Economy of Kazakhstan

Development of the national economy of Kazakhstan in the 1990s showed that its current state has not reached the pre-reform level. The dynamics of the main macroeconomic parameters accepted in international practice as reference indicators characterizing any national economy (GDP, GDP per capita, physical volume of GDP) was not always positive. Moreover, in 1991-95 it distinguished itself by a regressive character (88.6%; 94.5%; 91.1%; 88.7% and 93.7% compared with previous years). The stabilization achieved by 1997 was replaced by a new wave of crisis phenomena, which were an echo of the global (and Russian) crisis. Only since 2000 did the state of basic macroeconomic indicators become steadily positive, which led to the growth of the physical volume of GDP in 2002 by 9.5% (compared to 2001).

This is the highest figure in a decade (in millions of US dollars): 1993 – 11,426.4; 1998 – 22,139.8; 1999 – 16,854.4; 2000 – 18,292; 2001 – 22,153; 2002 – 24,447.4. GDP per capita in 2002 was $1,645.8, which again was a record achievement for a decade, during which this indicator grew steadily from 1993 ($697) to 1998 ($1,468), then decreased in 1999-2000 (up to 1129.1 and 1229 dollars respectively), and in 2001 rose again to 1491.4 dollars per person.

According to cheeroutdoor, GDP per capita, calculated at the purchasing power parity of the national currency (tenge), in 2002 amounted to 7560.1 dollars. Its lowest level was recorded in 1995 – 4508.0 dollars, which is 1248 dollars lower than in 1991.
The leading place in the sectoral structure of the national GDP in 2002 was occupied by the republican industry – 33.2%, then (in descending order) followed: transport and communications – 18.4%; trade – 13.6; agriculture (including forestry) and fish farming – 9.0 and construction – 6.9%.

The main sectors of the national industry are mining, non-ferrous and ferrous metallurgy, mechanical engineering, oil refining and petrochemistry, and the production of building materials.

Industrial production in 2002 increased (compared to 2001) by 9.8% and reached 2292 billion tenge. The increase in industrial production in the country was due to the predominant growth in production in the mining industry (by 14.7%) and in the manufacturing industry (by 7.7%). In the mining industry, the largest increase in production was observed in the extraction of iron ore concentrates (1.6 times and 2.5 million tons); non-agglomerated iron ore (1.3 times and 4.3 million tons); iron ore pellets (1.2 times and 7.3 million tons); crude oil (by 16% and 42 million tons). In the manufacturing industry, the growth in the production of food products (drinks, flour, sugar) was most noticeable. In the oil refining industry, the production of petroleum products increased by 9.5% (kerosene – 2.2 times). In metallurgy, the production of pipes of large and small diameters increased (by 1.2 times), in mechanical engineering – the production of plows and harrows (3 times); electricity meters (by 2.7 times), trucks (by 2.6 times).

The composition of the areas of industrial specialization included (in % of the gross volume of industrial production): Atyrau (21.3); Karaganda (13.8); Mangystau (12.0); Pavlodar (6.8). At the same time, the positive dynamics of indicators of Kazakhstani industry, observed in recent years (2000-02), did not reverse the crisis trends observed after 1991: the index of the physical volume of industrial production in 2001-02 was (compared to 1990) 66.0 and 71, 4%, the number of industrial enterprises and industries continued to decline (to 13,343 in 2001); only 20% of industrial enterprises functioned profitably.

The development of the national agrarian sector of the economy in the past five years was characterized mainly by depressive and regressive tendencies. The growth curve of gross agricultural output was uneven and unstable.

Following the fall of 0.8 points observed in 1997 (compared to 1996), in 1998 there was an even greater decline – by 18.9 points. In 1999 there was a sharp jump of 28%, then again a fall – by 4.2%, then (in 2001) an increase of 16.9% and, finally, in 2002 – an increase of 2.7%. In 2002, gross agricultural output increased and amounted to 555.5 billion tenge (3.62 billion US dollars), incl. crop production – 324.8 billion tenge, livestock – 230.7 billion tenge. The main results of the activities of the agricultural sector in 2002 were expressed in the following indicators (in parentheses – for comparison, 1992): in crop production – the total sown area of 17,756.3 thousand km2 (34,839.9 km2); yield (c/ha) – wheat 10.9 (13.2), potatoes 139.3 (104), vegetables 108.7 (114); in animal husbandry – livestock (thousand heads): cattle 4528.4 (9576.3), incl.

