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KAZAKSTAN


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 29,749 24,205 22,400 60
         
GNI per capita
 US $ 1,780 1,510 1,350 119
Ranking is given out of 208 nations - (data from the World Bank)

Books on Kazakstan

REPUBLICAN REFERENCE

Area (sq.km) 
2,717,300 

Population
15,143,704

Principal 
ethnic groups 
Kazaks 44.3%
Russians 35.8%
Ukrainians 5.1%
Germans 3.6%
and many others

Capital 
Astana
(formerly Akmola)

Currency
Tenge

President 
Nursultan Nazarbayev



  

Update No: 292 - (26/04/05)

Economic prowess after the downfall of the rouble
The economy of Kazakhstan, the gigantic Central Asian oil-producing republic five times the size of France, is surging ahead. Last year it posted stunning Asian Tiger-style growth of 13.2%, according to recent government figures, up from an already impressive 9% growth in 2000. It has recorded 10% annual growth or thereabouts for five years past.
That comes largely thanks to continued strong global demand in recent years for oil and metals, the nation's main exports. 
Kazakhstan has also benefited from the devaluation of the tenge, the national currency, in 1999, after the downfall of the rouble the previous year in 1998. That gave domestic industry a much-needed competitive boost, as hard currency export revenues remained strong while domestic operating costs in tenge more than halved. 

Fiscal Prudence 
As oil exports have ballooned in recent years, Kazakhstan's trade surplus has quadrupled to over US$4bn since 1998 and tax revenues have soared. 
The government has been quick to take advantage of the windfall and has won widespread praise for curbing the budget deficit and balancing the nation's books by the end of 2001. 
The International Monetary Fund (IMF) in particular has been impressed with the government's determination to clean up the country's shaky finances. "Although a favourable external environment, including high oil prices, contributed to such a positive outcome, the prudent stance of macro economic policies adopted by the authorities played an important role," says a recently released IMF report on Kazakhstan. "Kazakhstan is in a much better position now to confront a downturn in the external environment," the report continues. 

Oil country 
Much of Kazakhstan's good fortune, a rare island of economic and inter-ethnic stability in the fractious central Asian region, stems from the nation's enormous energy reserves. But it has made little headway in stimulating growth in new industries, and small and medium sized business accounts for just a small fraction of the economy. 
Despite the economic growth, fears of worsening political repression and widespread corruption are also tarnishing Kazakhstan's image as the region's star performer. In the last couple of months a series of prominent opposition and independent media figures have been arrested and an independent TV station TAN was forced off air when an unidentified sniper shot the channels feeder cable. 

Corruption allegations 
The increasing role in public affairs played by relatives of the President of Kazakhstan Nursultan Nazerbayev has raised eyebrows and led to claims of clan style favouritism in business. 
One analyst in Almaty, who asked not to be named for fear it would damage his relations with government officials, says he has been dismayed in recent months by the turn that political events have taken this year. "The family circle is so corrupt that Kazakhstan is turning into a central Asian version of Indonesia's Suharto regime." 
Perhaps most worryingly, in March Prime Minister Imangali Tasmagambetov made the stunning public admission that more than US$1bn was transferred offshore in 1996 to accounts in President Nazerbayev's name. 
Top government officials have explained that the diverted money was being reserved for troubled financial days and that the devaluation of the tenge in 1999 would have wiped millions off the value of the fund anyway had it remained in Kazakhstan. 
But with no further concrete details forthcoming over the nature of the funds and exactly how and when they were to be used, many say the explanation is unconvincing. Heading up any or all of the former Soviet Central Asian republics has proved to be very rewarding for the former General Secretaries of the local communist parties. Kazakstan, along with three of the other four is still run by the same man who was the communist political boss at the time of their unexpected independence. This happened without any request at any level for independence, or even a shot being fired. When Yeltsin decided to abolish the Soviet Union in 1991, an unexpected outcome was that these former local bosses would become independent potentates in their own right. 
After 14 years of complete dominance they are contiguous with the old-time Khans that were removed by imperial Russia in their conquests of the 18th and 19th centuries, even to the extent of dynastic marriages with the families of other former communist Presidents. As the President ages and his children grow up, what could be more natural than that they should enter, with a view eventually to taking over, the family business. 
Thus on the question of wealth, what is that of the state and what of the ruling family, is answered by the famous Louis XIV dictum, "L'Etat c'est moi."

