| GENERAL INFORMATION ABOUT KAZAKHSTAN: Kazakhstan is the 9th largest country in the world situated between right in the heart of Eurasia. The country benefits from a strategically advantageous location, which is particularly important considering the expected economic boom in the Asian region. Kazakhstan has the advantageous geo-political position between West and East and the value of this position will tend to grow due to the anticipated economic boom in Asia. Location – central part of Eurasia, to the south of the Urals. It shares borders with Russia, China, Kyrgyzstan, Uzbekistan, and Turkmenistan, and has access to the Caspian Sea. The country’s total area is 2,717,300 square kilometres, and the population is 15 million. The capital of the Republic of Kazakhstan is Astana. Kazakhstan is the 5th largest producer of oil and gas in the world and by 2006 Kazakhstan will be one of the largest producers of oil. Potential oil reserves are estimated at 13 billion tones. Kazakhstan is recognized as one of the richest countries in mineral reserves with the total of recoverable mineral reserves being worthy nearly USD 9 trillion. Kazakhstan was the first former Soviet republic to gain the status of a country with a market-based economy: by the European Union in the end of 2000, and by the United States in March 2002. Inflation for 2002 was 5.9%; it is planned to bring an annual inflation down to a stable level of approximately 3% over the next three years. The population of Kazakhstan is about 15 million, 1.5 million of whom live in Almaty. Kazakhstan’s gold and foreign currency reserves have reached US $ 7.421 billion, where the National Fund’s share was US $ 2,675,600. Today it exceeds the country’s foreign debts, so Kazakhstan has become a net creditor. Kazakhstan was the first CIS country to undertake measures, such as the pension reform, the bank deposit insurance system, the advanced repayment of foreign liabilities, state compensation for bank depositors and pension funds, exchange market losses ensuing from the national currency devaluation, and refusal from obligatory sales of currency exchange earnings to exporters. Almaty, the southern capital of the Republic of Kazakhstan, is the centre of the international business. It is the place where the country’s banking system and new technologies are best developed. Each year the number of new offices and representative offices increases which is the evidence of stability and continuous development of the market. Kazakhstan is the first among the CIS countries for the level of an average monthly salary. Over the past year alone, people’s incomes in cash grew by 20% Kazakhstan is characterised by the stable internal political environment and interethnic tolerance (over 115 nationalities) ECONOMIC FACTS OF KAZAKHSTAN BY THE END OF 2003: The GDP growth in 1999 was about 2%, whereas it was 9.6% in 2000, and 13% in 2001. In 2002, the GDP growth was 9.5%. The amount of the gross domestic product, according to estimate data, was 3,270.2 billion tenge for the nine months of 2003, or 109.1% as compared with the same period in 2002. In the area of aggregate activities, output in the mining industry increased by 7.7%, in the processing industry, by 8.5%, in manufacturing and electrical power, gas and water distribution, by 7.2%. During January through October of this year, the amount of the gross agricultural product has increased by 3.1%. The amount of investments in the fixed capital in January through October of this year has increased by 10.8% as compared with the respective period in 2002. During January through September 2003, the foreign trade turnover was US $ 15.2 billion. The growth, as compared with January through September 2002, was 31%, with an increased export (by 38%) and import (by 20%). Loan investments by the second-tier banks in economic sectors reached 879.4 billion tenge as of 1 October 2003. Most shares of the total loan amount are concentrated in industry – 29%, commerce – 28.3%, agriculture – 11.5%, and construction – 8.1%. The share of the second-tier banks’ loans to small businesses is 22.9% of the total amount of loan investments as of 1 October 2003, or 201.7 billion tenge. During the ten months, revenues to the state budget (excluding revenues to the National Fund) equalled 826.5 billion tenge, while only 803.1 billion tenge had been planned. In 2000-2002, the average rate of the real GDP growth in Kazakhstan exceeded 10 per cent, which nearly made the country the world’s first one. The ten-year forecast promises an approximate 7 per cent growth, which may create one of those rare breakthroughs to the new development level – those we have not witnessed after the Southeast Asia’s “tigers”. During the independence, the real sector of economy has basically completed the formation of the market-based competitive environment. The production pattern has been adapted to the world’s conditions of management and division of labour. A diversified industrial production structure and a high scientific potential have been formed. The fuel and energy, mining, and transportation complexes are well-developed. There are production facilities available which are not in use. Certain sectors have reached a high level of concentration of production and management, which can be a basis for establishing national corporations, competitive in the world economy. At the same time, the private sector is actively developing, providing over 75% of production. There are 348,000 small business entities in the country. Of more than 100,000 registered private enterprises, about 1,700 are large-scale production. Kazakhstan’s financial system is the best in the CIS countries. As of 1 August 2003, 35 banks were functioning in the country, including 2 run by the government, and 16 with foreign shares (including affiliates of non-resident banks). In July, the total home equity of the RK banking system grew by 3.7% and reached US $ 1.3 billion, whereas total assets reached 1,382.9 billion tenge, or US $ 9.4 billion (a fivefold increase during the last four years). The amount of people’s bank deposits reached US $ 2 billion. The structure of deposits is now witnessing a fast growth of the tenge deposits which make up 33.8%. In the first half of 2003, the positive balance in Kazakhstan’s foreign trade has grown more than threefold and reached US $ 2,405,000. Kazakhstan’s gold and foreign currency reserves have reached US $ 7.421 billion, where the National Fund’s share was US $ 2,675,600. Today it exceeds the country’s foreign debts, so Kazakhstan has become a net creditor. Kazakhstan was the first CIS country to undertake measures, such as the pension reform, the bank deposit insurance system, the advanced repayment of foreign liabilities, state compensation for bank depositors and pension funds, exchange market losses ensuing from the national currency devaluation, and refusal from obligatory sales of currency exchange earnings to exporters. A favourable investment environment has been provided in Kazakhstan. A system of privileges and preferences was set up for foreign investors, in terms of exemption from the income tax, the land tax, and the property tax and customs privileges. Guarantees of covering political and regulatory risks were also provided. By 2003, the number of functioning enterprises with a foreign share had reached 5,300, which is another proof to the fact that Kazakhstan has an attractive investment environment. To compare, the number of such enterprises in Russia is 1,042, in Kyrgyzstan – 99, and in Ukraine – 74. During the years of independence, a total of about US $ 21 billion have been invested in the economy of Kazakhstan. Regarding the per-capita indicators of direct foreign investments during the ten years, Kazakhstan is far ahead of other CIS countries. A special National Fund has been established in Kazakhstan, to accumulate part of revenues yielded from the oil sector for future generations. Besides, the Fund functions as a strategic reserve of the state budget in case of force majeure events. A special Development Bank has been established, to give mid- and long-term loans for strategic priorities in the country’s development. Transfer of the national capital to Astana has boosted the country’s economic development. Apart from political aspects, a significant multiple effect was achieved almost in all branches of the real sector. Many enterprises resumed working although it had seemed impossible to rehabilitate them. New productions and jobs are being created. As of today, Kazakhstan is one of recognised leaders in implementing reforms in the CIS. Kazakhstan was the first former Soviet republic to gain the status of a country with a market-based economy: by the European Union in the end of 2000, and by the United States in March 2002. |
| Did you know? Kazakhstan is recognized as one of the richest countries in mineral reserves with the total of recoverable mineral reserves being worth USD 9 trillion. |
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