Kazakhstan is Moving to …
After the collapse of the Soviet Union Kazakhstan (among the other former Soviet republics) was still under heavy Russian influence, most importantly in the economic hemisphere.
However, Russia has to think about why Kazakhstan has made a strategic decision to turn east for a cooperation with the Chinese state-owned oil company.
The extraction of oil and gas in Kazakhstan skyrocketed from 1995-97 when the Kazakh government launched wide-ranging economical reforms and privatization programs, which boosted the energy sector subsequently, according to the CIA World Factbook.
CNPC (China National Petroleum Company), a state-owned company, has achieved a solid control over independent oil producer PetroKazakhstan for $4.2 billion. It raises the question how far the privatization program once started is turning obsolete.
A formerly Canadian-owned company, PetroKazakhstan is going to have a 33% stake of KazMunaiGas, which is a state-owned oil company and itself holds 50% of the shares of PetroKazakhstan from CNPS. Alexander’s Gas and Alexander’s Gas and Oil Connection has the details.
It is clear that the state-owned companies strive to hold a strong stake in gas and oil production of the country, which counterplays the situation of small private enterprises.
An overview of the Kazakh economy asserts that 80% of GDP is achieved by the private sector of small businesses and the government estimated that by 2006 the number of small businesses will come up to 600,000.
Baikonur Spot
The mention of Baikonur, the world’s largest space launch facility, is essential since it has been working for 50 years in Kazakhstan encompassing the Soviet times and even boosting its space launching experience after the country has achieved independence.
Russia has rented the Cosmodrome since 1993 and the international space launch projects such as “Integral” or the International Gamma Ray Astrophysics Laboratory has worked from October 2002.
After the collapse of the Soviet Union, Kazakhstan prioritized using the huge spacecraft legacy for peace and stability within the country.
Other Businesses
The spacecraft activity in Kazakhstan is not noticed to be talked about in terms of its business potential but pumping oil and gas has been boosted by the government programs and despite the fact that only 15% of Kazakh oil output is pumped by the state-owned company, KazMunaiGas.
Apart from the oil and gas industry, Kazakhstan’s economy is distinguished as a large producer of agricultural products as grain and livestock the CIA World Factbook says.
The light industry has been added recently to the country’s production field to diversify it. It already includes car-building as of the 2003 president’s decree (Transportation Development Plan). Among the supported industries is also biotechnology.
The question is how much the goal to diversify the economy has developed favourably for today’s Kazakhstan. Does the goal have anything to do with the country’s choice to give the priority for Chinese state-owned company?
Samal Alyshbaeva, MBA student at KIMEP, says: “I think the priority was determined long before the actual sale, since, for example, in Aktubinsk the oil companies already belonged to the Chinese businesses.”
A student from the Kazakh National Technical University, Salia Akysheva, believes: “ A Chinese connection has more to offer than has the Russian one, because modern China is much more developed technologically than Russia is - that is why Kazakhstan wants to weave ties with China.”
on November 29th, 2005 at 5:13 am
Good to have you on board, Baktygul, and great first post!
So do you think that Kazakhstan’s decision to give priority to the Chinese state-owned company has broader political implications, and reflects a decision by Kazakhstan to pursue closer political ties with China as well? If so, do you think these ties will take precedence over its political relationship with Russian and America, or do you think Kazakhstan can successfully balance the three?
on November 29th, 2005 at 6:46 am
First of all, I’m so excited to have my blog posted! And want to thank you, James for congratulations on that and also Ben for help.
As for the questions, I think it really so that Kazakhstan is turning to the East while looking for stability, kind of trying to escape troubles since here in this part of the world there is a belief that America and nowadays Russia convey trouble. But in the 21st century Kazakhstan can not escape the western political style, especially if the country once was in the Soviet Union which originally had some ties with western way of thinking. It seems that the Central Asian countries are going to repeat the situation of Europe in the beginning of last century. I just hope the nationalism is not going to be severely prevailed in this region in some years after the industrially developed countries start to claim something more.
Baktygul.