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Kazakhstan’s economy has to tell a great success story

Tuesday December 18, 2012 09:28:44 PM, IINA

Astana: Kazakhstan is a fast growing economic power in Central Asia. A country, with a rich history and tradition, also abounds in immense natural resources. The vibrant leadership of President Nursultan Nazarbayev has enabled the former Soviet republic to make giant strides in all spheres of life, especially in the economic sector.


After successfully withstanding the severe economic crisis, which is an aftermath of the Soviet disintegration, in early 90s, the country is now witnessing robust economic growth and optimum utilization of its untapped natural resources.


With a GDP per capita over $7000, Kazakhstan is not only a leader in the Central Asian region, it is also regarded as the leading country with the most favorable business climate in the Central Asia Region, Kazakh government sources told the International Islamic News Agency (IINA).

The modern history of independent Kazakhstan began in 1991, within a few months after the collapse of the Soviet Union that remained in power for about 70 years.


The first challenge that the former Soviet republics had to tackle with was a severe economic crisis. All these republics had to cope with themselves problems of the erstwhile Soviet economy that had remained unresolved for decades.


Independent Kazakhstan has chosen a path that can be described as "progressive development without conflicts and upheavals -from economic development to political development."


The soundness of this path is well manifested in the economic success of the present-day Kazakhstan, and this success is widely recognized by the world.

With a GDP per capita over $7000, Kazakhstan is not only a leader in the Central Asian region, but also occupies equal economic position with other post-Soviet and post-socialist countries, which are currently members of the European Union and G8.


Keeping in mind a well-known thesis that the main wealth of a state is its people, it is possible to conclude that today Kazakhstan has managed to reverse the negative effects of the 1990s, when the country’s population was rapidly decreasing, both because of negative growth rate and migration.


Since the beginning of 2000s, the birth rate in Kazakhstan exceeded the mortality rate, and the population began to rise slowly, reaching 16,149,000 as on July 1, 2010.


Certainly, it is not so much for the ninth-largest territory of the world, but nevertheless, a positive trend is evident. It is also to note that the flow of migrants to the country augmented. A


mong migrants are not only ethnic Kazakhs, but also residents of neighboring states, who seek to obtain citizenship of Kazakhstan. There are also those, who earlier moved for permanent residence from Kazakhstan to other countries (Russia, Germany, Israel, etc.), and now come back.

About a quarter of the population are those under 15. Young people are the determining factor, when it comes to creativity and innovation, as the youth stimulates a society to develop.


While developing human capital, Kazakh authorities are paying special attention to education. Ever since the Soviet era, the literacy rate of Kazakhstan has remained almost 100%, whereas through the years of independence the number of higher education schools in the country dramatically increased and that resulted in a huge surge in the number of students and holders of higher degrees.


In an early stage, the most prestigious professions were that of economists and lawyers, but currently a large number of school graduates prefer engineering, technical and teaching degrees.

Kazakhstan also abounds in natural resources, whose extraction and export have become "engines" of Kazakhstan's economy and led her on a path of sustainable growth.


To date, Kazakhstan has positioned itself as one of the largest and promising exporters of most important goods in the global market - oil, metals and grain.


The sale of raw materials has served as "safety cushion" for the Kazakh economy at the most uneasy times, and thus enabling the government to meet its social obligations and implementing its development programs.


This was the case during the hard days of 1990-s, as well as during the last global financial crisis, when many of the leading countries were forced to reduce their social expenses drastically, but the government of Kazakhstan found reserves even to index all social payments (pensions, public sector wages, various benefits, etc.).

Natural resources have served as a starting capital for economic growth. But now there is a need for structural changes in the national economy, which would allow to use the gains from vast natural resources for developing the state-owned high-tech industries as well as in reducing import of consumer goods, primarily of agricultural and food industry.


In this regard, the Kazakh government takes a series of measures, aimed at ensuring industrial and innovative development of the country, the latest of which is the state program of forced industrial-innovative development of Kazakhstan for 2010 - 2014 years.

Among other former Soviet countries, Kazakhstan is regarded as the country to have the most favorable business climate. It is well appreciated by foreign investors.


Kazakhstan is a leader in the CIS in terms of the volume of foreign investment. According to the Ministry of Industry and Trade, Kazakhstan's economy attracted $113 billion during the period from 1993 to March 31, 2010.


The main investor-countries were the Netherlands, USA, UK, Virgin Islands, France and Italy. The top ten investors’ list also included Russia, South Korea, Canada and China.

Recently, there is a growing interest to invest into the Kazakh economy from the Middle East and Far East countries, which were not among leaders in investing in Kazakhstan before the last global economic crisis.


Wishing to diversify the structure of their overseas investments, many rich Arab countries as well as China, Japan, South Korea and other countries, which previously preferred to invest in Europe and the USA, turned into the Kazakh market. Foreign investments in Kazakhstan are secured by the national “Law on foreign investments”.





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