An investigation of foreign trade policy and its impact on economic growth: the case of Kazakhstan (1991 - 2008)
Salykova, Leila Nurtleouvna
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With the economic shift of Kazakhstan in 1991 from a centrally planned economy to a democratically independent republic, the country has seen its volume of external trade increase on a global basis. Consequently, Kazakhstan is now engaged in international commercial activities with more than one hundred and seventy countries and has trading and economic agreements with more than fifty other countries under a “Most-Favoured Nations (MFN)” regime. Indeed, Kazakhstan has established a free trade area and continues to work on deepening the integration process within the framework of the Eurasian Economic Community (which now comprises Russia, Belarus and Kazakhstan). Consequently, the main aim of this research is to study the impact of foreign trade policy on economic growth in Kazakhstan since its independence in 1991 until 2008. The conceptual framework adopted for this study is underpinned by a review of extant research on the evolution of foreign trade policy for important developed and developing nations - including former soviet countries. Thereafter, policy practices identifying similarities and differences were examined as a basis for the understanding of the nature of foreign trade policy evolution for the Kazakhstan case. On this note, the study methodology adopted a cross-sectional analysis of twelve nations from the Commonwealth of Independent States (CIS), which was supported by time-series analysis in order to demonstrate implications of key variables which impact economic growth. Hence, the primary approach towards analyzing the major sources of study data was a quantitative analysis to address study hypotheses with a focus on the Kazakhstan case. Results alluded towards:- 1. A better understanding of the evolution of the strategic development of the trade in Kazakhstan and other CIS countries since independence in 1991. 2. A strong correlation coefficient between export and GDP growth for most CIS countries during time series analysis. Consequently, exports were seen as the main source of growth throughout the period from 1992 – 2006 for CIS countries. 3. A number of key variables (such as: government consumption expenditure, private consumption expenditure, gross capital formation, export, agriculture, manufacturing, construction, service- shares in GDP) on both - end use and industrial origin - showed a negative impact on economic growth for some nations, while others showed a positive impact. 4. In the case of Kazakhstan, a positive impact of exports on economic growth resulting from regression results across the period. 5. Changing foreign trade policy from inward orientation (towards CIS States) to an outward oriented strategy (to the global marketplace) of these states (including Kazakhstan) throughout the period 1992 – 2008, increasing economic growth significantly.