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Multi-dimensional Review of Kazakhstan

Volume 1. Initial Assessment

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Kazakhstan’s economy and society have undergone deep transformations since the country declared independence in 1991. Kazakhstan’s growth performance since 2000 has been impressive, averaging almost 8% per annum in real terms and leading to job creation and progress in the well-being of its citizens. Extractive industries play an important role in the dynamism of the economy, but sources of growth beyond natural resource sectors remain underexploited. In the social arena, dimensions of well-being beyond incomes and jobs have not kept pace with economic growth.

Kazakhstan has set itself the goal of becoming one of the 30 most developed countries in the world by 2050. To sustain rapid, inclusive and sustainable growth and social progress, Kazakhstan will need to overcome a number of significant challenges. Natural-resource dependency, the concentration of economic clout and a fragile and underdeveloped financial sector limit diversification and economic dynamism. Widespread corruption still affects multiple state functions, undermines the business environment, meritocracy and entrepreneurial spirit. More generally, the state has limited capacity to fulfil some of its functions, which affects the delivery of public services like health and education, as well as the protection of the environment and the generation of skills.

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Enhancing governance and institutions for sustaining inclusive growth and well-being

OECD Development Centre

This chapter uses the framework of the OECD series “Government at a Glance” (OECD, 2013, 2015a), incorporating interaction with institutions, to assess the key governance constraints which shape policy effectiveness in delivering the desired public service outcomes to sustain inclusive growth and well-being.Kazakhstan has adopted a culture of continuous improvement to enhance its governance and institutions. Reforms are continuing to professionalise and modernise public service administration. It has strengthened the transparency and accountability of the national budget and of revenues from extractive industries. At the same time, it has stepped up its anti-corruption drive and rolled out open-government initiatives to improve policy transparency and accountability.Control of corruption remains a key cross-cutting governance challenge, transcending the scope of action of anti-corruption authorities. Corruption can hold back private sector development and economic diversification as well as the delivery of public services. Public procurement, which forms a sizeable share of government expenditure, is viewed as particularly corrupt. The delivery capacity of public administration remains low. This is exacerbated by weak government capacity and co-ordination across government agencies, which underscore the need to professionalise the civil service and instil a culture of meritocracy to harness talent and enhance integrity. In conjunction, institutional reforms must be pursued to enhance the rule of law, regulatory quality, and the openness and inclusivity of policy making.

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