Understanding the Pakistan Budgeting Process: Basics and Key Insights
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1. Kazakhstan
20 Years of Independence
December 2011
GOVERNMENT OF KAZAKHSTAN
2. Kazakhstan: Country Snapshot
KEY HIGHLIGHTS
Stable political and
macroeconomic environment:
Annual GDP growth of
approximately 9% during 2000-
2009, with GDP in 2010 reaching
US$148 billion (US$9,070 per
capita)
Competitive geographic
location:
Located at a unique cross-roads
between Europe, three BRIC
countries (Russia, India, China)
and the Middle East
KEY FACTS KEY MACRO STATISTICS
Significant market:
The Customs Union between Area: GDP per capita:
Kazakhstan, Russia and Belarus 2.7 million square km (1.1 million square miles) US$ 9,070 in 2010
represents a market of 170 million Capital: GDP growth:
consumers and combined GDP c.
Astana (0.7 million people at 01 October 2011 7% in 2010
US$ 2 trillion
Population: Currency:
Major reforms: Market and trade 16.6 million people at 01 October 2011 Kazakhstani tenge, KZT (US$1 ≈ KZT146.6)
liberalization, administrative Language: Sovereign Credit Ratings:
reform, privatization, budget
Kazakh is the official language, Russian is a means Standard & Poor’s ― BBB+/Stable (achieved rating
code, pension system, new tax of inter-ethnic communication upgrade in November 2011)
code, wealth accumulation in
Key ethnic groups: Moody’s ― Baa2/Stable
National Oil Fund
Kazakh (63.1%), Russian (23.7%) Fitch ― BBB−/Positive
GOVERNMENT OF KAZAKHSTAN 2
3. History of Sustainable Economic Development
KEY HIGHLIGHTS GDP STRUCTURE 2010 UNEMPLOYMENT RATE
%
In the last decade social 12 10,4
Industry
development indicators 18% 10 9,3 8,8
Real estate operations 8,4 8,1
improved: unemployment 32% 8
7,8 7,3
Trade 6,6 6,6
declined almost twice till 5.3% 4% 5,8
5,3
Transport, telecom 6
in 2011, poverty level has 5%
dramatically decreased from 8% Construction 4
46.7% in 2001 to 5.9 in 9%
Agriculture 2
2011, GDP per capita reached 11% Financial services
13% 0
9,070 per capita in 2010. Others 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: The Agency on Statistics
GDP PER CAPITA OF KAZAKHSTAN, $US bn
Estimate
11 365
9 005
8 499
7 257
6 772
5 292
3 771
2 874
2 068
1 658
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: The Agency on Statistics, the Government of Kazakhstan
GOVERNMENT OF KAZAKHSTAN 3
4. WEALTH ACCUMULATION IN NATIONAL OIL FUND
In 2000, Kazakhstan created a National Oil Fund, as a vehicle for
natural resource wealth accumulation and for stabilization of the state
through the commodity cycles.
In 2009 Kazakhstan used NOF for anti-crisis programs which helped
to smooth effect of the banking crisis and decline in foreign capital
inflows.
NOF is divided into savings and stabilization portfolios, and its
minimum level is set at 20% of GDP, while annual transfers to state
budget are limited to $8bn.
Government expects that NOF would reach 30,4% of GDP at the level
of $90bn in 2015, from estimated level for 2011 of $49bn and 28,8% of
GDP.
