# Social and economic situation in the Republic of Kazakhstan and Korean Diaspora in transitional period

Ivan Pak

"KAHAK" KOREAN SCIENTIFIC AND TECHNICAL SOCIETY

SOCIAL AND ECONOMIC SITUATION

IN THE REPUBLIC OF KAZAKHSTAN

AND KOREAN DIASPORA

IN TRANSITIONAL PERIOD

ALMATY - 1998

Editor-in-Chief: Prof., Ph.D. Park I.T.

Compilers: Dr. of economy Kwon L.A.

Dr. of history Kim G.N.

Dr. of philosophy Men D.V.

Dr. of politology Tshyan Von Chan

Ms. Yu E.S.


CONTENTS

HEADING

FOREWORD


1. GENERAL SOCIAL AND ECONOMICAL DESCRIPTION OF THE REPUBLIC OF KAZAKHSTAN IN THE TRANSITIONAL PERIOD

1.1. GEOPOLITICAL LOCATION

1.2. POPULATION

1.3. STATE AND OTHER LANGUAGES

1.4. RELIGION

1.5. STATE AND POLITICAL STRUCTURE

2. TRENDS IN ECONOMIC DEVELOPMENT OF THE REPUBLIC IN TRANSITIONAL PERIOD

2.1. MACRO-ECONOMIC STABILIZATION AND PECULIARITIES OF ITS DEVELOPMENT IN THE REPUBLIC

2.2. TRANSITION FROM ANTI-INFLATIONARY STAGE TOWARDS INVESTMENT STAGE

2.3. ECONOMY REFORMATION LEVEL

2.4. BASIC DIRECTIONS OF REFORMS DEEPENING. MAIN PRIORITIES

2.5. TRENDS OF DEVELOPMENT OF BASIC SECTORS IN REPUBLIC'S ECONOMY _PAGEREF

2.5.1. Industry And Its Key Sectors

2.5.2. Construction

2.5.3. Agrarian Sector

2.5.4. Transport And Communication

2.5.5. Trade And Public Catering

2.5.6. Territorial Division Of Labour

3. SOCIAL SITUATION

3.1. SOCIAL AND DEMOGRAPHIC DEVELOPMENT OF THE REPUBLIC (1990-1997)

3.2. STANDARD OF LIVING

3.3. EMPLOYMENT, LABOUR MARKET AND UNEMPLOYMENT

3.4. CONDITIONS IN SOCIAL SPHERE _ PAGEREF

3.5. FOREIGN TRADE, EXPORT AND IMPORT

4. MODERN KOREAN DIASPORA IN KAZAKSTAN

4.1. SOCIAL AND DEMOGRAPHIC CHARACTERISTIC

4.1.1. Migration And Geography Of Location

4.1.2. Migration Processes

4.1.3. Dynamics Of Population Number

4.1.4. Sex, Age And Social Structure

4.2. NATIONAL AND CULTURAL DEVELOPMENT AND ETHNIC PROCESSES _ PAGEREF

4.2.1. Education and Native Language Teaching

4.2.2. Press And Literature In Korean

4.2.3. Theatrical And Musical Art

4.2.4. National Movement And Korean Public Organisations

4.2.5. Modern Ethnic Processes

4.3. KOREANS ADAPTATION TO THE CONDITIONS OF MARKET RELATIONS

4.3.1. Social Structure Change

4.3.2. Business Activity Forms

4.3.3. Koreans Political Activity

5. SIGNIFICANCE OF KOREAN DIASPORA IN EXPANDING AND CONSOLIDATION OF LINKS BETWEEN KAZAKHSTAN AND REPUBLIC OF KOREA

5.1. KOREAN DIASPORA AS CONNECTING LINK BETWEEN KAZAKHSTAN AND REPUBLIC OF KOREA

5.2.KAZAKHSTAN-KOREAN RELATIONSHIP


FOREWORD

This year it will be exactly seven years since Kazakhstan acquired independence after the collapse of the Soviet Union. The formation of Kazakhstan as a sovereign, legal and civil state represents an important period in the history of the country.

The Republic acquired the status of a country with a stable internal political and social situation during an unprecedentaly short period of time. International links of the Republic are developing and the Republic is fast becoming a member of the international community.

Legal civil society formation in Kazakhstan takes place in the terms of its democratization on the base of creation legislative juridical basis, strengthening of all the authority branches both in the whole Republic and its regions.

This period (1990-1997) is characterized by a radical market reformation both in the economic and social spheres. Reformation of the economy on the base of market reforms is being carried out by means of denationalization and privatization of the state property, and by means of creation many structural or mixed economy and different entities.

The transition to market economy and market relations in all aspects of the social life of the country has been accompanied by certain difficulties. A transition economy implies a decline in production, a high inflation rate (until the most recent period), defaults by enterprises in payments, and growth in unemployment. But the macro-economic stabilization outlined since the middle of 1995 and its durability for the following two years have created a realistic background for the economic growth of the Republic.

In the President's Message "Kazakstan-2030" one of the seven most important long-run priorities was defined as "economic growth, based on an open market economy with a high level of foreign investment and internal savings". In order to achieve these pointed perspectives of social and economic development of the Republic It is necessary to realize the following seven long-run priorities:

1) National security;

2) Domestic-political stability and consolidation of the society;

3) Economic growth, based on an open market economy with a high level of foreign investment and internal savings;

4) Public health, education and well-being of Kazakhstan's citizens;

5) Energy resources;

6) Infrastructure, particularly transport and communications;

7) Professional status.

In the context of the strategic plan of Kazakhstan's development until 2030, the priority targets for the following three years are lined up as follows:

* strengthening of national security by means of more active relations with leading countries, attracting of capital investment into the energy sector of Kazakhstan and development of the state military doctrine;

* solving of the most critical problems in rural regions;

* struggle against poverty and unemployment;

* achieving of economic growth by means of strengthening domestic stability and unity of the society;

* completion of all social and economic reforms, above all in the budget sphere; as a result there will be timely payment of all the pensions, wages, salaries and other social transfers;

* creation of a favorable investment climate;

* acceleration of the reforms in the Government and state service, strengthening of the struggle against corruption and abuse of power;

Further concrete definition of the priority targets of the strategy until the year 2030 to provide development of different programs, 3-year and 1-year development plans and their realization.

Favorable prerequisites for the realization of the outlined middle-run and long-run priorities are the presence of rich natural resources, in particular oil and gas resources, a huge labor market and education potential, a favorable investment climate, and a stable society. It is also necessary to take into account the provision of 2.0% GNP growth in 1997 (compared to 1996), decreasing of the inflation rate to 12% instead of the expected 17.5%, the stability of the national currency tenghe versus the US dollar, and influx of foreign investment in 1997.

In order to represent the social and economic situation in the Republic during transitional period, it is necessary to examine the country itself, its population, economy, culture, and latest economical and social reforms.

This work also aims to show the Korean Diaspora in Kazakhstan, and its mentality and adaptation to the market economy on the basis of social and economic analysis of the present situation in the Republic.


1. GENERAL SOCIAL AND ECONOMICAL DESCRIPTION OF THE REPUBLIC OF KAZAKHSTAN IN THE TRANSITIONAL PERIOD

1.1. GEOPOLITICAL LOCATION

The Republic of Kazakhstan is located in the Central-Asian part of the Eurasian continent. To the north it borders the Russian Federation, to the east - People's Republic of China, to the south - the Republics of Uzbekistan, Kyrgyzstan, Turkmenistan.

The total area of the Republic's territory is 2724.9 thousand square kilometers. It is 4.5 times the area of Ukraine, 4.9 times the area of France, 7.2 times the area of Japan and 66 times the area of Switzerland. The total length of the republic's borders is 12187 kilometers, including 6467 kilometers of the boundary with the Russian Federation, 2300 kilometers - with the Republic of Uzbekistan, 1460 kilometers - with China, 980 kilometers - with the Republic of Kyrgyzstan, 380 kilometers with the Republic of Turkmenistan and 600 kilometers of the boundary on the Caspian Sea.

The capital of the country is Astana city (till 1997 - Almaty). The republic consists of 14 oblasts (regions) and Almaty city, which include 218 districts, 83 towns and cities, 17 districts i Location n the cities, 200 villages and 2456 aul (rural) okrugs (January 1, 1997). Among other large cities are Qaraganda, Kokshetau, Pavlodar, Semipalatinsk (Semey), Zhambyl (Taraz), Kyzyl-Orda, Aktubinsk (Aktobe), Ust-Kamenogorsk (Oskeman), Uralsk (Oral), Qostanay, Petropavlovsk.

Everyone, who visits Kazakhstan for the first time, is amazed by the boundless spaces, huge distances, measured by thousand of kilometers. The Northern Kazakstan is situated on the Western-Siberian plain, flat surface of which is rarely broken by small down-lands and rises along riverbanks. In the northern part, where there is more precipitation, there is forest-steppe with birch-aspen glens. Southwards, where there is less precipitation, feather grass steppe prevails.

The soils of the forest-steppe and steppe are of chernozem (black earth) and of chestnut, they are very fertile. Here the main grain region of the Republic is located.

The central part of the Republic constitutes the Kazakh melkosopochnik, or Sary-Arka - remainder of the ancient vigorous mountain system. Nowadays it is just a plain with not-very-high hills. To the south it borders on the spacious desert Betpak-Dala, further there are sands of Moyunkum. Here there are artesian waters, which can be used for a net of artesian and tubular wells. These lands are good spring-autumn and winter pastures.

Nature in the southeast of the Republic is more picturesque and multifarious. In the Western and Northern Tian Shan and Zhungar Alatau the lower belt of foothills represents a transition zone from the desert to arid steppes. Higher up, where there are more precipitation, motley grass steppes lie. These are rich pastures and good arable lands for non-watering farming. The steppes are changing by mountainous forests full of Tian Shan spruce, birch, wild apple-tree and apricot. Belt of forests follows by the sub-alpine and alpine meadows with dense and sappy grass - excellent summer pastures for livestock (zhaylau). Mmore higher up there is a belt of eternal snows and glaciers, where numerous rivers begin.

In the east of the Republic southwestern spurs of Altay mountain systems are located. The part of it, rich in ores of non-ferrous and rare metals, got the name Rudniy Altay (Oreous Altay).

Western Kazakhstan is a part of large Caspian Lowland, which was the bottom of the sea some decades of thousands years ago. There are a lot of depressions - salty lakes - in the western part of the Republic. The largest one is on the Mangyshlak peninsula - it is 132 meters below the level of the World Ocean.

Kazakhstan is very far from the oceans, that is why it has a sharp continental and arid climate. The average temperature of January varies from -18(C in the north to -3(C in the south of the country. Average temperature of July varies from 19(C in the north to 28-30(C in the south. In the northern and central regions frost reaches even -45(C. Almost all over the Republic there is very little of precipitation. In the north it is 300-400 mm a year, southward in the steppe - 250 mm, in desert - 100 mm. Because of the arid climate more than 4/5 of the republic's area is covered by arid steppes, deserts and semi deserts. Only in the mountains precipitation reaches 1600 mm a year.

Rivers are the main source of irrigation of the farms, especially in the southern and southeastern parts of the Republic. There for watering they use the Syrdaria, Talas, Shu, Ile, Karatal, Lepsy, Aksu rivers, which have their beginning high in the mountainous snows and glaciers.

In the flat regions of Kazakhstan Oral, Emba, Tobyl, Ishim, Nura and Sarysu contain little water in summer, and some of them get totally dry. In order to use these rivers for irrigation in the agricultural economy they usually build up dams to regulate water flow of the rivers.

The main navigable river of Kazakhstan is Ertys (total length of the river is 4248 kilometers, including 1700 kilometers inside of the republic). It provides up to 90% of the whole Kazakhstan's river transport turnover of goods. It has a large potential of hydro-energy. Ertys is an important source of drinkable water, which is very important for the arid central part of Kazakhstan. The large canal Ertys-Qaraganda was built here.

The second largest river of Kazakhstan is Syrdaria (total length is 2219 kilometers, including 1400 kilometers inside of the republic). Its uppers are located in the Central Tian Shan, out of the republic's frontiers. It has an especially important significance for watering and irrigation of farms and pastures. In order to regulate its drainage the Qyzyl-Orda dam, the Chardara reservoir and the Kazalinsk hydro-junction were built there.

The next large navigable river, which runs through the territory of the Republic, is Ile (total length is 1001 kilometers, including length of 815 kilometers inside of the republic's boudaries). Its waters are also used for watering of the farms and irrigation of the deserted lands.

There are 85022 rivers and temporal streams on the territory of Kazakstan, 48.0 thousands lakes with the total area of water surface of 45.0 thousand square kilometers. Within the frontiers of Kazakhstan there are northern and northeastern shores of the Caspian and Aral Seas. The largest inner lakes of the Republic are Balkhash Lake with area of water surface of 18.2 thousand square kilometers, Alakol (2.6 thousands square kilometers), Tenyz (1.2 thousands square kilometers) and others.

Lakes, as a rivers also, are rich with fish. In the Caspian Sea more than 40 fish species are fishing; the most valuable of them are sturgeon, stellate sturgeon, white sturgeon (beluga).

The huge territory of the Republic is characterized by the different natural features. That creates an extra diversity in flora and fauna. In the northern part of Kazakhstan, for example, there Siberian species of plants and animals whereas in the southern part tropical and sub-tropical species dwell. From the east and the south territory of Kazakhstan edged with mountains, where all the types of landscape are represented: from the foothill steppes to the deciduous and coniferous forests, alpine meadows and snowy peaks. The largest mountain massives are Khan-Tanyry (Khan-Tengri) Peak (6995 meters height) of Saryzhaya Khrebet (Ridge), 100-Year VGO Peak (6260 meters height) of Meridialniy Khrebet (Ridge), and Talgar Peak (4973 meters height) of Ile Alatau and others. Among the dwellings of the severe mountains there are Tian Shan brown bear, small singing birds; among the dwellings of the Central Kazakhstan steppes there are swift-footed saigaks, or antelopes, ancient fauna species, in the same place, on Tenyz lake - rare species of red-winged bird - flamingo, which were registered in the Red Book. On the vast territory of Kazakhstan 11 species of amphibia, more than 50 species of reptiles, 153 species of mammals and more than 450 species of birds are dwelling. In the connection with ecological deterioration and worsening of the environmental situation a danger of disappearance of several species of animals and plants appeared. In order to prevent disappearance of rare species they were registered in the Red Book of the Republic and are protected in state preserves.

The largest deposits of copper, lead, zinc, iron, tin and rare metals are concentrated in Kazakhstan. There are large stocks of coke coal too (Qaraganda coal basin). In Torgay valley there are enormous stocks of iron ores, bauxites and brown coals. Khrebet Karatau is rich with ledges of phosphorites, lead, zinc, and vanadium ores. Lead-zinc ores are also found in Zhungar Alatau, and heavy layers of the coal lie in Ekibastuz.

On the Emba Plateau and Mugodzhary Mountains there are chromites, copper and asbestos of high quality. On the Caspian lowland there and Mangyshlak Peninsula there are oils, gas and mineral salt. Basing on estimations of foreign experts, large oil and gas stocks on the Kazakstani shelf of the Caspian Sea were forecast. It is possible to say that Kazakstan is the second world's country on the derivable stocks of oil (after Saudi Arabia), and the fifth world's country on the derivable stocks of gas. Upon estimations, in Kazakhstani part of the Caspian Sea shelf about 10 billion tons of oil and 2 trillions of cubic meters of gas are concentrated.

The world's largest Karachaganak oil and gas condensate field lies in the Western Kazakstan Oblast (Region) and has enormous reserves of hydrocarbon raw material. Experts estimate that blue fuel's (gas's) reserves here exceed 20 trillion cubic foots, e.g. this amount is larger than amount of gas consumed by the Great Britain for more than 10 years. In underground horizons there are more than 2 billion barrels of liquid oil and condensate. Foreign companies develop and explore this oil field. In the November of 1997 an agreement was signed between two oil giants of the USA: "Texaco" and "Mobil". Old developers of the oil field "British gas", "Agip", and also Russian company "Lukoil" develop Karachaganak deposit as partners of "Texaco".

The most important industries in Kazakhstan are mining and production of non-ferrous and rare metals, mining of bituminous coal, oil, iron ore, ferrous metallurgy, machinery construction, chemical industry, construction materials industry.

Kazakhstan is one of the leading regions on grain-cultivation; grain takes considerable significance in the republic's export. Traditionally principal branch in the agricultural industry is a cattle breeding. Cattle-breeding products (meat, wool, sheep skin, and astrakhan) also represent important place in the export's structure of Kazakhstan.

A specific geopolitical location of Kazakhstan is also defined by the fact that the Great Silk Road passed through the territory of southern regions of Kazakhstan. History of the Great Silk Road begins in the second century BC. Through the territory of Central Asia trade and diplomatic routes passed, they linked China, Europe, Arabia and Byzantine. Cultures of different nations interlaced on this rote of 7000 kilometers length.

In the connection with adopted decision of UNESCO on renascence of the Great Silk Road they pay special attention to the southern regions of Kazakhstan.

1.2. POPULATION

By the beginning of 1998 (on preliminary estimation) population of Kazakhstan was 15671.8 thousands, including 8642.6 thousands of urban population (or 55%) and 7029.2 thousands of rural population (or 45%). An initiated process of urbanization reached its peak in 1992 (58% of urban population), and than its recession began, reaching the level of the eighties.

The rate between number of male and female population changed, but very slightly, to overcome of female's superiority. In 1997 number of females was 5.5 billion, or 51.3% of the total [population, in 1989 - 51.6%. In urban areas 1000 persons of male population were related to 1103.8 persons of female population, and in rural areas to 1003.6 persons.

Population of the Republic has rather young aged structure. Specific proportion of children and teenagers take 33% out of the total number, Number of capable to working individuals is 55% and the number of people with age over capacity to work is 12%. Population aging tendency is emerged in the result of growth of the number of elder age population in comparison with 1990 by 4%. Total coefficient of demographic assignment on the capable to work population (number of incapable to work individuals correlated to 1000 of capable to work) in 1994 is 666 persons over the Republic.

Density of population in Kazakhstan is rather low when compared to other countries. It is 5.8 persons per square kilometer. For example, in Ukraine it is 85.7, in Germany- 228, in India - 285, in Belgium - 330. Density of population throughout the territory of the Republic fluctuates from 2.1 persons per square kilometer in Mangystau Oblast, 2.7 persons per square kilometer in Qyzyl-Orda Oblast to 7.4 persons per square kilometer in Akmola Oblast and 17.0 persons per square kilometer in South Kazakhstan Oblast.

Location of population is not regular. The highest population density is examined in the southern foothill belt, where in oasises of watering agriculture the density of population reaches 100 persons per square kilometer. Density of population is comparatively high in the north of the Republic, in chernozem (black earth) forest-steppe and steppe belt - 20 and more persons per square kilometer. The higher density can be examined in a number of industrial regions. Side by side with it huge territories are very faintly colonized. In the fifties - seventies a tendency for more regular location of population was outlined, fast growth of its density in the steppe regions and suburb zones in Central and West Kazakhstan.

By the beginning of eighties 19 cities had a population of more than 100 thousand people, including 2 cities with more than 500 thousands - Almaty and Qaraganda. More than 60% of towns are small - with a population less than 50 thousands. High concentration of population in cities, especially regional (oblast) centers, is typical for Kazakhstan.

Dimensions of urbanization were especially accelerated in the fifties-seventies. In a number of regions satellite-town and city agglomerations grew around the large cities. The largest agglomerations grew up around Qaraganda, including satellite-towns such as Temyrtau, Abay, Saran, Shahtinsk, and numerous city-type villages, and around Almaty (towns Talgar, Kapshagay, Kaskelen, village Alatau and others). Some cities are formed huge industrial junctions (Shymkent and Kentau; Taraz, Zhanatas and Karatau; Pavlodar and Ekibastuz; Qostanay, Rudniy and Lisakovsk; Atyrau and oil-mining villages).

In the connection with great differences in natural and historical-economic conditions character of population's location and settling and types of settlements in the Republic are diverse. Most people of the country live in South Kazakhstan Oblast (1998.1 thousands, or 12.7% of the total population; 37.6 of them are urban (July 1, 1997)). According to the new administrative division the second most-populated region is East-Kazakstan Oblast (1649.5 thousands, or 10.5%; 57.4% of them are urban), then Almaty Oblast (1635.6 thousands, or 10.4%; 30.4% of them are urban), and, the next, Almaty City with population of 1064.7 thousands, or 6.7%.

In Qaraganda Oblast there are 1553.9 thousands, or 9.8%; 82.3% of them are urban. 1147.9 thousands, or 7.3% of the total population live in Qostanay Oblast; 1145.0 thousands, or 7.2% live in North Kazakstan Oblast, 43.6 of them are urban. 1006.9 thousands, or 6.4% of the total population live in Zhambyl Oblast; 45.9% of them are urban.

In Akmola Oblast 897.8 thousands, or 5.7% of the total population live, 55.5% of them are urban. In the connection with transfer of the capital a huge increase of citi and oblast population and acceleration of urbanization process are expected.

Kazakhstan's population is multinational. It is represented by more than 130 nationalities. By the beginning of 1997 year there were 8033380 (50.6%) Kazakhs, 5104623 (32.2%) Russians, 720306 (4.5%) Ukrainians, 277647 (1.8%) Tatars, 303575 (1.9%) Germans and 1421163 (9.0%) persons of other nationalities.

Kazakhs settle all over the Republic territory, but their highest share is in West and South Kazakhstan (Atyrau, West Kazakhstan, Aktobe, Kyzyl Orda, Almaty, Zhambyl, and South Kazakhstan Oblasts). Percentage of the Kazakhs in the total population is also high in East Kazakhstan Oblast (10.0%).

Kazakhstan's territory was inhabited in an ancient times. In East Kazakhstan the ancient palaeolith sites were found, neolith sites were found all over the territory. Among Kazakhs' ancient ancestors there are tribes of Saks, Usuns, tribal union Kanguy and other tribes, which lived on the territory of modern Kazakstan in the 2-1 centuries BC - 1 millenium AC. In the 6-7th centuries different Turk tribes - parts of West-Turk Kaganat - settled there, then Turgeshes, Karluks. In 8-11th centuries this territory was entered by Kimaks, Kypshaks, Oguzes. Creation of Karahanids' state (10-12th centuries) has promoted the ethnic unity of the local tribes. At the beginning of the 12th century Kazakstan was underwent the invasion of Selzhuks, Kidans, Mongols and Tatars. Mongolian conquest of the Central Asia and Kazakstan at the beginning of 13th century has led to further confusion of the tribes. At the end of 15th - beginning of 16th centuries Kazakh khanate have been founded, in the frames of which the formation of the Kazakh nationality was finished. In the structure of Kazakhs nationality 3 territorially isolated groups of tribes (Zhuzes) were formed historically: Elder (Senior) Zhuz (Semirech'e), Middle Zhuz (the steppe regions of Central Kazakhstan, valleys of Syrdaria, Ishim, Tobol and other rivers), Younger (Junior) Zhuz (West Kazakstan). In the 17th-1st half of 18th centuries territory of Kazakhstan was underwent aggression of Zhungars, and Kazakhs has been struggled against them during the long hard emancipatory war. In 1731 Kazakhs of Younger (Junior) Zhuz, in 1740 Kazakhs of Middle Zhuz and finally in 1846 of Elder (Senior) Zhuz were taken under the Russian citizenship. For a number of ages the main deal of the natives - Kazakhs - was nomadic cattle breeding. All the businesses were connected with it - making of rough wool clothes, outer clothing, large felt mats, vessels. In the second half of the 19th century a gradual transition of the native Kazakh population towards settled way of life and agriculture was begun; industry was slowly arised. But Kazakhstan still remained agrarian-stuff appendage of the central regions of Russia and sales market for its industrial goods. In this region of nomads-breeders about 90% of population was occupied in agriculture. The richest natural resources were used rapaciously. Kazakstan was a place of exile of political prisoners and a place of mass-deportation of the whole nations, so that has influenced a lot on the national structure of the population.

In 1916 in Kazakstan a national-emancipated rebellion flared up with Amangeldy Imanov at the head. It was severely quelled by tsar armies.

On 26th August 1920 the Kyrgyz Autonomous Soviet Socialist Republic was founded, and in 1925 a historically correct name "Kazakh ASSR" was restored. On the 12th December 1936 it was reorganized into the Union Republic, which existed up to the collapse of the USSR. In 1992 it was proclaimed to be Republic of Kazakhstan as an independent, sovereign, legal state in the world community.

1.3. STATE AND OTHER LANGUAGES

In the sovereign multinational Kazakhstan where tens nationalities are settling one of the urgent nowadays complex problem is connected with issues of state language policy, tongue construction experience, Kazakh language wide implementation and usage, national minorities languages maintenance and development of the and etc.

In 1989 in Kazakhstan The Law about languages was adopted and Kazakh language was proclaimed as state one, Russian is language of international communication. These language status was confirmed in the Constitution of the Republic of Kazakhstan in 1993.

New Constitution of the Republic of Kazakhstan adopted at the results of Referendum of 30th August 1995 established:

1) In the Republic of Kazakhstan the state language is Kazakh.

2) At the state organisations and local self-management bodies equally with Kazakh Russian language is officially used.

3) State care of conditions creation for study and development languages of the Kazakhstan people.

In the world practice "official" and "state" language status is used as synonyms. Official language is defines as basic state language used in the legislative and official office works, law and etc. Official language is different from state - first one does not suppose obligatory legal adoption, the second needs in the official proclamation by legal authority and proper legislative decoration.

So there is no difference between language status "state" and "Official", confirmed in the new Constitution of the Republic of Kazakhstan. Problem is that in every day life status "state language" associates with its privileges, special position different from languages of "international communication" and "official" because it becomes obligatory for all state citizens.

One of the main positions characterized modern language situation is state and official knowledge level. Research results demonstrated that fluently in Kazakh - 36% Kazakhstan people, speak and read fluently, but can not write - 8,9% , understand and can hardly speak - 6,2%, can understand and communicate only with dictionary or phrase-book - 6,5%, do not know completely - 36,6%.

Among Kazakhs positions are as follows: fluent - 74,7%, fluent speaking and audience without written knowledge -14,4%. Hardly speak - 6,2%, understand talks a bit - 2,9%, and about 2% don't know Kazakh at all.

Among Russians 71% of asked don't know Kazakh at all and only 7,7% know in some level, representatives of other nationalities: Slavs, Koreans, Germans slowly different from Russians. About 70% non-Kazakh Turcic population (Uzbeks, Tatars, Uigurs) use widely enough Kazakh speaking.

Situation with Russian knowledge is following: 96,2% of all asked Kazakhstani peoples can speak, read and write. Among Kazakhs 77,8% can speak, read and write. Percentage of fluently speaking, reading and writing is very high among Germans and Belarussians (100%), Ukrainians (98%), Koreans (97%), Tatars (91%) and others.

Kazakh language consolidates its positions at the traditionally Kazakh speaking south and East regions, but Russian dominates as usually at northern and central parts. Kazakh language usage is steadily expanded in such spheres as state bodies, education, mass media. culture and art, i.e. there where state regulation and support could be arranged. Kazakh language dissemination in more level on serves in a villages. Russian predominates in day-to-day communication, service, health protection and accordingly continues to dominate at citi media.

For all Soviet period and in the last tens especially Russian predominated at all spheres of functioning. Party leaders, high officials, science and culture elite of all soviet republics got education in the Centre. Languages of titled nations, i.e. nationalities given republic's name, are used very limited and the reasons were in the language policy from one side and Russian fluent knowledge prestige that opened opportunities for successful carrier, national nihilism, fears of acqvisition in bourgeois nationalism and etc. - from another side. In result to the moment of Kazakhstan sovereignty Kazakh language was totally removed or functioned non-significantly at many fields of social-political, economical and cultural life of the Republic. Moreover Kazakh Language itself and its dictionary structure, lexical fund were not ready for execution of the comprehensive spectrum of the functions. Scientists-linguists have to create fastly neolohisms,, replacing Russian and foreign lexical using before in Kazakh as loan-words adoptions. These new words are understandable to terminological dictionaries authors, but wide range of the Kazakh language bearers hardly understand them. Thus, formation and implementation of the modern lexical corresponding to the modern life conditions are still faced with.

As it is known for centuries Kazakhs used Arabic written language, than after October revolution they had to during more than ten years use national alphabet based on Roman alphabet. All further Soviet period national written alphabet on the basis of Cyrillic alphabet used. Modern Kazakh alphabet comprises from 42 letters among which five vowels and four consonants have not analogues in Russian. Kazakh relates to Turcic languages, and Turcic states in the Central Asia have tendencies toward acceptance of Turkish experience in Roman written alphabet usage. Question about Kazakh written language is still needs in respond.

Kazakh language vocabulary is rich, that confirms ten books Explanatory Kazakh Language Dictionary, which involves 67 thousands registered words, 24,5 phrase combination - totally 91,5 thousands lexical units. But not all lexical units one could find in the Dictionary, also for the last ten years thousands of neologisms invited to substitute used before loan-words adoption and reflect revealing new reality have been emerged.

Kazakh language relates to the agglutinate group of languages and has some special features. Russian relates to the inflexional languages. Thus, Kazakh and Russian are of different systems therefore they are significantly different.

In Kazakhstan, except state -Kazakh and official -Russian, languages of the other nationalities settled Republic are functioned. Mass media issues, typing production, performances, classes in the schools and universities are arranging in Ukrainian, German, Uigur, Korean, Tatar, Uzbek and others. But functional sphere of these languages are narrow and their knowledge level even among language bearers are noted as very low.

So, modern language situation has two tendencies: firstly, Kazakh-Russian double lingua and Kazakh-Russian-National triple lingua expanding, secondly, state language wide scale implementation into the all spheres of country's social life: policy, economy, science, military forces, legal proceedings.

1.4. RELIGION

Kazakhstan is poli-ethnic and multi-confessional state where in close contact Moslems, Christians, Budhists are living and also different traditional sects are doing. If one looks deep into the ages and asks how regions penetrated the history will be as follow:

East Turcic Kaghanate (8 century) death has accelerated Arabian conquerors movement into the Central Asia and Kazakhstan. Since that time Islam began penetrated in the Kazakh step. But this process of Islam dissemination was troubled by tribes breaking up. It accelerates at Karlooks Kaghanate appearance - the earlier feudal states on the Kazakhstan territory. More wide dissemination Islam had in time of Karahanids (11-12 c). At Berke Khan (1255-1266) Golden Orda tops began to go under Islam. In 1283 Tudemengu Khan became Moslem, Uzbek Khan is followed him. In 14 century at the Timur's time Islam positions are enforced. For consolidation of Islamic religion ideology Timur built moslem worship construction, implant Islam among nomads.

Islam penetrated into the Kazakh steppe through Central Asia via missioners coming with trade caravans. A special role in Kazakhs Islamization Kokand Khanate has played, which settled up in 18 century and enforced towards begining of 19 century at Alimkhan (1800-1809). That part of Kazakhs who had settled way of life was under relatively strong Islam influence. In Turkestan, Djarkent, Sayram and other cities of the South Kazakhstan Islam ideology come more deeply. In 10-13 centuries mosks were built here, among Kazakhs appeared piligrims visited Mekka and Medina. Islam becomes predominated religion. At that time a number of scientists seriously studied the medieval science which come with Islam - theology, Arabic Language and literature, philosophy and logic. Among them Abu Nasr al-Farabi, Iskhak al-Otrari, Jomal al-Turkestani, Kadyrgali Djalairi and etc.

Since "willing" joining of Kazkhstan to Russia Tsarism tries to spread Christianity among Kazakhs, but this attempt did not give results wished. Then autocrasy goes to open support of Islam, promoting its position dissemination and consolidation. Decrees on mosques building and providing them by mullahs were issued, there was mufti institution organised. Since moving of West Printing House in 1802 from Petersburg to Kazan the last one becomes the centre of Islam dissemination.

CHRISTIANITY. Russian migrants brought in Kazakhstan orthodox religion. Also Christians sects penetrated here which upon there social roots in the social life are divided on three groups: old Russian sectants (Old Belief, Khlystovcshina, Molokan, Dukhobor ), sects of the western originality (babtists, evangelical christians, adventists and sects setting up in Russia in XX century (iegovists, pjatidesjatniks, adventists-reformists).

As it is known since October Revolution religion lost material basis and stopped to be reflection of the existing social relations, its influence was significantly reduced. But that did not change position of religion in the social development. It was regarded that religion is a serious hindrance on the way of the social development.

In Kazkhstan at present as in the other democratic and civilized countries liberty of conscience is appropriated. Accordingly the activity of the different confessional organisations have been relived.

The Constitution of the Republic of Kazakhstan guaranties the liberty of conscience. Anti-religious propaganda regards as an interruption into the people private life.

In the Republic at present more than three thousands mosks were built and medrese and christian's schools - theological seminaries have started again there functioning. Christianity is represented by 10 independent from each other religious confessions. Eparchy of Almaty and Kazakhstan is managed the Russian orthodox church. There are some Old Beliefs groups (in East Kazakhstan and Uralsk regions). Catholic and Evangelic-Lutheran Church, some religious sects have not their centres in Kazakhstan. Churches of the evangelic christians-baptists are working mainly in the northern, southern and central regions and are guided by Senior Presbitor for Kazakhstan elected at the cult ministers meetings.

Followers of the Islam sunite direction are represented by tens religious societies, theological leadership of which realised in Almaty by representatives of the moslims theological leadership in Central Asia and Kazakhstan.

There are some Iudaism and Lamaism - Budhism kind believers groups in Kazakhstan.

Missions from USA and Republic of Korea are coming at the last years in Kazakhstan, they are christians - protestants. The aim of pastors - independently from nationality to attract people towards Christianity. Now in Kazakhstan more than 50 churches are functioning, among them only in Almaty there are about 30 ones.

State relation towards different confessions in Kazakhstan are determined by " Statute on Religious Unions in the Republic of Kazakhstan." Legislation has established that believers may united for joint satisfaction of their religious needs into the religious societies and groups. Believers united in the societies that have to be registered may do worship actions gathering in churches, payed willing donations and etc. Religious unions incomes free of state taxes. State does not interrupt into the internal (worship, canonic) life of the religious organisations. Realising control on religious cults state legislation following it takes them under protection. With aim of consequent implementation into life state policy towards religion authorized Council on Religion Affairs under President Administration are working in Kazakhstan, that one get control on realisation of the religious cults legislation. Council studies and summarizes above legislation usage practice, arranges relations between state and religious organisations in case of arising problems demanding resolution of the state side.

1.5. STATE AND POLITICAL STRUCTURE

Collapse of the former Soviet Union and the whole block of the socialist countries, new independent countries formation in the end of XX century caused a large scale and deep changes, which led to serious transformation of the world community geopolitical structures. One may say that process of a new paradigma formation are going, substantial characteristics of which reflect and construct at the same time the new social-economical, political, spiritual and other realities. These realities reflect the transition way of many countries from centralized planned economy towards market one based on principles of private property and individual freedom and competitiveness.

Proclamation of the sovereignty in the Declaration of State Sovereignty of 25th October 1990 became the basis for transformation in Kazakhstan. Naturally, that for solution of the complicated problems of political choice and advancement along civil way of the state development in Kazakhstan there was emerged the necessity of the constitutional regulation of the processes of formation and relationships between sovereign authority and people of Kazakhstan at diversity of their political, social, national and other elements.

For the first time the independence of Kazakhstan states in the Constitutional Law of the Republic of Kazakhstan "About State Independence Of the Republic of Kazakhstan" of 16th December 1991. That way Kazakhstan entered the world community as sovereign state. Moreover, elements defining independent state: indivisible citizenship, territorial isolation, state bodies independent system, independent economical system corresponding to the statute of independent state, independent military forces existence were consolidated in that one.

Therefore, under all politological and social-economical criteria two main constitutional states of that period - Declaration and Constitutional Law reflected and in some completeness consolidated the radical changes in life style tendency traced in Kazakhstan society. From other side that way was founded principally new begin of the qualitative process of the setting up in Kazakhstan its own constitutional system, preliminary and putting on parameters for further independent construction of the new politically and economically independent statehood on the Kazakh land.

