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Chair's Blog

30 FACTS ABOUT THE 30-YEAR ECONOMY OF KAZAKHSTAN

2021 is a special year for all of us. The year with a big date - the 30th anniversary of our independence. It is hard to believe that almost a third of a century has passed since our country gained independence! It seems that the country introduced tenge and rejoiced at the opening of new Kashagan deposit only yesterday. Ribbons were cut at new enterprises, and now Kazakhstan exports $14.7 billion worth of goods to European countries, while a third of this amount fell precisely in 2021.

Over the years of independence, the Kazakhstan economy has overcome more than one crisis — we started with huge problems left to us by inheritance from the USSR collapse, the planned economy simply could not withstand a challenge of time, was not able to feed the country as well as give decent work and wages. When it seemed that this crisis had been overcome, the Asian crisis of 1997-1998, then default in Russia in 1998, global economic crises in 2008, and fall in oil prices in 2014-2015 and the pandemic of 2020 with unprecedented negative oil prices appeared as well.

Despite this series of crises, today Kazakhstan is an independent, democratic and law-based state with a strong economy, sustainable development program, goals and ambitions, as well as with a currency that, unlike many others, has withstood all challenges without denominations and writing off extra zeros. We are a state with a National Fund, its own airbag, funds for development of the country today, tomorrow and the day after tomorrow. We have high social security indicators, rising wages and consumer habits of developed economies.

Analyzing efforts and achievements of Kazakhstan today, we can state with confidence: our republic has chosen the strategically correct path. Over the 30 years of independence, the country's population has grown by 2.6 million people - from 16.5 million people in 1991 to 19.1 million people according to the census conducted this year. At the same time, quality of life is also growing — average life expectancy of Kazakhstan citizens has increased from 65 to 73 years. Since 2000s, the country's urban population has grown by 33% — from 8.4 million to 11.2 million people.

Incomes of the population have increased 9 times over the years of independence. Purchasing power has grown 4.6 times since 1993. Share of the population with incomes below the subsistence minimum has decreased from 34.6% in 1995 to 5.3% by the end of 2020. The minimum wage, taking into account annual indexation, increased from KZT 13 in 1993 to the current KZT 60,000. GDP per capita has grown 13 times in dollar terms over the years of independence, and 720 times in national currency. In real terms, GDP increased 2.4 times. For comparison, the real GDP growth of Russia over the same period was 1.2 times, Belarus - 2 times, the European Union - 1.5 times, OECD countries - 1.7 times.

Simultaneously with GDP growth, production in Kazakhstan also diversified. More than 700 new types of products have been launched by 2021. Entire sectors, such as the railway, were established as well. Kazakhstan has never produced locomotives and wagons before independence, has not produced rails and other infrastructure for developed railways.

One of the important factors characterizing changes in structure of the national economy are investments attracted to fixed assets. Their growth rates have increased annually since 1997, with exception of 2010 and the pandemic of 2020. Since 1991, in real terms, volume of investments in the country's economy has increased 2.7 times, and in nominal terms by 21 times - from KZT 0.6 trillion to KZT 12.3 trillion.

A pension reform was carried out in Kazakhstan in 1998. It was very important to properly evaluate the work and pay a decent pension to people who worked during USSR. Since 1998, all employees have been obligatorily contributing 10% of their income to the accumulative pension fund. It would be impossible even in the long term to relieve burden on the state budget and taxpayers without such reform. Now Kazakhstan provides payment of the highest average pension in EAEU and one of the highest in the former USSR.

Education has played an important role in development of the economy as well. The Bolashak Scholarship was established in November 1993. Educated and qualified personnel are called upon to develop the economy in many directions, opening new types of activities, businesses, developing entire industries! During all this time, about 15 thousand Kazakhstan students have been trained at the best foreign universities, who still work for the benefit of society in almost all sectors of the economy.

Kazakhstan has achieved significant success over 30 years, but we still have to do the main work. The world is always moving and developing with us, and somewhere faster than us. Our main goal and objective remain unchanged — Kazakhstan's entry into the top thirty most developed countries in the world. For this purpose, concrete steps are being taken today — more flexible and clear state projects that have replaced state programs, sterilisation of oil revenues, reduction of the budget deficit, reduction of tax burden on the sector of small and medium-sized businesses, one of the softest fiscal systems of the former USSR, and much more.

Our economy, like our country, depends only on us, and where and how we live will be determined by us as well. Each of us. With own effort. With own mind. By your contribution to the common cause, to our common home called Kazakhstan!

 

Ruslan Sultanov

Chairman of the Management Board 

Economic Research Institute JSC

Views: 1044
Saved: 16.12.2021





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