Sultanov B.K. Kazakhstan Today
Подождите немного. Документ загружается.
240 241
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
4.4. Small and Medium Businesses
Kazakhstan pays particular attention to the development of small
and medium businesses. The government guarantees freedom of
business and ensures its protection and support to it. Small business
is an important element, whose condition and level of development
infl uences the sustainable economic growth of the country.
The country has a legal framework for business development. State
support to business aims at eliminating administrative barriers and
ensuring that business activities can be conducted with ease. A host
of statutes were adopted to govern the government policy to build a
strong market economy.
In order to create favourable conditions for the advancement of
business (through the stimulation of domestic demand, and support
to domestic enterprises), government purchases focus on local sup-
pliers.
The legal framework related to competition also strives to protect
the rights of market players and consumers from monopolies, anti-
competitive actions of government bodies, and unfair competition.
The state Competition Protection Agency works to create favourable
conditions for fair competition in Kazakhstan’s commodity markets
to ensure their effective functioning, the development of a uniform
economic space, free fl ow of goods, and the freedom of economic
activities in the country.
The business sector takes an active part in drafting and adopting
statues, and improving the legal framework related to the develop-
ment of business in Kazakhstan. This is done through the participa-
tion in the work of expert councils established by central and local
executive bodies.
Statistics says that the country has a little more than 1,000,000
small businesses, which altogether employ 1.7 million people.
The government understands the need to develop this sector and
encourages small and medium businesses by all means. It places
production and public service orders, helps promote goods in the
markets of other regions, and helps promote investment and innova-
tive projects.
The new Tax Code that took effect on 1 January 2009 provides
tax preferences for all businesses that invest in the economy. It also
lessens the overall tax burden on the non-primary sector and simpli-
fi es tax administration, primarily for small and medium businesses.
The resulting budget losses will be compensated by higher outputs
in the primary sector. This will help raise the role and status of small
and medium businesses.
Social and business corporations are tasked with creating the con-
ditions to strengthen cooperation between large regional enterprises
and small and medium businesses who can offer certain goods or
services as outsourcers. In this way, small and medium businesses
clusters will be created.
Additionally, social and business corporations will help promote
the products of small and medium businesses in interregional and
international markets. Their participation in projects ensures access
for small and medium businesses to fi nancial, land, and technological
resources, as well as to external markets, provides collateral guaran-
tees from social and business corporations, and offers an opportunity
to expand operations by founding joint ventures and grouping with
manufactures of similar or related products.
To encourage and support small and medium businesses in the
process of diversifi cation, state holdings have set up a committee for
the outsourcing of non-strategic, non-core assets and operations of
joint-stock companies with a government stake and of state enter-
prises, and for their transfer into a competitive environment.
An essential element in the development of small and medium
businesses are microcredits to the population that help attract non-
government funds in the sector.
In 1997, the government adopted a resolution to set up the Small
Business Development Fund, which was reorganised in 2008 as the
Damu Business Development Fund under Samruk-Kazyna. This fund
develops and promotes long-term lending schemes with the use of
government funds allocated for businesses.
The Business Development Fund provided loans to 199 micro-
credit institutions. Its contribution to the support of microcredit
institutions active nationally is 44%. As a result of the microcredits,
242 243
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
in particular to socially vulnerable people, workplaces are being cre-
ated and preserved.
The country is now implementing a system to rate the freedom
of business by region. These ratings should provide an objective es-
timate and reveal the barriers that hinder the advancement of small
and medium businesses.
Some administrative barriers have been already removed. Propos-
als have also been made for the long term that require discussion and
amendment of the respective statutes.
4.5. Oil and Gas Production and Transport
The top priority for Kazakhstan’s economic policy today is to
solidify its positions in the regional energy space.