The production of the main types of agricultural products in 2002 amounted to (thousand tons): meat (in slaughter weight) 672 (1257.5); milk 4068.2 (5265); grain 15,959.9 (29,771.7); raw cotton 360.7 (252.3); sunflower 189.8 (98.4); potatoes 2268.8 (2569.7); vegetables 1857.0 (985.1); wool 23.8 (96.4); egg (million pcs.) 2102.1 (3564.7). The composition of the regions that retain agricultural specialization included (in % of the gross national volume of agricultural production): Kostanay (14.1); Almaty (13.5); South Kazakhstan (12.2); North Kazakhstan (12.1); Akmola (11.8).

Kazakhstan has a fairly well-developed transport complex, including rail and road transport networks. The dynamics of the main indicators characterizing the activities of the transport complex in the 1990s reflected the deep crisis tendencies that engulfed the national economy. Thus, the volume of passenger traffic by all modes of transport decreased from 3591.7 million people. (1991) to 729.5 million people. by the beginning of 2002, incl. in railway transport: from 40.0 to 21.8 million people; on the bus – from 3191.7 to 548.2; on the river – from 49.8 to 7.9; on air – from 299.3 to 150.9; on a taxi — from 3.1 to 0.03; on the city electric – from 7.9 to 0.9 and on the passenger car – from 3591.7 to 729.5.
A similar trend can be traced in the dynamics of cargo transportation and freight turnover, the volume of which by the beginning of 2002 reached 709.7 million tons for all modes of transport (in 1991 – 2513.5 million tons). 135.6 million tons were transported by rail (in 1991 – 328.2); automobile 382.1 (2153.6); river 0.5 (11.2); air 0.0 (0.1); pipeline 143.3 million tons (20.4).

The most important role in the transport communication of Kazakhstan belongs to the roads. In 2002, 78.8% of cargo and 85.7% of passengers were transported through them. The length of public roads in 2002 was 88,388 km, of which 82,980 km, or 93.9%, were paved. According to their significance, roads are divided into republican and local, the length of republican roads is 26.1% of their total length, and local roads – 73.1%, respectively. There are 5 categories of roads in Kazakhstan: I category (the most comfortable) – 775 km (0.9%); II category – 4533 km (5.5% of the road fund); III – 32,549 (39.2%); IV – 41,960 (50.6%) and V category 3163 km (3.6%). The development of the public communications sector in 1991-2002 was characterized by two opposite trends: provided by this industry, and the rapid growth in the volume of services provided by cellular communications, the Internet and e-mail. So, by means of communication it was sent (at the beginning of 2002 compared with 1991): newspapers and magazines (million) – 81.9 (in 1991 – 1531); letters 16.0 (309.0); telegrams 1.6 (22.5); parcels (in thousands) 1516 (7408); international telephone calls 362.5 (107.7). In 1997-2002, the number of cell phones increased from 11,240 to 822,500, and Internet subscribers (in 1998-2002) from 885 to 652,712.

The volume of retail trade in 2002 (compared to the previous year) increased by 5.7%. The main increase was achieved through the trade in alcoholic beverages (107%) and non-food products (107%), while the growth in trade in food products was more modest – 103.2%. The volume of retail trade turnover received through the purchase of goods in the food, non-food and mixed markets, as well as the activities of individual entrepreneurs,
put 52.4 billion tenge, or 74% of the total retail trade. The retail turnover of trade enterprises reached 18.3 billion tenge, or 26% of the total volume, and the share of Almaty in the latter reached 38%. This type of retail trade is most developed (in total): in the Karaganda region – 87.5%; in Pavlodar region – 87.2%; in East Kazakhstan – 80.2%; in West Kazakhstan – 79.0; in Aktobe – 75.8; in the Kyzylorda region – 73.9%.

Kazakhstan has good prerequisites for the development of such an important non-manufacturing sector as the service market. In con. In 2002, there were 15,716 enterprises in the country providing services related to real estate, rental of machinery and equipment, computer services and services in the field of research and development, as well as services in the field of other commercial activities, recreation, cultural, sports events. 77.8% of organizations are commercial structures; 30.3% serve the real estate market; 14.4% organize recreation; 5.5% provide computer services and 5.1% of businesses are in research and development.

