September 23, 2011 / 10:01 PM / 7 years ago

INTERVIEW-Kazakhstan sees GDP growth at 7 pct for 10 years

* GDP expected to double in 10 years - minister

* Kazakhstan not pursuing ‘resource nationalism’-minister

* Says country remains stable despite recent violence

By Megan Davies

NEW YORK, Sept 23 (Reuters) - Oil-rich Kazakhstan aims to maintain economic growth at 7 percent for the next decade, helped by diversifying beyond the dominant energy industries that fuel its economy, its foreign minister said on Friday.

Kazakhstan, central Asia’s largest economy, holds about 3 percent of the world’s recoverable oil reserves and is the world’s largest uranium miner.

“We think that we have enough investments to the hydrocarbon sector, and now the time has come that we have to put more emphasis on the industrialization of the economy of Kazakhstan,” said Yerzhan Kazykhanov, speaking to Reuters after addressing the International Peace Institute in New York.

He hopes that Kazakhstan’s economy — which was hard hit by the credit crisis — would keep gross domestic product (GDP) growth at 7 percent for the next 10 years. If that happens, it could “increase our GDP by twofold,” he said, adding that is a pace which would not cause the economy to overheat.

Kazakhstan’s GDP rose 7.3 percent last year, a dramatic improvement from the 1.2 percent recorded in 2009.

Kazykhanov said Kazakhstan could be a hub for businesses selling products into Russia and Belarus, with which it is in a customs union. It also has opportunities to increase sales of products to western China and other central Asian countries, he said.

Areas which could be opportunities for foreign investment are machine-building and agriculture, Kazykhanov said, adding that Kazakhstan has the capacity to expand its fertile land.

Oil and gas production and uranium production currently make up 38.8 percent of Kazakhstan’s GDP, according to the government’s figures.


Kazakhstan has also grown more assertive over its natural resources, pushing to revise deals signed with foreign companies when strapped for cash in the post-Soviet years.

State companies have bought into, or are looking to acquire, stakes in foreign consortiums. Such acquisitions have sometimes followed accusations of environmental violations, tax evasion or non-compliance with contracts.

However, Kazykhanov, appointed as foreign minister in April, said it did not amount to “resource nationalism” when countries exert more control over their resources.

“I don’t think that Kazakhstan is pursuing the policy of resource nationalism,” he said. “We always conduct fair negotiations with our partners, oil and gas companies.”

Participants in the Kashagan oil field consortium have also come under state scrutiny. The world’s biggest oil find since the 1960s, it is scheduled to begin production by the end of 2012, but its costly second phase appeared to have been frozen. [ID:nRISKKZ]

Kazykhanov said Kazakhstan was concerned about the delays of the Kashagan exploration and development but “now things are moving”.

“We will continue to work hand in hand with our oil partners,” he said.

Kazakhstan, for so long a bastion of stability in volatile Central Asia, has experienced several suspicious bombings and shootouts this year.

“Unfortunately in these days no one country can be immune from the religious extremism,” said Kazykhanov. “Kazakhstan was lucky for a number of years preserving peace and stability.”

Officials in Kazakhstan have voiced concern over the possible advent of radical Islam, which is on the rise in the overpopulated and impoverished Ferghana Valley shared by its former Soviet neighbors Kyrgyzstan, Uzbekistan and Tajikistan.

Kazykhanov said that the “overall situation is under control” and law enforcement agencies were working hard to keep stability.

“But I don’t think the events ... influenced the investment mood with regards to Kazakhstan,” he said. “Kazakhstan remains a stable country and we fully control the situation.” (Additional reporting by Robin Paxton in Almaty; Editing by Eric Walsh)

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