Kazakhstan, the second largest of the former Soviet republics in territory after Russia, possesses enormous fossil fuel reserves and plentiful supplies of other minerals and metals. It also has a large agricultural sector featuring livestock and grain production. Kazakhstan's industrial sector rests on the extraction and processing of natural resources and also on construction, consumer, financial and other services sectors that experienced rapid growth rates in recent years.

The break up of the former Soviet Union in December 1991 and the collapse in demand for Kazakhstan's traditional heavy industry products resulted in a short-term contraction of the economy, with the steepest annual decline occurring in 1994. In 1995-97, the pace of the government programme of economic reform and privatization quickened, resulting in a substantial shifting of assets into the private sector and inflow of foreign direct investments (FDI).

Kazakhstan is recognized for continuous liberal economic reforms and government programmes aimed at economic diversification. These reforms and the revenues from the resources sector led to fast growth of Kazakhstan’s economy and recognition of Kazakhstan as the regional economic leader.

Kazakhstan holds 3.3% and 1.7% of world crude oil and natural gas reserves, respectively. Kazakhstan’s authorities are determined to bring national output of oil to 3,000 kbpd or 150 mln tons per annum by 2015 which means more than 200% rise in production from current levels. These plans look overwhelmingly aggressive at first glance. However, development of a gigantic Kashagan oil field will bring additional 1,000-1,500 kbpd of oil production. Kashagan is the fifth-largest oil field in the world. First oil from Kashagan is expected in 2013.


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