A Mindless Modernisation

As late as a month ago, it seemed that the socio-economic crisis in Kazakhstan caused by the drop of the world oil prices and the coronavirus pandemics had passed its peak (if not ended). This understanding, among other things, was supported by the oil prices growth to about 40 $ per barrel and the abandoning of the emergency rule in the country.

Currently, the coronavirus status in the Republic has worsened drastically and, most importantly, the partial measures such as the so called «lockdown» are not saving the situation. Meanwhile, the parliamentary and the local representative bodies elections are coming, so the authorities will have to try and pierce their way between Scylla and Charybdis: to preserve the internal political stability while completing the tasks at hand.

In view of this, there can be no doubt that, this fall, the political situation in Kazakhstan will be more than «explosive». Against this backdrop, Akorda and the Library will have to present new slogans and give new promises in order to gain the trust of the people.

In such a situation, it is customary for Kazakhstan to lunch small-scale social welfare programs and the unlimited-scale programs of modification and reformation of everything that can be modified and reformed.

The list of the economic sectors that will be supported by the state without fail includes the  machinery-production industry. This is clearly follows from the fact that Prime Minister of the Republic of Kazakhstan Askar Mamin has recently requested to take measures for the development of this sector in the Republic.

Let us quote some paragraphs from this interesting document and give a short commentary in order to prove that the Kazakh Government is deceiving itself, Akorda and the Library as well as all the Kazakh citizens (text in bold by kz.expert).

«At the meeting of the Government of the Republic of Kazakhstan chaired by Prime Minister Askar Mamin, Minister of Industry and Infrastructure Development Beybut Atamkulov reported on the development of the machinery-production sector.

According to B. Atamkulov, the machinery-production industry is one of the fastest developing sectors of the Kazakh processing industry.

In the course of the realisation of the industrial program (10 years), the sector has shown the following results.

The production output has grown by 5 times.

Investments have grown by 3 times and constituted 50 bln tenge.

The export has grown by almost 3 times and constituted 1.1 $ bln.

Based on the results of 2019, 1 trillion 372 bln tenge worth of goods were produced. During the five months of the current year, 535 bln tenge worth of goods have been produced; the growth constitutes 18,5%».

According to the quoted passages, the situation in the Kazakh processing industry is if not fine then at least progressing. The question is what kind of progress is it? Of this, we can judge by reading the following paragraphs from the governmental press-release.

«As of today, the industry has about 3 thousand enterprises that employ 65 thousand people.

«In the course of the realization of the industrialisation program, 128 projects whose worth amounts to about 367 bln tenge have been implemented, about 16 thousand jobs have been created«, reports B. Atamkulov.

Based on the results of 2019, the labor productivness constituted 16 $ thousand. The bill of the exported goods has been expanded».

It is not hard to calculate the at the average staffing number of the domestic processing enterprises constitutes 22 persons, the investments in each of the 128 projects implemented as part of the industrialisation program constitute less than 3 bln tenge, in other words, less than US10 $ mln and the labor productiveness of the processing industry approximately corresponds to that of Russia while falling behind the level of the labor productiveness in the developed countries by times.

Next, the quoted press-release lists the concrete achievements of the Kazakh Government, the Ministry of Industry and Infrastructure Development and its predecessors in the sphere. However, based on our calculations, they can be disregarded with assuredness. Because the figures that we have presented show that, with rare exception, the processing industry in Kazakhstan is something that, in its scale, closely resembles the Soviet kolkhoz and sovkhoz workshops of 40-50 years ago. 

And, alas, so long as the Government and the Ministry of Industry and Infrastructure Development do not acknowledge this fact (we have no doubt that they see the reality quite clearly), nothing good is going to come of their policies in this sphere.

And what we will end up with is the roadmap for the 2019-2024 machinery-production industry development, the program of the combined operations with Russia, the roadmap for the development of the oil & gas machinery production and the dozens of similar documents of the nationwide, industry-wide and regional scale whose purpose is not to do something real but to imitate a frenzied activity.


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