Abstract
Infrastructure spending, which has felt the strain of the slowdown, will
continue to feel it in 2009. The
government’s willingness to plough
money into the economy, and some big loans from foreign lenders
and
multilateral institutions for major projects, will soften but not eliminate
the pain.
In BMI’s Q309 Kazakhstan Infrastructure Report we forecast
that construction industry value will
contract by 1.28% to reach a value
of KZT1.59trn (US$11.8bn) in 2009. This is based on a revised and
updated
set of data from the national statistics agency. The high inflation that has
plagued the economy is
seen subsiding in 2009, though at 4.4% it still
pushes industry value real growth to -1.2% (nominal
growth is 3%).
BMI
now forecasts GDP in 2009 to contract 1.9% after an estimated 3.0% growth in
2008. Our forecast
is for the economy to resume its expansion in 2010, at
a rate of 2.4%, and then accelerate to 5.5% growth
in 2011.
For many
years Kazakhstan represented something of an infrastructural bonanza.
Kazakhstan is a sparsely
populated, increasingly wealthy, landlocked
country, which has a government committed to developing
road links to
countries that provide access to major export markets. Kazakhstan is a crucial
part of the
Silk Road terrestrial trading routes between the Asia-Pacific
region (China especially) and Europe (Russia
especially). The crucial
hydrocarbons industry needs substantial new investment if production and
exports
are to increase as planned. Further, the USSR-era has left
Kazakhstan with a curious legacy: the need to
import electricity and gas
to supply the major cities in the south and the southeast of the country,
including Almaty, which is the former capital and still by far the most
populous city in Kazakhstan. The
government has a vested interest in
promoting pipelines and power distribution networks that will enable
Kazakhstan to meet its requirements with locally produced energy.
For most
developing countries, growth and foreign investment depends on solid
governance, improving
transparency and a reduction in political/policy
risk. Kazakhstan has been in an unusual position where its
low ranking in
many surveys of transparency and governance has not deterred investments.
The China National Petroleum Corp.’s joint venture with KazMunaiGaz to
buy Kazakhstan-based
MangistauMunaiGaz from Indonesia' s Central Asia
Petroleum shows the appetite for the country’s
resources. The
Associated Press said CNPC will own half of MangistauMunaiGaz, but it was not
clear
whether the US$5bn loan to KazMunaiGaz was the entire cost to
China.
State-owned Kazakhstan Development Bank, together with the World
Bank and the European Bank for
Reconstruction and Development, has
financed the development of Kazakhstan’s electricity
infrastructure.
State-owned energy company KazMunaiGaz’s annual capital expenditure
– which
generally can be thought of its contribution to
infrastructure development in the country – amounts to
more than
US$2bn annually. This report includes a lengthy profile of this important
company.
The global financial crisis has forced the government to
nationalise several of the largest banks. For the
time being, the
country’s real estate developers are finding it hard – or
impossible – to access the funding
they need. Construction in Almaty
and Astana has – at least temporarily – ground to a halt.
| 
View Cart
