Democracy and Governance in Kazakhstan
The Development Challenge:
Thanks to the Government of Kazakhstan's (GOK) commitment to market reforms and the rise of the energy sector, Kazakhstan has achieved steady economic growth, with an estimated 9.2% GDP growth rate in 2003. The country made major advancements in banking reform and supervision, fiscal reform, small-scale privatization, pension reform, and attracting foreign investment to the energy sector. The country's output has increased 50% in the past four years. However, there is a growing danger of over-reliance on the oil sector. Kazakhstan faces major challenges of diversification and corruption that hamper the growth of a middle class. About 25% of the population lives below the poverty line, and there are huge disparities between urban and rural areas, and among regions. This underscores a need to further develop small and medium enterprises (SMEs), create a vibrant middle class, promote enhanced rule of law, greater transparency, and public accountability, and expand domestic and foreign investment outside extractive industries.
Compared with the rapid pace of economic reform, Kazakhstan is showing little inclination to embrace greater democracy. Recent developments in Ukraine and Georgia are likely to make work in this area even more difficult. September Parliamentary elections fell well short of international standards. Despite some positive developments, such as the President's refusal to sign a new restrictive media law and the fact that the September elections attracted more public attention than any previous election, the media, political institutions, civil society, and the judiciary are at nascent stages. Accountable and transparent government processes are not yet well established. Freedom House rated the country with a 6 on political rights and with a 5 on civil rights, both on a scale of 1 to 7 (with 7 being the lowest), and considers Kazakhstan to be not free. Corruption remains a significant issue. According to Transparency International, Kazakhstan ranks 124 out of 146 countries in terms of perceptions of the extent of corruption, with an extremely low score of 2.2 out of 10. Development of civic consciousness and advocacy throughout society will contribute to a strong grassroots effort to press for transparency and democratic reforms. Without a more pluralistic political power structure, this fledgling democracy will continue to struggle. One critical human rights issue where continuous USAID assistance has been successful is in keeping Kazakhstan off Tier 3 on the State Department's annual Global Trafficking in Persons Report.
With respect to social development, Kazakhstan has experienced unprecedented declines in life expectancy and health status. Men's life expectancy fell from 67.5 years in 1992 to 60.6 in 2001. Kazakhstan currently invests a meager portion of its gross domestic product (GDP) in its health system, less than 2% compared with World Health Organization (WHO) recommendations for 5% and the current Western European trend of 6% to 7%. A resurgence of infectious diseases is underway, which poses an immediate threat to the sustainability of the country's transition. Tuberculosis (TB) case notification rates are the highest in the world and threaten to grow higher as multi-drug resistant TB becomes more difficult and costly to cure. While by global standards HIV prevalence in Kazakhstan remains relatively low, an escalating trend from 100 HIV cases in 1996 to 4,500 cases today, and possible bridging of HIV/AIDS into the general population, are of great concern. Recently, the GOK designed a health care reform program, which calls for a doubling of the health budget (up to 4% of GDP). It focuses on primary health care and the provision of guaranteed medical services to vulnerable populations. This paves the way for greater involvement by USAID in creating the legal framework for health financing reforms; promoting evidence-based practices; improving medical and nursing education; addressing infant, child, and maternal health issues; and helping to produce valid, scientifically-sound data on the status of infectious diseases.
Kazakhstan's strategic location makes it a major player in the Global War on Terror, and its tremendous oil and gas resources make it key to economic development for Central Asia. U.S. investments in Kazakhstan's oil and gas sector have the potential of contributing to U.S energy security. Genuine economic and democratic reform also would directly advance U.S. national interests, as would a decline in growing infectious disease rates. Given these factors, the fact that GDP growth for Kazakhstan is one of the highest in the world should not distract attention from the need to address the undercurrent of issues that could eventually destabilize the country.
(Excerpted from the 2006 Congressional Budget Justification for Kazakhstan)
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