Oil and Dependency: The Case of Kazakhstan

Matthias Beck, Aigerim Amirzhanova

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)peer-review


Following the collapse of the Soviet Union in 1991, the newly independent oil-rich country of Kazakhstan has become a major recipient of foreign direct investment (FDI). Although international organisations such as the IMF and UNCTAD have claimed that FDI could be considered an engine in the transition from state socialism and as a powerful force for integration of this region into the global economy; this investment also poses significant risks to Kazakhstan. These risks fall into two broad categories: The first category can be broadly described as issues associated with the “resource curse” or the “Dutch Disease”. The term Dutch Disease describes a situation where booming demand in oil exporting countries, due to high oil revenues, leads to shift of an economy’s productive resources from the tradeable sector to the non-tradeable sector. The second category is associated with the over-dependency of oil exporting countries on a relatively small number of large multinational corporations (MNCs). This over-dependency can lead to a situation where licenses and concessions are granted at less favourable conditions than if they were auctioned in an efficient market. Examining the licensing policy of the Kazakhstani Energy and Mineral Resource Ministry, this paper notes that the latter issue of over-dependency has become less of a risk due to deliberate efforts to diversify investment relationships. Notwithstanding this situation there is some evidence that it remains difficult for oil exporting nations such as Kazakhstan to ensure that oil revenues are channelled into sustainable economic development.
Original languageEnglish
Title of host publicationUnderstanding Risk
Subtitle of host publicationContributions from the Journal of Risk and Governance
EditorsMatthias Beck
Place of PublicationNew York
PublisherNova Science Publishers
ISBN (Print)978-1-62618-686-6
Publication statusPublished - 2013

Bibliographical note

This is an updated and revised version of an article originally published in the Journal of Risk and Goverance


  • Risk management
  • Financial risk
  • Risk
  • Corporate governance


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