New stage of the constitutional legislation of the Republic of Kazakhstan formation starts since adoption of the new Constitution on January 1993 by Supreme Soviet. It was historical legal act completely newly defined state and social system of Kazakhstan. Constitution of 1993 brought into the social-political and economical life of the new independent state the whole complex of principally new , "non-socialist" legal and political institutions. Republic of Kazakhstan recognized that the most value is a human personality, his life, freedom and inalienable rights. It takes the constitutional obligations "to realize their activity in the interests of the citizen and society" .

General index of the social interests diversity, the main form of the Kazakhstan society became the Constitution of the Republic of Kazakhstan of 1995 adopted in referendum by 89,14% voices of republic's citizens participate in the votation (90,58%). A number of voting against new Constitution was 9,90 % of Kazakhstanies participated in referendum. Fundamental parameters of the new independent state Kazakhstan the Constitution of 1995 predefined in part 1 "General Provisions": " Republic of Kazakhstan approves itself as democratic, temporal, legal and social state the high values is human person, his life, rights and liberties" (p.1). Here for the first time upon President N.Nazarbaev's suggestion made during II session of the Kazakhstan Peoples Assembly on 29th June 1995 and since its approval there were included and later adopted the basic principals giving humanistic character for existence and development of the whole policy of Kazakhstan: public content and political stability; economical development for all people, Kazakhstan patriotism, democratic metods for solution of all the most significant state issues including voting at Republic' s Referendum or Parliament.

Along with the new Constitution recognizing of ideological and political diversity in the Republic of Kazakhstan which "creates real opportunity to overcome fully an elements of the soviet state system and go to the modern parliamentarism", it significantly expands legal basis of the property relations and enforced constitutional guaranties of the private properties rights. Thus, firstly state and private properties are recognized and equally protected by state. Secondly, rooted liberal-democratic principal of the society constructing socially oriented market economy was formulated and consolidated: " Property obliges, its usage has to serve simultaneously to public welfare".

As in the most CIS countries post-communist transition in Kazakhstan was not commenced since involving into the international economic system, but the first was political system changing. That is indeed defined the specific of the political development of Kazakhstan when internal political changes primate was vividly expressed at the first steps of the transformation process.

First of all transition from political system, concentrated all kinds of authorities in hands of CPSU and being basis of the former political regime, towards system where precise separation of the legislative, executive and court authorities is provided not only constitutional acts, but should be executed in reality took place.

Authorities separation supposed that state authority is executed by legislative, executive and court bodies. The highest and the only body realized legislative authority is Parliament. Executive authority is made by Government, central branch management bodies, ministries, departments, state services, local administration. Justice - only by court.

It should be noted that such principle has been fixed in the Constitution of 1993 (Foundations of the constitutional system, p.6). In reality changes in state authority distribution in Kazakhstan in 1991-1997 go towards President institution enforcement. Grounding president system advantages in the transit type states some researchers regard that firstly it is more stable than parliament system, because of its method to reach legislation up to call for plebiscite, secondly parliament system establishment needs in historical basis, economical, social, political, cultural and other pre-conditions which are lacking in Kazakhstan.

President institution have been born at the soviet epoch end when on 24th April 1990 the Law of the Kazakh SSR was established a position of the Kazakh SSR President , which status means state leader, N.A.Nazarbaev was elected at the Kazakh SSR Supreme Soviet meeting. Since that time President authority has been significantly developed.

According to Constitution 1995 and following by that laws defined status, functions and authorities of the authorities different kinds, President reflects unity of the state authority and as state leader regards as coordinator of all kinds of authorities. President is elected in accordance with constitutional law by full legal age citizens on the basis of all equal and direct elected right at secret ballot for a period of 5 years. The same person can not be elected for two times on succession.

President signs the laws adopted by Parliament or returns them for new submission if laws have adopted out of the Constitution, but also he can issue Decrees having law force in case foreseen by Constitution. President can retire the Parliament if that can not solve their problems. President approves the Government composition and also can retire that one. All mentioned above characterized the President control system.

For successful realization of this tasks President Administration activity is very important. Thus on April 1997 Decree "About changes and additions into the Decree of President of the Republic of Kazakhstan of 18th October 1996 " About system providing activity of the President of the Republic of Kazakhstan" was signed by President. That one has established that general state bodies control including control on state leader's acts and orders execution completely realize President Administration.

Thus, Kazakhstan model of the President governing system in structural-functional plan corresponds relatively to logic of "upper" modernization, when transition from administrative-command state control towards new realities of the formating market economy and civil society is realized. Along together President status specifics is that apart from a number of developed democratic states in Kazakhstan he does not leader of one kind of authority - executive, and as judge is raised above all three kinds.

One of the political transformation directions in Kazakhstan is changing in the system of the representative and legislative authority. If we regard them in context of president government system genesis one may isolates following features of the Parliament institution:

* deputy activity being more professional;

* transition from one chamber to two chamber structure;

* refuse from unified vertical of representative authority, from subordination of lower representative bodies to the higher ones;

* deputies fractions setting up in the Parliament

According to the new Constitution Parliament is "the supreme representative body of the Republic realizing legislative functions (article 49, Constitution of the RK, 1995). Parliament authorities duration is four years. Presenting to Parliament legislative power the Constitution realizes also principle of the people sovereignty: Parliament composes from two chambers - Mazhilis and Senate.

Mazhilis represents all Kazakhstan population and consists of 67 deputies elected in the one mandate territorial regions with equal number of the electors.

Senate which practically is "upper chamber" comprises of deputies representing regional maslikhates (two persons from each region, big city and capital) and President of the Republic of Kazakhstan (seven deputies are appointed by President). Therefore Senate from one side represents different administrative-territorial formations and expresses regional interests and opinions, but from another side - represents President's view as state leader. Along with that Parliament Senate is state body of the all Republic of Kazakhstan. That one approves laws adopted by Mazhilis and also makes decisions, other acts which are addressed not only to separate administrative regions, but to the state in general, i.e. all Republic of Kazakhstan.

Parliament session going on as joint or separate chambers seatings. Chambers form permanent committees number of which does not more than seven in each of them. Parliament chambers themselves solve problems under their competence in accordance with Constitution of the Republic of Kazakhstan. Constitution provides for that a number of the significant issues Parliament regards at a joint seating of the chambers. Such challenges are introduction of changes and additions into the Constitution, constitutional laws adoption, republic's budget approval, repeated discussion and voting on laws declined by President, legislative authorities delegation to the President, decision making on peace and war problems and other authorities (art. 53, Constitution of the RK)

Government of the Republic of Kazakhstan is realized executive power, is at the head of the executive bodies system and their activity. Government is formed by President and it composes of Prime-Minister, Prime-Minister Deputies, Government Apparatus Head, ministers, State Committees Chairs.

Prime-Minister is assigned by President at Parliament approval. Government activity involves practically all sides of the society life. Its activity main directions are defined by Constitution. Government at its activity is responsible before President and made reports in cases identified by Constitution. According to this norm Prime-Minister presents government's program to Parliament chambers joint seating for that one approval or decline. Government activity is limited by President's authoriyies duration (5 years) and it is retired in case of a new elected President.

As far as court authority is concerned, it has to realize protection of rights, liberty and legal interests of the state bodies, organisations; provide RK Constitution execution, laws, other legal norms and acts, international agreements. Courts system in the RK consists of Court of Justice and local courts established by law.

Court of Justice composes of Court of Justice Chair, Court of Justice Border Chairs and other Court of Justice permanent judges who are elected by Senate at President presentation based on recommendation of the Supreme Justice Council of the RK. The head of the Supreme Justice Council is President and includes Constitutional Council Chair, Court of Justice Chair, Procurator General, Minister for Law, Senate deputies and other persons appointed by President.

It should be noted that transition period specifics at post-communist countries concludes in that system of CPSU monopoly on all kinds of authority yields its place to political system based on recognition of the social and political interests pluralism, power de-centralizing and de-concentration. According to art. 5 of the RK Constitution social unions structure system is divided into 4 categories: political parties, professional, creative and others unions; mass movements, religious confessions.

Multi-party system formation process is still not completed in Kazakhstan, therefore it is still earlier to say about stable party system, about precise differentiation of the political forces in the Republic. Nevertheless upon the political parties and unions programs most of them support market relations and reforms. They only differently imagine the picture of the future society and ways to reach the aim.

For 1st January 1998 in Kazakhstan 9 political parties were registered: Kazakhstan Republic's Party (РПК), Party People Congress of Kazakhstan (ПНКК), Socialist Party of Kazakhstan (СПК), Communist Party of Kazakhstan (КПК), People-Cooperative Party of Kazakhstan (НКПК), Democratical Party of Kazakhstan (ДПК) and Republic's Political Party of Labour (РППТ). Definite political activity is realised by mass movement "Pokolenie", "Azamat", "Azat", "Lad", Liberal movement, "Respublika" Cordinative meeting of the political unions and a number of public unions which are more small, non-registered and without official status. Political parties, movements, public unions participated at the elections for Supreme Soviets of XII and XIII convocations and for Paliament Mazhilis in 1995, some of them even could formate deputies fractions in the highest representative body.

Formation of the multi-party system is connected not only with the social society structure, but also with political system opportunities, creating political foundations of party system functioning. In some extent possibilities of the Kazakhstan transforming, dynamic and modernizing political system first of all are defined by results of authorities bodies activity, regulation, their influence scope into the political parties.

Declaration about State Sovereignty of the Kazakh SSR of 25th October 1990 in p.5 has guarantied to all public and political organizations and mass movements equal rights to participate in the state and social life. Political-legal basis on multi-party system formation was founded in the Constitution 1993 too. Constitutional providing in the chapter 10 of the political parties in the state power realization have witnessed that pre-condition for multi-party system formation as organic part of all the state power mechanism has existed.

Together with new law " About public unions" of 31st May 1996 Kazakhstan Parliament has adopted law "About political parties". This law adoption is a new stage in the process of the political parties juridical institutionalization.

Pre-condition and provision of the setting up and functioning of the democratic legal state are political pluralism principle. Without that one it is impossible people willing revelation at the process of the state bodies formation, different social forces coordination in their activity, civil society state control. According to p.1 art.5 Kazakhstan Constitution in the Republic of Kazakhstan "ideological and political diversity are recognized. Public and state institutions joining, political parties setting up at the state bodies do not admit ".

An important consequence of the political pluralism principle is principle of the political parties equality, consolidated in thep.2 art.5 Kazakhstan Constitution where it is indicated that public unions are legislatively equal; non-legal state interruption into their activity and state bodies functions lying on the public unions and public unions state financing do not permit.

Nevertheless party system development process is ongoing in Kazakhstan. Political movement opposite directions are activated - Azamat, Azat, Lad, Working movement and others ; it is noted the Liberal movement efforts to transform into the political party. So, only time and practical activity will show their capabilities, people support and could they in reality fight for power or for organizing opposition to the existing authority.

Thus, political reformations specifics in Kazakhstan conclude in following:

* changes in the political systems of the society approve by institutional way;

* authorities structures leading by President are the main initiators of the economical and political reforms;

* political organisations representing interests of the society different groups are still weak and non-homogeneous.

At the modern transition period the main moderns making is state, therefore earlier individuals social integration forms significantly defined by developed vertical links and practically weak - horizontal. Namely this unity of the civil society and state is stipulated may be the main specifics of the state-political system in Kazakhstan.

2. TRENDS IN ECONOMIC DEVELOPMENT OF THE REPUBLIC IN TRANSITIONAL PERIOD

2.1. MACRO-ECONOMIC STABILIZATION AND PECULIARITIES OF ITS DEVELOPMENT IN THE REPUBLIC

Transitional economy of Kazakhstan is characterized by general tendencies, which are peculiar to most countries on their way to a market economy. That in its own development goes through several stages of market transformations. Transitional economy in the republic, as also in the countries in the CIS, is characterised by non-stability and contradictions of the processes, economic development tempos retardation and production falling down, inflation and unemployment growing up and population life standards reduction.

Reformation of the economy simultaneously means formation and development of market relations and overcoming of the economic crisis. It is a complex process of radical transformations of plan-centralized economy to the market one on the basis of the property diversity, multi-structural life and emerging of new economic subjects. At that time it is necessary to consider that at the first stages of the market reforms macro-economic policy of Kazakhstan was defined by centralized way, in Russia. The main leading industries of the Republic were mostly dependent on the center as a result of traditionally established economic links.

The new stage of market reforms began with acquiring of independence and introduction of the national currency - tenghe. Own macro-economic policy is being formed, it is based on the creation of legislative basis and normative documents, anti-inflation policy implementation and passage to investment stage of market reforms. Process of state property privatization in all the sectors of the economy was fastened, privatization of small objects (small privatization) was finished. It gave some positive changes, especially on the macro-level.

For the last two years macro-economic stabilization is noted in the Republic, it was outlined by the end of 1995. At first it was seen in the inflation neutralization, stability of the national currency - tenghe - toward the American dollar, stabilization of production level and even some growth of industrial production, provision of growth of the gross domestic product.

Market reforms, which were begun in the nineties, are connected with some difficulties. The initial stage of economy transformation was not simple. It is characterized by the complicated processes of the state property privatization, liberalization of prices and their rapid growth, decrease of the main industry branches. For example, inflation rate in the Republic in 1993 was 28.7%, and in 1994 - 1258%.

Implementation of the strict fiscal-credit policy by the government, first of all directed to suppress the inflation, notably improved the situation with inflation. In 1995 there was 60% inflation rate, in 1996 - 28.7 inflation rate, and in 1997 - just 12.0% instead of expected 17.5%.

Prices and tariffs for commodities and payable services in the consumer sector of the economy were grown from the January of 1997 to the December of 1997 by 11.2%, in the foodstuffs sector - by 6.0%, in non-foodstuffs sector - by 2.7%, in payable services sector - by 38.8%.

The main indicator, which shows level and rates of economic growth, is gross domestic product (GDP). The real GDP determines value of all the goods and services produced in all the branches of the economy. In 1997 year the gross domestic product was 1679.6 billion tenghe. The growth was 2% related to the previous year.

In 1990-1995 the decline of the value of the GDP took place in Kazakhstan. Indexes of the physical volume of the GDP related to the previous year are: in 1993 - 84.45%, in 1994 - 81.2%, in 1995 -91.1% (data of the National Statistic Agency). In 1996 it was the first time during the last several years when the real volume of the GDP have grown by 0.5% when correlated with the previous year. (See Table 1).

Table 1

199019931994199519961997Gross domestic product (in the factual prices), billions of tenghe47.8*29.9449.9925.51415.81679.6Relation to the previous year (in comparative prices), %84.481.291.1100.5102.0* 1990 year - in billions of rubles

In the structure of GDP in 1997 volumes of commodity production increased by 2.7% and of services production increased - 1.3%. Growth of goods production occurred in construction by 10.0%, and in industry by 4.0%. Increase of industry production made up by such branches as oil-mining industry, gas industry, ferrous and non-ferrous metallurgy, all of which cover 55% of the total industry production volume. Growth of production took place in the light industry and foodstuff industry.

In agriculture, despite of plant cultivation volume growth (by 4.2%), a decrease by 1.9% was observed, that was caused by the reduction of the cattle-breeding industry production by 11.4%.

Decrease of production in the branches of industry has occurred irregularly, and it led to the significant changes in production structure of the GDP. Specific share of services production rises and the share of the real sector of the economy declines. If in 1990 services production was 32.9% of the GDP, then in 1997 - 57.9% in the GDP structure. Share of services in the GDP reached the level of the developed countries, where they create about 53-70% of the GDP. Correlation between market and non-market services have changed and reached European proportions (4:1).

Growth of market services occurs very fast in trade and civil engineering as a result of the mass-privatization of this spheres, development of trading and mediating activities, and also as a result of fast prices' growth, especially for civil municipal services.

Fast growth of services share has been caused by the sharp decrease of commodities production, share of which was fell down from 67.4% in 1990 to 37.0% in 1997. The main reason for it was decrease of the specific share of the industry (20.7% in 1997). Specific share of agriculture in the GDP fell down from 33.9% in 1990 to 11.0% in 1997, and the share of construction fell down from 12.0% to 4.2%.

Fall down of this index over agriculture seems to be obvious, because well-developed countries level this index is at about 3%. But decrease of the proportion should be based on the structural changes in the branch, on the appliance of the new high technology productions and their appropriate use, so it should not decrease the absolute volume of the production. The gross product of the agriculture in 1996 was 60% of the 1990 level. In 1997 the gross product was 305.4 billion tenghe (in current prices), or 98.1% of the 1996 level.

Decline of production in the real sector of the economy significantly influenced on the dynamics of the GDP level. If in 1994 the real GDP was equal to 66.9% of the 1990 level, then in 1996 it was 61.7%. So, cumulative economic decrease in 1996 was 38.3%.

The volume of industrial production in the current wholesale prices in 1996 was 721.9 billion tenge, or 100.3% of 1995 level, in 1997 - 809.7 billion tenge, or 104.0% of 1996 level. Since 1996 year Kazakstani statistics also counts householders' production as the industrial production on the basis of householders' budget investigation data.

To some Kazakhstani experts' mind, growth of the industrial production with the calculation of the households, which produce up to 5-12% of the industrial production, can disfigure the macro-economic indicators. But, on the other hand, it is not rightful not to consider household' production and services, which cover a considerable part of timber industry, light industry and foodstuff industry production.

Volume of the GDP and the industrial production in 1997 (when compared to the 1996 year) in the CIS countries is as follows: in Kazakhstan - 102.2% and 104.0% respectively, in Kyrgyzstan - 110.4% and 146.8% respectively, in Tajikistan - 101.2% and 97.5%, in Uzbekistan - 105.2% and 106.5%, in Russia - 100.4% and 101.9%, in Belarus - 110.0% and 117.6%, in Moldova - 99.5% and 98.0%, in Azerbajan - 105.8% and 100.3%, in Armenia - 102.7% and 100.7%, in Georgia - 111.3% and 108.1% (data of the National Statistics Agency). The data shows close relation between these two indicators: the GDP growth is significantly determined by the increase of the total volume of the industrial production.

In 1992-1996 years in the CIS countries the GDP reduced at average rate of 10% a year, for example, in Russia and Belarus - by 8-9%, and in Kazakhstan and Kyrgyzstan - by 10-11% a year. It resulted in the reduction of the GDP to the level of beginning of the eighties in Kazakhstan, Belarus and Kyrgyzstan, and to the level of the end of the seventies in Russia, so it leveled 53-63% of the 1989-1990 level, when the maximum GDP volumes were reached in these countries ("Asia: Economy and Life", #33 (109) August 1997). In 1996 the GDP decrease rates have become slower (when compared to 1995) and some positive changes were outlined.

The GDP dynamics analysis is not sufficient for macro-economic stabilization evaluation. An important indicator of macro-economic stabilization is the stability of the national currency - tenghe - toward the foreign currencies. Tenghe exchange rate changed the following way (by the ends of the years).


US dollarGerman Mark1000 Russian rubles19932.871.4199435.7622.8215.72199560.9342.8413.46199667.2845.0413.69March of 199775.4544.8813.60"Statistical Bulletin", Almaty, 1997, page 85

The most considerable fall of tenghe exchange rate toward foreign currencies was in 1994. Then there was slight slow decrease of the exchange rate. As for the Russian ruble, the exchange rate was rather stable during last two years.

Monetary mass (M2) growth' dynamics displays that there were rapid tempos in 1994-1995 of growth:

Monetary mass (M2) of the Republic of Kazakhstan

19931994199519961997Billions of tenghe8.255.4115.4136.8177.4

Basing on the data of the National Bank of the Republic of Kazakhstan, volume of the monetary mass (M2) has grown 1.3 times in 1997. Volume of cash in circulation has grown 1.5 times during the year. The share of cash in the total volume of the monetary mass increased from 45.9% to 52.3% during 1997, or by 6.4%. Change of the monetary mass volume, especially of the cash, has caused an influence on the inflation rate. Exactly during 1993-1995 there were the highest inflation rates in the Republic.

Economists are not unite in estimation of monetary mass volume ratio toward the GDP volume, determined as a monetization level. On the calculations, the Republic level (coefficient) of monetization was 9.6% in 1996, 10.6% in 1997 (by the National Statistic Agency). In normally functioning economy the real monetary mass should cover not less than the half of the GDP. So, in 1991-1995 the US monetization level was limited in 57-65%, the German one -58-62%, in Great Britain - 92-98%, Japan - 110-113% (by the Institute of Economical Analysis of the Russian Federation. - Voprosy Ekonomiki (Problems of the economy), #12, 1996, pages 142-146). Some domestic economists suggest that it is expedient to increase the monetary mass volume to 22-25% of the GDP of Kazakstan. They also mean regulation of financial flows and of the monetary circulation in general (Reformation of the Kazakstan's Economy: problems and their solving. Under the reduction of M.B. Kenzheguzin. - Almaty. 1997, pages 34-35).

Maintenance of the objective monetization level, regulation of financial-monetary flows will contribute to elimination of non-payments, stimulation of investment activity.

Mastering of the investment in 1997 to create and reproduce capital stocks of the Republic came to 114.9 billion tenghe, or 18.7% more, than in the corresponding period of 1996. In 1997 non-governmental firms' sector has invested 72.2% of all the investments, including private firms - 13.0%, share holdings (domestic only) - 15.4%, share holdings (with the foreign participation) - 34.7%, foreign enterprises - 9.2%.

Share of foreign investment into the capital stocks (into creation and renewal renovation of the capital stocks) of the Republic for the last several years grows gradually. In 1994 it was 4%, in 1996 - 13%, in 1997 (operative accounts data) - 26%. In 1997 all the enterprises used more than 30 billion tenghe of foreign investment for industrial and non-industrial construction. Almost half of it (48%) was used by the joint ventures, 35% - by the foreign companies and firms, 10% - by the private companies of the Republic and 6% - by the government organizations and enterprises.

The raw fuel industries are the most attractive for the foreign investors. A specific share of the foreign investment into the oil-mining industry is 25%, carbon-mining industry - 13%. Enormous means are also invested in the municipal service objects (12%), foodstuff and flavoring industries (9%), electrical power industry (8%). An inflow of the foreign investment is expected in the connection with development of oil and gas deposits on the Caspian shelf of the Republic.

Intensification of the investment activity in the economy also confirms a passage from the anti-inflation stage of market reforms to the investment stage, implemented by the Government. It witnesses about the creation of the favorable investment climate for investors, especially foreign investors, and it reflects the fact that the country enters a stage of macro-economic stabilization.

On the International forum "Kazakhstani investment summit", which was held on 5-6th June of 1997, there were representatives from 18 countries (80 participants from 58 companies). It was marked that Kazakhstan is the leader among the countries of the CIS on the inflow of the investments per capita (182 US Dollars). However the rates of attraction of the investments do not correspond to the problems of Kazakhstani economy growth. On tentative estimations, the direct investments of 3-4 billion US Dollars are necessary annually.

American corporation "Chevron" is one of the largest investors in the Republic. It has invested significant funds into development of the Tengiz oil deposit. The South Korean firm "Samsung" invested huge capital assets into the Zhezkazgantsvetmet development, and Daewoo Corporation - into the development of Kazaktelecom. There are also many other foreign investors.

The republic's priority investment directions are the agrarian industrial complex and consumer goods manufacturing industry. The investment projects in these branches are directly connected to support of enterpreneurship, small and average-size businesses. By the beginning of 1997 in the Republic there were 90 thousand small and average-size businesses' objects, or 65% of all the registered enterprises, with number of workers of 2 million 650 thousands, or 20% of the able-bodied population.

The tendencies of the basic macro-economic parameters' dynamics reflect the positive shifts, especially for 1996-1997 years. They characterize economic development of Republic on the macro-level. At the same time the situation in the economy and especially in the social sphere remains very complex and difficult. In separate branches of the economy it is not possible to overcome recession of the manufacture. By the beginning of February 1998, 1895 enterprises completely and partially stood idle, worked in a mode of incomplete working hours for the various economic reasons (on the data of employment services of the Ministry of labor and social protection of the Republic of Kazakhstan). Number of the workers being in compelled holidays levels 147.0 thousand persons, including 121.5 thousands without payment for holiday, or 82,6% from compelled unemployed persons. The level of latent unemployment has made 3,2% of the economically active population. By the end of 1997 the level of registered unemployment was 3,8%. In these conditions the well-being standards reduced for the majority of the population.

At the same time separate infringements of financial discipline, inefficient management, absence of the real proprietor at some enterprises, insufficient tax control result in accumulation of non-payments in the economy. Significant debtor and creditor debts take place at the enterprises, and also debts on a wages to the workers and deductions to the Pension fund.

In "National report on human development. Kazakhstan 1997", which was prepared by the Institute of development of Kazakhstan with the support of the UN and the UNDP, some conclusions were made on the decrease of rates of the human development level in the Republic. If Kazakhstan occupied the 54th place on this parameter and entered the group of the states with the high potential of human development yet in 1993, than in 1997 it occupied 93rd place and now enters the group with the average potential. All basic social parameters fall: poverty and unemployment rates grow, indexes of health and education are reducing. A demographic situation is rapidly worsened in the connection with reduction of the birth rate, increase of mortality rate and migration outflow of the population.

In such extreme conditions of the social sphere development the question is raised: whether we have a right to state that we have achieved macro-economic stabilization in the Republic. If the population does not have appreciable results of the macro-economic stabilization, than such conclusions are as real and correct as far as the national welfare.

Experience of many countries, including countries undergone through the shock therapy, confirms, that they consistently realized the concept of macro-economic stabilization as a key of the economic policy problem in the transition from the crisis economy's condition of economy to the well-developed system.

On estimations of western experts, macro-economic stabilization is one of the decisive elements of reforms' process and major precondition of economic growth. Rehabilitation of the economy is impossible at high rates of inflation (growth of the given parameter more than 40% a year means the crisis situation as in financial sphere, and in the economy at all). Therefore the inevitability of continuation of the rigid financial-credit and tax policies in the Republic is obvious.

Just after suppression of the inflation there are the real opportunities for stabilization at the micro-economic level - level of enterprises. The significant investments are necessary for this purpose, without them it is impossible to overcome recession of manufacture.

Improvement of some macro-economic parameters in the last two years has allowed to forecast increase of the GDP and investments, further decrease of the inflation rate, contraction of manufacture recession in many branches in 1998, therefore stabilization of the situation in the economy as a whole becomes possible.

An indicative plan of social and economic development of the Republic of Kazakhstan for 1998 provides the GDP volume of 2005.0 billion tenghe, or 103.0% by the level of 1997. Volume of industrial manufacture is planned (in the current prices) at the level of 925.0 billion tenghe, or 103.0% in comparison with 1997, agricultural manufacture - 435.0 billion tenghe, or 103.0%. Increase of the investments is also provided, volume of which is planned at the level of 361 billion tenghe, or 106,7 % in comparison with 1997, investment in a fixed capital - 160.3 billion tenghe, or 10.0%. An index of consumer costs will be on the average throughout the Republic 11.2% for 1998 (Business week. - # 47 (275) on the 5th of December, 1997).

Prospective growth of the GDP in 1998 will be achieved first of all at the expense of obtaining branches: the manufacture of petroleum will increase by 6%, petrol - by 20, copper - by 14, lead - by 28, gold - by 40 %. Raw orientation of manufacture and export is still remained, its overcoming requires time.

In the current the further increase of specific weight of private sector to 76.0% of the GDP is expected. The average nominal wages will be 9751 tenghe, or 103,7 % compared to the level of 1997 year. The exchange rate of tenghe toward the American dollar is predicted with some fluctuations to grow to 81,9 tenghe on the average in a year. The budget deficit is provided in limits of 5.5% of the GDP, though they attempted to lower it, but their attempts ate still not successful.

Expected bettering of the basic macro-economic parameters in 1998 allows to provide increase of the main generalizing target indicator of social and economic development of the Republic - the GDP per capita in 1998, which will amount 126,2 thousand tenghe, or 103,5 % of the 1997 year level. In order to make this indicator internationally comparable, we shall convert it to the US dollars. It will be equal to 1541 dollars in 1998, and it was equal to 748.8 dollars in 1994. For comparison with other CIS countries, in 1994 the GDP per capita was 1926 dollars in Russia, 191 dollars in Azerbajan, 219 dollars in Kyrgyzstan, 302 dollars in Moldova, 543 dollars in Belarus (data of the National Statistic Agency of the Republic of Kazakhstan).

The stabilization and bettering of some macro-economic parameter in the last two years and expected positive shifts in the current year allow to accentuate attention on the economic growth.

In the introduction of the Republic's President's Message "Kazakhstan-2030" the necessity of precise knowledge and understanding of a development's direction are emphasized, so it will result in achieving of the aimed target. Among the designated seven priority targets he names the economic growth.

In choosing of models and factors of economic growth it is necessary for Kazakhstan to take into account existing experience of the foreign countries and, simultaneously, peculiarities of social and economic development of the Republic, its available advantage and existing unsolved problems.

The classical western model of economic growth, which is specific for the European countries and realization of which required almost two centuries, completely cannot be acceptable for Kazakhstan. First of all, because of the time factor. In view of the present situation in the economy and the break, which separates social and economic development of the Republic from the advanced countries, an experience of the quickly developing countries is more attractive. These are the countries of Asia Pacific Region, which deserved the title of the Asian Tigers and Dragons for the fast economic development. They possess experience of realization of market reforms by accelerated rates on the basis of attraction of the huge investments and high technology. They have reached high average annual rates of the GDP growth by the beginning of the 90's: in Thailand - 8.8%, in Malaysia - 8.7%, in Singapore - 7.5%, in Indonesia - 6.8%, in Taiwan - 6.8%, in the Republic Korea - 6.4%. These countries have made a huge jump in the economic development in extremely compressed terms.

Proceeding from the existing available foreign experience, the economists distinguish two models of the economic growth. The leader-countries of the global technical and economic progress adhere to the model of the pioneer development, within the framework of which they create the most technologically perfect and highly efficient organizational-economic structures and mechanisms. For the countries, which are less developed comparatively to the world technology level, the pursuing model of the development is characteristic. The basic principles of this model are brought to the development of technologies and organizational-economic mechanisms, already created in the leader-countries ("Asia - Economy and Life", #47 (123) November 1997).

In opinion of the domestic economists, model of pursuing development, or it is more correct to call it dug development model, in a number of branches and spheres of the economy is inevitable for the Republic as whole. However in a choice of economic model for Kazakhstan our position is ambiguous. As initial factor it is considered a similarity of a population, a territory, natural resources. As a final generalizing parameter the GDP per capita in long-ruin period is accepted. So, in opinion of one economists, as economic model for Kazakhstan we can consider Australia, which at now has the GDP per capita of 18.0 thousand dollars of the USA. In order to catch it up, it is necessary to have the real GDP growth rates of more than 10%. Annually up to 2030. In order to reach the level 7.0 thousand dollars per capita, the rates GDP growth should be 5.5% annually during 30 years ("Strategic idea - basis of economic growth", Kazakhstanskaya Pravda, November 8, 1997).

As the other reference point of economic development the parameters of Malaysia and Chile are presented, which are also close to Kazakhstan on the population factor and on the capacity of the home market. In view of prospective growth of the population in the country in order to maintain similar rates of its well-being level increase (in 5-6% annually) it is required to maintain an annual GDP volume growth 6-7%. Such rates seems to be quite real (M.B. Kenzheguzin, director of the Institute of economy of the Ministry of Sciences - Academy of Science of the Republic of Kazakhstan, doctor of economical sciences. "Necessary economic growth: the preconditions, factors, models, and rates". ("Asia - economy and life". #47, November 1997)).

At the same time the economists are unanimous in attempt of warning of mechanical application of reformation tools and models of the countries with the advanced market economy. As in conditions of post-socialist economy there is no sufficient appropriate material and institutional base. One of the main reasons of low productivity of the spent measures is insufficient validity and purposefulness of the accepted decisions, and low consideration of peculiarities of the Kazakhstani economy.

In process of the republic's economic development model choosing it is necessary to proceed from those major preconditions of economic growth, which are characteristic to it:

* Long-term strategy "Kazakhstan-2030" is determined and accepted. In the strategy 7 main priority targets, including economic growth, are submitted;

* Public stability;

* Presence of richest natural, mineral-raw resources;

* Rather high educational potential.

These initial preconditions and maintenance of macro-economic stabilization, which was planned in the last two years, create real opportunities for economic growth.

2.2. TRANSITION FROM ANTI-INFLATIONARY STAGE TOWARDS INVESTMENT STAGE

The essential provision for development of the economy of successful structural reformation development, industrial potential formation on the new scientific technical basis, consolidation of the competitive positions in the world market is high investment activity.

Post- socialism block countries majority which is under transition stage follows the tactic of maximal usage of the foreign capital as direct investments. On the earlier stage of reforms the IMF and World Bank were the main financing sources, but later governments of economically developed countries has joined. The main mass of the external financing resources were set for finance of balance of payments deficit. From 1990 to 1995 annual financial volume aimed for development of new independent stated was in average 8,8 milliards USD.

Thus, the World Bank credits were distributed along for four directions: rehabilitated loan of 180 millions dollars, which comprises from currency competence and finance for critical import purchase (40 mln USD) for transport and spare parts for that purchase in Almaty, Qaraganda, Shymkent, technical assistance loan (38 mln USD); loan for oil industry development (15,7 mln USD).

The IMF today gives loans to Kazakhstan for two lines: agreement on program of system transformations according to this 123 mln USD presented for compensation within 10 years (starting 1998) and agreement on reserved credits for the same loan sum.

European Bank for Reconstruction and Development loans are directed for programs on small and middle sizes enterprises support ( 100 mln Ecu), financial sector, oil and gas branches, industry support, natural resources development and export consolidation, JV and privatization setting up. This wide program involve budget about 700 mln Ecu.

According to experts of the Asian Development Bank and Japanese EXSIM Bank (co-financing of the IMF) Kazakhstan would receive rehabilitated loans of total sum 205 mln USD.

Machinery of President, MFA, Institute of Pediatrics are the recipients of the Republic of Korea official help. Korean Agency on International Cooperation are realized projects on international collaboration.

Profits taking from foreign participation have not only short term efficiencies, but perspectives for a long time. Mentioning foreign investments into the prioritative branches of the Kazakhstani people economy it should be also noted the creation mechanism for preferential investment climate in this field.

The creation mechanism for preferential investment regime in prioritative fields foresees presentation to investors a number of priorities and privileges. The main of them are:

1) Credit-financial preferences

a) preferences of non-budget funds of local bodies, sources of which may be non-interested bearing or preferential loans and credits, free loans of the international organisations, charitable funds.

b) preferences from budget

c) loans (advances) guarantees

2) Tax preferences

a) enterprises property tax discount

b) investment's tax crediting

c) tax credit for profit

First of all for creation of favourable investment climate in our country the whole complex of different measures are needed: improvement of three legal basis on preferences stimulation and presentation, on taxes and custom tariffs; regulating of managed decisions adoption in the state bodies; market infrastructure and currency market development; bank system stability and others. But the main feature characterized country's attractiveness for direct investments is as mentioned above preferences in the field of taxation. The Law on putting changes and additions into the President Decree "About taxes and other obliged payments into budget" creates more favourable climate for investments. The law takes into account the notes and proposals of the International Center on taxes and investments for improvement of the investment climate in the Republic of Kazakhstan.

The following legislative act improving investment climate in Republic is Law "About state support of direct investments" of 28th February 1997. In the Law the list of preferences and guarantees presented to foreign investors are given:

1. State natural grants

2. Lowing of income tax rate, land tax, and tax on property up-to 100% of principal rate for 5 years from the contract conclusion and for further period (5 years) taxes lowing in frames of 50% of principal rate.

3. Unlimited rights of investor approved for owning of his part of partnership society shares in the Statute Fund, free capital, profits and revenues transfer, given in result of contributed participation or shares sale, - at payment of taxes and other obligatory payments.

4. Prohibition on setting up of monopolies controlled sale of goods manufactured by investor.

5. Price control or regulation measures termination at starting materials distribution or goods sale.

6. Unimpeded national or foreign account opening, currency converting into tenghe.

7. Prohibition on hindrances creation for investors in property management by state bodies and official persons.

8. Legislative protection of the investments, profits, dividends, rights and investors legal interests.

Norm guaranteeing foreign investors interests protection in case of the deterioration of their position because of changes in Kazakhstan legislation is important in the Law of state support of direct investments (Article 9). The sense of this Article is in following: investor putting their capital into Kazakhstan economy has to be sure that - the state will not change conditions to the worse for him direction. In case of legislation acts changing the investors will be under acts being in force at the moment of his investment activity starting .

