Kazakhstan’s real gross domestic product (GDP) growth is projected at 3.8% for 2018 – down from 4.1% in 2017 – and to stabilize at around 3% in the medium term, according to the World Bank’s latest Kazakhstan Economic Update.
The Challenge of Economic Diversification amidst Productivity Stagnation attributes this GDP growth to a better-than-expected oil sector performance, steady pick-up in the services sectors and in agriculture. Despite these developments, however, Kazakhstan’s productivity growth has been in decline recently, curtailed by limited space for private sector growth and state dominance in the economy.
“Kazakhstan has initiated a series of reforms—including civil service reforms, fiscal decentralization, judicial modernization and measures to improve the business environment—in an attempt to address key structural weaknesses,” says Francis Ato Brown, World Bank Country Manager for Kazakhstan. “The implementation of these reforms could accelerate Kazakhstan’s transition toward a new growth model with a diversified and productive economy at its core.”
According to the report, household and public consumption in Kazakhstan remains weak. Going forward, household consumption is forecast to rise only modestly, on the back of recovering real incomes. Inflation eased to 5.3% in the year ending in October 2018, down from 7.7% in the same period in 2017, despite exchange rate volatility.
The special section of the Economic Update examines the decline in productivity of Kazakhstan’s economy.
“The economy of Kazakhstan is expected to perform better, thanks to the oil sector,” says Julio Revilla, World Bank lead economist for Central Asia. “However, analysis shows that productivity will be key for sustainable and long-term growth.”
Productivity growth in Kazakhstan has declined sharply in the past few years. After growing each year since the early 2000s and contributing up to 6% to GDP growth, the latest data shows that productivity declined by 2% per year between 2014 and 2016.
The decline in productivity is attributed largely to constraints imposed on private sector development, as reflected in low rates of business entry. In Kazakhstan, a handful of players—mostly state-owned enterprises – dominate key product markets. Empirical evidence suggests that newer, smaller firms are more productive than older, larger firms. However, because of the continued protection of inefficient, large firms, the exit of less productive firms is not taking place. This suggests that critical elements of Kazakhstan’s economic transition remain incomplete.
To improve productivity growth, the Economic Update makes several policy recommendations:
- Establish a regulatory environment that enables small and medium enterprises to emerge, grow, and attract FDI, and substantially reduce the state’s presence in the economy;
- Apply global best practices in reducing corruption and bolstering the rule of law to make companies in Kazakhstan more effective and adaptable;
- Implement competition and regulatory frameworks to ensure that privatization processes reduce concentration of market power, rather than simply transfer rents from the public sector to the private sector.
This edition of the country economic update is part of a semi-annual series designed to monitor socio-economic developments in Kazakhstan and is available online
Wide Variations in Post-COVID ‘Return to Normal’ Expectations
A new IPSOS/World Economic Forum survey found that almost 60% expect a return to pre-COVID normal within the next 12 months. including 6% who think this is already the case, 9% who think it will take no more than three months, 13% four to six months, and 32% seven to 12 months (the median time). About one in five think it will take more than three years (10%) or that it will never happen (8%).
Views on when to expect a return to normal vary widely across countries: Over 70% of adults in Saudi Arabia, Russia, India, and mainland China are confident their life will return to pre-COVID normal within a year. In contrast, 80% in Japan and more than half in France, Italy, South Korea, and Spain expect it will take longer.
At a global level, expectations about how long it will take before one’s life can return to its pre-COVID normal and how long it will take for the pandemic to be contained are nearly identical. These findings suggest that people across the world consider that being able to return to “normal” life is entirely dependent on containing the pandemic.
An average of 45% of adults globally say their mental and emotional health has gotten worse since the beginning of the pandemic about a year ago. However, one in four say their mental health has improved since the beginning of the year (23%), about as many that say it has worsened (27%).
How long before coronavirus pandemic is contained?
Similar to life returning to pre-COVID normal, 58% on average across all countries and markets surveyed expect the pandemic to be contained within the next year, including 13% who think this is already the case or will happen within 3 months, 13% between four and six months and 32% between seven and 12 months (the median time in most markets).
Majorities in India, China, and Saudi Arabia think the pandemic is already contained or will be within the next 6 months. In contrast, four in five in Japan and more than half in Australia, France, Poland, Spain, and Sweden expect it will take more than a year.
Change in emotional and mental health since beginning of the pandemic about a year ago
On average across the 30 countries and markets surveyed, 45% of adults say their emotional and mental health has gotten worse since the beginning of the pandemic about a year ago, three times the proportion of adults who say it has improved (16%)
In 11 countries, at least half report a decline in their emotional and mental health with Turkey (61%), Chile (56%), and Hungary (56%) showing the largest proportions.
