The leadership of our country headed for development of an open economy that meets the latest international standards of advanced economies in the world.
It has already became clear for everyone that the transparency of economic relations promotes investment inflow in the country, reduce social tension in society, creates the conditions for the eradication of corruption and strengthen fair competition between market participants. In recent years, our government, undoubtedly, succeeded in this, and left behind many states with a similar type of economy on the openness of their economies.
But in some cases, following the principle of openness in word, in practice officials follow it only formally. Not everything is going well in the relationship with the mass media. This is one aspect. Another aspect is a complete confusion in the public filings of some institutions. This is when formally there are figures and texts, but they convey absolutely nothing, but only confuse the careful reader.
We present to you thoughts and comments of one reader of “KazahZerno.kz” edition, who attempted to understand the magic of numbers and texts, put up for public consideration by the National Marketing Holding “KazAgro”, namely with its development strategy for 2011-2020 years, which was approved by decree of the Government of the Republic Kazakhstan from 31.01.2011, № 52. In the Strategy were published reporting indicators and planned targets for labor productivity, gross agricultural production, the level of added value, the acquisition of agricultural machinery, the degree of innovation and other indicators of enterprises financed by KazAgro.
Currently, we can read quite a lot of criticism about the activities of the Ministry of Agriculture and the National Managing Holding “KazAgro”. We do not argue, perhaps, there is something to criticize for. But only that do not make mistakes, who does nothing.
I decided to get acquainted with one of the main documents of the National Managing Holding “KazAgro”, namely with its development strategy for 2011-2020 years, which was approved by decree of the Government of the Republic Kazakhstan from 31.01.2011, № 52.
I have read the text part. Everything was ok: the analysis of the current state, mission of the Holding, its vision, strategic directions, goals, objectives, key performance indicators, expected results. Normally, everything is clear. Only one point made me to think. For example, there is the following text in “the Vision of the Holding”:
“By 2020 the Holding will become the leading management company in the implementation of public policies in order to improve the efficiency of AIC industries of the Republic of Kazakhstan.”
From the text, if taken literally, it follows that currently the Holding is not “a leading management company in the implementation of public policies in order to improve the efficiency of AIC industries of the Republic of Kazakhstan”, but will become such only by 2020. Then, who is holding the palm of victory in this sphere now? The memorandum “On main principles of activity of JSC “National managing Holding “KazAgro”, which was approved by decree of the Government of RK dated 23.12.2006, № 1246, states:
“The purpose of the JSC” National Holding “KazAgro” is the implementation of public policies to stimulate the development of AIC of Kazakhstan by providing effective management of investment assets and development of the corporate culture of joint stock companies operating in the field of agriculture, whose shares are transferred to it in return for placed shares “.
That is the second question: what Holding was engaged in since its creation?
After the text there are three appendices.
Appendix 1, which provides different diagrams.
Appendix 2 – “Explanation of key performance indicators of JSC” National managing Holding “KazAgro” on strategic directions for 2011 – 2020 years”.
Appendix 3 – “Forecast of funding for implementation of the development Strategy of JSC “National managing Holding “KazAgro” for 2011 – 2020 on strategic directions of activities”.
I looked through charts. They are okay. I started watching Appendix 2, and literally stumbled over the first key performance indicator (hereinafter – coefficient of efficiency), which is called “Labor productivity in enterprises funded by the holding.” Then, as usual, more, i.e. questions began to multiply in number, to deepen and widen in its essence. After completing Appendixes 2 and 3, I found that great professionals were engaged in drawing the contours of the Holding activities until 2020 year. So much was written and still nothing concrete was said! Special talent is needed for this! With such coefficient of efficiency preparing of any report and on any level is just a trifling matter. But the purpose of the Holding was not in the preparation of reports, but it is quite different.
Below I quote some of the coefficients of efficiency with my comments.
Labour productivity in enterprises funded by the holding, in thousands of U.S. dollars per 1 employee
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
1,5 |
2,9 |
9 |
11 |
13 |
16 |
20 |
22 |
25 |
29 |
35 |
40 |
It is interesting to see how, firstly, this figure is generally defined. Do subsidiaries collect information about the production of goods and the number of workers from all of its customers? Secondly, the reasons for its more than a sharp growth in 2011 compared with 2010. Thirdly, the foundation of its steady growth in future years.
