Export Development and the Wealth of the State

To raise the wealth of the state, it is essential to take on a far from easy task: developing the economy. Clearly, the state cannot support everyone and everything, nor is there any need for it to. First of all, we have to define our goals, and only then work out how to solve the problem. And our problem is to build sustainable growth and be competitive on the world market. Creating companies with a global name, which can now act as a catalyst for economic growth, should be a national priority. At the same time, raising wealth does not require exporting goods alone: it is no less important to export unique products, and therefore brains.

Kazakhstan has companies capable of competing with global players in international markets. These we must not merely protect, but also give every condition to expand their exports and go international.

I can hardly claim to be an objective expert on this question, but we definitely already have such companies. kaspi.kz, a technology leader in the financial sector, has begun actively expanding in Turkey. BI Group, a technology leader in the construction industry, has launched construction projects in the UAE, the USA, Uzbekistan and Poland. The confectionery factory Rakhat has long been an exporter of its products, as has Alina Group, which actively exports building materials. I am sure there are another dozen or so companies actively promoting unique products and services that can easily compete with international firms.

Turning several Kazakhstani companies into international ones would give the Kazakhstani economy a much greater multiplier effect than supporting companies engaged in import substitution. Hamilton Helmer identifies seven strategic powers that determine the durability and viability of companies, and none of them fits the concept of import substitution. Import substitution as a strategic goal cannot be scaled up to the national level as a policy for economic growth, because it does not help build strong and resilient companies. We need to support companies that can create an export product, which will naturally capture the local market as well, but will also be able to compete globally.

To be competitive, a company must achieve scale in production (which is not quite suited to Kazakhstan), have a strong brand (which requires colossal investment in marketing) and be recognized internationally (we now have several strong regional brands, such as Kaspi, Air Astana, BI Group and others).

We have companies that own unique resources, which also makes them international players, for example Kazatomprom, Kazakhmys, ERG or KazMunayGas.

There are not many companies in Kazakhstan with counter-positioning. I would include Kaspi, Hero's Journey and Sergek.

We definitely have no companies that create products so costly to switch away from that customers would find it hard to abandon them, and creating such companies is extremely difficult. Of companies with network effects, perhaps only Kaspi can be named. Nor can I recall any company in Kazakhstan with a unique production process.

Clearly, Kazakhstan needs to concentrate its efforts on promoting and helping companies with pronounced strategic powers that can enable them to become international leaders. It seems to me that such a strategy will certainly yield more than a strategy of import substitution.

I see many foreign companies entering Kazakhstan through political channels: for example, the Sergek analogue in Astana, Yandex, and, in its day, Sberbank. But I very rarely see our private companies with unique products being promoted abroad at the political level.