Kazakhstan's Quest for Economic Resilience: Diversifying Beyond Oil

Kazakhstan’s economy has been heavily dependent on oil revenues for many years. The discovery of the huge Kashagan oil field in 2000 marked the beginning of a new chapter in the country’s economic history, and the government established the National Oil Fund in 2001 to mitigate the weakness of price fluctuations in the world energy market under and fund future generations. However, the country’s dependence on oil has made it risky to external shocks such as global oil demand and prices.

Including some statistics:

In 2010, the oil industry accounted for more than 11% of Kazakhstan’s GDP, and oil exports accounted for about 57% of total merchandise exports

In 2014, 68.55% of Kazakhstan’s exports came from crude oil

In 2017, Kazakhstan exported about 1.3 million b/day of crude oil and condensate

In can be observed that increasing oil export provides most of the country's earnings and government revenue.

So, it raised an idea that Kazakhstan needs to diversify its economy to decrease its dependence on oil revenues and achieve sustainable economic growth. Kazakhstan is working to improve its business environment, develop non-manufacturing sectors, improve trade relations and strengthen human capital. These efforts are critical to making the country vulnerable to external shocks and boosting sustainable economic growth.

Bolshak Scholarship Program which provides students with scholarships to study abroad, acquire knowledge and skills that can be applied domestically. It therefore equips its employees with the skills and knowledge needed to succeed in non-consumer industries and contribute to sustainable economic growth.

Additionally, Kazakhstan is focused on developing its technology by implementing several mechanisms to support the sector, such as subsidies and tax credits in order to maintain the sector's availability development.

Unfortunately there are obstacles that we will consider further as underdeveloped financial sector and weak trade links. The lack of access to credit and underdeveloped credit and financial markets have affected the country’s economy. This has hampered the growth of non-consumption sectors and many unemployed economies. Kazakhstan is working to improve its economy by implementing several measures to strengthen the banking system, improve access to finance and promote financial inclusion. The country is uselessly working to reduce corruption, for employment improve conditions and attract more foreign investment.

Kazakhstan is struggling with poor trade relations with other countries, a legacy of the Soviet era. The country’s weak trade linkages limit access to foreign markets and hinder the growth of non-consumer industries. Kazakhstan is investing in rail and highway transport infrastructure to improve connectivity with neighboring countries.