The Strategic plan of the Ministry of Agriculture, approved by the new version of decree of the Government of Kazakhstan dated January 30, 2012 № 173, contains the following dynamics of labor productivity (U.S. dollars).
|
Targets (with the deadline (period) to achieve) |
Reporting |
Plan for the current 2011 year |
Planning period |
||||
|
2009 year |
2010 year |
2012 year |
2013 year |
2014 year |
2015 year |
||
|
3. Labour productivity in agriculture |
3 000 |
2 800 |
3 800 |
4 200 |
5 000 |
6 000 |
6 500 |
Comparison of given indicators drive us into a deep reverie. For example, in 2009 the performance of the enterprises, which were financed by the Holding, was twice lower than the average for the country in 2010 – the performance was about, parity, and then … then we see the denial of the law of the impossibility of exceeding twice the medium that has proven L. Volgin for the law of the Poisson distribution (L. Volgin, “The principle of a coherent distribution. Moscow: Soviet Radio, 1977).
According to this law, “miracles” for which the Nature is capable, never exceed twice the average: no one animal or plant does not exceed on any indicators more than twice the average member of the species, none of the people does not exceed by their physical and mental abilities the average person more than twice…
If a company funded by the Holding are not included in the sample, on which the overall performance of agro-industrial complex is calculated, then this performance, perhaps, will be the case; if the companies funded by the Holding, join the friendly family of agricultural producers, then one of two things: either Mr. L. Volgin lied with its own law, which is unlikely, or someone in the calculation of rates (if calculated) made an unfortunate mistake.
Although other options are possible. Indeed possible. I did not intend to consider the Strategic plan of the Ministry of Agriculture, but in the context of the topic, I cite the following information from the Strategic plan of the Ministry of Agriculture.
|
Targets (with the deadline (period) to achieve) |
Unit of measurement |
Reporting |
Plan for the current 2011 year |
Planning period |
||||
|
2009 year |
2010 year |
2012 year |
2013 year |
2014 year |
2015 year |
|||
|
1. The volume index of gross agricultural output |
% To previous year |
114,6 |
88,3 |
120 |
87,7 |
104,4 |
104,6 |
104,9 |
|
2. Gross value added of AIC |
% To previous year |
113,2 |
88,4 |
120,1 |
87,8 |
104,4 |
105 |
104,9 |
|
3. Labour productivity in AIC |
U.S. dollars |
3 000 |
2 800 |
3 800 |
4 200 |
5 000 |
6 000 |
6 500 |
Pay attention to the figures in 2012: the volume index of gross output and gross value added decreased in comparison with the previous year, but productivity increases. Being not too lazy I considered, how will look in monetary terms, the gross output in the planning period. I had the initial data. Thus, in Section 2, “Analysis of current situation and development trends of relevant industries (spheres) of actovity” is the following:
“Gross output of goods (services) of agriculture in 2010 amounted to 1 442.6 billion tenge, which is 11.7% less than last year.” Then the volume of gross output will look like, in billions tenge:
|
|
Reporting 2010 year |
Plan for the current 2011 year |
Planning period |
|||
|
2012 year |
2013 year |
2014 year |
2015 year |
|||
|
The volume of gross agricultural output |
1 442,6 |
1 731,1 |
1 518,2 |
1 585,0 |
1 657,9 |
1 580,5 |
Is this not strange that when the volume of gross output is 1 442.6 billion tenge, the performance is 2800 U.S. dollars and when 1 518.2 billion tenge – 4200 U.S. dollars?
Name of Efficiency: The share of agricultural equipment purchased by the general needs of the country,%
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
0,67 |
0,44 |
0,67 |
0,77 |
0,90 |
0,95 |
0,97 |
0,98 |
1,04 |
1,09 |
1,14 |
1,22 |
I wondered how this figure is defined: taking into account the need for agricultural machinery in monetary terms or in physical terms? If the calculation is in the first option – from the total cost (not interested in how and who has calculated), – then the figure, as it seems to me, says nothing.
The cost of John Deere combine S660 with header and pickup is something like 445 thousand dollars, or 65 922 thousand (the average rate for Q1 2012 – 148.14 tenge / U.S. dollar).
The cost of “Vector” combine is about 4000 thousand rubles, or 19 640 thousand tenge (the average rate for Q1 2012 – 4.91 KZT / 1 Russian ruble). Everything is clear, and how and why John Deere is different from the Vector. The question is not in this, but the fact that for 65 922 tenge it is possible to buy 1 combine, and for the same money you can buy three combines.
