Clusters and Competitiveness: An Analysis of ‘Kazakhstan 2050’ Strategy Textile cluster

Group 7

Alibek Abdygapparov 20131127

Aidana Baigutanova 20131694

Ainur Alimbetova 20131592

Saida Dagubayeva 20130578

Aliya Yergaliyeva 20110437

Spring 2016

Content

Main features of ‘Kazakhstan 2050’ strategy 3

Business clusters in ‘Kazakhstan 2050’ strategy 6

Food processing 7

Metallurgy 7

Construction materials 8

Oil and gas equipment 8

Textile 9

Tourism 9

Transport/logistics 10

Evaluation of the Textile Cluster’s prospects 11

Demand conditions 11

Firm strategy, structure and rivalry 13

Factor conditions 14

Supporting industries 16

Challenges/barriers to develop textile business cluster 18

Main features of ‘Kazakhstan 2050’ strategy

Kazakhstan has launched an ambitious national program to make the country one of the 30 most competitive nations in the world by 2050. President Nursultan Nazarbayev announced the plan on Dec 14 in his annual state of the nation address and laid out wide-ranging reforms in all spheres of the nation’s life. The plan, Strategy 2050, calls for better governance, welfare and tax system improvements, support for small- and medium-sized businesses and increased infrastructure development.

Kazakhstan has already made notable progress since emerging from the collapsing Soviet Union 21 years ago. According to the annual Doing Business Report of the World Bank and the International Finance Corporation (IFC) ranks Kazakhstan 49th of 185 countries surveyed and the country has attracted more than $160 billion in foreign direct investment (FDI) since gaining independence. That is 80 percent of all FDI into the five former Soviet republics of Central Asia. Kazakhstan is also considered one of the most business- and investment-friendly of the 12 members of the Commonwealth of Independent States (CIS). And Kazakhstan has already achieved its Strategy 2030 goal of becoming one of the world’s 50 most developed countries. “They only have less than 20 places to rise to crack the top 30,” international financial analyst Martin Hutchison told.

Kazakhstan 2050 Strategy is a new political course for the country until 2050 that builds on tasks set by Kazakhstan 2030 Strategy. Kazakhstan Strategy 2030, developed in 1997, defined the country’s strategic goals, in terms of international security, stability and national unity, economic growth, health and education, energy resources, infrastructure and professional state. Kazakhstan 2030 Strategy was implemented ahead of time.

If to look for statics, we can say that nowadays Kazakhstan’s GDP has increased over 15 years 16 fold and its GDP per capita – 7 fold. The country has also reached a 12-fold growth of its foreign trade and a 20-fold increase in its industrial output. Kazakhstan is today a middle-income country with a dynamically growing economy. Harmony and Peace have been strengthened among the 140 ethnic groups and 17 religions established in the country and Kazakhstan is today an important international center of inter-cultural and inter-religious dialogue. The government has also worked on improving the well-being of Kazakhstani. The average monthly salary grew by 9.3 times. Conditions to ensure high-quality healthcare services in all regions of the country are being worked on and since 1997, 942 schools and 758 hospitals have been built across the country. Kazakhstan’s oil and gas complex remains the powerhouse of Kazakhstan’s economy, which facilitates growth of other sectors. The share of the oil and gas sector within the country’s GDP has been growing at a steady rate, increasing from 3.7% in 1997 up to 25.8% in 2011. The country has diversified its export markets and secured its positions, thereby having reduced its dependence on any particular export direction. Over 48,000 km of public highways, as well as 1100 km of railways have been built and reconstructed and a New Silk Road is being revived by setting up a “Western Europe – Western China” transportation corridor.

As the head of state mentioned, the main goal of this strategy is to join the club of the 30 most developed countries of the world by 2050. “The nation must be ready to face changes in the global economic climate, realizing clearly that the desired spot is guaranteed only to those with the strongest economies,” he said. In order to reach these goals, we should follow some directions:

First, it is an industrial and innovative development. The government should guarantee the stable and well-balanced economic growth by means of diversification and improvement of its competitiveness. Here some key tasks to achieve it, as development of priority sectors of economy, effecting its diversification and improvement of competitive ability; creation of positive environment for industrial development; formation of economic growth centers on the basis of rational territorial organization of economic potential; guarantee of effective interaction between the Government and business actors in development of priority sectors of economy. As a result of implementation of forced industrial and innovative development of Kazakhstan by 2016 should achieve the following key indicators: growth of GDP by no less than 7 trillions of KZT, in real terms the growth of GDP will be 15 %; increase of manufacturing industry share in the structure of GDP to the level of no less than 12,5 %; increase of non-primary export share in the total export volume to the level of no less than 40 %; increase of non-primary export volume to the level of no less than 43 % of the manufacturing industry’s combined production volume; and growth of lab our productivity in manufacturing industry by no less than 1,5 times.

Second is an education development in the Republic of Kazakhstan. We should increase competitiveness of education and development of human capital through ensuring access to quality education for sustainable economic growth.

Third, health-care development "Salamatty Kazakhstan". Of course, the government will think about improving health of the people of Kazakhstan for ensuring country’s stable socio-demographic development. The key tasks of the program are:

• strengthening cross-sectoral and interauthority cooperation in matters of citizens’ health protection and provision of sanitary-epidemiological well-being;

• development and improvement of the Unified national healthcare system;

• maintenance of the spread of HIV in 15-49 age group at 0.2-0.6% level.

The government will work on harmonious language policy, which provides full-scale functioning of the state language as the most important factor for strengthening national unity by preservation of languages of all ethnic groups living in Kazakhstan. The key tasks of the program are improvement and standardization of the methodology of teaching the state language; development of the infrastructure of teaching the state language; stimulation of the process of teaching the state language; increase of the prestige of using the state language; increase of the demand for the state language; improvement and systematization of the Kazakh language’s lexical fund; enhancement of the language culture; functioning of the Russian language in the communicative-language space; preservation of language variety in Kazakhstan; studying English and other foreign languages. As a result of implementation of the State program for the development and functioning of languages Kazakhstan should achieve the following key indicators:

• Increase of the share of adult population that speaks the state language according to "Kaztest" results: to 20 % by 2014, to 80 % by 2017, to 95 % by 2020;

• Increase of the share of republic’s population that speaks English to 10 % by 2014, to 15 % by 2017, to 20 % by 2020;

• Increase of the share of population that speaks three languages (state, Russian and English) to 10 % by 2014, to 12 % by 2017, to 15 % by 2020.

Finally, all these programs and plans hope will be achieved. It is a dream of becoming an Independent Country that has equal relations with other countries and has its own place on the world map. It is a dream of becoming a happy country that allows its citizens to have fulfilling lives and to look at the future with faith. We have made our dreams come true. We have laid the foundation of the Eternal Land.