16 November8th Portoroz Business Conference Kazakhstan: The Emerging “Tiger” Economy of Central...

16 November 8th Portoroz Business Conference

Kazakhstan:The Emerging “Tiger”

Economy of Central Asia

R.W. Robertson, Ph.D.Director Graduate School of Business

Saint Leo University


Agenda

Kazakhstan: Context

Economy of Kazakhstan – Current Status

National Economic Strategy for Kazakhstan

Issues for Resolution

Summary


Kazakhstan - Center of The Silk Highway


Kazakhstan: Fast Facts (2005)

Area: 2.7 million square hectares Population: 15 million Density: 6 people per hectare GDP: 124 billion USD GDP (per capita p p p): $8,149 USD GDP Growth: 10 % Currency: Tenge


Population of Kazakhstan

14

14.5

15

15.5

16

16.5

17

1985 1990 1995 2000 2005

Year

Po

pu

lati

on

(in

mil

lio

ns)


Year 1999 2000 2001 2002 2003 2004 2005

Population 14.9 14.9 14.9 14.9 14.9 14.9 15.1

Unemployment 13.5% 12.8% 10.4% 9.3% 8.8% 8.4% 8.0%

Gross National Income 1290 1270 1350 1520 1780 2090 2250(per Capita)

Real GDP Growth (%) 2.7 9.81 3.5 9.8 9.2 8.1 9.5

Oil Production 0.6 0.8 0.9 1.0 1.1 1.2 1.5(Millions of barrels/day)

Total External Debt 24.8 21.8 17.6 14.3 11.7 8.8 6.2 (Government % GDP)

Selected Economic Performance of Kazakhstan(1999-2005)


-15

-10

-5

0

5

10

15

1 2 3 4 5 6 7 8 9 10 11 12 13

Years 1=1993

Kazakhstan GDP CIS (Mean)

Kazakhstan in Transition (1993-2005) % GDP Change Kazakhstan and all other Transition Countries


Major Exports

15.80%

3.20% 2.40%

74%

Mineral Products MetalsChemicals Food Products


Major Imports

43.80%

11.50%

13.40%

14.70%

Machinery/Equipment MetalsMineral Products Chemicals


Leading Markets

10.50%

9.60%

15%

19.80%

Switzerland Italy Russia France


Leading Suppliers

7.50%

7.20%6.90%

38%

Russia Germany China US


Kazakhstan: Potential Oil Production 2000-2035(millions of barrels per day)

0

0.5

1

1.5

2

2.5

3

3.5

4

2000 2005 2010 2015 2020 2025 2030 2035

Off-shore

On-shore


28%

13%12%10%

8%

7%7%

12%

Oil and Gas Services Trade and Commerce

Transportation Public Service

Agriculture Manufacturing

Metal Manufacturing Other

Kazakhstan: Structure of Gross Domestic Product (2003)


0

10

20

30

40

50

60

70

80

90

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

East

West

North

Kazakhstan: Structure of Gross Domestic Product (2003)


New Regulatory Environment

Government owned KazMmunaiGaz must be at least half owner in all new oil projects;

New rent tax was introduced on oil exports; and

Progressive tax introduced to ensure windfall from rising prices is split between the producer and the government.


National Economic Strategy

Integrate into the World Economy (WTO Membership/Organization for Security and Co-Operation in Europe Chairmanship,

Modernize and diversify the economy for sustainable economic growth (Cluster Development Initiative),

Develop a modern social framework for all citizens.


• Improve education as knowledge is vital for the new economy,

• Further develop the structure and institutions of democracy,

• Develop a national security strategy to meet the needs of the country and region,

• Implement a balanced and responsible foreign policy.


National Economy Goals

GDP growth of 8.5% in each of the next three years;

By 2008, the GDP will be double the 2000 levels;

GDP per capita will rise by US $5,559 by 2008;

Inflation will be held to the 5-7% range during the three year period; and

The volume of energy resources will increase.


Issues for Resolution

Corruption,

Overheating of the economy,

Democratic advancements,

Education system quality improvements.


Opportunities

Skills Training,

Service Industries,

Tourism,

Borat- “Cultural learning of America for make benefit glorious nation of Kazakhstan.”


Summary

Impressive GDP growth since the Russian crisis of 1998, driving substantial increases in average prosperity.

Increasing dominance of the oil and gas sector with considerable growth potential.

Pressure building from exchange rate appreciation. Overheating of domestic real estate prices. Significant government efforts to overcome challenges

of a resource-driven economy and diversify the economic base.


Thank You!

Спасибо!

16 November8th Portoroz Business Conference Kazakhstan: The Emerging “Tiger” Economy of Central...

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