Economy


Kazakhstan is important to world energy markets because it has significant oil and natural gas reserves. Within the next decade Kazakhstan would become one of the world's largest oil producers and exporters. But Kazakhstan’s strategic aspiration is to become a modern, diversified economy with a high value added and high-tech component, well integrated into the global economy. Energy sector is viewed as a good basis to achieve this goal.

Kazakhstan is a growing economic power with a strong resource base. The country has three percent of the world’s raw materials and a natural resource base of over $300,000 per capita, which is among the highest in the world - twice the level of Russia and higher than Australia. Oil plays a big role in Kazakhstan. With nearly 40 billion barrels in reserves and two percent of global production, the country has the world’s ninth largest proven reserves and is among the 20 largest oil producers. It has four percent of the global iron reserves, eight percent of the world’s zinc reserves and four percent of the world’s chrome reserves.

Two decades ago, emerging from the break-up of the Soviet Union, the economy of Kazakhstan was half the size it is today. Isolated from the world economy, it faced the immense challenge of economic
transformation. Over the past decade, the country has made impressive policy strides, absorbed large
resource-based earnings responsibly, progressed towards developing a strengthened public management and business climate, and allocated resources for diversification of economy to sustain growth.

Kazakhstan has grown rapidly since 2000. GDP growth averaged 10 percent and average real income more than doubled. GDP per capita rose from $5,982 in 2000 to $11,245 in 2011 and poverty incidence fell from 46.7 percent to 6.5 percent over the same period - especially remarkable since many experts doubted Kazakhstan could even survive 20 years ago. It is in the final stage of negotiations to enter the World Trade Organization and aims to become one of the top 50 most competitive economies in the world. It has a proven history as an attractive location for foreign direct investment (FDI), generating more than $150 billion this way since 1993.

Kazakhstan weathered the global financial crisis well, thanks to a dexterous response combining fiscal
relaxation with bank stabilization measures. In 2009, the government announced large-scale support measures, such as the recapitalization of banks and support of the real-estate and agriculture sectors, as well as SMEs. The total value of the stimulus programs represented 14 percent of the country’s GDP ($20 billion). As a result of the global economic crisis, GDP slowed to 1.2 percent in 2009, but according to the results of 2010 and 2011, the growth rate has increased to 7.3 and 7.5 percent.

Kazakhstan has made good use of its rich natural resources, such as oil, gas and uranium. In the early 1990s, President Nazarbayev had the foresight to create a fund, based on the Norwegian model, which preserved oil and gas revenues for our children and grandchildren. This so-called “fund for future generations” has now accumulated over $47 billion and is the cornerstone of managing and preserving the country’s oil wealth.

Kazakhstan is active in integration processes on a regional level as well as on a global one, proven by the current Customs Union with the Russian Federation and Belarus. The Customs Union, with a market capacity of about 170 million people, provides additional possibilities for investors and new horizons for effective realization of investment projects in Kazakhstan. The country’s competitive advantage is its more favorable business environment in comparison with the other countries in the Customs Union. According to the World Bank Doing Business 2012 report, the Russian Federation and Belarus
rank 120th and 69th respectively, while Kazakhstan is in 47th place. Kazakhstan has also achieved significant results in the Human Development Index (HDI), ranking 68th among 187 countries, according to the United Nations 2011 Human Development Report.

In order to ensure the further development of a competitive economy and industrial modernization,
Kazakhstan adopted a five-year State Program for accelerated industrial innovative development and an
industrialization map. During the past two years, the country has built approximately 400 new factories. Sixty new enterprises are up and running at full capacity, and have already produced goods worth $2 billion.

New information technology projects - like the Alatau IT Park – are growing. Ambitious education
initiatives make the latest generation of Kazakhs among the most highly skilled in the world. Every year, 3,000 young Kazakhs are sponsored by the government to study at the world’s most prestigious education institutions, before returning home.