Kazakhstan is one of the top twenty largest producers of hydrocar-
bons. The oil and gas sector accounts for up to 25% of the country’s
budget. Hydrocarbon production is growing at a signifi cant pace. In
2008, 70.6 million tonnes of hydrocarbons were produced, up 90% on
2000. Over 80% of hydrocarbons are exported to world markets.
In order to further develop the oil and gas sector, work is being
carried out to forecast and discover new promising fi elds, and speed
up their exploration, development and commissioning.
Increased production of oil and gas requires the speedy develop-
ment of transport infrastructure. Projects are under consideration to
expand existing transport systems and build new routes to export
Kazakh hydrocarbons.
Because of the favourable prospects for the construction of pipe-
lines, in planning hydrocarbon export routes Kazakhstan pursues a
multi-vector policy which allows the most effective use of pipeline
systems.
The oil and gas sector has to solidify the country’s role as an
infl uential and responsible player in global oil and energy markets.
Therefore, important objectives at present include strengthening
the country’s energy security, ensuring reliable and safe transit
for hydrocarbons, and developing international cooperation over
pipelines.
The ratifi ed Energy Charter Treaty is key to the enhancement of
the country’s export potential. This document sets forth the principles
of unimpeded and non-discriminatory transit of energy resources – an
issue which is extremely to Kazakhstan as an intercontinental state.
Hydrocarbons exported by Kazakhstan transit through many coun-
tries, primarily Russia. For this reason, it is important to strengthen
the government’s role in oil and gas transport. This also explains
the participation of state companies in the capital of major transport
companies, and the strategic importance of the oil and gas sector to
Kazakhstan’s economy.
244 245
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
Pipelines account for the majority of exported oil. Therefore, the
top priorities of the country’s policy are to further develop oil and
gas transport infrastructure, and to create new export systems and
expand existing ones.
At present the main routes for Kazakh oil are the Caspian Pipeline
Consortium’s (CPC) oil pipeline, Atyrau-Samara and Kazakhstan-Chi-
na pipelines, and the sea transport system through the Aktau port.
The 1,510-km CPC pipeline connects the Tengiz oilfi eld with an oil
loading terminal on the Russian coast of the Black Sea near Novoros-
siysk. This pipeline is the largest route for Kazakh oil exports.
Over 131 million tonnes of oil have been transported since 2001
(the year it was commissioned), including 31.1 million tonnes in 2006,
25.6 million tonnes in 2007, and 25.8 million tonnes in 2008.
Taking into account the forecasted increases in the production of
hydrocarbons, Kazakhstan needs to expand the CPC’s capacity up
to 67 million tonnes a year (including 50 million tonnes for Kazakh
oil). Kazakhstan and Russia’s energy authorities arrived at respective
understandings in May 2008.
Another important export route is the Atyrau-Samara oil pipeline,
which opens access to the markets of Eastern Europe through the
Baltic Pipeline System and the Druzhba System, and to the Black
Sea ports.
Atyrau-Samara exported 15.6 million tonnes of oil in 2006,
16 million tonnes in 2007, and 16.8 million tonnes in 2008.
Because of the planned increases in oil production, in particular
in Western Kazakhstan, Kazmunaigas and the Russian Transneft are
considering raising Atyrau-Samara’s capacity to 20 million tonnes a
year, with a plan to expand further to 25 million tonnes a year.
Currently, Atyrau-Samara’s capacity can be expanded with the help
of batching technology for pumping high-gravity oil from the Tengiz,
Karachaganak and Kashagan fi elds. The Kazakh side is currently
negotiating with Transneft to reach a decision on this issue.
The Kazakhstan-China oil pipeline is being constructed in two
stages. The fi rst stage included building the Atasu-Alashankou sec-
tion to transport oil from Western and Central Kazakhstan and Siberia
to China.
The 813-mm Atasu-Alashankou pipeline runs 962 km. Its
throughput capacity at the fi rst stage is 10 million tonnes year; it
will be increased to 20 million tonnes. In 2007, the pipeline exported
4.7 million tonnes of oil.
