The global economy remains slow, creating major challenges for reducing poverty and inequality. According to the IMF’s latest World Economic Outlook update, global growth is expected to be 3.2 percent this year and 3.3 percent in 2025, which is much lower than the pre-pandemic average of 3.8 percent.
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Economic stagnation often leads to fewer job opportunities and low wage growth, worsening long-term unemployment and reducing the share of income that goes to workers. The pandemic has made inequality worse, with widespread job losses and income gaps causing a 0.5-point rise in the global Gini index in 2020.
Anna Alshanskaya
In response to these challenges, governments need to focus on inclusive growth to create strong and resilient economies. Inclusive growth ensures that economic prosperity benefits everyone, especially the most vulnerable. It aims to create decent jobs, expand opportunities for all, and promote fairer wealth distribution.
Kazakhstan is at a crucial point in its development, working to shift toward a more inclusive and sustainable growth model. As part of its commitment to the United Nations 2030 Agenda, the country is focused on achieving the Sustainable Development Goals (SDGs) to improve the well-being and prosperity of its people. Over the past three decades, Kazakhstan has used its natural resources to achieve significant economic progress, becoming a key player among oil-producing nations.
However, the benefits of growth have not been equally distributed. The Gini coefficient, which measures income inequality, saw a notable decline from 0.366 in 2000 to 0.267 in 2009. Yet, the years following 2010 revealed a gradual rise in inequality, with the coefficient fluctuating between 0.278 and 0.291. Between 2013 and 2023, the Gini index increased by 5.1%, reflecting challenges in achieving equitable growth.
Data from the World Inequality Database highlight disparities in wealth distribution. The wealthiest 1% of Kazakhstan’s population controls 29.2% of the nation’s assets, while the bottom 50% holds a mere 4.6%.
In response to these challenges, President Kassym-Jomart Tokayev introduced a new economic course in 2023. This ambitious strategy aims to achieve sustainable economic growth rates of 6–7% and double the size of the national economy to $450 billion by 2029. At the heart of these reforms lies the principle of inclusivity, with a strong focus on equitable wealth distribution to ensure that “every citizen tangibly benefits from the fruits of consistent economic progress.”
What can be done to make growth inclusive?
There is no one-size-fits-all solution to inequality. Each country must identify and implement strategies tailored to its unique social, economic, and cultural context, drawing on its best practices and experiences. Two key areas that stand out are education and a flexible labor market.
Recent research shows that education is a key driver in reducing poverty and inequality. Over the past 40 years education has accounted for at least half of global per capita income growth. The return on education is particularly significant for the poor: for the bottom 20% of income earners globally, education explains more than 70% of the real income growth since 1980.
The PISA 2022 study revealed that the quality of secondary education in Kazakhstan is hindering the accelerated development of human capital. The gap between students from the wealthiest 25% of households and those from the poorest 25% is 41 points in mathematical literacy, with wealthier students outperforming their less affluent peers.
Alongside education, fostering a more flexible labor market is essential for addressing inequality. Nowadays, the nature of work has become more dynamic and diverse. New forms of employment, such as telework and platform-based work, are gaining momentum globally, reshaping traditional working patterns. These emerging trends present a significant opportunity to enhance access to the labor market for individuals who are often “left behind”.
As of the third quarter of 2024, the unemployment rate among women stood at 5.3%, higher than the 4.2% observed for men. Moreover, youth unemployment is a pressing concern, with 6% of young people classified as NEET (Not in Education, Employment, or Training).
Indeed, the issue of inclusive growth is complex and multifaceted. It goes beyond simple solutions and requires a comprehensive approach. Structural reforms need to ensure growth not only inclusive but also resilient enough to support long-term inequality reduction.
The author is Anna Alshanskaya, the head of Department of Economic Policy Analysis at the Kazakhstan Institute for Strategic Studies.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of The Astana Times.
