Central Asia: Kazakhstan

by Yelena Jetpyspayeva, Dmitry Kozlov

Giessen University, May, 2009

Agenda

• Kazakhstan: Overview (video)• Analyzing Kazakhstan Future by Western Expert

(video)• Politics and media• Economics and business

Kazakhstan: General Info

Kazakhstan: Borders

Kazakhstan: Political system

• Presidential republic• Nursultan Nazarbayev, president since 1991• Multi-party system, but in fact only 1 pro-

president party “Nur Otan”• Strong presidential power• Weak opposition, mostly government

controlled mass media• “Country specific” excuse

Kazakhstan: Int. Organizations

• Member of UN, NATO, OSCE, CIS, SCO, OIC etc.

• Eurasian Economic Community in 2000 together with Russia, Belarus, Kyrgyzstan and Tajikistan

• 2010 – OSCE chairmanship

Kazakhstan: Power FocusPOWER FOCUS (internal\external) • Main players: EU, US, Russia, China

• External players present: Asia – Iran, Turkey, India, etc.CIS – Ukraine

• Dimensions: military; economic; geostrategic; security

• Foreign Policy: multi-dimensional approach

Kazakhstan: Media Situation

www.freedomhouse.org 168 place Kazakhstan, 158 place Kyrgyzstan

Comment: Kazakhstan“Meanwhile, the most popular Russian-language blog platform Livejournal is still blocked in Kazakhstan since October last year. Recently, the opposition websites started suffereing from massive DDoS attacks campaign. One of such victims is the website of independent weekly “Respublika”, which often criticizes the prime-minister.

The government does not care much about OSCE - and the West does not care much about Kazakh democracy in the times of global crisis. Such coincidence allows Astana to do whatever it wants due to its “country specific”, so the Kazakhstan’s chairmanship will be later perceived as a bad dream by the member states - while Kazakhstan will remain the same Kazakhstan, as its people are used to know it. ”

Adil A. Nurmakov, Ph.D.

Country Editor for Kazakhstanwww.neweurasia.net

Regional Editor for Central Asiawww.GlobalVoicesOnline.Org

“During the blogging panel, Plakhina got up and demanded to know why six of her friends had been arrested for demonstrating against the proposals.The moderator, Vladimir Rerikh, a Kazakh journalist, clearly wanted the issue, and Plakhina, to go away. But Danny Schechter, a well-known American progressive journalist, spoke up on Plakhina's behalf, and she was able to continue pressing her case. Nazarbayeva could be seen talking on her cell phone, leaving the hall and returning several times”, -

writes Dan Kennedy.

http://www.guardian.co.uk/commentisfree/cifamerica/2009/may/05/kazakhstan-blogging-freedom-of-speech

• Major Industries of Kazakhstan Economy • Key factors of Economy Development

• Strategy of the Economy Development

• Main trends of the Economy Development

• Present Economic Situation

KAZAKHSTAN ECONOMY

MAJOR INDUSTRIES: Chemical Processing, Copper Smelting, Forging and Pressing Machines, Instruments, Iron and Steel, Mineral Processing, Mining, Oil Refining, Rolling Equipment, Sugar Refining, Textiles.

MAIN EXPORTS: Chemicals, Chemical Products, Clothing, Fertilizers, Iron Ore, Machinery, Minerals, Petroleum, Steel, Textiles.

Extraction and processing of NATURAL RESOURCES:• Fossils• Minerals• Metalsplay significant role in Economy Development

“OIL” ISSUE

Proven hydrocarbon reserves of Kazakhstan are estimated around 40 billion

barrels

Oil production in 2008: 1,54 million barrels/day

Expecting oil production in 2009: 1,71 million barrels/day

1,71 million * 40 USD = 68 400 000 USD/day

Kazakhstan produces 1,54 million barrels/day

It is planned to produce in 2015 approximately 3 million barrels/day to inter in the

TOP 10 OIL PRODUCERS of the World

Kazakhstan´s part of Caspian Sea - largest recoverable crude oil reserves in the region

Kazakhstan oil exports are the foundation of the country’s economy and have ensured that average real GDP growth has stayed above 9 percent recent years. Oil export in Kazakhstan comprises:approximately 24% of the GDPapproximately 65% of the overall export

