Kazakhstan: 2050 modernization strategy

By Colin Stevens.

This month (January 2014), Kazakhstan's leadership declared its most ambitious strategic plan up to the middle of the 21st century, intending Kazakhstan to join the 30 most-developed world economies. Similar long-term strategies are followed by the county’s neighbours – China, Malaysia and Turkey.

"Forthcoming decades will bring many well-known challenges, as well as numerous unexpected situations, new crises in global markets and world politics," said President Nursultan A. Nazarbayev (pictured), addressing the nation on 17January: "There will be no 'easy ride' in the 21st century."

Although the concept of a ‘developed country’ is under continuous modification, there are certain indicators to define this category - the Organisation for Economic Cooperation and Development (OECD) represents the basis. They are 34 economies producing more than 60% of global GDP. Brazil, China, India, Indonesia, Russia and South Africa are on the doorstep of joining, manifesting high investment rates, research and innovation achievements, high productivity and considerable share of small and medium enterprises, all resulting in high living standards.

Kazakhstan is looking forward to apply the OECD standards, persuing its own economic long-terms plans to reach 4% GDP growth, developing knowledge-based economy to raise non-oil exports up to two thirds. Within this framework, the accents are placed on acceleration of industrial and innovative methods in traditional mining sectors, engaging knowledge-based production using the latest scientific achievements in electronic, technologies, telecommunications and equipment.

Next to the traditional mining sector, the reform is awaiting agriculture to shift from large-scale to medium and small enterprises, providing financing resources to entrepreneurs directly, without intermediaries - farmers will receive more protection in a system of guarantees and insurances. With its vast steppa, ideal for cattle grassing, Kazakhstan has a natural richness to become a leading meat- and dairy-products exporter in the region.

Its knowledge/science-based economy is pillar of success however, to accelerate its modernization, the country needs to use the full potential of foreign direct investment (FDA).

"In co-operation with the foreign companies we need to set up design and engineering centres," Nazarbayev continued, inviting transnational companies operating in major oil, gas and mining facilities to establish profitable production in Kazakhstan, offering governmental support in providing favorable conditions for foreign businesses to produce equipment in Kazakhstan,  instead of importing.

The spin-off production sites of large international companies have been welcomed to Nazarbayev University in Astana and ‘Alatau’ Information Technology Park in Almaty.

Inviting the West to co-operate, Kasakhstanies are not overlooking the advantages of their geographical location in finalizing the construction of the Western Europe-Western China corridor. Railways to Turkmenistan and Iran reaching the Persian Gulf are already in place, but infrastructures reaching the sea remain a challenge for the Central Asian state.

The giant Zhezkazghan-Shalkar-Beineu railway project will reach out to the Caspian from the west and the Pacific from the east.

The openness of the country translates not only into the infrastructures, but also in education, encouraging high-school graduates towards trilinguism, Kazakh, Russian and English, to ensure the country's integration into the global community.

And no less attention is being paid to the development of the judiciary, as the government is conscious of the necessity of creating the highest-standard legal system, guaranteeing entrepreneurs an efficient mechanism for dispute resolution within the context of the rule of law.

The first stage of the realization of the 2050 strategy is planned to be achieved by 2030: "This is feasible. South Korea and Singapore followed this path," said Nazarbayev. "Kazakhstanies will not miss this ‘window of opportunity’ in the XXI century."

Colin Stevens

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