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A Study on Economic Development in the New Silk Road

A Study on Economic Development in the New Silk Road. Kazakhstan Mukhamediyev BULAT Kazakh National University. Territory of the republic (thsd. sq. km) 2724,9 Population ( 1.05.2011, thsd., person) 16 536 Density 6.06

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A Study on Economic Development in the New Silk Road

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  1. A Study on Economic Development in the New Silk Road Kazakhstan Mukhamediyev BULAT Kazakh National University

  2. Territory of the republic (thsd. sq. km) 2724,9 • Population (1.05.2011, thsd., person) 16 536 • Density 6.06 • Capital was moved from Almaty to Astana in 1997

  3. Economic Development of Kazakhstan in 2000-2010 • Rate of GDP growth 9-10 %last 10 years • The extraction of natural resources • Favorable investment climate • Developed financial sector • The Economy is closely integrated into global processes • Reflects the cycles of the global economy, all its ups and downs • Due to the structure of exports it is able to extract excess profits in times of crisis

  4. Rate of GDP growth

  5. GDP growth

  6. Inflation • 6-8 % in period 2000–2006 • Up to19 % in 2007-2008 • The banking bubble (excessive borrowing) • The real estate bubble (housing prices rise in ten times) • They burst with the onset of the global financial crisis • The sharp decline in lending to the economy • The slowdown in economic activity • Decline in real incomes

  7. Government measures • Increases in pensions and salaries for public sector employees • Support the banking system • Strengthening the raw material orientation of the economy • In 2010 exports of mineral products - 74.9% • including oil and associated gas 50% of exports

  8. The Resource Curse • Increased production of oil and gas condensate • Reserves will last for 35-50 years • Dutch disease • The development of economic and political institutions, the OF • Diversification of the economy • Financial sector development, access to investment resources • The increase in total factor productivity

  9. REER

  10. Estimated crude oil production in Kazakhstan, mln barrels per day

  11. Oil • Tengiz and Kashagan - an annual increase of 5 million tons • In the next 10 years the RK may enter to the five largest suppliers of mineral resources • Problems in oil refining sector

  12. The structure of oil and gas condensate in the ROK in 2000-2011, mln. T

  13. The structure of oil and gas condensate in the ROK in 2000-2011, mln. T

  14. Economic Development • High prices are favorable for the development of the economy of Kazakhstan. • However, the productivity decreases for a large part of non-oil economy. • Liquidity in the banking system is restored, but new loans made ​​in small quantities.

  15. The most important factor of the growth is the price of oil. In 2010, they rose by 41%. • Fixed capital investment has shifted from foreign sources to domestic sources. • The state budget deficit - about 2%.

  16. The price of Brent crude oil, U.S. $ per barrel

  17. Industry

  18. Foreign Direct Investment in fixed assets for the years 1993 -2010, USD million

  19. GDP growth

  20. Oil Extraction and its Price

  21. Inflation

  22. Export and Import, 2010

  23. Risks • The main risk to Kazakhstan is the price of oil.According to the WB the oil price rise by 1% leads to an increase in GDP by 0.08%. • Oil in 2009 was about 70 percent of exports, 26 percent of GDP. • Diversification of export destinations: - KPC and Atyrau-Samara - Baku-Tbilisi-Ceyhan pipeline - Atasu-Alashankou • External risks to the financial sector • The instability of the flow of portfolio investment (12% of GDP in 2010) • External debt equels about 80% of GDP.

  24. Customs union • Russia, Kazakhstan, Belarus - 01.01.2010. • Creating a single economic space2012 году. • Для Казахстана средний тариф увеличился с 6.7 до 11.5. • В 2010 году общий объем импорта остался почти неизменным. • Однако, импорт за пределами ТС сократился на 20%, а из Китая – на 48%. • В 2011 импорт из Китая медленно восстанавливается, а из Европы и Северной Америки снижается.

  25. Транссиб – 11 500 км Transsib– 11 500 km 14 суток 14 days Западная Европа -Западный Китай – 8 445 км West Europe -China – 8 445 km 10 суток 10 days до 45 суток 45 days Морской путь через Суэцкий канал – 24000 км The sea route through the Suez Canal – 24000 km

  26. Impact of the new Silk Road • The Economy of Kazakhstan • Other countries

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