In 1997 investment activity became growing. Although investment attractiveness and competitiveness of the Kazakhstan investment market were not changed immensely, the investment general volume growth temp into principal capital accounting all financing sources was 110,8% to the same period of 1996. State investments into principal capital (Republic's and local budget finance and also own funds of the state enterprises and JS, where state share blocks are mre than 50%) for January-September 1997 were 24,6 milliards tenghe. In general investments volume their rate is 34%.

Investments volume into the industrial field (105,4%) have been grown that was caused both by enterprises and institutions with foreign participations own funds and by foreign property. Investment volume in 62% is covered by enterprises, organisation and population sphere in 1997 some funds, 25% - foreign investments.

In the investment sphere in 1997 some pre-conditions for some situation improvement have been made in comparison with 1996. Investments general volumes decreasing temps became slower, inflation price growth temps in the major construction work decreased, foreign investments volume was growing. Investment activity toward end of 1997 was characterized by inflation temps retarding tendency because of investments into the principal capital growing which started in February. In January-August investment activity lowing tendency was overcome, and in 1997 for the first time for all the years of the economy reforms 20,2% capital investments growing in comparison with 1996 was observed. In 1997 investments development was 114,9 mln tenghe.

Investments development into the fixed capital through Republic's regions find in the Table 1.

Table 1. Investments Development into the Fixed Capital

Region's Share in Repub1ic Volume January-September 1997 rate to Jan-Sept. 1996, %September 1997 rate to August 1997, %Republic of Kazakhstan100110.8155.0Astana17.1681.8328.1Aktubinsk5.394.5206.8Almaty3.9106.5133.9Almaty city7.997.1109.1Atyrau26.6150.2104.8East Kazakhstan3.978.1136.2Zhambyl1.136.694.2West Kazakhstan3.898.281.8Qaraganda7.051.953.7Qyzyl-Orda3.150.0671.7Qostanay4.4104.5169.8Mangystau8.476.4117.3Pavlodar3.437.788.7Northern Kazakhstan1.353.8119.3South Kazakhstan2.890.4156.2

Enterprises, organisations and population finance 62% of the investments volume, foreign investments - 25%. But this funding in not enough to support enterprises at the conditions of unstable market situation, as survey shows in the structure of the enterprises and organisations finance usage costs on material revolving funds additions, labour payments, credits and loans discharge are prevailed. Other funds were directed for investments of the manufacture development (less 6%). Financial limitations of investments followed to act on way of the government's investment demand. In 1997 5,9% investments to the fixed capital were funded (in comparison with 6,2% in 1996).

Capital investments structure on financial sources in January - September, 1997 characterised by data in Table 2.

Table 2.

Investments and Fixed Capital in January-September 1997 in practical Share in General Investments Volume into Fixed Capital, %prices, milliards tengheJanuary-September199719961995Total investments into fixed capital73654100.0100.0100.0including financed byenterprises, organisations and population 4552561.880.494.0budget

including970913.26.56.0Republic's budget35544.85.14.2local budget11051.51.21.2others50506.90.20.6foreign investments1842025.013.1x

Structure and dynamics of investments into the fixed capital is presented in Table 3. The most attractive as usually for investments are oil and gas sectors, their share in the general investments volume is 38.2%/ non-ferrous and ferrous metallurgy (8,1%), transport (6,8%).

Table 3.

Investments and Fixed Capital in January-September 1997 in practical Share in General Investments Volume into Fixed Capital, %prices, milliards tengheJanuary-September199719961995Total73654100.0100.0100.0Electrical Energy31254.29.110.2Oil Production2507234.025.612.4Oil Processing13551.82.42.6Gas17442.43.62.5Coal28123.83.85.8Ferrous Metallurgy38585.29.79.9Non-Ferrous Metallurgy20892.83.47.6Industry of Constructing materials15702.20.70.3Flour-Grinding-Cereals and Mixed Folder Production4250.60.50.3Agriculture6080.81.62.0Transport49946.87.54.5Housing Construction1101215.013.013.6Other branches1499020.419.128.3

The low investment activity was observed at the enterprises of the fund formation branches. At the machine-building branch last year in the conditions of deficiency and own funds shortage manufacture of the most important products falling down tendency was kept. This branch production volume in 1997 in comparison with 1996 decreased on 30,1%. Depreciation of capital industrial assets also caused unstable work of the branch.

At the enterprises of machine-building industry for year machine-tools, in November - blacksmith-press tools and technological equipment for light industry branches were not produced. Due to lacking of the own funds for the starting materials purchase at the industry of constructing materials many kinds of production were not developed properly.

According to Investments State Committee (ISC) in 1997 more than 300 potential investors were applied for prioritative branches of economy to the ISC.

Contribution of investments directed into the oil production industry for 9 months 1997 increased on 13 % in comparison with the same period of 1996 and it is 46,6% of the general financing volume allot for construction of the objects for industrial purpose.

The most attractive direction of the investment activity in the field of non-industrial construction is housing construction, on the development of which for 9 months 11 milliards tenghe or 137,1 % in comparison with 9 months 1996 were sent

In January-September in comparison with the same period of 1996 investments into the principal capital were decreased in East Kazakhstan (on 22%), Qaraganda (48,1), Qyzyl-Orda (50%), Mangistau (23,6%), Pavlodar (62,3%), Northern Kazakhstan (46,2%) regions. The most low (on 63%) is marked in Zhambyl region.

According to the Investments State Committee (Goskominvest) information from 29th April to 1st October 28 1997 investment application were accepted for submission on contracts conclusion for total sum 210 mln USD by Goskominvest. Among potential investors there are 12 home, 7 foreign and 9 joint enterprises.

One of the important side of the capital attractive issue is capital run away hindrance and national capital return from abroad. Total sum Kazakhstan entrepreneurs incomes outflow, currency transmission to abroad under different evaluation is from 600 to 850 mln USD. For comparison: capital outflow in Russia during 1992 and 1996 is estimated from 60 up-to 150-200 mln USD. The main reasons of this process are not only in un-favourable investment climate, but in social economical and political situation. Reasons are in market economy immaturity and also in criminal activity, including officials corruption, compelling to hide income and "washing" money in abroad.

Investment climate situation monitoring has a great importance for taking in time information on asses of economical regulators influence on the identified process and adoption of available measures for enforcement or relax such influence. One of the methods used often in these cases is written questioning. This method was selected at questioning of home and foreign investors in the first half of 1997 by Ministry of Economy and Trade.

The aim of questioning: asses of activities arranged for investment climate improvement. As share market in Kazakhstan was not still developed properly in the questionnaires the main accent was made on direct investment into the enterprises and industries and services development.

In table 4 respondents evaluate the Kazakhstan market attractiveness.

Table 4. Asses of the Market Attractiveness of the Republic of Kazakhstan

Kazakhstan Market ranging at atractiveness for investmentsAssesment on results of respondents questioning, % of total numberAttractive51,0Not enough attractive29,4Non-attractive practically3,9Can not be defined15,7

As the high evaluation was received from 51% of respondents, the middle - from 29,4%, but the lowest - only from 3,9%, the respondents have characterised the Kazakhstan market higher than the middle level.

In questioning process the portrait of investor working in Kazakhstan was made. According results of questioning Kazakhstan residents invest mainly (75%). There are Joint Ventures, bank institutions, commercial structures, foreign firms, managing firms etc.

All respondents have a long-term investment plans in Kazakhstan. Among total number of respondents 94,1% of them are already investors, 5,9 have intentions.

For investments intentions into small and middle busyness and into the large projects respondents are divided by following way:

* investing and intend to invest funds into small and middle busyness 72,5%

* intend to invest the large projects 27,5%

Investment projects distribution over investment volume is shown in table 5.

Respondents were suggested to evaluate economy sectors priority for current and perspective investment. Asses and range on attractiveness level are in table 5.

Table 5. Investments Projects Distribution in the Republic of Kazakhstan According to Investments Volume

Investments volume Projects continuingProjects planningGraduation, USD19961997less 50 thousands11139from50 to 100 thous.345from 100 to 259 thous.442from 250 to500 thous.847from 500 to 1 mln274from 1 to 5 mln879from 5 to 20 mln464from 20 to 100 mln665from 100 to 200 mln--1more 200 mln111Total projects number475247

For perspective investments projects we receive the following. High attractiveness projects - in oil and gas industry, consumer goods production, trade and service; attractive - in bank activity, mineral resources extraction, rural-industrial complex processing branches, agriculture; satisfied attractiveness - in the industrial infrastructure, construction, geological activity, oil processing industry; low attractiveness - in chemical and oil-chemical industry, metallurgy.

Asses of the investments profitability in Kazakhstan was also made, which according to opinion of requested persons was high enough in comparison with other CIS countries.

To respondents asses the most attractiveness for investors in Kazakhstan provides political stability, mineral and natural resources richness of the country.

Results of questioning on investment attractiveness asses are shown in table 6.

Table 6. Asses of the Republic of Kazakhstan Investment Attractiveness Strategic Factors*

FactorPoints numberFactor rangePolitical Stability311Economical stabilizing144Legislation stability65Starting materials and natural resources riches311Prospective market potential272Tax preferences36Labour resources low cost193Labour resources high enough education level144Others, namelyCharitable activity, Metallurgical industry improvement, income* Factors ranging was made on notes frequency among first four factors, each mentioned factor took 1 point, others - no points. Factors range asses calculated by the maximal points sum (first - the maximal and further by decreasing).

In table 7 the results of respondents questioning on the negative factors influence are presented.

Table 7. Asses of Factors Negatively Influenced on the Republic of Kazakhstan Investment Climate *

FactorPoints number **Factors categoryNon-developed industrial infrastructure182High financial risk321Non-developed legal infrastructure261Non-developed social structure112Present tax regime331Lacking of stable legislative basis301Burocracy321Market specialists non-sufficient number 132State geopolitical location33Information unavailability33Political non-stability23Cultural and linguistic handicap13Others, namely* For negative influence factors divided into three categories: 1 - retarding strong factors (50% and more of all respondents); 2 - moderate factors (from 20 to 50%); 3 - weak factors (up-to 10% of respondents).

** Number of respondents identified factor ( totally 51 respondents participated)

Thus, according to respondents opinion investment process is handicaped very much because of: existing tax regime non-perfection, high financial market, burocracy, lacking of stable legislative basis, non-developed legal infrastructure .

At the end of September 1997 Goskominvest enter the World Association of Investments Attraction (WAIPA). Kazakhstani Goskominvest entered the WAIPA a bit later than other CIS countries, nevertheless country has experience in the foreign investments attraction. According to the data of the European Economical Commission Kazakhstan takes 5th place among the post socialist world in the investments attraction absolute size.

In 1997 Republic of Korea took 2-d place after USA at the investments volume implemented into the Kazakhstani economy. All was commenced when group of South Korean businessmen-leaders of the large textile, food industry, construction firms have visited Kazakhstan in April 1991. At that time negotiations were conducted in the Ministry of External Economical Connections and mutual cooperation prospective were discussed.

N.Nazarbaev's visit in the Republic of Korea in 1996 promoted consolidation of the bilateral economical agreements. The target of the government delegation of the Republic of Kazakhstan headed by Akhmetzhan Esimov, First Deputy Prime-Minister recent last year visit (16-19 November 1997) in the South Korea was conclusion a number of agreements with huge Korean private companies, joint commercial projects confirmation, intergovernmental Convention on double taxation exemption signing. The main task was to interest Korean manufacturers and businessmen for expanding their activity in the Kazakhstan market.

In the negotiations were achieved the following:

* agreement with LG Group on colour TV sets assembling produced by this Company. From 1998 94 thousands TV sets are planed to assemble, towards 2004 manufacture has to achieve 373 thousands units in year. Contract duration is 7,5 years. LG Group total investments sum will be $23 479 000.

According to Kazakhstan government budget efficiency this project realization up-to 2004 will be $23 856 000. Additionally 310 Kazakhstani employers will be engaged in the production.

* Memorandum signed with Dae Woo Group involves Korean investments into Business Center construction in Almaty, telecommunication systems modernization (project cost is 350 mln USD) and setting up of Scientific Research Center (project cost is 12,5 mln USD).

* negotiations with Hyundai Business Group confirm Corporation's plans to arrange motor car manufacture in Kazakhstan with production volume up-to 6 thousands units in a year.

* Samsung Group Company will contribute $8 mln in manufacture of equipment for blood transfusion in Pavlodar, $3 mln - in water bottling in Zheskazgan, $4 mln - in production of instant noodle preparing, $5 mln - in the garment factory, $50 mln - in cotton production in Shymkent.

Total direct foreign investments into the Kazakhstani economy of the Republic of Korea are $ 396 mln. Indonesia ($ 80 mln), USA ($ 79 mln), Great Britain ($66,8) left behind.

It was registered 44 investment applications of 297 mln USD attraction. Only on mineral resources usage in IY quarter they signed 35 contracts without agreements on production share in Northern Caspiy and Karachaganak deposit.

The main targeted indicators and directions of the state investment policy for 1998 to overcome crisis situation and provide its growth first of all it is foreseen the whole investment process animation. Taking into account the consolidation of the 1997 positive tendencies in the conditions of the limited financial state possibilities the Main directions of the state social-economical policy in 1998 provide for going on the realization of the investments policy on the basis of the following principles:

* enterprises state support by centralized investments at turning from non-returned crediting towards crediting on the basis of returned payment, except financing of socially important objects having non-commercial (non-profitable) character and without own financing;

* significant expanding of the investments projects joint (sharing) state-commercial funding practice including foreign capital attraction. Such practice promotes supply to the centralized funding for capital construction state programs realization;

* use of the part of the centralized (credit) investments funds for realization of the especially efficient and fastly compensated investment projects and small business objects independently on their branch and kind of property for speeding up structural industry reconstruction;

* legislative basis improvement;

* state controle enforcement for targeted costs of the Republic's budget directed for the native and foreign capital coming into the investment sphere; investments as non-returned financing of crediting.

Foreign commercial credits attractions volumes by Kazakhstan banks and legal subjects themselves without governmental guarantees are not limited. In 1988 Republics budget funds provide for construction and reconstruction of the group water pipes, customs control stations, housing construction program realisation in the regions, health protection, education, transport, communications, energy supply, machine building and other separate objects,

A great attention will pay to leasing business development as the most perspective directions of the investment processes activation and powerful impulse for technical improvement of the industry. With these aims laws "About putting changes and additions in the Law of the Republic of Kazakhstan "About Foreign Investments", "About Financial Rent (Leasing)" and "About putting of changes and additions into the Republic's President Decree of 6 March 1997 "About measures on the state support enforcement and small business development activation".

Republic's external economical activity reformation moves accents in the international cooperation from trade towards more progressive forms - foreign capital investments and joint activity.

Within nine months (January-September) 1997 export-import operations volume was 774 mln USD (101% to 9 months of 1996) including export - 4684 mln USD (104%), import - 3062 mln USD (97%).

Joint enterprises which activity level is growing begin to play a big role in the new economical mechanism building and development. Joint ventures in Kazakhstan at the period of its transfer to the market type economy may help to solve such problems as internal market saturation with different goods and services, native export potential expanding, new techniques and technology handling, additional working places setting up. Joint ventures regards as foreign capital attraction form.

Industrial JV activity in Kazakhstan at the starting period of their functioning is directed mostly towards short term taking currency incomes forcement, but is not directed on technologies transfer and managing experience usage which would provide their work long-term efficiency. Thus many foreign countries experience shows that foreign capital inside country of its activity try to reach self-regulation, local businesmen' activity depressing.

For Kazakhstan in our vew JS development prioritative fields have to become Agrarian-industrial complex, fuel-energetic branches, investments goods industries branches (light industry, electronics, different equipment production, agricultural machines) and long- term usage consumer goods. Also JV could play their role in the solution of the environmental problems in the large industrial centres, and in Aral Sea coastal zone and in the districts attached to Semipalatinsk region as well.

Joint ventures development dynamics surways consequent acceleration of the JV setting up from 15 in 1990 upto 164 in 1991, 225 - for the first half of 1992 and finally -1029 in 1995 from which really worked - 507.

According to preliminary data by 1 October 1997 in the Republic 127 Joint Ventures and foreign enterprises were acting ( for 1 October 1996 - 883 enterprises). The most number of enterprises is placed in Almaty - 879, Qaraganda region - 66, East Kazakhstan region - 42, Almaty region - 42, South Kazakhstan region - 40.

Cooperation between South Korean firms and Kazakhstani organisations is activity of mutual interest. Their joint activity may have very wide perspectives because both sides interests are mutually added.

Republic of Korea has experience in arrangements for goods mass production having competiveness at the external markets, opportunity for delivery of elements to organise complecting manufacture of the consumer electronics and also some kinds of computers demanded in Kazakhstan.

At the same time South Korean firms need extremly in the goods sales market because of protectional pressing of USA and Japan limitation the South Korean firms possibilities in expanding their production sales in fearing of competitiveness from their side. Kazakhstan market can swalow a lot of the production which delivery in USA, Europe and Japan are difficult because of that countries governmemts' import quota and other limitation implementation on the delivery of a number of goods manufactured in the South Korea.

Organising structure of the largest South Korean conglomerates is quite acceptable for Kazaklhstan market exploitation in the conditions of tenghe converting. At the same time it allows to develop cooperation in different fields and by that make easy goods exchange bargains development.

Simultaneously the same organising structure firms creation in Kazakhstan in a future plays an significant importance because it mostly corresponds to real competitiveness conditions at the world market. In particular it provides firms stability at crisis conditions, makes easy long-term planning and the whole group activity stability, reveals more wide financing possibilities and research development and elaborations and their results usage in many fields simultaneuosly, that is very important for maximal profit receiving from commercial implementation of the science and technics achievements. Japanese firms activity experience confirms such organising structure advantage .

Many Korean businessmen invested their funds into the Kazakhstan economy. But most part of these companies did not produced directly goods on the Kazakhstan territory, they open trade firm and representatives dealing with realisation of goods coming from South Korea. Enerprises dealing directly with production manufacture are the most interesting. The largest of them: JV "DAECO" (DEU electronics), "KAZSUM" (Samsung), "Telbone Kazakhstan" and others.

Joint business means investments intensive usage with purpose to develop Kazakhstan export potential, import replacement, internal market saturation with goods of deficiency, implementation of the own scientific-technical achievements and foreign management experience attraction.

This process activation in the Kazakhstan economy is caused by internal market low saturation with goods and services, more low manpower price and high non-usage of the scientific and technical potential.

2.3. ECONOMY REFORMATION LEVEL

The world economic policy shows that real combination of the free manufacturers with means of production can create the powerful motivated mechanism of economical growth. Therefore already on the earlier stage of perestroika an issue of state property separation and its transfer to the owners have emerged. Thus, privatization startng at that stage is a subject of many years discuission. In the basis of transition to the market relations are the processes of denationalization and privatiztion.

In the Republic of Kazakhstan processes of denationalization and privatiztion are going since 1991. Within 1991-1995 in the Republic two programs of denationalization and privatisation were realised.

The first program adopted on 22d June 1992 has involved 1991-1992 and concentrated mostly on sale of state property objects by employers collectives of enterprises become private.

Peculiarities of State Property Denationalization and Privatization in the Different Branches of National Economy

a) Small Privatisation

1. Trade. Towards end 1992 in trade no less than 50-60% of shops had to be under denationalization and privatisation that would let to withdraw 40-50% of commodity circulation from state sector.

For 1991-1992 in the circumstances of great deficiency of consumer goods demand and supply debalance it was necessary to keep state regulation of market funds re-distribution on primary demand goods especially. With these aims the whole sale chain of state trade has planned to transfom into the Joint Stocks with participation of Kazakh SSR's State Committee on State Property, local Councils of People Deputies and retail trade enterprises. That would allow to opposite existing monopoly of whole sale chain and strength its intermediate functions.

Small enterprises . To increase population busy activity the targeted policy for support of industry, construction, agriculture, transport and other brunches of national economy small enterprises were conducted. Above objects involve enterprises and organisations engaged up-to 100 employees. Only in the process of small privatisation settling coupons can be used for purchase of enterprises at the special auctions where in the auction regulations there are noted settling coupons as payment mean.

b) Big Privatization

In 1991-1992 process of denationalization and privatization of middle and large state enterprises first of all ones producing consumer goods and also in bank and insurance business on basis of Joint Stocks setting up.

State property objects had not to be under privatization. On the first stage objects of the ministries main activity had not to be under privatization.

It is not allow to denationalize and privatize the enterprises producing and saling:

* weapon and ammunitiors

* explosed, poisoned and drug substances

* medicinal preparates

* tobacco and alcohols

* other activities which are state monopoly

In the trade sphere regional distributed refrigerators, inter-regional whole sale stores, shopes dealing with foreign currency and motor car sale, jewelirs, goods of socially low prices had not be under denationalization and privatization.

No permission for denationalization of the middle and large enterprises without employees preparation to the transformation of enterprise, industrial funds price correct evaluation. These measures should be connected with market infrastructure formation and setting up of securities market.

About failure of the privatization first stage President N.Nazarbaev said during meeting of Administrations Heads on March 1993.

This period negatively reflected on political and economical spheres.

In the policy such privatization was fighting between local and Republic,s nomenclatures. The main participants of this fighting were local administrations, which had to take under the municipal property.

Economically privatization also did not give effect. Even prioritative targets of the process itself were are not determined.

The second program - National Program of Denationalization and Privatization in the Republic of Kazakhstan for 1993-1995 were adopted on 5 March 1993 and involved except small also mass privatization, privatizaion over individual projects and agro-industrial complex privatization.

In the National Program the privatization main aim was defined: " Creation of the necessary conditions for transition from centralized and planned economy to the market economy on the basis of property right personification in the process of returning to Republic's population by state of the national property by uncompensed and compensed transfer of industrial objects , other material and non-material actives related to the state".

To execute the National Program the Statement "About Privatization of Social and Cultural Objects under Balance of National JS, State Holding and JS Companies, JS and Collective Enterprises" was developed and approved by Cabinet of Ministers' Decree of 22d February 1995.

Approaches of this Statement include development of the united way of privatization of social and cultural objects which are under balance of companies, JS or collective enterprises, improve quality and diversity of the services presented by social and cultural objects to population, create competitivr conditions in the social services' sphere.

First group includes social and cultural objects having social importance for region and Republic in general.

Second group includes social and cultural objects which are under balance of companies, JS or collective enterprises and need for formation of the social infrastructure of economical subject, further maintanance of ones this subject takes.

Third group includes social and cultural objects which are under balance of companies, JS and collective enterprises without social significance as for economical subject as for this region.

Funds received from privatization of the social and cultural objects are placed to the current non-budget accounts " Guarantee sums" of the Territorial Committees on State Property, on which also all funds taken in the results of auctions and commercial competitions preparing and conducting are accumulated.

Please find below from the draft of the National Program on 1993-1995 list of objects and enterprises privatization of which is forbidden.

Earth, Entrails of the earth, forest funds, water resources, air space, Caspian shelf and territorial waters resources .

Protected or special way used natural territories.

Objects of historical and cultural legacy of Kazakhstan people.

Funds of the Republic of Kazakhstan budget, republic's currency budget, pension fund, fund of state social insurance and state non-budget funds.

National State Bank establishments, enterprises, organisations and institutions providing state securities issue.

Staff and reserve property which are under Ministry of Defense, National Security Committee, Ministry of Internal Affairs.

Enterprises and institutions of geological cartography-geodesical, hydrometeorological, seismological and mud flows protection services.

Motor car roads of Republic's importance.

Objects and enterprises of gas economy having Republic's and regional importance.

Crematoriums and cemetries.

Enterprises and objects providing service, launching and accompaniment of space apparatus.

Organisations and establishments of people social protection, children homes, child homes, old people's homes and boarding schools, hospitals and disabled people's sanatoria, institutions on prophylaxis of infectional, oncological, narcological and venerial patients, AIDS infected patients".

Privatization was realised on the following directions :

- Small privatization involves enterprises and organisations has to be privatized with number of employees less than 200 persons, mostly - objects of retail trade, public catering and consumer services;

- mass privatization (through coupons)

- privastization over individual projects.

There are about 27 thousand enterprises i.e objects of retail trade, public catering, consumer services, vehicles have to be privatized. They all according to National Program should be realised at auctions or commercial competitions.

Small privatization incuded three stages.

On the first stage State Property Committee realises objects selection and determins their privatisation terms.

Second stage - object preparing for auction or competitive sale.

Third stage - object sale.

An important feature of small privatization - National program foresees payment for state property by two kind of payment composing on 50% from monetarial funding and on 50% from privatized settling coupons.

Obligatory condition of small privatization - preliminary demonopolisation and sharing of the enterpriase of the whole sale trade, enterprises of consumer services and transport because of that "keeping upto now state middle structures. (whole sale trade stores, trade companies) interupt the work of private enerprises of consumer services and trade. Practice shows that they find out different ways to hinder private shops activity upto send for different checking energy control, fire and state trade inspections. Therefore, territorial committees on state Properties jointly with Antimonopoly Committee have to arrange breaking up into smaller units of the whole sale trade enterprises, consumer services unions and vehicle transport".

Thus, in 1993 the first auctions took place where for sale 171 objects, but 153 were sold were presented. These auctions demonstrated auctions efficiency on sale of small enterprises, and in 1994 auctions were conducted everywere in the Republic.

Within 10 months of 1995 on auctions about 5000 objects were presented, among which 2205 objects were realised. In 1993 in the auctions trade, public catering, consumer services and comunal economy enterprises mostly participate, but in 1994 and 1995 this list became longer because of drug-stores, motorcar service stations, trade stores, motorcar enterprises, enterprises of bread-products system and transport meanings's transfer into the private property. For a example in October 1995 in the Republic on auctions there were presented 157 motorcar service stations and 98 drug-stores, and in November 170 JS of bread-products system were supposed to present.

1) Problem of significant decreasing of the quality of objects were sold in comparison with objects were presented have been keenly arisen. In 1993 89,5% were realised, in the first half of the 1995 - 44%, in August 1995 - 29%. Such situation is explained of:

* increasing of the quantity of objects presented in the auctions at relatively small number of the persons having financing for purchase;

* low attractiveness of the many objects because of revolving funds lacking, debts accumulation, losing of technical station of objects (without repairing and reconstruction);

* high starting price formating at regular re-estimation of basic funds.

Status on coupon mechanism of the state property privatization foresees using of dwelling coupons for purchase of dwelling and purchase of small privatization objects. As Goscomstat informs for period of 1992-1994 105,8 milliards dwelling coupons were added on population including 21,4 milliards (20% of total quantity) - in 1994 that is on 50% lower than in the last year. At that 11,1 milliards (52% of all added on this year dwelling coupons) were directed to redeem state dwelling, but in 1993 - only one third of them. For unused dwelling coupons in 1995 in the local divisions of the People Bank of the Republic of Kazakhstan were open 3,7 millions of special coupon accounts where are concentrared 57,7 milliards coupons (55% ofchanged extra).

Totally from the starting of the available housing privatization Republic's population privatized about 3 millions of state flats. Private dwelling shares arised from 51% in 1992 to 82% (as it was calculated) in January 1, 1995. In 1994 there were privatized 401,1 thousands flats with average square 53,6 sq. meters, including 66% for coupons, for coupons with additional payment - 17%, for tenghe - 2%, free of charge - 15%. Saling price of all redeemed from the state flats totally in the Republic is 95,2 millions tenghe; in the new and reconstructed houses - 47,7 millions tenghe. Receipts coming from flats sale in 1994 was 8,0 millions tenghe, from which 73% remitted into the local budgets ( in 1993 1,9 millions tenghe and 59% accordingly).

1994 became the year of the real small privatization during that only in Almaty 20 auctions took place. On these auctions 134 objects of summary start price 18675,248 tenghe and final price 4233376,5 tenghe. from them practically 87 objects on total sum 63751,5 thousands tenghe were purchased. To redeem 4 objects purchasers refused. Therefore 28 objects were presented in the auctions again.

Also in Almaty in 1994 2 auctions were arranged and 4 objects were sold on total sum 466500 dwelling coupons. It was specially decided to use them in frames of small privatization with aim to help people in coupons sell.

From the begining of 1994 due to purchase of the objects in frames of small privatizations there were wrtten off on balance account in savings banks 740867,7 thousands coupons. These dwelling coupons were redeemed by customers of the small privatization objects themselves or customers remitted money for coupons into the savings banks.

In 1994 152 objects were sold including 14 objects of consumer services, 8 objects of agriculture, 63 trade objects, 14 motorcar service stations, 7 objects of municipal economy, 25 vegetable's shops located in Almaty.

The most quantity of the objects during 1994 were privatized in auctions in Kaskelen region (21), Ile (19) and Kapchagay (17). In 1994 176 objects were presented in the auctions in frame of small privatisation .

According to USAID 2552 objects of small privatization on sum 2.084.485.180 tenghe were sold in private property.

Towards December 1995 1853 objects on sum 1.264.860.179 tenghe were fully paid. In 1995 208 auctions took place including 42 by Holland method (starting price is dcreased. Auctions based on this method begun from October 1995). Among 2.552 sold objects 440 motorcar service stations, 186 drug stores and 81 working supply department were privatised. 289 objects of 2.552 were sold at decreasing of starting price.

For comparison: in 1994 in frame of small privatization 2.429 objects on sum 702.063.703 tenghe were sold, in 1993 (from July when small privatisation begun) 110 objects of 10.700.449 tenghe were privatised.

Besides objects sale in frame of small privatization in auctions and commercial competitions state shares blocks of different holdings and JS were presented. There were realised shares of:

1. 110 JS of "Astyk" (bread-products) system of total price 144.452.540 tenghe;

2. 51 transport enterprises of 144.452.540 tenghe;

3. 46 stores of general purpose of 127.123.740;

4. 11 vegetable and fruit stores of 58.609.126 tenghe

5. 3 JS "Kamkor Holding" of 12.281.000 tenghe;

6. 2 JS of "Munajonimderi" Holdingh of 44.314.000 tenghe

7. 2 working service departments of 5.260.000 tenghe

8. 2 JS of "Farmatsia" Holding on sum of 31.200.000 tenghe

9. 1 JS of "Legprom" Holding of 1.941.600 tenghe

10. 1 JS of "Bereke" system (meat products store and processing) of 5.100.600 tenghe.

Shares of 17 different JS were also realised.

Totally during 1995 in auctions in frame of small privatization state shares blocks of 417 JS were presented, shares of 244 JS were sold. It should be noted that towards end 1995 all purchased shares were not paid.

Total sum of state shares blocks and objects (involving shops, restarant, cafe, small hotels, motorcar service stations, drug stores etc.) is 2.860.328.000 tenghe.

In Aktubinsk region before small privatization 604 objects had to change property's form (a half from them - in the trade sphere). For comparison, at first stage state have privatized 237 objects, at second - 11. Complications in the privatization process emerged in 1995. As at opinion of local representatives of Territorial Committee property saturation took place at economy private sector. Entrepreneurs became scurpulous and ready to buy only profitable objects. That is why in 1995 only 88 objects among 156 presented for sale were sold. Nevertheless according to State Committee on Privatization Aktubinsk Territorial Committee on Privatization takes second place in the Republic upon results of auctions conducted in 1995.

In 1995 in frame of small privatization in the West Kazakhstan 103 objects among 245 presented were sold in the competitive auctions. From sale of these objects was given 80.788.000 tenghe.

In Qzyl-Orda region in frame of small privatization 50 auctions were arranged, that 4 times more than in 1994. There 150 objects of 300 proposed for sale were sold. Objects sale gave 22.000.000. The most high temps of privatization were in regional centre - Qzyl-Orda where in 1995 in frames of small privatization 100 objects were sold in auctions.

Mass Privatization

With starting of mass privatization the role of investment priivatized funds (IPF) has been increased. Theoretically and practically IPF two participation models were possible in the privatization process:

1. IFP receives coupons from population to exchange their shares and performs as customers at auctions.

2. IFP distribute their auctions through people.

Last variant means that such IFP founder is the State.

In frames of mass privatization in Kazakhstan transfer process from free coupon privatization to monetary privatization has begun. Enterprises of state holding company "Kurylys materialdary"; JS of state holding company "Zhihas", JS "Promstroyproekt" and "ADK" were among enterprises performed in the auctions. In auction of March 1995 shares of state enterprises unrealised in the coupon auctions were performed. Shares prices of these non-requested enterprises were very low. Besides on 24th March 1995 auction where JS "Promstroyproect"'s blocks shares were presented. Minimal saled block comprised 13,5% of Status Fund. Pre-payment in 5,5% of saled block that was 332581,37 tenghe had to be made for participation in the auction.

Legal and physical persons including foreign could participate in auction. Only state enterprises and enterprises having more than 30% of state share in Status Fund and also commercial banks had not right for particvipation. 40 % of financing taken in auctions was planned to forward into srate budget, 30% - local budget, 30% remitted in to enterprises' account.

On December 1995 coupon auctions were not arranged. Totally from the begining of 1995 State Privatization Committee has organised 10 coupon auctions. Invested Privatized Funds towards end of December have accumulated 112 millions coupons that is 65% of coupons charged to population total quantity.

Monetary Auctions

On December 1995 state shares blocks of 15 JS of 42.899.274 tenghe and 4.484.000 USD were realised by central body for monetary financing.

In December territorial committees of the Republic of Kazakhstan have sold state shares blocks of 68 JS for total sum of 217.146.220 tenghe.

Including regions:

* Zhambyl - state shares blocks of 20 JS on sum of 18.387.620 tenghe

* Qzyl-Orda - state shares blocks of 2 JS of 11.600.000

* Almaty city - state shares blocksa of 8 JS of 101.432.000

* South-Kazakhstan - state shares blocks of 3 JS of 341.474.000

* Mangystau - state share blocks of 2 JS of 678.000

* Pavlodar - state share blocks of 27 JS of 40.892.800

* Zheskazgan - state share blocks of 3 JS of 6.613.000

Totally in 1995 in monetary auctions state shares blocks of 123 JS on sum of 4.724.194.070 tenghe were sold.

For period 1991-1995 Program of mass privatization was fully completed, shares of 1700 enterprised were sold at using of privatized invested coupons.

Privatization on Individual Projects

Immediately after adoption of the National Program in 1993 work on arrangement of denationalization and privatization began. In 1993-1994 according to individual projects Almaty Tobacco Factory, Shymkent Confectionar's Factory, Almaty and Quaraganda Margarine Plants were privatized. These JS's shares realisation were made by sale to identified investor on discussed provisions. From December 1994 upto now goverenment started to transfer very large and unique objects and enterprises under management of foreign firms by contracts conclusion. During this period totally 44 enterprises were transfered under such management among which 31 contracts are ongoing to work, others were terminated.

Objective necessity to transfer Kazakhstani enterprises under foreign firms' management was provoked of following circumstances:

1. provide coming of strongly needed financing for solution of enterprises' activity current problems. Foreign firms taking Kazakhstani enterprises under management have to execute a number of important provisions:

a) increasing of enterprises revolving funds;

b) debts cancelation in the short terms;

c) keeping of all working staff;

d) prodactivity increasing;

2. allow to use in these enterprises advanced experience of the foreign firms management;

3. attraction of experienced managers for our enterprises management helps to their successful adaptation to the market economy strong conditions;

4. change of property form at transition of state enterprises under foreign firms management does not take place, enterprise leaves under state property. Therefore transfer under management, solving problem of enterprises having hard financing conditions activity normalisation, in a future let the government to make considerable decision on future of such enterprises

Lacking in Kazakhstan precise state conseption on state enterprises management and state shares blocks in the JS. State Committe on Properties paying the most attention to privatization problems practically stopped to manage state enterprises, state shares blocks. But as it was noted above 31 contracts concluded with foreign firms are still worked. First results of Sokolovsko-Sarbaiskiy Mining-Enriched Union, Pavlodar Aluminium Plant and others' activities are evidence the successful work of enterprises under foreign management.

During 1995 at privatization over individual projects realisation of state shares blocks of Pavlodar Aluminium Plant mentioned above gave 559.800.000 tenghe; at realisation of state shares blocks of the large "Kazkhrom" JS 2.329.440.000 tenghe were remitted.

