Kazakhstan is the second largest country in the former Soviet Union, apart from Russia, and has a total area of 2.7 million square kilometres. Its strategic location (on two continents, Europe and Asia, between two regional superpowers, Russia and China) gives a significant competitive advantage to Kazakhstan’s companies, especially in the transportation and telecommunications sectors.

Kazakhstan is extremely rich in natural resources. According to estimates from the Ministry of Ecology and Natural Resources, the country has mineral resources worth over $1 billion (excluding newly discovered oil and gas fields). Concerning metals, Kazakhstan has over 8% of the world’s iron reserves, as well as the world’s largest reserves of lead. Other resources include half of the world’s uranium reserves and a significant share of the world’s oil reserves on the Caspian shelf - giving a distinct advantage to Kazakhstan’s economy.

The population of Kazakhstan is over 15.8 million and is characterised by a very high level of literacy (97.58% of the total population). The official unemployment rate is about 4.0%, although some sources estimate hidden unemployment of another 4.0%, making a total estimated level of unemployment of around 9%. The average monthly salary is about $111. The population is 56% urban. The Law on Employment of Population (1991) gives the Government discretion on minimum wage adjustment. Otherwise, workers and enterprises are free to negotiate wages.

The labour market in Kazakhstan is characterised by the high level of unemployment, especially in the outlying regions, the relatively high skill level of the labour force, low wages, and the existence of some elements of a labour market infrastructure e.g. recruitment agencies. At present, we believe that the labour market in Kazakhstan is relatively favourable for foreign companies planning inward investment. The recruitment of skilled personnel should pose few problems.

The Republic of Kazakhstan is a democratic, secular, and unitary state. The President of Kazakhstan is the Head of State. The current Parliament was elected in December 1995. The Parliament of Kazakhstan is bicameral and consists of two chambers – a lower house, the ‘Majilis’ (with 67 MPs) and an upper house, the ‘Senate’ (with 47 MPs). According to the Constitution, the Parliament is elected for four years, so the next parliamentary elections in Kazakhstan are due to be held in 1999.

The executive branch of power in the country is also represented by the Government, which is appointed by and reports to the President, and is subject to approval by Parliament. Mr. Nurlan Balgimbaev, the previous Minister of Oil and Gas, was appointed Prime Minister by President Nazarbaev in October 1997.

Kazakhstan became the first Central Asian country to receive a credit rating from international rating agencies in 1996. The rating was assigned at BB- level (S&P), Ba3 (Moody’s), and BB- (IBCA), as of 1996. In 1997 the IBCA upgraded the sovereign rating to BB while other rating agencies kept the same grade. This is a significant accomplishment, considering the downgrading of Russia and other emerging economies after a series of crises in the second half of 1997.