Prospects of industrial and innovative development of the economy of Kazakhstan in modern conditions

Abstract

Object: Industrial and innovative development of the economy of the Republic of Kazakhstan is a priority issue of all economic development. State regulation of the economy purposes at strategic objects and problems formulation for perspective development.

Methods: The article presents data on the volume of industrial production, the physical volume indices for manufacturing industries are considered. The trends and levels of technological industrialization of manufacturing industries are considered separately.

Findings: The trends and forms of the manufacturing industry's development of the Republic of Kazakhstan in the sectoral and regional section are considered. Priority orientations of the industry development have been determined. The prospects for strategic planning are noted, and also the differentiation in the level of regional development. The dynamics of changes in the gross domestic product is considered and some prospects for the development of the manufacturing industry in terms of the development of petrochemical production are determined.

Conclusions: The article formulation the issues of transformation to an export-oriented economy and defines the trends of development of real sector industries.

Introduction

State regulation of the economy involves setting strategic purposes and problems for the long term prospect. To determine the prospects for the development of the state's economy, it is necessary to assess the impact of both external and internal factors, exogenous and endogenous, taking into considering the processes of globalization and integration, and analyzing technological trends. The most important role in determining the prospects for the development of the country's economy has the state of the environment, the consequences of changing which already now lead to irreversible processes.

Therefore, the implementation of the problems of strategic planning of the economy on a national measure, and also at the macroregional level, is associated with solving a wide range of problems. In this regard, the purpose of our research is to identify the prospects and directions of economic development of the Republic of Kazakhstan in the sectoral and territorial aspects. We have set the problem to analyze the state of industrial development of the country's economy and create a promising model of the country's economy.

Literature Review

A number of authors devoted their work to the industrial and innovative development of the economy of Kazakhstan in modern conditions and in a pandemic [4-9]. And there are also many articles on the directions and levels of technological industrialization of manufacturing industries [13-16]. All the diversity of views and approaches to the industrial and innovative development of the country are considered in the works of domestic scientists, such as: Koshanov A., Sabden O., Alshanov R., Dnishev F., Sagadiyev K., Zhaleleva R., Gabdullin R., Nurlanova N ., Kussainov B.

The article reflects the distribution of manufacturing enterprises by the level of technological development in the regional context for 2018 (as a percentage of 100% of the total of each region).

The directions and forms of development of the manufacturing industry of the Republic of Kazakhstan in the sectoral and regional context are considered. The article emphasizes that at present, with the advent of a foreign owner in the economy of Kazakhstan in the person of multinational companies, the economic interests of domestic production do not always coincide with the specific owner.

Methods

At the state level, strategic planning is the development of a long-term development Strategy. The main way of development of the economy of the Republic of Kazakhstan is the transition to the tracks of industrial development. The defining indicator of the level of industrialization of the economy is the indicator of the development of manufacturing industry in a multi-sector economy. Table 1 shows the indicators of the republic's industrial production volumes and indices for 2018.

As can be seen from these calculations, the part of the manufacturing industry in the structure of the entire industry is only 45.34%, and the physical volume index in ratio to the previous year is a few lower than the same indicator for the mining industry. In the structure of manufacturing industries, the specific gravity is more than 40%, then followed by the food industry and mechanical engineering. The part of petrochemical and coal industry products processing is less than 10%. The development of manufacturing industries with the production of products with high added value requires the formation of modern technological industries matching to the development level of developed countries, ensuring that the level of labor productivity is raised to world standards.

Table 1. Volumes and indices of industrial production by enlarged types of activity

Indicators

Production volume in current prices, mln. tenge

The specific gravity of the industry as a percentage*

The index of industrial production 2018, in % to 2017

Entire industry

27 218 063

100

104,4

Mining and quarrying

14877068

54,65

104,6

Manufacturing industry, including

10 403 854

45,35

(100% for sub-sectors)