Agrarian-Industrial Complex (AIC) Privatization

The most Kazakhstani state farmers (sovkhoses) were transformed into collective enterprises. At this process some defects were emerged:

1. Peoples needed in cash were sold their shares to farms leaders. Process of consolidation of shares in the directors' hands has gone such way. The most defect of this process is lacking of the opening inside farm. For period 1995 a lot of directors have been owned 10 % and more of shares of their farms.

2. Combination of the farm Director (Manager) and JS President (Chair) positions.

In accordance with privatization in the AIC went on way of setting up of one type enterprise - farm. On January 1995 their number in Kazakhstan was 30 thousands, but they don't play significant role in manufacture. It far from improved model of capitalist countries where industrial unit is a family. In USA for a example about all work volume executes farm owner at his spouse assistance plus employees at period of loadings.

There are a lot of challenges in this field. But the most important among them is funding problems and in-competence of the many state farms leaders.

If in 1994 state costs on village in credits, subventions and preferencies were estimated in 30 milliards tenghe, in 1995 - 11 milliards tenghe including 4,1 milliards tenghe - debt of 1994 for purchased in state resources grain.

According to plan-schedule on privatizsation of state agricultural enterprises in 1995 approved by regulation of the Cabinet of Ministers of the Republic of Kazakhstan of 28th February 1995 #4-2p 477 state agricultural enterprises were included in the list of enterprises to be privatized (among which 14 experimental stations and farms were excluded from the list). Including; in the I quarter - 129, II - 138, III - 102, IY - 108.

Practically in 1995 472 objects were privatized, it is 99% of plan-schedule.

Towards 1 December 1996 1776 state farms or 84 5 of total quantity were privatized. On the basis of the reformed sovkhoses more than 1000 colecctive farms, 420 small private enterprises, 340 JS and farm unions, 1240 peasant farms were setting up. Sharing of all state poultry breeding factories, cattle breeding complexes and pedigree stock breeding farms. On the basis of storing up, processing and service enterprises of the AIC were set up 144 JS with participation of th agrarian goods producers. According to experiment 20 sovkhoses were sold in auction for private property of individuals, 33 leaders of state enterprises having 20 years experience in farm's managemet received free of charge under private property the main part of the farms.

In result of all realised measures on property reformation in agrarian sector more than 32 thousands agricultural formations are existed. In state property only 286 state farms have been left. But soil fertility and yield of agricultural products are going on because of technologies breaking, harsh shrinking of the fertilizers and protection meanings usage. Prodactivity and number of cattles are lowing because of high cost of pedigree stock breeding work, providenessless of balance of forage basis, non-organising of the production profitable sale and villages population cash lack.

Today's agricultural products manufacture volumes in comparison with yearly average in 1991-1994 were dicreased for grains - 40%, potato - 24, vegetables -12, meat - 26, milk - 19, egg - 42 %.

Economical potential of the rurals has also been shrinked. In 1995 agricultural production of 94 milliards tenghe was not given. Expected loses sum will be more than 17,5 milliards tenghe. Non-payments for material-technical resources and services were increased and achieved 53 milliards tenghe. Additionally farms internal debt of salary added on became more than 9 milliards tenghe. Rural population life level still stays low than that one og the industrial centres' dwellings.

Average personal monetary profit of the rural population on September 1996 was 1132 tenghe, citi - 2601, i.e. in 2,3 times lower. For three quarters rural worker' average salary was 2230 tenghe that in three times lower than in industry, transport, construction. As consequence rural population's migration is increased. During 1995 and nine months of 1996 275 thousands persons left villages.

Only in 1996 there were founded 6000 peasant farms. Together with that farmers were left for self-survival, they have not support. In 1995 760 farms were collapsed, in 1996 - 800 farms. Especially unstable they are in Aqmola, Aktubinsk, South Kazakhstan regions. Many farms even don't try to open accounts in the banks, and in best cases dealing with natural economy with barter exchange. In 1 January 12996 only 9,9 thousands peasant farms among 22,5 thousands ones had accounts in the banks.

According to Government Decree #1447 of 22 December 1994 State Fund on Financial Support of Agriculture was setting up. During its functioning 1783 millions tenghe from budget farms needed in support have received. They were directed on cheaping of mineral fertilizers and plants protection means, sheep breeding support, reproduction and health improving of flock, farms development.

Some farms got state finanacial support and could used that efficiently. For example JS "Toguzkent" of Zhambyl region (Taraz city) in 1995 received financing from Fund as dotations for wool realisation 3,5 millions tenghe, for astrakhan fur - 300 thousands tegne.

Results of the Second Stage of Privatization

Close before finalising of II-d stage of privatization Agency of Social and Marketing Researches BRIF according to order of the US AID has arranged questionning of Kazakhstan population on theme "Relation to privatization process". There were asked 2000 persons (elder than 15 years old) in 10 Kazakhstani regions. Selection presents all population of Kazakhstan of all social-demographycal categories - sex, age, education level, nationality, place of settling. Method of personal intervew was used at questionning. Results witnessed:

57% of asked people positively evaluate the idea of privatization itself;

20% - negative relation;

18% - indifferent;

95% of asked persons have got their privatized invested coupons;

77% - invested PICs into the invested funds, 57% of them invested all their coupons, 20% - part of the coupons.

Percantage of people who positively relate to idea of privatization depends on respondent' settling region. Thus, among Aktubinsk region people 72% positively asses idea of privatisation, in Almaty region - 68%, in Qaraganda - 63%.

For period 1993-1995 in 19 coupon auctions shares of 1940 JS were performed including 1202 JS - fully realised. In frame of small privatization in 1995 were sold 2205 objects. More than 25 objects were transfered into management of national and foreign firms. In result the share of the private enterprises in industry in 1995 was about 40%. Non-state sector included about 60% of the retail trade turnover.

With aim to speed up the National Program Denationalization and Privatization, formation of the new investment media and development of stocks market on 21 August 1995 Resolution #1154 of the Cabinet of Ministers" About Sale of the Part of State Shares Blocks of the Privatized Enterprises in the Stock Exchange" was adopted. According to this Resolution it was supposed to sale in the CASE 10% of state shares blocks of the enterpises of the mining, metallurgical and other basic branches, including "Ritkhimneft", Zheskazgantsvetmet", Shymkentskiy Svintsoviy zavod", "Leninogorskiy polimetalicheskiy zavod", "Kazahmarganets", "Sokolovskiy podzemniy rudnik" and etc. State Committee on Privatisation has completed the work on termination of 8 bancrupt enterprises: "Shalkarstroy" JS, "Garant" JS, "Aktas" JS and others.

Within January-July 1996 State Privatization Committee suggested for auction sale 5929 objects of small privatisation among which 1980 were sold. That explains that a lot of presented objects were un-prestigeous and had not demand. For example, 1075 pharmaceutical objects were performed for sale, 482 were sold, among motor car service stations: 1423 and 846 accordingly, totally in 1993-1996 more than 9 thousands units of motorcars were privatized .

Among total number of the privatized enterprises 1422 were sold at an open auction, 226 - at the commercial competitions, 7 - at investment competitions, 321 were sold by different way (direct sale). Excepts objects of state property at the auctions 5834 motorcar units were presented, 1158 were fully sold or 19,8% of suggested for sale. During 7 months 1996 realisation of the small privatization objects gave 1829,5 millions tenghe. Thus small privatization in Kazakhstan fully completed. More than 17 thousands state property objects of different spheres of economy were transfered in private property.

Within January-July 1996 it was concluded agreements on sale of 489 JS state shares blocks, 462 of which are purchased, including 175 in frames of small privatisation. Income's volume to the state budget was 851,8 millions tenghe, including 170,1 millions tenghe in July. Significant place in the Republic has privatization of the enterprises bread-products system because Kazakhstan fertile soil allows to take the agrarian oriented course in the Republic's economy.

1995-1996. State Privatisation Committee started a great company for sale of the state shares blocks of the JS of bread-products system. Towards May 1996 there were presented 366 JS having state shares blocks and shares of 267 JS were realised. At present this work practically is completed. Most of performed shares were purchased by strange physical and legal persons. In sale of the state shares blocks on project "Astyk" 198 JS bread-products system took part. Generally in Republic the level of state shares blocks sold is 43%, that one fluctuates for separate JS from 8% (Qostanay region) to 90% (Mangystau region).

State Agricultural Enterprises Privatization

Towards 1 August 1996 plan-schedule of denationalization and privatisation of the state agricultural enterprises in the Republic was executed for 89%. Privatized state agricultural enterprises estmated cost was 8904,1 millions tenghe, Financing on 32,2 millions tenghe, including 28,4% remitted to the local budgets, were get for seven months of 1996. On 1st October 1997 18 farms has been privatized and 4 enterprises are in reforming stage.

Individual Projects Privatization

Since beginning of 1996 upon individual projects state shares blocks of 9 JS (Zheskazgantsvetmet, Ermakovsk GRES, Quaragandashahtaugol", Qaraganda TETS-2, Krasnooktjabrsk mining management, Keregetas, Sokolovsko-Sarbajsk mining-beneficated union, Turgay mining managerment, Ekibastuz GRES-1) were sold for 4916,7 millions tenghe. Total investments sum should be 101,9 milliard tenghe during 1-15 years. For the period January-September 1997 43 industrial enterprises were privatised for 42860,2 millions tenghe.

Privatization Financial Results

For this period generally in the Republic 7627,7 millions tenghe were received (including incomes for enterprises sold in preciding years). Coming for this period revenue 7059,2 millions tenghe (92,5 %) were distributed to the Republic's budget, 13,4 millions tenghe (6,7%) to the local budget, 48,7 millions tenghe (0,6%) - privatization process organising costs.

More than 77% of income came from industrial enterprises properties sale, that one practically completely was forwarded to the Republic's budget . During January-September 1997 financing get from privatization objects sold and purchased was 46.4 milliards tenghe that 28.2 milliards more than for the same period of 1996.

In frames of mass privatization within January-September 1997 generally in the Republic state blocks of 299 JS were realised in the monetary auctions of total cost 2009.4 millions tenghe (for comparison: during January-September 1996 there were realised 299 state shares blocks of 1462.5 millions tenghe).

Within January-September 1997 there were privatized 4811 state property objects that 61,7% more than at the same period of 1996. Privatization results in the Republic of Kazakhstan for the period January-September 1997 are characterised by following data:


Privatized in January-September 1997Informationally:

January-September 1996, % of the result

units% to resultredeemed cost, millions tenghe% to resulton quantityon cost

Total

including:

4811

100.0

46405.5*

100.0

100.0

100Industry 508 10,644201,2 95,3 9,3 88,2Construction 133 2,8 94,4 0,2 0,9 0,2Agriculture 18 0,4 3,2 0,01 4,3 0,1Transport 221 4,6 143,9 0,3 2,0 0,5Trade and Public Catering

1128

23,4

806,6

1,7

40,7

6,3Consumer Service and Municipal Economy


497


10,3


196,0


0,4


6,3


0,4Other branches 2114 43,9 927,7 2,0 35,7 4,2Objects conservated and uncompleted construction


192


4,0


30,5


0,1


0,8


0,1* This sum included payment for objects sold in 1996 and also mortgages of objects purchased in September

In Kazakhstan state sector contribution in the GNP production shrinked upto 54%. Accordingly private sector contribution incresed and achieved 46% . Such share of the private sector in the economy allows to state about market relations basises building in Kazakhstan.

Kazakhstan now creates civilized socially oriented society characterised by population's life high quality. On basis of such society is mixed economy, supposed diversed joint efficient functioning of the property, working forces and capital different forms. Foreign capital may bring in Kazakhstan scientific and technical progress achievments and advanced management experience. That is why Kazakhstan implementation into the world economy and foreign capital attract are the neccessary provision of modern civil society construction in the country.

2.4. BASIC DIRECTIONS OF REFORMS DEEPENING. MAIN PRIORITIES

The improvement of a situation at the macro-economic level occurs at presence of a lot of unsolved problems. Alongside with achievement of some financial stabilization non-payments, debts of the enterprises and separate managing subjects take place.

Creditor debts of the enterprises and organizations of the Republic have exceeded 1.1 trillion tenghe by the 1st October 1997 and have increased from the beginning of the year by 8.0%. More than one half (574 billion tenghe) of it is overdue and delayed, thus 2/3 of the debts are delayed for over three months. Debts are spread to non-payments to the budget, deliveries for the goods and services, and also wages to the workers. Over half of delayed debts falls to the industry, 1/5 - to the agriculture, 1/10 - to construction.

Debtor debts have reached 541 billion tenghe by the 1st of October 1997, including 333 billion tenge of overdue debts, or 62% of the whole sum. The general debtor debts' volumes have increased by 3.7% in comparison with the beginning of the year. The greatest share of the delayed debtor debts also falls to industry and construction. Thus the debts of the enterprises of the Republic to the enterprises of the countries of Commonwealth and other countries for the 1st of October 1997 have reached 221.3 billion tenghe and 4,2 times exceed the debts of these countries to the enterprises of Republic.

Other unsolved problem is a low tax collection rate because of instability of real sector of the economy. By the end of 1996 the specific weight of the unprofitable enterprises toward their total number has reached 50.3%, and sum of their losses - 38.4 billion tenghe. In 1997 number of the unprofitable enterprises and organizations has reached 6410, or 54.1% of the total number of the enterprises and organizations of the Republic, sum of their losses - 99.9 billion tenghe.

As a result of such economic activity the enterprises constantly experience a deficit of financial resources, are on a mode of incomplete working hours, some of them completely stand idle.

Attempt of reduction of non-payments in March - April 1994 by wide-scale mutual reckoning with crediting of debts was recognized unsuccessful, as not appropriate to the market economy.

The unsolved problems of the enterprises' non-payments, their debts and low tax collection rate require reorientation of reforms deepening onto a real sector of the economy, ensuring growth of the GDP. Carrying over of accent in the reformation of the economy on a micro-level is necessary. Without it steady stabilization of the macro-economic and creation of the real preconditions of economic growth are impossible.

The stage of a deepening of reforms in the real sector of the economy means overcoming recession of manufacture, outcome of non-payments problem, revival of investment activity and etc.. For this purpose it is necessary:

* to determine priority and key branches and enterprises, which will become initial points of economic growth and will require support. The choice of priority branches and manufactures should provide manufacture of production with the purpose import-substitution in the internal commodity market and expansion of opportunities of goods export. It means manufacture of competitive production of high quality, which (production) is best-selling as on internal, and on external market. It will require qualified management and marketing as at the branch of branch, so on the level of enterprises. The manufacture of such production should be based on structural transformations of manufacture, high technology, modernization of fixed capital, what is impossible without the appropriate investments.

One of major means of activation of investment activity is leasing, which hasn't developed sufficiently in the Republic:

* to speed up solving of the non-payments problems, debts of the enterprises, to determine the reasons of non-profitability of the enterprises and branches, non-perspective of overcoming by some of them of manufacture recession. With commissioning of "Law on the Bankruptcy" of the Republic of Kazakhstan with the amendments and additions the procedure of bankruptcy and sanation of the unprofitable enterprises will be done more operatively. Of course, it will be accompanied by legalization of latent unemployment and will require radical measures on social protection of the unemployed;

* to develop labor-consuming branches and manufactures, meaning light, food-processing industries, agrarian sector with the purpose of provision of the population by foodstuffs and essential commodities, and also creation of working places;

* to support in every way domestic manufacturers by creation of a favorable investment climate, preferential crediting and the taxation in period formation of the enterprise and etc.;

* to develop small and medium-size businesses by granting the aimed micro-credits, transfer of unused premises (rooms) to rent, sale of uncompleted construction.

The stage of a deepening of reforms in the real sector of economy requires the analysis of a condition of these branches and manufactures.

2.5. TRENDS OF DEVELOPMENT OF BASIC SECTORS IN REPUBLIC'S ECONOMY

2.5.1. INDUSTRY AND ITS KEY SECTORS

The industry is a key sector of the advanced countries' economy. The growth of industrial manufacture mainly defines dynamics of the GDP. In Kazakhstan' economy the industry also occupies a key position, though its share on extent of the last seven years in the GDP fluctuated within limits of 20-30%. In 1997 it was 20.7%. In the period of 1992-1997 there were the radical transformations in the economy, including transformations in the industry, in connection with a transition to the market relations, privatization of a state ownership and appearance of the new managing subjects. This process was accompanied by a sharp recession of industrial manufacture, especially in 1992-1994. These tendencies are characteristic to all countries of the CIS, and also to industry of Kazakhstan. Prevalence of mining industries of the Republic, closely interconnected to Russia and former Union republics, the presence of the large giants of industry - town-forming enterprises - have much complicated processes of privatization.

In a course of privatization at each its stage the accelerated methods and various forms of the managing subjects in created conditions were found. One of these forms was an attempt of creation of holdings. Then there was the process of de-holding, as a result the process of privatization has become longer and delayed. Formation of the real proprietor at the enterprises was accompanied by difficulties, and it has in turn affected rates of re-structuring and reformation of the industry, its branches and enterprises.

Amount of the managing subjects on patterns of ownership and types of the enterprises by the 1st of January 1998 has leveled 147547 in total in the Republic, 128643 of them are small, 13961 - medium, and 4943 - large. 26080 of them are in state ownership, 113490 are private, 3588 - share holdings without foreign participation, 2387 - share holdings with foreign participation, and 2002 of them are in foreign ownership.

In the industry number of the managing subjects in the same period has reached 20861, 17990 of them are the small enterprises, 2069 - medium, and 802 - large. 1407 enterprises out of 20861 are in state ownership (or 6.7%), 17487 - are in private ownership (or 83.8%), 940 - share holdings without foreign participation (or 4.5%), 722 - share holdings with foreign participation (or 3.5%), 305 of them are in foreign ownership (or 1.5%). As a result of state ownership's privatization in the industry the managing subjects of a private pattern of ownership prevail. A share of the small enterprises is also significant, it makes up to 86.2% of the total number of the enterprises.

The changes, connected to the transformation of a state pattern of ownership to the private one and transition to the market relations, occurred in the countries of East Europe and the CIS, were also non-simple. Thus significant reduction of manufacture of the GDP and reduction of the share of the industry in it accompanied them. For the period of 1991-1996 the volume of industrial production of Kazakhstan has decreased more, than by half (42.6% of the level of 1991). Thus the greatest recession has taken place in an industry of building materials (11.6% of the level of 1991), light industry (13.1%), chemical and petrochemical (18.0%), wood, wood-working, pulp and paper industry (19.1%), food (21.1%), mechanical engineering and metal-working (29.2%), gas (42.6%) industries. The data on dynamics of industrial manufacture are submitted without the account of householders, account of which is made since the end of 1996 and in 1997. However this dynamics catches the basic tendencies in development of the key branches of industrial manufacture and the industry as a whole. The least recession of manufacture took place in electric power industry, fuel industry, in particular in oil mining and oil refining, and in non-ferrous metallurgy. Volume of production in them during these five years reduced by one third, but at that time in other branches (chemical and petrochemical, food) the recession was 5-6 times.

In 1997 the total volume of industrial manufacture, including the householders' sector, was 809.7 billion tenghe, or 4.0% higher than the level of 1996 year. In development of industrial manufacture the positive tendencies were outlined. First of all it concerns the ferrous and non-ferrous metallurgy, a gas industry, where the production volume growth in 1997 has reached 24.0%, 115.2%, 120.3% accordingly in comparison with 1996. Growth of manufacture in the light industry of 105.3% and in food industry of 128.0% occurred also.

Results of conjuncture surveys at the industrial enterprises of Kazakhstan in the third quarter of 1997 also confirm display of stability in some branches and enterprises, such as oil extracting, ferrous and non-ferrous metallurgy ("Asia - economy and life". # 43, October 1997). Even in the coal industry, in which the recession had a long character, during all third quarter there was escalating manufacture. In mechanical engineering and metalworking the tendency of stabilization of manufacture volumes were outlined.

In branch structure of industrial manufacture the key role still belongs to the fuel industry, ferrous and non-ferrous, which produced 52.8% of all the industrial production volumes in 1997. The contribution of a food-processing industry has appreciably increased, its share has grown from 10.0% in 1996 up to 17.4% in 1997. At the same time some branches' specific weights remains rather low, for example, the specific weight of the chemical and petrochemical industry is 2.1%, of the mechanical engineering and metal-working is 5.0%, of the construction materials industry is 2.2%, of the light industry is 2.1%.

The enterprises of these branches cannot overcome recession of manufacture mainly because of the lack of own means for purchase of material resources, modernization of out-of-date engineering, introduction of high technology. Financial bankruptcy of the enterprises of these branches is the basic reason of a present their condition.

By the results of questionnaire inspection of the enterprises it also comes to light, that their industrial activity is interfered by their own financial difficulties and low solvent demand. So, the insufficient demand inside the country is one of the main reasons, interfering activity of the enterprises in the construction materials industry, alongside with insolvency of the customer in the chemical industry. Deficit of both raw and materials is characteristic for light and food processing industry. The insolvency of the customer is the main reason in the electric power industry, fuel industry, mechanical engineering and wood industry, so it constrains growth of production. The instability of tax policy complicates operations of the enterprises of the light industry ("Asia - economy and life". # 43, October 1987).

The financial difficulties are characteristic to all the enterprises and are the main obstacle in the overcome of the present heavy situation. They require inflow of the investments for revival of manufacture and overcoming of its recession as from the part of foreign investors, so as from domestic investors. For the moment the foreign investments are directed into the oil-mining branch, electric power industry, and into the metallurgical complex. Transfer of these branches' enterprises into concession to the foreign investors was one of the major factors in growth of manufacture in the given branches. These processes should be based on restructuring of manufacture and further reformation with the purposes of industrial production output, best-selling as on internal, so on the external commodities' markets.

2.5.2. CONSTRUCTION

It is the one of key branches of the national economy. Recently Kazakhstan represented the country of new building projects on erection and start-up of the largest metallurgical complexes, power stations, agricultural mechanical engineering, textile combines and objects of social assignment. In 1993 capital investment amounted 6068.0 billion tenghe, including civil engineering and erection works of amount of 2662.0 billion tenghe. In the last years these parameters have decreased more than twice.

Dynamics of the parameter of the construction's contribution to the GDP manufacture reflects the following: 1994 - 40.6 billion tenghe, 1995 - 62.5 billion tenghe, 1996 - 48.8 billion tenghe and 1997 - 70.2 billion tenghe. The specific weight of the construction in the GDP structure tends to fall: 1994 - 9.6%, 1995 - 6.1%, 1996 - 4.4% and 1997 - 4.2%.

The transition of this sector to market conditions of managing occurs in not-very easy way. There is a change of centralized distribution of capital investments and material resources to construction of large objects by the state order for the market relations. There are the new managing subjects on the basis of a various pattern of ownership (the situation is by the 1st of the January 1998)*:


IncludingIndustryTotalStatePrivateShare holdings without foreign participationShare holdings with foreign participationForeignConstruc-tion1495414751269954016694Small1324410031179422413588Medium1451414786236105Large259581198011* National Statistic Agency of the Republic of Kazakhstan. The statistical press-bulletin. # 4, Almaty, 1998.

Data show that a prevailing pattern of ownership in construction is a private one (84.9%), than the state ownership - 9.9%. The small enterprises also prevail among all the managing subjects - 88.6%, and in the total number of the state enterprises they amount 6.8%, of the private enterprises - 92.9%. The share of the enterprises in the share holding form with the foreign participation amounts 0.1% and the share of the foreign building enterprises amounts only 0.6%.


Table 1. Dynamics of the total volume of the industrial production of the Republic of Kazakstan in 1991-1997, in % toward the previous year*

Branches of the industry199119921993199419951996**1997**Specific weight of the branch in the total volume of the production, %19961997Total Industry99.186.289.271.989.6100.3104.0100100Electro energy production99.193.895.684.898.489.785.316.313.5Fuel industry, including102.594.185.286.087.7102.298.124.427.1oil mining industry104.898.086.791.596.7-111.2--gas industry108.983.379.956.4129.689.5120.3--coal industry98.794.487.093.472.8-93.0--Ferrous metallurgy106.290.475.670.5111.782.5124.014.212.0Non-ferrous metallurgy94.395.592.277.2103.8103.6115.212.013.7Chemical and oil-chemical industry94.973.155.458.9103.690.865.73.92.1Machinery construction and metal-working02.483.785.362.972.273.070.27.55.0Wood industry, wood-processing, pulp and paper industry102.785.691.355.157.2110.178.70.90.7Construction materials industry101.383.173.242.967.966.479.83.82.2Light industry02.579.088.355.739.9119.8105.32.32.1Food-stuff industry93.372.586.373.962.7135.1128.010.017.4* National Statistic Agency of the Republic of Kazakstan, "Statistical press-bulletin", #4, Almaty, 1998, page 12; "Al pari", #3, 1997, page 17; "Statistical yearbook of Kazakstan for the 1995 year", Almaty, 1996, page 166.

** With account of households.


The construction is a branch, development of which is directly connected to the investment activity and investments into a fixed capital (into creation and updating of the fixed capital).

The share of the foreign investments into the fixed capital of the Republic in the last years grows: in 1994 it was 4%, in 1996 it was 3%, in 1997 it was 26%.

Enterprises of all the ownership patterns used more than 30 billion tenghe of the foreign investments to construct objects of industrial and non-industrial purposes. According to the resolution of the Government of the Republic of Kazakhstan dated February 4, 1997 #148 4705 billion tenghe was allocated on construction of priority objects from the republican budget. In 1997 these means were spent for the construction of 59 objects of industrial and non-industrial purposes, 50 of them are starting. In the expiring year 5287.3 billion tenghe were mastered to construct these objects. 34 objects were put into operation, 12 of them are the group water-pipelines, (including 7 of them which reconstruction was finished). 2 regional hospitals, children's rehabilitation center in Almaty, 2 schools and other objects construction was completed..

At the same time the following objects still haven't been put into operation: a shoe factory in Karatau and on the Pavlodar machine-building factory; the starting-up and adjustment works on Taldykorgan factory of electric-submersible pumps and other are not completed.

In 1997 at the expense of the foreign investments a construction of objects and capacities on issue of blocks for seaport Aktau, a less-tonnage plant on manufacture of fuel in West Kazakstan Oblast, a construction and an accomplishment of cottages in Akmola Oblast, petroleum chinks in Mangystau Oblast, lines on packing milk products and meat processing were made; geological-prospecting work in Aktobe and West Kazakstan Oblasts. Also the "Ankara" hotel, children's rehabilitation center and sporting complex in Almaty; 4 chinks and two tanks on 41 thousand cubic meters in Atyrau Oblast, mill in Astana, Almaty and Kyzyl Orda Oblasts, rice mills in Kyzyl Orda Oblast; lines on packing of milk products in North Kazakstan Oblast; a line on macaroni production in Almaty Oblast; lines on meat-processing in Aqmola and Almaty Oblasts; a factory on spirit manufacture in East Kazakstan Oblast; bakery in Kyzyl Orda Oblast and other objects were erected (National Statistic Agency of the Republic of Kazakstan. The statistical press-bulletin. # 4, Almaty, 1998).

Positive shifts in development of construction are the accelerated rates of denationalization and privatization, reorientation of the branch on creation of objects of processing industries and agriculture, occurrence of the managing subjects of small and medium-size businesses.

At the same time number of constructed apartments on the enterprises and organizations of all the ownership patterns decreased from 20.5 thousand apartments in 1995 down to 13.2 thousand in 1997, including the state and non-state property, except for individual builders, which constructed 6.7 thousand apartments in 1997, or 128.8% toward the level of 1995.

For the same period the tendency of reduction of the social sphere objects erection proceeds; the share of means, directed to the construction of these objects in volume of the investments of non-industrial purpose has amounted about 1%. So, the quantity of comprehensive schools (student's places), constructed in 1997, was 8.8% in comparison with 1995; the quantity of places in preschool establishments - 39.9%; the amount of beds in hospitals - 22.5%, outpatient-polyclinic establishments, visits in a change - 31.8%. But the amount of student's places in comprehensive schools in agricultural regions has increased from 1326 in 1995 up to 1454 places in 1997, or growth has leveled 109.7%.

As already mentioned hereby, the significant growth of construction of habitation is observed at individual builders at the expense of their own means. The growth of habitation takes place in Aktobe, East Kazakstan, Zhambyl, West Kazakstan, Kyzyl Orda, Mangystau, Pavlodar Oblasts and cities of Astana and Almaty.

In the Astana city - the capital of the Republic - the enterprises and organizations of all the ownership patterns mastered 18.0 billion tenghe of the investments in a fixed capital in 1997, that makes 15.7% of the total volume all over the Republic. For this period the investments to the fixed capital of the city were 5 times higher than for the appropriate period in 1996. 41% of the expenses were the expenses for housing construction, 12% - for construction materials manufacture and 10% - for transport.

The basic source of the investments are the means of the non-budget fund "Novaya Stolitsa (New Capital)" (40% of the total volume), the small share was made from the budget means (12%). The share of the foreign investments makes 24%, means of the enterprises, organizations and population make about 23% of all the means. The expense on housing construction in new capital make 7.5 billion tenghe in 1997, or 47% in the republican volume of the habitation construction. During this period input of habitation in Astana has reached 115.4 thousand square meters and has increased in comparison with 1996 by three times. The total volume of constructed habitation in the Republic in 1997 was 1277,6 thousand square meters, and the new capital's share occupies 9.0%. Thus the rates of construction were accelerated, especially in the second half 1997. The positive tendencies were outlined in the creation of the social infrastructure objects, which have a main share (73%) of the volume of the investments.

2.5.3. AGRARIAN SECTOR

The agriculture occupies a special place in the national economy, being its specialization branch for many years. The agrarian sector supports the status of Republic as a large manufacturer and exporter of grain. Only Kazakhstan out of all the CIS countries is a net-exporter of grain: only one third of the produced volume is consumed on the home market of the country. The favorable preconditions for export expansion opportunities of the country are available not only for grain, but also for cattle-breeding production: tanning raw material, sheep's and camel's wool. If the price of a processed product is 2-4 times higher than the price of raw material, than profitability of its processing on the sites and then its export is obvious.

Acceleration of the agricultural manufacture reorganization and its reformation on a market basis are determined by the role of this branch in the national economy. The necessity of accelerated reformation of the agriculture is dictated by the fact that 45% of the population of the Republic live in rural regions, including 25% of a labor force and 33% of the unemployed, the conditions of life and employment of which completely depend on the condition of agrarian sector.

The market transformations in the given branch, as well as in the other sectors of the economy are connected with certain difficulties. A stage of mass-privatization is going to finish, and during this stage almost two thousands state farms were privatized and transferred to a private property; more than 60.0 thousand farms were created. The reorganization of the large sovkhoz (state farm) and kolkhoz (collective farm) manufacture, based on the state and kolkhoz-cooperative property, into farmers' and peasants' households occurs with some difficulties. Habitual conditions of agricultural manufacture, which were usual for decades: beginning with the centralized delivery of engineering, fuel and lubricant materials, chemical fertilizers, delivering of agronomic and veterinary service and finishing with the traditional social and labor relations between, are changing,. Formation of the market relations means occurrence of the new managing subjects in the country on behalf of the farmer, businessman and hired worker.

Number of managing subjects by ownership patterns and types of the agriculture enterprises in the Republic of Kazakhstan 1st January 1998*

Including by the ownership patternsTotalStatePrivateShare holdings without foreign participationShare holdings with foreign participationForeignAgriculture**11127122695393004715Small78709226791984415Medium13941991134601-Large186310516141422-* Statistical press-bulletin. #4, Almaty, 1998, page 90;

** Without the account farmer economies.

The data reflect significant prevalence of a private property in the agrarian sector - 85.7%, state ownership's share is only 11.0%. A share of small economies of 70.7% is also high. The material, technical and economical relations, which were formed for decades, were suddenly destroyed. All of this facts influenced much on the social and economic situation in the agrarian sector.

In 1990-1997 the specific weight of the agriculture in the GDP has decreased from 33.2% to 12.2%. The gross harvest of grain (in the weight after completion) has decreased from 28.5 million tons in 1990 down to 12.3 million tons in 1997. Meat production (in slaughter mass) from 1559.6 thousand tons down to 778.7 thousand tons in 1996 respectively, milk - from 5641.6 thousand tons down to 3579.4 thousand tons in 1997, eggs - from 4185.1 million pieces down to 1242.0 million pieces, wool - from 107.8 thousand tons (in physical weight) down to 32.4 thousand tons.

Such a sharp recession of production in the agrarian sector has taken place owing to reduction of the sowing areas of agricultural cultures, including grain (80.8% by 1990), decrease of grain productivity almost twice, especially on fodder cultures (2-4 times), reduction of efficiency of cattle breeding. Only in the last three years livestock of horned cattle has decreased more than by 1/4, sheep and goats - almost twice, poultry - more than twice. In turn it is caused by the sharp fuels', fuel-lubricant materials', fertilizers' and forages' price-rise, and also by reduction of well-being level of the agricultural population, compelled to reduce livestock of cattle and poultry.

In 1997 the gross production volume of the agriculture in all the categories of economies (in the prices of 1997) has totaled 305.4 billion tenge, or 98.1% by the 1996 level. Thus production of cattle breeding industries has amounted 126.8 billion tenge (88.7% toward 1996), plant cultivation industry - 178.6 billion tenge (104.7%). Thus, the reduction of the gross production volume of the agriculture has taken place because of cattle breeding industries. However in the plant cultivation they haven't reached stability in production of separate kinds of agricultural production.

In 1997 year 12.3 million tons of grain (in weight after completion) were harvested from the area of 14.1 million hectares, or 69% of the 1991-1995 average level. Two thirds of manufacture of grain are made with wheat. The total harvest of sugar beet in 1997 has totaled 128 thousand tons, or 38% of the 1996 level. The curtailment of sugar beet production has taken place mainly because of the reduction of the sowing areas by more than twice. At the same time the insignificant reduction of cotton crops was not reflected on the cotton harvest, which is amounted 206.3 thousand tons, or by 13% more, than in the previous year.

The vegetables' harvest has grown in general, except potato harvest.

On separate kinds of agricultural production the growth took place in some regions, but the occurred in others. The considerable role is played by weather-climatic conditions. The curtailment of production of grain and of the other plant cultivation production has taken place also because of low culture of farming, infringement of technological processes in realization of agrarian-technical and other measures.

The reorganization of the usual forms of agrarian-industrial complex's management and transition to the market basis occurs by accelerated rates in the last two-three years, therefore losses are inevitable. However crisis conditions of manufacture in the agrarian sector of the economy are impossible to be explained only by costs of transitive period.

The starting conditions of transition to the agriculture market were determined by the presence of large state farms and collective farms, mainly based on the extensive, expenditure way of economy's running. Thus there also were advanced economies with the high parameters of production and advanced social infrastructure. In the summer-autumn period of crop harvest, preparation of hay and even storage of agricultural products the agrarian sector could not manage without the material help of city and labor participation of the city-dwellers, and it was on the gratuitous basis.

The expenditure character of agricultural production at low productivity of labor and low profitability inevitably put forward a question of a transition to an intensive way of economy's running. At the same time the personal subsidiary agricultural farming (household) was not taken onto consideration, therefore there were not real conditions for formation of the owner-proprietor in the agrarian sector. Therefore the adaptation of the former worker of a state and collective farm in market conditions requires time.

Reformation of agrarian sector occurs as well as in other branches of the economy, at presence of non-payments and debts. In 1992-1996 agricultural production manufacturers could not pay off creditor debts, which has amounted 113.4 billion tenge. It is the delayed non-payments for machines, spare parts and inventory materials, fuel-lubricant materials, seeds, which were accumulated for years. One of the reasons of such large debts is a disparity of the prices between the agrarian sector and the industry. As a result agricultural production manufacturers become experience heavy losses.

In a created situation it is necessary to establish a flexible system of mutual payments, application of the more rigid sanctions, and also introduction of practice of bankruptcy of impractical unpromising economies and enterprises.

The losses of grain and agricultural production while transport shipments and because of disorder storage reduce a production efficiency. Reduction of production losses in the agrarian sector alongside with increase of productivity, elimination of unjustified disparity of the prices for agricultural and industrial production are the important directions in overcoming of expenditure way of economy's running.

