Science and technology in Kazakhstan

GDP in Central Asia by economic sector, 2005 and 2013. Source: UNESCO Science Report: towards 2030, Figure 14.2

The Kazakhstan 2030 Strategy was adopted by presidential decree in 1997. Apart from national security and political stability, it focuses on growth based on an open-market economy with a high level of foreign investment, as well as on health, education, energy, transport, communication, infrastructure and professional training.[1]

After the first medium-term implementation plan expired in 2010, Kazakhstan rolled out a second plan to 2020. It focuses on accelerating diversification of the economy through industrialization and infrastructure development; the development of human capital; better social services, including housing; stable international relations; and stable interethnic relations. According to the 2009 census, Kazakhs make up 63% of the population and ethnic Russians 24%. Small minorities (less than 3%) make up the remainder, including Uzbeks, Ukrainians, Belarusians and Tatars.[1]

Two programmes underpin the Strategic Plan to 2020, the State Programme for Accelerated Industrial and Innovative Development (2011−2020) and the State Programme for Educational Development (2011−2014), both adopted by decree in 2010. The latter is designed to ensure access to quality education and fixes a number of targets. For instance, by 2020:[1][2]

• 90% of secondary schools are to be using an e-learning system;
• 52% of teachers are to hold a bachelor's or master's degree;
• the standard of all secondary schools is to be raised to the level of the country's Nazarabayev Intellectual Schools, which foster critical thinking, autonomous research, a deep analysis of information and proficiency in Kazakh, English and Russian;
• Government scholarships for university students are to increase by 25% (by 2016);
• 80% of students who complete their degree under a government grant scheme are to be employed in their field of specialization a year after graduation.

The State Programme for Accelerated Industrial and Innovative Development focuses on the twin goals of diversifying the economy and improving Kazakhstan's competitiveness by creating an environment more conducive to industrial development and developing priority economic sectors, including via effective interaction between the government and business sectors. Kazakhstan's economic priorities to 2020 are agriculture, mining and metallurgical complexes, the energy sector, oil and gas, engineering, information and communication technologies (ICTs), chemicals and petrochemicals. Targets include:[1][3]

• raising domestic research spending to 1% of GDP by 2015;
• increasing the number of internationally recognized patents to 30;
• opening two centres with industrial expertise, three design bureaux and four technology parks;
• raising the share of non-primary exports to at least 40% of exports by 2014;
• raising labour productivity in manufacturing by a factor of no less than 1.5 by 2020; and
• raising the contribution of the manufacturing sector to at least 12.5% of GDP by 2020.

It is estimated that, by 2006, two-thirds of Kazakh firms were privately owned.[4] Prices in Kazakhstan are almost completely market-based and banking and other financial institutions are much better established than elsewhere in the region. The government can dialogue with private enterprises through Atameken, an association of more than 1 000 enterprises from different sectors, and with foreign investors through the Foreign Investors’ Council, set up in 1998. Kazakhstan nevertheless remains attached to state-led capitalism, with state-owned companies remaining dominant in strategic industries. When the global financial crisis hit in 2008, the Kazakh government reacted by stepping up its involvement in the economy, even though it had created a wealth fund, Samruk−Kazyna, the same year to further the privatization of state-controlled businesses.[5]

Samruk−Kazyna resulted from the 2008 merger of two joint stock companies, the Kazakhstan Holding for the Management of State Assets (Samruk) and the Sustainable Development Fund (Kazyna). Samruk−Kazyna is charged with modernizing and diversifying the Kazakh economy by attracting investment to priority economic sectors, fostering regional development and strengthening inter-industry and inter-regional links. Oil and gas represent 60−70% of Kazakh exports. A 2% reduction in oil revenue in 2013, subsequent to a drop in prices, cost the Kazakh economy US$1.2 billion, according to Ruslan Sultanov, Director-General of the Centre for Development of Trade Policy, a joint stock company of the Ministry of the Economy and Budget Planning. More than half (54%) of processed products were exported to Belarus and the Russian Federation in 2013, compared to 44% prior to the adoption of the Customs Union in

In December 2012, President Nursultan Nazarbayev announced the Kazakhstan 2050 Strategy with the slogan ‘Strong Business, Strong State.’ This pragmatic strategy proposes sweeping socio-economic and political reforms to hoist Kazakhstan among the top 30 economies by 2050. In his January 2014 state of the nation address, the president observed that ‘OECD members have covered a journey of deep modernization. They also demonstrate high levels of investment, research and development, labour efficiency, business opportunities and standards of living. These are the standards for our entrance into the ranks of the 30 most developed nations.’[1][6]

