2 | THURSDAY, DECEMBER 15, 2011 INTERNATIONAL HERALD TRIBUNE.

SPONSORED SECTION

I n June, Kazakhstan took on the role ofchairing the 57-country Organization of Is-lamic Cooperation. We did so because

we saw an important opportunity to givefresh impetus to the OIC’s longstanding ob-jective of promoting modernization in theMuslim world in line with the values of Islam,based on peace, tolerance and human dig-nity. Kazakhstan’s own experience as a pre-dominantly Muslim nation with more than100 ethnic groups and 40 religions, with nohistory of inter-religious or interethnicenmity, is a case in point.

The Arab Spring has thrown into sharprelief the lack of progress in some parts ofthe Islamic world, underlining the inability ofa number of countries to address mountingeconomic and social problems. Addressingthe root causes of stalled development inthese states and integrating them into theglobal mainstream is an urgent priority thatwill help prevent radicalization of attitudestoward the West.

We believe that the OIC’s main focusshould be on promoting economic develop-ment and competitiveness through trade

IN HIS OWN WORDS | Yerzhan Kazykhanov, minister of foreign affairs

For the Islamic world, prosperity and peace go hand in hand

Minister of Foreign Affairs Yerzhan Kazykhanov.

OECD | Bid for observer status

A role in global decision-making

O n Nov. 22, during a working visit toParis, Prime Minister KarimMassimov presented Kazkahstan’s

bid for observer status to the council of theOrganization for Economic Cooperation andDevelopment. This would enable Kazakh-stan to take part in the work of the OECD’svarious commissions.

‘‘Half a century ago, when the OECD wasestablished, few could imagine that one dayKazakhstan would be able to submit such arequest to the organization,’’ Massimovsaid. ‘‘Twenty years ago, when our countrygained independence, such an ambitionseemed incredible. Now, we are an economyopen to new ideas and investments. We areinvesting in the development of a diversifiedand innovative economy with modern infra-structure and high-quality education with theaim of optimizing our citizens’ potential.’’

For the government, Kazakhstan’sstrategy of improving its industrial perfor-mance and moving beyond its role as a pro-ducer of commodities justifies raising itsprofile on the world stage. Today, emergingeconomies — of which Kazakhstan is one— play an increasing role in overall globaleconomic growth. Kazakhstan’s experience,as well as its desire to share that experiencewith regional and global partners, is turning itinto a laboratory for economic reform anddevelopment.

Massimov highlighted the government’sbid to the OECD during the third economic fo-rum Expert-100-Kazakhstan in Astana onNov. 25, in connection with Kazakhstan’squest for membership in the World Trade Or-ganization and its partnership with Russiaand Belarus in the Customs Union. On Jan.1, 2012, the union is to be upgraded to aSingle Economic Space and, eventually, intoa Eurasian Union, with membership open toother former Soviet republics.

‘‘Russia is on the brink of its entry intothe World Trade Organization,’’ saidMassimov, ‘‘and we hope that Kazakhstanwill follow in the next 12 months.’’ Kazakh-stan’s goal of increasing its internationalcompetitiveness and involvement in globalissues does not conflict with the creation ofa single economic space, he observed, butrather complements it.

According to the prime minister, recentdevelopments within the European Unionmake the world’s largest political and eco-nomic federation an example to follow, butalso offer lessons to be learned as theformer Soviet troika moves forward.

‘‘We are all too aware of the problemsfaced by the European and global econo-mies,’’ Massimov said. ‘‘Therefore, theheads of governments of the Customs Un-ion have decided to create a common thinktank consisting of the member states’ min-isters of economy to address the issues atstake in an adequate manner with the aimof helping businesses succeed.’’

Taking the other partners’ needs and re-quirements into account offers no threat tomember states, he said. ‘‘Our countries’economists face the task of formulatingtime-effective and cohesive measures to al-low the process to be completed,’’ saidMassimov. ‘‘This means that during the up-coming 12 months, painful and harsh de-cisions will have to be made. Yet, the SingleEconomic Space should be consideredthe best available tool for guiding and

ECONOMY | Credit-rating rise

Integrating economic performance with social gains

T wenty years of national developmenthas shown that Kazakhstan, while farfrom immune to global booms and

slumps, is sufficiently alert to global eco-nomic conditions to put in place effectivesafety nets aimed at preventing the worst.The result so far, in the government’s view,has been a consolidation of positive mac-roeconomic and socioeconomic trends.

Strong growth continues to mark the per-formance of virtually all sectors of Kazakh-stan’s economy. ‘‘In the first nine months of2011,’’ Economic Development and TradeMinister Kairat Kelimbetov recently told acabinet meeting, ‘‘Kazakhstan’s foreigntrade turnover grew more than 40 percent.High economic growth rates, along with thefavorable foreign market environment, con-tributed to an increase in foreign tradeturnover of 41.3 percent in January-Septem-ber this year, to reach $91.9 billion.’’