Investment in Atasu-Alashankou amounted to $806m. Construc-
tion was funded from authorised capital and loans raised against
guarantees by the China National Petroleum Corporation (CNPC).
On 28 June 2006, the fi rst start-up facility was commissioned. A total
of 400,000 tonnes of oil were pumped to fi ll the pipeline.
To fulfi l the second phase of the Kazakhstan-China pipeline
project, the Kenkiyak-Kumkol oil pipeline will be built, the exist-
ing pipeline at the Kumkol-Karakoin-Atasu section will be recon-
structed and modernised, and the Kenkiyak-Atyrau section will be
reconstructed.
As for sea transport, the most important element in enhancing oil
exports is the Aktau port situated on the Caspian Sea. Today, Aktau
is the only Kazakh seaport which has offshore oil loading terminals
and oil transhipment facilities to ensure transport of Kazakh oil by
the Caspian Sea to Azerbaijan (Baku), Russia (Makhachkala), and
Iran (Neka).
In 2008, the Aktau port shipped around 9 million tonnes of Ka-
zakh oil.
In accordance with an agreement between Kazakhstan and
Azerbaijan, Kazakhstan is implementing the Kazakhstan Caspian
Transportation System (KCTS) project, which includes the Yeskene-
Kuryk pipeline and the Transcaspian system. The latter will include
oil unloading terminals on Kazakhstan’s coast of the Caspian Sea,
oil carriers for sea transport, oil loading terminals on Azerbaijan’s
coast of the Caspian Sea, and connections to the Baku-Tbilisi-Ceyhan
system.
KCTS is expected to transport 500,000 bpd (23 million tonnes a
year) at the initial stage, with a further expansion to 750-1,200 bpd
(35-56 million tonnes a year).
Oil transport to Iran is another promising southern route. Kaz-
munaigas, Total, JNOC and INPEX are implementing the Ka-
zakhstan-Turkmenistan-Iran oil pipeline project, which will become
246 247
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
an alternative route for Caspian oil being pumped to the Persian Gulf
markets.
The participants are currently considering Phase I of the project,
which includes tanker transportation of oil (without the construction
of the oil pipeline) from Kazakhstan to the Iranian port of Neka.
A particular problem today is the overloaded Turkish straits. Too
many carriers and tankers cross the Bosporus and the Dardanelles
when passing from the Black Sea to the Mediterranean. Safe navi-
gation and environmental requirements impose restrictions on the
throughput capacity of the straits. In the long term, these will limit
transport of additional quantities of Kazakh oil, hence the need for
bypass projects.
This is the reason why Kazakhstan is considering participating in
the construction of the Burgas-Alexandropoulos and Odessa-Brody-
Polotsk-Gdansk pipelines.
In its energy policy, Kazakhstan is pursuing a multi-vector ap-
proach and paying particular attention to the creation of new export
routes to supply hydrocarbons to global markets. These will become
a signifi cant factor in raising the country’s export potential and
strengthening its economic security.
The gas sector is another important component of Kazakhstan’s
economy. Natural gas, the known and estimated reserves of which
reach 3.3 trillion cu m (including the recently discovered fi elds on the
Caspian shelf), and potential resources 6-8 trillion cu m, is becoming
an increasingly signifi cant energy carrier.
The paramount goals of the plan to advance the gas sector are to
multiply the socioeconomic effects of the increased production and
sound management of domestic gas reserves, and to enhance transit
opportunities of the gas transport system with a view to satisfying
domestic demand and further raising export potential.
Gas exports and transit are also important to Kazakhstan. The main
gas routes are the Central Asia-Centre (CAC), Orenburg-Novopskov,
Soyuz, Bukhara-Ural and Bukhara Gas Area-Tashkent-Bishkek-Al-
maty (BGA-TBA) pipelines.
