Guest blog written by Baur Bektemirov
This is a blog series written by the alumni of the Leading Economic Growth Executive Education Program at the Harvard Kennedy School. Participants successfully completed this 10-week online course in July 2020. These are their learning journey stories.
There is an old cliché that crisis is an opportunity. In my case, the Great Lockdown has certainly become an opportunity to learn and even re-think my work as the Chief Economist for a government organization, which just recently was tasked with an expanded role to help the government to attract more investment and contribute to the economic growth.
The Leading Economic Growth program has helped me to assess, once again, the main problems and obstacles for the economic development of Kazakhstan, look for the real roots of these problems (the binding constraints), analyze possible solutions to these barriers, and even formulate a draft for solving some of them.
It does not, however, gives you a ready recipe to address current problems, instead, the program teaches and provides methodology: how to assess the problem, look for solutions, take a problem-driven iterative approach, build authority, ability, and acceptance to solve the problem in the existing political circumstances.
For example, Kazakhstan is showing all the symptoms of classical Dutch decease problem. The pro-growth policies adopted in late ‘90s—early 2000s, have led to rapid growth of the GDP at the expense of economic diversity (economic complexity). This has led to all the standard problems: strengthening of the national currency, growth of mining and non-tradable sectors of the economy with little productivity growth at the expense of other tradable goods and services. As the result, the economic growth has been stagnating for about 6-7 years now, while investment into economy has contracted, mostly due to the stagnation of banking lending.
The current pandemic does not help solving this problem either. But now, in addition to the short-term economic stimulus, central authorities must decide on economic policies, which will ensure long-term sustainable development. It is imperative to review the current model based on old pro-growth policies, which do not yield the same results as they used to 10—15 years ago.Continue reading Leading Economic Growth in Kazakhstan