Critical Issues in Kazakhstan

Kazakhstan is exporting unprocessed raw materials and our economy is oil and gas depended. As Porter said industrial policy should be mainly "horizontal" and improving overall environment in which firms operate to encourage competitiveness. What our country needs is development of industrial sectors of economy. Particularly government should support those sectors which have strengths or potential such as agriculture, services (including transport-cargo, business services), and oil field services.

Likewise, government should focus on exporting industries mainly in those companies that are exposed to competition and in which foreign and domestic companies are willing to invest that's why they could compete internationally.

There could be problems with corruption and rent-seeking private companies. This kind of companies becoming more reliable on government support so they won't expand the market and reduce costs but will ask favors from government. Government should stop supporting such kind of private companies as soon as the government discovers that they are doing poorly.

Another importing issue that Kazakhstan has lack of innovation and developing science, new technologies, local research and development, professional people. The "Programme for Development of Science in Kazakhstan" began in 2007 and many of the objectives are not fully realized. One of the reasons of slow development is that country needs well-educated students but majority of the students are not interested in this specialization because of the low salaries, poor laboratory facilities, and housing difficulties that inhibit mobility. So students more attracted in economics and finance specialization.

So the primary objectives of Kazakhstan is to support the competitiveness of Kazakhstan's non-extractive industries and stimulate increased productivity and economic development in such sectors as tourism, food processing, oil-and-gas mechanical engineering, textiles, transportation services, metallurgy, and manufacture of building materials.