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Prepared by N. Raman (SPR).
SM/10/158, 6/28/2010. In particular, see Box 3.
This point has been acknowledged by the authorities. For instance, it was noted in a 2010 essay by current Minister of Economy and the former head of Samruk Kazyna. (http://www.samrukkazyna.kz/page.php?page_id=2869&lang=3&article_id=3327).
Participation of a state-owned oil and gas company in developing the oil resources of a country is not unusual in many developing countries; indeed many countries explicitly use some version of the model pioneered by StatOil in Norway.
This is defined as the change in the investment abroad by the NFRK as a percentage of the change in the increase in foreign assets in the financial account in 2010.
For more details on the operation of the NFRK, see Box II.2 of Chapter II of the 2010 Selected Issues Paper for Kazakhstan (SM/10/161, 6/29/2010).
The 2011 World Competitiveness Yearbook, compiled by IMD, ranks Kazakhstan 55th out of 59 economies on health and environment, and 41st on education.
The authorities’ long-term aim is to reduce the non-oil deficit to 3 percent of GDP by 2020, but no intermediate targets have been determined.
Except for the US$8 billion that is transferred to the budget from the NFRK, the authorities exclude revenues from oil in their calculation of fiscal revenues. As such, by the authorities’ definition, they continue to record fiscal deficits that need to be financed by borrowing.
See Chapter II of SM/10/161 (6/29/2010).
For instance, KMG estimates that up to $136 billion is needed to fully develop the first phase of the Kashagan oil field. See http://www.kmg.kz/en/manufacturing/upstream/kashagan/
Bayulgen (2010) notes that this assertiveness is a common feature in oil-producing countries. As the public sector develops expertise, national governments revise what could be considered unbalanced agreements.
The most recent example being the new Law on Subsoil and Subsoil Use enacted in 2010. This law strengthens the public sector’s rights over hydrocarbon and other mineral resources.