Kazakhstan's Diversification From the Natural Resources Sector : Strategic and Economic Opportunities

This book explores opportunities for diversifying modern Kazakhstan's economy, which is still heavily dependent on its natural resources, as well as looking at economic opportunities for the whole Central Asian region arising from the Chinese government's Belt and Road Initiative (BRI). The book is comprised of four parts. Part 1 explores the first main theme of the book: development of the economy based on the resource sector with the example of Kazakhstan. Part 2 examines opportunities for diversification arising from BRI: a rise of transport and communication industries alongside the new Belt and Road economic route. Part 3 explores the view from China on the perspectives of regional development, not least the economic reasons for the launch of this programme, investments and planned effects. Part 4 discusses other internal sources for diversification of the economy in Kazakhstan based on development of local industry in the oil and gas sector, small- and medium-sized enterprises and tertiary sector of the economy. This book will be of value for students, academics, policy-makers, and practitioners focused on economic development and business in the Central Asian region, as well as those who are working on the design of instruments for economic development in their own countries. Irina Heim is a post-doctoral Fellow in Organisational Behaviour and Entrepreneurship at Henley Business School, University of Reading, UK. She also teaches a number of economics disciplines at the Department of Economics, University College London. She has published articles in international academic journals, as well as a range of contributions to academic books Foreword Preface Bibliography Contents Notes on Contributors Abbreviations List of Figures List of Tables Part I: Development of the Economy Based on Resource Sector: Economic Opportunities for Diversification 1: Institutional Reform in Kazakhstan Introduction Neo-institutional Theory and Emerging Economies Main Trends in Institutional and Economic Development of Kazakhstan in Recent Years Conclusion Bibliography 2: The Oil and Gas Industry in Kazakhstan’s Investment Regimes Introduction Evolution of the Investment Regime, Subsoil Legislation, and Petroleum Fiscal Systems in Kazakhstan Early post-Soviet Times: 1991–1993 Post-Soviet Times: Most Favorable Investment Regime and the “Free Entry” Model—1994–1997 An Increase of Government Bargaining Power: “Negotiation Model”—1997–2003 Crisis and Post-Crisis Period: “Approval Model”—2003–2014 Evolution of Subsoil Legislation and Petroleum Fiscal Systems, 1991–2015 The International Law on Foreign Investment and Reinvestment in the O&G Industry The Shaping Factors for FDI, RI, and RR in Kazakhstan Hypotheses Group 1: Guarantee of Legislation Stability Hypotheses Group 2: Guarantees Against Government Interference and Nationalization Hypotheses Group 3: Clearly Defined Principles of Compensation and Guarantees of Free Use of Dividends Hypotheses Group 4: Transparency of Investment Activity Conclusion Bibliography 3: The Effects of Oil Revenues on Kazakhstan’s Economy Introduction Institutional Theory and Sustainable Development of Resource-driven Unbalanced Economies Economic Development in the post-Soviet Period O&G Industry Overview The Effects of Oil Rents on the Economic Development Recent Economic Development The Effects of OR on Socio-economic Development The Most Recent Socio-economic Reforms Strategy 2050 Nurly Zhol The One Hundred Concrete Steps Concept Conclusion Bibliography Part II: Kazakhstan: Strategic Opportunities 4: Infrastructure Investment and Development Alongside the Belt and Road Initiative Introduction Infrastructure and Large-scale Infrastructure Investment Policy Infrastructure Investment The Belt and Road Initiative Regional Participation Private Sector Involvement Opportunities Under the BRI Investment Volume, Funding, and Financing Conclusion Bibliography 5: Investments in the Digital Silk Road Introduction New Digital Economy Institutions Technological Digital Divide The Digital Silk Road Digitalization of the O&G Industry Local ICT Industry Development Conclusion and Future Research Bibliography Part III: China and Regional Development 6: Chinese Investments Across the New Silk Road Introduction An Overview of Chinese Investment in Kazakhstan BRI and Its Motivations Overproduction of Infrastructure-Oriented Goods Pressure of Sustaining Economic Growth Threat from Protectionism Kazakhstan’s Opportunities Conclusion Bibliography 7: Kazakhstan as Logistics Linchpin in the Belt and Road Initiative Geography as (Logistics) Destiny Kazakhstan Situated on Silk Roads and Steppe Roads Shipping Costs, Containerization and Capacity Four Major Issues in Becoming a Logistics Linchpin Silk Road Logistics and Politics Bibliography Part IV: Kazakhstan: Economic Opportunities 8: Diversification and Local Industry Development Introduction Development of the Indigenous Firms in the Energy Sector Local Procurement in the Energy Sector of Kazakhstan Steps Taken by Three Major O&G Consortiums Toward Local Industry Development Future Expansion Project of TengizChevrOil (TCO) North Caspian Operating Company (NCOC) Karachaganak Petroleum Operating (KPO) Public-Private Initiatives Conclusions and Implications Bibliography 9: Building Entrepreneurial Ecosystems: Effects of Economic Integration Introduction Economic Integration Eurasian Economic Union Discussion and Further Directions of Research Bibliography 10: Development of the e-Tourism Industry in Kazakhstan Introduction The Tourism Industry in Kazakhstan Information Technology in the Structure of the Tourism Industry Conclusions and Policy Recommendations Bibliography Index