The situation in the world economy remains disturbing, and the countries which manage to maintain not bad rates of economic growth spark interest. First of all, these are BRIKS countries, but comparing to Ukraine they have different conditions of development, including economy volumes and priorities.
However, there are also countries which are similar in conditions, potential and common factors of influence - former USSR republics, including Kazakhstan. In 2011, despite the continuation of the global crisis, the country reached 7.5% GDP growth with real GDP amount of $167 billion. What is the secret of such figures? Ukrainian economy is also undergoing modernization, and many things we must do for the first time, thus it is even more interesting to learn 'what they do'.
Not without the state
Indeed, both our and foreign experts admit that the economic development owes its success to the effective model of economic modernization in Kazakhstan. Director of the Center for Civil Society Studies Vitaly Kulik notes: having obtained independence, Kazakhstan, as many other post-soviet republics, was copying the experience of the Russian Federation, focusing on liberalization of economy, attracting foreign investors and accelerated privatization of industrial enterprises.
"However, in mid 1990ies Astana revised its social and economic model of development and focused on synchronization of the economic model with political one. As a result, it created typical Central Asian type of economic policy - first economic stabilization and growth of industry, then expansion of competitive environment and political liberalization. Thus, the share of the state in the economy started to grow from the end of 90ies. In particular, the government took up development of transport infrastructure: aviation, railway, oil and gas pipelines. The state share in all local departments of the biggest foreign corporations is 20-25%. Preparing and developing new deposits the governments takes bigger share than it used to," Kulik says.
The main parameters of the modernizing reforms were formed by President Nursultan Nazarbayev in the state development program "Kazakhstan-2030". The strategy focuses on seven priority goals: national security; political stability and consolidation of society; economic growth; health, education and prosperity of citizens; energy resources; development of infrastructure, including transport and communication; professional government. As you can see, this strategy has a lot in common with the reformation program of President of Ukraine Viktor Yanukovych, Kulik adds.
One of the priorities is economic growing based on open market economy with high level of foreign investments and domestic savings. Though the program focuses on foreign investments, "Kazakhstan-2030" makes the government a moderator of economic process and strengthens its positions in management. In 2010 the state became one of the leaders on economic reforms among 183 countries. According to the rating of countries, favorable for entrepreneurship, Doing Business-2011, Kazakhstan came up from 74th to 59th position (to compare; Ukraine held 145th position, Russia - 123th and Belarus - 68th).
Effective modernization
Apart from "Kazakhstan-2030", the government adopted the Strategy of development of transportation complex till 2015, Strategy of territorial development, Concept of creation of regional financial center in Almaty, Concept of steady development of Kazakhstan, Concept of formation of social and business corporations, and others. The basic document on modernization of economy on the basis of innovations was approved in 2003 as the Strategy of industrial and innovation development for 2003-2015.
The main goals of the Strategy are as follows:
- assistance in formation of hi-tech industries, including effective system of technology transfer, both domestic and foreign;
- creation of modern elements of scientific and innovative infrastructure - technology parks, national scientific centers, scientific and technological zones, etc.
Ukrainian Cabinet also insists on necessity of innovative development of economy, political scientists Roman Syrinski says and adds that such policy seems logical against the background of international experience.
Following the presidential decree on measures of modernization of economy of Kazakhstan, the government formed a number of financial institutions through which it transfers budget investments. Kulik notes that such measures and institutions are similar to the elements of Ukrainian program of economic reforms.
Moreover, Kazakhstan carried out twice the tax amnesty (in 2001 and 2006). In general, changes in the tax sphere have reduced pressure on business: VAT is 15% (in Russia - 18%), social tax - 13% (in Russia - 26% and to be increased to 34%). "In 2008 Nazarbayev personally banned auditors to control small and middle business enterprises till the yearend. The pension reform started in Kazakhstan back in 1998," Syrinski reports. The reforms being carried out in Ukraine now are vrey similar.
Summing up, analysts report that the economic model of the country has survived the crises of 1998 and 200. Thus, GDP annual growth rate in 1999-2008 reached 10%, matching the Chinese figures. According to Syrinski, the consequences of the world crisis were serious, but tolerable. Even in 2009 the country kept GDP at the same level.
Almost like here
There is no surprise that the country keeps attracting foreign investors. And the matter does not concern only primary resources. Kazakh specialists assure that the success lies in the country's attempts to escape resource dependence. Though 65% of all investments still go to primary resources sector, the gap between investments into primary and non-energy sectors has reduced twofold for the last 4 years. If earlier 'non-energy' investors did not want to come due to law market capacity (population of Kazakhstan is only 16 million), now the problem has been partially eliminated thanks to the creation of the Customs Union and Single Economic Area with Russia and Belarus, forming common market capacity of 170 million people and total GDP of $2 trillion, Kulik specifies.