CAC transits Central Asian gas and exports Kazakh gas. Oren-
burg-Novopskov and Soyuz transit Russian gas and export Kazakh
gas. Bukhara-Ural transits Central Asian gas, and BGA-TBA imports
natural gas from Uzbekistan to Kazakhstan.
The most urgent issue for the country’s gas transport sector is
the reconstruction and modernisation of the gas pipeline system, in
particular the CAC pipeline. CAC exports Kazakh and Central Asian
gas to Russia, the Caucasus and Europe.
Intergas Central Asia prepared an investment feasibility study on
the expansion of CAC, Makat-Northern Caucasus and Okarem-Beineu
pipelines. This paper provides for the implementation of projects to
raise the throughput capacity of CAC from 54.8 to 100 billion cu m
a year.
Energy security and the energy defi cit of the southern regions are
also very serious issues for Kazakhstan. The Beineu-Shymkent pipe-
line, which will supply gas from western regions to southern oblasts
and further to Kazakhstan’s eastern border, is being constructed to
consistently meet the southern regions’ demand for gas. Kazmunaigas
is fi nalising an investment feasibility study of the project.
Another signifi cant issue is the diversifi cation of export routes.
The Kazakhstan-China pipeline project is being developed, which
will increase Kazakh gas exports to China and ensure the transit of gas
there. In particular, it is expected that Turkmen gas will be transported
to China through Uzbekistan and Kazakhstan to the Kazakhstan-China
border (through Shymkent to Khorgos). The fi rst phase of the project
was planned for 2007-2009.
The Caspian and Transcaspian gas pipeline projects are also im-
portant to the advancement of Kazakhstan’s gas transport system.
An agreement on the former was made at an international level
by Russia, Kazakhstan and Turkmenistan in late 2007. The Caspian
pipeline project envisages the construction of a new pipeline, includ-
ing along the Caspian Sea shore of Kazakhstan, with a throughput
capacity of 30-40 billion cu m a year. This project will increase Ka-
zakhstan and Turkmenistan’s transit potential and increase exports
of Central Asian gas to Russia and to global markets.
The Transcaspian gas pipeline project is being considered in con-
nection with the construction of the Baku-Tbilisi-Erzurum (BTE)
pipeline in Southern Caucasus, which is complete and ready to pump
248 249
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
gas. This route will allow the export of natural gas to Europe through
Azerbaijan, Georgia and Turkey.
The Transcaspian pipeline, the throughput capacity of which is
expected to be 20 billion cu m, will export Kazakh gas to Europe,
through a link to the BTE pipeline.
However, it should be noted that this project involves some risks.
These include the legal status of the Caspian Sea, which directly af-
fects the policy of laying the underwater pipeline, as well as some
political, environmental and technological issues.
4.6. Mining
The mining sector is one of the key industries in Kazakhstan.
Its particular features are the great variety of the extracted minerals
and, correspondingly, the host of businesses that explore and develop
deposits and provide logistical services to subsoil users.
During Soviet times, Kazakhstan worked intensively to expand
the raw material base and produce all the types of minerals that were
ready for extraction. Major mining enterprises were set up and in-
frastructure developed. Today’s strategic objectives call for the most
effective use of Kazakhstan’s traditional advantages, which include
the development of mineral resources.
A signifi cant economic aspect of Kazakhstan’s mineral resources
is that they often lie near the surface and can be extracted using cheap
open-pit mining. In addition, in some instances, their occurrence al-
lows complex usage.
In Central Kazakhstan, for example, non-ferrous and ferrous
ores, coking coal, limestone and fi re clay occur near each other. This
combination is advantageous to the development of ferrous and non-
ferrous metallurgy and related chemical and mechanical engineering
production.
The Karatau Mountains, Rudny Altai, the Mugodzhar Hills, the
Turgai Valley, and the Mangystau Peninsula are particularly rich in
minerals. Kazakhstan’s huge natural resources make its mining sec-
tor one of the most important industries, determining its economic
potential.