Oil &Gas export:

Northward

Westward

Southward

Eastward

Kazakhstan is a first state among CIS that obtained an investment rating from 2 International Rating Agencies:

huge foreign investments to oil&gas and mineral extraction sectorsSince 1993 more then 40 billions of USD were invested

September 2002 – “Moods Investors Service” INVESTMENT LEVEL

May 2004 – “Standards and Poor´s” SECOND RATING OF THE INVESTMENT CLASS

May 2009 – „Standard & Poor's“ STABLE INVESTMENT RATING

“COAL” ISSUE

• Largest recoverable coal reserves of Central Asia are in Kazakhstan.

• 2-d LARGEST coal producer in the former Soviet Union, after Russia.

“POWER PRODUCTION” ISSUE

Overall installed generating capacity 17 GIGA watts

80% coal-fired 12% Hydro Electric Power Stations

71 Power Plants

…including 5 Hydro- Electric Power Stations

Wind Energy

Kazakhstan possesses enormous potential of wind energy

The solar energy resource potential is quite great for the vast territory of the largest Central Asian Republic

NUMBER OF SUNNY DAYS/YEAR

2200 - 3000

ENERGY OF SOLLAR RADIATION

1300-1800 kW/m2/year

NUCLEAR POWER

U3O8

Kazakhstan possesses of 2-d largest URANIUM reserves in the World 1,5 million tons

It is planned to provide by 2010 year 15 000 tons of Uranium/year.

end of June 2009 -- Kazakhstan-India nuclear fuel agreement 2,500 tons of uranium to the New Delhi

Agriculture

• Agriculture compose approximately 10,3 % of GDP • Kazakhstan is 7-th largest producer of the grain in the world

Livestock production: dairy production, leather, meat, woolAgricultural crops: wheat, barely, cotton, rise

Agricultural area: 846 021 sq.km, among which:

205 000 sq.km. are dedicated for PLANTING611 000 for PASTURES

…total area of GERMANY equals 357,021 km2

“BAYKONUR” is world´s oldest and largest operational space launch facility

Developed SPACE infrastructure

Approximately 16 launching are performed annually

1 Launching costs 35 000 000 USD

Majority of Kazakhstan Export are: Fossils, Minerals and Metals

Kazakhstan dependence on oil & gas as well as on mineral resources

THUS, There is an urgent necessity to develop final-product industries in Kazakhstan."Kazakhstan – 2030" – industrial and innovative development strategy.Development of the industries:

Auto and tractors production, non-Ferrous metallurgy, long-term use commodities production, synthetic materials, organic chemistry,

production and processing of the oil.Electronics Manufacturing Industry, computers, computing technique,

software, telecommunications, robot-production.Bio-technologies, space technologies, fine chemistry

Economy development goes along with the CLUSTER DEVELOPMENT APPROACH

CLUSTER – economy sector/industry that will be competitive and effective within a given geographic, economic and environmental surrounding of particular region of Kazakhstan

MetallurgyTransport logistic (World bank investment project 2009, US$ 2.125 billion loan for the Kazakhstan South-West Roads Project to help upgrade the trade route linking China to Russia and Western Europe)Textile industryProduction materialsFood productionOil and gas machineryTourism

ECONOMY DEVELOPMENT STAGES:1. ED is determined by basic factors like natural resources2. ED depends on efficiency, industrialized society 3. ED is based on Innovations and HiTech, i.e. post-industrial society

Kazakhstan presently is on the way from 1-st stage to 2-d stage

Economy Development Trends

Present Economic Situation

Problems in a Banking SectorSharp declines in oil and other export pricesWidening current account deficitNational Currency 20 percent devaluation in early February 2009Recession of the Economy

Government Anti-Crisis Measures supported by National Fund 1. Financial Sector stabilization (4 bilion USD)2. Real estate market stabilization (4 bilion USD) 3. Small and Medium Enterprises support (1 bilion USD) 4. Agro Industry support (1 bilion USD) 5. Innovativ, Industrial and infrastructure projects (1 bilion USD)

Рахмет! Спасибо!

Vielen Dank! Thankx!