Promising to explain the strategy's goals to the population in order to ensure public support, the president stressed that ‘the well-being of ordinary citizens should serve as the most important indicator of our progress.’ At the institutional level, he pledged to create an atmosphere of fair competition, justice and rule of law and to ‘shape and implement new counter-corruption strategies.’ Promising local governments more autonomy, he recalled that ‘they must be accountable to the public.’ He pledged to introduce principles of meritocracy into human resources policy for state-owned enterprises and companies. The president recognized the ‘need to update relationships between the state and non-governmental organizations and the private sector’ and announced a privatization programme. A list of state enterprises to be privatized was to be drawn up by the government and the Samruk−Kazyna sovereign wealth fund in the first half of 2014.[1]

The first stage of the 2050 Strategy focuses on making a ‘modernization leap’ by 2030. The aim is to develop traditional industries and create a processing industrial sector. Singapore and the Republic of Korea are cited as models. The second stage to 2050 will focus on achieving sustainable development via a shift to a knowledge economy reliant on engineering services. High value-added goods are to be produced in traditional sectors during this second stage. In order to smooth the transition to a knowledge economy, there will be a reform of laws related to venture capital, intellectual property protection, support for research and innovation and commercialization of scientific results. Knowledge and technology transfer will be a key focus, with the establishment of research and engineering centres, in cooperation with foreign companies. Multinational companies working in major oil and gas, mining and smelting sectors will be encouraged to create industries to source required products and services. Technology parks will be reinforced, such as the new Innovative Intellectual Cluster at Nazarbayev University in Astana and the Alatau Information Technology Park in Almaty.[1][6]

In its 2050 Strategy, Kazakhstan gives itself 15 years to evolve into a knowledge economy. New sectors are to be created during each five-year plan. The first of these, covering the years 2010−2014, focused on developing industrial capacity in car manufacturing, aircraft engineering and the production of locomotives, passenger and cargo railroad cars. During the second five-year plan to 2019, the goal is to develop export markets for these products. To enable Kazakhstan to enter the world market of geological exploration, the country intends to increase the efficiency of traditional extractive sectors such as oil and gas. It also intends to develop rare earth metals, given their importance for electronics, laser technology, communication and medical equipment. The second five-year plan coincides with the development of the Business 2020 roadmap for small and medium-sized enterprises (SMEs), which will make provision for the allocation of grants to SMEs in the regions and for microcredit. The government and the National Chamber of Entrepreneurs also plan to develop an effective mechanism for helping start-ups.[1][6]

During subsequent five-year plans to 2050, new industries will be established in fields such as mobile, multi-media, nano- and space technologies, robotics, genetic engineering and alternative energy. Food processing enterprises will be developed with an eye to turning the country into a major regional exporter of beef, dairy and other agricultural products. Low-return, water-intensive crop varieties will be replaced with vegetable, oil and fodder products. The Kazakhstan 2050 Strategy fixes a target of halving the share of energy revenue in GDP and ensuring that non-resource goods represent 70% of exports by 2050. As part of the shift to a ‘green economy’ by 2030, 15% of acreage will be cultivated with water-saving technologies. Experimental agrarian and innovational clusters will be established and drought-resistant genetically modified crops developed.[1][6]

Infrastructure development is a priority. In his state of the nation address of January 2014, the president said that highways were currently under construction to link Kazakh cities and turn Kazakhstan into a logistics hub linking Europe and Asia. ‘The Western Europe–Western China corridor is nearly completed and a railway line is being built to Turkmenistan and Iran to gain access for goods to ports in the Gulf,’ the president said. ‘We should increase the capacity of Kazakhstan’s port in Aktau and simplify export-import procedures. Upon completion, the 1 200 km-long Zhezkazgan−Shalkar−Beineu railway will connect the east and west of the country, providing access to the Caspian and Caucasus regions in the west and to the Chinese port of Lianyungang on the Pacific coast in the east.’[1][6]

The traditional energy sector is also to be developed. Existing thermal power stations, many of which already use energy-saving technologies, will be equipped with clean energy technologies. A research centre on future energy and the green economy is to be established by the time Expo 2017 takes place. Environmentally friendly fuel and electric vehicles are to be introduced in public transportation. A new refinery will also be established to produce gas, diesel and aviation fuels. Endowed with the world's biggest uranium reserves, Kazakhstan also plans to set up nuclear power plants to satisfy the country's growing energy needs.[1][6]

In February 2014, the National Agency for Technological Development signed an agreement with the Islamic Corporation for the Development of the Private Sector and a private investor for the establishment of the Central Asia Renewable Energy Fund. Over the next 8−10 years, the fund will invest in Kazakh projects for renewable and alternative energy sources, with an initial endowment of US$50−100 million, two-thirds of which is to come from private and foreign investment.[1][7]

Among the targets of Kazakhstan's 2050 Strategy are:[1]

