministry of labor and social security of RK and its head Tamara Duysenova. The very fact that the were able to initiate, organize and conduct neighborhood rounds in 2017 with the goal of establishing the actual employment of working-age Kazakhstanis around the territory of the republic, deserves high praise. In proving the scope and difficulty of the work done we will quote the press release: On the formalization of self-employed in the Government meeting, said labor Minister T. Duissenova”:

“From 1991 to 2001 in our country as a result of mass closure of businesses and loss of jobs, the number of self-employed grew by 8.7 times, or 327 million people to 2.8 million people.

On behalf of the Head of state, the Ministry of labor and social protection of the population in preparation for the introduction of health insurance held, and continues to work on formalizing the self-employed”

Stage 1. So, as part of the reconciliation status of all citizens in the information systems of state bodies, on April 1, 2017, determined by social status 13.2 million people and 5.7 million persons status was not identified. This means that officially, they live in Kazakhstan, but there aren’t any among the employees of revenue-generating mandatory pension contributions, either among students or recipients of social benefits.

Stage 2. From April to August last year, the local Executive bodies held door-to-door rounds. The result is the updated statuses of 1.5 million people. The remaining were:

update the information about 943 thousand citizens in databases of government agencies identified as emigrants and deceased citizens or have declared themselves students;

– to formalize the practical employment of 1.7 million people, of which 1.5 million declared themselves to be employees and 233 thousand – individual entrepreneurs;

– to engage in productive employment 1.6 million unproductive employees and the unemployed.

Stage 3. Joint efforts updated the statuses yet 438 thousand people from among the emigrants, the dead citizens and students.

The remaining citizens in the process of updating will be completed in the first quarter of this year”.

This information is bolstered by data from another press release of the institution: “Of employment informal self-employed in 2018, said the Minister of labor and social protection of population of Kazakhstan Tamara Duissenova”. We quote:

“We will remind, last year in the context of defining the status of citizens and formalization of the self-employed were identified 5.7 million people. In the result of joint work with the Central state authorities, in less than a year have been identified and formalized the status of about 3 million people and today it is not updated remain the status of 2.7 million people.

Of the 2.7 million citizens without status of 1.14 million is informally employed, for the formalization which is the necessary legislative changes. 1.55 million unproductive self-employed and the unemployed, which will engage in productive employment” – said the Minister of labor and social protection of population of Kazakhstan Tamara Duissenova said during the government meeting on January 16 of this year.”

Once again we repeat that by our estimates, government and its relevant institution generally isn’t managing with the issue of lowering of unemployment in the country considering the current shocling rate of 22.6% of able-bodied citizens as of the late 2017 at least in half, down to 10-11%. However, encouraging is the fact that the state finally stopped self-lying and lying to society, market and investors.


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