According to Doing Business ratings, Kazakstan holds stronger positions than other members of the Customs Union, thus it should not be afraid the partners may draw away a part of investments. The rate of investments per capita in Kazakhstan is two times more than in Korea and Turkey and1.6 times more than in Russia.
For further investments, Astana reduces administrative barriers and simplifies procedures, improves effectiveness of legal and tax services. The government continues taking active part in the modernization. Thus, it has created a fund "Kazyna" to coordinate all institutions engaged into development of innovation projects of international significance. Measures on diversification of economy also include 'cluster initiative', which is called to improve competitiveness of local production on domestic and foreign markets. Don't forget about primary resources. The country holds the sixth place in the world on the amount of natural reserves. Mineral resources base of Kazakhstan includes 5004 minefields, costing about $46 trillion.
Among other important resources, there is the geographical location. Main transcontinental routes, connecting Asian-Pacific Region with Middle East and Europe go through Kazakhstan. The state is constructing now the transportation corridor "Western Europe - Western China" and expects minimum 50 million tons of cargo traffic through it by 2020. This route is shorter than the sea route through Suez Canal. The government constructs necessary infrastructure and creates touristic cluster.
Speaking about tourism, the country has numerous unique natural reserves and national parks, more than 100 heath recovery areas, more than 9000 archeological and historical sites. "No resources will be of use if there is no peace in the country. I am glad that our biggest achievement is political stability," Syrinski says. Drawing a parallel between Ukraine and Kazakhstan on this issue is more than appropriate. The rate of investments into human capital assets is about 9% of GDP, which is a lot by CIS standards. Economic stabilization has reduced the migration turnover. Internal migrations are still active, but no longer spontaneous. "Educated and tolerant population is a guarantee of stability. If we ever have a revolution, it will happen in the sphere of science and technologies," the political scientist notes.
A part of similar reforms are now being carried out by Ukrainian Cabinet, another part, including export insurance, funds on science support, is the task for the near future. We should also pay attention to such not insignificant factors as transportation and transit potential, diversification and intensification of economy. These are all urgent and pressing issues, thus the experience of the country, close in spirit to Ukraine, will be of use.
Andriy Boyarunets
However, there are also countries which are similar in conditions, potential and common factors of influence - former USSR republics, including Kazakhstan. In 2011, despite the continuation of the global crisis, the country reached 7.5% GDP growth with real GDP amount of $167 billion. What is the secret of such figures? Ukrainian economy is also undergoing modernization, and many things we must do for the first time, thus it is even more interesting to learn 'what they do'.
Not without the state
Indeed, both our and foreign experts admit that the economic development owes its success to the effective model of economic modernization in Kazakhstan. Director of the Center for Civil Society Studies Vitaly Kulik notes: having obtained independence, Kazakhstan, as many other post-soviet republics, was copying the experience of the Russian Federation, focusing on liberalization of economy, attracting foreign investors and accelerated privatization of industrial enterprises.
"However, in mid 1990ies Astana revised its social and economic model of development and focused on synchronization of the economic model with political one. As a result, it created typical Central Asian type of economic policy - first economic stabilization and growth of industry, then expansion of competitive environment and political liberalization. Thus, the share of the state in the economy started to grow from the end of 90ies. In particular, the government took up development of transport infrastructure: aviation, railway, oil and gas pipelines. The state share in all local departments of the biggest foreign corporations is 20-25%. Preparing and developing new deposits the governments takes bigger share than it used to," Kulik says.
The main parameters of the modernizing reforms were formed by President Nursultan Nazarbayev in the state development program "Kazakhstan-2030". The strategy focuses on seven priority goals: national security; political stability and consolidation of society; economic growth; health, education and prosperity of citizens; energy resources; development of infrastructure, including transport and communication; professional government. As you can see, this strategy has a lot in common with the reformation program of President of Ukraine Viktor Yanukovych, Kulik adds.
One of the priorities is economic growing based on open market economy with high level of foreign investments and domestic savings. Though the program focuses on foreign investments, "Kazakhstan-2030" makes the government a moderator of economic process and strengthens its positions in management. In 2010 the state became one of the leaders on economic reforms among 183 countries. According to the rating of countries, favorable for entrepreneurship, Doing Business-2011, Kazakhstan came up from 74th to 59th position (to compare; Ukraine held 145th position, Russia - 123th and Belarus - 68th).
