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Multi-dimensional Review of Kazakhstan

Volume 2. In-depth Analysis and Recommendations

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Kazakhstan has embarked upon an ambitious reform agenda to realise its aspiration of becoming one of the top 30 global economies by 2050. The country’s economy and society have undergone deep transformations since independence. To sustain economic progress, overcome recent difficulties, and drive improvements in well-being to realise its aspirations, Kazakhstan will need to address a number of challenges to ensure its economy becomes more productive and diverse, and is sufficiently flexible and resilient in the face of an ever-shifting external environment. This next stage of economic transformation will require continuing reforms. This report discusses policy actions to address four key obstacles to development in Kazakhstan, identified in Volume 1 of this review. It presents in-depth analysis and recommendations to improve the economy’s resilience through diversification, to mobilise financing for development, to transform the role of the state in the economy, including through privatisation, and to improve the effectiveness of environmental regulations.

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Towards better environmental regulations in Kazakhstan

OECD Development Centre

Kazakhstan’s impressive economic expansion since the late 1990s relied on high rates of energy use and generated significant pollution. These rates are not sustainable, putting at risk the country’s development ambitions, while new international agreements add urgency to the need to reduce greenhouse gas emissions. This chapter shows how the current structure of Kazakhstan’s system of environmental regulation, permitting and assessment impedes energy efficiency and pollution control. The emphasis on reforming the application of environmental permit fees and penalties as a means of raising revenue rather than on creating incentives to reduce efficiently environmental impact, adds to the cost of investing and doing businesses in Kazakhstan with limited environmental benefit. Better regulation also means designing policies and laws so that they achieve their objectives at minimum cost. These recommended reforms mostly involve bringing the policy into line with the benchmark OECD approach. Kazakhstan’s emissions trading scheme presents a model of how the country can adopt effective mechanisms of environmental regulation to place the economy on a more sustainable development path, but it will be essential that this and other mechanisms are well implemented.

English

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