Mitigating the Effects of Oil, Trade Policies, and International Relationships on Kazakhstan - Essay Example

The country is heavily dependent on substantial oil exports managed by entrepreneurs from other countries, while many other businesses combined will not meet the need of Kazakhstan for ongoing economic stability and growth in case the price of oil falls for a relatively long period of time. The danger of socio-political unrest similar to what happened to Egypt, Syria, Nigeria, and Libya has been lingering on. Millions of people will suffer if the nation does nothing but wait for the impact of a resource curse. The popular corruption in government and a decline in the quality of life, once aggravated by poor economic stability in the world that can force oil prices down, thereby lowering the country’s revenue, will result in massive unemployment and great dissatisfaction among millions of laborers.

This thesis offers solutions in the light of the need to have foresight, aside from proving that Kazakhstan is indeed on the verge of realizing a resource curse. Introduction A.Background and Reason for Choosing the Topic Many authors have written about natural-resource-rich countries that have suffered as a result of the phenomenon called the resource curse. Very recently, Shaffer, Brenda and Ziyadov, Taleh (2012. p.2) wrote as editors of a book containing the results of a survey conducted to gather perspectives of nations supplying energy, about the issue of the resource curse.

They briefly defined it as “the tendency of natural-resource-exporting countries to underperform economically, have nondemocratic governments as well as poor governance, and a higher propensity for involvement in conflicts”. Two years earlier, Gelman, Vladimir and Marganiya, Otar (2010, pp. 50-51) had bluntly stated that resource wealth results in a curse on democracy. They identified at least six observations capable of clarifying the implications of having this resource curse. Arguments given by scholars included the fact that governments receiving revenues from oil exports tend not to tax or impose light taxes only.

As a result, the people will not demand accountability from the government officials or the government as a whole. "Taxation issues are one of the most important incentives for citizens to participate in politics; thus, the interest of individual involvement in politics and as an influence on the political process declines in oil states." (p.51) The 2nd reason involves the ability of the authoritarian rulers to pacify the people with "increase in social payments, pensions, and benefits, and thus buy the political loyalty of citizens" (p.51) A 3rd observation follows the 2nd in the sense that these rulers will then avoid transparency of their way of governing and developing the people and the country’s economy.