Kazakhstan has been resolute in buildingup financial reserves to support the econo-my wherever and whenever needed. ‘‘Ka-zakhstan’s international reserves rose by26.6 percent in the first 10 months of 2011against the same period in 2010, reaching$75 billion,’’ Kelimbetov said. A healthy bal-ance between savings and spending allowsthe population to reap tangible benefits.

Economic Development and Trade Minister KairatKelimbetov.

Period 2006 2007 2008 2009 2010 Q1-3 ’11

GDP +10.7% +8.9% +3.3% +1.2% +7.0% +7.0%

Industry +7.0% +5.0% +2.0% +1.7% +10.0% +4.3%

Agriculture +6.0% +9.0% -6.0% +13.8% -11.7% n.a.

Investment +11.0% +14.0% +5.0% +2.1% -0.5% +1.5%

Consumer index +9.0% +11.0% +17.0% +7.3% +7.1% +6.2%

Sources: CIS Interstate Statistics Committee, State Statistics Agency, Reuters

Key macroeconomic indicators, 2007-11

implementing the crisis-management andprevention measures that have to be taken.Its timely creation will be a great help in mit-igating the impact of current economic prob-lems on national economies.’’

Joining Massimov on his visit to Pariswas Zhanar Aitzhanova, minister of econom-ic integration, who presented Kazakhstan’scandidature to hold the World Trade Exhibi-tion Expo 2017 in Astana. ‘‘Kazakhstan isthe ninth-largest country in the world,’’Aitzhanova pointed out. ‘‘It is equivalent tothe size of Western Europe. While locatedprimarily in Asia, part of Kazakhstan is alsolocated west of the Urals in Eastern Europe.Therefore, by choosing Kazakhstan as hostcountry for Expo 2017, you are choosing infavor of the bridge connecting Asia withEurope in the heart of Eurasia.

‘‘Kazakhstan’s vast surface also makesit rich in wind resources, which gives it aclear perspective to develop and consumewind energy,’’ Aitzhanova said. ‘‘The averageannual wind speed in most parts of Kazakh-stan is up to six meters per second. In co-operation with the U.N. Development Pro-gram, wind potential was studied in anumber of areas, resulting in the develop-ment of a wind atlas for Kazakhstan, whichis an interactive electronic map showing thedistribution of wind speeds across the coun-try. Moreover, Kazakhstan has several cli-matic zones, in which solar energy re-sources are stable. The number of sunnyhours reaches 3,000 per year.’’

Conversion in stages to the use of sus-tainable energy as a substitute for dwindlinghydrocarbon resources also fits into Ka-zakhstan’s plan for industrial development.

‘‘Kazakhstan has one of the world’slargest reserves of silicon,’’ Aitzhanova said.‘‘The country has all the potential for the de-velopment of solar photovoltaic cells, pan-els and solar thermal collectors to generateheat on its own basis, using the newesttechnologies. The potential of renewable en-ergy in our country is estimated at morethan 1 trillion kilowatts per hour a year.’’

In conclusion, the minister said: ‘‘Bychoosing Kazakhstan, you are also choos-ing not only multicultural, multilingual andmultiethnic diversity, but also diversity offuture energy resources for sustainabledevelopment.’’ C.v.d.L.

Prime Minister Karim Massimov: ‘‘We are aneconomy open to new ideas.’’

and investment policies based on effectiveinvestment in education, science and tech-nology. The average gross domestic productper capita in OIC countries is $9,500, whilein the European Union it is more than$24,000. There is a disproportionate distri-bution of wealth among OIC countries, with10 out of the 57 member states producing80 percent of the combined economic out-put. Several leading economies in the Islam-ic world are overly dependent on raw materi-als and need to diversify their development.

History shows that countries relying tooheavily on natural resources end up with dis-torted economies vulnerable to swings incommodity prices. This is a challenge thatKazakhstan has known it can face for sometime. To meet it effectively, we have beenquick to invest in industrial and innovationsectors while attracting foreign capital andupgrading our education system. We havemade this a top priority, even though wehave already been able to increase the aver-age income of the people of Kazakhstan by17 times since independence in 1991.

To contribute to achieving greater devel-

opment of and recognition for the Islamicworld, Kazakhstan’s President NursultanNazarbayev has put forward a number ofmajor initiatives. These include the estab-lishment of a dialogue platform for the 10leading Islamic economies, the creation ofan international center of innovation, sup-port for small and medium-sized businessesin the Islamic world and the development ofa food-security system within the OIC.

