Yevgeny Hon: The manufacturing industry as a driver of economic growth

18 december 2015

Yevgeny Hon

Head of the Department of Economic Analysis

KazISS under the President of RK

In today's world the role of the manufacturing industry is constantly increasing in the structure of most developed economies. This is due, primarily, to the fact that enterprises of this sector are the main drivers of innovation through the development and integration of intellectual capital and the widespread introduction of innovative technologies. The development of this sector becomes especially important for Kazakhstan in the conditions of adverse conjuncture of the world commodity markets.

In this regard, one of the main directions of anti-crisis and structural reforms in the President’s Message “Kazakhstan in the new global reality: growth, reform, development” is further improvement of the investment climate in order to create export-oriented processing industry. In particular, the Head of State noted that only the diversified economy is able to effectively confront the emerging challenges and threats in the new global reality. That is why, currently, Kazakhstan continues to actively implement the second five-year program of industrial-innovative development.

Analysis of the results of the first phase of industrialization showed that, despite a number of problems, in general, there are some positive changes. So, more than 20 new sectors, such as the aerospace industry, the production of communication equipment, electronic components, fiber optic cable, basic pharmaceutical products, boilers, electric lighting equipment, and others have been created. Over the past five years, the gross value added of the manufacturing industry has increased by 65.7% - from 2.5 to 4.1 trillion tenge.

For qualitative development of export-oriented industries Kazakhstan is actively working to improve the business environment: the favorable investment climate, simplified administrative procedures, e-government, “one stop principle” for investors, and more. All these tools are aimed at improving the business environment and increasing the attractiveness of Kazakhstan among foreign investors. It should be noted that, due to the implementation of the industrialization program over the past five years in the manufacturing industry have been attracted $ 17.6 billion of foreign direct investment. This is almost three times more than in the period 2005-2009.

Thus, the economic policy conducted in Kazakhstan under the leadership of the Head of State, helps to smooth the impact of external shocks in the form of lower prices for raw materials and will create a number of important drivers of economic growth in the medium and long term.

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