| Independence in 1991 caused many of these
newcomers to emigrate. Kazakhstan's economy is larger than those of
all the other Central Asian states combined, largely due to the country's
vast natural resources and a recent history of political stability.
Current issues include: developing a cohesive national identity; expanding
the development of the country's vast energy resources and exporting
them to world markets; achieving a sustainable economic growth; diversifying
the economy outside the oil, gas, and mining sectors; enhancing Kazakhstan's
competitiveness; and strengthening relations with neighboring states
and other foreign powers.
Kazakhstan, the largest of the former Soviet republics in territory,
excluding Russia, possesses enormous fossil fuel reserves and plentiful
supplies of other minerals and metals. It also has a large agricultural
sector featuring livestock and grain. Kazakhstan's industrial sector
rests on the extraction and processing of these natural resources
and also on a growing machine-building sector specializing in construction
equipment, tractors, agricultural machinery, and some defense items.
The breakup of the USSR in December 1991 and the collapse in demand
for Kazakhstan's traditional heavy industry products resulted in
a short-term contraction of the economy, with the steepest annual
decline occurring in 1994.
In 1995-97, the pace of the government program of economic reform
and privatization quickened, resulting in a substantial shifting
of assets into the private sector. Kazakhstan enjoyed double-digit
growth in 2000-01 - 8% or more per year in 2002-07 - thanks largely
to its booming energy sector, but also to economic reform, good
harvests, and foreign investment.
The opening of the Caspian Consortium pipeline in 2001, from western
Kazakhstan's Tengiz oilfield to the Black Sea, substantially raised
export capacity. Kazakhstan in 2006 completed the Atasu-Alashankou
portion of an oil pipeline to China that is planned to extend from
the country's Caspian coast eastward to the Chinese border in future
construction. The country has embarked upon an industrial policy
designed to diversify the economy away from overdependence on the
oil sector by developing light industry.
The policy aims to reduce the influence of foreign investment
and foreign personnel. The government has engaged in several disputes
with foreign oil companies over the terms of production agreements;
tensions continue. Upward pressure on the local currency continued
in 2007 due to massive oil-related foreign-exchange inflows. Aided
by strong growth and foreign exchange earnings, Kazakhstan aspires
to become a regional financial center and has created a banking
system comparable to those in Central Europe. |
About Kazakhstan
