Kazakhstan has become a relatively open economy. In 1999 the shares of export and imports in terms of GDP stood at 38 percent and 35 percent, respectively, reflecting a favorable trade balance. In that same year exports stood at US$5.2 billion while imports were US$4.8 billion. The country has the trade structure of a primary commodity supplier. In 1999 oil, gas, and minerals accounted for 78 percent of exports. In contrast, in this same year consumer products dominated imports.
Kazakhstan's largest trading partner is Russia. In 1999 Kazakh exports to Russia accounted for 20 percent of all exports, followed by China accounting for 8 per-
|Trade (expressed in millions of US$): Kazakhstan|
|SOURCE: United Nations. Monthly Bulletin of Statistics (September 2000).|
cent, Italy for 7 percent, Germany for 6 percent, and Switzerland for 6 percent. The United States accounted for less than 2 percent of Kazakhstan's exports. Russia was also the largest importer to Kazakhstan, accounting for 37 percent of total imports. Russia was followed by the United States, which accounted for 9 percent of imports, the United Kingdom for over 6 percent, and Italy for about 3 percent. Other trading partners accounted for less than 2 percent each.
Before independence 90 percent of Kazakhstan's trade was with Russia. After independence, the government committed itself to establishing the conditions for integration into the international market. These steps included price liberalization, through the reduction of subsidies and the deregulation of prices, as well as a balanced government budget through increases in taxes and cuts in government spending. The government also instituted a tight monetary policy through an increase in the Central Bank interest rate and encouraged foreign trade liberalization by lifting export and import licenses, granting permission to all firms to engage in foreign trade, and lifting tariffs . Kazakhstan also devalued the domestic currency to bring it down to the domestic market rate, and privatized and restructured state monopolies . The government sought to create a market environment through the legislative and regulatory reform of banking, capital markets, civil and contract law, and dispute adjudication. In order to cushion the social impact of these sweeping economic structural transformations, the government developed a social safety net. The Kazakh government has also pushed ahead with plans to join the World Trade Organization (WTO) in 2002.