2. Modern structure of an external economic situation and trading balance of the Republic of Kazakhstan
GDP Structure (Statistics Agency data)
Last year, gross domestic product volume (GDP) was USD 186,199,487,000 in current prices. This is a 7.5% increase compared with 2010. In GDP makeup, the production of commodities share is 43.2%, services – 51.8%. Thus, last year the production of commodities resulted in USD 80, 403, 710,000, agriculture, hunting and forestry, fish farming – USD 9,605 billion, industry – USD 58.442 billion, construction – USD 12,356,568,000, tertiary industries – USD 96,530,123,000, and net taxes on products and imports – USD 12,996,823,000.
Economic policy of Kazakhstan on the modern stage
Kazakhstan gains a considerable share of profit from the export of oil and other mineral resources, moreover, economic policy of Kazakhstan is focused on shifting away from increasing mined deposits, extraction volumes, and the export of raw materials and to more output of finished products with high value added.
The year 2010 became an important stage in the economic development of Kazakhstan. A new industrial program has started, which main objective is the development of finished products for export, with a gradual transition to more high-technology products. There has been a Customs Union formed under which there are additional possibilities for investors, who implement their projects in Kazakhstan, to reach the developed Russian and Belorussian markets.
Economic geography Kazakhstan consists of five large economic regions:
North Kazakhstan — efficient grain economy, extraction of iron ore and coal, mechanical engineering, production of oil products and ferroalloys, and energy.
East Kazakhstan – efficient nonferrous industry, energy, mechanical engineering and forestry products.
West Kazakhstan is one of the largest oil and gas extraction regions.
Central Kazakhstan – efficient ferrous and nonferrous industries, mechanical engineering, and cattle breeding.
South Kazakhstan – cotton, rice, wool, grain, fruits, vegetables, grapes; efficient nonferrous industry, instrument manufacturing, light manufacturing, food production, fish farming, and forestry products.
Foreign trade
The main business partners are the CIS and Baltic countries. Russia is the largest business partner. Kazakhstan has effective trade relations with Germany, Turkey, Switzerland, the Czech Republic, Italy, China, the U.S.A, Great Britain, South Korea, etc.
3. Analysis and forecast of foreign trade of the Republic of Kazakhstan
Tariffs
In the recent past, the trade policy of Kazakhstan had features that were problematic from the standpoint of WTO accession. The Asian Development Bank, a source that invites credence, comments that: “Kazakhstan has a rather complex tariff schedule with a large number of tariff bands and a high maximum tariff rate, although its non-weighted average tariff is not high.” ADB 2006, Table 3.1 adds numbers to these comments: it shows a maximum tariff rate of 100 percent, and says that the unweighted average tariff is 7.4 percent.
ADB 2006 notes that tariffs in Kazakhstan escalate (that is, rise with the level of processing), so that the effective protection rate for final processes is higher then the nominal rate. It gives as examples sausage (Table 3.3), imports of which bear a nominal tariff rate of 35 percent but an effective rate of 44 percent; and packed juice, on which a nominal rate of 15 percent is levied, but the effective rate of protection is 46 percent ADB 2006 remarks that excise taxes discriminate between foreign and domestic output. “In Azerbaijan and Kazakhstan, the coverage of excise taxes on imported and domestically produced goods is identical, but the rates of the former are considerably higher than those of the latter for some commodities.” Jensen and Tarr 2007, p 35 note that charges for rail transport in Kazakhstan differ according to whether the transported good is an import, an export, or a domestic product for sale elsewhere in Kazakhstan, but do not specify how they vary. Finally, ADB 2006 notes the existence of export taxes.
“Kazakhstan levies export taxes on a limited number of commodities when they are exported to non-EAEC countries.” Ferrous metal scrap is cited as an example with the comment that exports to the EU of this commodity are also exempt from the tax. ADB, 2006, chapter 3, p 5, also comments, however, that “a serious problem with tariffs in Azerbaijan, Kazakhstan, Tajikistan and Uzbekistan is that changes in tariff schedules are rather frequent and unpredictable.” Perhaps, therefore, these problematic features have already been removed. The current tariff schedule of Kazakhstan appears to be based on six percentage rates: 0, 5, 10, 15, 20 and 30. A complication, however, is that a number of tariffs are stated as, for example, “30 per cent but not less than 2 euros per kilo.” It is therefore possible that when this specific element is translated into a percentage, the actual rate charged is higher – possibly much higher – than 30 percent. If the import price of a product whose tariff is specified as above is one Euro, for example, the tariff rate actually charged would be 200 percent. Kazakhstan apparently plans further tariff reform in 2008. Informal reports suggest that many tariffs will be reduced, and that, although some rates will be increased, the arithmetic average tariff rate will be reduced.
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