With the purposes of overcoming of the expenditure character of economy's running, increase of profitability along with structural reorganization, it is necessary to conduct a technical re-equipment. In "Basic target indicators and directions of state social-economic policy of Kazakhstan for 1998 year" for the agrarian-industrial complex the following prime problems are provided at the level of regions: development of measures on technical re-equipment of manufactures, introduction of modern technologies and attraction of the foreign capital.

The agriculture is one of the priority sectors for attraction of both domestic and foreign capital. By the present moment the share of the investments into the agriculture is insignificant. Though on data of State Committee on Investments of the Republic the most enormous quantity of the applications is connected with the agriculture and processing of agricultural production.

A lot of expectations on the development of small business in Kazakhstan are connected with the agriculture. In 1997 a number of the Republic Government's Resolutions on the support of small business, granting of micro-credits were passed; realization of these resolutions in the agrarian sector should give appreciable results.

2.5.4. TRANSPORT AND COMMUNICATION

Development of these sectors directly depends on a situation in the basic sectors of the economy of the Republic, and also economic interrelations between the countries of the CIS.

Dynamics of freight shipping by the transport of the Republic evidently reflects the situation for 1990-1997. *

Millions of tons

199019941995199619971997, (%) toward19901996All kinds of transport2613.01189.0155.01286.51330.150.9103.4Railway345.0175.4161.1140.2137.739.998.3Automobile2236.0979.6954.21104.11150.451.4104.2Pipeline (oil-piping)20.631.737.941.140.9198.599.8River10.72.52.01.21.09.381.0Air0.070.020.030.030.0228.696.1* Is calculated on: "Brief statistical year-book of Kazakstan", 1996, Almaty, 1997, page 121; "Statistical press-bulletin", # 4, Almaty, 1998, page 115.

The data of table show the basic tendencies of a transport economics on all its kinds: occurring structural shifts during market transformations, demand for some particular kinds of transport by market economy, sharp recession of branch as a whole on the initial stage of reforms, some positive changes in the last two years as a whole on all types of transport, including on automobile and pipelines (piping of petroleum). These changes in volume of shipment on types of transport also depend on the tariffs on shipments. The same situation develops in the communications too.

Transport and communication concern to manufacture of services and, despite reduction of physical volume of services, cost of them can grow. So, the number of the sent letters was reduced in 1990-1996 from 379.0 million down to 38.2 million, or 9.9 times; newspapers and magazines - from 2112,7 million down to 138.6 million, or 16.7 times; parcels from 10.3 million down to 0.5 million, or 2.0 times; cables - from 23.7 million down to 4.5 million, or 5.3 times. At the same time the incomes from the basic activity of the communication enterprises have grown from 5.7 billion tenghe in 1994 up to 25.5 billion tenge in 1996, or 4.5 times. It was caused buy both the growth of inter-city telephone call services and the increase of the number of telephone apparatus in the telephone network of common use. In the structure of incomes from services, rendered by the enterprises to communication, the main specific weight (80%) is occupied by inter-city and local telephone communications.

Transport and communication have a steadily high share in production of the GDP. In 1994 they have brought the contribution into the GDP in volume o 47.3 billion tenghe (11.1%), what is much more than construction, and in 1997 - 178.9 billion tenghe (10.6%).

The market transformations in connection with the privatization in these branches have also brought to radical changes. The new managing subjects on the basis of a various patterns of ownership appeared: quantity of the managing subjects in transport for January 1, 1998 has made total of 3515, 897 of which (or 25.5%), are state enterprises, and 2152 of them (or 61.2%) are the private ones. The share of the share-based enterprises without foreign participation equals 9.2%, without foreign participation - 2.2% and foreign enterprises total 1.8%. The small enterprises make up 2370 pieces, or 67.4%, 77.2% of them are private.

At the enterprises of communication there is a little bit another situation: quantity of all the managing subjects makes 853, 484 (56.7%) of them are in state ownership, 314 (36.8%) are private. The foreign enterprises have an insignificant share, there are only 5 of them in the small business. There are 31 (3.6%) of the share holdings with the foreign participation.

The further development of transport and communication, their accelerated re-structuring and reformation are also interconnected to the investments, technical re-equipment and increase of the profitability in these branches.

2.5.5. TRADE AND PUBLIC CATERING

The branches concern to production of services and, after the transition to the market, have all the preconditions for accelerated development. Just the first stage of small privatization began from the enterprises of trade and catering. Objects of trade and catering, privatized in 1997, have reached the quantity of 1279 pieces, or 18.9% of the total number of the privatized enterprises in the Republic, in 1986 - 37.4%.

Quantity of the managing subjects in trade and catering of all the patterns of the ownership and types of the enterprises for the 1st of the January 1998 has totaled 31752, 922 (2.9%) of them are the state enterprises. The share of the share-holdings of 723 (2.3%) and of foreign enterprises of 906 (2.8%) is rather high. The small enterprises amount 30850 (97.2%), 28216 (91.5%) of them are the private ones. Data show, that the process of privatization is mainly completed, and the real basis for market transformations of the branch was created.

The market mechanism was displayed at establishment of the prices in the market due to the volumes of supply and demand. The formation of demand was in many respects caused by the reduction of the buying power of the population in connection with delays of payment of a wages and pensions and limitation of money resources at a greater part of the population. The supply of the goods was characterized by its sufficient saturation because of high import volumes.

In 1997 the retail goods turnover in all the channels of realization in the current prices has reached 326.3 billion tenghe, or 130.8% of the 1996 year level. In comparison with 1994 it has grown 6.3 times.

In these years the share of trade in production of the GDP has also increased: in 1994 - 51.4 billion tenghe (12.1%) and in 1997 - 288.7 billion tenghe (17.2%). Due to this branch contribution the specific weight of services production in the branch structure of the GDP has grown much ("Statistical Year-book of Kazakhstan". Almaty, 1996, pages 10-11; "The Statistical Press-bulletin", #4, 1998, pages 4, 10).

In 1991 the saturation of the market by consumer goods was stabilized, that was caused due to the activity of various commercial and intermediary structures, independent purchases of trade organizations and private persons. As a result the opportunities of satisfaction of demand have increased. However the demand concentrates mainly on the food products and essential commodities.

In the finished year the sale of consumer goods per capita has amounted 20 thousand tenghe. Throughout the regions of the Republic some distinctions in a consumption level of the goods are notable: in Almaty - 112 thousand tenge per capita, in Pavlodar and North Kazakhstan Oblasts - 11-12 thousand tenghe, in South Kazakstan and Kyzyl-Orda Oblasts - from 5 to 9 thousand tenghe. There is a reorientation of demand of part of the population to purchasing of the goods on the markets. Volume of realization of agricultural products and cattle has leveled 18 billion tenghe, or by 9% higher than the level of 1996.

In 1997 the catering enterprises realized own or other production for 9.3 billion tenghe, or 67.9% of the level of the previous year.

In conditions of economic reforms in the Republic the tendency of the specific weight growth of non-state sector in the volume of retail goods turnover is kept. In 1996 it has leveled 94.3%, and in 1997 - 98%. The private enterprises and individuals have ensured 83% of the retail goods turnover.

2.5.6. TERRITORIAL DIVISION OF LABOUR

According to new administrative division, since 1997 there 14 oblasts and Almaty city on the territory of the country instead of 19 oblasts and Almaty: Akmola, Aktobe, Almaty, Atyrau, East Kazakhstan, Zhambyl, West Kazakhstan, Qaraganda, Qyzyl Orda, Qostanay, Mangystau, Pavlodar, North Kazakhstan, South Kazakhstan oblasts and Almaty city. The former five oblasts have come to structure of the consolidated oblasts: Torgay oblast has partially come to structure of Akmola and Kostanay oblasts, Taldy Korgan oblast - to Almaty oblast, Zhezkazgan Oblast - to Karaganda oblast, Semipalatinsk oblast - to East Kazakstan Oblast, Kokshetau Oblast - to the structure of North Kazakstan Oblast.

The areas are located on the extensive territory of the Republic, have various natural-climatic conditions, mineral and raw resources, differ by formed branch specialization and social infrastructure, accumulated industrial and labor potential.

The largest oblasts are: Qaraganda Oblast (428.0 thousand square kilometers), Aktobe Oblast (300.6 thousand square kilometers), East Kazakstan Oblast (283.3 thousand square kilometers), Qyzyl-Orda Oblast (226.0 thousand square kilometers), Almaty Oblast (224.2 thousand square kilometers), Qostanay (196.0 thousand square kilometers). The oblasts differ by the density of the population per 1 sq. km: the highest density is characteristic of South Kazakhstan Oblast - 17.0, Almaty - 12.0, North Kazakhstan - 9.2, the lowest one: Aktobe Oblast - 2.4 and Mangystau Oblast - 2.1. The largest population is in South Kazakhstan Oblast - 1999.3 thousand persons, East Kazakhstan Oblast - 1642.3, Almaty Oblast - 1633.9, Qaraganda Oblast - 1546.3 thousand persons; the smallest is in Mangystau Oblast - 345.0 thousand persons and in Atyrau Oblast - 455.4 thousand people ("Social and economic situation of the regions of the Republic of Kazakstan", January - September of 1997, Almaty, 1997, page 13).

Share of regions (oblasts) in the total volume of the industrial production of the Republic in January - September 1997 has leveled: Qaraganda Oblast - 20.1%, Atyrau Oblast - 14.4%, East Kazakhstan Oblast - 10.0%, Pavlodar Oblast - 9.9%. According to this distribution there was similar (approximately) structure of capital investments from all the sources of financing. Thus specific weight of capital investments in Akmola Oblast (17.1%) is rather high.

At the same time there is the historical territorial division of Kazakhstan by five regions: Western, Northern, Eastern, Central and Southern Kazakhstan, each of which is submitted by the appropriate oblasts on the place of their arrangement.

The market transformations in economy and social sphere of Kazakhstan and the level of their realization will be determined by how they pass in the regions. At the present stage of the reformation the center of gravity of done reforms is crossing to the regions. The regulation of occurring processes is possible at determination of the purposes of regional policy and development of its realization mechanism. In turn, for this purpose an estimation of the starting level of the regions' development, and their typology are necessary.

In the Concept of regional policy of the Republic of Kazakhstan, developed by collective of the scientists of the Institute of Economics of the Ministry of Sciences - Academy of Science of the Republic of Kazakhstan, which was approved by the resolution of the Government of the Republic of Kazakhstan of the 9th of September 1996 #1097, a typology by the principle of specialization of regions is offered. According to the given typology four groups of the regions are distinguished:

* the first group: regions (oblasts), which have the unique stocks of mineral resources of strategic importance and a rather high impulse in intensive development of research-and-production potential, capable to integrate economy of the Republic into the global economy by accelerated rates. Thus they have extremely irrational branch structure of economy with prevalence of branches in production and partially in processing of mineral raw materials (Atyrau, Aktobe, Mangystau, West Kazakhstan, partially Qyzyl-Orda, Zhambyl oblasts, which have the average starting level of social and economic of development);

* the second group: regions (oblasts) with high research-and-production potential, clearly expressed specialization in the branches of heavy industry, with rather favorable economic conditions for creation of high technology science-capacious productions, basically self-supplied with financial resources (they act as donors in formation of the profitable part of the budget of the Republic), but have a high degree of fixed capital's deterioration and crisis ecological situation (East Kazakhstan, Pavlodar, Qaraganda, Qostanay, North Kazakhstan Oblasts, which have the highest starting level of social and economic development);

* the third group: regions (oblasts), agrarian-industrial complexes, which are the leading ones in formation of grocery fund of the Republic (Agrarian-industrial complexes (AICs) of North Kazakhstan, Akmola, Qostanay, Zhambyl, South Kazakhstan, West Kazakhstan, and Almaty oblasts);

* the fourth group - depressive regions (oblasts), which have extreme soil-climatic, social, economic, and technological conditions (which (conditions) rigidly limit the opportunities for economic maneuver), extremely irrational branch structure, and also regions of ecological crisis (Qyzyl-Orda, former Torgay, Semipalatinsk Oblasts, agricultural regions of Atyrau, Mangystau, South Kazakhstan Oblasts).

For each group of regions according to this typology the main priorities of social and economic development are determined, proceeding from real opportunities, expected investments and in view of regional peculiarities.

Starting conditions of regions are unequal: Atyrau and Mangystau oblasts occupy the 1st and the 2nd place by the production of gross added value per capita - accordingly 306.0 thousand tenghe and 223.7 thousand tenghe in 1996; and South Kazakhstan and Zhambyl oblasts occupy the 13th and the 14th places respectively - 36.6 thousand tenghe and 26.6 thousand tenghe. For the same period the highest inflation rate took place in Qaraganda Oblast - 131.9% while the average rate in the Republic war 128.7%.

By the beginning of 1997 Qaraganda Oblast took 93.5 billion tenge (or 17.9%) of debtor debts out of the total republican volume of 521.9 billion tenghe, Almaty City - 73.5 billion tenge, or 14.1%, Pavlodar Oblast - 60.4 billion tenge, or 11.6%, Mangystau Oblast - 59.7 billion tenge, or 11.4%, Qostanay Oblast - 37.7 billion tenge (7.2%) and East Kazakhstan Oblast - 32.2 billion tenghe, or 6.2%. In the total sum 1019.5 billion tenghe of creditor debts in the Republic 225.9 billion tenge (22.2%) were related to Atyrau Oblast, 155.7 billion tenge (15.3%) - to Qaraganda Oblast, 96.5 billion tenge (9.5%) - to Pavlodar Oblast, 82.7 billion (8.1%) - to Almaty city, 81.9 billion tenge (8.0%) - to Qostanay Oblast. The largest delayed sum of the debts on the wages was in Qaraganda Oblast - 6.6 billion tenge (13.7% of the republican level), in Qostanay Oblast - 5.6 billion tenghe (11.7%), in Pavlodar Oblast - 5.0 billion tenghe (10.5%).

Development of the priority spheres, attraction of the investments are necessary for all the groups of the regions during stabilization of the national economy and realization of market transformations. Only on the basis of development of the real sector of the economy, taking it out from the crisis condition it is possible to solve many social problems.

The stage of realization of the small privatization in all the spheres of the economy is generally going to finish. It is evidenced by the data on the subjects' patterns of ownership and types of the enterprises for the 1st of the January 1997. In the majority of regions the number of the private enterprises equals to 82.0-85.0%, of the total number of managing subjects, in Qaraganda Oblast they occupy a little bit less share (79.3%), and in Atyrau Oblast they take 71.7%. The share of the enterprises with foreign participation and the foreign enterprises are highest in Almaty, where it makes 7.2%, and in Atyrau Oblast - 1.8%, in the other areas it amounts within the limits of 0.5-1.0%.

The small enterprises also occupy the high specific weight in the total number of the managing subjects: in Akmola Oblast - 90.4%, in Almaty city - 94.1%, in other areas within limits of 81-85%. Thus the significant share of the small enterprises is made by the private managing subjects (85-90%). This information confirms that the market bases are created in regions.

3. SOCIAL SITUATION

3.1. SOCIAL AND DEMOGRAPHIC DEVELOPMENT OF THE REPUBLIC (1990-1997)

The market transformations in the economy and social sphere, accompanied by the crisis phenomena, recession of production, inflation and growth of unemployment, have much affected social and economic conditions of life of the population of the Republic in the transitive period.

It is well known, that the development of the population and the economy is closely interconnected and inter-conditioned. Just the human resources are the most valuable property of the country and basic subject of its social and economic development. Therefore the unconditional inclusion of problems of the population in the economic strategy will promote acceleration of rates of steady development and increase of quality of life of the people. Provision of macro-economic stabilization in intermediate term prospect and hereinafter of economic growth of the Republic Kazakhstan is inter-conditioned with expected development of demographic processes.

Demographic development of Kazakhstan during long 30-years period (1960-1990) was characterized by the steady high rates the population growth. Such course of demographic processes seemed to be regular and stable.

The stabilization of the population growth rates, coefficients of birth rates and natural growth, which were outlined at the end of the 70's, was replaced by some increase of these parameters in the beginning of 80's, that has affected improvement of a demographic situation in general. However the new tendencies, displayed since the middle of the 80's and especially in the 90's, have caused the special concern and steadfast attention of demographers, economists and the society.

In the middle of the 90's the demographic situation in the Republic sharply worsened, so it requires its estimation in retrospective and forecast of the expected short-term and long-term tendencies. Thus it is necessary to determine, how transient and permanent the demographic processes of transitive period under the influence of the social, economic and other factors.

The estimation of the given demographic situation in the Republic assumes first of all analysis of dynamics of a quantity and structure of the population. In the dynamics of the population of the Republic up to 1993, as already was emphasized above, tendency of a steady absolute growth was observed. Thus for 1990-1992 years the increase of the population has made 101.8%, the average annual rate of growth - 0.6%, in previous years - 1.2%.

For the first time the population of the Republic decreased by 43.4 thousand people in 1993, in 1994 - by 263.2 thousand, when the net migration has made -410.0 thousand people; in 1995 - 135.2 thousand people, in 1996 - 71 thousand, in 1997 - by 188.9 thousand people, or by 1.2%. 106 thousand people out of 188.9 lived in urban sites and 82.9 thousand people lived in rural areas. The growth of population was remained only in three oblasts: Atyrau oblast (by 6.4%), Qyzyl-Orda oblast (by 1%) and South Kazakhstan oblast (by 0.4%).

Population of the Republic of Kazakhstan Thousands of people, % *


YearNumber of residents by the beginning of the yearIncluding% of the total number of populationUrbanRuralUrbanRural199316913.79655.29655.25743199416870.39491.57378.85644199516607.19269.57337.25644199616471.99195.87276.15644199715860.78748.67112.155451998 (forecast)15671.88642.67029.25545* "Statistic yearbook of Kazakstan for 1995", Almaty, 1996, page 14; National Statistic Agency of the Republic of Kazakhstan, "The statistical press-bulletin", #4, Almaty, 1998, page 62.

In the last five years the population has absolutely decreased by 1241.9 thousand people. It has taken place as a result of decrease of the birth rate (factor of birth rate was lowered from 21.7 in 1990 down to 14.7 per 1000 people of population in 1997), reduction of a natural growth rate more than twice, so the gain of population is completely neutralized by the migration outflow of the population.

The characteristics of demographic development of the Republic in the last years are displayed in high intensity of occurring processes, in a natural movement and migration of the population, so it is reflected in the dynamics of its number and structure.

Population of the Republic of Kazakhstan for January 1, 1998 on the preliminary data of the National Statistic Agency of the Republic of Kazakstan has made 15671.8 thousand people, including 8642.6 thousands (55%) of urban and 7029.2 thousands (45%) of rural inhabitants. The parity of the urban and rural population on an extent of the last ten years did not change - 56.0% of the city-dwellers and 44.0% of the rural inhabitants, though in the beginning of the period the tendency of acceleration of urbanization (in 1992) was displayed - 58.0% of the urban population.

The parity of number of males and females changed to overcoming of female overweight, but by the slowed down rates. In 1987 number of females has leveled 8152.5 thousand people, or 51.4%, 4589.9 thousands of them lived in city and 3562.6 thousand people - in rural areas. Per 1000 males in urban sites there were 1103.8 females, in rural areas - 1003.6. This parameter is highest in the city of Almaty - 1163.3.

In connection with reduction of the birth rate and the growth of the migration outflow of the population, in which 2/3 are able-bodied, the tendency of growing old of the population steadily displays. This factor also renders the negative influence on a natural movement of the population, reducing the birth rate and raising the mortality rate.

Under the influence of social and economic factors and difficulties of transitive economy the people's reproductive behavior changes. In conditions of unstable crisis economic situation of transitive period the birth rate is reduced owing to fall of the vital level and material precariousness of families, absence of work, reduction of incomes, people's uncertainty in future. The material difficulties, connected to the upkeep and education of the children, cause conscious restriction of the birth rate. Traditions of many children possession are being lost not only by urban, but also by rural population. Number of third, fourth and more children of children decreases. This tendency is displayed in transitive period, but can affect formation of reproductive of behavior of people and for the remote prospect.

The absolute reduction of number of marriages also renders the negative influence on the birth rate. Factor of marriages is also reduced in connection with the changes in dynamics of divorcing. Specific weight of number non-married (officially) women's children is simultaneously increased, that creates problems of incomplete families and education of the children.

Differentiation in parameters of a level of the birth rate in urban sites is 13.6%, in agricultural areas is 20.5%. The rather high factors of birth rate are characteristic to the population Qyzyl-Orda and South Kazakhstan oblasts - 28.5 per 1000 person of the population, thus in separate years the tendency of increase of these parameters is displayed. In southern and western areas of the Republic (Zhambyl, South Kazakhstan, West Kazakhstan, and Atyrau oblasts), where the Kazakh population mainly lives, the level of the birth rate is much higher of the average republican parameter. 64.3% of all the births in the Republic fall on the Kazakh population, about 20% - on the Russians, 16.7% - on other nationalities. The significant growth of the Kazakh population has taken due to the higher birth rate and natural growth, and also immigration - returning of Kazakh repatriate-migrants to the historical native land.

The tendency of reduction of the birth rate is displayed more heavily in the northern areas of the Republic (Akmola, North-Kazakhstan, Pavlodar, and Qostanay oblasts); in Almaty there is the lowest parameter of the birth rate - 11.4 per 1000 person of the population.

Dynamics of the natural growth of the population of the Republic depends not only on the change of the birth rate parameters, but also on the mortality rate. The number deaths per 1000 persons of the population has increased from 7.7 in 1990 up to 10.1 in 1997. On the data National Statistic Agency of the Republic of Kazakhstan the general factor of mortality, starting since the second half of 1995, tends to decrease. In 1997 in comparison with 1995 the number of deaths has decreased by 8.4 thousands, or by 5%, and has equated 160.2 thousands.

The number deaths in the urban areas is higher, than in agricultural regions. Mortality of males is higher, than of females, especially among the able-bodied (3.6 times higher). The reduction of mortality in the finished year in comparison with the previous year has taken place throughout all the Republic, except three oblasts - Atyrau, Mangystau and Zhambyl oblasts. The death rate in particular regions is higher the average republican in East Kazakhstan (12.5 per 1000 of population), Qaraganda (12.2), North Kazakhstan (11.7) oblasts and Almaty (11.5 per 1000 of population).

The structure of mortality by the reasons is remained stable: 47.7% of total number of death - from illnesses of blood-circulation system, 13.5% - died from accidents, poisonings and traumas, 8% - from illnesses of breath organs. During 1997 the mortality increased from the infection diseases by 17%, from tuberculosis - almost by 5%.

In the last five years the tendency of reduction infants was outlined: in 1994 - 27.2 deaths of children in the age of up to 1 year per 1000 infants and in 1997 - 24.2. However in some regions the infant mortality is rather high: in Mangystau oblast - 40.9 per 1000 persons, in Zhambyl oblast - 30.4, in Qyzyl-Orda oblast - 29.1. Mainly the high level of newborns' mortality falls on the condition, arising in prenatal period (from 28 weeks of pregnancy, including confinement and first 7 days of newborn's life), illnesses of breath organs and inherent anomalies. It is caused by unsuccessful ecological environment, heavy working conditions and women-mothers' way of life, unhealthy image of life of some parents (abusing by smoking, alcohol, and narcotics). It has an effect on parental mortality, which is rather high in separate regions.

The reasons of children's and parents' mortality are in many respects caused by difficulties of transitive period and can be partially eliminated under condition of acceptance of effective measures on protection of childhood and motherhood, preventive maintenance of health, healthy image of life and increase in general of the index of human development (IHD).

The reproductive behavior and reproductive directives of family on possession of many children or possession of less children are formed first of all out of the direct dependence on the nationality, but by social and economic conditions, environment, way of life, traditions, women's employment, educational and cultural level, religious belief. These factors cause the regional distinctions in parameters of a natural movement of the population in the regions of the Republic. Therefore the level of birth rate in urban sites as of Russian population, so as of Kazakh is almost identical, especially in young families. The conscious restriction of birth rate grows in accordance with growth of spiritual inquiries and interests, emancipation of the women and their employment.

At the same time it is necessary to ascertain that fact, that in ethnic-demographic processes the tendency is outlined: in western and southern areas with prevalence the Kazakh population the extended reproduction can be noted, and in northern, central and eastern areas and Almaty, where mainly the Russians live the natural decline of population is noted. The formation of ethnic-demographic development of the Republic will generally be defined by the parity of these two directions in reproductive process.

The natural growth, one of the main sources of extended reproduction of the population till the present time, does not lose the importance and in the long term. Factor of the natural growth for period of 1990-1997 has decreased from 14.0 per 1000 of population down to 4.6, or 3.0 times. The reduction of the natural growth of the population has taken place in a greater measure due to the decrease of the birth rate, but not due to the growth of the mortality rate.

Sharp decrease of the natural growth of the population, which is completely neutralized by migration outflow of the population, has rendered essential influence on dynamics of the population.

The migration of the population is characterized by high intensity of occurring migration processes. The large losses of the population took place in 1994, when the balance of external migration has leveled -410.4 thousand people, n 1995-1996, when it has decreased too, and in 1997, when it has again decreased -261.4 thousand people).

Dynamics of migration in 1993-1997 Thousands of people *

YearsTotalFar abroadNear abroadinoutbalanceinoutbalanceinoutbalance1993111.3333.4-222.111.0100.5-89.5100.3232.9-132.6199470.4480.8-410.46.5105.0-98.563.9375.8-311.9199571.1309.6-238.53.1101.3-98.268.0208.3-140.3199653.9229.4-175.52.373.6-71.351.6155.8-104.2199738.1299.5-261.42.160.0-57.936.0239.5-203.5* National Statistic Agency of the Republic of Kazakhstan. "The statistical press-bulletin", #4, Almaty, 1998, page 64.

For the period of 1993-1997 there was the reduction of number of people arriving in the Republic as "Far abroad", so as from the "Near abroad"; 344.8 thousand people has arrived in total.

In interstate migration turnover (the sum of people arrived to and left the Republic) of Kazakhstan in the last five years 1997.5 thousand people participated. The basic part of the leaving migrants to the countries of near abroad is maid by the migrants to Russia - 72.4%, 2% - to Uzbekistan and Ukraine, 1.8% - to Belarus. Among the emigrants to the far abroad 18.4% went to Germany, 0.6% - to Israel, 0.3% - to the USA.

Basically migrants from the industrially advanced areas leave the Republic: North Kazakhstan oblast - 51.3 thousand people, Qostanay oblast - 39.5 thousand people, Akmola oblast - 34.4 thousand people. As the inspections show, 2/3 of the leaving migrants make the able-bodied persons, with a rather high level of education (literacy) and qualification, which were received in the Republic. It means certain losses for the society.

The external migration renders influence not only on dynamics, age-sexual structure of the population, level of its education (literacy) and vocational structure, but also on the change of structure of the population by nationalities. Migration with the states of far abroad in 1996 has given a gain of the Kazakh population by 429 persons, with the countries of near abroad - 6474 persons, in total - 6903. Number of Kazakhs in 1997 has reached 8033.4 thousand people, or 50.6% of the total population of the Republic.

The formed demographic situation in the last years requires determination and specification of the basic purposes of demographic policy of the Republic in a context with its social and economic level on prospect. The long-term strategy "Kazakshtan-2030" provides the decision of many problems, connected to the health of the population.

The further perfection of demographic policy in regional conditions of the Republic of Kazakhstan should be based on the determination of the its basic directions in view of historical development of the country, its multinational structure, peculiarity of conditions of life and culture-household traditions. At the same time it is necessary to determine top-priority of realization of measures of demographic policy at each stage of social and economic development of the Republic.

For this purpose it is important to develop the command on the most probable demographic development of the Republic in view of these factors, and also about the most desirable demographic development of the Republic, which is probable to carry out by measures of active demographic policy.

The most desirable type of reproduction of the population is the extended reproduction. A zero gain of the population and depopulation are unacceptable for Kazakhstan, taking into account its geopolitical situation, necessity of spatial crowding of the extensive territory and other factors.

The main purposes of the demographic policy are the increase of quality of life, protection of reproductive health of the population, increase of average duration of life of the people. As known, the mode of reproduction of the population with the high birth rate and the high mortality rate is accompanied by large demographic costs for the society.

The most desirable mode of reproduction of the population of the Republic in long-term prospect means stabilization of the level of the birth rate and some its increase, decrease of mortality of the children and able-bodied population, especially of men of able-bodied age in view of the shown negative tendencies.

The average duration of forthcoming life is reduced under the influence of many demographic, social and economic factors. It makes 65.3 years in Kazakhstan, males' - 60.3 years and at the females' - 70.3 years. Increase of the average duration of life up to the level of the economically advanced countries (75 years) and reduction of the difference in the given parameters between men and women population get important meaning.

Therefore the special attention is required by the problems of further strengthening of health and increase of the average duration of life, strengthening of family, of the matrimonial relations in young families (granting of the loans, credits on habitation, granting of work and etc.); creation of more favorable conditions for education of the growing up generation (maintenance of children's preschool establishments, training in comprehensive schools, sanitary rest of children, teenagers and etc.).

In conditions of formation of the market relations each family is not capable to maintain burden of all the expenses, connected to the maintenance, training and education of the children. Therefore the necessity of addressed state support to the most needy and requiring families is obvious. It is necessary to strengthen measures of moral-training character on overcoming of psychological parasitic attitude by means of mass media and TV.

3.2. STANDARD OF LIVING

The achievement of the macro-economic stabilization and then economic growth has an ultimate goal of the increase of a vital level and quality of life of the population of the country. The money incomes and expenses of the population are the major indicators of a social and economic situation in the Republic. They are in turn caused by a lot of the factors: by a condition of the economy, employment of the population, demographic situation, size and structure of family and etc.

In conditions of the transitive economy with crisis phenomena and recession in the real sector, growth of unemployment, growing old of the population the vital level of the overwhelming majority is reduced. On the data of the National Statistic Agency of the Republic of Kazakhstan the money incomes of the population have generally increased in 1995 in comparison with 1994: 315.1 billion tenghe against 121.6 billion tenghe. The money income per one family by the results of the families' budget accumulation also tends to grow: in 1994 - 27.1 thousand tenghe, in 1996 - 101.3 thousand tenghe.

The labor incomes make 72-76% of the money incomes of the population. The share of other sources of money receipts (current transfers as pensions, grants, stipends) takes 9%, receipts from all the kinds of sales - 8%, other - 10-11%. Essential distinctions in the level and structure of the money incomes of the urban and rural inhabitants are notable. The incomes of the city dwellers exceed a parameter of the rural areas 2-2.5 times. In agricultural areas a share of the labor incomes (wages) is lower, receipt from sales and current transfers is higher. In conditions of systematic delays of payment of wages and pensions in a country the important source of the incomes are the receipts from sales of agricultural production.

The level of the money incomes has significant distinctions in the regions. In December 1997 the high level the average-per-capita money income was in Almaty city (6070 tenge), Qaraganda oblast (4790 tenge), Mangystau oblast (4093 tenge), the low one - in South Kazakhstan oblast (1719 tenge) and Almaty oblast (1986 tenge).

As the basic source of the population's money income formation is made by wages, the dynamics of growth of wages and branch distinctions become the rather essential factors. Dynamics of growth of the average nominal wages in the Republic of Kazakhstan are characterized by following data:


19941995199619971997 toward 1986, %All the economy1725.74786.068528550124.1

On the National bank's average-weighted rate of the US dollar the salary has reached 113.4 USD and increased by 11.5%.

The formation of the money income of each family and its differentiation is influenced by the significant difference in the payment for labor of the workers in different branches of the economy. At the average monthly wages in the economy of 8550 tenghe the differentiation in the branches are rather essential: in material manufacture - 9244 tenghe, including the industry - 13052 tenghe, the agriculture - 3745 tenghe, the transport - 11142 tenghe, the construction - 11087 tenghe, communications - 10041 tenghe. In the branches of the non-productive sphere the average monthly wages of one worker in 1997 has made 7111 tenghe, including in the public health institutions - 5785 tenghe, in the education - 6250 tenghe, in the social support sphere - 5652 tenghe, in the culture and art - 5549 tenghe, in the science and scientific services - 8998 tenghe, in the institutions of the finance, credit, insurance - 16822 tenghe, in the government authorities - 9676 tenghe, including in the apparatus of ministries - 17401 tenghe (National Statistic Agency of the Republic of Kazakhstan. "The statistical press-bulletin", #4, Almaty, 1998, page 58).

The essential differentiation in payment for the workers' labor is also observed in the basic industries. The average monthly wages for 1997 of the workers of the fuel industry are 25542 tenghe, ferrous and non-ferrous metallurgy - 16918 and 14783 tenghe, electric power industry - 15693 tenghe. There are rather low wages of the workers of the light industry - 5716 tenghe.

Dynamics of the wages' change reflects a general tendency of growth in the economy of the Republic, and in branches. The same situation is also observed in the regions at the preservation of significant differentiation. The high level of the average monthly wages for 1997 is characteristic to Mangystau oblast (18.0 thousand tenge), Atyrau, East Kazakhstan, Qaraganda, Pavlodar oblasts and Almaty city (9.6-12.5 thousand tenghe), Akmola, Aktobe, West Kazakhstan, Qostanay and Qyzyl-Orda oblasts (7.3-9.3 thousand tenghe), Almaty, Zhambyl, North Kazakhstan, South Kazakhstan oblasts (up to 6.5 thousand tenghe).

Pensions, grants, stipends and material help are the basic source of the money income for some categories of the population. The number of pensioners in Kazakhstan in 1994 was 2954 thousands people, in 1997 - 2771 thousands people, 2086 thousands out of them receive pensions due to their age, 267.0 thousands - due to physical inability, 237.0 thousand people - due to the case of loss of the supporter. The average size of the monthly pension for 1994-1997 has increased from 121.5 tenghe up to 3283.0 tenghe.

However in the conditions of the consumer goods and services prices' rise in order to estimate the real standards of living of the population, it is necessary to compare the minimum sizes of payment for labor, subsistence wage, real wages and pension. So, on the data of the National Statistic Agency of the Republic of Kazakhstan, the index of the real wages in December 1997 against the November has made 114.9%, and by December 1996 - 106.9%. If in general in the industry the index of the average monthly nominal wages for 1997 toward 1996 has leveled 120.0%, then in total the real wages has leveled 102.2%. At the growth of the average monthly nominal wages in all the industries, the index of the real wages fluctuated in limits of 101.6%-103.2% only in ferrous and non-ferrous metallurgy, in the fuel industry, but in the other branches - in limits of 88.8%-98.3%.

At the average monthly nominal wages for 1997 in all the branches of the economy of 8550 tenghe the minimum size of the wages has made 2129 tenghe, and the subsistence wage - 3505 tenghe. The size the subsistence wage, determined by the prices for consumer goods and services, varies throughout the regions of the Republic. In the December of the last year it exceeded the average republican level in Mangystau oblast (118.9%), in Almaty (117.6%), in Atyrau oblast (109.8%), in East Kazakhstan oblast (108.2%), in Qaraganda oblast (107.8%). In the other regions the given parameter was lower than the average republican level.

In the structure of the money expenses the greatest specific weight is occupied the foodstuffs expenses (56%), the non-foodstuffs goods - 22%, services - 20%, alcohol drinks - 2% (on the data of the families' budget research in May 1997. "A statistical review of Kazakhstan", 1997, #2, page 40). In the money expenses for foodstuffs the greatest share is occupied by bread, grain products, meat and meat products, milk and milk products purchasing, the minimum share - by the vegetables, fruits, fish and fishy products. Among the non-foodstuffs goods the surveyed families purchased mainly the goods of limited validity: clothes, fabrics, footwear. Among the services more than half of expenses was necessary for payment for public and municipal services.

These data characterize deterioration of the population's life-support conditions in the transitive period. Fall of a vital level of the population and amplification of social polarization in the society occurs, so that requires a creation of reliable and effective system of social protection.

It should be directed on overcoming of the population's vital level recession and formation of social-economic bases of its stabilization in accordance with an overcoming of the crisis.

The basic directions of state regulation of the population's vital level, in opinion of the domestic economists, can be following:

* to guarantee the uniform standards of social protection; the minimum guarantees in the field of payment of labor and labor relations, pension maintenance, grants, stipends, medical service, education, ecological protection;

* to adjust the incomes on the basis of differentiation of the tax rates depending on sources of the incomes;

* to adjust the prices and tariffs on the socially important the goods and services ("Reformation of the Economy of Kazakhstan", Almaty, 1997, page 326).