• Kazakhstan is to increase per capita GDP from US$13 000 in 2012 to US$60 000 by 2050;
• With the urban population due to rise from 55% to 70% of the total, towns and cities are to be linked by high-quality roads and high-speed transport (trains) by 2050;
• Small and medium-sized businesses are to produce up to 50% of GDP by 2050, compared to 20% at present;
• Kazakhstan is to become a leading Eurasian centre of medical tourism (possible introduction of universal medical insurance);
• Annual GDP growth is to reach at least 4%, with the volume of investment rising from 18% to 30%;
• Non-resource goods are to represent 70% of exports and the share of energy in GDP to be halved; GERD to rise to 3% of GDP to allow for the development of new high-tech sectors;
• As part of the shift to a ‘green economy’, by 2030,15% of acreage is to be cultivated with water-saving technologies; agrarian science is to be developed; experimental agrarian and innovation clusters are to be established; drought-resistant GM crops are to be developed;
• a research centre on future energy and the green economy is to be launched by 2017; and
• a Geological Cluster of Schools is to be launched at Nazarbayev University by 2015.

GDP growth trends in Central Asia, 2000−2013. Source: UNESCO Science Report: towards 2030 (2015), Figure 14.1

Kazakhstan devoted 0.18% of GDP to research and development (R&D) in 2013 and 0.17% of GDP to R&D in 2015, down from a decadal high of 0.28% in 2005. The economy has grown faster (by 6% in 2013) than gross domestic expenditure on research and development, which only progressed from PPP$598 million to PPP$714 million between 2005 and 2013. As long as economic growth remains strong, it will be difficult to raise the country's level of expenditure on research and development to 1% of GDP by 2015, the ambitious target of the State Programme for Accelerated Industrial and Innovative Development, which was adopted in 2010. The Kazakhstan 2050 Strategy fixes a target of devoting 3% of GDP to research and development by 2050.[1][3]

In 2011, the business enterprise sector financed half of all research (52%), the government one-quarter (25%) and higher education one-sixth (16.3%). Since 2007, the share of the business sector in research has progressed from 45% to 52%, largely to the detriment of the government share, which has shrunk from 37% to 25% of total spending. The share of the private non-profit sector has climbed from barely 1% in 2007 to 7% in 2011. Research remains largely concentrated in the country's largest city and former capital, Almaty, home to 52% of research personnel.[1]

Trends in research expenditure in Central Asia, as a percentage of GDP, 2001−2013. Source: UNESCO Science Report: 2030 (2015), Figure 14.3

Public research is largely confined to institutes, with universities making only a token contribution. Research institutes receive their funding from national research councils under the umbrella of the Ministry of Education and Science. Their output, however, tends to be disconnected from market needs.[1]

Only one in eight (12.5%) manufacturing firms were active in innovation in 2012, according to a survey by the UNESCO Institute for Statistics. Enterprises prefer to purchase technological solutions that are already embodied in imported machinery and equipment. Just 4% of firms purchase the license and patents that come with this technology. There appears to be a growing demand for the products of research, even if most industrial enterprises do not conduct research themselves, as enterprises spent 4.5 times more on scientific and technological services in 2008 than in 1997.[1]

Innovation expenditure more than doubled in Kazakhstan between 2010 and 2011, representing KZT 235 billion (circa US$1.6 billion), or around 1.1% of GDP. Some 11% of the total was spent on research and development. This compares to about 40–70% of innovation expenditure in developed countries. This augmentation was due to a sharp rise in product design and the introduction of new services and production methods over this period, to the detriment of the acquisition of machinery and equipment which has traditionally made up the bulk of Kazakhstan's innovation expenditure. Training costs represented just 2% of innovation expenditure, a much lower share than in developed countries.[1][9]

In 2006, the government set up the Science Fund within the State Programme for Scientific Development 2007−2012, in order to encourage market-oriented research by fostering collaboration with private investors. About 80% of the funds disbursed go to research institutes. The fund provides grants and loans for projects in applied research in priority areas for investment, as identified by the government's High Scientific Technology Committee, which is headed by the prime minister. For the period 2007−2012, these were:[1][9]

Central Asian researchers by field of science, 2013. Source: UNESCO Science Report: towards 2030 (2015), Figure 14.4

• hydrocarbons, mining and smelting sectors and correlated service areas (37%);
• biotechnologies (17%);
• information and space technologies (11%);
• nuclear and renewable energy technologies (8%);
• nanotechnologies and new materials (5%);
• other (22%).

The State Programme for Scientific Development 2007−2012 stipulated that the Science Fund should channel 25% of all science funding by 2010. However, after the global financial crisis hit in 2008, the government's contribution to the fund dropped. The fund adapted by offering more flexible terms, such as interest- and tax-free loans, and by extending the loan period up to 15 years. In parallel, Kazakh scientists were encouraged to reach out to Western partners.[1][9]

Central Asian researchers by sector of employment (HC), 2013. Source: UNESCO Science Report: towards 2030 (2015), Figure 14.5