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#Kazakhstan ranks 52nd in Economic Freedom of World index

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forum02Kazakhstan has been ranked 52nd among 159 countries in the Economic Freedom of the World report published 15 September by the Fraser Institute. The report is based on 2014 data, writes Zhazira Dyussembekova.

“The index published in Economic Freedom of the World measures the degree to which the policies and institutions of countries are supportive of economic freedom. The cornerstones of economic freedom are personal choice, voluntary exchange, freedom to enter markets and compete and security of the person and privately owned property,” noted the institute’s website.

The summary index is based on 42 different data points in five areas, such as size of government expenditures, taxes, and enterprises; legal structure and security of property rights; access to sound money; freedom to trade internationally and regulation of credit, labour and business.

According to the report, Kazakhstan has improved three places compared to the previous year, when it ranked 55th. Since 2005, the country has risen from 70th place.

In reviewing each section, Kazakhstan collected high points in areas such as credit market, labour market and business regulations. Judging by this indicator alone, the nation is ranked 22nd among all participating countries. At the same time, the weakest indicator is freedom to trade internationally, where it is only 128th.

“Kazakhstan’s result can be called good as 52th place in the ranking takes into account negative factors of the current crises. It should be noted that the rating and research institutes do not always take into account all the specific factors of a particular economy. At the same time, Astana has reserves to increase the degree of economic freedom of entrepreneurs,” said Alexey Chekryzhov, an analyst at Berlek-Yedinstvo, a geopolitical, public expert organization working in the field of policy analysis and planning, monitoring and research in the Eurasian region.

Kazakhstan pays a lot of attention to business development, as the tools to stimulate entrepreneurial activity are changing and being modernised, he said.

“Earlier subsidies and funding for priority activities were in first place, while today the institutional transformation of state comes to the forefront, designed to increase the attractiveness of entrepreneurship,” he added.

Chekryzhov also noted Kazakhstan will soon be launching an interesting experiment which will also affect legislation regarding entrepreneurship.

“We are talking about plans to create an Astana International Financial Centre (AIFC), the legal and regulatory framework of which will be based on the English legal system. Of course, these rules will only work in the territory of the AIFC. However, the relationship between the two legal systems is very interesting. Perhaps this intersection is the place where new tools for the liberalisation of the economy will be found,” he said.

In its rating Kazakhstan amassed the same number of points as Peru and follows Spain. Neighbouring Kyrgyz Republic is ranked 70th; Tajikistan, 84th; Russia, 102nd and Azerbaijan, 107th.

The highest positions were achieved by Singapore, Hong Kong and New Zealand. Switzerland, Canada, Georgia, Ireland, Mauritius, the United Arab Emirates, Australia and the United Kingdom were among the top 10. The lowest-rated countries were Iran, Algeria, Chad, Guinea, Angola, the Central African Republic, Argentina, the Republic of the Congo, Libya and Venezuela.

The Fraser Institute produces the annual Economic Freedom of the World report in co-operation with the Economic Freedom Network, a group of independent research and educational institutes in nearly 100 countries and territories.

Cyber-espionage

EU countries test their ability to co-operate in the event of cyber attacks

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EU member states, the EU Agency for Cybersecurity (ENISA) and the European Commission have met to test and assess their co-operation capabilities and resilience in the event of a cybersecurity crisis. The exercise, organized by the Netherlands with the support of ENISA, is a key milestone towards the completion of  relevant operating procedures. The latter are developed in the framework of the NIS Co-operation Group, under the leadership of France and Italy, and aim for more coordinated information sharing and incident response among EU cybersecurity authorities.

Furthermore, member states, with the support of ENISA, launched today the Cyber Crisis Liaison Organization Network (CyCLONe) aimed at facilitating cooperation in case of disruptive cyber incidents.

Internal Market Commissioner Thierry Breton said: “The new Cyber Crisis Liaison Organization Network indicates once again an excellent cooperation between the member states and the EU institutions in ensuring that our networks and critical systems are cyber secure. Cybersecurity is a shared responsibility and we should work collectively in preparing and implementing rapid emergency response plans, for example in case of a large-scale cyber incident or crisis.”

ENISA Executive Director Juhan Lepassaar added: "Cyber crises have no borders. The EU Agency for Cybersecurity is committed to support the Union in its response to cyber incidents. It is important that the national cybersecurity agencies come together to coordinate decision-making at all levels. The CyCLONe group addresses this missing link.”

The CyCLONe Network will ensure that information flows more efficiently among different cybersecurity structures in the member states and will allow to better coordinate national response strategies and impact assessments. Moreover, the exercise organized follows up on the Commission's recommendation on a Coordinated Response to Large Scale Cybersecurity Incidents and Crises (Blueprint) that was adopted in 2017.

More information is available in this ENISA press release. More information on the EU cybersecurity strategy can be found in these Q&A and this brochure.

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coronavirus

 Commission approves €32 million Polish aid scheme to compensate airports for damage suffered due to coronavirus outbreak

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The European Commission has approved, under EU State aid rules, a PLN 142 million (approximately €32m) Polish aid scheme to compensate airports for the damage suffered due to the coronavirus outbreak. In order to limit the spread of the coronavirus, on 15 March 2020, Poland banned all international and domestic air passenger services at Polish airports. The flight restrictions were progressively lifted as of 1 June 2020, but certain travel warnings, travel bans and restrictive measures remained in place until the end of June 2020.

This resulted in high operating losses for the operators of Polish airports. Under the scheme, the Polish authorities will be able to compensate airports for the revenue losses suffered during the period between 15 March and 30 June 2020, as a result of the restrictive measures on international and domestic air passenger services implemented by Poland. The support will take the form of direct grants.

The scheme includes a claw-back mechanism, whereby any possible public support in excess of the actual damage received by the beneficiaries will have to be paid back to the Polish State. The risk of the state aid exceeding the damage is therefore excluded. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve state aid measures granted by member states to compensate specific companies or specific sectors (in the form of schemes) for the damage directly caused by restrictive measures taken in exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the  scheme notified by Poland will provide compensation for damage that is directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the compensation does not exceed what is necessary to make good the damage. On this basis, the Commission concluded that the aid is in line with EU state aid rules. More information will be available on the Commission's competition website, in the public case register under the case number SA.58212 once confidentiality issues have been resolved.

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Belgium

Commission approves €2.2 million Belgian aid measures to support Flemish airports in the context of the coronavirus outbreak

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The European Commission has approved €2.2 million Belgian aid measures to support the operators of Flemish airports (Antwerp airport, Ostend airport and Kortrijk airport) in the context of the coronavirus outbreak. The measures were approved under the state aid Temporary Framework. The measures consist in: (i) an aid scheme, under which all Flemish airport operators will receive support in the form of a direct grant; and (ii) support to the operators of Antwerp and Ostend airports in the form of payment deferrals of certain costs and fees (namely annual compensation for the use of statutory staff of the Flemish Region and concession fee for the use of the airport infrastructure due for the year 2020).

The purpose of the aid measures is to help Flemish airport operators mitigating the liquidity shortages that they have been facing due to the coronavirus outbreak. The Commission found the measures to be in line with the conditions set out in the Temporary Framework. In particular, (i) the measures can only be granted until the end of this year; (ii) the direct grants do not exceed €800,000 per company, as provided by the Temporary Framework; and (iii) the payment deferrals will be granted by 31 December 2020, and will be due by no later than 31 December 2021 and involve minimum remuneration, in line with the Temporary Framework.

The Commission therefore concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measures under EU state aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here.

The non-confidential version of the decision will be made available under the case number SA.58299 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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