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KAZAKSTAN


 

 

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)

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Update No: 334 - (27/10/08)

Is the Kazak boom over?
The Kazakh economy has been doing spectacularly well in this decade from rising oil prices since 1999. Its growth rates of GDP have been in the order of magnitude of 10% per annum for a decade.

With the price of oil plunging from $147 per barrel at a high point in July to a half that, $73 per barrel in mid-October, oil revenues are naturally shrinking. Does this portend the end of the boom?

The answer is probably not, but that a slowdown in the expansion can be expected - not necessarily a bad thing either. 

The perils of hyper-activity
Hectic growth can bring its pitfalls, notably grandiose projects and a culture of excess and of corruption, notable in Kazakhstan's case earlier in the decade. 

The switch of the capital to Astana in mid-Kazakhstan from Alma-Ata in the extreme south-east of the country under the Altai mountain range had a logic behind it in unifying the vast country and anyway was decided upon before the boom began in the 1990s. But it has been accompanied by frenzied building projects in Astana that have siphoned off much of the oil wealth from the rest of the country, where most of the people live. 

The hyper-boom generated infinite opportunities for corruption, which temptations the regime's cronies and hangers-on were not disposed to withstand. Their motto could well be Oscar Wilde's: "I can resist anything but temptation." 

They are not likely to have to pay his penal penalty for it.
Indeed, crony capitalism becomes soon enough liberal kleptocracy.

In opposition - abroad!
Actually, a qualification is called for here. One has to remain a crony of the top figures in the regime, particularly the president, or things can get sticky. Open criticism is not tolerated. 

This is something that has been realised by the former intelligence chief of the country, Alnur Mussayev, now living in Vienna. But even there he is not safe. Armed men attempted to abduct him and his interpreter on a Viennese street in mid-September. The Austrian authorities discreetly referred to 'a foreign country' as responsible; it is not difficult to guess which one.

Mr. Mussayev fled Kazakhstan last year along with his onetime deputy, Rakhat Aliyev, who is also the former son-in-law of Kazakhstan President Nazarbayev. Both Mr. Mussayev and Mr. Aliyev have publicly accused the Kazakh government of widespread corruption and of the receipt of payment of millions of dollars in bribes by Western oil companies to Mr. Nazarbayev.

The release of this information is not hard to credit, but is embarrassing not just the regime, but all those in the West doing business there.

The IMF lowers forecasts
The global credit crisis has squeezed Kazakhstan's financial system since last year, causing economic activity to slow and forcing the government to introduce a $6 billion buyout fund to prop up the sector. 

Tim Callen, head of the IMF mission to Kazakhstan, has revealed that the IMF had cut its growth forecast for Kazakhstan for 2008 to 4.5 percent from 5.0 percent, and to 5.3 percent from 6.0 percent for 2009. 'What's likely to happen is that the recovery previously expected in the middle of next year will be pushed towards the end of the year,' he said. 'All in all, we anticipate certainly not an easy year coming up but medium term prospects are still fundamentally very good .' 

The government has slashed its own 2008 forecast to 5.3 percent, after years of averaging 10 percent growth due to booming oil and commodity prices.

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