President Nursultan Nazarbayev has recently launched no less than 75 new projects under the auspices of the second five years of the State Programme of Accelerated Industrial and Innovative Development. These are, of course, very serious and grand plans that will strive to take the country to new heights in terms of economic growth. But the President has also stated that despite the definite positive results, the process of industrialisation has not yet reached its main goal, which isthe overall transformation of the economy with manufacturing prevailing over the extractive industries. Institutional change, not just façade alterations, is at the heart of the matter.
The Kazakhstan 2050 Strategy, which is currently the basis of all economic and social development, clearly aims to diversify the country from digging up its reputed oil, gas and other natural resources, but progress has been slow on that front. The challenges to moving away from extraction are plentiful and they are inseparable from the current way of doing business. What is needed is innovation that can accommodate social coherence and balanced development.
With 42 percent of its population living in rural areas, Kazakhstan needs to have a well-performing agricultural industry. That’s not to say that the country needs more farmers and shepherds, but that life in a rural area needs to be as comfortable as in the most developed cities, and just as productive. Focus on agro-technologies and logistical networks are already providing for some of this, but there is still untapped potential in the regions. For example, the area of inter-regional transport and communication is lagging in comparison to construction booms in the capital and main cities of the republic. Currently, the Tulpar-Talgo is the only fast speed train and runs a limited, if slowly increasing, scope. The population density allows for few profitable corridors, however, the population is growing and developing international transit routes such as Western China-Western Europe give reason for a more prosperous tomorrow.
Here the function of the Eurasian Eurasian Union presents a many-sided prospect. Some fear the danger of Russian monopolies taking over the Kazakh market, but it’s a double-edged sword. If the local businesses establish themselves firmly, they will be in a position to offer products and services that others can’t. Will they be in that position given the ease of seeking rent from extraction, is another question altogether. Perhaps EXPO 2017 will provide inventive ways of seeing the energy sector, or perhaps the tourism industry will transform radically in the foreseeable future.
Regardless of the answer, the fact that regional and international cooperation is growing in importance is indisputable. Diplomatic missions and trade delegations to and from Kazakhstan are making steady progress in creating a much-needed atmosphere of trust and mutual respect. Without rapport, there can be no long-term relations and beneficial exchanges. The role of individuals who act in tandem with the overarching goal cannot be overstated.
Kazakhstan is a young country, and a generational divide between the ex-Soviet and newly independent citizens is blurred by the traditional values and ideologies of the steppe civilisation. It is no coincidence that the President chose to introduce and discuss the concept of “Mangilik El” or Eternal Nation. The ancient inhabitants and current dwellers of the region could not endure without a guiding philosophy that connects the past with the future and provides a clear understanding of the here and now.
In business, what is essential for Kazakhstan is the cultivation of corporate culture, which will create the most favourable business climate. So far, the only truly international companies on the world markets have been KazMunayGaz, Kazakhmys, ENRC, and to a lesser extent, KazAtomProm. Increasingly, national companies under the administration of Samruk Kazyna National Welfare Fund and also private owners are reaching a state where they can talk of IPOs and public ownership. But before the most lucrative and successful enterprises can be sold off, even partially as is the plan, the judicial backbone as well as the general public must be ready for those crucial steps.
In light of an emergent civil society, the official “cultural policy” of Kazakhstan is currently being formed. Culture, after all, is a matter that touches everybody living within the community. The public discussions online and rounds of organised discussions have concluded and are being analysed by a working group at the Ministry of Culture who will be presenting it to the head of state. This gives a great impetus to the creative sphere in general as it places value on the home-grown artists. Certainly, the music and entertainment industries, as well as the literature and theatrical works, must be authentic because at the end of the day, that’s what makes the country unique and different in the eyes of investors.
Generally speaking, Kazakhstan, the brand, is gaining a reputation. Sport achievements and the odd successful artist provide high visibility on the world markets. The task of the current and future administrations is to translate that into a coherent system of social organisation and development. After all, the country is a dynamic mix of different religious, ethnic and tribal cultures, proud of its past heritage and current citizens and looking forward to a bright future.
As such, the most valuable resource that Kazakhstan has and needs to continue to develop is its human capital. Small and medium-sized enterprises represent a giant potential against the backdrop of raw material extraction. Young talent seeks to find ever-advancing ways of self-expression and purposefulness. New faces in the business and the political scene are also leaving their marks of distinct character and ambition. With President Nazarbayev at the helm, noticing and correcting the flaws in the chartered course, Kazakhstan is steering steadily towards a better future for all of its citizens.