Kazakhstan

The Republic of Kazakhstan declared its independence from Soviet Russia in 1991. It is the 9th largest country in the world, bigger than Western Europe, and is the world’s largest land-locked country.

Since 1991 it has pursued a “democratic” path with a bicameral presidential constitution. Its President, Nursultan Nazarbayev, was leader of the Kazakh Communist Party in 1989. Since his election in 1991, he has been re-elected in 1999 and 2005 for 7 year terms. Thanks to a 2007 amendment to the constitution, he can run for office indefinitely but future presidents after him will only be allowed to serve 5 year terms. Nazarbayez maintains strict control over the country’s politics and elections have not met with independent observers’ approval. That said, Kazakhstan’s economy and the prosperity of its people has improved. Its international standing is high and it belongs to many international organisations – UN, NATO’s Partnership for Peace, Commonwealth of Independent States, and it has applied for membership to the World Trade Organisation.

It was the first of the Former Soviet Union States to receive, in 2002, an investment grade rating (BBB-) from Standard & Poors. It has been praised by the IMF for its economic management. As a place to do business it is well ahead of other Central Asian States.

Culturally, the population of Kazakhsatn (15m) is made up 55% Kazakhs, 27% Russian, and the rest other Central Asian groupings. The official and dominant language is Kazakh, though Russian is more widely spoken in business. Islam is the primary religion followed by orthodox Christianity. There is complete freedom of religious worship.

Economy
GDP in 2008 was approx. $104b according to the World Bank, with per capita GDP of $6708. Growth of GDP in 2008 was 1.3%. over 2007. Prior to that, GDP had grown more than 8.4% per annum in the years 2002-2007. It is easily the largest economy in Central Asia.  It had external debt of $96.4b at the end of 2008 and foreign exchange reserves of $19.4b in April 2009.

Oil is the most important commodity in the economy, accounting for some 65% of exports and 24% GDP. Other important sectors are agricultural, (10% of GDP) with wheat and livestock prominent, and minerals, especially uranium. The banking system was partly nationalised this year in response to the credit crisis. As with many other Western banks, Kazakhstani banks got carried away with lending to the property sector which then became severely squeezed as prices nosedived from 2007 onwards. It happened from a relatively low base and fairly early on, so Kazakhstan was spared many of the worst excesses. In addition to propping up the banks, the government removed the unofficial peg to the dollar, allowing the tenge to devalue by 20%, thought the peg appears to have been re-established at the new level . Other stimulatory packages include a corporate tax rate reduction from 30% to 17.5% for 2010, reducing further to 15% from 2011.

Broadly speaking, the economy has been well managed and thanks to its abundance of natural wealth, it would not be surprising to see some small growth this year after being in recession in the first quarter.