The state social support comes true on the address basis, first of all, for the most socially vulnerable categories of the population, needy, many-children-possessing families, and lonely pensioners. In 1997 the government undertook emergency measures on liquidation of debts on a wages and pensions. Reform of pension support is simultaneously prepared, it began to work since the beginning of 1998. Alongside with State Pension Fund, which will carry out pension maintenance of the present pensioners, the private pension accumulating funds will be created for the citizens, which will become pensioners in future.

The social support of the indigents also goes on the line of the foreign humanitarian help into the Republic of Kazakhstan. It comes in form of products, medicines, medical equipment, clothes, footwear, first of all to schools, boarding schools, hospitals. By the end of 1997 into the Republic the goods of 3561.3 tons from 19 countries - USA, Germany, Russia, Sweden, Norway, Turkey, Canada, Republic of Korea, Uzbekistan and other countries - have arrived. The humanitarian help was directed to all the regions of the Republic.

3.3. EMPLOYMENT, LABOUR MARKET AND UNEMPLOYMENT

Reformation of the economy in the transitive period is accompanied by deterioration of a situation in the sphere of employment and in the formed market of labor. Recession of production, mass disengagement of workers, the inflation, growth of unemployment much complicate a problem of job finding and employment of the population. Under exploitation of labor of the engaged takes place in all the branches of the economy. Especially the difficult situation develops in small and medium towns, where the employment of the population completely depended on the large town-forming enterprises, and also in agrarian sector and on the market of labor in agricultural areas.

It is well-known, that maintenance of employment and reduction of unemployment are one of the most difficult social-economic problems even in the countries with advanced market system. In conditions of the accelerated transition to the market relations, when the radical transformations of the property and social-labor relations take place, when the new managing subjects appear, the certain difficulties are inevitable.

The market transformations in the sphere of employment are accompanied by reduction of the population's employment level: in 1992 - 77.3%, in 1993 - 73.8%, in 1996 - 71.3%. On the data of the National Statistic Agency of the Republic of Kazakhstan for 1997 the number of the engaged population has decreased. At that time the reallocation of the engaged from the public (state) sector into sectors of private and individual entrepreneurship, to joint ventures. Also a number of the independently engaged population grows.

The structure of employment by the sectors of the economy reflects appreciable shifts: in 1992 at the state enterprises, public organizations, in collective farms 93.1%, of able-bodied population was engaged, in agricultural farmers' (peasants') households - 0.5%, in small and private enterprises - 1.3%, in joint ventures - 0.1%, independently engaged population - 4.9%.

Data the number of the engaged in branches of the economy of the Republic for 1996-1997 reflect essential shifts:

Thousands of people, % *

19961997 (estimation)thousands of people% toward the total numberthousands of people% toward the total numberTotal employed in all the branches6518.9100.06400.0100.0Including:In the collective, private, state, joint stock, public organizations4433.668.03696.057.8In the farmers' (peasants') economies208.63.2300.04.7At the enterprises with small staff147.82.3240.03.8Independently employed population1567.524.02000.031.2Other employed population161.42.5164.02.5* National Statistic Agency of the Republic of Kazakhstan. "The statistical press-bulletin", #4, Almaty, 1998, page 50.

The branch reallocation of the engaged reflects changes not only by the ownership patterns, but also by the types of enterprises: specific weight of the engaged in agricultural farmers' economies, at the small enterprises and especially of the independently engaged population raises.

The shifts show reallocation of the engaged from sphere of the goods manufacture to the sphere of services. In conditions of stable economy the reduction of number of the engaged in material manufacture in connection with technical re-equipment of branches, restructuring of the enterprises is the usual phenomenon.

In conditions of the transitive economy a disengagement of workers occurs in connection with recession of production, bankruptcy of the enterprises. "Law on the bankruptcy" requires additions and amendments in order to make its application to solve the destiny of the unprofitable enterprises, which make 54% of their total number. As a result the legalization of incomplete employment, or latent unemployment, which makes 3.2% can take place. This is that part of the engaged population which has not formally lost relations with the enterprises, being on a mode of incomplete working hours (294), have completely stopped manufacture (555) or partially have stopped manufacture (1046). The workers of these enterprises are in compelled holidays, mainly without payment.

The analysis of latent unemployment reveals some peculiarities, reflecting cyclic character of occurring processes. In the economy of Kazakhstan, where the branches of the heavy industry and mining enterprises prevail, recession of production and the latent unemployment have general economic character, so it causes the depth of the economic crisis and difficulty of its overcoming. The latent unemployment also covers branches, which produce consumer goods: many sewing factories, shoe joint-stock associations, confectionery enterprises have completely stopped the manufacture.

The reduction of employment also occurs in organizations of branches of non-productive sphere. In 1997 the number of the workers of non-productive branches has at whole decreased by 4.9%, including in institutions of culture and art - by 17.2%, public health institutions - by 7.4%, literacy (education) - by 7.2%, science and scientific service - by 7.1%, apparatus of ministries and departments - by 2.4%.

Various kinds of employment are spread, such as secondary employment, combined jobs. Formation of the labor market is accompanied by the development of the non-standard forms of incomplete employment - voluntary and compelled.

The situation on the market of labor remains difficult, in spite of the fact that in 1997 a number of the officially recognized unemployed has decreased in comparison with 1996 by 24.9 thousand people, or by 8.8%. The rate of unemployment to the economically active population has made 3.8% against 4.2% in 1996. However in the regions significant differentiation in these parameters is observed: the highest level of unemployment is in South Kazakhstan oblast - 7.7%, West Kazakstan oblast - 6.5%, Aktobe oblast - 6.4%, Atyrau oblast - 6,3%, East Kazakhstan oblast - 6.2%, Qyzyl-Orda oblast - 5.6%. The lowest rate of unemployment is in Almaty - 0.7% (On the data of the Brief statistical directory "Regions of Kazakhstan in numbers", Almaty, 1997, page 10).

Kazakhstani market of labor situation is characterized by display of the tendencies:

* by acceleration of the rates of the unemployment growth of up to 1996. For 1991-1996 the unemployment has grown from 4.0 thousand people (0.6% - rate of unemployment) up to 282.4 thousand people (by the end of a year, rate of unemployment - 4,2%). For this period the unemployment has increased 70.6 times. In 1997 the reduction of unemployment in comparison with the previous year is observed. It is possible to explain by growth of self-employment of the population, some adaptation of it to conditions of the market, development of small business and other forms of employment, that reduces number of applications of the citizens to the services of employment on the employment question, though in 1997 their number has made 533.6 thousand people;

* by decrease of the citizens employment percent under the ratio of addressed applications - from 34.5% in 1994 down to 18.1% in 1997. It occurs as a result of de-balance of the labor supply and demand. The need for the workers decreases (by the end of the 1997 year 1905 organizations applied to the employment services - 8.8 thousand people were demanded against 9.2 thousand people in 1996). Thus 72.7% of the demanded workers make the persons of working trades;

* by segmentation of the market of labor and increase of scales of the structural unemployment. The division of the labor market by the sex, age, trades takes place; demand for separate new trades, demanded by the market economy, raises.

The change of a situation in the labor market occurs under influence of many economic, demographic, social, economic and other factors. The analysis of a usual and expected situation in the market of labor requires a complex research of these factors in close interaction.

The social portrait of the unemployed in the labor market of the Republic is characterized by the fact that 57.3% of the unemployed are females, 35.5% - youth in the age of 16-29 years. 53.9% from them are the workers, 22.2% - the employees. 44.8% of them are in the age of the greatest labor activity. There are 5.9% of the unemployed with university diplomas (with higher education), 22.6% - with average special education (special literacy), 48.2% - with average general education (comprehensive literacy), 7.3% - with incomplete average education (incomplete comprehensive literacy).

For agricultural areas these parameters are a little bit other, as well as for regions of the Republic. Among the citizens looking for work almost 99.0% make the free persons. The significant part of them is the disengaged workers; considerable specific weight is occupied by the retired at own will (fluidity of the staff, or frictional unemployment), graduates of comprehensive schools, average special educational institutions and high schools.

Such originality of structure of the unemployed certainly requires a flexible policy of employment. A main purpose of the employment policy of the Republic in conditions of transition to the market economy is an assistance in the citizens employment and increase of their social protection from unemployment, maintenance of the effective utilization of labor potential of the country and its regions.

In intermediate term prospect till 2000 in the strategy "Kazakstan-2030" as one of the priority purposes there was the struggle with poverty and unemployment, the struggle will be based on the introduction of system of the micro-credits, development of small and medium business, labor-consuming manufactures.

3.4. CONDITIONS IN SOCIAL SPHERE

The market transformations in the economy are accompanied with the reformation of non-productive sphere. Formation of the market basis in the non-productive branches and the sphere of services occurs in difficult conditions. There are also non-payments, debts on payment of a wages to the workers, absence of financial assets.

Such branches of non-productive sphere, as education, public health services, science and scientific service, in recent were on the budget financing. The enterprises and the organizations of these branches were the subjects of the state ownership. With their transition to market basis in a course of denationalization and privatization in these branches the new managing subjects appeared on the basis of variety the ownership patterns.

For the 1st January 1998 in education (literacy) there were 6136 (83.5%) state enterprises out of the total number of the enterprises and organizations of 7348, and there were 1137 (15.5%) of private enterprises, 42 (0.6%) of share-holdings without the foreign participation, 33 (0.4%) of the organizations with foreign participation or foreign ownership. 4820 (or 65.6%) of them are the small enterprises. In the number of small enterprises 3657 (or 75.9%) are the state ones and 1090 (or 22.6%) are private.

The data reflect that in the education the public sector remains the prevailing form. The share of private comprehensive schools still is insignificant. Mainly they are small and medium types of schools in public sector. Large schools, which are totaled 90, are also almost everyone state.

In the system of comprehensive education the changes occur, which are characterized by the reduction of number of schools: in the 1994/1995 educational year in the Republic there were total of 8841 schools, and in 1996/1997 - 8685, or 98.2%. Thus the schools with profound study of various subjects, gymnasiums and lyceums are created on the private basis.

Reformation of the comprehensive education takes place in conditions of display of the new tendencies in the system. Number of pupils grows by slowed down rates, and the number of the teachers is reduced.

The positive moment in the system of comprehensive schools is the increase of number of schools, conducting training in one change, and some reduction of schools, working in two and three changes. At the same time the graduation of the pupils from comprehensive schools is reduced as among those who graduates from with the incomplete comprehensive literacy, so among those who graduates with the complete comprehensive literacy, especially in the rural areas. If by the beginning of the 90's the average number of graduates with the comprehensive (special and general) literacy were 284 thousand people, then in 1996 - 198.0 thousands.

The important factor is a deterioration of a demographic situation, particularly a reduction of the birth rate, that reduces a number of the pupils. Alongside with it a decrease of the vital level of the population also negatively influences youth education, especially in agricultural regions.

In the system of special comprehensive education a steady tendency of the reduction of the preparation of the specialists with special comprehensive education was also outlined. By the beginning of 1997/1998 educational year the number of special secondary institutions (colleges) has totaled 219, that is by 45 educational institutions less, than in 1993/1994. The number of the pupils in them has decreased by 17%. Such tendency is displayed in all the regions of the Republic, except Atyrau, Mangystau oblasts and Almaty city.

Reformation of the high educational system in the Republic is accompanied by radical changes in it: a network of high educational establishments grows due to the growth of the number of private high schools. In 1997 22 educational institutions were opened, and by the beginning of 1997/1998 educational year all over the Republic there are a total number of 133 institutions, with 293.5 thousand people studying in them.

The growth of the number of the students per 10000 people of the population from 177 in 1996/1997 educational year up to 187 in 1997/1998 is observed. It occurred everywhere, especially in Almaty, where this parameter changed from 869 to 916 respectively. Such accelerated rates of the reformation of the higher education system are caused by many factors: by demand of the market economy for the experts of new trades (managers, marketing specialists, lawyers, financiers and other), available material base (buildings of educational institutions, equipment and etc.), presence of the qualified staff of the highest qualification on many directions of the science.

Upon estimations of the foreign experts one of major factors of economic growth of the Republic and its advantages is a high educational level of the population. Formation of the private sector in the sphere of education is still on its initial stage, therefore it is accompanied with some difficulties. This process touches the expectations of the improvement of the quality preparation of comprehensive schools' pupils, of the specialists of average and high qualification in those trades, which are demanded by the market economy.

The similar processes happen in such a conducting branch of the non-productive sphere, as the public health. This branch directly concerns to the sphere of service.

Deformation of public health assumes development of the various ownership pattern in the sphere by denationalization and privatization of medical establishments, creation of the market of medical services with introduction of elements of a competition among the doctors with the purposes of increase of quality of their service to the population.

By the beginning of 1998 the number of the managing subjects in public health is totaled 3431, 2000 (58.3%) of them are state, 1363 (39,7%) are private, 34 (1.0%) are the share holdings without foreign participation and 34 of them (1%) are share holdings with foreign participation, 34 are in foreign ownership. More than half of hospitals and polyclinics are still in public sector, hardly more than 1/3 - in private sector. The share of other types of medical establishments is insignificant.

The small medical establishments make 67.2%, 56.4% of them are private.

Dynamics of the basic parameters of the republic's public health service development reflects reduction of the number of the doctors of all specialties and paramedical personnel: in 1990 - 68.9 thousand doctors (per 10000 people there were 41.2 doctors), in 1996 - 59.6 doctors (per 10000 people - 37.6 doctors), paramedical personnel: accordingly 207.3 thousand persons (per 10000 people - 123.9) and 148.3 thousands (per 10000 people - 93.6). For this period there was the absolute reduction of the number of hospital establishments, and of the quantity hospital beds.

In non-state hospital organizations the number of beds is generally 4 times less, than in state ones. The development of private medical establishments instead of state is one of the factors of reduction of this parameter. On the data of the single statistical survey, done in the middle of the last year, it is revealed that in the Republic in 1996 there were 27 non-state medical establishments. Most of them (19) function in East Kazakhstan oblast (all of them are on the territory of former Semipalatinsk oblast).

In comparison with non-state hospital institutions, the network of non-state ambulant-polyclinic institutions is developed wider, there were 223 of them in 1996. Among the individual practice medicine services the most widespread kind of services are dental, then - therapeutic and other services.

The weakly developed network of non-state public health organizations and private persons, who provides medical services, does not create competitive environment. It does not in turn promote the increase of quality of services to the population and decrease of charges for medical services. The market of medical services is still at the stage of formation.

The market transformations in sphere of the science and scientific service mean choosing of the branch's development model on the basis of determination of new priorities, overcoming of technological backlog of the domestic science from the world standards, reorganization of organizational structures of academic institutes of fundamental researches and branch institutes with applied researches. In the plan of the branch reorganization the merge of the Ministry of a Science and New Technologies with the Academy of Sciences is carried out. The concept of scientific-technological development of the country is developed, the basic priorities of the Kazakhstani science are determined. In the end of 1997 with the help of independent multi-step examination the competitive selection of the research projects for their financing was done for the first time. Thus transition to the program-target method of organization and financing of all the fundamental and applied researches was carried out. It was the early stage, which has brought the spirit competition to the sphere of a science (A. Nysanbaev. "The Market and Kazakhstani Science", in the newspaper "Science of Kazakstan", #6, March 16-31 1998).

The process of privatization and appearance of private organizations in the sphere of the science and scientific service occurs more rapidly, than in public health and education. So, for January 1, 1998 out of 3026 organizations in the science and scientific service the state ones make 694 (22.9%), private - 2191 (72.4%), share holdings without foreign participation - 79 (2.6%), share holdings with foreign participation and foreign enterprises - 62 (2.0%). The small enterprises occupy the significant specific weight - 90.8%, small state enterprises in their total number - 17.4%, non-state scientific establishments - 78.2%, with foreign participation and foreign enterprises - 2.2%.

In a course of reformation the changes in dynamics of the branch's development parameters occur. In 1990 the number of scientific establishments equated 279, 108 of them in Almaty, in 1996 - 274, or 98.2% toward the level of 1990. The number of the scientific employees in the country for this period has decreased from 39.4 thousand people down to 17.4 thousands.

The volume of technological work, carried out in the country per a year, in 1993 has made 109.2 million tenghe, including in Almaty - 53.3 million tenghe, and in 1996 - 5148.7 million tenghe and 2031.3 million tenghe accordingly. Growth of volume of technological work in the Republic has grown more than 47 times, and in Almaty - 38 times.

The increase of volume of carried out technological work was accompanied by increase of their efficiency. If in 1993 the technological activity of the scientific branch's establishments was unprofitable (the profit, or, more correctly, the loss has reached (-142.5 thousand tenghe), then in 1996 the profit has reached 442.2 million tenghe. ("Regional statistical year-book of Kazakhstan", Almaty, 1997, pages 261-262).

These data characterize positive shifts in development of the science of the country, despite certain difficulties with financing, reduction of number of scientific establishments and science officers, decrease of prestige of scientific labor.

The science of Kazakhstan has huge achievements in the fields of geological, mineralogical and mining sciences, heyday of which is connected to the academician of the Union and the republican academies of sciences K.I. Satpaev and other outstanding scientists, who created Kazakhstani scientific schools.

The enormous scientific results were achieved in the field of physical and mathematical sciences under the direction of the academician K.P. Persidskiy, a Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan E.I. Kim, in the field of metallurgy - Academician L.P. Nee, in medicine - scientific school of allergologists and immunologists of Academician N.D. Beklemishev, in biology, chemistry, history, philosophy, linguistics and other areas of the science.

After acquisition of independence by Kazakhstan and entry to the global community the scientific international contacts extend. The opportunities of active participation of the conducting scientists with their projects in competitions, which are hold by international scientific funds and organizations, with the reports on the world scientific forums are appeared.

Radical reformation of the science implies creation of the market of the scientific articles, development of informal creative communities and appearance of the scientific business. The scientific potential, accumulated for many decades in the Republic, and display of the new tendencies in this sphere create the major preconditions for informational and technological progress in conditions of the market.

3.5. FOREIGN TRADE, EXPORT AND IMPORT

The formation of the Republic of Kazakhstan as the sovereign state and the development of the economy on the market basis created the real conditions for expansion of foreign economic relations of the country into the world community. In the field of foreign trade Kazakhstan cooperates with many countries of all the continents. In 1996 in total exports of the goods of the Republic the export to the countries of Europe took 26.4%, and import - 18.3%, to the countries of Asia 16.2% and 9.4% respectively, Africa - 0.1% and 0.06%, America - 1.5% and 2.5%, Australia and Oceania - 0.006% and 0.01% accordingly.

The closest economic relations Kazakhstan has developed with the states of the CIS, their share in total volume of the goods turnover takes 62%. The basic trade partners in this group of the countries are Russia (49%), Ukraine (3%) and Uzbekistan (3%). Into the countries of the CIS 91% of all the exported articles of food and raw materials for their manufacture were exported, 68% of mineral fuel resources, 69% of the chemical goods, 91% of machines, equipment and transport means. From the CIS countries 92% of fuel and energy resources were imported into the Republic, 75% of production of a chemical industry, 57% of technical means.

In the republic's foreign trade turnover with the European countries the largest specific weight is occupied by Germany (4%), Netherlands (35%) and Great Britain (3%). In Asian region the largest volumes of the trade turnover has developed with China (5%) and Republic of Korea (2.5%). The basic articles of export are the delivery of mineral products (38%), production of metallurgical manufacture (31%), foodstuff goods and raw material for their manufacture (12%). The import is represented by machines, equipment, transport means, devices and apparatus (30%), fuel and energy resources (21%), chemical production (15%) and articles of food (13%).

In structure of the export there are the considerable appreciable shifts occurring: export of fuel resources (mainly of petroleum and gas condensate) is increased, share of production of metallurgy decreases. In the import a share of fuel and energy resources due to the reduction of deliveries of natural gas, electric power and petroleum is reduced. Such changes are not always caused by demand for the goods, but also by non-payments and double taxation on them, so it is negatively influences the mutual trade relations.

Dynamics of the foreign trade turnover parameters shows, that for rather short period of time of 1994-1997 the turnover has grown from 6791.9 million dollars of the USA up to 10641.4 million dollars, or by 56.7%. In 1997 growth of the turnover in comparison to 1996 has leveled 101.4%. At that time the export increased faster, than the import. As a result the foreign trade turnover balance in 1994 was (-330.5 million dollars of the USA), and in 1997 - (+ 2091.2 million dollars).

Such positive shifts in the republic's foreign trade turnover with the foreign partners can be even more essential at increase of the world prices for petroleum, grain, which are the most important export goods of Kazakhstan. Prices fall down on the world markets for petroleum and grain has affected decrease of the export opportunities of the Republic.

4. MODERN KOREAN DIASPORA IN KAZAKSTAN

4.1. SOCIAL AND DEMOGRAPHIC CHARACTERISTIC

The Koreans represent the latest ethnic component of the multinational population of Kazakhstan. In the autumn of 1937 there was a violent, forced, mass-transmigration of the Korean population from the Far East Krai (territory) into the regions of Central Asia and Kazakhstan.

4.1.1. MIGRATION AND GEOGRAPHY OF LOCATION

Deportation of the Koreans was carried out under the Resolution #1428-326s of the Council of the National Commissioners of Union of the Soviet Socialist Republics and Central Committee of the C.P.S.U. (B.) of August 21, 1937 "About eviction of the Korean population from boundary regions of the Far East Krai", which was signed by V. Molotov and I. Stalin. According to the brief preamble of this resolution the deportation of the Koreans was planned "in purposes of suppression of the Japanese espionage penetration into the Far East Krai". As a matter of fact the fatal role was drawn by many circumstances, which induced Stalin to give the order about forced, mass-transmigration of 200 thousand peoples for thousands kilometers.

These circumstances can be conditionally divided into two groups: external and internal political circumstances.

To first group circumstances includes:

1. Annexation of Korea in 1910 and announcement that Korea is a Japanese protectorate;

2. Japanese intervention on the Far East in 1918-1922 years;

3. Incident in Manchuria in 1931 and formation of the puppet state Manchou-go by the Japanese protege - emperor Pui in 1932;

4. Adoption of the "Instruction for the national defense of the empire", in which the Soviet Union (as well as the USA) is announced the enemy number one by the Japanese government in the June of 1936;

5. Signing of the Japan-German Anti-Comintern pact in the July of 1936;

6. Military collisions, provoked by the Japanese militarists in the July of 1937, on border with China.

Thus, it is possible to sum up, that in 1937 there was the real military threat from the imperialistic Japan, which demonstrated the activity on expansion of spheres of the influence in regions of the Far East for a long previous period. However this circumstances are impossible to be considered as one of the justifying reasons for the mass-transmigration of the Koreans.

The circumstances, formed in the country by 1937, were caused by whole cumulative social, economic, national and cultural policy of Stalin's dictate. Now it is widely well-known that Stalin didn't trust all the national minorities living in the USSR, everybody knows his great-power chauvinistic course on termination of nationalism of all the deviations and directions. By 1937 the Korean population was considerably integrated into the political, economic and cultural life of the Far East Krai. However the character of their spatial accommodation - rather compact regions with significant or prevailing specific weight of the Korean population - has probably caused anxiety, complicated the daily control for "Unreliable people".

Violent transmigration of the Koreans deep into the country for thousands of kilometers far from the borders of Korea and Manchuria also pursued the certain political and economic purposes. It is possible to assume the following: at first, the transmigration into Central Asia and Kazakhstan, the area of which is tens times as big than the territory of the Far East Krai, automatically meant the dispersion and smashing of groups of the Korean population in the regions of settling. At second, as a result of felonious methods of the forced, continuous collectivization without taking into consideration the specific way of living in Kazakhstan and Central Asia the millions of people perished, and hundreds of thousands wandered out of the limits of their republics and the country. Direct losses in 1931-1933 years from famine, epidemics and other deprivations only in Kazakhstan have reached 1700 thousand of people. 1030 thousands migrated out from the limits of the Republic, including 616 thousands, who left the country irrevocably. Thus, the sharp deficit of labor resources has arisen here, so it was partially filled up by the migrants, in this case by the Koreans. Among the other conclusions, it is possible to assume, that the accommodation of the settlers mainly in the southern areas of Kazakhstan and the republics of Central Asia provided a concentration of migrants on the traditional agricultural activity: rice-growing and vegetable-growing.

Historical researches of the last decade, and also the memoirs the Koreans of the senior generation have opened a picture of severe, anti-humane conditions of the deportation and all the deprivations of the first years on the new land. However the archival materials also contain the information on the help of the Kazakhs to the migrants, but the national memory keeps the kindness of those who gave the shelter, saved from famine and cold incomparably more fully.

On the report data of the Region (Oblast) Executive Committees for 1st December 1938, the 18 525 Korean economies were settled as follows:


Almaty Oblast4191Qyzyl- Orda Oblast7613Qaraganda Oblast1225Aktobe Oblast758Qostanay Oblast1040Atyrau (Gur'ev) Oblast1075North Kazakhstan Oblast778West Kazakhstan Oblast512South Kazakhstan Oblast1269

The average statistical Korean economy (family) consisted, in opinion of the soviet ethnography specialists, down to the beginning of the 80's of 5-7 persons. Our estimations, made on the basis of the account records and alphabetic books of the collective farms with the Korean contingent of the 50's-60's years, have shown, that the average statistical size of the Korean family was 5.5 persons. Taking into account this parameter, it is easy to calculate distribution of the Korean population on areas of Kazakhstan and their provisional total number in the Republic. As the data of the population census of 1939 were published only in a brief kind and specify an aggregate number of the Korean population in the Republic - 97 269 persons, the table of settling is given on the materials of the subsequent censuses.

The statistical data testify that in the past years there was no significant redistribution in spatial accommodation of the Koreans of Kazakhstan; particularly in the five oblasts of Southern Kazakhstan and Qaraganda oblast for December 1, 1938 there was arranged 70% of economies of the Korean settlers; by the 1959 census there was 70% living here; in 1970 - 69%. However, comparison of the given archival materials of 1937-1940 years and of the 1959, 1970 and 1979 population censuses, on the materials of regional development allows to ascertain significant reduction of the allocation compactness of the Kazakhstan's Koreans. For example, for October 1, 1938 from 4 327 economies (families) of the Korean settlers of the Almaty Oblast (including Taldy-Korgan Oblast at that time (as at present too - translator's comment) - 3 516 economies - about 18 thousand of people - were arranged in Karatal district (rayon), it made 80% of their aggregate number in the oblast, in 1959 in the district the 10 693 Koreans lived, i.e. about 50% of the Korean population of the oblast. The share of the Koreans of Karmakchinskiy, Syrdaria and Chiili Districts in the aggregate number of the Korean population of Kyzyl Orda Oblast has decreased from 3/5 in 1939 down to 1/10 in 1979; in the Qostanay district of the Qostanay oblast - from 2/3 down to 1/15; in Dengiz and Baksay districts of the Gur'ev oblast (Nowadays Atyrau oblast - translator's comment) - from 3/5 down to 1/10 and etc.

The largest specific weight of the Korean population in the Qyzyl-Orda oblast was: in 1939 - 12.8%, in 1959 - 4.4%, in 1970 - 2.73%, in 1979 - 2.2% and in 1989 - 1.9%, which occupied in the inter-census period of 1939-1970 years the third position by the number of people among the nationalities living in the oblast. In all the Southern Kazakhstan areas the specific weight of the Korean population exceeds the average republican level.

Conducting the account on the administrative districts of the Kazakhstan's oblasts this way, it is possible to see the more particular phenomena and to reveal general patterns of the Korean population allocation in the Republic. The difficulties in the research of questions of dynamics of spatial accommodation of the Koreans in Kazakhstan consist, first of all, in insufficiency, fragmentation of the ethnic-statistical material and, secondly, different changes in the administrative division of the Republic, since some districts (the oblasts) were abolished, other merged, the third were transferred to other areas.

4.1.2. MIGRATION PROCESSES

The qualitative change in allocation of the Koreans in Kazakhstan consists in their intensive outflow from village to city (from rural areas to urban ones), the rates of which exceeded the average republican parameter. In the researched period the Korean population of the Republic urbanized by accelerated rate as a result of the migration from village to city, change of the administrative status of the certain inhabited sites and natural growth of the number of the Koreans-city-dwellers.

In the 60's-90's in Kazakhstan the traditional branches of industry heavily developed and the industries appeared, settlements, and cities grew: if in 1941 in the Republic there was 31 cities of the republican and oblast submission and 70 settlements of the urban type, then in 1971 there was 80 and 174 of them accordingly.

The rural-urban migration of the Koreans should be considered as a component of intensive process of reallocation of the population between city and village (for the benefit of the first one) in Kazakhstan as a whole. However if we consider that in 1937-40 years the specific weight of the agricultural Korean population made up to 80 %, and by the results of the 1989 census - 84.2 % of the Koreans of Kazakhstan lived at city, the rates of rural-urban migration of the Koreans much exceed the average republican parameter.

In time the accommodation of the Korean population of the Republic on the various types of urban and rural settlements also varied, and the steady tendency of infiltration to the large cities (oblast centers) was observed, for example, in Atyrau (former Gur'ev) by 1979 86.6% of the total Korean population of the oblast lived, in Zhambyl - 71%, in Qostanay - 68%, in Qaraganda - 94.1%, in Qyzyl-Orda - 66%. The number of the Koreans in Almaty city for inter-census period of 1959-1970 years has increased in 2,5 times, and 1959-1979 years has increased more, than 4.6 times, and in the inter-census period since 1979 till 1989 - by 40%.

As the migration to city is connected to existing changes of the way of life, then the process of adaptation has complex structure, covering two basic spheres of vital ability: labor and social spheres. The more essential the distinction in working conditions and life at the sites of eviction and moving in, the potentially more difficulties to adaptation. In the connection with mentioned above the certain circuit observed in moving of the Koreans from village to city: village - small town or city (administrative center of the district) - large city (administrative center of oblast, capital). Social-psychological difficulties, as a sensation of loneliness feeling, felling of "Isolation", "Singularity of the way of life", were the reason of the Korean migrants allocation in large cities by "Cell" method, that allowed to ask for the help of the relatives, familiar and compatriots in overcoming of arising problems. Migration processes, depending on a national fitting, are very difficult to investigate, as the current registration of migration does not allow though approximately to estimate it depending on this rather important from the different points of view attribute. The development of materials of the 1970 and 1979 censuses has enabled to path the migration of the population only on the major nations of the republics.

Considering mechanical mobility of the Korean population of Kazakhstan in diachronic view, it is possible to mark the two basic migration waves. The first one is related to the period of migration from the Far East Krai and economical settlement in Kazakhstan, i.e. 1937-1940 years. The natural-climatic distinctions of the region of eviction and the region of settling, the absence of ecological conditions for traditional economic activities such as rice-growing and watering vegetable-growing, and also lacks, errors and the miscalculations in the organization of the economies and way of life of the Korean settlers on the district level were the basic reasons of mass outflow into the regions of watering agriculture of the Uzbek SSR. Particularly the migration was motivated by natural desire of the people to reunite with other members of the family and the relatives, removed to Uzbekistan.

The second wave of the territorial moving of the Koreans is related to the second half of the 50's, when it was authorized to them to return to Far East and to the Littoral Krai, and when the restrictions of the civil rights were canceled.

The essential means of territorial allocation of labor resources was the "orgnabor" (the special term of the Stalin's era, means organizational recruitment for implementing of hard work of the large value, also see "Labor Army" - translator's comment), which has twice touched the Koreans of Kazakhstan. At the first time in 1950-1953 the whole Korean contingent of the several weak and non-profitable collective farms of the Karatal district of the Taldy Korgan Oblast was removed to the districts of the South Kazakhstan Oblast for development of Zhetysay massive of the South Kazakhstan Oblast to the cotton-growing plantations. The total number of the settlers is estimated on the basis of statistical data of the archival materials at the level of 1.5-2 thousand of people. In the beginning of the 60's the delta of the Ile (Ili) river nearby the Bakanas village (Almaty oblast) were developed to the rice plantations; and in the connection with the organization of the large rice state farm "Bakbaktinskiy" about 200 Korean economies were removed from Taldy Korgan, Almaty, Qyzyl-Orda oblasts by the orgnabor method.

It is necessary to note, that some kinds of mechanical mobility of the Korean the population of Kazakhstan almost have not been statistically documented. First of all it concerns the specific for the Koreans seasonal migration (commutation), occurring as in internal, so and in the inter-republican direction. The scales, the geography, the sex, age and professional structure of the Koreans-seasonals are now possible to assume only in general. The seasonal agricultural migration of the Korean population can be considered in different aspects: ethnic-ecological, experience of cultivation of the certain cultures (onion, garlic, vegetables and melons and gourds); economic efficiency, i.e. cultivation of these cultures on places, instead of transportation of the ready production for significant distances; attraction of the persons of pension age to active labor and etc.

The key reasons of the high migration mobility of the Koreans were first of all economic interests, aspiration of migrants to lift up the vital level, to get more favorable conditions for labor and development of the individual.

One of the characteristics of migration behavior of the modern Diaspora of Kazakhstan as against the other non-native ethnological groups is the complete absence of repatriation to the historical native land. The insignificant part of the young Koreans temporarily leaves the Republic for study or for work in the Republic of Korea and few tens of persons have set off to other abroad countries for constant residing.

4.1.3. DYNAMICS OF POPULATION NUMBER

Dynamics of the number of the Korean population, defined by the change of the reproductive behavior, natural loss, and inter-republican territorial moving is reflected in the following table #1.

In the inter-census period of the 1939-1959 years the significant reduction of the number of the Korean population of the Republic has taken place: in the absolute figures by 23 277 persons, i.e. almost by one quarter. Besides the mass outflow from Kazakhstan to the Uzbek SSR of the Korean-settlers during the economic settling period of the 1937-40 years, the Korean population was reduced owing to a number of the concrete-historical reasons.

Table 1. Dynamics of number of the Korean population (2.5%). The basic articles of export are the delivery of mineral products (38%), production of metallurgical manufacture (31%),arations and etc.

Presence of the data about various demographic events among the Koreans in Kazakhstan during 2 years (1938 and 1939) allows to use calculation of demographic factors by the method of the analysis of processes, occurring in the population.

Factor of birth rate among the Koreans exceeded average factor in Kazakhstan, which made up in 1937-38 years 42.4 persons per each thousand people. Factor of mortality exceeded the average parameter in the Republic almost twice: in 1937 the mortality rate in Kazakhstan leveled 18.3 persons per each 1000 of the population, and in 1938 - 16.3. Especially high factor of the mortality rate is among children, or, to be precise, among the infantile age group, which exceeded the average parameter of the Soviet Union.

In the years of the Great Patriotic War many men of the Korean nationality were labor-mobilized for the industrial enterprises, mines, construction of the defensive, engineering structures and etc, owing to that it is possible to assume the lowered child-birth rate in this period.

The above-stated concrete-historical circumstances have much eased the demographic growth potential of the Korean population of Kazakhstan, that was displayed later in the inter-census period of 1959-1970 years.

High mortality among the Koreans of Central Asia and Kazakhstan was marked by all the Koreans-knowing ethnographers, who did not put the special problem of researching the demographic processes. The analysis of archival materials of the account records books of collective farms with the Korean contingent of the population generally confirms a statement about traditional many-children-possessing of the Korean families, consisting on the average from 3 up to 3 5 children In agricultural regions there are rather many families with 5-6 children.

Some indirect parameters testify the beginning reduction of the birth rate among the Koreans, as well as among a number of the other nationalities. First of all it concerns to increase of the marriage age. In the end of 19th - the beginning of 20th centuries the normal age for the Korean girls, entering in a marriage, was 16 years. In the researched period the share of entering in a marriage in the age of up to 20 years was constantly reducing. It is possible to name and such an indirect parameter of change of the generative behavior as a reduction of the active reproductive behavior, i.e. the concentration of births in the narrower and narrower age interval. One more indirect parameter of the reduction of the birth rate - is a spreading of the practice of intra-family regulation of the birth rate. The educational level, the degree of women's involving into the public manufacture also has an effect for differentiation of the birth rate. The spontaneous reduction of norms of many-children-possessing among the Koreans of Kazakhstan, reducing of them down to possessing of the average and low number of children, was promoted by the gradual reduction of children's mortality, factor of which in the USSR in 1940 made 181.5%, in 1950 - 80.7%, in 1960 - 35.3%, in 1965 - 27.2%, in 1970 - 24.7%. The mentioned circumstance has deprived necessities of securing of the population's self-preservation and natural reproduction by means of the high birth rate.

