Kazakhstan is one of the leading economic partners of Russia. Both states have close historical economic ties, which can be further strengthened by the further integration of states within the EAEU. Kazakhstan is the most important partner of the Russian Federation in terms of the exchange of industrial products. What is the specificity of the manufacturing sectors of the economy of the Republic of Kazakhstan?
Leading industries of the Republic of Kazakhstan
The industry of Kazakhstan is represented by several leading segments:
- coal industry;
- metallurgy;
- fuel and petrochemical industry ;
- chemical industry;
- food industry;
- light industry;
- production of building materials.
Consider their specifics in more detail.
Coal industry
The coal industry of Kazakhstan is among the largest industries not only in the Republic of Kazakhstan, but also throughout the EAEU economic space. The country is among the leaders in terms of coal production per capita, as well as in reserves. Its largest reserves are concentrated in Central Kazakhstan, as well as in the Northeast of the state. A significant portion of the coal is exported.
According to experts, the Republic of Kazakhstan is experiencing a certain deficit of coals belonging to the category of varietal, most often used in the communal sphere, as well as at enterprises where boiler houses of the corresponding type operate. To cover the needs of the country's economy in this type of coal, it is possible to expand production capacities in the corresponding segment. In particular, this may be an increase in production intensity in the Pavlodar region. Coals occurring here are characterized by a high degree of grade, they are easy to enrich, the costs of obtaining them from the subsoil are relatively small.
Metallurgy
Among the leading industries of the Republic of Kazakhstan - non-ferrous metallurgy. Kazakhstan produces excellent quality copper, zinc, titanium, various rare earth metals. Products can be issued in the form of rental. RK is one of the world leaders in copper production, its main part is exported to Western Europe. Kazakhstan is a significant player in the global gold market. The country has more than 170 deposits.
The metallurgical industry of Kazakhstan is also developed in the segment of output from iron ore. RK is among the world leaders in reserves of the corresponding breeds. At the same time, a significant part of the reserves belongs to the category of readily available. The main volumes of iron ore mined in the Republic of Kazakhstan are exported.
Metallurgy is one of those industries of the Republic of Kazakhstan in which very close ties are established with Russian enterprises. This is largely due to the fact that a significant part of the corresponding communications was established even under the USSR. Thus, between the enterprises of the Kazakhstan SSR and the RSFSR, an active exchange of raw materials, metal, and billets was carried out. In many areas, the relevant ties are still valid. There are all prospects for their further strengthening - taking into account the fact that Russia and Kazakhstan are now most likely to integrate even more economically within the EAEU.
Fuel and petrochemical industry
The oil industry of Kazakhstan is another important sector of the state economy . The Republic of Kazakhstan produces the widest range of products of the corresponding type - gasoline, diesel and boiler fuel, kerosene for aviation and many other types of oil products. This industry is adjacent to the developed petrochemical segment. The country produces various types of plastics, fibers, tires.
The peculiarity of the development of the oil industry of Kazakhstan is that it is an example of successful integration of the state and private enterprises. The fuel industry of Kazakhstan is represented not only by large corporations, but also by small and medium enterprises. Numerous foreign investors also take an active part in the development of the oil industry of the Republic of Kazakhstan. The fuel industry of Kazakhstan remains attractive for businesses from Russia, other EAEU states, and Western countries.
Engineering
Engineering is an example of another significant industry in Kazakhstan. The state produces equipment for various purposes, machine tools, pumps. The enterprises of the machine-building industry of the Republic of Kazakhstan actively interact with foreign investors - Russian, Western, representatives of the EAEU states - with a view to attracting investments. Mechanical engineering in the Republic of Kazakhstan grew at a noticeable pace in the mid-2000s; there was some decline during the crisis of 2008-2009. But difficulties were overcome, and now the corresponding industry is among the stable segments of the state’s economy.
Mechanical engineering in the Republic of Kazakhstan is an industry that has significant prospects in connection with the availability of sufficiently large capacities - from the time of the USSR, which are not adequately involved. Now the share of the relevant industry in the economy of Kazakhstan is small, it is several times inferior, in particular, to Russian indicators. However, subject to the successful attraction of investments, a significant increase in the dynamics of output of machine-building products by Kazakhstani enterprises is possible.
Production of building materials
The production of building materials is another example of a successful industry, which represents the industry of Kazakhstan. The state produces cement, pipes, slate, linoleum, various panels, ceramics and other types of products. The main volume of building materials of the Republic of Kazakhstan is produced at the expense of the national resource base.
Production of building materials in the Republic of Kazakhstan is among the most dynamic sectors. So, from 2008 to 2013, the production of the corresponding type of product in Kazakhstan, according to some reports, doubled. In turn, the dependence of Kazakhstan companies on imports decreased. The government and business have identified new guidelines for the further development of the industry. It is estimated that within the framework of existing innovation programs, support will be provided to the leading enterprises of the segment.
Chemical industry
The chemical industry of Kazakhstan is also significant for the state economy. Among its leading segments is phosphorus production. According to some estimates, Kazakhstan is among the leaders of the CIS market for its release. Also in the country there are large enterprises engaged in the production of chrome compounds, paints and varnishes.