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AVIATION & SPACE

Astana and Moscow propose new space complex project

Russia and Kazakstan have been discussing a project to launch minor satellites into space from aboard MiG-jet fighters, Interfax News Agency reported.
Kazak Prime Minister, Danial Akhmetov, met chief designer of the Moscow Institute of Thermal Engineering, Yury Solomonov on March 23rd to discuss the problem of creating a space aviation missile complex Ishim, the press service of the Kazak government said.
Akhmetov has instructed state agencies to study the option of forming a national aviation-space complex for launching small civilian spacecraft to low earth orbit, according to the news agency. He instructed the Kazakstan Aviation and Space Committee and its Information and Communications Agency to form a working group for comprehensive assessment of the Ishim space missile project and its practical realisation.
For his part, Solomonov declared that Moscow Thermal Engineering Institute can design and build a new rocket provided with solid fuel-powered engine that guarantees rockets' safety and absence of toxic components. The Ishim complex will use Russian-built MiG-31 supersonic interceptor fighters to lift small rockets with satellites to the required altitude, the press service said.
The rockets will be fired from the fighters and propel small satellites weighing up to 360 pounds into orbit, the press service said. The Ishim complex is intended for launching minor space apparatuses into space for civilian purposes. Experts believe the market will be perspective and allocations worth around 1.5bn Euro might be made until the year 2020 to finance the project.
Commenting on the project, an expert said that the jet fighter MiG-31 gains the necessary altitude with a small rocket and satellites on board, then the rocket is separated from the jet and takes into the orbit a space apparatus with the weight of no more than 160 kilograms by means of its own engine.

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ENERGY

BG Group sells Kashagan stake to Kazakstan

Selling its share (16.67%) in Northern-Caspian oil project BG Group is planning to get about US$1.8bn from the deal before taxation. According to the company's reporter at its web-site, the sum will include compensation for BG Group's expenditures under the Northern Caspian PSA that it incurred since inaction (January 1st 2003) until termination of the agreement, New Europe reported.
BG Group also reports that it is planning to finalise the deal to sell its share to partners in the consortium having pre-emptive rights - Eni, ExxonMobil, Royal Dutch Shell, Total, ConocoPhillips - on April 6th 2005. As it was already reported on March 30th, Kazakstan and Agip KCO developing Kashagan oil field have completed negotiations and inked the agreement, thus, Kazakstan has purchased one half of BG share in the Northern-Caspian project, while the second half of the share was equally split among members of the consortium. Thus, as was officially announced by the negotiating parties, BG has sold its share in Kashagan project directly to Agip KCO members, while the latter assigned one half of BG share to Kazakstan. As a result of this deal shares in the project are distributed among members the following way: ENI (operator of Northern-Caspian project), Total, ExxonMobil and Shell have 18.52% each, ConocoPhillips - 9.26%, Impex and KazMunaiGaz - 8.33% each.

Construction starts on key Kazakstan-China oil pipe

China National Petroleum Corp (CNPC), China's biggest oil producer recently announced that construction had started on the 240km Chinese section of the Kazakstan-China oil pipeline in Jinghe country, Xinjiang Uygur autonomous region, Interfax News Agency reported.
The Xinjiang section will form part of a 3,000km pipeline from the oil-rich Caspian shelf to China, which will carry oil across eastern Kazakstan into China's Xinjiang autonomous region, where it will be refined or sent directly to China's booming east.
According to oil analysts, the pipeline will benefit both countries. China can get a stable and secure crude oil supply while Kazakstan, the world's third largest oil producer will have a reliable oil market.
Construction on the Kazakstan section of the oil pipeline began in September and will be completed in 2005. The country plans to raise its annual crude production to 100m tonnes by 2010. The cost of the pipeline expected to be worth US$3bn, began construction last year. It will link Atasu in Kazakstan to Dushanzi and is China's first major land oil import route. A CNPC staff member said the cross-border oil pipeline, with 2,800km in Kazakstan and 240km in China is expected to be completed on December 16th 2005. It will be able to carry 20m tonnes of oil per year. Three Chinese factories are responsible for supplying the pipe. Chinese made pipes have been shipped to Kazakstan since last winter. China's imports of Kazak oil now travel hundreds of kilometres by rail to Xinjiang.

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INFORMATION TECHNOLOGY

Kazakstan becomes new IT hotspot for India

The main aim of Kazakstan is to be the hotspot of information technology (IT) for India, New Europe reported recently.
It is embarking on a big drive to become the IT services doorway to the huge Russian market which is comprised of the former Soviet republics. Some officials from Kazakstan were scheduled to visit India in April. The main aim of the trip will be to attract Indian IT firms and professionals to join hands in a 33m Euro IT Park plan.
Prasad Bhamre, advisor to Kazakstan's Ministry of Economy and Budget Planning, was quoted as saying; "Kazakstan is a ideal springboard for Indian firms for the Russian-speaking market. In immediate terms, there is nearly one billion Euro waiting to be tapped by way of incentives and subsidised loans." Bhamre added, "The incipient trend of the economy will be oil and gas. All oil deals have local content requirements. Setting up shop here will make Indian firms local and allow then to grab big IT product development services and maintenance business from global oil majors." It is expected that Kazakstan will make their presentation at Hyderabad and Bangalore.

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