At the absolute growth of the Korean population of Kazakhstan in the inter-census period of the 1959-70 years of 7.5 thousands, its specific weight has decreased from 0.8% down to 0.6 % in connection with sudden change of the total number of Kazakhstan's population from 9 205 thousands up to 13 million in 1970, caused by both natural growth and intensive inflow of migrants from the other Union republics.

The inter-republican migration, namely outflow to the other Union republics, influenced on the dynamics of the number of the Korean population.

In the inter-census period of the 1959-70 years the growth of the Korean population of Kazakhstan was lower than the average Union level. At the same time the number of the Koreans in Kyrgyz SSR has increased 2.5 times, in Tazhik SSR - 3.5 times, in Turkmen SSR almost twice, that is explained by the intensive inflow of the Koreans-migrants from Kazakh and Uzbek SSRs. In this period a settlement of the seasonal migrants in the other Union republics began in Ukraine, Moldova and other republics. In Ukrainian SSR more than 6 thousand Koreans lived constantly by the results of the 1979 census.

The influence of inter-nation marriages to the character of ethnic-demographic processes among the Koreans of Kazakhstan was not an object of special consideration till now. Addressing to changes of the spatial accommodation of the Koreans in Kazakhstan, it becomes obvious, that large cities of Republic become centers of their concentration first of all. As well-known, besides other social consequences the urbanization makes the direct international dialogue objectively necessary, as the overwhelming majority of the enterprises and establishments are multinational labor collectives.

The intensive international dialogue during labor activity corrects ethnic stereotypes, liquidates national biases and proceeds then in the family-household sphere and in the personal communication outside of the work. It can be certified by the increasing specific weight of inter-nation marriages among the Koreans of Kazakhstan. If in the 30's-40's they had incidental character, at the present moment the inter-nation marriages represent essential aspect of the ethnic development of the Koreans. By the archival data of the Civilian Registrar's Office of Almaty in the 90's the share of inter-nation marriages among the Koreans has reached about 40%.

By the 1989 census data in Kazakhstan there were 71.8 thousand Koreans being married, about 6 thousands of widowed and 4.2 thousands of divorced. Among the divorced 84.7% are women and 70.5% of them are in the age of 60 years and more. Two thirds of the divorced Koreans are the women and one third are the men.

4.1.4. SEX, AGE AND SOCIAL STRUCTURE

The materials of the 1989 population census give the data on the distribution of the Koreans of Kazakhstan by the sex and age. From the total number of 103 315 persons in Kazakhstan there are 29797 children in the age of up to 14, 13402 people of the 15-25 years age group, 35419 people with age of 25-45 years, 17896 people - 45-65 years, 6801 persons who are senior than 65 years. In general almost one third of the Koreans has age up to 16 years, about 57% are able-bodied and 13% are senior than able-bodied. If we divide the age groups by decades, then the most numerous are the children with age up to ten years and young people with age of 30-40 years, which make one fifth each of total Korean population. It is possible to assume that at present the numeral overweight moves toward the age groups of 10-20 years and 40-50 years accordingly. The data on the age groups with a five years step and sex differentiation are shown in the following table.

Table 2. Distribution of the Koreans of the Kazakh SSR by the sex and age by the materials of the All-Union population census of 1989

AgeBoth sexesMaleFemaleAll the population103 31551 11152 204Including the ages of0-410 1185 1394 9795-910 1155 0955 02010-149 5644 8814 68315-197 5693 8643 70520-245 8332 9292 90425-298 1234 1034 02030-349 8255 0334 79235-3910 6325 2395 39340-446 8393 4273 41245-494 7772 4452 23250-544 5432 2242 31955-594 7082 3022 40660-643 8681 7322 13665-692 7161 1831 53370 and older4 0851 5152 570From the total number of the population:younger than able-bodied31 51115 96915 542able-bodied58 72930 17228 017older than able-bodied13 0764 4308 646

The process of reduction of the birth rate, beginning in the last decade, is characteristic to all the peoples of Kazakhstan, including the Koreans. The sharp reduction of the birth rate has been universally spread as among the city-dwellers, so among the rural population. It is possible to be sure, that the worsened economic conditions and the increased requirements to the quality of life will hereinafter define the reduction of the birth rate factor. On the other hand the worsening of the ecological, stress-creating situation, the easing of the social protection of the population and etc. determine certain reduction of the average duration of life. At the present moment the steady tendency of increase of the mortality is observed. Thus in the subsequent decade the deterioration of the age structure of the Korean population is predicted. By the data of the 1989 population census the distribution of the Koreans by the age groups reminds consistently assembled children's pyramid: from the widest disk at the basis to the narrowest at the top:


70 years and older3.760-695.550-598.640-498.830-3915.220-2917.610-1918.50-922.1All the population100%

In the long term the basis of the demographic pyramid will become narrower, and the center of "gravity" will move to the middle, so it will result in the instability of the ethnic-demographic figure. However the present demographic potential, expressing in the large number of the young, able-bodied and in future reproductive contingent, allows to hope that in 20-30 years in the case of improvement of all the sides of the social, economic and political situation in the country, increase of the standards of living and influence of other positive objective preconditions and subjective factors the demographic behavior of the Koreans, as well as of the other nations of Kazakhstan will be optimized, that will by all means have an effect as on the dynamics of number, so on the age structure too.

The analysis of the social structure of the Korean population of Kazakhstan faces objective difficulties, consisting in the absence any representative, systematized empirical material, because in the state forms of the statistical accounts the Koreans considered in the column "And others", so the and special ethnic-sociological researches in this field have not been carried out yet.

Proceeding from the present data it is possible to make the following preliminary conclusions. At first, the share of studying youth is very high, it makes more than 20% from the total number of the Koreans. At second, the absolute prevalence of the urban population and other indirect facts confirm a presence of the wide social layer of the people of intelligent labor. At third, the number of the qualified industrial workers and workers of physical agricultural labor is rather insignificant. At fourth, the factor of residing place in urban or rural environment is not the criterion of the social affiliation for the Koreans, as the significant part of the Koreans in rural areas belongs to the layer of employees of culture, education, public health, experts of agricultural economies and etc. In turn up to the recent times the considerable group of the city-dwellers, including the metropolitan Koreans inhabitants didn't break their seasonal agricultural activities. At fifth, the transition from the planned socialistic economy to the market relations has caused accelerated social dynamics of the Korean population. In the past decade a layer of the small and medium entrepreneurs, which took up the future scientists, culture, art, education employees and etc., has much grown as in the quantitative and so in the qualitative relation. At sixth, the significant decrease of the Korean students' number is observed. This phenomenon is caused by such reasons as: fall of prestige of higher education and qualities of the higher education, introduction of the chargeable form of studying, transition of the preparation of many specialties in universities to the state language, change of value orientations, decrease of the motivation level etc. At seventh, the tendency of reduction of the state and various budget establishments' employees' number (of the Korean nationality) assumes to be steady.

Thus, since the moment of violent resettlement of the Koreans from the Far East Krai to Kazakhstan up to the end of the 90's, there were the significant changes as in the dynamics of their number, and in the geography of their allocation in the Republic.

The Korean population of Kazakhstan in this period is characterized by the high degree of territorial mobility as of inner, so of the inter-republican direction. The territorial movements of the Koreans within the boundaries of Kazakhstan first of all mean their participation in the rural-urban migration of the whole population of the Republic. Participation of the Korean population in inter-republican migration has both seasonal (commutative) character, and results in change of the constant residence. In the observed period there were the large changes in character of the reproductive behavior of the Koreans of Kazakhstan: from many-children-possession of the rural population to short-children-possession of the urban one. The reduction of a level of the birth rate becomes peculiar for young families of the rural Korean population. The mortality rate has much decreased, in particular children's (infants') mortality, the average duration of life has increased. Though the demographic processes have certain autonomy and, by virtue it were the objects of the special analysis, but finally they are determined by the social, economic and cultural factors. So the striking changes in public life of the country of the last decade will not pass without leaving a trace for the Korean Diaspora.

4.2. NATIONAL AND CULTURAL DEVELOPMENT AND ETHNIC PROCESSES

4.2.1. EDUCATION AND NATIVE LANGUAGE TEACHING

Changes in the cultural sphere have a great significance for social-economical and ethnic processes in our country. But national-cultural and ethnic life of the Kazakhstani Koreans had its own pre-history which one should be noted. The Great October revolution's victory and Soviet power establishment created pre-conditions for solution of problems of the national and cultural construction and accelerated processes on wiping of illiteracy on the basis of mother tongue and Russian language among Far East Koreans, national literature and art development.

Exaggerations and mistakes in the national cultural policy in 1920-1930 have naturally influenced into the development and deepening of public education system, professional artistic culture among Soviet Koreans. But significant successes have been achieved in the eve of the violent migration, especially in the field of enlightenment: 300 schools of different level, 2 Korean Pedagogical College have been worked, Korean Pedagogical Institute has been set up in Vladsivostok in 1931, there were Korean departments at the Far East University, High Communistic Rural School.

Deportation of Koreans into Kazakhstan and Central Asia made an irreplaceable damage in the national culture development. Following then hypo-centralized, administrative-command policy towards all national minorities led to all kind deformation in the field of spiritual culture, consequences of which is arisen sharply at the modern stage of the common incentive of the ethnic self-conscience, ethnithity growing up of all nations of our multinational country.

After re-settlement in Kazakhstan there were set up Korean national schools in the system of public education in Kazakhstan. Under the Decree of the Soviet Union Communist Party Central Committee of 24 January 1938 "About National schools re-organisation" Korean Schools as all other "national" ones were re-formed into " the ordinary type soviet schools". Kazakhstan Communist Party Central Committee Decrees #49 and #60 dated 8th April 1938 have liquidated Korean Pedagogical College in Kazalinsk and Korean Institute in Qyzal-Orda " tuition in Korean have been converted into the Russian".

In 1946-1950 native language teaching has been practiced practically in all schools where Korean pupils predominated. At that period there were some favourable conditions such as maintenance of the Korean rural people large compact areas , having tutors staff, Korean language manuels, dictionaries and phrase-books. But situation became worse towards middle of 1950, Korean language lessons have been practically disappeared in the schools' programme in Kazakhstan. At the end of 1951 attempt to develop Korean language study in the schools of the Koreans compact dwelling have been made. Kazakh SSR Council of Ministers Decree of 11 July 1958 and accordingly an Order of the Republic Enlightenment Ministry 3149 of 22 July 1958 were directed to the present situation improvement.

But Korean population settlement geography alteration, formal character of so important event of the language policy, non-responsibility and non-initiatives of the regional people education departments, lacking of the qualified staff - teachers who know both Korean and Russian well, and also well corresponding method of teaching, significant lacking of study programmes, text-books and school dictionaries have made impossible the fundamental improvement of the Korean language teaching. Although some shifts took place.

Administrative-command system ignored the national needs including education development. A number of violent actions against minor nations incompatible with declared in words adherence to the internationalism and respect of all peoples and national minorities equality in rights has been done. Active spreading of Russian language and Russian culture made in large scale, rights of a number of ethnic groups and nationalities were infringed upon.

At the same time Russian teaching at schools expands significantly the youth opportunity to get higher education. In 1993 all 250 students including the second year course ones have been studying in the four faculties of the K????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????tlement of the seasonal migrants in the other Union republics began in Ukraine, Moldova and other republics. In Ukrainian SSR mo????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????become centers of their concentration first of all. As well-known, besides other social consequences the urbanization makes the uth and girls studied at the 43 higher education institutions of the Kazakh SSR.

Issues of enlightenment and education is closely linked with development and functioning of the national language. Ethnic and language behaviour alteration of the Kazakhstan Koreans is obviously seen from materials of the Soviet Union census of population in 1959 and 1989.

Table 1

LanguageMother TongueRussian KazakhYears195919891959198919591989Total:5493953420190114960425151Proportion72,451,827,549,2--

Table shows that ethnic and language processes of the Kazakhstan Koreans are characterized by two interconnected tendencies: Russian language dissemination and mother tongue maintenance. Share of the persons indicated Russian as the mother tongue has been growing quantitatively in qualitative relation.

Long time period of joint dwelling of the Kazkhs and Koreans was regularly reflected at the innovations of the ethnic and language behaviour. According to the data of 1970 census of population 490 Koreans in the republic had a good command in Kazakh language, but in 1989 - 1006. But in real life number of Korean knowing oral Kazakh was significantly more indicated data. International marriages, national and mixed families, dwelling of some Koreans separately among Kazakhs and other factors became the reason of that in 1989 151 Koreans have accepted Kazakh as a mother tongue.

Languages interaction has been also shown in loan-words of Kazakh into Korean appearance, more into the oral and less into the literature. Kazakhisms involved into the Korean language are connected with mode of life, culture, Kazakh people history. Differences in life style, customs, traditions, religion and joint life pre-determined adoption of that words for which in Korean Language there were not equal words. For the first time lexical loan-words were connected with knowing of Kazakh ethnonims, toponims, first names. subjects and categories of ethnic culture: names of relationships system (agay, apa and etc); calendar and life cycle holidays (hauryz, toy); objects of the national closes, house (malakhay, chapan, yurta), Kazakh meal (besparmak, ayran, kumys and etc.).

At the end of 80 -beginning 90th boom of the mother tongue has been emerged among all, without exemptions, ethnoses of Kazakhstan. Korean cultural centers, mission's churches, enthusiasts-teachers at the schools and kinder-gardens tried to teach people to read and communicate in "mother tongue". Here is some comparative data on Korean language teaching arrangement in the South Kazakhstan region. In 1989 Korean language was studied in the 3 schools, 6 groups by 75 students, but in 1996 accordingly in 11,24, and 300. Since 1994 adults in the courses of Kazakhstan Korean Center, pupils in special groups of two gymnasia and in one kinder-garden were studied Korean language. Totally in 1989 number of students learning Korean was 75, and in 1996 - 615, number of teachers was growing up from 3 to 14.

In the Taldy-Qorgan region there were set up 20 groups for that people who wish to learn Korean. In Ushtobe city Quanzguy school was open (Director Jun S.G.), building, furniture and equipment of which were bought by Korean businessmen. Children library with a set of belles-lettres and literature for study, dictionaries and journals getting from Korea was organised at school. Lingua-phone cabinet was presented by head of the regional administration.

Generally in 1992 about 3 thousand people were involved into Korean language study, in 1994 - more than 5 thousands. In 1995-96 study year Korean language was taught in 17 Kazakhstan schools, where 1450 students in 95 groups were united.

At present, in Kazakhstan there are Korean divisions at the Orient Study Faculty of the Al-Faraby Kazakh National State University, Philological Faculty of the Abai Almaty State University, Qyzyl-Orda and Ust-Kamenogorsk Universities and at the Kazakh State university of World Languages. About twenty young Kazakhstan Koreans have gone through the half year and 9 months language courses in Korea. Total number of students at the Kazakhstan universities Korean divisions is 200.

Non-valuable assistance in the access of Koreans to the national language, culture and history, training of qualified personnel of language-teachers makes Enlightenment Center of the Republic of Korea which open the doors in 1991. Mr. Shin Ghe Chehl, first Director has great desert in arrangements for the enlightenment Center's activity. More than 350 Korean language teachers were training for a whole period of the Center existence, tens of teachers participated at the courses in Seoul.

Government of the Republic of Korea in 1997 have allot significant funds for buying, repair, reconstruction and getting equipment of the big separate building in which except authorities there are a big hall with stage, library with books fund, Kazakhstan Koreans museum exposition is preparing. Vast and diverse activity programme has been planned by Mr. Sim Young Sob, Director.

When Kazakhstan Koreans language is discussed usually one says about mother tongue revival necessity and connects realization of this task with all possible problems, their delete ways or with achieved successes. But to be correct the language of our fore-fathers and people of the most elder generation is unique dialect, source of which rises up to 15 age. This dialect in every day and now in linguistic science one calls "kore mar" and its present station is close to leathal out-come. Kore Mar in Kazakhstan as by the way in other countries of the post-Soviet space is doomed to complete die and its reanimation today impossible. Thus concerning "mother tongue" one has to mean Seoul standard of the modern literary language which for modern Korean children in Kazakhstan is no less "foreign" than English or Arabic. Then modern literary Korean language may be regarded as "genetically native language, or translating directly from English - "inherited language" and finally it is not speaking about revival, but about study of "national", "genetically mother tongue", "inherited" and etc., by one word other language that still ten years before was not known in Kazakhstan.

4.2.2. PRESS AND LITERATURE IN KOREAN

It is known that in 1930 7 news-papers and 7 magazines were issued at the Far East Krai. The most mass of them "Senbon" ("Avanguard") news-paper published since 1 March 1923 and had single circulation up-to 10 thousannds copies. In connection with Soviet Koreans migration to Kazakhstan and Central Asia part of the editorial collective, fonts, typographical equipment "Senbon" newspaper were moved in Kazalinsk and two years later in Qyzyl-Orda. On 15th May 1938 newspaper was issued under new name "Lenin Kichi" and up-to 1954 it was newspaper of the Qyzyl-Orda Region Communist Party Committee. Its technical basis and staff were low up-to movement of the above newspaper edition to Almaty.

"Lenin Kichi" as periodical press for Soviet Koreans had a number of specific aspects at its activity, main of that was ethnically differential character of materials published.

Newspaper was a hearth of the Koreans spiritual life. It brought together all Korean poets and writers, poems, stories, fragments of plays, novels. Korean readers were always interested in divers information of Korean Music and Drama Theatre activity published in "Lenin Kichi".

But "Lenin Kichi" newspaper activity also has problems and shortcomings. The main problem was in that newspaper loosed its readers. In these conditions newspaper could help to everyone willing to study national language by opening appropriate rubric. But this decision was not in competence of the newspaper's reduction. On 5th March 1988 in "Lenin Kichi" first Korean language lesson was published.

In 1991 newspaper "Lenin Kichi" has changed its name to "Kore Ilbo", it has had status of international newspaper of the CIS Koreans and become weekly newspaper. Newspaper issued in two parts: in Korean and Russian. At the beginning of 90th newspaper was very popular among Koreans of Kazakhstan, Uzbekistan and Russia. Separation of the united in former times ethnic community of the Soviet Koreans by new states boundaries led to significant reduction of the subscribers and readers number. Constant cut of state funding, typographic expenditures increasing, lacking of active assistant and support from regional cultural centers and Korean businessmen, readers interest falling down, lacking of creative workers, deficiency of interesting materials on the newspaper pages and many others may be noted as weak sides of the "Kore Ilbo" editorial office activity. Despite all problems newspaper go on to issue and bring to their readers an information on history, culture and Kore Saram language challenges; on news of Korean peninsula and etc. This year newspaper editorial office will celebrate 75 years of its foundation.

Literary creation of the Koreans 1946-1966 is presented by tens of authors who were united together in 1962 into the Korean poets and prosaic section consists of 8 members under Kazakhstan Writers Union. It was very special that no one of them was professional poet or writer, they did not receive special literary education, but graduated from the pedagogical institute or colleges in Korean or Korean division of the Far East State University in 1920-1930. Thus in the life of writers themselves as in their literary works two periods are: first, connected with Far East up-to 1937; second - with Kazakhstan and Central Asia Republics.

Giving the most general characteristic of the Soviet Korean literature one may note that creature of all Korean writers, poets, writers, dramatists is under influence of classical literary legacy of Korea and Russia and socialist realism canons. Historical specifics of Korea's development, migration to the Russian Far East, motherland nostalgia, revolution years stormy events have been mainly pre-determined essential characteristic of Soviet Korean literature conception and development. Violent migration in Kazakhstan and Central Asia, partition of Korea, war in peninsula, American aggression have reflected in tragic attitude of Korean authors.

In 90th literary creature of young Koreans created their works in Russian, has been emerged in Kazakhstan. Genrietta Khan, Lavrentiy Song, Dmitriy Lee, Mikhail Park, Alexandr Kan and Stanislav Lee can be belong to Russian language writers. Some prose collections and authors book were published up-to now.

4.2.3. THEATRICAL AND MUSICAL ART

On 9th September 1932 in Vladivostok by Soviet Government Decree the Far East Krai Korean Theatre has been founded, in that one the best representatives of the amateur theatrical and singing art were united together. At Vladivostok period from 1932 to 1937 actors group has been forming, national dramatic art was originating, theatre artistic direction was defined.

At resettlement the troupe was divided into two parts, the main one was sent in Qzyl-Orda, another one - in Tashkent. In 1950 Taldy-Korgan and Tashkent Theatres were brought together and in 1959 moved in Qzyl-Orda. In 1963 Qzyl-Orda Korean Music and Drama Theatre was gone from regional to republic's belonging. Since 1968 the Theatre is in Almaty.

Creative basis of the theatrical troupe in 1940-first half 1960 was actors-founders of the Korean theatre, come from the media of talented representative of the theatrical amateur performances in the Far East. Among them Kim Din, Lee Gir Su, Lee Khan Deck, Lee Gen Khi, Tsoi Bondo, Park Choon Sep, Lee n.p., Kin Ho Nam, Se Ben Kho. The first theatre additional staff consisted of graduate students of the Actors Faculty Korean group of the Tashkent Institute of Theatre and Art.

Towards middle 1960 two People Artists of the Kazaklh SSR: Kim Din, Lee Kham Deck, three Honoured Art Worker: Thai Djan Choon, Tsai en, En Sen Sen, Honoured Artists of the Republic: Lee Gir Sou, Tsoi Bun Dho, Lee En Sou, Park Choon Sek, Kim Khonam, V.E.Kim.

All peoples national art in its creative seeks continually apply to the cultural legacy separated by space and time. Korean Theatre appealed for development of national drama art during all the time of its existence made performances on the classic materials. Classic Korean literature includes historical chronological masterpieces, Middle Ages stories, legends, and also prose and progressive literary men poetry of XVIII-XIX ages Korea.

Life on the Kazakhstan land could not be reflected in the Korean theatre creature. People's artists of the USSR K.Kuanyshbaev, A.Mambetov, Kh.Bukeeva, Peopl's artists of the Kazakh SSR K.Kozhamkulov, K.Karmysov, K.Badirov, A.Tokpanov and others paid attention to the Korean theatre development, gave creative assistance in work on Kazakh classic drama, shared art experience, helped to penetrate into the Kazakh people original culture, traditions and way of life. In 1949 premiere and following plays of "Kozy-Korpesh and Bajan-Sulu" have been successfully realized on the Korean theatre's stage.

Fraternal commonwealth of Korean and Kazakh workers of theatrical and musical art has found out its following at work under modern Kazakh comedies.

Korean theatre culture was always fed by the best world classic creatures, different nations drama. Have started their creative way from pure national plays performance, approved on familiar native material, theatre expanded its "geographical' frames and nevere tried to closed in "itself" because remembered the united, all human role of art.

4.2.4. NATIONAL MOVEMENT AND KOREAN PUBLIC ORGANISATIONS

In 1989 in Almaty and other regional cities initiative groups of the Korean public have started to setting-up of the Korean cultural centers which were registered by local authorities. Prorammes and status of the national cultural centers were standard and contained as a main tasks mother tongue, national customs and traditions revival, soviet Koreans history study, competitions arrangements, study groups (circles), dancing ensembles creation, libraries, museums setting-up.

On 17th March 1990 in Almaty the first Constituent Assembly of the Kazakhstan Koreans took place, 96 delegates of the Republic, as well as guest delegations representing Korean Cultural Centers in Moscow, Tashkent, Khabarovsk and other cities participated in its work. Assembly set up Republican Association of the Korean Cultural Centers of Kazakhstan (RAKCCK), Professor Khan G.B. was elected the President of above Association.

Resolution adopted by delegates of the Constituent Assembly on RAKCCK creation noted that Kazakhstan Koreans as all people of the multinational country make a contribution into its economical, social and political development." We have sincere feelings of gratitude to the Kazakh people who get conditions for survival and development to many nations including Koreans". Further it was said that Association calls for to play an important consolidate role among Kazakhstan Koreans and put an identifying contribution into organisation and conduction of the events on revival of the national culture and language.

Scientific-Technical Society "Kahak" headed by Professor Park I.T. has been set up under Association. STC "Kahak' carries on great organising and coordinating work among Koreans scientists, arranges links with foreign scientific centers, gets sponsoring support in monographs publication, holds international workshops and conferences. In October 1997 large international conference with participation more than 150 scientists of different countries was held by STC "Kahak" in frames of celebration of Koreans 60 years living in Kazakhstan. There were prepared and issued Conference reports collection as well as book "Koreans in the Science of Kazakhstan"

At the third meeting of RAKCCK on 7th October 1995 the decision to recall it the Kazakhstan Koreans Association was adopted.

At 4th extraordinary meeting (12th December 1995) of Kazakhstan Koreans Association changes were put in the Statutes. Tskhai Ju.A. was elected KKA President.

National movement of Kazakhstan Koreans was moulded into form of creation of the different public organisations bringing together people according to their political orientation, professional activity, age. and etc.

In 1992 "Noinkhve" public organisation united veterans with aim to make social support was set up.

In 1993 Regional Foundation of Social and Legislative Protection has been founded in Kazakhstan.

In 1996 Association of Korean Studies united native and foreign researchers dealing with the past and present of Kazakhstan Koreans and also history, economy, ethnography, religion of Korea and Korean language was set up under Orient Studies Institute of Kazakhstan Academy of Sciences. Association has published 4 issues of "Korean Studies of Kazakhstan Proceedings", conducted a number of scientific seminars, international scientific conference. Association is led by Dr. Kim G.N.

New time influence was expressed in foundation of "Kazakhstan-Korea" Federation of Businessmen which one was constituted by Kazakhstan Koreans association, Kazakhstan Entrepreneurs Congress and group of leading companies with aim to develop multi-side cooperation of businessmen of the Republic of Kazakhstan and Republic of Korea. At the first constituent assembly of KKFB Tskhai Ju. A. was elected the Chairman of the Federation Directors Council and Kim N.L. - President.

In 1997 60 years have gone since Koreans deportation from Far East and their living in Kazakhstan. All Korean Community of the Republic was prepared with dignity, solemnly and festively celebrate this memorable anniversary. Vast, multi-aspect preparing work was done, significant material and financial meanings were attracted, hundreds peoples were mobilized and involved into the active preparations and the results have been impressed. Climax of events was undoubtedly solemn meeting took place in the Palace of Republic. President N.Nazarbaev in his welcome speech noted that Kazakhstan Koreans despite on all difficulties and privations connected with deportation could survive at fraternal help of hospitable Kazakh people and took appropriate place in the Kazakhstani peoples family. Presidents marked Koreans merits in all spheres of Kazakhstan public activity and expressed confidence in further successful development of Korean Diaspora on Kazakhstan land become native to it.

4.2.5. MODERN ETHNIC PROCESSES

Character of spatial location of Koreans in Kazakhstan impressed in its absolutely prevailing urbanized part, changing completely economy, working activity, intensive modernization and standardizing of citi life and also long time living in other ethnic media, transition to another language code, changing in ethnic psychology and ethnic self-identification and many other factors determine modern ethnic processes in their media. As it is known Korean people genesis, formation and development of economic and cultural type, development of ethnic culture and national language took place during many ages at completely different natural-climatic, landscape conditions of the Korean peninsula. Korean immigrants arrived in Russian Far East and most of them stood their in Primorskiy Krai up to deportation, living compactly at the rural places have kept many elements of traditional material culture and followed continuously to the national ceremonies, customs and traditions.

Since coming in Kazakhstan and up to the beginning of intensive outflow from rural places into the cities, i.e. up to the beginning of 60th many things distinguished Koreans in their material life and spiritual living at locations of compact dwelling from other neighbouring people. Soviet researchers investigated at the end of 50th ethnography of the "Korean kolkhozes" have noted two identified tendencies in the ethnic processes: from one side maintenance of traditions and innovations appearance from another side. Tradition and innovation synthesis formation process can be shown in the examples of economy form, material culture, family ceremonies and anthropony.

Material culture

a) habitation

Habitation of Koreans living at the rural regions of Kazakhstan is syntheses of traditional and Central Asian elements of construction. Hoses mainly were built in the Korean kolkhozes with clay walls or walls from adobe brick that was not in practice before movement in Kazakhstan because traditional Korean dwelling is frame-pillar building. Living houses constructive plan, functional designation of premises, roof's form, constructive materials used, outbuildings have changed.

Internal content of the rural Koreans habitations was distinguished by non-significant, but very remarkable and easy known specific elements, such as mats, oblong cylindrical pillows, thin bedding mat, the national dishes and utensils.

Modern apartments of standard construction, furniture produced by industry, electrical house devices, kitchen equipment and many other standardized townspeople dwells in which there was more less place for ethnic specifics. Now it is difficult from the first view on apartment's planning and its interior to determine who is owner - Kazakh, Russian or Korean although more attention on some nuances it can be revealed. Samsung TV set, Gold Star washing machine and Dae Woo refrigerator can not be the key to the answer. But if open refrigerator and check in its content it is more possible to identify the owner nationality. Thus modern standard habitation practically completely excepted ethnic specifics and in the villages at elder generation Koreans houses still can be observed some traditional elements.

b) clothes

Towards 70th Korean national clothes in Kazakhstan may be only seen on the stage of the Korean theatre, i.e. it was disappeared even as element of ethnic specific festive ritual life. Expanding contacts with Korea of modern period, grown interest to all national embraced all peoples of Kazakhstan emerged again the usage of traditional, Korean female and children's clothes especially. Women of elder and middle ages began to wear more often already forgotten chkhima and chogori during family celebrations and holidays. Such interesting phenomenon as usage by Korean girls the Korean clothes as New Year and carnival's costumes is observed. But there is not possible to say about return to everyday wearing of the national clothes because universal standardizing and unification embraced fully this side of material culture too.

c) food

Undoubtedly that in food exactly all peoples remain the most conservative in their life style. Koreans townspeople going on up to now to eat rice cooked without salt - pap, noodle - kooksoo, cabbage strongly salted - kimchkhi, salades, soy-bean spices. Moreover, Korean dishes have come into the feed ration of many other nations of Kazakhstan and on a holiday table plov and besparmak is next to fern or carrot salades which include constantly in the menu of many cafe and restorants.

For passed time since the moment of violent migration in Kazakhstan in result of close communication with neighbouring peoples Koreans food content was significantly expanded. At present the integral components of Koreans meal ration include bread, milk products, butter lacked at the past in their meal. Koreans under doubtless influence of Kazakhs begun to drink black tea and very often with milk. Consumer of meet, including mutton, which before resettlement practically was not used by Koreans, was significantly increased. Menu of holidays and every day life includes very often Kazakh dishes and dishes of other Central Asian nations: besparmak, kazy, plov, manty, chebureki. Integral part of Koreans meal became borsch, soljanka, pelmeni, pirozhki and other dishes of the Slavonic peoples. Thus, in food exactly symbiosis of traditional and new in material life of Koreans is mostly obvious.

Spiritual Culture

a) Family Ceremonies

In a family ceremonies of Kazakhstan Koreans imagination that in the human life there are three holidays or as people say three holiday cooking is strongly kept: first child anniversary - dol (sandji), marriage - chankhi and 60-years jubilee - khvangab. and today these holidasys are celebrated in the Korean families very solemn. In a family ceremonies the most essential components were maintained and at the same time new elements have been emerged.

In the modern Korea marriage without both sides parents blessing is practically impossible and now a significant part of young people are married trough mediation. Such situation has been observed among Koreans only at the first decades of their life in Kazakhstan. Modern youth is more free both at partner choice and at marriage decision making. It should be again noted that dwelling in a big cities defining many-ethnic communication circle and also smoothing, equalizing of many ethnically difference distinction lead to more growing up of international marriages. Therefore in a marriage party where fiance Korean and bride is Kazakh or vice-versa one may see mixture of Korean and Kazakh ceremonies and also modern tradition of marriage registration.

And now as in old times no one can celebrate his khvangab because such person should have a children who oblige to prepare celebration and cover all expenses. Very small was left from traditional ritual part. The main element is going on make bows - "chel" and cup giving to person celebrating jubilee. Kazakhstan Koreans make three low bows and there is no visible difference in how it do men and women. In Korea it is accepted that person who celebrate his jubilee received two low bows and one head bow, additionally there is a great difference in male and female execution.

Researchers note that if in material culture traditions are strongly maintained in food, in a family ceremonies it concerns first of all funeral-mentioned elements.

Elder Koreans in Kazakhstan go on as before to prepare for themselves funeral clothes. Immediately after death the relative of died person come to the yard and say triple aloud the name of died brandishing at the same time by above one's shirt. Body firstly placed on wide plank, covered by white sheet and screened off by white material.

In khansik, chkhoosok and death day all family come to the grave of died person before lunch time and start to clean, painting or repairing of grave and fence.

Thus, it may be resulted that modern ethnic processes among Kazakhstan Koreans are defined by their geographical location, dwelling in another ethnic media, intensive contacts to people of other nationalities, high urbanization level and ac-culture in Russian language media and characterized by maintenance of the most significant elements of material and spiritual culture and implementation of many innovations.

4.3. KOREANS ADAPTATION TO THE CONDITIONS OF MARKET RELATIONS

4.3.1. SOCIAL STRUCTURE CHANGE

Sociological research of the social-stratigraphical structure of the Korean population shows that among them the changes take place: transition from one social groups to others and appearance a new social strata, formation of the middle class and impoverishment of the Diaspora some levels. At the last years new social levels: entrepreneurs and businessmen, cooperators, free professionals and others have been formed.

Life of ten last years has led us to conclusion that among Korean Diaspora in principle new level are formed, with new for our society challenges on independence in decision making, economical activity and responsibility, with high self- evaluation and high material demands.

Let's isolate three main groups of Koreans-businessmen: 1. businessmen-owners, owners-directors of small enterprises and chairmen of JS and JV; 2. non-state enterprises managers, who are not owner of these enterprises: JS directors, exchange stocks leaders, brokers, officials and etc.; 3. leaders of the public organisations, representing interests of businessmen or their separate groups.

Who is modern Koreans - businessman? Average age is 35. A number of women is growing, majority of them are working with their husbands or relatives. They underline that they are some elite of the Diaspora. For such high asses they have some basis. All asked JS directors have a higher education, some of them are candidates or even doctors of sciences, former institutes teachers, workers of the Academy of Sciences and etc.

Korean intelligentsia position at transition period. Complication and many aspects of the social-political processes significantly influence on the intelligentsia's destiny. One of the alarmed processes at present is process of intelligentsia dissolution. This process develops into three directions.

1. According to formation of a new Kazakhstan state some intellectuals go to the power structures. Intelligentsia selected this way is becoming burocracy, nomenclature, officials.

2. Intelligentsia withdrawal explains by changing professions, because of that at the conditions of transition to market they cannot maintain themselves and their family. Scientists and teachers, engineers and journalists leave for commercial structures, become bankers, businessmen, leaders and members of the different JS, small and middle enterprises which do not connected with intellectual activity, i.e. they go out the field of intellectual labour. And this process it seems will be intensified because of enterprises bankruptcy and closing, lowing of financing for science, culture, i.e. just because of forthcoming unemployment and simple wish to improve their material situation.

Data of questioning shows that intelligentsia material position became worse. Comparing their present and former life majority noted that life became worse (48%) or a bit worse (26%), i.e. more than two of third (97,4%) confirmed our suppose.

About half of requested science workers would prefer to combine work in the state structure with work in the economy free sector.

These two directions and consequences of these processes are extremely urgent for Korean Diaspora because lead towards breaking out of intellectual, moral foundation of ethnos, withdraw it for many years behind.

Active scientists in their best years -25-35- leave science, therefore the gape between elder generation scientists and young ones just coming into science became wider. Those who needs in life arrangement leaves science. Life brings the most talanted scientists into the commercial structures, business, field of management.

Science became older because mechanism of age rotation is not developed. Eminent scientists as usually keep their creative energy for a long time. And they could find place at any conditions. But a lot of good specialists who already worked out their resources are still worked: ahead only poverty-ridden pension. We should help them.