The volumes of Kazakhstan’s mining production are signifi cant
in global terms. Open-pit and underground mines and ore process-
ing enterprises have been consolidated and are now the property of
various groups. The leaders in the mining sector are Kazchrome,
Kazatomprom, Kazakhmys, Kazzinc, Kazakhaltyn, and ArcelorMit-
tal Termirtau.
Central Kazakhstan is home to the Karaganda and Ekibastuz coal
basins where coking and high-calorie power-plant coal is mined
from open pits and underground mines. The Karaganda basin mainly
consists of underground mines containing high quality coking coal
250 251
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
with an ash content of 10% to 35%. The basin has large gas reserves
– methane has been extracted here for a long time. The basin also
includes the Bogatyr mine, which is the largest mine in the world,
producing 50 million tonnes of coal a year.
The main coal producer is ArcelorMittal, an international metal-
lurgical company. ArcelorMittal uses coal for its steel plant, which
is also situated in the region.
The Ekibastuz basin is situated to the northeast of Astana, in Pav-
lodar Oblast. This basin is the largest coal producer in Kazakhstan. Its
coal mines are managed by Bogatyr Access, a state enterprise, which
accounts for about 35% of the coal production in Kazakhstan. The
Ekibastuz coal has high ash content, ranging from 35% to 50%. This
coal is mainly used by households and to generate power at thermal
power plants.
As a cheap power-plant fuel, Kazakhstan’s coal is widely used
in Northern Kazakhstan, the neighbouring Western Siberia, and the
Urals. In the long term, Kazakhstan’s coal industry will progress
even further. In addition to the reconstruction and re-equipment of
mines in the Karaganda basin, the Maikuben brown coal fi eld (to the
south-east of Ekibastuz) and the Priozerny mine (Turgai brown coal
basin) have been launched since Independence.
Kazakhstan ranks second globally in terms of known uranium
reserves, which are concentrated in six uranium areas – Shu-Sarysu,
Syrdarya, Northern Kazakhstan, Caspian, Balkhash, and Ili.
Kazatomprom, a state nuclear holding company, is the fourth
largest producer of uranium in the world. In 2006, Kazakhstan
produced some 5,300 tonnes of uranium, out of which 3,000 tonnes
were produced by Kazatomprom. In 2007, production reached 6,937
tonnes.
Kazakhstan is also a notable player in the world copper, uranium,
titanium, ferroalloys and steel markets. In Eurasia, it is the only pro-
ducer of chrome. It also has signifi cant infl uence on the regional iron,
manganese, coal and aluminium markets.
Situated close to Russia, China and India and boasting huge re-
sources, Kazakhstan has become one of the ‘hottest’ regions on the
global investment map.
Kazakhstan’s mining sector has very promising economic poten-
tial. The advancement of the competitive mining industry enhances
the taxable base and provides signifi cant profi t for the national budget.
The intensive development of the production and exports of raw ma-
terials in recent years has seen the national economy attain signifi cant
economic growth and strengthen its investment potential.
The country’s main objective today is to create the conditions
conducive to the advancement of the industry, investment attraction,
and construction of the relevant infrastructure, which will help make
the most effective use of the industry’s competitive edge.
252 253
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
4.7. Processing Industry
The advancement of high value-added production is one of the
most important conditions for the dynamic development of Kaza-
khstan. This is the reason that the government is offering signifi cant
support to the country’s processing industry. This sector is in an
exceptional position, because it creates new technology that often
contributes to the progress of other industries.
Kazakhstan’s processing industry has a number of advantages.
These include the host of idle production facilities where new pro-
duction could be launched, cheap workforce with relatively high
qualifi cations, the signifi cant educational and cultural background
of the population, and the country’s natural and geographical po-
tential.
The common development priorities in the sector are technical
upgrades, energy and resource saving, technical and environmental
safety of the technologies used, loss-reduction, and the effective use
of mineral resources.
