According to energy minister Vladimir Shkolnik, total investments in Kazakh mineral resources projects are expected at USD 7bn. He also believes that this figure will be even larger in 2005. Shkolnik noted that the amount of the investments speaks in favor of rapid industry development.
The minister did not provide any details, but mentioned that he speaks about foreign investment. Shkolnik stressed that government should ensure this money is used to the greatest possible extent in RK and stays in our country. The minister said that revenues from this sector should be transferred to education, healthcare and social welfare.
Meanwhile, according to the IMF, Kazakhstan should change its economic policy due to high risks of the economy’s oil dependence. According to IMF’s estimates, the share of the oil economy, including associated services reached 25% of GDP and 50% of exports. IMF reports that Kazakh oil sector attracted large scale FDI of USD 3 to 4bn per annum, which stimulated construction, transportation, and other service sectors and generated large budget revenues.
However, IMF noted that the challenge of coping with the rapidly rising oil wealth becomes more serious, since oil production is expected to rise 2-3-fold over next 10-15 years. IMF says that increasing income from natural resources often allowed government rather than the private sector to take a central role in the economy.
Referring to the experience of some oil-rich states, IMF said that oil wealth affects negatively the establishment of democratic institutions.