In hindsight, we must pay attention to the three countries that implemented such strategies and successfully accomplished similar tasks in the 20th century – Singapore, South Korea and Norway. That is why Kazakhstan is interested in the experience of economic development in these states.
The Singapore Economic Development Strategy, which was implemented by the Council of Economic Development, allowed the country to become a financial and commercial centre of Southeast Asia and to achieve rapid economic growth and improved welfare of the population (from 1967 to 2002, per capita income increased from $2,200 to $25,400, or by more than 11 times). As a result of these steps, this tiny island nation received the title of “East Asian Tiger.”
The base of economic growth in South Korea was founded in the 1960s and 1970s, when the government, under strict state planning, identified priority industrial development, particularly in industries that could compete at a global level due to the low cost and convenient geographic location of the state. Following a long-term industrial development strategy divided into five-year stages, South Korea was already among the 30 most developed countries by the 1990s due to investment by the leadership in developing new technologies, microelectronics, biotechnology and optics.
In Norway, success was achieved through the establishment of oil-industry clusters, promoting partnerships with leading companies, the rapid transfer of modern technologies and supporting competitive manufacturers and service providers.
From this it follows that every successful country has its own unique way of development. But the foundation of growth in each case is the implementation of long-term development strategies.
Kazakhstan is constantly working to improve the welfare of the country. Thus, the goal set by President Nursultan Nazarbayev of Kazakhstan on joining the 50 leading countries by 2030 has already been achieved. In 2013, we were ranked 50th in the Global Competitiveness Index of the World Economic Forum (WEF GCI), as well as in the World Bank’s ease of doing business ranking.
According to some indicators, Kazakhstan is already among the 30 most developed countries in the world. For example, the WEF GCI ranked Kazakhstan 14th in terms of public debt in 2013, a positive signal to foreign investors. Another example is our country’s provision of secondary education for children, where we take 29th place.
The President’s state-of-the-nation address, the Kazakhstan 2050 Strategy, lays the foundation for gradually improving the social, economic and institutional environment and for achieving this goal by 2050 in five strategic areas: developing human capital; improving the institutional environment; developing knowledge economy sectors; accelerating the formation of the infrastructure of a knowledge-based economy and integrating into global and regional economies.
World experience shows that the success of a country depends not only on its economic well-being, but also on its level of human development, environmental security and efficiency of public administration. In this regard, the concept identified key indicators for further evaluation of our progress toward the goal.
Thus, it is necessary to increase gross domestic product (GDP) per capita from $12,000 to $60,000. This is possible given we maintain a 4.3 percent per year annual economic growth to mid-century. We also need to raise labour productivity, to decrease the dependence of the domestic economy on oil price fluctuations and to ensure macroeconomic stability through increasing the share of non-oil exports in GDP from 32 to 70 percent. Also, we must boost activity in the field of innovations and increase funding for research and development 15-fold, from the current 0.2 percent to 3 percent of GDP, in order to reach the level of developed countries with knowledge-based economies. Small and medium enterprises (SMEs) are a key driver of economic development. By 2050, their share in GDP should grow to 50 percent due to the creation of favourable conditions for doing business, the renewal of infrastructure and investment in human capital.
In addition, Kazakhstan’s economy should become attractive for investors. The share of investment in fixed assets will be maintained at the level of 30 percent of GDP. This will provide a high level of savings to ensure macroeconomic stability. Rising prosperity will significantly improve the living conditions of the population. Thus, life expectancy in the country will increase from 69 to 80 years.
A priority in this regard is the improvement of quality of life through effective healthcare and education systems, efficiency and transparency in institutions and the prevalence of information technologies. Human capital will become a key driver of the economy, and healthy demographics providing a high natural growth of population will become one of Kazakhstan’s competitive advantages. Population growth will bring high academic and creative potential and professional manpower.
International experts have recently given their assessment of Kazakhstan’s opportunities to join the 30 most developed countries of the world. At the meeting of the Asian Development Bank’s (ADB’s) board of governors in Astana this spring, ADB President Takehiko Nakao noted that Kazakhstan can achieve this goal by promoting economic diversification, using resource revenues prudently, ensuring good governance and strengthening institutions in order to promote the efficiency of the private sector.
Other experts believe that in some ways, Kazakhstan is already among the top 30. Member of the European Parliament Elisabeth Jeggle, welcoming Kazakhstan’s ambitious goal of joining the 30 most developed countries, believes that building a strong, innovative and diversified economy, competitive in global markets, is the basis of any economic success. She stressed that the President and Government of Kazakhstan will take all necessary measures to implement the objectives of the Kazakhstan 2050 Strategy.
Taking into account the current development of Kazakhstan, we can say that the goal of joining the 30 most developed countries in the world by 2050 is achievable. The state is taking all necessary measures for its implementation. However, it should also become the goal of every citizen, which in turn will create the conditions to achieve this goal.
The author is Minister of Economy and Budget Planning of Kazakhstan.