Growth Challenges – setting the stage
Sjamsu Rahardja
November 30, 2022
          • Growth challenges – no short-term fixes
Outline   • Productivity and diversification
          • Broad areas for structural reforms
Average GDP growth has declined after each crisis




        Source: WB staff estimates from Bureau of National Statistics data
Largely due to declining productivity growth




            Source: WB staff estimates
Economic diversification remains challenging

                                                                          Share of fossil fuels in export and energy in 2020
                                                                  70

                                                                  60                                                               Kazakhstan




                                      Share of fuels in exports
                                                                  50

                                                                  40                                            Russia

                                                                  30
                                                                                                                             Malaysia
                                                                  20
                                                                         Romania                                                  South Africa
                                                                  10                                                Mexico
                                                                                                               Turkey
                                                                   0
                                                                       30.0 Ukraine          50.0        Chile      70.0       90.0 Poland
                                      Share of fossil fuels in energy sources


                                                                         Source: World Development Indicator

Source: World Development Indicator
Some sectors with higher employment are shrinking in output
       Average growth 2017 - 2021
    10.0
                                                                              Real GDP         Labor productivity          Employment
     8.0

     6.0
                                                                                                                                                                 5.4
     4.0
                                                                                  3.2
     2.0                                                                2.1                    2.2
                   1.1                  1.5                                                                                                   1.4
                             0.9                                                                             0.9                  0.8   0.7
     0.0                                           0.2        0.3                        0.2          -0.1                                          0.1   -0.1
                                                                                                                           -0.5
     -2.0
                                                                                                                    -2.8
     -4.0

     -6.0

     -8.0

    -10.0




       Source: WB staff calculation from Bureau of National Statistics data
Weak relationship between real wage and labor productivity

                                 Average growth 2017 - 2021
                                                                                    25.0


                                                                                    20.0


                                                                                    15.0
                     Real wage




                                                                                    10.0


                                                                                     5.0


                                                                                     0.0
                     -10.0            -8.0            -6.0            -4.0     -2.0       0.0       2.0   4.0   6.0   8.0   10.0
                                                                                Real labor productivity

        Source: WB staff calculation from Bureau of National Statistics data
   Private sector faces many challenges ranging from influence of
   SOEs and regulatory burden

      Economy-Wide product market regulation
      score (2018):
      index scale (0 to 6 from least to most restrictive)




                                                            Source: World Development Indicator
Source: OECD
Quality investment in human capital is needed




      Source: World Bank Human Development Index
Kazakhstan needs more dynamic spatial transformation
Share of population living in Astana, Shymkent,                   Share of urban population in total population
Almaty City (2018-2021)                                           (2010-2018)

60.0%                                                     60.0%
                                                                                                                             57.8
                                                                      56.8
55.0%                                                     55.0%

50.0%                                                     50.0%                                                              50.5


45.0%                                                     45.0%       44.3

40.0%                                                     40.0%
              36.0%                               38.0%                                                                      37.5
35.0%                                                     35.0%
                                                                      33.1

30.0%                                                     30.0%


25.0%
                                                          25.0%

                                                          20.0%
20.0%
             2018              2019     2020   2021               2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

                                                                        Kazakhstan        Southeast Asia      Central Asia

Source: National Bureau of Statistics                                   Source: World Development Indicator
Pақмет Ñ?ізге