104,5

food production

1 527 687

12,9

100,9

beverage production

343 794

3,8

103,2

production of tobacco products

123 620

1,4

101,2

light industry

99 351

0,8

106,9

production of paper and paper products

62 381

0,9

106,1

production of coke and refined petroleum products

901 982

9,9

109,1

production of chemical industry products

401 141

4,8

108,7

production of basic pharmaceutical products

78 526

1,5

91,9

production of rubber and plastic products

211 380

2.4

108,3

production of other non-metallic mineral products

563 678

4,8

103,1

metallurgical industry

4 614 873

43,1

102,4

production of finished metal products, except for machinery and equipment

239 609

2,2

103,8

mechanical engineering

1 089 800

10,9

114,4

furniture production

38 613

0,3

103,1

Other industries

146 032

2,7

 

Note - compiled according to the express information No. 36-5/227 of June 28, 2019 [1] * Authors' calculations

It is no secret that the technological lag of any production is a significant obstacle to the growth of labor productivity.

The most promising course of the country's economic development in conditions of the economic crisis caused by political factors, differences in the global price war between OPEC and Russia, and coronavirus pandemic is the development of agriculture and transformation to organic farming and animal husbandry, for which our country has a distinct absolute advantage. In terms of quality, area and climatic conditions, the republic occupies a leading position in the world economic s area.

In the condition of a global economic recession and decline, even with a negative deviation in world oil prices, the development of petrochemical industries should become the technological trends for Kazakhstan.

It is necessary to abandon the export-oriented economy oriented on the mining of raw materials and the role of a raw material appendage of the world economy. Developing the production of petrochemical products and focusing on the processing and deepening of oil refining processes and the development of the chemical industry on this basis.

In the conditions of modern economic development and high volatility of prices for raw energy resources, it is necessary to develop the petrochemical industry. The chemical industry in Kazakhstan is basically represented by the enterprises of Kazphosphate LLP and KazAzot JSC, and also by the activation of the pharmaceutical industry.

The chemical industry of the Republic of Kazakhstan is one of the most important industries of the country. The products of this industry are widely used for the manufacture of different consumer products, and should find extensive applying:

  • • oil industry (oil and gas pipelines, service equipment, etc.);
  • • construction (building materials and structures);
  • • agriculture (pesticides, fertilizers, etc.);
  • • pharmaceuticals;
  • • textile and furniture production, etc.

Against the background of the global recession, the domestic chemical industry has shown positive dynamics in latest years. From 2010 to 2018, the volume of production in monetary terms increased by 3.2 times – from 104.1 to 387.6 billion tenge.

The increase in indicators was due to the restoration and modernization of enterprises, and also the introduce of new investment projects in the framework of the “Industrialization map”. The chemical industry is also the largest consumer of refined petroleum products. The issues of deep processing of crude oil are the most sensitive for the successful development of the petrochemical and chemical industry. Unfortunately, this sphere is limited to the use of domestic raw materials for obtaining products of primary processing of crude oil.

During the period 2010-2018, 54 projects were realized, which made it possible to expand the assortment of manufactured chemical products. In 2010-2018, the volume of exports in monetary terms increased by 2 times – from 383 to 783 million US dollars. Today, due to government support, the domestic pharmaceutical industry is actively developing. The existing production places are being expanded and new production places are being opened that match international standards. Over the period from 2010 to 2018, the volume of production in the pharmaceutical industry increased 4 times, from 19.9 billion tenge to 78.8 billion tenge.

Kazakhstan have been developed a number of long-term strategic programs for the transition to industrial and innovative development and strengthening of manufacturing industries.

We will focus separately on the realization of the State program of industrial and innovative development of the Republic of Kazakhstan for 2020-2025, accepted in December 2019. The program is financed from the republican (national) budget. The total amount of financing for the Program for 5 years is 780797.1 million tenge (table 2).

Table 2. Financing of the industrial and innovative development program for 2020-2025

Years

2020

2021

2022

2023

2024

2025

Total:

Republican budget

146 065,3

215 725,1

107 896,4

107 863,5

101 996,9

101 249,9

780 797,1

Note - compiled according to the site http://adilet.zan.kz/rus/docs/P1900001050 [2]

According to the arrangement plan for the realization of the program, 157.70 billion tenge was allocated for the realization of PIID projects.

