Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments February 8, 2012 erstellt
Beschreibung:
Existing literature provides examples of countries which have mismanaged natural resource revenues. Almost every resource-rich country including successful ones such as Norway and Indonesia has been trapped by the external debt attractiveness. Mexico and Nigeria with huge amount of natural resource revenues have ended up with excess volume of external debt. Unsuccessful examples of economic history made the academic environment come up with the economic terms like “boom based borrowing capacity” and “debt overhang.”With its moderate and productive level, external debt is not harmful and destructive on its own. But adding excessive external debt up to the natural resource revenues, this process accelerates real exchange rate appreciation. Real exchange rate appreciation makes manufacturing sector more vulnerable. Also, huge amount of foreign exchange reserves leaves policy makers with the responsibility of wise use of them. As this task is quite challenging, prudent economic policies are not fully implemented or delayed for a long time. Natural resources with the excessive external debt are not only reason behind the shrinking manufacturing sector, but also major obstacle of the potential manufacturing sector, which is the object of national industrialisation policy. What is the motivation behind the increasing external debt? Is Kazakhstan going to make same mistakes as Latin American, Asian and African nations did at the past? Recent economic data shows that even in the USA, de-industrialisation is clear enough to observe. If for a country economic and export diversification is quite broad, then de-industrialisation may not be considered as a grave problem. But as manufacturing is the conventional source of innovation, learning by doing and research and development, for a less developed country such as Kazakhstan, it has great importance. This paper will investigate causes and consequences of increasing external debt of Kazakhstan. Also, impacts of this process on existing and potential manufacturing sector will be on the purpose of this study. Paper will be concluded with policy implications