There is a remarkable feature in the events in Kazakhstan that has been out of sight of numerous commentators. Formally, Kazakhstan is a quite successfully developing economy, which for a long time was considered an example of a transition from a “plan” to a “market”. However, it turns out that economic growth alone cannot yet serve as the basis for social stability. & Nbsp;
Photo: RIA Novosti
Champions of economic ratings
Literally three weeks before the start of the protests, on December 10, 2021, speaking at the international scientific and practical conference “Leadership. Stability. Progress «, held in Nur-Sultan, Deputy Prime Minister Yeraly Tugzhanov said that» Kazakhstan is the leader among other CIS countries in terms of the accumulated volume of attracted foreign direct investment per capita. » And it is true. In the period from 1993 to 2021, the amount of such investments attracted by Kazakhstan amounted to at least $ 365 billion.
In fact, even more foreign money came to the country — this can be judged by studying the main oil and gas projects of Kazakhstan: Tengiz, Karachaganak and Kashagan. They have been implemented by international consortia on the basis of special government agreements since the early 1990s. Revenues from the export of hydrocarbons allowed Kazakhstan to accumulate significant oil reserves, which reached $ 94 billion at the end of 2020, including funds in the National Fund (an analogue of the Russian NWF) — $ 59 billion.
Kazakhstan has always been a favorite of international rating agencies and institutions studying economic growth. In the Human Development Index, compiled by UN experts, Kazakhstan ranks 51st (Russia — 52nd).
In 2021, in the Global Competitiveness Ranking, which the World Economic Forum calculates, Kazakhstan took 35th place, behind the Czech Republic and ahead of Portugal. In the Global Competitiveness Index, Russia ranks 45th — between Chile and Greece.
And if the official unemployment rate, according to the International Labor Organization, in 2020 in Russia and Kazakhstan was the same (4.6%), then the level of social stratification was «in favor» of Kazakhstan.
In the Russian Federation, about 13% of the population is below the official poverty line, in Kazakhstan — only 5.3%. The incomes of 10% of the poorest Russians are 15.6 times less than the incomes of 10% of the richest compatriots. And in Kazakhstan, 10% of the “wealthy” are only 5.9 times richer than 10% of the “poorest”.
Kazakhstan also looked advantageous against the background of other post-Soviet republics. In general, over 30 years, the volume of Kazakhstan's GDP has grown 190 times — from $ 11.4 billion in 1993 to $ 190 billion in 2021. In terms of GDP per capita, Kazakhstan is second only to the Baltic countries and Russia.
According to the PwC Paying Taxes 2020 report, the total tax burden on business in Kazakhstan is one of the lowest among the republics of the former USSR. In the 2021 Index of Economic Freedom, which is compiled by the Wall Street Journal and the Heritage Foundation, Kazakhstan ranked 34th out of 178, ranking among the «mostly free economies» next to Germany and Norway, ahead of Belgium and Spain. In the Index of Economic Freedom, Russia is in 92nd place.
It is possible to list the achievements of Kazakhstan for a long time, but this information will lead us to a dead end more and more: if everything is so good in the economy, why do we see what is happening in Kazakhstan now?
The flip side of growth
Economic growth and social development are not synonymous, the economist says. You can have great business results, low taxes, and a high level of investment, but all of this may not mean an increase in the standard of living of people, or an increase in consumption.
Yes, in terms of the average salary, Kazakhstan ranks third in the CIS — after Russia and Belarus. But this is a low salary. In the pre-pandemic 2019, the average salary in Kazakhstan in foreign currency terms was $ 488, while in the Russian Federation it was $ 739. But the official indicators of price growth in Kazakhstan are higher than Russian ones. In 2020, inflation accelerated by 7.5%, and in 2021 — by 8.9%. Food prices rose even more — by 11.3% in 2020 and by 10.9% in the first 11 months of last year. To compensate for the rise in prices, people borrow money, and in 2020 the debt load of Kazakhstani residents increased by 12.3% compared to the same indicator in 2020. However, the high cost does not scare everyone: in 2020, the luxury market in Kazakhstan has only grown — just like in Russia.
In fact, the economic model of Kazakhstan is far from being as modern as it might seem from the outside. In essence, it is a deal between the owners of the raw materials business and the owners of the country. The government guarantees that people will work for the lowest possible salary, allowing business to save on costs, and business guarantees that all the wishes of the government will be fulfilled.
At the same time, we are talking primarily about international business — the resources of Kazakhstan are mined and exported by foreign companies. More than 70% of the oil business in Kazakhstan is controlled by foreign companies. The USA is in first place — 29.5% of all oil production, China — 17.7%, European companies — 17.4%. The largest oil company in Kazakhstan, the Tengizchevroil joint venture (JV), is 50% owned by Chevron, 25% by ExxonMobil, 5% by LukArco (a subsidiary of Lukoil) and only 20% by Kazakhstan's KazMunayGaz …
Kazakhstan provides 40% of world uranium production. But 11 out of 13 uranium mines and factories belong to companies from Russia, Japan, China, France, Canada. Foreign companies control metallurgy and gold mining.
At the same time, the ruling clans do not lose sight of theirs. As the World Bank experts write in the “Kazakhstan Economic Report — Summer 2021”, “… according to the indicator of regulation of goods markets of the Organization for Economic Cooperation and Development (OECD) … the regulatory system of Kazakhstan … limits competition significantly more than regulation in Eastern Europe … Most restrictions is associated with distortions created by the participation of the state in the economy, especially in the form of state ownership in the subjects of the quasi-public sector in the markets where the participation and competition of the private sector is usually viable … ”That is, the government in Kazakhstan is an accomplice of the resource business, its beneficiary.
At the same time, foreign direct investments, which Kazakhstan is so proud of, are investments primarily in the extraction of raw materials.
The same “Report on the Economy of Kazakhstan — Summer 2021” states that Kazakhstan “shows little progress in attracting significant FDI inflows relative to the size of its economy. In addition, most of the investment attracted to the country to date is concentrated in the extractive industries, which are more susceptible to changes in commodity prices and have only a limited spreading effect to the rest of the domestic economy. ”
As in Russia, “two economies” have formed in Kazakhstan: one, an export-raw material, is flourishing with the participation and control of the authorities, and the other, a “consumer” one, in which most of the country's population works, lives by completely different standards. There is a wall between them. And what is happening now will lead either to the dismantling of this wall, or to its strengthening.