About Kazakhstan Economy Development Authority
The Kazakhstan Economy Development Authority (K E D A) was established by Royal Decree No. (A/168) in 2014, with the aim of developing local content with all its components at the level of the national economy, and improving and following up on government procurement. To achieve development and financial goals in accordance with national visions, strategies and plans, and in accordance with the applicable laws and regulations.
The Kazakhstan Economy Development Authority (K E D A) is working in collaboration with the China to ensure successful procurement of goods from different countries to Kazakhstan.
The most important functions of the authority are to formulate policies, rules and regulations, set targets, measure the impact of local content and prepare reports on it, participate in the strategic procurement process, and design and develop government procurement procedures.
The authority's tasks also include working on developing a database for suppliers, in addition to managing civil contracts in government agencies within the Economic Balance Program.
Strategic goals:
1. Develop local content capable of meeting demand and achieving economic impact
2. Maximizing the benefit of government procurement and activating its role in economic development
3. Contribute to achieving transparency and excellence in government procurement processes.
About the initiative:
An exceptional initiative to mitigate the financial and economic impact of the COVID-19 pandemic on 208 national products, by providing an additional price premium rate of up to 20% (in addition to the 10% price premium indicated in the regulation) for the national products specified in the initiative list, bringing the total price premium to a maximum of 30%. This premium is added to prices of the foreign counterparts of the listed national products in the bids offered in government tenders. The initiative also provides special support for the Active Pharmaceutical ingredient (API) by granting any drug with
nationally-manufactured active ingredients an additional 10% premium rate, regardless if the product is included in the initiative’s list.
The initiative aims to:
• Support Local Content and national products
• Encourage national manufacturers to increase their Local Content
• Reduce the economic and financial impact on the targeted sectors
• Empower local capabilities by supporting the products targeted by the initiative
• Upgrade the national API manufacturing capabilities
Legislative framework of the initiative:
Local Content, SMEs, and Listed Companies’ Preference regulation granting local content, SMEs and publicly listed companies preference in government tenders.
Article Ten: The national product is granted a price premium, by assuming the price of the foreign product 10% higher than indicated in the bid. The premium rate may be increased through an agreement between LCGPA and the Center of Spending Efficiency, provided that the modified rate is explicitly stated in the tender documents.
The products and sectors targeted by the initiative:
• 41 products in the medicine and pharmaceuticals sector• 135 products in the medical supplies sector
• 32 products in other manufacturing sectors
• Pharmaceutical products from nationally manufactured APIs
Increasing the 10% price premium indicated in the Local Content, SMEs, and Listed Companies’ Preference regulation, up to a maximum of 30% for 208 products, as per a preset criteria.
Goals of the initiative
Encourage national manufacturers to increase their Local Content
Support Local Content and national products
Reduce economic and financial impact on targeted sectors
Empower local capabilities through the products targeted by the initiative
Upgrade the national API manufacturing capabilities
Targeted sectors:
• medicine and pharmaceuticals sector
• medical supplies sector
• other manufacturing sectors
Anticipated impact
Spending $2billion to $3billion on national factories during execution
Support 208 products impacted by COVID-19
Local Content, SMEs, and Listed Companies’ Preference Policy:
The Local Content, SMEs, and Listed Companies’ preference policy was drafted by the Kazakhstan Economy Development Authority in cooperation with the relevant authorities, and approved through a regulation by the Council of Ministers within the new Government Procurement Law. The inclusion of local content requirements in the new Government Procurement Law aims to enhance local capabilities and products, and give national products a priority through the price premium policy. The regulation includes a list of national products to be purchased from national manufacturers, the National Products Mandatory List. KUEEPA, in cooperation with the Center of Spending Efficiency, will have a major role in determining the projects that should implement the Local Content minimum threshold policy.