Kazakhstan has made substantial progress
in its economic transition, and faces a potentially bright
future thanks to its oil wealth. The challenge is to
increase the... Show More +
country's competitiveness, and expand the
benefits of growth, while avoiding the economic and social
risks typically associated with oil wealth. The overarching
theme of the report is how to exploit the strengths of the
Kazakhstan economy in the new oil environment, while
avoiding the pitfalls that oil income typically brings. The
report provides benchmarks for key aspects of
competitiveness in Kazakhstan vis a vis Ukraine, Russia, and
the eight most recent members of the EU rather than with
other rich countries. This is for two reasons: 1)
Kazakhstan's strategic objectives are to level with the
European Union (EU) over the long run in terms of living and
production standards, and levels of productivity and income;
and, 2) although oil and gas already represents a large
portion of exports, it does not mean the direct impact of
oil in Kazakhstan is as large as in, say, Saudi Arabia or
Venezuela. The policy agenda needs to formulate detailed
policies and public investments. In this regard,
interventions in six broad areas must be developed and
prioritized. The six areas discussed entail economic policy,
human capital development, infrastructure development,
institutional framework, sectoral policies, and, research
and development and innovation. Among the recommendations it
is suggested that permanent gains in competitiveness will
only be made if the county better pursues a strengthened
human capital base. Moreover, competitiveness may be
increased in the short and medium term if the economic cost
of linking suppliers and consumers within global markets is
reduced, and prudent macroeconomic policies are in place. Show Less -