Since 1999, Kazakhstan’s processing industry has been demon-
strating steady growth. The most dynamic sectors were metallurgy and
metalworking, production of construction materials and foodstuffs,
and the production of oil distillates.
One particular of the processing sector is that it is fully fed with
local raw materials and fuel. Kazakhstan is rich in coal, oil, non-fer-
rous and ferrous metals, chemical raw materials, and the construction
materials that are necessary for the advancement of heavy industry.
The country’s diversifi ed agricultural sector supplies raw materials
for light industry and food processing.
The most developed mechanical engineering sectors in Kazakhstan
are heavy and agricultural engineering, manufacture of machine tools,
instrument engineering (to a certain extent), and electrical engineering.
Taking into account the needs of the economy, the sector manufactures
equipment for the mining, coal, oil, metallurgical and food industries,
and machinery for the transport and construction sectors.
The country’s mechanical engineering enterprises also produce
press and forging equipment (Shymkent), cutting machines (Almaty),
batteries (Taldykorgan), centrifugal pumps (Astana), and X-ray equip-
ment (Aktobe).
The centres of industrial production are Almaty, Karaganda, Ust-
Kamenogorsk, Shymkent and Atyrau. Astana and Pavlodar are the
important hubs in agricultural engineering.
Foreign investment is being attracted into the mechanical engineer-
ing sector to set up the production of medical equipment, agricultural
machinery, diesel engines, food industry equipment, electric motors,
and other items.
A total of 41 chemical enterprises operate in Kazakhstan. These
include Kazphosphate, Kazazot, the Aktobe Chromic Compound
Plant, Kaustik, Orica Kazakhstan, Nitrokhim, Ulba-Ftorkompleks,
Reactive Phosphorus Compounds, SDT Group, and Yevrokhim.
In the near future, some chemical enterprises will be consolidated
into a nationalised chemical company which will manufacture fertilis-
ers and other products.
The products offered by Kazakhstan’s chemical sector are plastics,
chemical fi bres and yarn, tyres for cars and agricultural machinery, a
wide range of rubber goods, chromic compounds, calcium carbide,
caustic soda, nitrogen and phosphoric fertiliser, phosphorus com-
pounds (white phosphorus, sodium tripolyphosphate, phosphoric
acids), synthetic detergents, sulphuric and nitric acids, and other
items.
The country’s chemical industry is built on a solid mineral base,
which includes phosphate rocks, iron pyrites, barytes, bromine, so-
dium and potassium salts, sodium sulphate, oil processing and coking
industry by-products, and sulphur dioxides produced by non-ferrous
metallurgy.
Today, the most developed chemical sectors are the mining-and-
chemical industry and the heavy chemicals industry. They extract
chemical minerals and produce mineral fertilisers and inorganic
(phosphoric and sulphuric) acids, respectively.
The petrochemical industry is also on the rise. The country has
three oil refi neries in Atyrau, Pavlodar and Shymkent that produce
petrol, diesel, fuel oil, aviation kerosene, petroleum bitumen, and
other oil products.
254 255
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
To meet the country’s demand for oil products to a fuller extent,
another oil refi nery is expected to be built in Western Kazakhstan,
not far from Aktau. The prospects of this sector are based on the
government support and further investment in all-round oil refi n-
ing.
To advance Kazakhstan’s petrochemical sector, the National
Industrial Petrochemical Technology Park (a special economic
zone) was set up in Atyrau Oblast. This facility will refi ne crude
from the Tengiz fi eld in accordance with an agreement with Ten-
gizChevroil.
The construction sector manufactures cement, asbestos sheeting,
asbestos-cement pipes, rolled roofi ng, linoleum, sanitary ware, fl oor
and decorative ceramic tiles, panels and other structures for large-
panel house construction, kaolin for the paper industry, radiators,
convectors, and other construction materials and structures.
Kazakhstan has suffi cient resources to manufacture construction
materials.
