A practical approach to oil wealth management: Application to the case of Kazakhstan

Aktoty Aitzhanova, Anastassiya Iskaliyeva, Venkataraman Krishnaswamy, Dmitry Makauskas, Hossein Razavi, Ahmad Reza Sartip and Aida Urazaliyeva

Energy Economics, 2015, vol. 47, issue C, 178-188

Abstract: This study presents a practical approach to oil wealth management by bringing together various dimensions (oil production and sustainability of oil reserves, impact on the economy and the balance of trade, and the impact on the fiscal balance, government debt, and the national oil fund) within a long-term planning framework. The study provides a quantitative depiction of the above dimensions to 2050 for the case of Kazakhstan where the country's oil output has grown from about 0.6million barrels/day (mb/d) in the late 1990s to 1.8 (mb/d) in 2013, and it is expected to reach a peak of 3.5mb/d by 2035. The analysis of this study indicates that within the limits of proven oil reserves, Kazakhstan's oil production capacity would collapse to negligible amounts after the peak period of 2035. This envisaged scenario will have undesirable impacts on the economy, balance of trade and fiscal balance both prior and after 2035. To avoid these erratic impacts, the study examines an alternative “conservative” production scenario that would enable the country to maintain its level of oil production until 2050, and to manage better the transition to a non-oil economy.

Keywords: Oil resource management; Fiscal balance; Oil fund (search for similar items in EconPapers)
JEL-codes: Q2 Q38 Q43 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:47:y:2015:i:c:p:178-188

DOI: 10.1016/j.eneco.2014.11.009

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