Image and Realities
Vasily Astrov, A Note on Kazakhstan’s Oil Fund
Introductory Remarks The economy of Kazakhstan has been growing dynamically over the past decade, largely thanks to the expansion of oil and gas production and exports. In 2004, Kazakhstan’s real GDP exceeded for the first time the level of 1992, the first year of independence – much earlier than e.g. in Russia. Since 2004, the size of the Kazakhstani economy has more than doubled. With the official per capita GDP at purchasing power pari- ties of 9 300 EUR in 2010, Kazakhstan is now ranking third in the CIS (behind Russia and Belarus) and has a comparable level to that of the poorest EU members Bulgaria and Romania. The actual incomes are probably higher given the large scope of the shadow economy, although there are also pronounced income inequalities, particularly between cit- ies and the countryside. Thanks to a massive anti-crisis fiscal package, Kazakhstan’s economy has also demonstrated remarkable resilience to the global crisis: in 2009, it posted a positive growth of 1.2%, whereas the economies of nearly all transition countries – with the exceptions of Albania, Azerbaijan, Belarus and Poland – were in decline. The rapid growth in oil production has been made possible primarily thanks to massive inflows of FDI from multinational companies, typically within the framework of production-sharing agreements (PSAs). In some years, FDI accounted for over a half of the country’s fixed capital for- mation, with nearly two-thirds of FDI inflows targeting the energy sector. FDI was facilitated not least by the liberal and reform-oriented image of the country....
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