The export structure of the chemical enterprises of the Republic of Kazakhstan is such that inorganic chemistry products dominate in it, characterized by low indicators of the technological limit. There is also a tangible dependence of Kazakhstan on imports of chemical products. In turn, high-tech products prevail in it - fertilizers, detergents, plastics. Thus, the chemical industry of Kazakhstan has significant potential for modernization. In particular, in the aspect of import substitution.
Food industry
The food industry of Kazakhstan is among the most dynamic segments of the country's economy. The predominant share in the structure of the corresponding industry belongs to grain processing, production of milk, bread, meat processing, cultivation of fruits and vegetables, and activities of oil and fat enterprises. Significant needs of the Republic of Kazakhstan for food imports remain. This may determine the prospects for further growth of the corresponding segment as an import substitution tool.
The government of the country also plays a significant role in the development of the food industry of the Republic of Kazakhstan. Thus, the Kazakh authorities have developed large-scale programs to support national producers. Mainly, these are subsidies, reduction of interest rates on corporate loans, assistance in the acquisition of fixed assets. It is expected that in the process of implementing the corresponding initiative, government agencies will invest several trillion tenge in support of businesses. It is also expected to adjust a number of provisions of tax legislation in order to optimize the interaction of food industry enterprises and the state in terms of budgetary allocations.
Light industry
Kazakhstan's light industry is also developed. It is mainly represented by enterprises operating in the cotton segment. Studies show that the needs of the domestic market of the Republic of Kazakhstan far exceed the current dynamics of production of consumer goods. About 90% of the corresponding products in Kazakhstan are of imported origin. At the same time, in order to solve the problems of import substitution, it is necessary, as economists note, to ensure the highest level of industry competitiveness. Resources for this, of course, are. The fact is that the light industry of the Republic of Kazakhstan is characterized by a high level of equipment with modern equipment that is supplied by leading world brands, while in many other segments of the industry the depreciation of the respective funds is quite large.
The noted problem characterizing some producing segments of the economy of the Republic of Kazakhstan, however, does not go unnoticed by the government and business, it is being solved - along with other difficulties that characterize the industry of Kazakhstan.
Consider this aspect, as well as the prospects for the further development of production sectors of the Republic of Kazakhstan.
Problems and prospects of the industry of the Republic of Kazakhstan
We noted above that the industry of Kazakhstan in many segments is characterized by a rather high level of deterioration of funds. This problem is recognized by the business community and the state; measures are being developed for its effective resolution. Another difficulty characterizing the industrial sectors of the Republic of Kazakhstan is the relatively low capacity utilization. This primarily affects labor productivity. The general level of manufacturability of industrial enterprises of the Republic of Kazakhstan is assessed as inferior to advanced industries in Western countries.
The problems noted are planned to be addressed in the framework of a number of large-scale initiatives, such as, for example, the government program "Performance 2020". It is aimed both at supporting existing businesses, and at opening new industries. Through this program, companies representing various industries of Kazakhstan can take advantage of state support. To do this, they need to show that, firstly, they have a development strategy, and secondly, aspiration and resources that can ensure that the activities are in line with state tasks to modernize the economy.
Tasks for the development of industry of the Republic of Kazakhstan
The Government of the Republic of Kazakhstan faces a number of urgent tasks, without which the effective development of industry in Kazakhstan is not easy to implement. We study their specifics.
First of all, the government should formulate a long-term policy in the field of industry, which should be based on the initiatives of not only authorities, but also business and academia. This area of activity should be aimed at structural modernization of production enterprises operating in the Republic of Kazakhstan.
Another major aspect of industrial development in Kazakhstan is technological modernization. It is assumed that it will be simultaneously carried out at several tens of the largest enterprises. The current course of modernization, possible difficulties in its implementation will be analyzed, and on the basis of the received data the program “Performance 2020” itself will be adjusted. A significant role in the implementation of this area of activity will be played by scientific institutions.
The modernization of the industry of Kazakhstan also requires the training of new personnel - especially in the field of management. Leadership competence is one of the key success factors for any enterprise. High-tech fixed assets - this is only one of the conditions. It is also important that the head of the company were responsible and highly professional leaders. Similarly, the issue of training qualified personnel is also in the area of directly production sites in enterprises. Experienced, competent engineers are required who can ensure the efficient use of updated funds. We need qualified specialists to perform specific production tasks.
For the successful implementation of the "Productivity 2020" program in the Republic of Kazakhstan, the consolidation and effective distribution of financial resources is necessary. The budgetary burden on the state in this aspect should be reasonable, therefore, private businesses — those working in Kazakhstan, in Russia and other EAEU states, and Western countries — will also be involved as investors.
Many researchers believe that the modernization of the industry of the Republic of Kazakhstan will also require further improvement of the legislative framework governing the activity of enterprises in the relevant field. This may relate to the most diverse aspects of business activity - the conclusion of civil law agreements, contracts with foreign partners, investment agreements, intellectual law, etc.
Experts expect that the authorities of the Republic of Kazakhstan will ensure the development of industrial potential not only in the traditionally industrial areas of the country, but also in other parts of it, where the concentration of industrial enterprises is relatively low, but the potential for building new facilities is high. Thus, it is expected that not only the industry of Central Kazakhstan will develop, but also enterprises in the regions that are still lagging behind in terms of the number of industrial facilities and the volume of their output.