THE WORLD ECONOMIC CRISIS AND ITS IMPACT ON THE ECONOMIC DEVELOPMENT OF THE CENTRAL ASIAN COUNTRIES
Aza Migranian, D.Sc. (Econ.), professor, chief expert at the Bishkek branch of the Institute of CIS Countries (Bishkek, Kyrgyzstan)
In the Central Asian (CA) countries, the world crisis has mainly had an impact on the financial and investment sphere. The region does not have enough of its own economic resources to overcome the consequences, so it will have to turn for the most part to influential neighbors.
The nature and manifestations of crisis phenomena depend on the level of development and integration of the economic systems of different states into the world economy.
Let’s take a look at the situation that has developed in the CA countries under the influence of the world financial crisis, as well as at the possible ways to overcome it and the prospects for the region’s further development.
Since the crisis began, there has been a significant drop in the growth rates of the macroeconomic indices in Kazakhstan’s economy. The 2008 year-end results were not encouraging—the financial and economic spheres had obviously experienced a slump.
By the end of 2008, however, the powers that be had managed to halt the decline in financial indices. But it was the lower investment activity and difficult financial situation in the banking sector in 2007 that led to the economic crisis. This is confirmed by the data of Kazakhstan’s Statistics Agency.
The GDP index for 2008 amounted to 103.2% compared to the previous year. Goods production accounted for 45% and services for 52.5%. The total production volume decreased by 2.2% (3,045.9 billion tenge) from January to June 2009 compared to the same period in 2008, giving rise to a corresponding change in the aforementioned indices—36.3% (goods) and 65.8% (services).
The production branches—oil and mining—suffered the most from the crisis. The drop in growth rates in these branches corresponds to the downward trends in economies throughout the world. This reduction in production volume led to a change in the sectoral and geographic structures of the country’s industry.
Box 1. Crude oil production increased in the Atyrau (by 20.6%) and Mangistau (by 2.0%) regions. In the Aktobe and Kzyl-Orda regions, it dropped by 2.6% and 3.7%, respectively. Gas condensate production increased in the Mangistau region 1.6-fold, and in the West Kazakhstan region by 0.2%. In the Kostanai region, iron nugget production dropped by 18.9%. Copper ore production rose in the East Kazakhstan (by 68.1%) and Aktobe (by 14.3%) regions, while in the Karaganda region its production dropped by 0.8%. Steel manufacture rose in the Pavlodar (by 24.2%) and Kostanai (by 23.1%) regions, while in the East Kazakhstan and Karaganda regions, steel production dropped by 7.3% and 16.5%, respectively. The production of………………