Empire of the Ring

Chapter 600: Economic Reforms (3)

There was tension in the conference room of the government complex in Astana. It was because Youngho had joined the conference on the day when there was a joint briefing of each ministry.

The cabinet ministers were getting in a sweat about the seemingly indifferent questions obviously asked by the Duke and Prime Minister.

“I don’t understand why there’s still express charge in government offices even though all process is faster now that government computer does everything that has been computerized, and payments had been actualized.”

“The practice has been going on for a long time, and it’s not like civil servants required them. People just leave express money at the offices and leave. We think that they’re afraid that they’d be disadvantaged in their next visit.”

“If the people feel obligated to pay express charge, this must be because of the authoritative attitude of civil servants. Please make sure to get it right.”

“I’ll make sure to carry it out.”

The deep-rooted bad habits still remained even though a new country had been created and corruption had been wiped out.

The salaries had been actualized to prevent corruption, but there were no signs of improvement.

It seemed privatization was the only answer at this point.

Since government institutions could not be outsourced, government-affiliated organizations and state-run businesses would have to be handed over to the private sector. Only then would civil servants come to their senses, or there would be no hope.

If privatized, the era of unlimited competition would open up because no company would benefit from exclusive protection or budget support as public institutions.

They would have to earn money by themselves and pay employee salaries and invest in more facilities according to the market principle.

Then there would be the overall management needs of efficiency, speed, and flexibility, and when these economic factors joined the market, the private economy would also be active.

The companies would have to force themselves to work harder to pioneer new markets to gain more profits. As a result, they would pay more salaries to attract talent, and the domestic economy would be revitalized as their increased income would lead to increased consumption.

That would naturally lead to an increase in the middle class and lead the economy with domestic demand alone, even if the country encountered unfavorable external conditions.

“I have discussed this with His Highness, but I’d like all of you to transfer any state-run businesses or affiliated companies of each ministry to the private sector. At this rate, we won’t have any competitiveness or meet the people’s standards. Ministers, I urge you to submit a private transfer plan as soon as possible.”

Prime Minister Kasim’s remarks were tantamount to a bombshell announcement, so the conference room was stirred up.

In particular, the face of the Minister of Energy and Industry was turning yellow.

The Ministry of Energy and Industry alone had about 40 government-invested or state-run companies, but it did not seem that was not the only reason why he was startled.

Aigerim, the minister of energy and industry, looked at Youngho’s face and cautiously voiced an opposition,

“Your Highness, Mr. Prime Minister. I understand that government-invested or affiliated companies are not highly competitive, but I wonder if domestic private companies can do their job properly. Please reconsider this.”

The minister did not seem to trust the private sector.

Kasim, who pondered upon the energy industry minister’s remarks, made an even stronger comment.

“If so, do you have confidence in improving lax management of the government organizations and state-run companies? Then I’ll withdraw this announcement at any time.”

“It is true that they had been wasting state coffers with their poor management, but under the new administration, they made some progress. I’m saying this because the sudden transfer to the private sector has a risk of an organized backlash.”

“We’re just changing the status of our employees from civil servants to civilian employees. If you work hard, you’ll get better pay. What’s your concern?”

“It’s because it’s obvious that most people will go astray the moment they move into the private sector. I’m afraid only a small number of employees survive in private companies.

This is bound to result in a high rate of unemployment, so why don’t we take time until the final decision?”

The remnants of socialism were so deep-rooted that it would be nothing short of a shock to employees who worked only moderately, but they had enough chance to improve and change their ways of working since the new government. Any more grace would only gnaw national competitiveness.

“You’re saying we need to drag out uncompetitive institutions because of incompetent employees? If you’re worried about them, at least retrain them. You’d have that much budget for such a task.”

“People are also embarrassed by the sudden change.”

“The people who are embarrassed are not the people, but the civil servants and employees of public corporations. If you have any intention of serving your country, you should welcome the change. Tell them to work harder and build up their skills to stay in position.”

“...”

Perhaps because Youngho was backing him up, Kasim’s voice was getting stronger and higher than ever.

As Prime Minister Kasim did not seem to budge, Cabinet members in the room finally quieted down.

