Bulat Khusainov, D.Sc. (Econ.), principal researcher, Institute of Economics of the Ministry of Education and Science of the Republic of Kazakhstan (Almaty, Kazakhstan)

Serik Akhanov, Ph.D. (Econ.), Chairman of the Board, Financial Institutions Association of Kazakhstan (Almaty, Kazakhstan)

The world economy is at the stage of a global crisis triggered by a financial shock; it has not experienced such turmoil since the days of the Great Depression.

The period of robust economic growth quickly gave way to a recession not only in advanced countries; a slowdown in the growth of the gross domestic product (GDP) is also recorded in developing and emerging market countries (see Table 1).

Virtually all countries have been seriously affected by the financial and economic crisis. Advanced economies experienced an unprecedented 7.5% decline in real GDP during the fourth quarter of 2008 (compared to the third quarter), and output continued to fall almost as fast during the first quarter of 2009.

The U.S. economy has probably suffered most (as a result of intensified financial strains and the continued fall in the housing sector). West European and advanced Asian countries have been hit hard by the collapse in global trade; the situation is compounded by financial problems of their own and corrections in housing markets.

Emerging economies have also suffered badly: in the fourth quarter of 2008, they contracted by 4% in the aggregate, with the damage inflicted through both financial and trade channels.

The effects of the crisis are most pronounced in East Asian countries that rely heavily on manufacturing exports, in emerging European and CIS economies, which have depended on strong capital inflows to fuel growth.

An analysis of Kazakhstans economic development is clearly of interest in this context, since for many years it was a leader among the CIS countries in the pace and quality of transformation reforms.

This is evident from the length of the transition period, which is determined using chain indexes of GDP growth in member countries of the Eurasian Economic Community (EurAsEC) in relation to the initial stage of reform.

In particular, Kazakhstan and Belarus surpassed the 1991 GDP level in 2003, Russia in 2006, and Tajikistan in 2008. In other words, the transition period lasted 12 years in Kazakhstan and Belarus, 15 years in Russia, and.

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