Kazakhstan’s Economy and the Oil Sector: A Developmental State or Resource Curse Model?

Abstract

This chapter explores the evolution of Kazakhstan’s oil and gas sector since the nation declared its independence in 1991 through the lens of the developmental state theory. It provides an overview of the privatisation of the nation’s oil sector and the entry of multinational corporations in the country. In this context, Kazakhstan has been constrained by exogenous and endogenous factors, such as low commodity prices, lack of adequate export pipeline infrastructure, and geopolitical instability, all of which have affected foreign investment levels. Further, the chapter investigates the government’s role in regulating the oil and gas sector. In particular, it analyses government policies, such as nationalisation, and efforts to increase rent by amending existing legislation, and state involvement and participation in the industry as a response to pressure from the electorate. The chapter examines these efforts within the context of the state’s significant dependency on the oil industry, and the government’s attempts to restructure the economy while increasing state participation in key oil and gas projects. In the light of this paradox, the chapter emphasises the need for a shift in the nation’s energy policy that would ensure its future energy needs are met, while contributing to the restructuring of the economy.