The concept of achievable goals

June 10. Kazpravda

By Erbolat DOSAYEV, Minister of Economy and Budget Planning

The concept of achievable goalsThe task of Kazakhstan’s joining the 30 most developed countries in the world by 2050 seems very ambitious, but achievable.

In hindsight, we must pay attention to the three countries that implemented such strategies and successfully accomplished this task in the XX century – Singapore, South Korea and Norway. That is why Kazakhstan is interested in the experience of economic development of these states.

The Singapore Economic Development Strategy, which was implemented by the Council of Economic Development, allowed the country to become a financial and commercial center of Southeast Asia and to achieve rapid economic growth and welfare of the population (from 1967 to 2002, per capita income increased from 2200 to 25 400 dollars, more than 11 times). In the result of these steps this island nation in the number of other countries, received the title of “East Asian tiger.”

The base of economic growth in South Korea was founded in 1960-1970s, when the government under strict state planning identified priority industrial development, particularly in the industries that can compete at a global level due to the low cost and convenient geographical location of the state. Following the long-term development strategy divided into industrial five-year stages, South Korea already in the 1990s was among the 30 most developed countries at the expense of leadership in the development of new technologies, microelectronics, biotechnology and optics.

In Norway the success was achieved through the establishment of oil-industry clusters, promoting partnerships with leading companies, rapid transfer of modern technologies and support of competitive manufacturers and service providers.

From this it follows that every successful country has its own unique way of development. But the basis of the ascending movement in each case is in implementation of long-term development strategies.

Kazakhstan is constantly working to improve the welfare of the country. Thus, the goal set by the Head of State on joining the 50 leading countries by 2030, has already been achieved. In 2013 we were 50th in the ranking of the Global Competitiveness Index of the World Economic Forum (WEF GCI), as well as in the ranking on the ease of doing business of the World Bank. At the same time, on some indicators Kazakhstan is already among the 30 most developed countries of the world. For example, on the level of public debt in 2013, RK was 14th in the ranking of WEF GCI, which is a positive signal to foreign investors. Another example is such index as the coverage of children with secondary education, where we take the 29th place.

The President’s state of the nation address Strategy Kazakhstan-2050 lays the foundation for gradual improvement of social, economic and institutional environment and for achieving this goal by 2050 in five strategic areas:

1) Development of human capital;

2) Improvement of institutional environment;

3) Development of knowledge economy sectors;

4) Accelerated formation of infrastructure knowledge-based economy;

5) Integration into the global and regional economies.

World experience shows that the success of the country depends not only on its economic well-being, but also on the level of human development, environmental security and efficiency of public administration. In this regard, the Concept identified key indicators for further evaluation of achievement of the set goal.

Thus, it is necessary to increase GDP per capita from 12 to 60 thousand dollars. This is possible, under condition of a 4.3% per year annual economic growth to mid-century. At that we need to raise labor productivity, to decrease the dependence of domestic economy on oil price fluctuations and ensure macroeconomic stability through increasing the share of non-oil exports in GDP from 32 to 70%. Also we must boost activity in the field of innovations and increase funding of research and development by 15 times, from the current 0.2 to 3% of GDP in order to achieve the level of developed countries with knowledge-based economy.

As known, a key driver of economic development is small and medium enterprise (SMEs). By 2050, its share in GDP should grow to 50% due to creation of favorable conditions for doing business, renewal of infrastructure and investing in human capital.

In addition, Kazakhstan’s economy should become attractive for investors. The share of investments in fixed assets will be maintained at the level of 30% of GDP. This will provide high level of savings to ensure macroeconomic stability. Rising prosperity will significantly improve living conditions of the population. Thus, the life expectancy in the country will increase from 69 to 80 years. A priority in this regard is the improvement of life quality due to effective healthcare and education systems, efficiency and transparency of the institutions, the prevalence of information technologies. Human capital will become a key driver of the economy, and healthy demographics, which provides high natural growth of population will be a competitive advantage of Kazakhstan. Thereby, the republic will possess a high academic and creative potential and professional manpower.

International experts also give their assessment of Kazakhstan’s opportunities to join the 30 most developed countries of the world. Thus, President of the Asian Development Bank Takehiko Nakao at the 47th annual meeting of the ADB noted that Kazakhstan can achieve this goal by promoting economic diversification, using resource revenues prudently, ensuring good governance, strengthening the institutions in order to promote the efficiency of private sector.

Other experts believe that in some ways Kazakhstan is one of 30 leaders. Thus, member of Euro parliament Elisabeth Jeggle, welcoming ambitious goal of Kazakhstan to join the number of the 30 most developed countries, believes that building a strong, innovative and diversified economy, competitive in global markets, is the basis of any economic success. At that she stressed that the President and Government of the Republic of Kazakhstan shall take all necessary measures to implement the objectives of the Strategy-2050.

Thereby, taking in to account the current development of Kazakhstan, we can say: the goal of joining the 30 most developed countries in the world by 2050 is achievable. The State is taking all necessary measures for its implementation. However, it should become the idea of every citizen which in turn will create the conditions to achieve this goal.