Group 5 Economic Growth in Kazakhstan Members

Group : 5 Economic Growth in Kazakhstan Members : Beksultan Nazarkhan MD Shahriar Rahman Yucong Shang

Kazakhstan: General Info

Kazakhstan: Borders

Did you know that Kazakhstan…? ?

MAJOR INDUSTRIES: Chemical Processing, Copper Smelting, Forging and Pressing Machines, Instruments, Iron and Steel, Mineral Processing, Mining, Oil Refining, Rolling Equipment, Sugar Refining, Textiles. MAIN EXPORTS: Chemicals, Chemical Products, Clothing, Fertilizers, Iron Ore, Machinery, Minerals, Petroleum, Steel, Textiles. Extraction and processing of NATURAL RESOURCES: • Fossils • Minerals • Metals play significant role in Economy Development

Kazakhstan EXPORT Others 21% Russia 10% Ukrain 2% Great Britain 2% Italy 16% China 12% Iran 5% Israel 2% Switzerland 16% France 8% Netherlands 5%

3 BASIC REASONS TO INVEST, TRADE AND PRODUCE IN KAZAKHSTAN Favorable Investment Climate 1. Natural resources 2. 3. Markets Ø Political & social stability Ø State support and guarantee of investments (Kazakhstan has signed agreements on mutual investment protection) Ø Large mineral & renewable reserves (#1 Uranium Producer in the world) Ø Hub Europe <-> Asia Ø Large & fast growing neighbor markets (up to 500 million consumers)

Main investors of the Republic of Kazakhstan Romania 8. 13% 5. 76% United States 3. 68% South Korea 21. 93% 5. 60% Russian Federation 3. 35% Liberia 4. 27% Japan Italy 2. 60% 2. 39% China 15. 26% 3. 79% Switzerland British Virgin Islands 3. 38% Canada 16. 78% Great Britain France 2. 55% 0. 54% Netherlands Others Yes, the US is one of the top investors to Kazakhstan

Kazakhstan: Economy Overview Ø Significant achievements due to economic reforms, political stability and natural resources • GDP in 2009 reached $115. 3 billion USD • Many economists expected crisis-hit Kazakhstan's economy to shrink, but, on the contrary, the country demonstrated seemingly small growth in 2009 (1. 2%) and stable 4. 7% growth in the 1 st half of 2010, which is considered as a great success, as most of the CIS countries have experienced a decrease in their GDPs. Ø Stable, focused and forward-looking government policy • Kazakhstan is committing significant effort to diversify its economy • Kazakhstan strives to increase transparency in business practices Macroeconomic indicators* 2003 2004 2005 2006 2007 2008 2009 2010 Nominal GDP ($ bn) 30. 8 43. 2 57. 1 81. 0 104. 9 133. 4 115. 3 1 H 62. 9 Real GDP growth (%) 9. 8 9. 6 9. 7 10. 7 8. 9 3. 3 1. 2 8. 0 6, 808 7, 742 8, 699 9, 839 10, 895 11, 353 11, 526 11, 313 (F) Consumer price inflation (end-period, %) 6. 8 6. 7 7. 5 8. 4 18. 8 9. 5 6. 2 7. 3** Recorded unemployment (average, %) 8. 8 8. 4 8. 1 7. 8 7. 3 6. 6 6. 7 5. 9 -273 335 -1, 056 -1, 999 -8, 321 6, 279 -4, 248 4, 923 3, 6 6, 7 10, 3 14, 6 15, 1 33, 5 15, 2 16, 5 22. 7 32. 8 43. 4 74. 0 96. 9 107. 7 113. 2 114. 6 2, 213 5, 436 2, 117 6, 663 7, 966 14, 783 10, 501 6, 353 GDP per capita (current $ at PPP) ** Current account balance ($ mln) Trade balance ($ bln) External debt ($ bln) Foreign direct investments, net ($ mln) * sources: National Bank, Ministry of Economic Development and Trade ** source: World Bank *** as of January-September 2010

Economy Development Trends GDP, million USD 140, 000 Inflation, % 45 40 120, 000 35 100, 000 30 80, 000 25 20 60, 000 15 40, 000 10 20, 000 5 0. 000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

The Global Financial Crisis and Kazakhstan Impact of the global financial crisis on the Kazakhstan’s economy: In September 2007, Kazakhstan fully experienced the impact of the world crisis, mostly in the following sectors of economy: Ø Financial sector Ø Small and middle-sized business Ø Housing construction Ø Agro-industrial sector …as a consequence, all branches of the economy were affected Government’s response: Ø In autumn 2007, the Government promptly developed the Plan of Antirecessionary Measures for 2007 -2008 and began its immediate implementation. Ø In autumn 2008, the Government approved Anti-Crisis Program with a focus on five vectors: financial sector, real estate market, support to SME, agriculture sector and innovation-driven industrial projects. Ø Total value of the stimulus programs - $20 bln (14% of the country’s GDP).

Results of the restructuring from macro-point of view Indicator • Inflation (y-o-y) 01. 10. 2008 01. 10. 2010 18. 2% 6. 7% • Banks’ liquidity • (% of total assets) 14. 1% 22. 6% • Volume of banks’ • assets in NB 9. 1 USD bln 10. 5 USD bln • Banking system • gross external debt 41. 6 USD bln 17 USD bln • In addition, the banking system of Kazakhstan has showed its solvency; and the three problematic banks have successfully finished their restructuring.

Key Outcomes of the Anti. Crisis Package Significant growth of economic indicators was realized during the 1 st half of 2010 in several industries: Industrial production 11. 0 % Foreign trade turnover 40. 1% Crude oil production 5. 9 % Export 72. 2% Natural gas production 5. 1 % Cargo turnover 10. 4% Coal production 6. 0 % Passenger traffic 10. 8 % Iron production 25. 0% Communication services 4. 9 % Retail sales 13. 3% Processing industry 19. 4 % Agriculture 1. 3 % Wholesale turnover 13. 5% Mining 5. 8% Construction works 0. 1%

Economy of Kazakhstan in view of Dr. Patrick Dixon

Thank you for your attention!