Nursultan Nazarbayev
President, Republic of Kazakhstan

    In the past 10 years comprehensive economic reforms have been undertaken in post-Soviet Kazakhstan, which has proved its validity as an independent state. Following the break-up of the USSR the life itself dictated the necessity of the most forceful system transformations. Along with the maximum use of state resources there was a need to act quickly and radically, to set free the people’s energy providing them with liberal laws.
The first stage of reforms was completed in 1993 with the introduction of the national currency. The base of the next stage was a full-scale privatization, establishment of a self-sustained financial system, curbing of inflation and macrostabilization of the economy as well as attraction of foreign investments. By the fall of 1997 the main goals were achieved and we could move over from crisis management to positive control of macroeconomic processes and concentrate our efforts on strengthening the banking system, on raising exports of mineral resources and developing the potential of the oil-and-gas sector as well as of the mining-and-metallurgical industry.
At the end of the 1990s the economy became stable enough. We got an opportunity to pay more attention to individual industries and enterprises, to start liberalizing the tax system, to reform the town property and pension systems, to begin a policy of import substitution and develop the transport infrastructure.
Today, Kazakhstan is recognized by both the European Union and the U.S. as a country with a market economy. The private sector accounts for 75 % of the country’s GDP. The financial sector has been stabilized, the rate of the national currency has become steady. By general admission the banking system is one of the most advanced in the CIS and, by its level, is matching those of leading developed countries in Eastern Europe.
The country’s gold and foreign exchange reserves are already exceeding public debts. Inflation rates do not go beyond values acceptable for a healthy economy.
From 1993 to 2001 Kazakhstan attracted direct investments of about $17B and that practically amounts to 80 % of the total volume of investments in countries of Central Asia. Estimates of the European Bank for Reconstruction and Development show that by volumes of attracted foreign investments Kazakhstan is placed first among countries of the CIS and third among East European and Baltic states. Domestic investments are on the rise as well: last year they exceeded the level of foreign investments for the first time. And this dynamics will continue.
The time has shown that we have chosen the right strategy. In the past three years Kazakhstan’s economy has been steadily growing. Its GDP has increased almost 40 %, the volume of industrial and agricultural production jumped up nearly
50 %.
As is known, a stable economic growth begins, when the accumulated rate of no less than 15 % is achieved. Since 2001 Kazakhstan has had the accumulation level of almost 25 % to the gross national income. Last year the volume of bank credits amounted to 460 billion tenge (over $3B).
A major role in the country’s economy belongs to the metallurgical complex, which accounts for about 40 % of GDP. By 2010 we intend to at least double GDP and the metallurgical industry will make an important contribution to accomplishing this task. Its leading enterprises include Ispat Karmet JV, Kazakhmys corporation, Kazzinc JSC, TNC Kazchrome, Kazakhstan Aluminium of Kazakhstan, Sokolovsko-Sarbaisky Mining Production Association and others.
Today Kazakhstan has come to a new stage in its economic development. This stage is based on the following program directions: modernizing industry on the basis of the most advanced technologies, especially so in petroleum chemistry, metallurgy and manufacturing; forming efficient stock and insurance markets; increasing export orientation, securing positive trends in the leading sectors of the economy.
The government detailed these tasks in its 10-year strategic plan and now efforts are being made to implement specific state programs. The priority will still be given to the oil-and-gas and mining-and-metallurgical complexes, the country’s agriculture.
We set the following tasks:
    – to provide more thorough processing of raw materials and increase of added value. To develop petroleum chemistry, production of rolled stock, hardware, food industry. To implement special programs of servicing export complexes and modernizing plants, which will service the oil-and-gas and mining-and-metallurgical industries;
– to develop simultaneously the infrastructure and related industries such as transport, communications, financial sector, geological exploration, production of fertilizers, construction materials, machines and equipment;
– to complete reforming the social protection system and nonproductive sphere;
– in the coming years to substantially advance the integration with Russia and Central Asian countries as our major economic partners; to follow the course of bringing politics and laws in line with those of all member-countries of the EurAsian Union.
The largest deposits of mineral resources are the country’s assets. The value of their recoverable reserves is estimated to amount to several trillion dollars. Kazakhstan intends to join the world’s major oil producers. Many of natural reserves that we possess are at the world level.
At the same time the predominance of the extracting industries over the rest of the economy’s sectors still remains. Currently the situation in figures looks as follows: oil, non-ferrous and ferrous metals as well as grain account for 80% of the total export volume. But since the emphasis on sales of raw materials can never guarantee a stable development of the economy, it needs to be thoroughly restructured.
As far as prospects for the mining-and-metallurgical sector are concerned, it should be clear that possibilities of its extensive development are not so great regardless of our subsoil wealth. That is why we are setting the task for the industry’s enterprises to introduce advanced technologies of recovery, high process stage, metal working, the more so, as enormous possibilities of development are emerging in the machine building industry as well.
During all these years private property and entrepreneurship have been vigorously promoted and supported. The growth of small businesses – currently there are 400,000 of them employing 1.6 million people – is one more proof of the reforms’ right direction. The GDP share of small enterprises went up practically from zero to 18 %. And this is not their upper limit.
The agro-industrial complex has a rather large potential as well. The total export potential of the farming industry is estimated at $25 billion to $30 billion. Kazakhstan will devote the period from 2003 to 2005 to economic revival of auls (villages) where 43 % of the country’s population are living. Our agenda includes adopting the draft law «On ownership of land» and, on this basis, completing the reform of land and water relations, setting up enterprises to produce large-size goods for both export and domestic public purchases.
    We are getting ready to take state-sponsored measures of encouraging introduction of up-to-date agricultural technologies, development of industries to process farm products, establishment of a broad network to provide credit and financial services as well as insurance of farm enterprises and restoration of scientific and informational support of the countryside.
At the same time the active socially oriented policy remains the priority task. It includes efforts to combat poverty and unemployment, establishing a modern labor market, promoting small businesses, increasing incomes of workers in the nonproductive sphere, strengthening the national infrastructure of education, health care and culture. Just recently we have made a decision to undertake the action, unprecedented by its scale, to compensate citizens’ deposits lost more than 10 years ago after the break-up of the Soviet Union and collapse of the USSR Sberbank system. This will mean compensating $90 million for lost money to almost 7 million people, e.g. the half of the country’s population. All this proves that today we have reached such a level, when concrete results of all further reforms are to be judged more and more by the extent of raising the well-being of the people.
Thus, Kazakhstan now is on the threshold of further serious and dynamic changes in the economy and social sphere. They should transform the country and move it to the advanced positions.