As a country that unilaterally renouncedits nuclear weapons, we are strongly com-mitted to global nuclear disarmament. Ka-zakhstan dismantled the world’s fourth-largest nuclear arsenal and was the first toshut down one of the world’s largest nucleartest sites. Kazakhstan initiated a specialOIC resolution urging further efforts to pre-vent the proliferation of nuclear weapons.We have also given our backing to establish-ing a conflict-prevention and mediation me-chanism within the OIC.

Through concerted actions to solve glob-al problems, OIC countries can do much toraise the profile of the Islamic world and ad-dress misperceptions in the West about the

nature of Islam. Just as there should be noplace for hatred of the West in the Islamicworld, there should be no Islamophobia inthe West. At the same time, key Islamiccountries need to focus on solving theirpolitical and socioeconomic problems byraising the living standards of their citizensand creating stability. Leadership in the glob-al arena begins at home.[

‘‘Over the past nine months, real-money in-come in Kazakhstan rose by 6.8 percent,’’Kelimbetov noted, adding that with an un-employment rate of 5.3 percent, Kazakh-stan is experiencing ‘‘visible growth in con-sumer demand due to the easing of thesituation in the labor market.’’

In early November, Standard & Poor’smade economic history by raising Kazakh-stan’s credit rating, to BBB+, as did FitchRatings (to BBB-) on Nov. 21. Fitch forecastthat Kazakhstan’s sovereign net foreign as-sets would reach 49 percent of gross do-mestic product by the end of 2013, up from37 percent at the end of 2010.

For Kazakhstan, these new indicatorsare likely to open more doors to externalfunding on a world capital market still show-ing signs of stress. According to theAzerbaijani-based regional news agencyTrend: ‘‘The upgrading of the credit ratingcontributes positively to the country’s inter-national prestige and gives it such advant-ages as the opportunity to decrease in-terest rates on loans borrowed fromabroad, a potential increase in the value ofKazakhstan’s securities, expansion of ac-cess to international financial markets anddiversification of the base of potential in-vestors and their geography, hence

strengthening its competitiveness on inter-national markets.’’

According to Grigory Marchenko, gov-ernor of the National Bank of Kazakhstan,the upgrade can also be seen as a way ofencouraging Kazakhstan to make furthereconomic strides. In November, Marchenkocalled the improved rating a step in the rightdirection, adding: ‘‘Kazakhstan should havean even higher rating because it’s a netcreditor to the world. We have a huge credit-or position. That is why we believe Kazakh-stan deserves a rating of at least a single A.’’He noted that the government’s externaldebt was just $4.5 billion, while the nationaloil fund had increased to $42.5 billion.Moreover, the central bank has reserves of$32.5 billion. ‘‘There are no doubts whatso-ever about the sovereign ability to repay thedebts,’’ Marchenko said.

In the first three quarters of this year, Ka-zakhstan’s economic growth stood at 7

percent compared with the same period in2010, according to the Moscow-based CISInterstate Statistics Committee. The figureputs Kazakhstan ahead of the overall CISeconomic growth estimate for the period,which is 4.2 percent for the first half of thisyear.

Kazakhstan’s external trade is in linewith its domestic economic performance.Exports in the first nine months of 2011reached $65.8 billion, up from $43.9 billionin the same period the previous year. Im-ports increased from $21.1 billion to $26.1billion year on year, resulting in an externaltrade surplus of $39.8 billion, or more thana quarter of Kazakhstan’s gross domesticproduct, up from $22.8 billion a year earlier.

Following a mild retreat in 2010, capitalinvestment in Kazakhstan is back in theblack, with a year-on-year increase of 1.5percent in the first nine months of 2011. In-flation has been contained so far, with theoverall consumer price index remaining at6.2 percent year on year in the first threequarters of 2011. As of Oct. 1, unemploy-ment stood at 5.3 percent.

Kazakhstan has been proactive amongthe ex-Soviet republics in adapting to thenew situation, as figures show. After inde-pendence, the country’s economy, likethose of most other newly independent So-viet republics, found itself in dire straits. As aresult, industrial output fell by 13 percent in1992 and by 13 percent in 1993, only todrop nearly 30 percent in 1994.

As early as 1996, economic growthpicked up, with a modest increase in GDP of0.5 percent, reaching a high of 13.5 percentin 2001. Capital investment, which had seena net decline of 43 percent in 1995 and of40 percent in 1996, rose 12 percent the fol-lowing year, and peaked at 49 percent in2000. All this demonstrates that Kazakh-stan’s policy of limiting the consequences ofthe global financial crisis has been consist-ent from the start. C.v.d.L.

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Kazakhstan’s 20th anniversaryLooking back, thinking ahead