GROWTH OF NATIONAL OIL FUND, , $US bn
GOVERNMENT OF KAZAKHSTAN 4
5. International Trade Dynamics
INTERNATIOINAL TRADE OF KAZAKHSTAN EXPORT STRUCTURE 9M 2011
71.1 1% 3%
3% Mineral products
47.7 60
43.2 60.1
Metals and metal products
38.2 11%
27.8 0% Chemical products
20 Food products
32.7 37.9 28.4
12.8 17.3 23.6 23.6 14 Equipment, machinery
2004 2005 2006 2007 2008 2009 2010 09M 2011 82% Other
Im port, US$ bn Export, US$ bn
MAJOR TRADE PARTNERS 9M 2011 IMPORT STRUCTURE 9M 2011
Major trade partners, 9M 2011
Export, share in total Import, share in total Equipment, machinery
32.5% Chemical products
China 19.6% China 23.3% 32.2%
Metals and metal products
Italy 18.1% Germany 9.1%
Mineral products
Netherlands 8.9% Ukraine 9.1% Food products
11.7% 9.7%
France 6.7% United States 8.0% 3.7% 10.2% Other
Switzerland 5.6% Italy 4.8%
Sources: the National Bank of Kazakhstan, the Agency on Statistics
GOVERNMENT OF KAZAKHSTAN 5
6. Foreign Direct Investments Dynamics into Kazakhstan
KEY HIGHLIGHTS FDI IN KAZAKHSTAN TOP 10 INVESTORS IN KAZAKHSTAN, 2006 – 6M2011
Since 62% 19.8 19.6
50% 18.5 18.1 Total FDI in 2006 - 6M2011 is US$96 billion
independence, Kazakhstan has
46%
attracted over US$136 billion in Total, US$ bn Share in total
FDI, half of which has been 2 5 % 10.6
8.3 27%
invested during the last three Netherlands 61. 9 24.9%
21%
4.1 4.6
years. 6.6 19%
14% USA 35.2 14.2%
14%
80% of total FDI per capita UK 18.0 7.3%
2002 2003 2004 2005 2006 2007 2008 2009 2010
among the CIS countries France 16.3 6.6%
FDI , US$ bn FDI in oil and gas, %
Sources: the National Bank of Kazakhstan, the Agency on Statistics
Italy 10.0 4.0%
Russia 9.9 4.0%
SHARE OF FDI IN GDP
China 8.9 3.6%
20% 19% 18%
17% 17%
15% 15% Canada 8.7 3.5%
15% 13%
12% 12% Switzerland 8.2 3.3%
10% Japan 6.9 2.8%
5%
0%
2002 2003 2004 2005 2006 2007 2008 2009 2010
GOVERNMENT OF KAZAKHSTAN 6
7. Development Programs
The Program on Accelerated Industrial and Innovative
Development of Kazakhstan for 2010–2014
Major target industries for diversification:
Objectives:
Agriculture and agro-products processing
Accelerated diversification of economy and promotion of
Construction and construction materials long-term economic competitiveness
Oil refining and services Coordination of public and private sector efforts and
efficient allocation of state resources
Metallurgy
Chemical, pharmaceutical and defense
Priorities:
Energy generation (including nuclear and alternative
energy) Productivity gains to ensure national competitiveness
Transportation and telecommunications Attraction of investments, primarily FDI, to develop export
oriented industries
Tourism
Development of national innovation system
Mechanical engineering
Entrepreneurship development with increasing role of
Biotechnology SMEs in the industrialization process
Improved regional economic development
GOVERNMENT OF KAZAKHSTAN 8
8. NEW TAX CODE...
Kazakhstan has introduced new tax policy with two major goals:
Simplification of administrative procedures on tax payments
The corporate income tax was reduced from 30% to 20%, while value added tax
was reduced to 12%
Today, Kazakhstan has the lowest taxation for business not involved in mineral
resource extraction
…WAS APPRECIATED BY INVESTORS
ADMINISTRATIVE REFORM…
According to the World Bank’s Ease of Doing Business Index 2012,
Kazakhstan is ranked 47th in the world, ahead of countries such as Ease of Doing Business Rank* 2012 2011 Change
Czech Republic, China, Turkey and Russia. In 2010, Kazakhstan was
judged to be the top reformer in the world, rising 15 places in the China 91 87 4
global ranking
Azerbaijan 66 54 12
Kazakhstan 47 59 12
Belarus 69 91 22
Russia 120 123 3
Hungary 51 46 5
Note: These tables do not present ranks of all CIS countries
Source: World Bank, WEF
GOVERNMENT OF KAZAKHSTAN 7