Therefore, the presented per cent number of agricultural machinery upgrading tells nothing, due to missing the most important information: to count in monetary terms or in physical units.
Due to the presence of this uncertainty, it is not possible to assess the extent of activities related to upgrading of agricultural machinery.
Name of Efficiency: The share of processing of meat, milk, fruits and vegetables in per cent from their total production in the Republic
|
Name of Efficiency |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
The share of processing of meat, milk, fruits and vegetables in per cent from their total production in the Republic: |
0,27 |
0,28 |
0,43 |
0,55 |
0,76 |
0,96 |
1,12 |
1,32 |
1,49 |
1,65 |
1,8 |
1,88 |
|
meat |
0,12 |
0,12 |
0,13 |
0,19 |
0,33 |
0,46 |
0,6 |
0,77 |
0,92 |
1,08 |
1,23 |
1,31 |
|
milk |
0,15 |
0,15 |
0,3 |
0,35 |
0,39 |
0,43 |
0,43 |
0,43 |
0,43 |
0,43 |
0,43 |
0,43 |
|
Fruits and vegetables |
0,01 |
0,01 |
0,01 |
0,02 |
0,04 |
0,07 |
0,09 |
0,12 |
0,14 |
0,14 |
0,14 |
0,14 |
I could not understand how was calculated the final index. The pyxis opens quite simple. It turns out that the final percentage of processing is the sum of processing per cent of these produced agricultural products. Who calculates in such way? Let’s count. Due to the fact that it is not clear which products are grouped under the title “fruits and vegetables,” I limited myself to the calculation of meat and milk only.
On page 25 of the statistical collected volume “Agriculture, forestry and fisheries in Kazakhstan. 2006-2010” (the summary is available on the Internet resource of the Statistics Agency of the Republic of Kazakhstan www.stat.gov.kz), it is stated that in 2009 and 2010 were produced, in thousand tons:
|
|
2009 |
2010 |
|
Meat (slaughter weight) |
896,3 |
937,4 |
|
milk |
5 303,9 |
5 381,2 |
|
TOTAL |
6 200,2 |
6 318,6 |
Then, in natural units, the amount will be processed, in thousand tons:
|
|
2009 |
2010 |
|
meat |
1,08 |
1,12 |
|
milk |
7,96 |
8,07 |
|
TOTAL |
9,03 |
9,2 |
Hence, the percentage of meat and milk processing of their total production is:
|
2009 |
2010 |
|
0,146% |
0,146% |
However, I believe, even counting in different methods the share of meat, milk, fruits and vegetables, such a general indicator as “Share of meat, milk, fruits and vegetables in % of their total production in the country” in general is misplaced, it is like to determine the average temperature in the hospital. Important and necessary indicators are the proportion of processed meat to the total volume of its production, similar to milk. Concerning fruits and vegetables, it would be useful not to dump everything in one concept “fruits and vegetables”, but to plan processing with more “fine” classification. Carrots and apples are different products, different areas of planting, different crops.
Name of Efficiency: ROA и ROE, %
|
Name of Efficiency: |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
ROA, % |
-2,68 |
1,0 |
1,1 |
1,27 |
1,46 |
1,59 |
1,76 |
1,46 |
1,48 |
1,56 |
1,67 |
1,84 |
|
ROE, % |
-6,31 |
2,84 |
2,72 |
2,82 |
2,9 |
2,81 |
2,92 |
2,29 |
2,23 |
2,23 |
2,31 |
2,48 |
It would seem what interesting is in the return on assets and equity? The Holding works and makes the sly. The question is whether the ROA and ROE match those figures, which are listed in columns “2009” and 2010″?
In the depository of financial statements (https://www.dfo.kz) I have found the consolidated financial statements of the Holding for 2009 and 2010 years. Here is the original data for calculation of ROA and ROE, in thousand tenge:
|
|
2008 |
2009 |
2010 |
|
assets |
268 592 959 |
413 340 289 |
438 284 319 |
|
equity |
149 400 329 |
203 956 919 |
238 782 955 |
|
profit |
|
– 12 029 457 |
4 020 221 |
Algorithm for calculating ROA and ROE is known to everyone, but just in case, I will remind, at least for myself: in the numerator are the earnings for the period, in the denominator – the average value of assets or equity over the period.