Effective modernization
Apart from "Kazakhstan-2030", the government adopted the Strategy of development of transportation complex till 2015, Strategy of territorial development, Concept of creation of regional financial center in Almaty, Concept of steady development of Kazakhstan, Concept of formation of social and business corporations, and others. The basic document on modernization of economy on the basis of innovations was approved in 2003 as the Strategy of industrial and innovation development for 2003-2015.
The main goals of the Strategy are as follows:
- assistance in formation of hi-tech industries, including effective system of technology transfer, both domestic and foreign;
- creation of modern elements of scientific and innovative infrastructure - technology parks, national scientific centers, scientific and technological zones, etc.
Ukrainian Cabinet also insists on necessity of innovative development of economy, political scientists Roman Syrinski says and adds that such policy seems logical against the background of international experience.
Following the presidential decree on measures of modernization of economy of Kazakhstan, the government formed a number of financial institutions through which it transfers budget investments. Kulik notes that such measures and institutions are similar to the elements of Ukrainian program of economic reforms.
Moreover, Kazakhstan carried out twice the tax amnesty (in 2001 and 2006). In general, changes in the tax sphere have reduced pressure on business: VAT is 15% (in Russia - 18%), social tax - 13% (in Russia - 26% and to be increased to 34%). "In 2008 Nazarbayev personally banned auditors to control small and middle business enterprises till the yearend. The pension reform started in Kazakhstan back in 1998," Syrinski reports. The reforms being carried out in Ukraine now are vrey similar.
Summing up, analysts report that the economic model of the country has survived the crises of 1998 and 200. Thus, GDP annual growth rate in 1999-2008 reached 10%, matching the Chinese figures. According to Syrinski, the consequences of the world crisis were serious, but tolerable. Even in 2009 the country kept GDP at the same level.
Almost like here
There is no surprise that the country keeps attracting foreign investors. And the matter does not concern only primary resources. Kazakh specialists assure that the success lies in the country's attempts to escape resource dependence. Though 65% of all investments still go to primary resources sector, the gap between investments into primary and non-energy sectors has reduced twofold for the last 4 years. If earlier 'non-energy' investors did not want to come due to law market capacity (population of Kazakhstan is only 16 million), now the problem has been partially eliminated thanks to the creation of the Customs Union and Single Economic Area with Russia and Belarus, forming common market capacity of 170 million people and total GDP of $2 trillion, Kulik specifies.
According to Doing Business ratings, Kazakstan holds stronger positions than other members of the Customs Union, thus it should not be afraid the partners may draw away a part of investments. The rate of investments per capita in Kazakhstan is two times more than in Korea and Turkey and1.6 times more than in Russia.
For further investments, Astana reduces administrative barriers and simplifies procedures, improves effectiveness of legal and tax services. The government continues taking active part in the modernization. Thus, it has created a fund "Kazyna" to coordinate all institutions engaged into development of innovation projects of international significance. Measures on diversification of economy also include 'cluster initiative', which is called to improve competitiveness of local production on domestic and foreign markets. Don't forget about primary resources. The country holds the sixth place in the world on the amount of natural reserves. Mineral resources base of Kazakhstan includes 5004 minefields, costing about $46 trillion.
Among other important resources, there is the geographical location. Main transcontinental routes, connecting Asian-Pacific Region with Middle East and Europe go through Kazakhstan. The state is constructing now the transportation corridor "Western Europe - Western China" and expects minimum 50 million tons of cargo traffic through it by 2020. This route is shorter than the sea route through Suez Canal. The government constructs necessary infrastructure and creates touristic cluster.
Speaking about tourism, the country has numerous unique natural reserves and national parks, more than 100 heath recovery areas, more than 9000 archeological and historical sites. "No resources will be of use if there is no peace in the country. I am glad that our biggest achievement is political stability," Syrinski says. Drawing a parallel between Ukraine and Kazakhstan on this issue is more than appropriate. The rate of investments into human capital assets is about 9% of GDP, which is a lot by CIS standards. Economic stabilization has reduced the migration turnover. Internal migrations are still active, but no longer spontaneous. "Educated and tolerant population is a guarantee of stability. If we ever have a revolution, it will happen in the sphere of science and technologies," the political scientist notes.
A part of similar reforms are now being carried out by Ukrainian Cabinet, another part, including export insurance, funds on science support, is the task for the near future. We should also pay attention to such not insignificant factors as transportation and transit potential, diversification and intensification of economy. These are all urgent and pressing issues, thus the experience of the country, close in spirit to Ukraine, will be of use.
Andriy Boyarunets
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