A Study on Economic Development in the New Silk Road

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A Study on Economic Development in the New Silk
Road

• Kazakhstan
• Mukhamediyev BULAT
• Kazakh National University

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• Territory of the republic (thsd. sq. km) 2724,9
• Population (1.05.2011, thsd., person) 16 536
• Density 6.06
• Capital was moved from Almaty to
  Astana in 1997

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Economic Development of Kazakhstan in 2000-2010

• Rate of GDP growth 9-10 last 10 years
• The extraction of natural resources
• Favorable investment climate
• Developed financial sector
• The Economy is closely integrated into global
  processes
• Reflects the cycles of the global economy, all
  its ups and downs
• Due to the structure of exports it is able to
  extract excess profits in times of crisis

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Rate of GDP growth
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GDP growth
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Inflation

• 6-8 in period 20002006
• Up to 19 in 2007-2008
• The banking bubble (excessive borrowing)
• The real estate bubble (housing prices rise in
  ten times)
• They burst with the onset of the global financial
  crisis
• The sharp decline in lending to the economy
• The slowdown in economic activity
• Decline in real incomes

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Government measures

• Increases in pensions and salaries for public
  sector employees
• Support the banking system
• Strengthening the raw material orientation of the
  economy
• In 2010 exports of mineral products - 74.9
• including oil and associated gas 50 of exports

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The Resource Curse

• Increased production of oil and gas condensate
• Reserves will last for 35-50 years
• Dutch disease
• The development of economic and political
  institutions, the OF
• Diversification of the economy
• Financial sector development, access to
  investment resources
• The increase in total factor productivity

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REER
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Estimated crude oil production in Kazakhstan, mln
barrels per day
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Oil

• Tengiz and Kashagan - an annual increase of 5
  million tons
• In the next 10 years the RK may enter to the five
  largest suppliers of mineral resources
• Problems in oil refining sector

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The structure of oil and gas condensate in the
ROK in 2000-2011, mln. T
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The structure of oil and gas condensate in the
ROK in 2000-2011, mln. T
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Economic Development

• High prices are favorable for the development of
  the economy of Kazakhstan.
• However, the productivity decreases for a large
  part of non-oil economy.
• Liquidity in the banking system is restored, but
  new loans made ??in small quantities.

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• The most important factor of the growth is the
  price of oil. In 2010, they rose by 41.
• Fixed capital investment has shifted from foreign
  sources to domestic sources.
• The state budget deficit - about 2.

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The price of Brent crude oil, U.S. per barrel
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Industry
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Foreign Direct Investment in fixed assets for the
years 1993 -2010, USD million
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GDP growth
  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Real GDP growth, 9,8 13,5 9,8 9,3 9,6 9,7 10,7 8,9 3,2 1,2 7,0
Nominal GDP, billion 18,3 22,2 24,6 30,8 43,2 57,1 81 105 132 113 146
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Oil Extraction and its Price
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Inflation
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Export and Import, 2010
Export, Import,
CIS 13.4 45.8
Russia 8.1 37
Europe 54.1 25.3
Italy 16.2 5.3
France 7.5 1.7
Asia 25.7 21.7
China 17.1 13.3
Turkey 2.1 2.1
Japan 0.9 1.9
Korea 0.4 1.8
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Risks

• The main risk to Kazakhstan is the price of
  oil.According to the WB the oil price rise by 1
  leads to an increase in GDP by 0.08.
• Oil in 2009 was about 70 percent of exports, 26
  percent of GDP.
• Diversification of export destinations - KPC
  and Atyrau-Samara - Baku-Tbilisi-Ceyhan
  pipeline - Atasu-Alashankou
• External risks to the financial sector
• The instability of the flow of portfolio
  investment (12 of GDP in 2010)
• External debt equels about 80 of GDP.

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Customs union

• Russia, Kazakhstan, Belarus - 01.01.2010.
• Creating a single economic space2012 ????.
• ??? ?????????? ??????? ????? ?????????? ? 6.7 ??
  11.5.
• ? 2010 ???? ????? ????? ??????? ??????? ?????
  ??????????.
• ??????, ?????? ?? ????????? ?? ?????????? ?? 20,
  ? ?? ????? ?? 48.
• ? 2011 ?????? ?? ????? ????????
  ?????????????????, ? ?? ?????? ? ???????? ???????
  ?????????.

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Impact of the new Silk Road

• The Economy of Kazakhstan
• Other countries