In the program of industrial and innovative development, the growth dynamics of the manufacturing industry in 2018 relative to 2010 is characterized as follows: the volume of production increased from 3.8 trillion tenge in the base year of 2010 to 10.4 trillion tenge in 2018, or 2.7 times in nominal terms. The average annual growth rate of the index of physical volume of industrial production in the manufacturing industry in the indicated period was 4.5 % and increased, in total, by 42.3 % (2018 to the level of 2009). This is twice as high as in the mining sector (21.4 %).

The program sets purposes to achieve the following indicators in the area of development of the Republic's manufacturing industry by 2025:

  1. real growth of labor productivity in the manufacturing industry compared to 2018 by 60%;
  2. growth of manufacturing industry exports by 90% compared to 2018;

  1. the index of physical volume of investments in fixed assets in the manufacturing industry by 1.6 times to the level of 2018;
  2. an increase in the number ooperating manufacturing enterprises per 1000 people of the economically active population by 1.5 times to the level of 2018, i.e. by 50%;
  3. increasing the place in the Index of Economic Complexity (Harvard) from 7to 55 (level from -0.31 points to 0.14 points).

According to the state program, the part of the manufacturing industry in 201was only 11.4%, in the structure of GVA of industries, which is lower than the global level of 15.6%.

The level of technological development of manufacturing industries in the regional context for 2018 is shown in figure 1.

In the industrial structure of manufacturing enterprises, 44.4 percent is happened to by metallurgical production, and petrochemical enterprises happened to only 10%.

The largest specific gravity of low-tech industries (93.5%) happened to the Atyrau region, basically oriented on oil production. And the minimal specific weight was registered in the Karaganda region, accordingly, in this area – the highest indicators for average technological production. This is quite naturally for the old industrial region. The largest specific gravity of high-tech production (companies) was registered in Zhambyl region (43.5%) with an average republican indicator of 10.9%. That is, the excess is more than 4 times the value. An outsider amonthese industries is the Atyrau region, which has a precise raw material orientation on oil production. Thus, we can note a high degree of differentiation of regional development and technological backwardness of oil-producing regions, despite their overall level of social and economic development.

In 2019, according to the industrialization map, 130 projects totaling 449 billion tenge were planned to be realized in the republic with the creature of 12.6 thousand jobs. According to the results of 12 months, 76 projects worth 360.6 billion tenge were introduced with the creation of more than 6100 permanent jobs. Thus, the analysis of the state of the level of industrial development of the country's economy revealed a high level of differentiation of the regional economy.

We believe that the development of the petrochemical cluster is a promising direction in the context of a steady decline in consumer demand for crude oil and a rapid transition to the processes of in depth processing of petroleum products with bringing the stages of technological conversion to the production of finished products for the needs of all manufacturing industry. We have proposed the objective of structural adjustment of the country's economy with priority development of petrochemical production and agriculture with re-adjustments of in-depth processing of crop and livestock products of the agro-industrial complex. We see a promising development of agriculture and bringing the share of processing of crop and livestock products to the level of industrial development of the food industry and light industry, leather and textile industries.

Results

The development and implementation of Strategic plans determines the prospects for the development of the country's economy and its strategically important sectors, that is, the choice of development priorities. This direction was devoted to the cluster selection of the development of strategic industries and the formation of clusters that group the development of individual industries. It should be noted that the cluster approach is somewhat similar to the theory of creating territorial-industrial complexes, the purpose of which was to create a single technological chain from the extraction of primary raw materials to delivery to the final consumer.

The basis for the formation of the territorial production complex was the idea of creating energy production cycles by N. Kolosovsky. At that time of economic development, this scale was justified by the country's economic prospects, based on the possibilities of comprehensive strategic planning of the national economy.

Currently, with the arrival of a foreign owner in the economy of Kazakhstan in the form of multinational companies, the economic interests of domestic production do not always coincide with a specific owner.

The ideas of the territorial production complex are not fully realized in the modern economy due to the factor of taking into account sales markets and changes, the situation for raw materials and emerging technological trends, which are dictated by the new economic reality. But despite the dynamic changes in the world economic system and the emergence of new approaches to planning, the planning methodology as a system retains all its inherent properties [10].

