INFLUENCE OF THE SHADOW ECONOMY ON THE FINANCIAL AND ECONOMIC DEVELOPMENT OF KAZAKHSTAN

Murat LAUMULIN


Murat Laumulin, D.Sc. (Political Science), Research Fellow at the Kazakhstan Institute of Strategic Studies (Almaty, Kazakhstan)


ABSTRACT

This article examines the phenomenon of the shadow (hidden) economy and its influence on Kazakhstans financial and economic development and security. The republics statistical bodies often use the term non-observed economy, which implies hidden, unaccounted, informal, and illegal economic activity. Non-observed economic activity includes the production of goods and services, as well as the illegal redistribution of revenue and assets. Based on how widespread shadow and corruption processes are and on the current level of Kazakhstans economic development, it can be concluded that when pursuing a policy to combat the shadow economy, attention should be placed not so much on reducing its scope as on raising the efficiency of the entire governance system. Furthermore, the state should play a leading role in managing socioeconomic processes.

Keywords: Kazakhstan, shadow economy, economic security, corruption, trade, markets.

Introduction

The shadow economy is a widespread phenomenon today, affecting even developed countries, although states with a transition economy are more susceptible to the influence of this phenomenon. In some countries, the shadow economy is larger than the formal sector.

The criminal sector is a segment of the shadow economy. So, in some cases, its existence can threaten not only normal functioning of the legal economy, but also the national security of the state. In this respect, an analysis and


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