The total volume of services provided by these enterprises amounted to 80,115 million tenge, which is 52.7% more than in 2001. The largest volume of services – 63.9%, or 5,120.7 million tenge, was performed at the expense of enterprises. The state budget funds amounted to 13.5% of the volume of services, and the population of the republic paid another 8009.7 million tenge of the volume of production in the service sector. The predominant share of services was provided by private enterprises (64.4%). State organizations completed the scope of work for 16,441 million tenge (20.5%), and enterprises owned by foreign states, legal entities and citizens provided 15.1% of the total volume of the service sector.

There were 807 enterprises in the country that carried out tourism activities in 2002 and served 171.4 thousand tourists (in 2001 this figure was 154.5 thousand people, and in 2000 – 146.9). The main income item of the tourism business in 2002 was outbound tourism (66.3% of all industry revenues), domestic tourism brought 21.7% of income to the general treasury, and inbound tourism – the remaining 12%. The largest income was received by the enterprises of Almaty and Astana, as well as East Kazakhstan, Karaganda, Mangystau, Almaty, Aktobe and Zhambyl regions.

The bulk of tourists arrived in the republic from Germany – 29.4%; from the USA – 5.1%; from China – 5.8%; from the Russian Federation – 3.2%; from Israel – 2.9%; from Iran – 1.4% and from France 1.7%.

In 2002, 195 hotels functioned on the territory of the country, of which 85.6% are private, 8.2% are owned by the state and 6.2% are owned by other states and legal entities. Their one-time capacity was 19,179 beds, and the number of rooms was 9,838. Profit from the operation of hotel complexes reached 174.1 million tenge in 2002 and was received mainly in institutions in Almaty, Atyrau, Akmola, North Kazakhstan, West Kazakhstan, Zhambyl, Karaganda, Pavlodar, Aktobe, Kyzylorda and Almaty regions. Hotels in Astana, South Kazakhstan, East Kazakhstan and Kostanay regions suffered the greatest losses.

A synthetic indicator of the development of the national economy of Kazakhstan is the state of public finances or the state budget of the country. The latter in 2002 amounted to 1,641.3 billion tenge (10.7 billion US dollars), with revenues of 821.1 billion and expenditures of 820.2 billion tenge, and a budget surplus of 0.9 billion tenge, respectively.

The revenue part of the republican budget, which has been steadily growing since 2000 both in tenge and in dollar terms, was formed by the following revenue items: income tax (207.4 billion tenge); value added (175.9); personal income tax (77.4); income from foreign economic activity (38.0); fees and various non-tax revenues (47.6); excises (25.4 billion tenge).

The expenditure part of the state budget underwent serious changes in 2001-02: more and more state funds were spent on the social sphere – wages and pensions (373.5 and 416.3 billion tenge), for the needs of national defense (32.5 and 37.7) and on the economy (road construction, support for the agricultural sector, etc.) (108.2 and 113.1 billion tenge).

An important indicator of the balance of public finances and the general state of the national economic system is the level of the budget deficit (surplus). Fluctuations in the dynamics of this indicator in the republic in the 1990s. were significant.

The highest peaks of the state budget deficit were observed in 1995-99 (from -37.0 in 1996 to 69.8 billion tenge in 1999), and for the first time the national budget surplus was achieved in 2002 (0.9 billion tenge). The exchange rate of the national currency against the US dollar in
2002 confirmed the established ten-year trend towards its steady decline, and the sharpest, spasmodic decline was observed in 1993-95 and 1998-2000.
It seems that inflationary processes were developing in the republic, which were the result of price liberalization carried out in the beginning. 1990s, when the levels of consumer price growth in 1992-94 were 3060.8; 2265.0 and 1258.3% per year. It was possible to smooth out a sharp surge in inflation only by 1997 (11.2%), and in 2002 the growth in consumer prices was already 106.5%. At the same time, the prices of industrial producers also increased (111.6%), while prices for sold agricultural products, on the contrary, decreased by 2.3%.

Indices of growth in prices for consumer goods and services in 2002 were: food products – 106.6%, non-food – 106.3, paid services to the population – 107.1%. The cost of a food set consisting of 1 kg of beef, butter, wheat bread, vegetable oil, sugar, potatoes, cabbage, 1 liter of milk and 10 pcs. eggs, made up in con. 2002 in Astana $7.85.

Economy of Kazakhstan