Structural elements of the methodological system of social and economic planning include basically theoretical and specific principles, a system of methods and approaches in planning, organizational aspects of the planning system, accounting for the time horizons of plans and their main indicators.

Modern forecasts consider not only the objectively emerging trend of development, but also the possible consequences of the implementation of state measures to regulate the market. This form of planning can include economic, including tax measures of state support for economic entities involved in the implementation of the plan [11].

Currently, many countries use market forecasts that assess the economic situation: on the market of a particular product; in a particular sector of the economy; on the world market.

Local government institutions, management bodies of corporations, financial and industrial groups, and other business units participate in the planning process.

The world economic system is currently actively using the capabilities of not only forecasting, but also planning. Foreign practice actively uses the Soviet experience of planning. Modern state plans, unlike the Soviet ones, are not directive in nature.

In Kazakhstan, at the state level, national programs are currently being adopted, provided with a system of financing in the following areas of development of the country:

109

  •  strengthening of the national currency;
  •  industrial and agricultural development;
  •  education, research;
  •  social protection of the population and employment;
  •  environmental safety;
  •  reform of public services, etc.

In the future, based on development and forecasting, it is planned to achieve technological and institutional modernization of the entire economy of the Republic of Kazakhstan.

The economic development of the Republic of Kazakhstan is characterized by active dynamic development. Table 3 shows the indicators of GDP dynamics for 2008-2018.

In figure 3, we present a graphical representation of the dynamics of gross domestic product, calculated in the national currency (curve line) and US dollars (bar chart) for 2008-2018 with the trend equation.

In figure 3, we graphically display the GDP indicators in US dollars in a horizontal bar chart and show the equation of the trend of this indicator, which has a positive dynamics. GDP at current prices in the national currency is shown in the form of a polyline curve.

More clearly, the GDP indicators in the national currency are shown in figure 4.

Figure 4 shows a diagram of the change in gross domestic product, at current prices, calculated in national currency, in the form of a bar chart.

The prospects for the development of the republic's economy tend to grow, but a high degree of instability of the exchange rate creates crisis situations that affect the dynamics of gross domestic product. The main reason for this instability is the high dependence on the global energy market and the resulting fluctuations in oil prices. High instability of the national currency exchange rate is provided by fluctuations in demand for other products of the mining and metallurgical complex of the republic.

The novelty of this research is the proposal to emphasize the development of indicative and regulatory planning of local authorities and local self-government bodies. The separation of ownership forms and the transfer of strategic objects to private ownership without assigning these owners all forms of responsibility leads to tragedies, such as the lack of a system for monitoring the state of hydraulic structures and the break of the dam in the village of Saryagash. This is one of the most famous disasters, and, unfortunately, not the only one.

The economic independence of these structures will contribute to the rapid solution of local economic problems at the level of economic entities of all forms of ownership.

Conclusions

The paper reflects the trends in the development of manufacturing industries and emphasizes the task of accelerated development of the petrochemical industry. Force majeure circumstances occurring in the modern economy should not affect a significant decline in the pace of economic development. Precisely, these circumstances should be an incentive for the activation of the manufacturing industry, which is incomparably less dependent on external factors, in particular the supply of resources and fluctuations in the price of natural resources and depend on the demand for and volume of consumption of raw materials. The country's recent documents pay special attention to this area, in particular, the implementation of the Business Map and the country's economic recovery.

The paper purposes to analyze the state of the level of industrial and innovative development of the country and to develop promising directions of economic development. In this regard, the transition to industrialization of the country's economy is an urgent need of time. The development of the cluster petrochemical complex in the western regions of the country and the development of the agro-industrial complex in almost all regions should become the engine and catalyst for the socio-economic recovery of the country. In this paper, we have made a brief analysis of the transition to industrial and innovative development based on the growth of the manufacturing industry. In general, despite the absolute growth of GDP, in relative terms, there is a decrease in the growth rate of the indicator. In other words, the potential growth of the country's economy due to extractive industries is close to being exhausted. The practical value of this research lies in the cognitive nature of the material and in the implementation of provisions and proposals in state programs, as well as the possibility of using this material in the educational process and in the methodological plan. 

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Year: 2020
City: Karaganda
Category: Economy