Hussain Ahmad
By Hussain Ahmad
“Those were hard times,” remembers Azamat Berdibay, Ambassador of Kazakhstan in Qatar. “Imagine entire cities plunging into darkness at eight or nine at night due to power shortage and the chaos it brings.”
Berdibay was referring to the days in his youth when Kazakhstan was going through pangs of independence from the Soviet rule. It was December 1991. Economy and governance were in tatters. Deprivation reigned. Survival was the word that swirled in the heads of most Kazakhs.
Fast forward to 2014. Two recent developments shine light on where Kazakhstan stands today. First, the Kazakh government signed an agreement last month with the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank and the World Bank, allowing them access to state funds to co-finance projects that promote industry, diversification and competitiveness. The government is providing $2.7bn to the fund.
Talking about the deal, Olivier Descamps, Managing Director at the London-based EBRD, said Kazakhstan found a “very clever, unique way” to work with international banks to have “an enhanced chance to increase the pace of industrialisation.”
Second, on May 29, Kazakhstan signed a treaty with Russia and Belarus to form the Eurasian Economic Union (EEU). The new bloc will be a counterweight to other regional and international blocs, and bolster economic ties among the members.
If the first partnership is a bold step towards industrialisation and economic diversification, EEU speaks of geopolitical ambitions of Kazakhstan in a fast-changing world. Together, they are the latest in a long array of measures President Nursultan Nazarbayev has taken to propel his country to the pinnacle of progress.
As regions and countries hurtle from one crisis to another, Kazakhstan is in the spotlight for its economic progress.
Nazarbayev, who has been the president since the Soviet dissolution in 1991, is the architect of modern Kazakhstan and has been credited with steering his country through a period of turbulence.
While the neighbouring ‘-stans’ stumbled in their march to the future, Nazarbayev planned his steps meticulously and assiduously.
It hasn’t been a journey of roses — the president has been and continues to be excoriated in the Western media for some of his actions, but that didn’t deter him. If economic prosperity and internal stability are yardsticks to measure the progress of a nation, Nazarbayev is a highly successful statesman, and his country a shining example to its more impoverished neighbours.
Kazakhstan’s population of 17 million has grown into the most prosperous in Central Asia. The country has the second largest oil reserves as well as production among the former Soviet republics after Russia. It ranks sixth in the world by total amount of its mineral resources, worth roughly around $46trn. The largest numbers of mineral resources are oil and gas, chrome, uranium, zinc and iron. And the income from these resources has been deployed to build a modern, economically vibrant state.
The GDP of the country in absolute terms increased from $11bn in 1993 to $203bn in 2012; per capita GDP increased from $700 in 1994 to $14,000 in 2013 and is projected to touch $20,000 by 2020.
The first priority of Nazarbayev government since gaining independence was to create a business-friendly environment by implementing systematic political and socio-economic reforms.
It pursued a path of liberalisation and privatisation across the key sectors of economy, which resulted in a huge inflow of foreign investment. More than $160bn of foreign direct investments has flowed into the country since 1993 and 80 percent of the FDI in the region went to Kazakhstan.
According to the World Bank, Kazakhstan is ranked 47th in the “Doing Business” rating.
Another economic masterstroke of the president was his decision to move the capital from Almaty to Astana in 1997. The move has helped breathe some life into the economies of the northern regions and spread wealth more evenly around the country. Astana is a glittering new capital, in the middle of the steppe, which will soon be home to the tallest skyscraper in the region.
Kazakhstan has also transformed into a venue for international business meetings. It has hosted an OSCE Summit, Islamic Economic Forum, Congresses of World and Traditional religions, Asian Winter Games 2011 and Astana Economic Forum.
More importantly, it will host the international exhibition EXPO-2017 in Astana, which will have a positive spillover on the development of Astana and the whole of Kazakhstan.
People in the region too have benefited from Kazakh progress. “We have around a million migrant workers in our country, especially from the neighbouring states,” adds Berdibay.
Peaceful borders
One of the biggest advantages of Kazakhstan, and this needs to be attributed to Nazarbayev’s vision, is that it has no border disputes with neighbours. Border disputes are inevitably a drain on nations’ resources and create instability at home and in the region and bedevil growth.
Nazarbayev has been able to rid his country of this scourge by solving border problems with his neighbours peacefully, and this is a stupendous achievement considering that Kazakhstan is the largest landlocked country in the world. It shares a 4,000-mile border with Russia and has borders with Uzbekistan, China, Kyrgyzstan and Turkmenistan. Nothing contributes to growth better than peace.
Secondly, despite its huge ethnic diversity, Kazakhstan enjoys social and ethnic harmony. Many countries in the world are imploding due to ethnic and sectarian strife and multi-ethnicity is often a recipe for turmoil. Kazakhstan is comprised of people from around 130 ethnicities who happily coexist.
“We are different and equal children of Kazakhstan’s united people,” the president said recently.
Nazarbayev has declared 2015 the Year of the Assembly of the People of Kazakhstan. This assembly will be a consultative and advisory body under the president that unites representatives of practically all 130 nationalities in Kazakhstan. Nazarbayev proposed to establish the assembly in 1992.
Around 70 percent of the population are Muslims, but Islamic terrorism hasn’t reared its head as the government has been fiercely protective of its secular principles. According to constitution, Kazakhstan is a secular state.
The future promises to be rosy as well as challenging. With Ukraine in turmoil and tensions growing between Russia and the European Union, countries in the Soviet bloc would need to tread cautiously to avoid getting caught in the crossfire.
But Kazakhstan follows a balanced and multi-pronged foreign policy, necessitated by its strategic geographic location and high economic ambitions. Astana enjoys good relations with all neighbours and Europe.
Having to share borders with two superpowers – Russia and China – has worked to its advantage. Russia is its biggest trading partner, with over $26bn in bilateral trade last year; it is the main consumer of Kazakhstan’s non-oil exports, which include mining products and chemicals.
China has been Kazakhstan’s largest investor since 2010. During a visit in September 2013 by Chinese President Xi Jinping, Nazarbayev inked investment deals worth $30bn. China is connected to Kazakh oil via a 1,400-mile pipeline, which was opened in 2005.
Kazakhstan’s increasing economic clout and geopolitical importance will help it chart a course of its own, without getting unduly influenced by major powers in a way that will harm its interests.
The Peninsula
