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EBRD issues new strategy for Kazakhstan
Kazakhstan has made visible progress in market-based economic reforms in the
past two years, although political reforms were slower and did not match
economic achievements, according to the EBRD’s latest strategy for the
country, published today on www.ebrd.com.
The strategy applauds Kazakhstan’s macroeconomic prudence, already rewarded by
its sovereign foreign currency rating being upgraded to investment grade.
Economic growth of 9.5 per cent, driven by growth in the oil and gas
industries and high commodity prices, contributed to a fiscal surplus of 4.7
per cent of GDP in 2003. Progress was seen in the deepening of the banking
sector, advancement of financial-sector regulation, and improvements in
company law, public utilities tariffs, and renewed efforts to promote reforms
in telecommunications and railways.
The strategy notes that strong presidential power is not adequately balanced
by the legislature or judiciary, and pervasive corruption remains a problem.
The registration of opposition parties and the abandonment of a controversial
proposed media law were positive steps in the country’s democratic transition.
Parliamentary elections in September 2004 fell short of international
standards, although they represented an improvement over previous
parliamentary polls.
Economically, Kazakhstan’s chief long-term challenge is to become less
vulnerable to oil price fluctuations. To achieve diversification, the strategy
says, the authorities should further improve the investment climate by
bolstering confidence in the judicial system, fighting corruption and
enhancing corporate governance of local companies.
The Bank will therefore focus its support for Kazakhstan on private-sector
activities, primarily in the local financial sector and agribusiness, and
co-finance projects outside the natural resources sector. Public-sector
involvement will concentrate on projects with significant transition impact or
a regional dimension. The creation of opportunities for local-currency lending
will be a priority, as will the diversification of financial services. The
Bank will help with the privatisation of the State Accumulation Pension Fund
and development of the mortgage sector.
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