ReliefWeb

Executive summary

The rapid increase in oil production coupled with the rise in world oil prices have been the main engine of economic growth of Kazakhstan after the transformational recession of 1990s that followed the independence. But its favourable macroeconomic indicators do not entirely reflect the country's level of social development.

The high income inequality, large numbers of disadvantaged and vulnerable groups and poor economic and social conditions in underdeveloped regions, small towns and rural areas remain the country's major challenges. Unemployment and low wages became the main causes of poverty after the recession. Given the very thin layer of Kazakhstan's middle class and the existence of a very large group of the population with fragile incomes and high risks of poverty, people's vulnerability to economic shocks caused by the deterioration of external conditions, such as fall in oil prices, is high.

The impact of the global financial and economic crisis on Kazakhstan was evident, with retail sales and industrial output both registering negative growth in 2009. Weak economic growth, together with lower global commodity prices, helped to reduce consumer price inflation: in 2009 the average rate of inflation was 7.3 percent, a sharp fall compared with the rate of 17.1 percent recorded in 2008. Nevertheless, some inflationary pressure may yet emerge in 2010, owing to a pick-up in domestic demand, commodity price rises, and higher import duties related to the customs union with Russia and Belarus in effect since January 1, 2010.

Health indicators in Kazakhstan clearly demonstrate slow progress in the reduction of human poverty. The Tuberculosis (TB) epidemiological situation in the country in recent years shows improvements and a trend to stabilisation in both, civil and penitentiary sectors, but the incidence rate is still high. A growing concern is multi-drug resistant (MDR) TB and the HIV expansion increases the risk of TB. Although the absolute number of officially registered HIV cases is still comparatively low, an exponential increase has been recorded in recent years. The stigma associated with HIV and TB is common and is projected to family members of sick people. Other health related problems are preventable infectious diseases, viral hepatitis, brucellosis and diarrhoea.