We obtain:
|
|
2009 |
2010 |
|
ROA, % |
– 3,53 |
0,94 |
|
ROE, % |
– 6,81 |
1,82 |
It is strange, but the coefficients, calculated on the basis of the same indicators are somewhat different. We recount in another way, in the numerator is still the same income, in the denominator we will put the size of the assets or equity at end of period:
|
|
2009 |
2010 |
|
ROA, % |
– 2,91 |
0,92 |
|
ROE, % |
– 5,90 |
1,68 |
Again, something is wrong.
And yet, how to define the return on assets and equity?
Name of Efficiency: The degree of innovation in the activities of the group of companies of the holding,%
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Х |
Х |
0,6 |
7,1 |
10,4 |
11,6 |
Х |
Х |
Х |
Х |
Х |
Х |
In order to understand the sacred meaning of this parameter, we start with the conceptual apparatus, i.e. we try to understand what is planned to implement during the 2011-2014 period, i.e. with the definition of the word “Innovation”:
subparagraph 7) of article 1 of the Law of the Republic of Kazakhstan “On state support of industrial innovation performance”:
“Innovation is the performance result of physical and (or) legal persons received the practical realization in the form of new or improved facilities, technologies, products and services, organizational solutions of technical, industrial, administrative, commercial nature, and other socially useful result taking into account provision of environmental security in order to increase economic efficiency. “
Earlier, in subparagraph 1) of article 1 of the Law of the Republic of Kazakhstan “On state support of innovation performance” (become inoperative by the Law of the Republic of Kazakhstan dated 09.01.2012 № 534-IV) cited the following definition:
“Innovation is the result of scientific and technological activities, received the realization in the form of new or improved products (works, services) or technology, which has qualitative advantages when used in practice in comparison with analogues and having economic and (or) public benefit.”
We agree there is something strange in it: in the period from 2011 to 2014 some kind of innovation was integrated, and it was done only for 11.6%. In subsequent years, for some reason the capital letter “X” was put. Tired to implement? Gosh, well, they could have brought it to the end and introduced something for 100%. There was no need to leave it. Not even half-way, but almost at the very beginning.
Among other things, I am interested in how to report on the implementation of the Efficiency? You must be a real Expert! That is right, with a capital letter.
Name of Efficiency: The growth of service indicators of the group of companies of holding,%
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
100 |
100 |
101 |
101 |
100 |
101 |
100 |
101 |
100 |
100 |
100 |
101 |
Firstly, it is not clear why at such a large set, of quite different targets, the number of eight tasks, there is only one a key indicator.
Secondly, there are no natural starting rates – the number of current users of the group of companies of the Holding.
Thirdly, the dynamics of interest is extremely passive, if graphically, you get some kind of decaying cardiogram. Or interest is to be understood in such a way that, for example, in 2010 the number of users compared to 2009 increased by 100%? Then – respect and esteem. However, in the absence of the starting number of users, all of these interest rates are about nothing.
Name of Efficiency: The annual increase in the number of references to the activities of the Holding and its subsidiary corporations in the mass media by 5%
|
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
100 |
50 |
5 |
5 |
5 |
5 |
5 |
5 |
5 |
5 |
5 |
5 |
It should be recognized that the rate is fashionable, now only lazy persons do not write or speak about the content analysis. The question is not in this, but about what kind of references it is said. Indeed, the reference may contain criticism, and maybe – eulogy. Or it does not matter what they write, as long as written.
In general, it is funny how the efficiency monitoring will be held?! And the fun lies in the fact that there is no the starting number of references. Who knows how many mentions were in 2009. Maybe such a content analysis appears, but solely for you, for personal use. And everyone else that is enough to provide such cheerful percent of annual growth.
What to write in conclusion? There is no need to write anything. It is enough for those who are clever as they say. And then there are the Strategic plan of the Ministry of Agriculture for 2011-2015, a program for the development of AIC in the Republic of Kazakhstan for 2010-2014, a comprehensive plan of actions to implement the project “Development of export potential of cattle meat” in 2011 – 2015 years.
And if in these documents there is such a thing? And how these documents are correlated with each other.
After studying the development strategy of the Holding I came to the conclusion that before asking about what has been done, it is necessary to ask, what do you want? There is need to look at the figures, to understand what these figures represent, what they characterize.
In short, we should start from the beginning, with the planning.
Reference: 1 dollar = 147.89 tenge.
Abdrakhman Sarmantayev
