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Kazakhstan – it’s not just the economy, stupid!

By ucqbfkf, on 19 March 2014

Kazakhstan_FlorianLast week I attended a workshop on the ‘Sustainable Use of Mineral Resources’ organised by the British Council and Kazakh partners in Ust-Kamenogorsk, a city in eastern Kazakhstan. I did not only appreciate the great cuisine and remarkable hospitality, but the trip also made visible some of the challenges the country is currently facing.

Following the workshop’s title, I expected discussions about sustainability. A sustainable use of resources requires all of its three dimensions to be reflected – economic, social and environmental. Generally, a sustainable resource management seems to be the key issue here. The goal is to fairly share economic profits among society without compromising environmental stability. Most discussions during the workshop focused on mapping the mineral landscape through international academic collaboration. The results will facilitate exploitation with a predominant attention on the economic side of the sustainability equation.

Concentrating mainly on the economic side is just not enough. Nevertheless, most emphasis is put on economic considerations. Kazakhstan is a resource rich country. The oil industry accounts for more than one-fourth of GDP. Additionally, there are substantial reserves of raw materials such as uranium, copper, iron ore, and zinc. Recent discoveries of rare earth metals promise a prosperous future. The extraction industry is booming. In short, there is great potential for economic development. The growth rates in GDP over the past decade demonstrate that Kazakhstan is harvesting these economic benefits.

Kazakhstan_Florian2From a social point of view there is room for improvement. Despite increasing investments in health service, education, and poverty reduction, major gaps between urban and rural areas persist. High-level education seems to be most successful. Kazakhstan has already played an important role in the former Soviet scientific research community – going far beyond the Baikonur space launch facility. The newly established state-of-the-art Nazarbayev University in Astana emphasises the on-going importance of this legacy. However, the full social potential is not sufficiently considered.

Also environmental aspects are not a top priority on the political agenda. Historically known for its nuclear testing, contemporary Kazakhstan struggles to cope with pollution from metal smelters, car emissions and heavy industry. Environmental impacts of the growing resource-intensive economy are of secondary importance.

In summary, significant endowments are only one part of the story. In order to escape the so-called resource curse, it takes more than ‘just’ getting rocks out of the ground to benefits from them in the long run. The ball is in the court of politicians, businesses and academia now. After all, it’s not just the economy, Kazakhstan!

Florian Flachenecker, UCL ISR Doctoral Researcher

Florian completed his MA at the College of Europe in European Economic Studies. He holds a BSc in Economics from the University of Mannheim. Florian worked at the Centre for European Economic Research (ZEW), the collaborative research centre ‘The Political Economy of Reforms’ at the University of Mannheim, Deutsche Bank AG Research for Economic and European Policy Issues and at UBS Deutschland AG at the Chief of Staff.

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