Economics in the Rural Areas of Kazakhstan

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Economics in the Rural Areas of Kazakhstan

Economics: An Article Review

The article by Agrawal provides results of an empirical study of the correlation between the economic growth and the decrease in the levels of poverty in the rural areas of Kazakhstan, a country that, after a period of stagnation following the dissolution of the Soviet Union, entered a phase of economic development (90). The poverty was related to the narrow specialization of the countrys industry created during the Soviet period to take advantage of the economies of scale.

The reorganization of the countrys economy into a mixed one (that is, one where the property can be owned by both the government and private parties (McConnell, Brue, and Flynn 33)), as well as certain reforms and the discovery of crude oil and gas, led to economic success (Agrawal 92).

It is stated that income distribution usually remains rather constant in an economy if it is not addressed, so poverty reduction can only take place if there is pro-poor growth (that is, the incomes of the poor increase by higher percentages than those of the non-poor), for otherwise the poor would simply remain poor (Agrawal 94).

The data provided in the article suggests that in Kazakhstan, the decrease in the levels of poverty occurred mainly as a result of the implementation of government policies aimed at providing higher pensions and real wages, better social security, and at lowering the unemployment rates.

However, the government initially did not implement such policies; in fact, the governments revenues increased in 1999-2002, but the relative levels of social expenditure dropped, so a very marginal decrease in poverty rates of that period is stated to be associated with the general growth of the economy, the reduction of unemployment rates, and the increased governments revenue which allowed for keeping the social expenditures on similar absolute levels (Agrawal 105-106). Only in 2003 did the government begin implementing the above-mentioned social policies aimed at the alleviation of poverty, and it is these policies that led to the decrease of poverty levels (Agrawal 108-109).

Thus, it is stressed that the governmental social policies in Kazakhstan played a crucial role in alleviating poverty; the levels of poverty tended not to change significantly when economic growth was experienced but such policies were not implemented (Agrawal 109-110).

Works Cited

Agrawal, Pradeep. Economic Growth and Poverty Reduction: Evidence from Kazakhstan. Asian Development Review 24.2 (2008): 90-115. Web.

McConnell, Campbell R., Stanley L. Brue, and Sean M. Flynn. Macroeconomics: Principles, Problems, and Policies. 20th ed. 2015. New York, NY: McGraw-Hill Education. Print.

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