Monopolization of the economy and the sphere of services by the national companies and megaholdings is not appropriate - the president

/Interfax-Kazakhstan, Astana, February 1, 05/ - The President of Kazakhstan again criticized the activities of the national companies and so- called megaholdings, which by conduction undesignated activities, create barriers to competition. N.Nazarbayev expressed such an opinion Tuesday at extended government session in Astana. "The question of competition development must become the issue number 1 in the agenda of the government' work - the President told. This said he underlined that currently within the country the question on monopolization of the economy by the national companies and megaholdings became very actual. "Currently megaholdings in addition to its main activities are conducting unintended activities - by creating consultancies, insurance, financial companies...", he said. At the same time, Nazarbayev continued "national companies also conduct activities that might be conducted in competitive environment, small and medium businesses". "In this direction majority of private megaholdings are not aging behind, and also our major banks, which participate in not related sectors - resorts, mass media, entertainment, construction and security, some of them have charity funds", head of the state underlined. As a result he noticed "no place for small business is left, natural competition, monopolization takes over whole sectors and industries of the conomy with all negative effects resulting from that". "Whole city becomes under management of one company", he added. N.Nazarbayev also stressed that "holdings' activities is transparent, closed and this especially concerns banks ". "How con we talk about reliable banking system if so many companies affiliated with banks exist?", he appealed to the participants of government session, having stressed that "conflict of interests persists which puts the ultimate consumer under negative impact". Speaking about megaholdings, working in raw materials sector, the president stressed they monopolized their industries. "It is now time to attract new companies which would develop newly explored mineral deposits, i.e. strengthen the competition in the country", Nazarbayev convinced. In fall of previous year Nazarbayev already criticized the activities of megaholdings and national companies for conducting activities in unrelated economy sectors, including services area. The President drew some examples. In particular, according to his estimates national railway carrier Kazakhstan temir zholy (KTZh) "acquired many daughter companies on additional activities" - maintenance and exploitation of cargo floors. "I have pointed at only one national company, but this concerns many companies, and I have full list of what they have created so far", Nazarbayev told. In its turn TuranAlem commercial bank according to the words of head of the state, engages in tourists business, has a security agency, investment company as well as pension fund". Another commercial bank Valyut Tranzit, he continued, controls hotels, construction and jewelry companies, entertainment complex. "Does this relates to business? Does Deutsche Bank has same structure as our bank?, he asked. At the same he does not intend to divest independent business units. National companies have to dispose off such business at market value and competitive price. Having noticed that Kazakhstan is a really much more developed than other CIS countries in banking field, the president has pointed out that the National bank faces losses, issues of capital markets inefficiency remain. N.Nazarbayev noted that the government has supported and will continue to support national companies and banks, but at the same time it is important that companies and banks understand the real goals of the reforms taking place in the economy [2005-02-01]