Kazakhstan embarked on an OECD Multi-dimensional Country Review (MDCR) in December 2014. The review is implemented as part of the 2015-16 Country Programme signed between Kazakhstan and the OECD. This review aims primarily at supporting public action by the national authorities of Kazakhstan in sustaining inclusive growth and progress in the well-being of its citizens.

MDCRs are an OECD tool aimed at helping countries achieve their development goals and were launched as part of the OECD Strategy on Development, adopted in 2012. MDCRs identify and analyse major constraints to a country’s development and make practical policy recommendations. They reviews take a cross-sector rather than sectoral approach so as to consider the multi-dimensional nature of economic policies and challenges. The MDCRs are implemented in three distinct phases, giving rise to as many volumes. Volume 1 of a country review describes the economy and highlights the main obstacles to development. Volume 2 conducts in-depth analysis of a number of key constraints and makes policy recommendations. Volume 3 proposes concrete application of these recommendations.

This report is the second volume of the MDCR of Kazakhstan. This report focuses on four key issues: i) diversification; ii) financing development; iii) privatisation and the role of the state; and iv) environmental regulation. The focus issues respond to four of the key constraints identified in the diagnostic phase of the review. Volume I identified seven key constraints to development: i) natural-resource dependency; ii) the concentration of economic clout in the hands of the state and a small number of private actors; iii) the fragility and underdevelopment of the financial sector; iv) the insufficient effectiveness of environmental regulation; v) corruption; vi) limited implementation capacity for certain government functions; and vii) a skills system insufficient to equip the labour force adequately for a number of sectors. A number of concurrent OECD Reviews, co-ordinated through the Kazakhstan Country Programme provide further insights on other key policy areas, including public governance, competition law and practice, investment policy, innovation policy, and education policy.

This MDCR is designed to assist Kazakhstan in formulating development strategy and to support the policy reforms needed to achieve further sustainable and inclusive development. This report comes at a time where Kazakhstan faces stronger headwinds in external conditions for development than it has for over a decade. In response, Kazakhstan is accelerating structural reform processes to transit towards a more sustainable and resilient development model. While the recommendations are intended to support policy action by Kazakhstan’s national authorities, the findings are also relevant for academics, the private sector and civil society.