Economist: power sector upgrade, internal migration main challenges in 2024

Economist Almas Chukin sums up the year 2023 as “on the whole, not bad, even good” for Kazakhstan’s economy, which grew by almost 5 percent.

He says the growth happened “despite difficult external circumstances, rising inflation (by about 10 percent, the final figures are not available yet), and the continuing war in Ukraine”.

“I can also name as positives the decent prices for oil, metals and other things [exports],” he added in an interview with Exclusive.kz.

“Internally, our economy has coped with the challenges. We have adapted to the new situation linked, for instance, to the sanctions [against Russia]. And the work to reduce unemployment is going relatively well,” he said.

“However, there are many things that are still not working, and there are many things that we are yet to start working on. For example, there is an expanding crisis in the power generation sector. Regular accidents in the sector show that it needs fundamental modernisation.

“Alarm bells have been ringing for a long time, but we have not been allocating any money and we  have not been paying attention, hoping the sector would survive somehow, but it cannot happen out of nowhere,” Chukin said.  

He said another issue that required attention was internal migration.

“People are moving from rural areas to towns, and from towns to cities. And northern cities, with the exception of Astana, are losing population.

“The capital, and major southern cities like Almaty and Shymkent, are rapidly growing, which is creating certain imbalances. Such massive population influxes require advance planning,” he said.

Asked about his expectations for 2024, Chukin said that the planned launch of the second phase of the Tengizchevroil project would be one of the main economic events for Kazakhstan, as it would increase overall oil production by 40 percent.

“It should notably affect our welfare. We can talk as much as we like about economic diversification, launching new sectors, like IT, digitisation and so on, but for now our main revenues come from oil production. It is the main factor that affects lots of things,” he said.

Regarding the war in Ukraine, Chukin said it would “likely be suspended, I don’t know how exactly, and the situation will, I would not say get better, but become more stable”.

By Merey Sugirbayeva

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