Cement manufacturing has become an important industry in Kaza-
khstan. Powerful cement plants were built in Shymkent and Semei, in
the vicinity of which large cement clays occur. New high-tech brick
and linoleum enterprises were launched. Glass plants and a host of
other enterprises will be set up.
The development of non-ferrous metallurgy in Kazakhstan is
rather impressive. This sector started in 1928 when the fi rst major
enterprises, the Leninogorsk Polymetallic Plant and the Karsakpai
Copper Plant, were built. Ever since then, the extraction and process-
ing of non-ferrous metals in Kazakhstan have been progressing at a
signifi cant pace.
Kazakhstan’s non-ferrous sector became a leading export industry
because of the country’s rich mineral base.
The main industries in the non-ferrous sector are copper, lead
and zinc, aluminium, and titanium and manganese. Each of these
industries includes mines, open pits and concentrating plants that
often form large works.
Copper extraction and smelting are concentrated in Central and
Eastern Kazakhstan. The largest copper enterprises are the Balkhash
and Zhezkazgan Mining and Metallurgy Plants. The lead and zinc, or
polymetallic, industry occupies the east and south of the country. The
Shymkent Lead Plant (based on the Karatau Mountains’ deposits) is
operating in the south. The town of Tekeli is another important polyme-
tallic producer. The aluminium and titanium and manganese industries
have developed in Pavlodar and Ust-Kamenogorsk, where large thermal
and hydro power plants generate large volumes of cheap electricity.
Kazakhstan’s ferrous metallurgy includes integrated and non-in-
tegrated production. The country manufactures cast iron, steel, rolled
iron, and ferroalloys.
The largest ferrous metallurgy enterprise in Kazakhstan is the
Karaganda Metallurgical Plant, which combines two integrated plants
and uses iron-ore concentrates delivered from Kostanai Oblast and
metal scrap. The plant manufactures cast iron, steel, pipes, railing,
and sheet iron.
Quality ferrous metallurgy is also being further developed. This
includes the Aktobe and Aksu ferroalloy plants.
Some metallurgical products made in Kazakhstan are the cheapest
in the world. Metallurgical goods are also much cheaper than oil and
gas in terms of transport costs because they do not require separate
infrastructure (such as oil and gas pipelines).
The metallurgical sector and the production of fi nished metalwork
contribute to the enhancement of Kazakhstan’s exports. The country’s
metallurgical industry is currently the most consistent competitor in
external markets.
The food and light industries also have signifi cant potential and
are an important element in comprehensive economic development.
During its years of independence, Kazakhstan has built a solid base
to further advance these sectors.
The most developed food sectors in Kazakhstan are the produc-
tion of meat, bakery, fl our, and dairy products. Sugar production
is developing in the south where sugar beet is grown. Other food
industries include fi sh (Northern Caspian), confectionery, canned
items, and winemaking.
The most advanced light industries (out of the numerous that
exist) are the manufacture of textiles (including cotton, wool and
256 257
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
cloth manufacture), leather and footwear, felt, knitted fabrics, and
sewing.
The largest textile centres are Almaty, Shymkent, Karaganda,
Kostanai, Taraz, Petropavlovsk, and Uralsk.
4.8. Space Industry
In recent years, space operations have become integrated into
economic processes. This tendency has required the government to
develop a whole complex of space activities.
Scientifi c experiments in the area of space technology, geophysics,
medicine and biology, biotechnology and fundamental sciences have
made it possible to use space achievements in almost every fi eld, from
alerts to the possibility of environmental disasters to the creation of
new virus vaccines.
A wide range of services associated with space research and
orientated to end users need to be developed. The country will have
signifi cant economic benefi ts if space research and other astronautic
achievements are integrated into its economic activities.
At the very beginning of the space era, the role of space exploration
in human life could not have been imagined. Today, there is no area
of human activities that could not make use of the results of space
exploration. The industrial, agricultural, transport, energy, health,
educational and telecommunications sectors – all of them make use
of the space industry’s achievements.