***

“Mr. Prime Minister, I think I pushed it too hard. When I looked at the expressions of the cabinet ministers, I could tell that they’re not confident in this. I’m afraid there’s going to be a lot of resistance from the management.”

After the conference, Youngho chatted with Prime Minister Kasim over tea in the minister’s office.

“This is what you’ve been saying since the beginning of the new administration. And some ministries were already preparing to transfer their subsidiaries into private entities. As for the Minister of Energy and Industry, there are so many agencies and public corporations that he must not have any clue about where to begin.”

“Some of them will need a lot of help from you.”

“Of course. Minister Aigerim works very hard, but he has a lot of sense of authority. It would be very difficult for him to get rid of the public corporations and affiliated organizations because he must have his people scattered in them. He’s been abusing his power of human resources, and now it’s time for him to leave all that behind. We would’ve started this since the beginning.”

“That’s why we have to transfer to the private sector and be competitive. No matter how much we’ve changed, there’s still a long way to go from my perspective. If they knew how the companies owned by the royal family make profits, they’d all fall out of their chair.”

“I’m just ashamed. I’d have no more wish if state-run businesses can do their job only about a tenth of what the companies owned by the royal family can do. Does it make sense that even our resource exploration is done by a foreign company?”

The royal family’s shipping company that did businesses all around the world was always busy around the clock because it would be pushed out of the competition if it was lax.

Zeynep Wine which produced premium wine could take it easy by now, but master artisans were still working all night setting the temperature of the mature room for better quality.

In order to survive in an era of unlimited competition, any company must make strenuous efforts or it would give up the lead at any time.

However, the public corporations had not put in such efforts since the beginning of the country. That was why Kazakhstan did not join even the ranks of middle-power countries despite its abundant resources.

“Your Grace, I think we need to add more resource research companies. Foreign companies alone are not enough.”

“Really? I thought it was going well.”

“Currently, we’ve only done one-fifth of the research in the central part. It’s going to take another ten years to make the national resource distribution map.”

“Would you please recommend a company, Prime Minister?”

“What companies would I know? There’s a domestic company, but honestly, I don’t trust it. Couldn’t the geological survey company in the royal territory work on it?”

“Well, it’s not much of a company. There are only a few experts and staff.”

“Why don’t you expand the investigation team a little bit? Wouldn’t it be like we’re leaking state secrets to foreign countries if we let foreign companies handle the research? I heard your resource exploration team is very talented. Wasn’t there a groundbreaking research result in the royal territory recently?”

“Well, I’m looking forward to it. I learned that there’s such capability with bentonite only this time.”

What Prime Minister Kasim said was about the other functionality of bentonite.

Bentonite had been found to purify contaminated soil and promote the growth of plants, as well as its use for cosmetics and medicine.

Even though a small amount of bentonite was sprayed on the land, it resulted in the fast growth of plants.

“Is it harmless to the human body?”

“There’s no harm. It turned out that it boosts the strength of the soil as well as plant growth.”

“Then we could probably restore the land that had been contaminated by pesticides during the Soviet times.”

“It’s quite possible.”

“How much bentonite is buried under the royal territory?”

“It’s inexhaustible. It’s hard to quantify because it’s all over western Kazakhstan.”

“I guess the key would be refining.”

“It won’t be terribly hard with modern technology.”

“Wow, I used to blame our ancestors who settled in this barren land, but it was, in fact, a huge gift from them.”

Although Kasim said Kazakhstan was barren, it was, in fact, a blessed land.

All kinds of minerals were buried at a world-class level, including oil and gas which were the source of money that made dollars right away.

The crude oil deposit was the world’s ninth-largest as there were 39.8 billion barrels of confirmed oil and an estimated 124.3 billion barrels.

Gas also ranked 17th in the world, while zinc, tungsten, uranium, lead, chromium, copper manganese, and others boasted the world’s first or second-largest reserves.

In addition, most of the minerals on Earth were buried in large quantities, so it was yet to know how many more would be found in the future because the estimated volume of reserves was increasing year by year.

As Kazakhstan was such a place, Youngho was eager to make a domestic resource map.