Kazakhstan is an upper-middle-income country with GDP per capita of nearly US$10.5 thousand in 2015. Kazakhstan’s real GDP growth slowed from 4.1 percent in 2014 to 1.2 percent in 2015 due to falling oil prices and weakened domestic and external demand. The move to a floating exchange-rate regime in August 2015 led to a sharp depreciation of the tenge, which negatively affected private domestic demand and intensified inflationary pressures. The pass-through effect of the depreciation caused inflation to spike, reaching 13.6 percent, year-on-year, in December 2015.
Progress on poverty reduction largely stalled in 2014 and 2015 due to slow growth and a weak labor market. The government is attempting to soften the impact of the slowing economy by protecting social spending and increasing pensions. However, pro-poor transfer programs are still relatively undeveloped, leaving low-income households vulnerable to rising food prices, falling real wages and diminished employment opportunities.
Education is a high priority for Kazakhstan, and in 2011, Kazakhstan ranked first on UNESCO’s “Education for All Development Index” by achieving near-universal levels of primary education, adult literacy, and gender parity. These results have reflected Kazakhstan’s efforts of expanding pre-school access and free, compulsory secondary education. For the next 10 years, Kazakhstan is embarking on further major reforms across all education levels.
Kazakhstan faces challenges in restructuring its healthcare system. The country’s health outcomes lag behind its rapidly increasing income. The major causes of adult mortality are non-communicable diseases such as cancer, cardiovascular disease, other tobacco and alcohol-related diseases and injuries. The new State Health Care Development Program recognizes health as one of the country’s major priorities and a pre-requisite for sustainable socioeconomic development.
Agriculture accounts for less than 5 percent of GDP, but the sector continues to employ almost one-fourth of the working population and is critical to addressing poverty and food security, as well as providing an important avenue for diversification of the economy.
The year of 2015 was marked by the launch of a new wave of structural reforms. The “100 Concrete Steps, a Modern State for All” Program is structured around five major pillars of the institutional reform agenda: (i) professionalizing public administration, (ii) enforcing the rule of law, (iii) increasing state transparency and accountability, (iv) fostering economic diversification and growth, and (v) uniting the nation.
Strengthening institutions (via the “100 Steps” Program), improving physical infrastructure (via the Nurly Zhol Infrastructure Development Program), and raising the quality of human capital (as part of the skills-enhancing agenda) are all key pillars of the long-term development strategy “Kazakhstan 2050,” which aims to transform Kazakhstan into a knowledge-based diversified economy driven by the private sector.
