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Shaky structure maintains a growth rush

Kazakhstan has had a good run, but the easy things have been done and the strong economic growth of the past two years has eased. The republic is banging up against a ceiling that will only be breached if there is more reform.

Adekenov: "Things are moving very
fast here and banking reforms that
happened in Kazahkstan five years
ago are just taking off"

TURNING IN THE second best performance of the 12 Commonwealth of Independent states (CIS) countries in 2002, Kazakhstan's economy is still unbalanced. Although oil and minerals production is still the engine of growth and earns the republic good money, dependence on raw materials is an Achilles heel. The economy may be lopsided but it grew by 9.2% over the first half of 2002. Industrial output increased by 8.7%, agricultural production rose 5.1%, and construction, transport and communications all grew by well over 9%.

Even more encouraging is the improving standing of services and consumer-driven industry: the mineral and raw material sector still accounts for 80% of GDP in terms of output but broken down by expenditure, services already account for more than half of GDP. That is on a par with developed countries and its share is increasing every year. Industry accounts for a little under a third of GDP.

The republic's dependence on world commodity markets made itself felt in the second half of 2002 when falling oil prices knocked $300 million off tax receipts, despite oil production rising by 13%.

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