Much Work to be Done to Make Economy Competitive

Kazakstan’s economy will have to overcome its reliance on raw materials and focus instead on developing technology and training professionals if it is to achieve its goal of becoming one of the world’s 50 most competitive countries, NBCentralAsia experts say.



Last week, the Kazak parliament discussed ways of increasing the country’s economic competitiveness. According to the United Nations’ annual development index, Kazakstan went down five points on the rating scale for competitiveness last year, moving from 51st to 56th place.



Masimov’s government, formed in January this year, has made becoming one of the top 50 most competitive countries in the world a top priority.



Parliamentarians have flagged up several factors that are holding back Kazakstan back in the ratings, including corruption, backwardness in medicine, science and non-mineral based production, and poor levels of communications and technological infrastructure in some part of the country.



The minister for the economy and budget planning, Aslan Musin, told the parliamentary hearing that Kazakstan would need to increase its gross domestic product to 300 billion US dollars by 2015 in order to catch up with the countries at the bottom of the top 50. That implies a fourfold rise on last year’s figure.



Commentators polled by NBCentralAsia identified three main areas for improving Kazakstan’s score. First, make the economy less dependent on exporting raw materials. Second, concentrate on hi-technology manufacturing process, and third, train the staff.



“To be competitive on the world market, the country needs to be armed with technical innovations and new ideas. Unfortunately, we have [instead] opted for a raw materials-based direction,” said political observer Seidakhmet Kuttykadam, who concluded, “We could rise up to reach 50th or 49th place for a while, but we wouldn’t be able to sustain it.”



Kuttykadam said that high-tech manufacturing requires professional staff, and more of these need to be trained to take over when Soviet-trained staff retire in the very near future.



NBCentralAsia political expert Eduard Poletaev says analysts should also be looking at factors that will affect Kazakstan’s competitiveness down the line, for example when it joins the World Trade Organisation, WTO, next year. Accession to the WTO may initially have a negative impact on Kazakstan’s rating because agriculture and manufacturing will face stiff competition from abroad, but this should stimulate both sectors in the long run, Poletaev said.



“Difficulties will arise two years after Kazakstan joins the WTO, since it will face new [trading] conditions. Not all sectors will be able to hold out against the competition, but in general entry to the WTO will push us closer to the top 50 developed countries,” he said.



(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)