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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 sectoral competitiveness in Kazakhstan

OECD Development Centre

Following the global economic crisis, Kazakhstan initiated extensive industrial development and innovation programmes with the aim of enhancing overall productivity and decreasing dependence on growth in extractive sectors. Since their initiation in 2010, the country has made some progress in terms of productivity improvements within non-resource sectors and boosting employment in manufacturing and some knowledge- and information-intensive services.This chapter studies trends in Kazakhstan’s competitive stance in different sectors and identifies enabling and constraining factors for competitiveness in the future. Based on past trends, it highlights the risk in Kazakhstan of a slower diversification process if resource sectors were to experience another boom. While recent economic reform efforts have been fruitful for Kazakhstan’s competitive stance and diversification, implementation, co-ordination between policies, and regulatory burdens remain challenges. Moreover, facilitating access to external financing will support investment and private sector development. The government has put in place a strategy and the related institutions to develop a highly qualified workforce with adaptable and more practical skills. The actual implementation of this strategy, and reaching sufficient scope for the various programmes, will be essential. Finally, enhancing innovation capabilities, particularly through augmented leveraging of information and communications technologies (ICTs) and related services, is a fundamental requirement for Kazakhstan’s competitiveness and greening of the economy in the future.

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