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Oil, gas and uranium account for 70% of Kazakhstan's economy
Government is developing natural resources industries
Revenue from natural resources used to encourage growth of other industries
Scheme to pay for citizen's education abroad also used to develop skills and knowledge economy
The featureless plains of Kazakhstan belie what riches lie buried beneath them.
The country has an abundance of natural gas and oil that if developed could more than double the country’s crude output in the next decade to 4 million barrels per day, according to the International Energy Agency. That would make it one of the top 7 oil producers in the world.
Add a boom in uranium mining to the country’s raw materials portfolio and government figures reveal that 70% of its economy comes from its natural resources.
Kazakhstan’s mineral wealth will be a major source of income for decades to come, but it won’t last forever. The country is trying to use it wisely to transition to a broader economic base while developing the natural resources industries to the maximum.
Last year Kazakhstan was the world’s top producer of uranium, accounting for over a third of global production.
The industry’s rapid expansion, plus the good quality of the uranium and the comparatively cheap method of mining it have combined to give Kazakhstan an advantage over other big exporters like Australia and Canada.
With continued investment, Vladimir Shkolnik, the head of Kazakhstan’s national atomic energy company, Kazatomprom, is keen to maintain that position.
“We are hoping to keep our leadership position in the uranium field,” he says. “We have dozens of facilities and hundreds of mines and we think we will remain a world leader in the uranium sector.”
Kazakhstan’s government is also trying to encourage more foreign investment.
Since independence in 1991, around $150 billion of foreign investment has flowed into the country; $18 billion dollars last year alone, according to the government.
Companies like GE and Eurocopter have been attracted to the country, entering partnerships with national companies that have helped bring training and new skills to the local workforce.
While money is flowing from the country’s natural resources industry, the government is using some of its revenue to boost other sectors, like IT and engineering. The aim is to make the economy more resilient when commodities prices fall and better prepared for the day when the gush of oil and gas reduce to a trickle.
“Of course revenues from raw materials are still by far the largest share of the country’s budget,” says energy analyst, Murat Karymsakov. “But in recent years the president (of Kazakhstan) has announced and put into place a plan for industrial and technological development to diversify the economy.”
A program that pays for the best and brightest of Kazakhstan’s young citizens to study aboard, as long as they return to the country upon graduation, is also helping to create a more knowledgeable, young workforce.
Nurzhan Nazarbayev studied in the U.S. but now works at a new hydrocarbon purification plant in western Kazakhstan. He says he feels it is important to play an active role in contributing to the country’s development.
“I am proud to work in this sector; to be a benefit to the nation,” he says. “With my background, ten years ago I went to a western university to get education and now I am back in my country, to serve my country.”
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