First of all specialists with higher education and officers have come to the poverty levels. Very small distance separates from them leaders of low and middle level. Remarkable that the last ones in this case are an ideal model of marginal level: their asses of their material position let equally include them both to poverty and middle provided social level.

Farmer economy. More than half of farmers are people from former kolkhozes and sovkhozes. Among them a lot of qualified specialists and also machine operators in agriculture, specialists in plant growing, cattle breeding, constructors, drivers and others. Among farmers Koreans one may find former leaders of kolkhozes and sovkhozes.

Remarkable part of farmers before did not work in agriculture although lived in a village (village intelligentsia, officers, consumer service workers). The large reserve of farmer economy is Koreans of the cities who living in the city, but kept in touch with the villages that let them to keep customs of agricultural work and life style. Non-satisfaction of the work conditions at the public economy and aspiration to have own business, test their capabilities led them to farmer economy. Farms formation still meets resistance of still powerful administrative system on all levels. The main source of the conflicts is problem of land presentation to the new owners. Often authorities enabling monopoly on land artificially excite public opinion against land distribution among future farmers.

Very often Korean farm consists of only one family, rarely some relatives-families united in a farm. At asses of farmer economy in Kazakhstans there are different opinions, but optimism is less. There are enough reasons for alarm.

Thus, farms now are special "descent group" sending into the most unfavourable social medium. A lot of factors compel to suppose that nowadays rural population itself can not withdraw from its medium "critical mass" of market economy subjects capable to resist local authorities pressure.

In general among Korean Diaspora at the last time new level is founded, whose existence does not depend on state participation in the industrial product re-distribution. This strata is identified by specific ethos on the basis of which the necessity in independence, in right to make decision in property, revenue size orientation not its guarantee, readiness to economical responsibility.

In this new strata main body and periphery are identified, the last one is the main reserve for growing.

According to Statistical Department and on results of sociological questioning there are about 1-1,5 thousands so called "new Koreans" i.e. living on European "middle class" standards. Of course we can not call this group as business, because it isolated only on criteria of income size and consuming level. Nevertheless this index may be accepted as limited size of this social strata. First of all JS leaders, General Directors, Boards Chairs, members of the Directors Council, firms and corporations Directors and etc. are among them. The most of them are working in private enterprises, then in JS, in enterprises under property of collectives and foreign firms.

As it is known the most important defined sign of totalitarial system is forbidden of any self-organisation of people trying to be independent from governing party. Thanks to political activity of Koreans original Renaisessans of "nation unity" begins, relationships between different social levels are consolidated.

At present one may say that among Korean Diaspora in generally elite has been formed. It involves first of all nomenclature, leaders of the large corporations and firms, scientists, mass media representatives and others. New Korean elite - business elite is started to form intensively. Two governing elites have been appeared: political and economical. New commercial structures are under leaderships of the young people, not all of them had in the past carrier of nomenclatures. But circle of people arranging national movement of Koreans is narrow enough and their links with political establishment are still very close.

Pilot research made in frames of two cities (Almaty and Ushtobe) let conclude about typical tendencies rendered both direct and indirect influence on social structure of Korean Diaspora.

Research materials are extremely regional and reflect specific conditions of two cities. Nevertheless these data allow ever relatively to show the changes taking place in the social-structural relations among Koreans.

Author have defined work's prospective. First of all large scale field research are needed to carry on. that ones allow to elucidate new tendencies and mechanisms of the Koreans social structure changes. At much scope this relates to the formation of a new social strata and groups of businessmen, leas-holders, people under individual working activity and others. Above does not exclude including of a new approaches towards study of social structure and new problems of Korean population of the Republic of Kazakhstan.

4.3.2. BUSINESS ACTIVITY FORMS

One of the most important condition of the market relations formation is small and middle business development. Its formation defines first of all by general economical policy conducted in the country. Along with that specifics of Koreans business activity are existed, which are determined by appropriates and tendencies of the social-economical development and market conjuncture.

For effective functioning of the business activity in Kazakhstan all needed pre-conditions are existed. Expanding of the Koreans business activity should be considered as a contribution into the general activation of the sustainable economical development. Koreans businessmen work practically in the all branches of the Republic's economical complex. Only in 1997 in Almaty Koreans have registered more than 1,5 thousands enterprises of the different organising legal kinds of property (including farms), that was a significant number of all city economical subjects.

Citi (Almaty) structure of the small business in which Koreans are engaged is a bit different than generally in the Republic. Analysis of business activity of the Koreans in Almaty shows that they are mainly interested where to send their investments. To be more objective author used initial data of Almaty Statistics Department.

Review of the industrial orientation of small business (e.g. fabrication of construction brick and ceramic tile, furniture industry, knitted goods industry and etc.) shows that a number of a such enterprises is not much. More vividly intermediary service is expressed at consumer goods purchase-sale, stock exchange operations and etc.

15% of small enterprises are dealing with industrial activity, 9% - construction and repairing works, 40% - general commercial activity to provide market by goods, 2% - science, medicinal service.

Intensive development of the small business takes mostly place in the intermediary field and branches need not the significant capital investments. At the same time innovation business connected with risk capital usage for new technologies setting up, for investments into the new kind of production manufacture begin to take a temp.

Despite on the complicated general economical situation in Kazakhstan Korean businessmen activity demonstrate a high potential and viability of this ethnos. Annualy in the Republic up-to 3 thousands different enterprises organised by Koreans are registered. At the same time each seventh of the newly founded are terminated. The most number for the last two years is setting up in the trade, about 40%. Share of industry is about 25%, non-industrial sphere - about 30%. Number of subjects engaged with business without formation of legal person is significantly increased. This category of businessmen prefers trade sphere: trade in the market by vegetables, water melons, melons and grounds, salads of carott, cabbage, radish and etc. About 5% Koreans engaged in the city economy work at the non-state enterprises of Almaty. If take into account secondary employment and a number of working at farms (season work on onion and water melon, melons and grounds), individual businessmen without setting up of legal person, that share is - 13%. The most number of continually working at small and middle enterprises is concentrated in a trade, intermediary service, public catering, currency changing operations - 21 %. In 14 regions of Kazakhstan 105 thousands Koreans are settling. In average in 1997 3-4 small and middle enterprises belong to one thousand Koreans.

Dynamics and density of these economical subjects location are different. The most quantity of the enterprises registered by Koreans are placed in Almaty city and Almaty region and also in South Kazakhstan, Dzhambyl, Qzyl-Orda, Qaraganda regions that is 68% of total number in the Republic. Mainly that caused by targeted efforts of the local managing bodies, their close relationship with businessmen.

In 1997 in Republic Law about small and middle business support has been adopted, there general legal, economical and organising foundations of the state policy on business promotion were explained. Local authorities have right themselves to approve patent's rates sizes for subjects of small and middle business depend on prioritative direction of their activity. The law has to foster business activity support activation at local places.

To up-bring the growing generation in spirit of patriotism, responsibility for destiny of their Motherland the Association of Kazakhstan Koreans did a lot for Koreans business activity development. The most importance has links and collaboration with businessmen of historical motherland.

The main part of the Korean employees note the necessity in purchase of modern compact and highly technological equipment. But this problem practically stays non-solved because of financial resources missing. More than 60% of enterprises did not receive any credits, although they need in them very much. The reason is in lacking of security or reliable guarantee. But more often businessmen don t take credits because of high rates, missing size of presented funds and short terms on which credit is giving. Despite on objective difficulties psychological readiness of the Koreans to continue starting activity is high enough.

Business activity problems. In particular problem of determination of the sizes of the critical mass Koreans activity for the market self-regulation mechanism working and creation of competitive medium is very urgent. Extremely important in these conditions to foresee the regional priorities for support of small and middle business. In the world practice already different programs of efficiency state support have developed. In Kazakhstan taking into account specifics it is necessary more wide use direct allot of budget funds into the corresponding funds, giving credit guarantees of the commercial banks with compensation of their possible loses. Certainly investments will not compensate completely. But their maximal effect will be covered if take into account shrinking of state subsidies on prices and other expenditures.

At the same time support is needed to enterprises feel relatively well. Here criteria of credit presenting are coincided with criteria used in other fields and first of all in potentially competitive. Otherwise used tax preferences should be fast compensated.

Let call names of some businessmen, who are firms presidents and leaders playing significant role for economy development in the Republic.

1. Kim Vladimir Sergeevich - Director General, JS "Dzheskazgantsvetmet".

2. Kim Nikita Leonidovich - President, "Kazakhstan-Korea" businessmen federation

3. Kim Vladimir Alekseevich - President-General Director, "Kazakhinstrakh" state company on foreign insurance

4. Kim Viktor Georgievich - General Director, "Trans-Atlantik" firm

5. Kim Stanislav Nikolaevich - Chairman, Foundation of economy, cultural-technical development of the Republic of Kazakhstan.

6. Kim Viktor - Deputy Director, "Sakura" firm, Health complex, restaurant, sauna, design, construction

7. Lee Oleg Mikhaylovich - Chairman, Board of Pavlodar oil processing plant.

8. Nee Viktor Hksunovich - Director, JS "Estetika".

9. Tsoy Pavel Nikolaevich - President, JS "Dostar-Capital-Marketing"

10. Tsoy Arthur Anatoljevich - President, Chairman, Board of Directors, "Tulpar" CIC.

11. Tskhay Uriy Andreevich - Chairman, "Dostar" firm, Chairman of Board, "Kazakhstan-Korea" businessmen Federation

12. Sin Sekki - Director General, "Katalizator" JS

13. Shin Bronislav Sergeevich - President, "Almaty " JS and many others.


4.3.3. KOREANS POLITICAL ACTIVITY

Transition from totalitarian system towards democratic society can not be successfully realized without deeply thought and harmonically conducted political and economical reforms. One of the most important problems of this transformations is providing of the new democratic structures' simultaneous development and original market relation approval. In this conditions issues of power organisation and control have arisen in a new way. This is vital consumer of the social-political development in basis of which new priorities, new social-economical strategy were made.

Growing process of the society political activity urgently up-rises problems of the forms and methods renovation of work with people. Specific feature of this process is emerging in the social life the numeral independent Korean unions, social movements expressing different social groups' interests. To avoid contradictions appearance between these interests and to make them the source of the national development the consent of the social forces, their interests realization best way and forms search are needed.

All Korean social movements' consolidation is objective reality and necessity, and also nation's consolidation guarantee. Without that it is impossible to solve the key problem of the national movement - to go towards way of civilized nation.

For the last time on the Kazakhstan territory more than ten independent Korean cultural centres and unions have been setting up. Therefore there is no more complicated and obliged task as consent achievement of all different forces, there is no more high target than the formation of the conception leading to unity.

Together with psychological and national determinants there are also a serious economical pre-conditions fostering consolidation of Diaspora and first of all setting up of the common economical space without of which at our dependence of each other the normal nation development is impossible.

Market relations formation in the society as the main regulator of the social-economical and others fields of the social life, free business development at strengthening of the workers social protection needs in the independence of the local power and control bodies. Koreans participate in the local self-control, help to realize the main aim of the political system reform - human person at the centre of the new universe, taking his interests and consumers for the starting point.

At the modern conditions many issues of the social-economical development are solving at the local places by the peoples themselves, not from centre on the state level. One should accepted that in Kazakhstan Koreans always were active at the society self-management. Naturally, this system includes not only social territorial self-management, but also state' one (akimats), economical-industrial, social-constitutional (through political parties, social organisations and other unions).

Local activity of the regional unions of the democratic reforms involving the hundreds of Koreans are substantially strengthened. It should be noted that already in 1991-1997 at a number of Kazakhstan regions Koreans significantly have activated their work in the bodies of local self-management. The great importance at that is national mass media.

Today Koreans participate actively in the social, political and spiritual life of the Republic. A lot of them are or have been leaders of the ministries, industrial enterprises, different departments, amongst leadership of the President of the Republic of Kazakhstan Machinery. Here specially it should be noted Kim Ilya Lukich, Doctor of Economical Sciences, Professor, Minister for Finance, Kim Georgiy Vladimirovich who have been for some years the Chairman of the Committee on National Policy.

For the last years they've been Deputies Ministers: Kan Victor Petrovich - Ministry of Internal Affairs, Kim Afanasiy Grigorjevich - Ministry for Youth, Tourism and Sport, Kim Ivan Vasiljevich - Ministry for Local Industry, Kim Juriy Alekseevich - Ministry of Justice, Park Aleksey Andreevich - USSR Poultry Industry, Park Semen Aleksandrovich - Finance Department Head, Kazakhstan Ministers Council, Park Gennadiy Nikolaevich - Ministry of Bread Products, Khvan Vladimir Ivanovich - Ministry of Meat and Milk Industry, Khegay Aleksey Jurjevich - Ministry for Car Roads. Nee Vladimir Vasiljevich executed duties of the President of the Republic of Kazakjhsdtan Administration Business-Manager and many others.

At present Professor - Philosophy Doctor Khan Guriy Borisovich is a member of Higher Dicsiplinary Council and Chairman of the Chair of International Law of the Kazakh State Juridical University.

As known in 30-40th Koreans were not elected as deputies of the USSR and Republic's Supreme Soviet, but when a lot of them have demonstrate a heroism at work there were emerged amongst them Heroes of Socialist Labour. Already in 50th Koreans become elected to the highest country body - Supreme Soviet. One of the first amongst Koreans was Park Aleksey Andreevich - deputy of IY and Y convocations (1950, 1955), Deputy Head of Tselina Regional Department of Sovkhozes of the city Tselinograd (now Astana). He was a member of the Commission on agriculture in the Supreme Soviet.

Kim Ella Ivanovna is the only deputy of the USSR Supreme Soviet from Kazahstan (1985-1989), brigade-leader of the poultry sovkhoz "Ushtobinskiy", Karatal district, Taldyqorgan region. She was reward with many orders and medals. Kazakhstan deputy corps involves; Kim Ilja Lukich, he was deputy of three convocations (Y-YII, 1958-1970), Kim Nikolay Nikolaevich, USSR State Prize Winner, he was deputy of XII convocation (1990), Deputy Chairman of the Committee on industry, transport and communication at the Supreme Soviet.

For the last 60 years of settling in Kazakhstan the best sons and daughters of the Korean Diaspora have been elected to the Kazakhstan Supreme Soviet. Kazakhstan Koreans are proud such people as Kim Nikolay Ivanovich (XI convocation, 1985), Kim Rosa (YIII, 1970), Kim Juriy Alekseevich (XII, 1993), Lee Ten, Khan (IX, 1975), Rem Gen Cher (YII, 1970), Tjan Olga (Y, 1955), Khvan Nikolay Grigorjevich (YI, 1963), Khegay Ksenija (YI, 1963), Shin Vera Vasiljevna (YIII, 1970), Chzhen Moisey Alekseevich (X-XIII, 1980, 1985, 1990), Sher Raisa Petrovna, present member of the Mazhilis elected in 1995 and others.

In the former Soviet Union elected companies have conducted on range from upper identified by the Communist party. Thus, presentation at the higher power body was distributed amongst all social layers including also national groups.

Let's observe data on Koreans' participation at elected power bodies. In 1989 337 persons were elected to the Soviets of different stages, including :

2. Kazakh SSR deputies - 2

3. Regional - 18

4. Citi - 56

5. District -47

6. Citi District Soviets - 25

7. Villages - 45

8. Villages and aouls - 144 /1/

Elections of 1995 have demonstrated that national groups, including Koreans, representation at the power's bodies was shrank for many times. Here it is clearly seem the fact that electorate already votes according to national sign. On alternative basis it will be more difficult and complicated for national minority to be elected into the Parliament and local power bodies.

Forthcoming elections compel to re-regard the approaches towards candidate's preparation organization. Electorate have already had some experience in such work arrangements at the new conditions both positive and negative. One is clear that at any conditions more reliable approach towards preparing of the candidates among Korean Diaspora taking into account the experience of the elections have already been. Such work should be done at places of Koreans local settlement. Therefore the significant importance has activity of the Korean Cultural Centres at local places.

The nature of the original democratic elections is in consensus achievement promotion, tension decreasing at the society, formation of the electorate opinion that their support is crucial for advancement of the exciting problems solution. As elections took place shown they still did not take the functions of the society civil stability promotion, because a lot of vital challenges are aggravated too much and economy, social medium and spiritual sphere are under crisis.

If say about last time Koreans took part and involved into the Kazakhstan Communist Party's party committees. They were involved into the central party machinary, worked at the regional, citi, district committees. Some information about Koreans participation at the Republic's Communist Party bodies gives table:


NN Kazakhstan Communist Party Committee 198819901.Kazakhstan Communist Party Central Committee senior officials-12.Kazakhstan Communist Party Regional Committes machinery senior officials 663. Kazakhstan Communist Party Citi and District Committes machinery senior officials3455 /2/

At the Regional Communist Party Committees Koreans-communists took the positions of: Sector Chief - 1, Senior Organiser - 2, Instructor - 1. At the District Committees nomenclature of Koreans was as follows: Senior Organisers - 24, District Committees Secretaries - 3, Second Secretary - 1 /2/.

Koreans were elected as the delegates of the CPSU and Kazakhstan CP meetings, as members of the CPSU Central Committee and Kazakhstan CP Central Committee.

At present time Koreans involved towards activity of the different associations, public organizations bringing by that their contribution into the country movement towards democracy. Thus, 22 Koreans participated at work of the Kazakhstan Peoples Assembly (KPA). This body is unique, there is no any analogue in the CIS Republics. The tasks and targets of the KPA are in the international relations harmonization of the ethnic settling in Kazakhstan.

From all above conclusion may be done that Koreans like other ethnic participate actively in the different branches of the powerful structures and look for creatively the ways and methods for their functions realization. They have opportunity to develop their initiative, show capabilities at the business, take part at the democratic renovation of our society, in overcoming of the market relations transition period difficulties.

5. SIGNIFICANCE OF KOREAN DIASPORA IN EXPANDING AND CONSOLIDATION OF LINKS BETWEEN KAZAKHSTAN AND REPUBLIC OF KOREA

5.1. KOREAN DIASPORA AS CONNECTING LINK BETWEEN KAZAKHSTAN AND REPUBLIC OF KOREA

Independent Kazakhstan and Republic of Korea carrying out wide democratic reforms widely expand and deepen economical and cultural relationships. History of the mutual links goes by their roots deeply in. Caravan paths of the Great Silk Road confirm that. This road became the symbolic bridge connecting people of different languages, religions, state system and governing.

Then up-to XIX age information about links between Korea and Central Asia was lack because of different reasons. Korea was characterized as isolated country, that is why in orient study Korea calls "country hermite" - restricted country. Further events of Korean emigration to the Russian Far East and up to Kazakhstan were followed.

The first document officially fixed Koreans dwelling on the territory of Central Asia and Kazakhstan was the census of Russian empire population. Separated Koreans at that time settled on the territory of modern Uzbekistan, Kyrgyztan. They were settling in Kokand, Pishpek (now Bishkek), Przhevalsk. Relatively more number was in Kazakhstan.

Koreans settled in Semirechensk oblast in Vernensk uezd, Verniy city (now Almaty), Dzharkent uezd, Dzharkent city, in Syrdaria oblast in Aulie-Ata city (now Taraz), in Perov uezd (now Qyzyl Orda region), in Aqmola oblast. They all were included in YII part of census "Distribution of non-local natives according to place of birth", Korea was indicated as their place of birth, and also partly in XIII part "Distribution according to native language" where Korean language is identified. At the same time they were not indicated in XI part, where foreigners are indicated.

As it was already noted in 1937 upon Stalin's decision about 200 thousands Koreans settling at the Far East were violently deported in Kazakhstan. Tens years have passed, for that time Koreans lastingly settled in Kazakhstan. New generation has been grown who being far from historical motherland never forgot his originality. At present they are connecting link between present motherland and fore-motherland. " Former President of the Republic of Korea Kim Eng Sam talked to President of the Republic of Kazakhstan N.N.Nazarbaev at the meeting in Seoul on May 1995 that "Ethnical Koreans living here now and carrying out Kazakhstan citizens duties become alive connecting links in the consolidation of friendship and cooperation between our countries" /1/.

And here non-voluntarily question is emerges: would like Kazakhstan Koreans to move to the land of their fore-fathers? Statistics identifies that for the last years only some small cases of their movement to the historical motherland were registered. Koreans themselves have not aspirations to move to the land of their fathers because of essential differences in the social systems of both countries. An important factor is that Koreans in Kazakhstan have more higher life level in comparison with main mass of country population. Additionally in difference from Germany which up-to now promoted Germans movement Republic of Korea " does not carry out state policy which could promote Kazakhstan Koreans movement". At the same time Koreans have not bad chances to show themselves cooperating with Korean business representatives. Kazakhstan with its huge resources of oil, gas, non-ferrous metals and extreme interest in financial resources and qualified industrial management is quite attractive partner.

Republic of Korea does a lot of efforts and has a big hopes on assistance of their compatriots settling in Kazakhstan. It is not a secret that Republic became "a place of struggle for social and spiritual influence on countrymen of two opposited to each other states: Republic of Korea and Korean People Democratic Republic"

Except trend to global economical expansion Republic of Korea is moving also by more primitive causes. They try more seriously to settle down in Kazakhstan. Production of the many-profiled concerns has already not enough demand in the motherland and for that advancement towards developed markets of Europe and USA a huge investments are needed. Therefore Koreans intensively go to the sale markets. For consolidation of own economical potential Republic of Korea also needs in access to starting materials resources of Kazakhstan. In turn it is profitable for Kazakhstan to attract state and private Korean investments for withdrawing of economy from deep crisis. Advancement technologies, experience in the fabrication organising and joint business of today partner could help to Kazakhstan.

Thus Korean Diaspora automatically carry out this honorable mission of connecting bridge-link which our forefathers looked for and arranged. Today there is no any corporation or firm where Koreans from Kazakhstan are working. They sincerely wish and help to their compatriots in the successful business development of both countries.

Korean Diaspora helps to their countrymen fast adapt to places of their working, everywhere: in business, teaching, science, sport, religion and other directions. In Kazakstan a lot of JV with Republic of Korea are functioning in which Kazakhstan Koreans take a key and defining positions.

For example, activity of the "Sumsang" corporation, director of which is Kim Vladimir Sergeevich, Almay sitzen. "Sumsang" in the Republic the only example of investment into the large production. In 1995 corporation gave under management "Dzheskazgantsvetmet" - one of the large in the CIS plants capable to produce 200 thousands ton copper in a year. Production of this corporation has a big demand in abroad.

There are tens such examples in the country. JS USCO General Director is Park Viktor Michaylovich, who with known Dr. Bung successfully develops middle business in the Republic in the field of Furniture. "Kazakhstan-Korea" federation of businessmen are successfully functioning in Kazakhstan, that includes the biggest Korean businessmen of Kazakhsran target of them is in arrangement of economical links with businessmen from the Republic of Korea.

Kazakhstan Koreans help in consolidation of cultural links. Significant part belongs to Koreans-scientists, who are training and making researches in Seoul and propagandizing life style of their countrymen from abroad.

Interpreters give an invaluable services to their brothers in blood. Korean specialists, post-graduate students, students, pastors already speak Russian much better than 506 years before, but in case of quite importance they need in assistance of translators.

Unfortunately today Republic of Korea is under crisis, Kazakhstan Koreans as all Koreans in abroad sincerely regret about the situation and always are ready for assistance. May be our material support will not be great, but we know that it is temporary phenomenon, Republic of Korea will re-born and take worthy place among developed prosperous countries. Re-born of economy, naturally, will apprise the Koreans authority despite places of their dwelling.

Thus, time goes forward. How Koreans enter the XXI century? What horisons wait for Korean Diaspora brought by their fate from one end of Asia to another one and founded out the motherland for themselves and their descendants in Kazakhstan land? Difficult questions, only life itself could answer. But surely Kaszakhstan Koreans carry out honourable mission in which history of Korea - their Historical motherland and Kazakhstan history - where Koreans found not only shelter at the terrible period of deportation, but found motherland, are combined in organic unity. And this history shows what deep historical roots are linked Kazakhstan anb Republic of Korea. Koreans of Kazakhstan demonstrated convince how strong and in-exhausted their national feelings. National self-conscience, national spirit have gone by re-pressings and persecutions may sleep in the hide parts of people's souls, but at favourable conditions they with double force will say about themselves, fostering their bearers to shine brighter among general multinational palette for prosperity of real Motherland and historical Motherland.

5.2.KAZAKHSTAN-KOREAN RELATIONSHIP

On 28th January 1991 Republic of Kazakhstan and Republic of Korea have concluded Agreement on diplomatic links at the embassies level. Embassy of the Republic of Korea has been officially opened on 30th June 1993.

Since that time Korean officials immense activation work is observed and they were deeply interested in political, economical and spiritual life in the Republic, direct contacts arrangements.

N.A.Nazarbaev's two official visits in 1992 and 1995 and as well as other officials visits in the Republic of Korea, which became new stage in the two countries relation, had a great importance

For the last years after diplomatic relationship establishment Kazakhstan and Republic of Korea comprehensively develop cooperation contacts in the political, economical, cultural and other fields and in the international organizations. Continue mutual understanding and trust of the both sides become deep and benevolent and friendship relations are consolidated.

Nevertheless the most effective propaganda of the "Korean development model" is products of material culture fabricated by Korean industry. At the beginning of 90th the flow of the high quality motorcars, TV sets, refrigerators and other domestic electrical equipment and computers poured in Kazakhstan. High quality and reliability caused trust and respect to producer. Additionally in the last years Republic of Korea goes actively from devices export to technology export and in some extent "shares" its industry achievements with trade partners. That allows to involve local population to advanced production process, helps to employment and understanding of Korean industrial ethics. At the mixed firms under Korean specialists leadership the training of the local managers is realized.

The key for such success was adoption of the development strategy oriented on external links which made export the economical growth main moving force. Such strategy defined by country special features which has poor natural resources and narrow internal market and powerful labour resources. Natural diligence and high educational level made a great contribution too.

Despite on different reality in the many fields both sides respect each others development way and don't intervene into the internal activity. Interaction and partnership relationship establishment appealed into the XXI century, long and stable and mutually profitable relations maintenance and development respond to the basic interests of both countries and their peoples, provide peace keeping and consolidation, stability and development in Asia.

Today Republic of Kazakhstan is recognized by 117 world states, with 105 diplomatic relationships are established, 26 Embassies are opened in abroad. In Kazakhstan 40 foreign embassies and missions, 16 representatives of the international and national organizations are worked. More than 800 interstate and intergovernmental agreements were concluded.

But diplomatic activity of the Republic of Korea is directed toward country role expansion at the international sphere and increasing of contribution into the international community actions.. All above means that Republic of Kazakhstan and Republic of Korea are sovereign and independent states, which became the all rights members of the world community, its integral part. Striving for stability consolidation at the whole Asian continent Kazakhstan and Republic of Korea initiate the Meeting on interaction and tristing measures in Asia, which has to be universal institution of the preventive diplomacy at the huge world region. And finally, Kazakhstan and Republic of Korea became the UNO members equaled in rights.

In the relationships between two countries - maximally keep all diversity of the links already made and also to conclude equal in rights Agreement on cooperation and mutual assistance in which juridical fixed principal of mutual sovereignty and independence respect.

Kazakhstan adherence to the Treaty on Nuclear Weapon Non-Proliferation as non-nuclear state terminated one of the main political moments influencing into the Seoul loyalty for Korean capital run to the Kazakhstan market. Representatives and businessmen from the Morning Calm country are very active in Kazakhstan helping for economy reformation and growing.

In 90th active bringing together in economical aspect take place. Trade-economical relationships were established practically after Kazakhstan sovereignty proclaiming. In Almaty close relations between Chamber of Commerce and Industry and Korean companies were setting up. From that economical links are developed dynamically.

Surely, states economical relationships on the development modern stage cannot limited of mutual goods deliveries, export-import. The most civilized forms are manufacture setting up at the territory of the Country-partner, financial investments, know-how sale. Now in Kazakhstan large corporation Samsung, Daewoo, Henday, LG and other firms are working.

According to asses of the economists and specialists it is necessary to invest into the Kazakhstan economy annually 3-4 milliards USD of direct investments. Naturally that is a huge capital. For comparison: budget income part expected execution are about 3,5 milliards dollars. Where they take? Unfortunately, in close future neither state nor native private business cannot provide such funds for country's economy (1).

Therefore Kazakhstan is interested in close economical cooperation with countries-donors. Moreover, in results of the first half year 1997 Republic of Korea became leader on direct investments into the Kazakhstan's economy, as it was already mentioned about 400 millions USD or 52% of general volume. This is 5 times higher than USA, but far from limit, assets of known here Korean busyness conglomerates Henday, Samsung, Daewoo and LG are about 44-67 milliards USD. So, they able to invest money.

With Samsung Corporation "settled strongly" in Zheskazgan region and interested not only in copper, but also prioritative economy sectors such as industrial infrastructure and processing industry, mutual understanding enter the new phase: governmental Agreement about long time cooperation was concluded, which defines sides mutual obligations on investment proposals realization. In its frames during negotiations with Sumsang leadership such projects as sewing industry, heating devices production, cable plant construction, manufacture of equipment for transfusion of blood, mineral water bottling were agreed. Contract on hydrocarbon prospecting was suggested.

Contract on colour TV set production in Almaty was concluded. Investments of 23,4 mln USD will provide production towards 2004 of 373 thousands TV sets and 310 working place. Budget efficiency from this project realization will be 23,8 USD. This is incomes of taxes and payments. Third of spare parts are planned to produce in Kazakhstan. Together with investments new technologies, new level of qualification, new relation toward busyness will come in Kazakhstan. And that is significantly no less than investments. Only for workers training for Almaty TV plant firm intends to spend 300 thousands USD.

With corporation Daewoo Agreement on buses and vehicles fabrication in Shymkent was concluded. Kazakhstan would like to order this firm oil production and processing. This challenge is discussed with the National company "Kazahoil". To develop this problem Korean specialists arrival in Almaty is planned. They will also study possibilities of arrangements for the fabrication of the sea platform on the basis of conversion enterprises at the East Kazakhstan. Recently agreement on intentions between State Investment Committee and Daewoo was made, according to that Congress-Centre in Almaty and national tele-communicational super-magistrale, high technical scientific industrial centre are intended to build.

There are future perspectives with corporation Henday and Hanhwa. Contracts on many millions USD are concluded with them too.

There are a lot of companies in Korea, which are ready to have economical contacts with Kazakhstan. They receive detailed information about economical situation in Kazakhstan, about expected investment projects and working conditions for investors.

Up-to now tax regime was a serious hindrance for busyness. For encouragement of the foreign investors internal tax legislation is perfected. Some preferiences are given by conclusion of bilateral convention about double taxation termination. It means that Korean firms pay tax there where they have income, i.e. in Kazakhstan, but in the own country company took it into consideration.

This is some con-session of Korean side. Thus, a good precedent of investment into one of the prioritative economy branches -processing industry - with far going consequences.

Between Kazakhstan and Korea obligations on small and middle business development are exist. Now looking for, manufacture identification for such investments are doing. Republic of Korea has enough technological resources, specialists on basis of which needed volume of different products inquired at the Kazakhstan market.

Such cooperation growth compels to think newly about future prospects, about search of new economical and political relations forms according to changing international realities. That is why the idea of active cooperation is a new phenomenon, which else needs in practical forms.

Undoubtedly that Kazakhstan and Republic of Korea for a long time were outside of the interests to each other. Also there are no arguments in fact that both regions need in each other: Republic of Korea - for partners diversification, technologies export (in which country saved a great experience) and creation of a jumping-off place for taking Central Asia market. Kazakhstan - attraction vitally needed investments and some modern technologies, diversification its external trade and entering the markets of states which conditions and demands level are more soft. Also necessity to study experience of models for accelerated economical development and simultaneously become indeed the bridge between Asia and Europe and run away from today status of "developing country" is existed.

At the same time at this cooperation some problems exist - lacking of transport infrastructure that providing direct links between countries-partners. But international experience shows that in the modern world air-cargoes become one of the most effective kind of inter-states links consolidation and growing incentive of international economical relations.

If Kazakhstan could attract the largest air companies including cargo of the Morning Calm Country to work at the region as jumping-off place to the Europe it restores one of the ancient functions - Great Silk Road.

Thus, for Kazakhstan an Republic of Korea potentially wide field for mutually profitable cooperation exists. New international realities require new non-standard inter-states solutions.

For the Republic of Korea relations with Kazakhstan are very important because Korea regards Kazakhstan as strategic ally. Official Seoul accepts that for solution problem of Korean peninsula unification relationships with Kazakhstan have to be prioritative. Social-political situation at the Asian region not only at last turn depends on Kaszakhstan position on different political issues.

Establishment of the friendly links between both countries promoted the study of each country's reality, elucidation of development perspectives and usefulness in a future. Besides official visits on the states leaders level cultural links are widely developed.

As it is known Almaty and Daogoo are twin-cities. On this way practically all kinds of delegations exchange: jubilee, youth, cultural, scientific, student, sport, religios and educational are arranged.

One may surely say that Kazakhstan interest and opportunities which Republic of Korea gives will support the successful development of friendship between Kazakhstani and Korean people. Today also the doors of Almaty universities are widely open for students and post-graduate students from Republic of Korea. Almay universities try to create for students the most favourable conditions for successful study and life.

Cultural contacts have a great importance for both countries. Sometimes theatres guest performance, lucky art exhibition could bring more usefulness for mutual understanding than high level negotiations.

In Kazakhstan cultural contacts with Korea take an important place, but Kazakkstani are interested in culture of modern Korea and for Koreans traditional samples of Korean Diaspora and local dwellers are more attractive. E.g. in 1991 Korean theatre, Ariran ensemble of folk singing and dancing, Kazakh actor A.Dnishev and others were successfully on tours in Seoul.

The proper place in cultural exchange takes exhibitions and fares (for example, KOTRA-94) which are used for different agreements conclusions. Korean side publishes Kazakh classics, in 1995 for Abai 150 years jubilee "Book of words" was issued in Seoul in three languages (Korean, Kazakh, Russian). Korean and Kazakhstan scientists jointly participate in the international conferences and seminars on different fields of science.

Korean side pays a great attention to compatriots from Kazakhstan. In 1994 private TV-Radio Company MBS made 21 series film "Koreans" where history of Koreans settling at the former Soviet Union was reflected.

In realization of cultural links of the Republic of Korea the significant role plays KOREAN FOUNDATION financed by government and private companies, but practically controlled by government.

Foundation tasks are: scientists, writers, paintists exchange, support of Korean researches and Korean language study, Korean culture materials dissemination in abroad, study, planning and coordination of the Republic's of Korea International cultural exchanges program with other Countries. For the last years of cooperation and Foundation activity proved its efficiency and its creators hopes come true especially at the Central Asia countries.

Another kind of the Republic of Korea connections with foreign countries is "KOICA" - Korean International Cooperation Agency. Under above line professors from Seoul are teaching Korean language at the Kazakhstan universities. Korean doctors treated free of charge patients under, the most suffering are sending to Korea. At present two doctors and about ten teachers work in Almaty under above Agency program.

It is already tradition that every year doctors from Seoul and Daegoo come in Almaty. Their attendance in Kazakhstan is short, but peoples evaluations are very high. Koreans implement traditional East medicine and Kazakhstani doctors reveal Korean achievements in the field of medicinal equipment.

At the last years Kazakhstan became the place of "pilgrimage" for missions from Republic of Korea. In Kazakhstan there are more than 50 protestant, catholic and budhist churches, only in Almaty they are more than 30. Churches parishioners are not only Koreans, but representatives of other nationalities.

At present there are close contacts between Kazakhstan and Republic of Korea in the field of sport, science and other directions.

When these lines were writing some changes took place in the both countries. In Kazakhstan capital became Astana instead Almaty. In December president's elections have been in the Republic of Korea, Mr. Kim Tae June is elected as a new President. He received very heavy "inheritance", country was in crisis.

One conclusion could be made from all above that the significance of friendly relationship between two countries is highly evaluated. Influence of economic and cultural links toward political, social processes in Kazakhstan and Republic of Korea is undoubtedly. Kazakhstani and Korean people rapprochement itself on the basis of fraternal contacts expanding has of course positive moment, it serves to the interests of peace consolidation in the Far East and Asian region.

Cooperation of Kazakhstam and Republic of Korea will be not only useful, but also serves for consolidation of both states positions in the world community.


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