World Organization for Development
The World Organization for Development has been endowed with consultative status with the UN ECOSOC since 2014. The World Organization for Development, which has consultative status wich the UN ECOSOC, develops and implements Global Initiatives to achieve the UN Sustainable Development Goals.

Kazakhstan: The New Economy of the CIS Countries




Kazakhstan: The New Economy of the CIS Countries



The Fifth Astana Economic Forum was held from May 22nd to May 24th in the capital of Kazakhstan. Heads of major multinational companies, government officials, heads of finance ministries and agencies of the CIS countries and the world, representatives from the world of science, business, international experts, Nobel Prize winners and many others attended the forum. President Nursultan Nazaryayev even made an appearance at the opening ceremony. The forum’s topic for 2012 was “Global Economic Transformation: Challenges and Prospects in the 21st Century”.

Participants discussed the global economic problems and prospects of development of the CIS countries, with particular emphasis on Kazakhstan, in the modern world. The Analytical Information Service of the World Organization of Creditors (WOC) conducted a study to compare the economic performance of the CIS bloc member states and other blocks of countries. They also compared the various economic indicators of Kazakhstan with those of the other CIS countries and the largest global economies, including China, Brazil, India, Germany, Japan, the UK, and the USA.

“The numbers studied indicate that the CIS bloc of countries is one of the most attractive among country blocs in terms of investments,” said Robert Abdullin, President of the WOC. “At the same time, Kazakhstan has an advantageous position when it comes to competing for said investments, with both the other CIS countries and other major developed and developing countries.”

World Economy Today
The state of the world economy is gradually stabilizing, and despite the fact that there is still a high risk of the economy weakening again, the general forecasts for world GDP growth are no long negative. In fact, experts believe that their most recent expectations could be too low when it comes to the present-day economy. Expectations remain cautious, however. According to projections by the IMF, global GDP should grow by 3.5% in 2012, which is just a little bit slower than the growth rate of 2011. It is expected that, in developing countries, the GDP will grow by 1.5% in 2012, but in the Eurozone, due to various factors (such as low business confidence), the main economic indicator is predicted to fall by 0.3%.

In 2013, the economic growth in developing countries is projected to be anywhere from 5.5% to 6%, and it is expected that the negative impact from the financial situation of the Eurozone will be compensated with the regulation of monetary and fiscal policy in these countries. In general, the situation in developing countries and countries with transit economies is relatively stable.

As for the CIS countries, their economies showed significant improvement in the second half of 2011, which were especially supported by the favorable situation on the oil and commodities market, as well as the high volumes of agricultural product production in countries such as Armenia, Belarus, Kazakhstan, and Russia. The high rates of domestic demands for goods and services also played a role in helping the economies.

But the lower economic growth rates in the world and the weaker export figures in Europe, together with the tightening of monetary and fiscal policies in some member countries of the CIS, could signify lower GDP growth in 2012 and 2013, as compared to 2011 in the region, despite the expectations of favorable prices on commodities market.

GDP growth could fall to 4.2% and 4.1% in 2012 and 2013, respectively, in comparison with growth of 4.9% in 2011. However, these figures are higher than the average expected growth rate of GDP in the world.

Even if the Eurozone experiences some favorable developments, the CIS countries, which are the net exporters of oil and gas, are still expected to experience a decrease in economic growth.

Kazakhstan’s economy, however, will be supported by high levels of trade volumes, as well as investments in oil and gas and mining industries. Investments in infrastructure are expected to have a positive impact on the economies of Kazakhstan and Uzbekistan.

Kazakhstan Compared with the CIS countries and the Largest Economies in the World
To get a more accurate glimpse of Kazakhstan’s GDP dynamics compared with other CIS countries, five of the CIS countries with the largest GDP rates were taken into account: Azerbaijan, Belarus, Russia, Ukraine and Uzbekistan.

The growth of Kazakhstan’s economy was very high before the crisis. For example, in 2006, its GDP grew by 10.7%, and by 8.9% in 2007. Even during the crisis, Kazakhstan’s economy did not decline, although its growth dropped by 1.2% in 2009. According to IMF estimates, the GDP of Kazakhstan grew by 7.5% in 2011. Among the countries considered, only Uzbekistan had higher forecasts of GDP growth, but it should be noted that Kazakhstan’s economy is almost 4 times larger than in Uzbekistan.

See also  Cyberbullying a top concern on Safer Internet Day

Kazakhstan’s economy, during the considered period of time, showed a very high growth, not only with respect to the CIS countries, but also when compared with the largest economies in the world.

Kazakhstan’s GDP growth rate is higher than in developed countries, and is inferior only to top leaders in economic growth in the world, such as China and India. According to IMF forecasts, GDP growth in Kazakhstan will be at 6% in 2012 and 2013, while it will be at 6.9% in India and 8.2% in China.

In terms of total public debt to GDP, Kazakhstan is roughly on par with the countries of Russia, Uzbekistan and Azerbaijan, all of which have a lower than average indicator compared to the CIS member countries. It should be noted that the value of this indicator has consistently low since 2002, when the IMF began tracking this index in Kazakhstan. According to forecasts, this indicator will be low in  coming years as well.

When considering the value of total public debt relative to GDP among the major developed and developing countries, it is obvious that Kazakhstan’s public debt, which was equal to 10.9% in 2011, is the lowest number among the countries considered. The chart also shows that in countries which already have high levels of total public debt relative to GDP, such as Japan, the USA, the UK, are expected to have an increasing amount of debt in the coming years, unlike developed countries with low levels of debt, such as Kazakhstan, China, Brazil and India.

With regard to the investments which pour into the economy of Kazakhstan, this indicator is high in comparison with other CIS countries. In 2007, this indicator was 36%, and during the crisis period, it decreased to 27% only to recover later and reach 32%. This indicator value in Kazakhstan is currently inferior only to Belarus.

Kazakhstan: The New Economy of the CIS Countries

China is the leader in terms of ongoing investments in its economy compared to its GDP (48% in 2011). We should pay particular attention to the fact that this indicator has been growing in China since 2000 – back then, the percentage of investments in its economy was 35%, which was already higher than in other countries considered in the chart.

The second country in terms of the volume of investments to GDP is India, where the value of this indicator was 34% in 2011. Kazakhstan is a little behind India – the volume of investments compared to Kazakhstan’s GDP amounted to 32%

Murat Karimsakov, Chairman of the Executive Body of the “Eurasian Economic Club of. Scientists” Association (EECSA): “Kazakhstan is destined for success – it has a lot of prerequisites for attracting investments. One of them is a stable social environment. There are many natural resources, and the country is working actively on the development of human capital. The Nazarbayev Research Institute, along with many other laboratories and experimental design bureaus, has established and adopted a new law regarding science and the public support for innovation. The government is also doing its part, by doing everything possible to create an attractive investment climate. The big advantage in this respect is a single, functioning economic space, which 170 million people all participate in – the market is very large. Its GDP exceeds 65 billion dollars, which allows for a lot of opportunities  concerning the movement of works, goods, services and labor.

The figures shown above indicate that the bloc of CIS countries is one of the most attractive blocs of countries in terms of investments among the considered countries and blocs.

It should be noted that both Kazakhstan and the CIS countries as a whole have advantageous positions when it comes to competing for investment capital among major developed and developing countries.

Many foreign investors have recognized the high investment attractiveness of the country, and are making major investments in the economy of Kazakhstan as a result.

All information provided by the Analytical Information Service of the World Organization of Creditors (WOC)

Comments are closed, but trackbacks and pingbacks are open.