New economic era of CARs

Sophia Siddiqui

IN this time of economic pressures around the globe, one country of Central Asian region, the Republic of Kazakhstan, is seen as confidently moving towards the status of a welfare State, developing a new counterpart to the world famous ‘Scandinavian Model.’ The President of Kazakhstan, Nursultan Nazarbayev, presented a new strategy for the country, the main priority of which he outlined as the growth of citizens’ well-being, increasing income levels and quality of life. Kazakhstan occupies a worthy place in the international ranking of social development and welfare of citizens. The Legatum Prosperity Index places the country at the 72nd position, in the middle globally and the best place among all the countries of the former Soviet Union. Last year alone, Kazakhstan has soared in the ranking by 11 positions at once and now, for example, it ranks 35th in terms of access to education and its quality. The dynamics of Kazakhstan in this ranking reflects the qualitative changes that have been occurring in the country over the past decades. The country is systematically heading towards creation of a welfare state, aimed primarily at ensuring the well-being of its citizens, and only then at satisfying some political ambitions. This, in fact, was confirmed by Nursultan Nazarbayev in his recent address to the people. The President of the Central Asian Republics voiced a long list of initiatives that, subject to their successful implementation, should turn the country into a real social paradise.
For example, Kazakhstan plans to significantly increase spending on education, science and health care. Presently 10% of GDP is spent on these areas, only in developed countries. Part of this money will go to raising salaries for doctors. Although the work they have, perhaps, will be less. After all, a healthy lifestyle in Kazakhstan is now elevated to the rank of national ideology. The country plans to start a large-scale construction of sports and recreation complexes, carry out a complete modernization of hospitals and unprecedentedly increase control over the quality of water and food. Kazakhstan is also changing its approach to education, even though the current model works successfully. The world ranking of the country for this indicator is in the top-35. However, there is still something to strive for. Future qualified personnel in Kazakhstan will now begin to prepare from kindergarten, all schools will switch to international standards, and universities will be evaluated not by the number of “star” teachers or tuition fees, but by how well their graduates find work.
Construction of new homes, preferential mortgages, a comfortable urban environment and increased security on the streets – all these aspects should become puzzles of the new socio-economic picture of Kazakhstan in the coming years. The country is providing great support for business development. Conditions for starting a business in Kazakhstan are among the most attractive in the world. Tax amnesties, concessional loans and the lack of audits allow start-up entrepreneurs to get on their feet and grow further. Now the share of small and medium-sized businesses in the country’s GDP is 30%, in the plans of the Kazakh authorities to bring this figure up to 50%. While oil is a major source of revenue for the country, and oil prics are stablzing again after a long slump, Astana never suffered from the “Dutch disease” and did not rely on only one sector of the economy. Kazakhstan also relies to a large extent on agriculture and manufacturing. In the next three years, the country will spend an additional half a billion dollars on the development of these areas. In addition, a direct investment fund in the non-resource sector will be created in Kazakhstan, which will operate on the principle of co-investment with foreign partners.
These measures, it seems, will allow the formation of new stable sources of growth for the Kazakhstani economy, stimulate the inflow of investments and promote freedom of the market. And this, in turn, will directly affect the welfare of citizens and their level of income. What, in fact, is the ultimate declared goal of all the transformations that the Kazakh authorities have started. The model of the welfare State that Kazakhstan is developing can be compared with the Scandinavian one. It is often spoken of as the symbiosis of the most successful elements of capitalism and socialism. The model is based on capitalism, whose weaknesses are corrected by the best practices of socialism, and the whole system is structured so that it works exclusively for the benefit of the population. How successful the ‘Scandinavian model’ of economic development can be judged by the level of per capita GDP in the countries of this region and the places they occupy in various world rankings, welfare indices and lists of the happiest countries. Denmark, Sweden, Finland and Norway are always in the top ten. The stability of the economy, social mobility, universal employment, equal access to education and health care, the redistribution of wealth are the distinctive features that these Scandinavian countries have already acquired and which Kazakhstan is acquiring now, creating its own unique model of a social state, taking into account its historical past by world standards experience independence.
—The writer is freelance columnist, based in Islamabad.

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