Kazakhstan will accelerate the already blistering pace of its economic growth as it seeks to achieve its goal of becoming one of the world’s top 10 richest countries by 2015, its economy minister Aslan Musin said yesterday.
But officials warned that rapid capital inflows are causing inflationary and monetary pressures which threaten the country’s high growth success story.
Musin, who is also deputy prime minister, said that in order to achieve that goal the country will need to invest over $300 billion and annual GDP growth will need to be boosted from the already high level of10% to 12-14%. Kazakhstan has consistently posted the highest growth numbers in the central and eastern European region since 2000.
Oil production will need to be doubled, as will foreign trade volumes, while the administration is also looking to diversify the economy away from the oil and gas and metals sector, with a focus on improving agricultural production volumes and upgrading the country’s infrastructure to further exploit its highly advantageous geographical position between China and Russia.
“We understand that our oil and gas resources will not last forever,” Musin said. He added that the government also wants to boost the role of small and medium-sized enterprises in the economy, targeting a 40% contribution by 2015. To achieve the ambitious targets Musin said the authorities in Astana are likely to boost the level of foreign investment in the country as a result of new legislation and economic reforms.
But deputy central bank governor Medet Sartbayev acknowledged that inflation remains a problem. To help suck up excess liquidity in the country Sartbayev said: “We need to push forward with the development of the capital market,” adding that the government was currently preparing new laws on securitization, mutual and investment funds, as well as protection of minority investor rights.
“There are signs of a property bubble in some cities in Kazakhstan and so we want money to go into the capital markets instead,” he said
As an example of capital markets development Sartbayev said that he expects that there will be $5bn woth of asset backed issuance in the next couple of years, while strategically important companies such as power company Kegoc and rail company Kazakhstan Temir Zholy will be listed in Almaty.