During the years after the fi rst artifi cial satellite and Vostok 1 with
Yury Gagarin aboard were launched, space exploration progressed
signifi cantly. Today, over 40 countries produce and launch spacecraft
demonstrating their scientifi c and technological potential. More than
130 countries use the results of space activities. The Baikonur Cos-
modrome ensures the operation of the International Space Station.
Space satellites now provide precise records of natural and land
resources. Observations from space help predict yields, locate forest
fi res and epicentres of earthquakes and fl oods.
It is important to not only develop the orbital and earth compo-
nents of the observation and navigation system, but also to ensure
its effective use and integration with the programmes and plans for
the acceleration of the country’s socioeconomic and innovative ad-
vancement.
The mechanism of public-private partnership will be used to
achieve this.
258 259
Kazakhstan today
Chapter 4. Kazakhstan’s Economy
Space activities in Kazakhstan are performed by the National
Space Agency, which was set up in 2007. Its main objectives are to
develop uniform state policy in the area of space activities and ensure
its implementation; to exercise government control and coordination
of space activities; to form and develop the space industry, including
designated space systems, ground facilities, space research and tech-
nology, and human potential; to create conditions for the formation of
a market in space technology and services; to promote international
cooperation in the area of space activities; and to coordinate work
related to Baikonur.
The National Space Agency works through subsidiaries, which
include Kazakhstan Garysh Sapary, the National Centre for Space
Research and Technology, Baiterek, the Republican Centre for Space
Communications and Electromagnetic Compatibility of Electronic
Equipment, and the other state enterprises that participate in the
management of Baikonur.
The companies’ activities include fundamental applied research
into the physics of near, deep and terrestrial space; implementation
of intersectoral space programmes and projects; and creation and im-
plementation of high-performance information and space technology
to meet socioeconomic objectives.
In 2004, to increase the effi ciency of the space industry, the govern-
ment adopted the State Programme for Space Activity Development
in 2005-2007. A similar programme for 2009-2020 is currently under
consideration.
These papers cover the following issues: the creation of a scientifi c
space system and advanced space power installations; development of
a scientifi c and experimental base for space activities and astrophysi-
cal research; development of a national system for satellite monitoring
of Kazakhstan’s territory and crust; research aboard the International
Space Station; and the upgrade of ground space facilities.
A total of $6bn is expected to be invested in Kazakhstan’s space
industry by 2011, and an additional 69 billion tenge in the National
Space Agency’s projects.
This money will be used to set up the Baiterek complex, a space-
craft assembly and test complex in Astana, the KazSat communica-
tions and broadcasting system with ground control, and an earth
remote sensing system with ground control.
Retraining and professional development for space specialists,
and preparation of technical regulations and standards in the area of
space activities is also planned.
In order to effectively advance its space activities, Kazakhstan
is in close contact with Russia, one of the leading space powers.
According to the agreement between Kazakhstan and Russia on the
development of cooperation with regard to the effective use of the
Baikonur complex, signed on 9 January 2004, Russia’s operation of
Baikonur is extended until 2050.
Cooperation between the countries is not limited to Baikonur.
Other issues include increasing the environmental security of space
activities and enhancing Kazakhstan’s participation in the implemen-
tation of ground and space programmes.
A promising player in Kazakhstan’s space industry is the Baiterek
joint venture, which plans to set up Baiterek, a new, environmentally
friendly spacecraft complex at Baikonur to provide commercial
launch services.
In addition, the National Space Agency was working towards
sending a Kazakh astronaut to the International Space Station in the
autumn of 2009 to fulfi l a special scientifi c programme.
The State Programme for Space Activity Development aims at
the creation of a fully-fl edged space industry, a knowledge-intensive
hi-tech sector fostering the industrial and innovative development of
the national economy and solidifying national security and defence.