African fisheries need reforms to boost resilience after Covid-19
The African fisheries sector could benefit substantially from proper infrastructure and support services, which are generally lacking. The sector currently grapples with fragile value chains and marketing, weak management institutions and serious issues relating to the governance of fisheries resources.
These were the findings of a study that the African Natural Resources Centre conducted from March to May 2020. The centre is a non-lending department of the African Development Bank. The study focused on the impact of the Covid-19 pandemic in four countries – Morocco, Mauritania, Senegal and Seychelles. The countries’ economies depend heavily on marine fisheries. The fisheries sector is also a very large source of economic activity elsewhere in Africa. It provides millions of jobs all over the continent.
The study dwells on appropriate and timely measures that the four countries have taken to avoid severe supply disruptions, save thousands of jobs and maintain governance transparency amid the ongoing global uncertainty and crisis.
Infrastructure shortcomings include landing facilities, storage and processing capacity, social and sanitary equipment, water and power, ice production, and roads to access markets.
Based on the findings, researchers made recommendations to strengthen the resilience of Africa’s fisheries sector in the context of a prolonged crisis, and looking ahead to a post-Covid-19 recovery.
The report strongly advocates for:
– Increased acknowledgment of the essential role of marine fisheries stakeholders and the right of artisanal fishermen to access financial and material resources.
– Strengthening the collection of gender-disaggregated statistical data in a sector that employs a vast number of women and youth.
– Establishing infrastructure and support services at landing and processing sites of fishery products, with priority access to water.
– Investing in human capital to ensure high-level skills in the different areas of fisheries management.
– Improving governance frameworks by encouraging the private sector and civil society to participate in formulating sectoral policies and resource management measures.
The study recommends urgent reforms to make marine fisheries more resilient and enable the sector to contribute sustainably to the wealth of the continent’s coastal countries.
Marine fisheries are a crucial contributor to food security and quality of life in Africa. Good nutrition is a key factor to quality of life, and the marine fisheries sector supports the nutrition of more than 300 million people, the majority of whom are children, youth and women. It also provides more than 10 million direct and indirect jobs.
Dominated by artisanal fishing and traditional value chains, the fisheries sector in Africa is mainly informal and is rarely considered in public policies or in assessing the wealth of countries.
Like other sectors, the African fisheries sector has been severely hit by the Covid-19 pandemic. Covid has affected supply markets and regional trade. This has resulted in substantial economic losses for most households that depend on fisheries.
Top Trends Impacting Global Economy, Society and Technology
The new technologies of the Fourth Industrial Revolution, such as artificial intelligence (AI), the cloud and robotics, are changing the way we live, learn and do business at a rate unprecedented in human history. This seismic shift is playing out in a world characterized by unreliable political landscapes and increasing environmental instability.
Scenario planning in this environment can be very difficult for businesses, affecting their ability to plan for the future, and properly assess the risks and opportunities that may present themselves. The Technology Futures report, released in collaboration with Deloitte, provides leaders with data analysis tools to scenario plan and forecast future technology trends.
“The rapid pace of technological change, alongside the global crisis caused by COVID-19, means that leaders today need new tools to understand challenges and develop strategies in the face of an increasingly uncertain future. This report provides three new analytical tools for business leaders to think about the future in a dynamic environment,” said Ruth Hickin, Strategy and Impact Lead, Centre for the Fourth Industrial Revolution, World Economic Forum.
“We are delighted to collaborate with the World Economic Forum to take a disciplined look into the future, particularly as we emerge from a world-altering event, like COVID-19,” said Mike Bechtel, Managing Director and Chief Futurist, US Consulting, Deloitte, and lead author of the report. “We hope that by providing a clearer picture of how today’s nascent technologies will impact our future, we can play a meaningful part in driving innovation, collaboration and economic growth that improves life for all people.”
The report breaks down future trends into four categories for business leaders and provides some examples of what is likely to remain constant in the years ahead.
- Information: With the volume of accessible data exploding and more of our personal lives lived online, the report projects the probable implications for remote learning, remote working and healthcare.
- Locality: Since the onset of COVID-19, even more of our interpersonal interaction is virtual and physical experiences have dwindled. The report projects more niche, readily available virtual experiences available to consumers.
- Economy: The report forecasts a growing likelihood that flexible and clean energy production will continue rising.
- Education: Personalized education will likely grow, along with the availability of digitized and virtualized content.
In addition to strategic modelling, the report gives leaders a baseline history of how the Fourth Industrial Revolution has progressed. It highlights just how fast technology is evolving and outlines one way risk management could evolve to better address and adapt to it.
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